QCN Yearbook Issue 3.5 - May 2016 by Firefly Communications

YearBook 2016 Contents sector analysis

Key projects 13

While it may seem that the construction euphoria in Qatar has peaked in recent years, and has now plateaued, the sector is still expanding at a rate impressive even to the most seasoned contractors. Qatar-based civil engineer Walid Daniel Dib, and QCN’s editor Farwa Zahra provide a snapshot of Qatar’s top 10 projects since 2015, and explain why they matter for the country.

Sector Analysis 20 Discussing latest trends and challenges, industry professionals offer analysis and insights into a range of sectors linked to Qatar construction, including contracting, project finance, sustainability, real estate, technology, MEP, human resources and legal.

Civil

Civil 37

Sustainability 55

Project delays: Causes and repercussions of project delays in Qatar.

Construction waste: Turning Qatar’s construction waste into treasure.

Contracting and trading: Planning ahead for any challenges.

Engineering: An exclusive interview with Ahmad Jassim Al Jolo, chairman of Qatar Society of Engineers.

Sustainable HVAC: The impetus is there for the Gulf’s construction industry to produce energy-efficient buildings.

Solar technology: Is Qatar’s dusty and hot environment really a perfect place for solar plants?

Resources 47 Resources

Sustainability

Human resources: How will Qatar deal with recruitment challenges once the Kafala system is reformed? Labour accommodation: Despite some recent facilities for blue-collar workers, supply of decent accommodation remains a challenge in Qatar.

Legal & Finance 67 68

Qatar Construction Specifications 2014: An analysis of key technicalities and legalities of QCS 2014.

Public-private partnership: Scope and potential role of PPPs for Qatar’s growing infrastructure sector.

Project finance: With Qatar’s state budget moving into deficit, a new paradigm for construction project financing is now beginning.

2016 | QCN YEARBOOK | 1

YearBook 2016 67

Legal & Finance

Contents Infrastructure 75

Real Estate 85

2022 World Cup: Will Qatar’s stadiums fall into disuse after 2022?

Commercial property: Key factors to consider when renting an office space in Doha.

Formwork solutions: Qatar is a booming market for construction, which makes it very important.

Offshore construction: Streamlining offshore construction with a modular approach.

Facility management: Competition in Qatar’s facility management sector is fierce.

Real estate law: Implications and role of Qatar’s recent law governing its realty sector.

Infrastructure

Technology 95

Real Estate

Audiovisual: Contemporary AV integration is more about project management.

100

Acoustics: Qatar’s construction sector increasingly recognising the role of building acoustics.

PMV: Impacts of technology on the commercial vehicle industry.

101

BIM: The demand and supply scenario of BIM in Qatar.

95 2 | QCN YEARBOOK | 2016

TECHNOLOGY

PLUS: Editor’s Letter 6 A Year in Quotes 8 Construction Timeline 10 Project Qatar 103

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editor’s letter

Drop in contract awards during 2016 is expected partly as the ripple effect of plummeted oil prices, and partly due to the high number of contracts already awarded.

6 | QCN YEARBOOK | 2016

Of the USD299,711 million (QAR1.09 trillion) net value of planned and underway projects in Qatar, construction and transport hold a share exceeding 81 percent, as cited in Deloitte GCC Powers of Construction 2015 . The value of planned projects, however, may change adjusting to the regional economic environment. Entering April 2016, Qatar’s construction sector marked its worst quarter – in terms of contract awards – since its successful bid for the 2022 World Cup. According to Meed, contract awards dropped by 92 percent during this period. This, however, was expected partly as the ripple effect of plummeted oil prices, and partly due to the high number of contracts already awarded to fulfil most requirements ahead of the World Cup and to meet the goals of Qatar National Vision 2030. In fact, forecasts coming earlier this year estimated a 24 percent decline in the value of contracts in 2016 compared with 2015. Notwithstanding these forecasts and numbers, is this really the worst of times for Qatar construction? With more than 70 percent of Qatar’s export earnings coming from oil and gas, any change in Brent crude is bound to be reflected in energy as well as other sectors, and construction is no exception. But what the reduced pace of construction also suggests is perhaps a development trajectory whereby the number of new projects is highest in the early stages of development, which gradually go down as the industry matures. In fact, while Qatar Economic Outlook 20152017 estimated construction as the fastest-growing sector in 2015 with a projected growth of 13.6 percent, the document also states that this growth rate will likely slow

