INTERVIEW: Simon Cowley, vice president, Global Technical Support, CommScope Enterprise Solutions – PG 36
issue 2.6 June 2015
tough
choi c es Challenges of hiring in
PLUS
Tips on hiring the right candidate
FEATURE STORY
A look into Qatar’s latest mega project – Place Vendôme
Qatar construction
TECHNICAL
How will Qatar Construction Specifications 2014 affect existing and planned projects?
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Unlike sectors such as oil and gas, most of skilled and senior staff members in Qatar’s construction industry are expatriates. With a number of projects scheduled for completion in 2022 and 2030, Qatar’s construction sector is facing an urgent need to hire competent candidates from all over the world. In our cover story, we discuss recruitment challenges in Qatar construction.
June 2015
www.qatarconstructionnews.com
Cover Story Al Sraiya QCN2.6.pdf
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How will Qatar’s construction industry deal with tough the recruitment choi c es Challenges of hiring in Qatar construction challenges once the Kafala system is reformed? QCN’s Farwa Zahra explores some repercussions, as foreseen by human resources professionals of some leading construction companies in Qatar. INTERVIEW: SIMON COWLEY, VICE PRESIDENT, GLOBAL TECHNICAL SUPPORT, COMMSCOPE ENTERPRISE SOLUTIONS – PG 36
issue 2.6 June 2015
PLUS
Tips on hiring the right candidate
FEATURE STORY
A look into Qatar’s latest mega project – Place Vendôme
TECHNICAL
How will Qatar Construction Specifications 2014 affect existing and planned projects?
Brought to you by
Regulars
From the Editor - 4 Construction News - 6 Guest Column - 16 Legal - 42 Qatar Tenders - 44
27.
30.
36.
Technical Impacts of QCS 2014 on qatar’s construction projects
feature story Place Vendôme: Qatar’s new mega project
Industry Insights Solution providers must invest and demonstrate a commitment to GCC
Paul Prescott and Gabriel Olufemi of Pinsent Masons look into the latest version of Qatar Construction Specifications (QCS) introduced in 2014, and how it will impact the country’s construction industry in the future.
Qatar’s aspiration to build big projects has well been demonstrated over the years, but now the country is readying to recreate the glitz and glamour of world’s fashion capital Paris in Doha through its mixed-use project – Place Vendôme, writes Syed Ameen Kader.
Speaking exclusively with QCN, Simon Cowley, vice president of Global Technical Support for CommScope Enterprise Solutions, discusses the role of connectivity in branding a sports venue in the context of Qatar’s preparation for the 2022 World Cup.
QCN | June 2015
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editor’s letter International media analyses, which are backed by skewed figures, reflect the reporters’ assumption that every construction project underway in Qatar is a product of the state’s winning bid for the 2022 World Cup. Making headlines recently was the news about Swiss police’s raid on FIFA’s annual meeting in Zurich, resulting in arrests of some senior officials facing bribery allegations. For Qatar, the news is even more crucial against a backdrop where the Gulf state’s winning bid for the tournament was continuously under scrutiny and speculation, at least until March 2015 when the football governing body finally passed its verdict in Qatar’s favour. However, concerns over the 2022 World Cup have re-emerged with the recent raid. Keeping the briber y allegations against FIFA officials aside, another factor affecting Qatar’s World Cup June 2015 | QCN
prospects is the ongoing criticism on the state’s policies for and treatment of its migrant workers. The sentiment picked up force once again in late May with an infographic published in Washington Post, which compares worker deaths in Qatar since 2011 with casualties happening in preparation of tournaments that took place in other parts of the world. The number of deaths in Qatar, as evident in this infographic – which is being widely shared over online social media – is far more than those in other countries. Ironically, however, the statistics used for Qatar’s workers’ deaths are those calculated since 2011 – the time when no construction activity had begun on any stadium for the 2022 World Cup. In fact, construction activities for the World Cup stadiums began only recently. Similarly, Daily Mail’s recent news report claims that by 2022, death rate of employees working on stadiums, hotels, apartments, public transport systems and roads for the World Cup will reach somewhere close to 4000. The death of migrant workers is condemnable, regardless of when and where they happen. However, international media analyses, which are backed by skewed figures, only reflect the reporters’ sweeping assumption that every construction and infrastructure project underway in Qatar is a product of the state’s winning bid for the tournament. In fact, much of the infrastructure development happening in Qatar comes as part of Qatar National Vision 2030 which was launched in October 2008 – two years before the country’s winning bid for the 2022 World Cup that came in December 2010. While many ongoing and planned projects in Qatar are linked to the World Cup, they are by no means dependent on the tournament. Most of these projects will continue whether or not the World Cup takes place here, albeit at a slower pace perhaps if there is no urgency to deliver by an immovable deadline of 2022.
With Qatar’s recent attempts towards boosting its tourism, particularly in meetings, incentives, conferencing, exhibitions (MICE) sector, the current projects which stay exclusive to the 2022 World Cup are the proposed stadiums and linked facilities. Of the USD276.3 billion (QAR1 trillion) worth of projects planned or underway in Qatar, according to MEED Projects, FIFA World Cup stadiums make up USD4 billion (QAR14.5 billion) of the market. This is less than two percent of the market size. Similarly, other projects planned to facilitate football fans in 2022, seem small, though not insignificant, when seen as part of the country’s bigger , more ambitious projects. The future of Qatar’s construction sector seems promising, and the need for global talent is here to stay, but so are the challenges, which the country must address to ensure it achieves Qatar National Vision 2030. In our cover story Tough Choices on page 18, we look at some of the major recruitment challenges linked to escalating cost of living for workers, the Kafala sponsorship system, and increasing competition among the Gulf states, requiring human resources to support their infrastructure projects. For many construction professionals, the year 2015 may increase the attractiveness of Qatar’s employment market, once the proposed labour reforms are in place as promised by the government. But how will changes in the Kafala system impact hiring practices and the recruitment scene in Qatar’s construction sector? Read on to find out. More in this issue, we introduce a human resources column to regularly provide our readers with latest statistics and tips for employers and employees in Qatar’s construction market. Enjoy reading.
Farwa Zahra Editor
Construction
News
Do Recent fatalities reflect safety
of construction com Qatar’s health and safety issues have once again come into the spotlight with two deadly incidents taking place during the month of May, writes Syed Ameen Kader.
June 2015 | QCN
construction news
y inadequacies
mpanies?
While the nature of construction activity is such that there is always a risk of accidents happening, casualties and injuries can be mitigated if global standards of health and safety are in place.
7
In the first incident, a tower crane collapsed while being erected at a construction site, near F-Ring and Airport Roads, killing at least one person and injuring three others. The second incident, though did not happen at any construction site, involved a construction truck carrying scaffolding material, which fell on top a passerby vehicle at Corniche, killing a British expatriate. Both the incidents are separate but linked to construction activities – something that raises serious concerns about the kind of health and safety practices followed by construction companies and contractors in Qatar. Amid ongoing media criticism about Qatar’s poor living and safety standards for its migrant workers, such fatal incidents only highlight the inadequacies of construction companies who, some feel, are not doing enough to address this issue. Andy Reid, business development manager at Qatar International Safety Centre (QISC), told QCN, “If all companies were to follow the standards and the law regarding health and safety, then for sure this would have a major impact on the safety of people.” Reid, who has been involved in safety training for the past 25 years, said the most important precaution for owners, companies and authorities is to make sure that the people doing the job have had all the necessary training available to them and that they are qualified to the highest standards. Another senior health and safety expert, who did not want to be named, agreed that major causes of accidents are due to the lack of training, planning and right skills available on site, besides lack of management awareness and supervision. “A good safety system requires top management to support the safety efforts to work according to the required safety plan, rules and regulation set out by the authorities, and to follow the common world standards, use of best available technologies,” he added. Although safety training is a requirement mandated by the Qatar Construction Specifications 2014 (QCS 2014), it is usually only the major companies who follow these requirements as they do not want to jeopardise their reputation in the international scene. According to Don Boynton, MEP service group manager at GHD, the QCS 2014 has a good guide on how to include a culture of safety on sites. However, he continues, there appears to be some sites where the specifications are not followed or enforced. He said everyone has an obligation to safety. “This starts from the designer; safety has to be imbedded into the design. Manufacturers also have an obligation to provide equipment and plant that is safe to use; this may mean providing specific training for specific plants,” added Boynton. With Qatar undergoing massive construction, the industry needs to do more to avoid such incidents that happened in May. “It is everyone’s responsibility to intervene if they see an unsafe act as that intervention could save his or her life. Everyone has a voice and everyone has the right to return home safe and return to their job the next day,” Reid concluded. QCN | June 2015
Construction
News
Industry Views
QCN approached a number of legal experts to ask about some of the most common disputes in Qatar’s construction industry. Here is what they had to say:
Variations, delays and payments among key disputes in Qatar construction The disputes common in Qatar’s construction industry mirror those of the construction industry worldwide (variations, delay, payment), but tend to be exacerbated by unequal contract terms, unrealistic risk allocation, pricing constraints and lack of independence in the ‘engineer’ role. The position is further compounded by delayed or reduced payments impeding cash flow. The exacerbation of these disputes in Qatar’s construction industry is evidenced by the unusual proportion of disputes, which result in termination and/or calls on performance bonds. That in turn increases the likelihood that the parties will see the dispute all the way through litigation/arbitration. Reducing these disputes requires
“The most common disputes being seen at the moment relate to either the making of arbitrary calls on the performance bond or the contractor not leaving site after the termination of a contract for breach.” Scott Lambert, regional head of construction and infrastructure at Al Tamimi & Company, says both of these issues can be addressed by making it easier to obtain an injunction order to either stop the bond being taken or to remove the contractor from a site.