down in 2016 with the focus having shifted on operation and completion of existing projects rather than commencing new projects. While the economic slowdown m i g h t h ave i m p a c te d s o m e developments, projects crucial to the country’s immediate goals are still fast approaching their targets. In April, Qatar Rail announced 37 percent overall completion of its Doha Metro project, with more than 85 percent tunnelling work complete. The year 2015 concluded with early partial opening of the Hamad Port, and this year, more key projects such as the Msheireb Downtown Doha and Education City are scheduled to reach completion. The truth is, despite this phase of turbulence, Qatar still represents one of the fastest-growing construction markets globally and regionally – something evident in Pinsent Masons’ recent construction survey. Findings from the law firm’s study revealed that about 33 percent of respondents see Qatar as offering the strongest regional opportunity, bringing the country to the top slot regionally after the United Arab Emirates (UAE). Another report from Hays, titled Salary & Employment Report 2015, forecasts that in the coming years, the Gulf region will see migration of top talent out of UAE and into Qatar and Saudi Arabia as these countries “offer better career prospects and higher salaries, and as the modernisation of the cities continue, they are becoming a more attractive place to live.” All these forecasts, however, merely reflect a snapshot of the country’s construction sector. In our 2016’s annual edition QCN Yearbook, which also marks two years of QCN, we delve into the details of trends, challenges and opportunities shaping Qatar’s construction sector.

Divided into eight subsectors – civil, resources, sustainability, legal and finance, infrastructure, real estate and technology – the yearbook provides analysis from leading industry professionals, while also featuring key news and events influencing the sector over the last one year. While this list of subsectors is by no means exhaustive, it aims to represent all key areas of construction in Qatar. Apart from subsector-specific articles and feature stories, on page 13, we look at some of Qatar’s landmark projects seminal to the industry’s progress. In gathering the publication’s editorial, on one hand, we have benefitted from the wealth of information generated over the last one year in QCN’s regular issues, making this yearbook partly a compendium edition. On the other hand, the publication also carries fresh content based on the most upto-date information available. Since the end of February, the oil price has moved above USD30 (QAR109) per barrel, but the International Monetary Fund anticipates it to recover only moderately, reaching USD50 (QAR182) per barrel at least until 2019. That said, at the end of the day, oil prices have historically proven to be cyclical. Albeit steadily, they are expected to rise again. Until then, one hopes Qatar’s construction sector utilises this best-worst period as a time of cautious optimism and rational resource management, not just to survive the slump, but also to emerge out of the crisis as an industry which is more robust, mature and efficient to embrace future challenges. Enjoy reading QCN Yearbook.

Farwa Zahra Editor

industry views

A YEAR IN QUOTES

Over the year, we asked industry professionals about key issues emerging in Qatar’s construction sector. Here is what they had to say.

“We are not going into a crisis... Now is the time for companies to implement some timely policies, efficiency initiatives, diversification and adjustments to their business.” Andrew Rotteveel, head of Project and Development Services, JLL MENA.

“The reevaluation of priorities and cash flow issues on client’s side have certainly challenged the sector in 2015, perhaps more than in recent years.” Christoph Weber, managing director, Hochtief ViCon Qatar.

“To optimise safety standards, it is vital that construction companies follow the Qatar Construction Specifications 2014, which makes it mandatory for construction sites to have a guardrail and toe board.” Paul Gilligan, general manager, Rapid EPS Middle East.

“Construction companies should ensure that they have considered and put in place clear policies that set out fair and minimum working and living standards for its labourers.” Cheryl Cairns, partner, Construction and Arbitration, Trowers and Hamlins LLP.