June 2015 | QCN
an acknowledgment that both parties need to get something out of the relationship: a quality product, on time and on budget for one party, and a reasonable profit margin for the other. This requires realistic expectations on both sides and sensible risk allocation. Risk allocation is best approached by looking at which party has most control of, or ability to mitigate, that risk – ultimately this will also help keep prices down. Avoiding dispute escalation requires a mechanism in place to deal with differences as they arise. This is crucial in maintaining trust between the parties and avoiding disputes becoming personal. Construction contracts provide a mechanism in the simplest terms in the role of the engineer, but in Qatar the mechanism is frustrated
“Market conditions remain such that both late and non-payment continue to rank highest as Qatar’s major contentious area leading to lengthy negotiations and construction disputes.” Paula Boast, partner and head of construction for Charles Russell Speechlys, Middle East, adds that construction disputes arising from late payments and non-payments will continue in the foreseeable future. She suggests contractors and employers to take steps to limit damage resulting from the knock-on effects of project delays, and of course procurement impacts on materials equipment and resources.
by the engineer’s lack of independence. More sophisticated methods such as Dispute Adjudication Board are included in International Federation of Consulting Engineers’ (FIDIC) standard forms but they are almost always deleted or ignored. Suzannah Newboult is a legal director in DLA Piper’s construction litigation team.
“In our experience, one of the most common disputes in Qatar’s construction industry concerns interpretation of time bars and the extent to which a contractor’s right to claim can be extinguished under the construction contract.” Cheryl Cairns, partner at Trowers & Hamlins LLP, says the firm often deals with disputes as to whether stated time bars applicable in particular to service of notices will be strictly upheld (as is the approach adopted in English law) or if there is scope for argument by utilising the relevant local law.
construction news
9
Awards
Key recent contracts awarded in Qatar • The Public Works Authority of Qatar (Ashghal) has awarded seven road projects as part of Qatar’s road development scheme. The first contract has been awarded to a joint venture, including the local National Industrial Contracting Company, Brazil’s Azvi Company, and the local Al Ghanem Trading & Contracting. Other companies winning the contracts include Marbu Contracting Company, Bin Omran Trading & Contracting, and Qatar Building Company. The scope of these contracts includes the construction and development of old and incomplete roads, in addition to pedestrian and cycle traffic signage, Enertech paths, April15 QCN signals, HHP.pdf street 1 4/8/15 street lighting, and landscaping.
• Japan’s Mitsubishi Corp and Tokyo Electric Power Co (Tepco) have won a contract to build a USD2.5 billion (QAR9 billion) gas-fired power plant in Qatar. The plant, with an output of about 2.4 million kilowatts, will be one of the largest thermal power plants in the Middle East. The deal has been done with Qatar General Electricity and Water Corporation (Kahramaa). Located 20 kilometres south of the capital Doha, operations at the site are scheduled to commence in 2017. • Ashghal has signed three contracts worth QAR3.2 billion for the Inner Doha Resewerage Implementation Strategy (Idris) project. The are for the design and 2:45 contracts PM build of three main trunk sewer
projects. A joint venture of French Bouygues Construction, and local UrbaCon Trading & Contracting have won two contracts for package one. Idris SHP – a joint venture of German Hochtief and local/Austrian AlnSraiya Strabag – has won package two. • SSH Qatar has been awarded with the design and supervision role for the Specialist Clinical Centre for Dental. Awarded by Ashghal, SSH Qatar will lead the development of the design from concept on behalf of Hamad Medical Corporation. The 61,000-square metre medical centre will have six interconnected buildings with a shared three-level basement and a ground floor with four upper levels.
Construction
News
Qatar to adopt reverse osmosis technology as part of its future energy and water policy
The Qatar General Electricity and Water Corporation (Kahramaa) has reached a 25-year power and water purchase agreement with a consortium comprising the Qatar Electricity and Water Company QSC, Qatar Petroleum, Qatar Foundation, and Mitsubishi Corporation as international developer. The consortium will be responsible for the construction of a 2520-megawatt power and 136.5 million imperial gallons per day water plant, known as Facility D. The power and water plant is expected to have a total investment cost of approximately USD3 billion (QAR11 billion), and is scheduled to be commissioned in the second quarter of 2017. “This is the first time that reverse osmosis technology will be used in Qatar for water desalination,” said Tim Armsby, partner at Eversheds – the law firm providing advisory services to Kahramaa for this agreement. Nick Pinder, lead associate at Eversheds, said, “This is a major milestone for the State of Qatar in its future energy and water policy. It represents an excellent result for Kahramaa in achieving such a competitive levelised tariff through its procurement process.”
strategic rebranding for TADMUR Holding
Tadmur Holding has undertaken a strategic rebranding exercise in order to maximise long-term growth opportunities as well as face new challenges brought about by a highly globalised and tech-savvy business environment. Dafer Mustafa Hallawa, chief executive officer, Tadmur Holding, said, “This rebranding exercise is beyond merely changing a logo or name. It is and will be reflective of the direction and path that we have committed ourselves to take for the benefit of everyone and for the attainment of our business goals and objectives.” Since 1985, Tadmur has substantially increased its scope of operations in construction and other areas in Qatar.
Dafer Mustafa Hallawa, chief executive officer of Tadmur Holding.
June’s Big Number
USD
172 billion June 2015 | QCN
According to Deloitte Middle East’s latest annual report GCC Powers of Construction 2015: Construction – The Economic Barometer for the Region, the value of projects planned and underway in the Gulf Cooperation Council (GCC) in 2015 is expected to reach USD172 billion (QAR626 billion). The value has been forecasted against a backdrop of lower oil prices, continuing political unrest and reduced International Monetary Fund (IMF) growth forecasts across the GCC. In Qatar, some of the largest projects expected to be awarded this year include Qatar Rail’s QIRP: Passenger & Freight Rail, one for the new Qatar Economic Zones, and Occidental Petroleum Corporation’s Idd e Shargi North Dome Expansion Phase 5.
Arabian Supply CentER partners with Lukoil Arabian Supply Center (ASC), an affiliate of Al Jaber Group, has been appointed as Qatar’s official distributor of the oil giant Lukoil for its wide range of oils and lubricants. During the contract signing ceremony, ASC’s managing director, Hisham Hadid, said, “This partnership will contribute to a significant gain for Lukoil Lubricants across the country.” He further said, “Our strength and presence in the country is very well recognised, and we foresee the positive demand for Lukoil products. Our sales network and capabilities will add new dimensions in long-term relationship with our customers.”