“A larger cultural shift is required in terms of increasing the perceived value of human safety among construction companies in the region.”

Mark Ainger, country director, Faithful+Gould, Qatar.

8 | QCN YEARBOOK | 2016

“This is a time of consolidation and cost management. Construction firms have to dig internally for further efficiency, and process streamlining to eliminate waste and redundancies in systems.” Engineer Khaled Awad, chairman, Advanced Construction Technology Services.

“Employers have to proactively educate their people on the dangers of excessive working and the real need for proper rest and nutrition, particularly those in physicallydemanding jobs.” Michael Connor, associate director, Faithful+Gould, Qatar.

“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, Charles Russell Speechlys, Middle East.

“Any system that encourages transparent evaluation of companies and fair competition between contractors, especially in government projects, should be welcomed.” Nicholas Sykes, Interspace manager, Gulf Contracting Company.

“To achieve the objectives for the 2022 World Cup and the 2030 National Vision, regulators, owners, designers and contractors must consider alternatives to traditional design-bid-build project delivery.” Allen Jay Holland, BIM manager, Design Division, KEO International Consultants.

Qatar construction May 2015 • • •

The fifth edition of Qatar Construction Specifications (QCS 2014) came into force. Prequalification process for operators and facilities management for the Doha Metro and Lusail Tram Railway launched by Qatar Rail. The Public Works Authority (Ashghal) awarded 11 contracts worth QAR6.58 billion for infrastructure projects under the Inner Doha Re-sewerage Implementation Strategy (IDRIS).

•

June 2015

Qatar’s Ministry of Interior issued directive making it mandatory to use only air-conditioned vehicles for carrying 11 or more workers.

•

September 2015

May

•

October 2015

•

Qatar commenced construction of Al Bayt stadium – the 60,000-seat venue planned for the 2022 World Cup. Qatar Rail’s tunnelling operations entered the Guinness World Records for the highest (21) number of tunnel boring machines operating simultaneously on a single project. Hamad International Airport’s expansion plan unveiled. This includes main terminal extension, construction of concourse D and E, and the connection with the Red Line of the Doha Metro. Qatar Academy Msheireb (QA Msheireb) officially moved to Msheireb Downtown Doha.

June

•

A major part of Doha drainage project completed with the excavation of a 10-kilometre long and 30-metre deep tunnel. Plans announced for establishing an industrial zone spanning across 6.3 million square metres (sqm) in Qatar. Prequalification for the design and build for long-distance phase one railway infrastructure and systems integration completed by Qatar Rail. Msheireb Downtown Doha welcomed the International Centre for Sport Security as its first official tenant in the commercial district.

November

August

July

•

October

September

July 2015

•

Qatar’s Emir signed the new sponsorship law (Kafala changes), making it easier for employees to switch jobs and obtain an exit permit. The new legislation is expected to come into effect from December 2016. Msheireb Downtown Doha officially opened Msheireb Museums. Bids invited by Qatar Rail for mixeduse, transport-orientated real estate development on and adjacent to a number of its major metro stations, in 12 identified sites.

August 2015

November 2015

•

Barwa Labor City, known as Barwa Al Baraha, with a capacity to house 50,000 workers, started renting out units. Qatar Rail lunched the first tender for the long-distance passenger and freight rail project. Siemens won an order for 18 turnkey substations, worth QAR1906 million, from Kahramaa.

•

Qatar’s Doha Exhibition and Convention Centre (DECC), spread over 47,700 sqm, officially opened in West Bay. Qatar Rail invited architectural subcontractors to participate in a new prequalification process for architectural finishes, envelope and façades, and hard and soft landscaping.

timeline: 2015-2016 March 2016 •

December 2015 •

•

Hamad Port started early partial operation involving opening of general cargo and roll-on and roll-off facilities. Supreme Committee for Delivery and Legacy announced seventh and eighth World Cup venues at Ras Abu Aboud and Al Thumama, respectively. Qatar Rail signed contract with Qatar Cool for providing district cooling to seven of Doha Metro stations.