12
construction news
Values of projects planned and underway in Qatar 4%
3%1% Sector
5%
Value (USD million)
6% 47%
34%
Construction
Transport
Power
Chemical & Industrial
Oil
Water Gas
Source: MEED
Construction
139,843
Transport
103,083
Oil
16,559
Water
16,098
Gas
12,889
Power
8785
Chemical
1484
Industrial
970
299711
GCC’s 10,000 Construction Projects Boosting the Regional Tile and Ceramics Market According to a report by Frost & Sullivan, the Gulf Cooperation Council’s (GCC’s) tile market is expected to grow at a compound annual growth rate of more than 10 to 12 percent until 2020, driven by increasing demand in the residential and hospitality sectors. The GCC market for tiles was estimated at more than 450 million to 500 million square metres in 2014, out of which as much as 70 percent of the demand was for ceramic tiles, Frost & Sullivan stated. The region imports almost 40 percent of its total demand, with China, Spain, Italy, Egypt and India being the largest suppliers of tiles to the GCC. The ceramics market was well represented at Project Qatar 2015 held in May 2015, where a number of Chinese companies were present to showcase their products. “The GCC tile market is one of the most dynamic in the world, with the large-scale construction projects we are seeing here in the region, leading to equally large-scale demand for quality building materials,” said Vibha Sawhney, senior June 2015 | QCN
With more than 10,000 projects under construction or in the design and planning stage in the GCC, the tile market is one of the fastest-growing segments of the building materials market in the region.
architect and interior designer, head of hospitality design division, Modo Milano Consultancy JLT. “The increasing importance of residential development in the construction mix and the desire for high-quality products is also influencing demand. With the region home to a large number of highnet worth individuals, there is a natural desire to deliver high standards,” he added.
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News Events Construction
14
section
7 – 10 June
7 – 8 September
Underground Future Interiors Infrastructure and Conference Deep Foundations Qatar InterContinental Doha InterContinental Doha
7 – 10 June
Qatar International Stadium Construction Exhibition Qatar National Convention Centre
6 – 9 September
Port Development Week
Once completed, Qatar’s Hamad Port will be one of the world’s largest ‘greenfield’ port-development projects.
The Qatar interiors and fit out market had an estimated value over USD800 million (QAR2.9 billion) during 2014. Pictured here is the inside view of the Museum of Islamic Art. (Image FotoArabia)
Future Interiors Qatar aims to provide a meeting place for project owners, project managers, design professionals, contractors and consultants to stay up to date on industry trends and lucrative business opportunities. The event will also provide an opportunity for industry practitioners to exchange ideas and best practices as case studies from major projects in Qatar and the Gulf Cooperation Council will be highlighted, while also providing a focused platform for manufacturers, material suppliers and solution providers to showcase their expertise, products and services.
Port Development Week is aimed to serve as an interactive platform for project stakeholders. To be held at InterContinental Doha, the event is scheduled to feature high-level strategic discussions and share peer-led case studies, addressing some of the biggest challenges, opportunities and requirements in delivering and operating world-class ports in the region. Along with networking opportunities, the event will also offer focused streams incorporating port operations, port security, port planning and expansion, and marine and coastal engineering.
June 2015 | QCN
26 – 27 October
Future Landscape & Public Realm Qatar
Future Landscape & Public Realm Qatar 2015 will provide an opportunity for landscape and design professionals, urban planners, urban designers and high-level decision makers from across the value chain to gather together and discuss new innovations and technologies, key challenges, the latest projects and future opportunities. One key area of focus will be the development of youth and sporting facilities within Qatar’s public realm.
7 – 8 December
Future Drainage Networks Qatar
Future Drainage Networks Qatar is a specialised conference designed to meet the requirements of designing, constructing, refurbishing, operating and maintaining effective sewerage and drainage networks in Qatar. Bringing together the responsible government authorities, the project management consultants, general engineering consultants, contractors, sub-contractors and materials and machinery suppliers, this conference will provide an opportunity to exchange knowledge, share best practice and most importantly shape future plans and strategies.
The event will provide tips on improving drainage networks.
16
sectioncolumn guest
Bid Shopping: An obstacle to fair market competition Despite the rise of construction activities across the Gulf, the regional industry is often marred by unethical practices of bid shopping and bid peddling. M. Vasanth Kumar explains the phenomena, while looking at their repercussions on concerned projects.
M. Vasanth Kumar is the chief executive officer of Arabian MEP Contracting, Qatar.
In putting together their proposals for announced project tenders, professional construction companies spend a great deal of their time, effort and money to prepare their bids in an effort to win a contract in a legitimate way without compromising on quality, safety and performance. As honest as their efforts are, sometimes they are marred by the unethical phenomena called ‘bid shopping’ and ‘bid peddling’. Bid shopping occurs when a main contractor, who has just won the project using the lowest price offered by the subcontractor at the time of submitting a tender, forgets June 2015 | QCN
the subcontractor’s contribution to his success and discloses this price to other subcontractors in order to play one bidder against another. The motive behind bid shopping is to create competition among subcontractors in the hope that a company, not initially involved at the tender stage, offers a rate lower than the original subcontractor’s quote, ultimately benefiting the lead contractor by reducing its cost, and hence increasing its profit. In the pursuit of elevating its profit levels, what the main contractor ignores is the fact that subcontractors’ bids are their intellectual property, which cannot be disclosed to competitors without obtaining a formal permission. While bid shopping occurs from the side of the main contractor, bid peddling is driven by subcontractors. Bid peddling happens when a subcontractor, who did not quote to the main contractor during tender stage or did not submit a competitive price initially, adopts a shortcut approach at a later stage by cutting its prices to unsustainable levels, thereby jeopardising the opportunity of the subcontractor who had actually contributed to the main contractor’s win by quoting the least amount. A main contractor who does shopping and a subcontractor who involves himself in peddling are simply not following ethical practices in the construction business. From the repute point of view, the act is very short-termed and a pure reflection of greediness and lack of professionalism. What is alarming is that these practices are on the rise in the Middle East region. If the practices of bid shopping and peddling are left unchecked, it will usually be the client who will experience the gravest consequence. Having invested a large sum of money in a bid-shopped project would mean that while the client
will spend the same amount of money, the main contractor will squeeze more profits which may affect the overall quality of the works. If a subcontractor has quoted an amount below the breakeven point, it runs the risk of bankruptcy. To avoid running out of the business, it is very likely for the subcontractor to use substandard products or deliver unsatisfactory services in order to retain the business in an attempt to achieve some profit out of the deal. Offering substandard services can also involve poor quality workmanship by using unskilled low-cost workers and unsafe site conditions, which eventually puts the entire project at high risk. Being aware of the bid shopping practices, subcontractors also tend to take a precocious approach by refusing to submit bids or purposely bidding higher to compensate for post-award negotiations. This practice again is not healthy for the construction industry as they lead to market prices being artificially increased and act against the interest of the client. Qatar’s current tendering regulation requires main contractors to provide a list of subcontractors they wish to use if the contract is awarded to them. However, in most cases, such lists are not well balanced and do not offer strong protection to qualified subcontractors as low-cost substitution often takes place in the last hour without any valid statutory grounds. Open and fair competition is always welcome to keep the construction cost at sustainable levels, and have the work satisfactorily performed at the lowest possible price. That said, market self regulations are often compromised through bid shopping and bid peddling practices, leaving detrimental effects on the industry, unless tough legislation is in place to combat such unethical practices.
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18
section
In a recent interview, Qatar’s Minister for Labour and Social Affairs Dr. Abdullah bin Saleh Al Khulaifi assured that the new labour law will be implemented before the end of this year.
June 2015 | QCN
TOUGH choices: Recruitment in Qatar construction Qatar proposed labour reforms in May 2014. One year on and the country is yet to implement any changes in its Kafala sponsorship system. Reassuring many anticipating employees here, the government recently indicated the reforms will be actualised before November this year. But what happens once the changes are finally incorporated? How will Qatar deal with recruitment challenges once the Kafala system is reformed? QCN’s Farwa Zahra explores some answers, as foreseen by human resources professionals of some leading construction companies in Qatar.
A
ccording to GulfTalent’s latest report Employment and Salary Trends in the Gulf, 66 percent of the employers surveyed plan to create more job positions. Similarly, the Bayt.com Middle East Consumer Confidence Index Survey, March 2015, reveals that 60 percent of the respondents in Qatar consider jobs to be plentiful, with expectations for more vacancies to open up this year. Forty eight percent expect the number of employees in their company will increase before the end of the year. Another 48 percent believe that Qatar is more attractive as a job market than any other country in the region. However, GulfTalent’s report also states that Qatar has one of the lowest retention rates for employees primarily because of the high cost of living and restrictions on a candidate’s ability to switch jobs. “While hiring of unskilled workers from abroad is very easy, attracting skilled
Engineering is currently the most desirable education for the Qatari employment market, followed by administration and commerce.
QCN | June 2015
20
cover story workers and technology-based staff is a real challenge,” says M. Vasanth Kumar, CEO of Arabian MEP Contracting. What makes recruiting skilled workers a major concern is the ongoing development in other parts of the Gulf Cooperation Council (GCC). The construction industry, he continues, has high labour content and having adequate number of manpower is the key to any contractor’s success. However, that cannot be interpreted as more manpower equalling more success. “What is required for the construction industry is quality manpower with a good productivity rate,” says Kumar.
Challenges ahead
Elie Azzi, head of human resources at Medgulf Construction, says, “Because cost of living is high here, people sometimes have doubts about coming to Qatar.”
Unlike other sectors such as oil and gas, most of the skilled and senior staff members in Qatar’s construction sector are expatriates coming from diverse parts of the world.
With more market choices available to the candidates, Qatar must develop a competitive edge if it is to retain the best talent. What serves as a major impediment for many high-skilled professionals is the high cost of living in Qatar, among issues such as academic and residential facilities available here. According to Kumar, finding suitable accommodation amid skyrocketing rentals and dearth of bachelor accommodation remain the biggest challenges for recruiters after the problem of visas for limited nationalities. “They wish to relocate here with their families, but the issue of school shortages for their children makes things really difficult,” says Kumar. Voicing similar concerns, Elie Azzi, head of human resources at Medgulf Construction, says, “Because cost of living is high here, people sometimes have doubts about coming to Qatar. They sometimes express interest to go to other Gulf countries where cost of living might be cheaper.” As per Qatar’s policy, employees working
in Qatar can apply for residence permit for their dependents only if their salary is at least QAR10,000. While the amount may be considered better compared to salaries back home, many engineers are not willing to move without their families. Speaking of difficulties of recruitment in specialist areas such as mechanical, electrical and plumbing works, Kumar says, “Attracting them to Qatar requires employers to offer high salaries, which unfortunately the local construction market is not able to do due to the cutthroat completion from overseas contractors in this highly price-driven market.” Rami Kattan, the former head of recruitment at UrbaCon Trading & Contracting (UCC), believes that with the rise in construction activities in the last decade, employers face a seemingly endless challenge to hire and retain the best talent. The trend in Qatar then appears to be in contrast to a typical recruiting scenario where candidates compete to secure a job. “We are in the medial of the recruitment competition,” says Kattan. However, a look at some job portals reflect a different scenario where many job postings get 100 plus applicants, showing the candidates’ willingness to join the Qatari construction sector. What then makes companies such as UCC feel the recruitment pressure? “Finding good qualified candidates is not hard, but finding unique candidates with extreme creative, passion and determination is, so they can add real value,” Kattan voices his concern. What gets in the way of employers to get the right candidates is also linked to the origins of skilled and staff workers. Companies do not always have the choice
“With a few simple clicks, an employer should be able to streamline their sourcing and recruitment.” - Ibrahim Badreddeen, country manager, Qatar, Bayt.
June 2015 | QCN
“Finding good qualified candidates is not hard, but finding unique candidates with extreme creative, passion and determination is.” Rami Kattan, former head of recruitment, UCC.
to hire the person fit for the job profile, despite mutual consent. Stated differently, the employers do not always get the visas for nationalities of their choice. While a company may wish to hire a person from Bangladesh, it may get visa approval only for candidates from Nepal. “The single most important challenge is lack of nationality of work visa of contractor’s choice,” says Kumar. That said, companies often address the issue by expanding their range of sourcing to find the best candidates. “Sometimes, we are not given visas for the country where we find required skilled manpower and we search for alternatives, but our recruitment strategy is always to find an alternative way to overcome any visa issues,” says Azzi. As the demand for construction professionals continue to grow, the industry is also becoming more demanding on individuals’ skillset in specialist areas. This means that while Qatar’s recruitment pool continues to expand, for job seekers, the market is no less competitive as one would assume considering the pressure to hire ahead of the 2022 World Cup’s immovable deadline. Speaking of MEP, specifically, Kumar says Qatar’s recent regulations require engineers to be tested and certified here prior to their involvement in a project. While this is a welcome step for the overall sophistication of the industry, it slows down the entire chain of the hiring process. For an employee, securing a job in Qatar is one thing, retaining it is quite another. With a high number of individuals hired overseas, there is almost always a risk for a candidate to overpromise or overrate their profiles. While companies are increasingly attempting to strengthen their recruitment process, what
67% The percentage of companies in Qatar that are either definitely or probably hiring in a year’s time.
With a number of projects scheduled for completion in 2022 and 2030, Qatar’s construction industry is facing an urgent need to hire competent candidates from all over the world.
QCN | June 2015
happens if an individual fails to meet the organisation’s expectations? To save the amount of time and money invested in bringing labour into Qatar, many companies conduct trainings and workshops to ensure that the individuals can cope in a changed working environment. To avoid such situations, Kattan explains UCC’s strategy of ‘ASK’, which stands for Ability, Skills and Knowledge. When these features are present in a candidate’s profile, Kattan says, he can be trained to adapt and fit into most job roles that he might have failed to meet in the past. Explaining Medgulf’s induction system, Azzi tells QCN, “Once a new employee joins Medgulf, he will be exposed to a full induction system through our trained HR team. Then he will meet relevant managers and get necessary tools required to execute his work. A trained HR personnel will then sit with him to inform about Qatar laws, company policies, his rights and obligations, etcetera.”
Labour reforms In May 2014, Qatar proposed worker reforms for its increasing workforce. One year on, the state has reiterated its promise to abandon the long-established Kafala sponsorship system – also dubbed as a form of modern-day slavery by some human rights organisations. For Azzi, Kafala is one of the major challenges of recruiting in Qatar’s local market. In a recent interview, Qatar’s Minister for Labour and Social Affairs Dr. Abdullah bin Saleh Al Khulaifi assured that the new labour law will be implemented before the end of this year. Awaiting the abolishment of the sponsorship system, many expatriates have their fingers crossed, with a large number belonging to the construction sector – one of the highest-growing areas for overseas talent. Despite speculations, the message Qatar’s commitment to labour law reforms sends is certain. Eventually, albeit slowly, the new system will be in place. Once the new legislation is in place, what repercussions will it leave on the construction sector? Azzi foresees the immediate period followed by the new law will be marked by a heightened activity. With the twoyear ban waived from workers leaving their employers, candidates will explore better June 2015 | QCN
“While hiring of unskilled workers from abroad is very easy, attracting skilled workers and technology-based staff is a real challenge.” - M. Vasanth Kumar, CEO, MEP Contracting.
opportunities. To retain their best talent, companies will have to negotiate in terms of salaries and facilities. For many companies, increasing the salaries would also mean inviting a risk of bankruptcy, leading to downsizing of staff for cost management. “The salary scale in Qatar might increase but within one to two years, it will be a free market where there will be normal salary scale and people can change from one employer to another depending on their contract directions,” says Azzi. Another implication linked to free market is that while employees will have access to better employers, the latter too will have access to a much larger talent pool available. On a macro level, this will potentially lift the benchmark for both employers and employees. However, followed by a phase of rapid hiring and firing, the market will ultimately settle in accordance with the new system. Eventually, says Kattan, “The new law will organise the recruitment market [which] will lead the construction industry along with other industries to move forward to a higher level of quality.”
Recruiting practices LinkedIn’s The Talent Gap Report reveals the differences between employers’ and professionals’ approach to talent in the United Arab Emirates, Saudi Arabia and Qatar. The document suggests that Qatar’s employers seem to rely more on traditional ways of recruitment rather than engaging with global talent through online social platforms such as Bayt.com, Naukrigulf. com, GulfTalent and LinkedIn. Despite the option of reaching out to international workforce directly through social networking
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services, many organisations here depend on third-party recruiters while an increasing number of companies now explore both direct and indirect options. When an agent is involved, a recruiter is usually obliged to pay the fees once the candidate has been hired. QCN approached an aspiring candidate looking for an engineering career in Qatar. Requesting anonymity, he believes personal contacts remain one of the primary means to secure a job for someone not already in Qatar. With his profiles updates on platforms such as Bayt.com, LinkedIn and Naukrigulf.com, among others, he says, “With hundreds of candidates applying for a posted job without considering if their profile matches the job description, it seems like these platforms are losing their credibility. Looking at the status of job applications, many of my applications were not even viewed. In many cases, the system shows that not a single application was viewed by the employer.” According to Bayt.com’s ‘Hiring Management in the MENA’ poll, conducted in August 2012, a third of employers in the Middle East and North Africa (MENA) region consider sourcing relevant candidates as the single biggest challenge they face when hiring senior executive talent. However, Ibrahim Badreddeen, Bayt’s country manager in Qatar, believes that, “With a few simple clicks, an employer should be able to streamline their sourcing and recruitment processes and attract the best talents.” Considering the large-scale developments undergoing in Qatar; the need for more skilled and senior professionals; and nature of Qatar’s construction force being expatriate primarily, it is imperative for the state to expand its global reach by accessing global talent directly instead of
Qatar’s employers seem to rely more on traditional ways of recruitment rather than engaging with the global talent through online social platforms.