• •

•

Daruna announced partnership with Red Sea Housing Services Co. to build 4000-bed accommodation in Umm Salal that will serve some 24,000 men. Tunnelling of Doha Metro’s Green Line and Northern section of Red Line completed. Megapolis, a 6000-sqm family entertainment centre located in the heart of Medina Centrale, The Pearl-Qatar, inaugurated. Ashghal announced the completion of the General Cleanliness Buildings Complex in Doha Industrial Area. Doha West Sewage Treatment Works – Extension 5 project achieved two million man-hours without lost time injuries.

April 2016 •

•

The Supreme Committee for Delivery and Legacy appointed Impactt Ltd as an independent third-party External Monitor to ensure the welfare of workers engaged in infrastructure development projects related to the 2022 World Cup. 37 percent of Doha Metro project completed, with more than 85 percent of tunnelling work finished.

March

December

February January

January 2016 •

•

Qatar Rail invited Qatari companies to participate in the facilities management prequalification processes. Ashghal implemented a new electronic application for the management of the Tenders and Auctions Committee meetings.

February 2016 • •

•

23 new plots of land allotted at Zubaar, Al Khor and Umm Salal for private companies to build labour camps with modern amenities. New economic zones draft law cleared, allowing foreign companies to be set up without a local partner, easy repatriating of profits and funds. The Doha North Sewage Treatment Plant entered operational stage.

April

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key projects

Qatar Rising: 10 landmark projects and why they matter While it may seem that the construction euphoria in Qatar has peaked in recent years, and has now plateaued, the sector is still expanding at a rate impressive even to the most seasoned contractors. Qatar-based civil engineer Walid Daniel Dib, and QCN’s editor Farwa Zahra provide a snapshot of Qatar’s top 10 projects since 2015, and explain why they matter.

ccording to Deloitte Middle East’s 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 was expected to reach USD172 billion (QAR626 billion). This had been forecast against a backdrop of a lower oil price, continuing political unrest and International Monetary Fund’s reduced growth forecasts. Of the top 100 projects within the GCC, Qatar has a share of 9.3 percent. Despite this relatively smaller share, the country’s construction industry is growing at an exponential rate. In 2014,

the sector’s real growth rate stood at 18 percent, making it the fastest-growing construction market in the region, according to BMI Research. The annual average growth rate of Qatar’s construction industry is expected to reach 11.4 percent between 2015 and 2022. Furthermore, the sector is expected to stay bullish at a growth rate of 10.2 percent for at least another 10 years. Through the year 2015, Qatar’s construction sector continued its ongoing boom with some key projects announced, and others opening doors to the public. Below is a list of Qatar’s landmark megaprojects in progress.

Lusail city

What it is:

At almost USD45 billion (QAR164 billion), the project which is driven by the Lusail Real Estate Development Company is aimed to eventually accommodate approximately 450,000 people in 19 districts, containing waterfront villas, townhouses, residential skyscrapers, and 22 hotels. The completion date is set in late 2019, but the development is estimated to be fully operational by 2020.

Why it matters:

The project’s futuristic smart city approach will fit in with the country’s 2030 sustainability vision. Residential trash is expected to be transported to a central hub for separation through pneumatic tubes. On the west side of the city lies Qetafian – an island meant to be surrounded by man-made waterways. The project is also of importance due to the fact that the final 2022 World Cup match will take place in the new city’s iconic stadium.

Among some prominent developments within Lusail City are Katara Towers, illustrated here, scheduled to open doors in 2018. (Image Katara Hospitality)

2016 | QCN YEARBOOK | 13

key projects

Barwa Al Baraha Migrant workers walk in Labor City, Qatar. Apart from residential units, the development has a hotel, entertainment centre, mall, laundry, health centre, mosque, Islamic centre, police station, civil defence centre, fire-control centre, sports facilities, shops, restaurants and offices. (Image Arabian Eye/Reuters)

What it is:

Also known as the ‘Labor City’, Barwa Al Baraha is a housing programme for blue-collar migrant workers in Qatar. Backed by Barwa Real Estate, the project is spread across 1.8 million square metres (sqm), which began accepting tenants from the second half of 2015. With the capacity to accommodate 53,000 workers and employees, it is also one of the largest housing projects for workers in the GCC. Facilities within this project include a hotel, entertainment centre, mall, laundry, health centre, mosque, Islamic centre, police station, civil defence centre, fire-control centre, sports facilities, shops, restaurants and offices.

Why it matters:

Ever since its successful bid for the 2022 World Cup, Qatar has been under international media scrutiny for the treatment of its migrant workers. Reports from human rights organisations continue to make headlines from time to time, highlighting the poor state of living and working conditions of most migrant workers here. Building a housing facility such as Barwa Al Baraha serves dual purpose in Qatar’s favour. First, it works towards a higher purpose of morality. Secondly, it sets a precedent for companies to provide their workers with decent living conditions. Both these factors will likely improve Qatar’s global image – something the country needs before it delivers the World Cup. As an added benefit, developers will also explore this once-hidden opportunity of building worker accommodations.

Qatar Economic Zones What it is: Awarded in 2014, with news of possible operation of some parts in early 2017, Qatar Economic Zones (QEZ) is a 27-square kilometre three-part megaproject with a strategic focus on industrial-grade manufacturing, aviation and marine logistics as well as warehousing. The USD3.2 billion (QAR11.6 billion) project is currently driven and managed by Manateq. Why it matters: While this project is perfect for international investors due to its strategic location, QEZ will also allow the country’s often sidelined local small- and medium-sized businesses to flourish with lucrative leases, allowing these businesses to prosper alongside their larger international counterparts. That is not all, though, as this is one of the first few instances – along with the Qatar Science and Technology Park and the Qatar Financial Centre – where full foreign ownerships can take place, as opposed to requiring a Qatari partner own 51 percent of local firms.

14 | QCN YEARBOOK | 2016

key projects

Doha Metro: Gold Line

What it is:

The Gold Line, which starts from Villaggio Mall and runs through the city towards the old Doha International Airport, is set to take the scenic route of some of the city’s older parts, including Msheireb. Expectations are high, and the pressure on contractors is even higher, as they are required to hand in this megaproject by 2019, when it is set for full operation. Also known as the historic line, the USD3.3 billion (QAR12 billion) Gold Line is one of four lines running above and below ground, to be built along with the country’s Lusail Light Rail Transit, and the highspeed railway running towards Saudi Arabia’s borders. In total, the Doha Metro is expected to host 37 stations across Doha in its first phase. There were points in time where Qatar had 21 tunnel boring machines (TBMs) working simultaneously, which allowed them to formally break the Guinness World Record of consecutive TBMs. These heavy machines were operating day and night, six days a week, boring up to 20 metres of tunnel per day.

The east-west Gold Line extends from Ras Bu Aboud to Al Aziziya, servicing 10 stations. Pictured here is a Doha Metro project site for Green Line. (Image Avi Viljoen/Flickr)

Why it matters:

Think about it this way: Qatar’s population has now passed the 2.5 million people mark. Roads without sidewalks and extra hot weather do not make for the most pedestrian-friendly walking circumstances. With a subpar existing public transportation system, and such high taxi demand from the country’s expatriates, Doha’s need for proper Metro infrastructure is not limited to the 2022 World Cup, but is a necessity for it to compete with global cities of similar stature.

2016 | QCN YEARBOOK | 15

key projects

Msheireb Downtown Doha

As Qatar’s leading development adhering to LEED certifications, Msheireb Downtown Doha at completion has to tick the boxes of resource efficiency, energy efficiency, cost effectiveness, water conservation and maintenance of indoor air quality. (Image Arabian Eye/Corbis)

What it is:

Currently under unremitting construction, the Msheireb Downtown Doha aims to cater to all audiences with eight characteristic precincts. Over QAR20 billion has been invested in the project, which is meant to bridge a connection between Qatar’s past heritage and future generations. Tied to Souq Waqif by subterranean parking lots, the project will facilitate transportation throughout Msheireb by means of an interconnected tram network.