With growth, Qatar’s construction industry is getting more demanding on individuals’ skillsets in specialist areas.
QCN | June 2015
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cover story
With increasing demand for skilled labour in regional construction markets of Saudi Arabia and the United Arab Emirates, Qatar must create a competitive edge to attract and retain talented engineering and related staff.
solely relying on recruitment companies. While hiring the labourers for site works can only be done through traditional means due to the candidates’ limited education and little access to the Internet, Kumar says, using social media makes up the most effective option for high-skilled professionals. For companies such as QDVC, Consolidated Contractors Company and Atkins, social networking websites such as LinkedIn are used to expand the reach of recent job announcements, while the applications are effectively produced and applied on corporate websites. Within this realm, companies such as QPM and Parsons have stepped ahead. In addition to providing a platform for application submission, the website used Taleo talent management solution. What this software does is formulate an archive for the employer and employee alike. Employees can save and continuously update their application details and supporting documents. This takes away the hassle of repeatedly filling application forms. The system regularly matches the candidate’s profile with emerging job offerings and send alerts in the case of a relevant opportunity. For employers, the system works as a data centre for talented candidates interested in working for them. Taleo’s comprehensive six-step procedure to complete an application also ensures that only serious and interested professionals get to reach the recruiters.
Job market According to the Bayt.com Middle East Job Index Survey, February 2015, in a year’s time, 67 percent of the companies in Qatar are either definitely or probably hiring. Most jobs in the MENA are expected to come from the private sector with 73 percent of the respondents from private multinationals saying that they will probably or definitely be hiring in a year’s time. Bayt.com’s study shows that engineering is currently the most desirable education for the Qatari employment market, followed by administration and commerce. The results are reflective of the state’s changing landscape with ongoing developments. While opportunities are aplenty, are there enough skilled candidates ready to come to work for Qatar at a time with issues such as the Kafala system? Assuming the sponsorship system is abolished in the near future, will the state still achieve a competitive edge over regional markets at a time when Qatar’s increasing cost of living and dearth of international schools, among other issues, stand as a colossal force in the way of the international best talent? While a large pool of candidates is still willing to join Qatar’s construction sector, attracting the right candidates will be a matter of creating a competitive edge that surpasses current impediments concerning the applicants worldwide. June 2015 | QCN
Rami Kattan, former head of recruitment at UrbaCon Trading and Contracting, believes that once Qatar implements its proposed labour reforms, the country’s recruitment market will be more organised.
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technical
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Impacts of new technical regulations in Qatar Construction Specifications 2014
Paul Prescott and Gabriel Olufemi of Pinsent Masons look into the latest version of Qatar Construction Specifications (QCS 2014), and how it will impact the country’s construction industry.
A
new technical regulation QS 27/2014 – QCS 2014 – was published in the Official Gazette on February 4, 2015. The purpose of QCS 2014 is to provide technical guidance, and establish a minimum acceptable quality standard in materials and workmanship for works to be undertaken in Qatar. QCS 2014 is mandatory for all private and public sector projects. It replaces and supersedes the technical regulation QS 27/2010 – QCS 2010 – in all respects. In December last year, the Minister of Environment Decision (210/2014) required all concerned parties to implement QCS 2014 “three months from the date of publication” in the Official Gazette. QCS 2014, therefore, came into force from May 4, 2015. Here are some ways QCS 2014 might affect projects and contracts in Qatar.
Key changes
In some contracts awarded by government entities in Qatar, references to the term ‘laws’ expressly include amendments or modifications. This means that a contractor or consultant who is party to those government contracts must therefore comply with QCS 2014’s new requirements when executing a live project.
The minimum requirements and standards in QCS 2010 have been revised and updated in QCS 2014, and the new technical regulation has been realigned to make it more userfriendly. QCS 2014 contains a few new sections and topics. Section 1, for instance, deals with the welfare, safety and protection of workers. The regulation sets out the minimum requirements for the provision of welfare facilities, in addition to other minimum health and
safety requirements. Section 29 is another new section that applies to rail projects, which was not in QCS 2010. This section sets out the minimum requirements for tunnel design, geotechnical specification, tunnelling (including tunnel boring machine excavation, precast concrete and grouting for segment lining), dewatering and groundwater management, concrete and steel structures, and railway tracks. The concerned parties – employers, contractors, and engineering or design consultants – must review QCS 2014 to familiarise themselves with the technical changes or additional requirements, and how they might affect their projects and contracts.
Contractual obligation In a standard contract governed by International the Federation of Consulting Engineers (FIDIC) – FIDIC form of contract is typically used in Qatar – the term ‘laws’ is widely
If concerned parties are required to implement the changes to QCS on live projects, there could be significant cost and time impact on these projects.
QCN | June 2015
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technical
defined to include regulations and other by-laws of any legally-constituted public authority. QCS 2014 would be considered ‘laws’ under the contract, pursuant to Ministerial Decision 210/2014. Under Sub-clause 1.13, contractors are required to comply with the laws (that is QCS 2014) in performing the contract. Contractors must therefore comply with the requirements set out in QCS 2014 when designing, executing and completing the works, and remedying defects in the works. This also applies to consultants providing design services.
Change in law provisions Under Sub-clause 13.7 of a standard FIDIC contract, a contractor is entitled to additional time and money if it incurs additional cost or encounters delay as a result of implementing new laws, or as a consequence of repealed or modified existing laws (such as those amended in QCS 2014), which are made 28 days prior to the tender date. If such date is on or after May 4, 2015, the contractor would have no entitlement. Contracts awarded by government entities in Qatar usually either: deny a contractor any entitlement by deleting the provisions in Sub-clause 13.7 entirely; or limit the entitlement by only granting additional time and money if the change in laws could not have been foreseen by an experienced contractor. Consultants must also check the change in law provisions in their contracts.
How QCS 2014 affects future projects With QCS 2014 published in February, an experienced contractor or consultant could foresee this change in law from that date. The technical specifications for future projects must be reviewed to ensure they are consistent with the requirements of QCS 2014. Contractors and consultants must adequately price and programme for any changes or additional scope. If references are made to QCS 2010 in tender documents, bidders should raise tender clarifications to ensure the changes or additional scope are captured and priced for.
June 2015 | QCN
Does QCS 2014 apply to live projects? If concerned parties are required to implement the changes to QCS on live projects, there could be significant cost and time impact on these projects, for instance, through redesigning work, resequencing programme, amending method statements, or re-executing works. Ministerial Decision 210/2014 and QCS 2014 do not provide any clear guidance on the transition period for implementing any changes, and so it is unclear whether QCS 2014 applies to live projects, particularly where the changes affect the projects. Under a standard FIDIC contract, the contractor’s obligation to comply with ‘laws’ does not expressly include ‘laws’ as may be amended or modified. However, in some contracts awarded by government entities in Qatar, references to the term ‘laws’ expressly include amendments or modifications. A contractor or consultant who is party to those government contracts must therefore comply with QCS 2014 when executing a live project. The contractor or consultant might be entitled to additional time and money resulting from complying with QCS 2014, but this depends on how the change in law provisions (if any) are drafted in the contracts. In the absence of express contractual obligation that a contractor or consultant complies with laws as amended or modified, there are some provisions of the Qatar Civil Code that could be deployed to argue that new laws do not apply retrospectively to obligations. However, the interpretation of these provisions provide far from clear guidance on whether QCS 2014 applies to live projects.
It is unclear whether QCS 2014 applies to live projects, particularly where the changes affect the projects.
Paul Prescott is legal director at Pinsent Masons. Gabriel Olufemi is solicitor at Pinsent Masons.
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feature story
As a luxury retail space, Place Vendôme will feature some of the leading fashion brands from across the world.
Place Vendôme: qatar’s new MEGA PROJECT Qatar’s aspiration to build big projects has well been demonstrated over the years, but now it is readying itself to recreate the glitz and glamour of the world’s fashion capital, Paris, in Doha through its iconic mixed-use project – Place Vendôme, writes Syed Ameen Kader.
June 2015 | QCN
feature story
T
he USD1.2 billion (QAR4.4 billion) retail and hospitality development draws not just the inspiration but also the name from historic public square, Place Vendôme in Paris. Today, the octagonal-shaped historical fashion and cultural destination is home to some of the world’s renowned retail fashion stores and deluxe hotels such as the Ritz. Qatar’s own fashion capital will reflect the famous high-end shopping street, Rue de la Paix, of which Place Vendôme, Paris is the starting point. The architecture has been conceptualised keeping the luxury and extravagance theme of that famous lane to offer a great shopping experience. This new fashion destination will consist of shopping malls, spread over 230,000 square metres (sqm) of gross leasable area (GLA), and three hotels – one of which is a luxury property with 250 rooms; another is a five-star with 250 rooms; and the third is a 150room service apartment block. Launched last year, the project has picked up momentum, with about 50 percent of the basement work completed, following the excavation of two million cubic tonnes from site and the installation of 5300 foundation piles. Sean Kelly, project director, Place Vendôme, says, “We started construction in March 2014, and a lot of work has been done in the mean time. We have currently come out of the ground. We are trying to open the project in Q3 2017.” The project has an average of 12,000 cubic metres (m3) of concrete poured per week in different locations throughout the site with significant progress in the hotel components. Although the construction work is happening in full swing, there is always
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the fear of projects getting delayed, as it has been the case with many large projects in Qatar. Will Place Vendôme be able to meet its timeline in a difficult construction scenario where availability of materials and resources is an issue? Kelly sounds confident about it. “We are currently on schedule to achieve that. We understand there are a lot of challenges ahead of us, but we feel we are prepared for those challenges,” he says, adding that they want to create an impact by opening all projects at the same time. Located in the Entertainment City of Lusail, Qatar’s master development and home to the host stadium of the opening and closing of the 2022 World Cup, Place Vendôme is expected to greatly benefit from its location. “Lusail is a huge project and we are happy to be an integral component of that project. We are confident that we are in the right place,” says Kelly. The multi-billion dollar Lusail project is planned to have advanced infrastructure and an extensive coastline that offers all amenities and access to the Gulf. A new metro is currently under construction and will soon be interlinked with the rail system that will connect directly to the Hamad International Airport. Lusail, being a smart development, will play a part in managing the property more efficiently – a critical aspect of running a successful mall in a market where oversupply scenario puts an extra bit of pressure on the bottom line. Eventually, malls that are better managed will be sustainable in the long run in Qatar where the retail market is expected to see exponential growth in the future. Kelly points out that Lusail has looked into integrated traffic management system and his project has also been designed to integrate
QCN | June 2015
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feature story
Lusail, being a smart development, will play a part in managing the property more efficiently – a critical aspect of running a successful mall in a market where oversupply scenario puts an extra bit of pressure on the bottom line.
Project Details Expected Cost
USD1.25 billion (QAR4.36 billion)
Location Entertainment City, Lusail, Qatar
Land Uses
Plot Area: 186,933 sqm Built-up Area: 800,000 sqm Gross Leasable Area: 230,000 sqm
Key Figures
No. of retail units: 400 Expected footfall/month: 2 million+
Completion Date
Q3 2017
Project Owners and
Developers
United Developers
Main Contractor Construction and Reconstruction Engineering Company
Main Consultants/Architects Arab Engineering Bureau
June 2015 | QCN
with it. “There is no doubt about stratification of the market. So you will have projects that are well managed, well operated and well branded. And there are others, which won’t be as well managed,” he says, suggesting that it creates good variety for customers, “because not all customers might want to come to us. So it would be a good variety”. The project will certainly be a new centre of attraction for regional and international residents and visitors seeking a combination of varied entertainment and retail choices in one place. The company already has started its leasing strategy, which is focused on dealing with luxury brands first. “We had the roadshow in Paris, Milan and Cannes in November last year, and another one in Dubai in December last year. This was an opportunity for us to read the luxury brands, understand their needs and aspiration through the countries, and make sure we are
aligning with those,” explains Kelly. So, have they signed any brand as of now? “We have continued to negotiate and deal with them over the last six months, and it’s all going well at the moment,” he adds, without revealing too much about the brands he is talking to right now. But, is it not that many of ambitious projects in Qatar relying too much on the World Cup prospects to make it viable? Is Vendôme’s 650-key new hotel supply targeted towards this mega event? Kelly says it is an important component of the development since the provision of rooms is part of the World Cup commitment, but the event is not what the mall is all about. “The 2022 World Cup will be a major milestone but it will not be end of the story. We will be open for four years Located on the sea front of Lusail, Place Vendôme will feature a canal running through it directly from the sea.
feature story by that time. This project or Qatar will continue beyond that [World Cup],” he says. However, Kelly agrees that the 2022 World Cup is a fantastic marketing opportunity for the country and for his project from which they will definitely benefit. But is Kelly not worried about oversupply because, according to DTZ estimates, there is more than 1.2 million sqm of retail space in 12 new shopping malls that are currently at various stages of development and may be opened by 2019. This would represent a 220 percent increase in current supply – something which will impact Vendôme too. Kelly says they are not worried about oversupply for many reasons. First of all, he adds, at the moment, there are a lot of unorganised retail in Qatar – about 70 percent of the market is unorganised or street retail. “In this region, the opposite is usually true. There is about 70 percent organised retail and 30 percent are the mom-and-pop shops. So Doha is transiting to a lot more organised retail,” he says, adding that they understand there is a
competition in the market, “but that just makes us stronger and work harder”. He continues, “We think we are ready for the competition. We feel Doha can handle new supply. So we are looking forward to it.” Kelly may sound optimistic but a number of independent market reports have raised concerns about sustainability of many of these projects after the 2022 World Cup if Qatar is not able to maintain high traffic flow of tourists as well as the size of its population. But Kelly says they want to look at the country’s bigger picture and its long-term
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A snapshot of southern end of Place Vendôme’s precinct, which is currently under construction.
“We are currently on schedule to achieve the completion by Q3, 2017. We understand there are a lot of challenges ahead of us but we feel we are prepared for those challenges,” says Sean Kelly, project director, Place Vendôme.
QCN | June 2015
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feature story
Launched last year, the project has picked up momentum now with the completion of about 50 percent of the basement work, following the excavation of two million cubic tonnes from site and the installation of 5300 foundation piles.
The main entrance of the Place Vendôme, which will be a mix of retail and hospitality projects.
The project will reflect the famous high-end shopping street, Rue de la Paix, of which Place Vendôme, Paris is the starting point.
June 2015 | QCN
strategy such as the Qatar National Vision 2030. “As I said, the 2022 World Cup is a component of that, but it’s not end of the world. The Qatar story will get stronger. I think we are a very attractive and important regional destination and we will continue to be so. As we build more facilities, we will just become a more attractive regional destination,” he says. However, Kelly acknowledges that more events of such scale will definitely be an impetus in future. He does not see any reason why Qatar cannot have more events post the 2022 World Cup, pointing out that Qatar has a good track record when it comes to hosting mega events. “We just recently had the Handball World Championship. The World Championships in Athletics is happening in 2019, and so the football World Cup in 2022,” says Kelly, who is certain that the efforts made by Qatar’s government to attract more events will pay off in future. “We have first-class facilities, and airport. We have an array of first-class hotels for everybody. So there is no obvious reason that doesn’t make Doha an attractive location for anything,” he concludes.
special promotion
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Tarsheed to encourage energy conservation in Qatar,
within the objectives of the National Programme for Conservation and Energy Efficiency
K
AHRAMAA, in collaboration with the Ministry of Municipality and Urban Planning, amends some provisions of the Ministerial Decision No. 6 of 1989 on the technical specifications of buildings. Qatar General Electricity & Water Corporation “KAHRAMAA”, through the National Program for Conservation and Energy Efficiency “Tarsheed” and in collaboration with the Ministry of Municipality and Urban Planning, succeeded in obtaining the consent of the Cabinet for the issuance of a Ministerial Decision No. 108 of 2015 to amend some provisions of the Ministerial Decision No. 6 of 1989 on the technical specifications of buildings with regard to electricity conservation. Tarsheed, had presented a suggestion in September 2013 containing the amended requirements of the thermal insulation in buildings and its suggested changes and remarks on Annex 6 of the Decision No. 6 of 1989 concerning the update of the thermal insulation drawings and their inclusion in paragraph 12 of the regulations approved for the electrical extensions in December 2010. This amendment is an important step in the field of rationalised construction encouraged by KAHRAMAA within its objectives to achieve overall economic and environmental development in the framework of Qatar National Vision 2030, particularly due to the benefits
of good thermal insulation of buildings (including the windows insulation) for conserving 30 to 40 percent of the building’s energy, preserving the internal temperature and improving the surrounding environment, for instance by reducing emissions and noise pollution and prolonging the life span of the structure.
preservation of its precious economic resources. Over the past year, the programme had saved a total of 11 percent of the individual electricity and water consumption rate, and reduced the carbon emissions by around two million tonnes, saving approximately QAR600 million and 1.8 million tons of carbon emissions.