Why it matters:

Over the past few years, the heart of Doha shifted towards the West Bay residential and commercial skyscrapers. For this very reason, Msheireb Properties partnered with architectural and cultural experts to revitalise the young city’s downtown area, while still maintaining the sustainable qualities of world-class downtown areas. In fact, the project is aspiring to become the world’s first sustainable community, aiming for more than 100 buildings with the Leadership in Energy and Environmental Design’s (LEED) platinum or gold status. So far, Msheireb has been awarded a LEED platinum status for its Diwan Annex building.

Internal Security Forces Camp What it is:

At an impressive four million sqm, the large-scale Internal Security Forces (ISF) Camp was awarded in 2011 to Qatar Project Management, costing an estimated USD3 billion (QAR11 billion). Expected to be operational in its first phase by mid-2016, the camp already has operational barracks, guardhouses, headquarters, and is meant to have a 10,000 spectator stadium and a five-star hotel. The overall completion date is estimated to be in 2025.

Why it matters:

The ISF camp project, located in Duhail, is the first project in the Middle East to achieve the Global Sustainability Assessment Standards’ (GSAS) ‘neighbourhood’ accolade.

16 | QCN YEARBOOK | 2016

10,000

Seating capacity of the stadium at ISF Camp.

key projects

Hamad Port

Tugboats seen at Hamad Port during a ceremony marking the new port’s partial opening in Mesaieed, Qatar. (Image Arabian Eye/Reuters)

What it is:

Located in the southern outskirts of Doha, the New Port Project – also known as the Hamad Port – is one of the world’s largest greenfield port megaprojects ever tendered. Its budget is a hefty USD7.4 billion (QAR26 billion), mainly due to major excavations, spanning over 26.5 square kilometres of seaside land. These excavations have ranged into varying slopes and channels ranging from four to 17 metres deep. The port has already been partially opened, with the first cargo vessel arrived on December 24, 2015.

Why it matters:

Due for full completion later this year, the port is meant to deal with the country’s raw material shortage crisis. The news of the port opening soon came just in time to match the need for infrastructure supplies for the World Cup and various other megaprojects. Once fully operational, the port’s container terminal one will fit a capacity of two million containers per year, ticking yet another box in Qatar National Vision 2030. As of now, according to the Minister of Transport HE Jassim Seif Ahmed Al Sulaiti, the initial operations involve opening of “the port’s general cargo and roll-on roll-off facilities” along with the establishment of “operations for the delivery of general goods, vehicles and construction equipment”.

2016 | QCN YEARBOOK | 17

key projects

World Cup stadiums Illustrated here is Al Rayyan Stadium – one of the proposed venues for the 2022 World Cup. The precinct surrounding Al Rayyan Stadium will include a vast range of facilities, including a mosque and aquatics centre. (Image Supreme Council for Delivery and Legacy)

What is it:

To meet the requirements of its successful bid for the 2022 World Cup, Qatar is expected to deliver at least eight stadiums to host the tournament. Of these, the country has unveiled designs for five stadiums, with the latest design revealed in 2015 for Al Rayyan stadium, featuring a seating capacity of 40,000. As of 2016, the Supreme Committee for Delivery and Legacy announced the award for main contractor for Al Wakrah Stadium to a joint venture, while Arab Engineering Bureau was awarded the design contract for the eighth proposed venue to be located in Al Thumama.

Why it matters:

The capacities of these proposed venues exceed Qatar’s local requirements, which explains why every stadium announced so far comes with a legacy plan from the Supreme Council of Delivery and Legacy. That said, building these projects on time is Qatar’s key to maintain its position globally in the world of sports. With the country’s tourism strategy giving significant attention to sports tourism, it is imperative for Qatar to prove its sustained capability to the world. Successful delivery of FIFA stadiums would additionally mean the country’s strengthened position for future bids.