The approval of thermal insulation of buildings stated in the conditions, set forth in the Ministerial Decision No. 108 of 2015, is compliant with the objectives of the national programme “Tarsheed” that aims to reduce the individual electricity consumption rate by 20 percent and water consumption by 35 percent, which would reduce harmful carbon emissions and achieve sustainable environmental development within the overall development system of the State and
It is worth mentioning that several Gulf countries and other countries in the region are tending to approve thermal insulation in buildings and some of them have already started to implement it as a part of the Construction Law.
QCN | June 2015
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Industry insights
Solution providers must invest and demonstrate a commitment to the Gulf The experience of watching a game live is no longer limited to spectators in the stadium. With advanced technologies and increasing use of social networking sites, people frequently share images and videos captured during the game. For many fans, sharing the live experience is a vital part of the overall attractiveness of a sports event. Speaking with QCN, Simon Cowley, vice president of Global Technical Support for CommScope Enterprise Solutions, discusses the role of connectivity in branding a sports venue in the context of Qatar’s preparation for the 2022 World Cup. Please tell us about CommScope and its projects in Qatar. CommScope has become the leading provider of network infrastructure solutions for stadiums around the world. Powering voice, video, data and mobile communications – our solutions improve the business operations of the stadium while elevating the convenience, comfort and entertainment of every spectator to heights never imagined before. In Qatar, some projects, which have implemented our solutions and services, include Internal Security Force, Doha LandMsheireb and Qatar University.
Tell us about some of the advanced/ latest connectivity solutions being incorporated in stadiums? The stadium should be viewed as both a building and a data centre. Therefore,
June 2015 | QCN
it is subject to challenges faced by both. The solutions include Category 6A and preterminated fibre infrastructure to support an ever-growing suite of applications, from traditional data networking, high-speed WiFi, power over Ethernet (PoE), intelligent LED lighting, intelligent infrastructure, data centre infrastructure management (DCIM) tools, and distributed antenna systems. These are also being deployed in non-sports venues.
What are some features that make a truly connected stadium? In a stadium with a crowd of thousands of people, while watching the game, it is common that spectators are busy using their smartphones or other tech gadgets to access Facebook or Twitter, make a call, capture videos or send messages or images. Apart from that, managing the stadium
With more than 20 years of experience in the cabling/interconnect industry, Simon Cowley has held several engineering, product management, and engineering management positions with leading solution providers.
“The early plans [for FIFA stadiums] look promising and the general feedback is positive around Qatar’s willingness to invest in best-inclass solutions.”
Industry insights
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The Internet network at stadiums needs to be strong and secure to keep spectators safe by allowing federal and local agencies to communicate instantly and securely, says Simon Cowley.
systems such as to quickly, easily and remotely operate lighting, heating, ventilation and air-conditioning, voice and data systems require support from the network. Massive video screens, finger-swipe purchasing, and on-the-fly advertising increase the complexity of the network infrastructure. CommScope aims to enhance the fan experience in 2022 and provide a safe and secure environment by carrying out the following strategies. One: design, build, and manage the stadium in a sustainable way. Two: reduce CapEx and OpEx across all buildings and spaces. Three: manage during and between events with limited resources. Four: enable new business models, and five: future-proof to adapt easily to changing needs and applications.
How important is the role of the venue’s connectivity in the overall attractiveness of a sporting event? The fan wants to share the experience with those who were not lucky enough to attend. To do that, it involves social media, e-mail and texting, etcetera. They simply would not value the experience as much if they cannot flaunt their good fortune.
Higher connectivity at sports venues is also linked to security risks. How can solution providers ensure that spectators and organisers get seamless connectivity without any compromise on security and their privacy? With everyone accessing a common network, data can be
compromised. Therefore, the network needs to be strong and secure to keep spectators safe by allowing federal and local agencies to communicate instantly and securely. Hackers attack networks for valuable data and if the network is not secure, they easily penetrate it and obtain important data. With the growing infrastructure and latest technologies, data is being compromised at an alarming rate. The most important challenge faced by solution providers is to ensure that the network is managed safely. The network needs to be effectively managed by specialist operators and they need to select the right technology – wired or wireless, indoor or outdoor. This is a function of the coverage requirements and the data throughput requirements. Another important step is to select the right backhaul technology – here, there is a whole plethora of options available from satellite backhaul to wired solutions. Next would be to design the right transport and switching network – a key question here would be whether to keep this capability in-house or to outsource. The deployment of an efficient operations and management system would be essential for end-toend oversight and security management. The right product and services partner(s) to design, deploy, integrate and commission the communication systems as well as manage the live systems would be inevitable for success. More advanced security protocols and data protection strategies will be required to protect users’ critical assets and defend the network.
QCN | June 2015
According to Simon Cowley, good connectivity is important for stadiums since fans want to share their live experience with those who were not lucky enough to attend.
“The GCC countries are open to technology from anywhere in the world provided that it meets or exceeds their needs.”
In Qatar, where the speed of the Internet is not fast compared to more developed countries, what implications do you see during 2022 World Cup in terms of connectivity at stadiums? Visitors demand robust infrastructure to support streaming, uploads, videos, and messaging in high traffic areas. Qatar must deliver best-in-class infrastructure to support the fan experience as well as the country’s image as a global leader. Qatar is planning well in advance to ensure best-in-class connectivity. Analysing people’s movement and high network traffic areas along with technology that directs load within the network, whether wired or wireless, will deliver the best results.
Can you discuss the cost side of equipping a stadium with sophisticated connectivity technologies? Stadiums are often developed by one party and operated by another. Operators want multipurpose facilities for best utilisation. With the convergence of systems into the network, stadiums must have a robust wired and wireless infrastructure that allows for successful application deployment to best monetise the facility.
At what stage of a project must solution providers be involved? Multiple terabit traffic levels are common at major sporting events today. Solution
June 2015 | QCN
providers must be involved in the conceptual stage to match the owners’/operators’ goals, plans and visions with the right technology. Solution providers with experience in stadiums offer invaluable experience on what works best with supporting reference sites.
Where do you see Qatar’s existing and ongoing stadiums compared with the rest of the world? The early plans look promising and the general feedback is positive around Qatar’s willingness to invest in best-in-class solutions. Like any stakeholder, Qatar demands high value for their investment. Only providers that deliver this value will be considered and this will drive the right kind of competition and deployments to help reach Qatar’s vision for the 2022 World Cup and 2030.
What are some major challenges of dealing in the Gulf and Qatar? Qatar is an explosive market with high growth and strong local influence. Success in the Gulf Cooperation Council is a long game; solution providers must invest and demonstrate a commitment to the region. The GCC countries are open to technology from anywhere in the world provided that it meets or exceeds their needs. Relationships and a solid track record of project execution are the big keys to success.
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human resources
Hiring the right fit W
ith key milestones such as the FIFA 2022 World Cup and the Qatar National Vision 2030, the time is ripe for Qatar to hire the best candidates from all over the world. According to Bayt.com’s Career Aspirations in the Middle East and North Africa survey, December 2014, construction is the most preferred industry to work in, according to professionals in Qatar. Here are five effective ways to help you hire the best candidates for your company:
Use the right tools Using a single-tiered strategy is not enough. If you want to hire the best, you must deploy the best. While traditional means of recruiting can continue, employers need to engage more in online recruitment practices, whether through their corporate websites or job portals such as Bayt.com that has over 20 million registered members.
Refine interviewing skills More often than not, interviewers are not abreast of the job requirement, relying on their rudimentary gut feel to decide whether a candidate is suitable for the position or not. Do not go by your instinct alone. Instead, prepare your questions in advance and learn everything about the specific position and the candidate before the interview June 2015 | QCN
Qatar’s construction recruitment in numbers 68% of 56% of professionals in Qatar say construction is the number one industry attracting and retaining top talent.
41% of professionals in Qatar feel construction is one of the most stressful industries to work in.
stage. Similarly, it is very critical for an interviewer to document interviews, assigning grades and providing detailed information where needed.
Talk to candidates Professional networking platforms give employers the opportunity to evaluate candidates beyond the limits of a traditional CV. A large part of today’s top talent is mostly active online. Across the Middle East, 81 percent of professionals agree that such platforms are a great way for employers to engage with candidates and know them better.
Become an employer of choice Employers need to brand themselves as companies that empower and value employees. According to Bayt’s survey, 76 percent of professionals turn to the Internet to research a company when considering a job opportunity.
construction companies in the Middle East will be hiring in a year’s time.
49% of Qatar’s professionals say construction has the longest working hours. The most sought after skills in the construction industry are: 1. Good communication skills in Arabic and English (61%) 2. Being a team player (48%) 3. Leadership skills (44%)
Hire for culture Cultural fit has gained increased prominence among hiring managers recently. An assessment of the cultural fit allows a recruiter to go beneath the surface of a candidate’s skills, qualifications, and relevant experience to determine whether the candidate’s on-the-job behaviour is consistent with the values and expectations of the organisation.
Most construction companies are looking for: 1. Junior executives (38%) 2. Executives (29%) 3. Coordinators (30%). Source: The Bayt.com surveys 2015 & 2013.
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legal
Assignment of rights in Qatar’s
construction projects Employers, contractors and consultants enter into various construction contracts, which sometimes need to be assigned or transferred to a third party in terms of rights, obligations or both.
James Bremen and Leith Ben Ammar of Herbert Smith Freehills discuss the key issues arising from assignment of rights in construction projects.
I
n construction projects, employers enter into a variety of contracts with contractors and consultants. At various stages of a project, employers need to transfer the rights, obligations or both. Situations like these arise under construction contracts to third parties, such as lenders, who step in if the employer goes into liquidation (or is unable to finish the project). Similarly, another company within the employer’s group can be the ultimate owner of the completed project or a buyer of the completed project. Likewise, contractors and consultants enter into various agreements such as subcontracts,
June 2015 | QCN
which they might need to transfer, for example, to the employer or its nominee in the event their appointment is terminated. The transfer of contractual rights and obligations under Qatari law is made using three procedures, which exist under Qatar’s Civil Code: • A procedure which allows a contracting party to transfer its rights under a given contract, known as ‘assignment of rights’ (Articles 324 to 336). • A debtor-led procedure which allows a contracting party to transfer its obligations under a given contract, known as ‘assignment of obligations’
(Articles 337 to 353). • A creditor-led procedure which permits the transfer of a contracting party’s obligations by substituting a debtor with another debtor, known as ‘novation’ (Articles 381 to 386). This article will focus on the assignment of rights (Articles 324 to 336).
Assignment of rights Qatar’s Civil Code
under
Pursuant to the provisions of Qatar’s Civil Code, an assignment of rights is made through a bipartite agreement between the assignor and the assignee. For example, in a construction project, an employer – who wants to assign its
legal rights under the construction contract to a buyer of the completed project – will need to enter into an assignment agreement with that buyer. Such agreement will take effect on the employer and buyer on execution. However, in order for the assignment of rights to take effect on the contractor and third parties, the employer will need to give notice of the assignment of rights to the contractor, and the contractor will need to accept such notice by signing an acknowledgment with date certifying it by Qatar’s Ministry of Justice. If the contractor refuses to make such acknowledgement, the employer can ask the Qatari courts to serve notice of the assignment of rights to the contractor, which will constitute a valid acknowledgment under Qatari law.
Drafting an assignment clause The parties to a construction contract may agree – usually through an assignment clause in the construction contract – to prohibit or limit their statutory right to assign rights. Any attempted assignment of rights which fails to comply with the restrictions of the underlying contract’s assignment clause will be invalid and will constitute a breach of that contract. An assignment clause is a common feature of most construction contracts. It appears in a number of construction documents such as professional appointments, building and engineering contracts, letters of intent, collateral warranties and intellectual property licences. Most models from suites of construction contracts, such as those governed by International Federation of Consulting Engineers, Joint Contracts Tribunal (JCT) or LOGIC will have an assignment clause. Assignment clauses may prohibit assignment absolutely, permit assignment absolutely or permit assignment subject to qualifications or conditions. Often, in building contracts, the contractor will be prohibited from assigning the contract, whereas the employer will be allowed to assign the contract, subject to the consent of the contractor. Such consent may or may not be qualified.
There might also be a pre-agreed list of companies or classes of companies to whom assignment is permitted, such as lenders, prospective buyers of the project and companies within the same group as the employer. The assignment clause will also specify how many times the contract can be assigned. Finally, the clause will also usually specify that notice of the assignment must be given by the assigning party to the non-assigning party, in line with the requirements of Qatar’s Civil Code.
43
Often, in building contracts, the contractor will be prohibited from assigning the contract whereas the employer will be allowed to assign the contract, subject to the consent of the contractor.
Market practice In an infrastructure project or a commercial property development, an employer will usually want the flexibility to assign the benefits of the various construction contracts, if it is a party to in the project, to a number of current or potential future stakeholders, such as lenders and prospective purchasers. In contrast, contractors or consultants will want to limit the employer’s ability to assign the benefits of construction contracts to avoid owing responsibilities to a party they are not familiar with. Furthermore, contractors and consultants will also want assignment of the contract’s benefits to be restricted because insurance policies often require that the number of assignments of a construction document should be limited if the cover is to continue. The market position differs across different industries. In petrochemical projects, for instance, the engineering contract will contain a much more restrictive assignment clause than in smaller commercial property developments or infrastructure projects. This is mainly due to the fact that the contractor and the employer will have conducted extensive due diligence on each other to determine whether they can, respectively, build the project and pay for the project. Furthermore, some plant owners will have restrictive licences for technologies used in the plant, which cannot be assigned by the owner. In this case, even if the construction contract is assigned, it will be of no value to the assignee as he would not be able to operate the plant without the necessary technology.
In such petrochemical projects and other energy projects, a contractor will usually be prohibited from assigning its interest in the construction contract and the employer’s right to assign will usually be limited to pre-agreed entities or classes of entities. Assignment of rights is a necessary and commonly used tool in construction projects. Given that Qatari law provides contracting parties an unrestricted right to assign rights, they must ensure that carefully drafted assignment clauses, taking into account the needs and specificities of the project, are included in the various project agreements they are a party to.
James Bremen is partner in Herbert Smith Freehills’ Doha office. Leith Ben Ammar is an associate in his team.
QCN | June 2015
www.QatarTenders.com Tender Name
Description
Client
Manpower Supply
Supply of manpower
Qatar Fertilizer Company
Piling Works
Piling for a new heavy ends tank
Steel Platform
FEES (USD)
Closing (m/d/y)
55
7/7/15
Qatar Vinyl Company
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Seef Limited, Qatar
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Provision of civil maintenance and support services at offshore locations
Qatar Petroleum
137
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Public Works Authority (Ashghal)
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Fire Hydrant System Maintenance
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Qatar Petroleum
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EPIC of GRP Workshop Modification, Diesel Tank, Material Yard and control Panel
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Fire Water Tank
EPIC for additional fire water tank (NGL-3) and fresh water PIP
Qatar Petroleum
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55
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824
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Piping Inspection Services
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Qatar Petrochemical Company Limited
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Crane, Forklift, Bucket Truck, & Trailer
Provision of crane, forklift, bucket truck, and trailer on call-off basis
Seef Limited, Qatar
55
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Fuel Station Construction
Construction of fuel station
Qatar Fuel Company
275
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Server Main and DR Sites Infrastructure Works
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June 2015 | QCN
INTERVIEW: Simon Cowley, vice president, Global Technical Support, CommScope Enterprise Solutions – PG 36
issue 2.6 June 2015
tough
choi c es Challenges of hiring in
PLUS
Tips on hiring the right candidate
FEATURE STORY
A look into Qatar’s latest mega project – Place Vendôme
Qatar construction
TECHNICAL
How will Qatar Construction Specifications 2014 affect existing and planned projects?
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