Inner Doha Resewerage Implementation Strategy Why it matters:

What it is:

The Inner Doha Resewerage Implementation Strategy (IDRIS), which has been revised a few times, is a cluster of interconnected projects valued at almost QAR10 billion. The main contract, awarded to Hochtief ViCon, is a deep, 14.7 kilometre central tunnel, with internal diameters up to 4.5 metres. With IDRIS expected to be fully operational by late 2019, the project is expected to relieve a dated, overloaded sewerage infrastructure in dire need of a makeover.

18 | QCN YEARBOOK | 2016

Drainage and sewerage flooding has become a serious issue with the steep surge in Doha’s population. More than 20 areas of central Doha have had sewerage flooding problems last year. The vision of Ashghal’s IDRIS will eliminate the need for 30 existing pump stations serving the project’s area. While the project’s budget is substantial, IDRIS is set to utilise the latest sewage treatment technologies, allowing for recycling sludge bio-solids, beneficial reuse of biogas, and most importantly unrestricted treated sewage effluent (TSE) use.

key projects

The Expressway Programme What is it:

Under the supervision of Ashghal, the Expressway Programme is one of the world’s largest road infrastructure projects that will connect Doha with other cities through a set of advanced highways, roads and flyovers. The scope of this project includes the New Orbital Highway, Dukhan Highway, Al Rayyan Road and Lusail Expressway. It will deliver more than 20 major projects and more than 150 major interchanges (from traffic light junctions to four-level interchanges with tunnels and flyovers). Commenced in 2010, the project’s original date of delivery lies sometime in 2017.

Why it matters:

With Qatar’s growing population, the number of vehicles on Doha’s roads has increased exponentially over the last few years, leading to hours of commute. Forecasts suggest the country will continue to have more expatriates joining its workforce. If Qatar wants to remain an attractive destination for immigrants, an infrastructure project such as the Expressway Programme is crucial. Another area this programme looks into is the reduction of future accidents, considering that Qatar has one of the highest rate of road-related accidents. Through the Expressway Programme, roundabouts on main roads will soon be a thing of the past, with incorporation of 240 major interchanges ranging from conventional trafﬁc lights to fourlevel interchanges with tunnels and ﬂyover. Part of the Expressway Programme, the New Orbital Highway, will add efficient highway for Qatar’s important industrial areas, namely Mesaieed, New Hamad Port, Dukhan, Al Khor, and Ras Laffan, without the need to travel through the main residential communities of Al Wakrah, Doha and Al Khor.

According to Ashghal, the Expressway Programme will provide vital transportation links across Qatar, connecting key cities, towns and villages with high-quality national freeways and urban arterial routes. (Image Arabian Eye/Corbis)

Apart from the projects mentioned above, a number of real estate projects are coming up to enrich Doha’s skyline. With the opening of Gulf Mall in the first half of the year, the organised retail accommodation currently stands around 690,000 sqm across 14 shopping centres, according to DTZ. More malls, however, are expected to enter the market in 2016. In the last quarter of 2015, Tawar Mall announced it was entering the completion phase. Another retail project in Markhiya area is Al Hazm Mall, which though looks complete, is expected to open doors for public sometime in 2016. Similarly, the Mall of Qatar has scheduled its opening for September 2016.

DTZ estimates that 12 new malls are currently at various stages of design or construction, and may be opened by 2019. This would mean an addition of more than 1.3 million sqm of retail space by 2019. On the hospitality side, the year 2015 started with the opening of the muchawaited Anantara’s Banana Island Resort. This was followed by the opening of Marsa Malaz Kempinski hotel. Later during the year, Qatar saw the opening of Hilton Worldwide’s second property in Doha – DoubleTree Doha. According to DTZ, with more hotels to reach completion in 2016, up to 4000 new hotel rooms are scheduled to come to the market by December this year.

In the context of entertainment infrastructure, Qatar is expected to have its first outdoor airconditioned commercial plaza in 2016 in Katara Cultural Village. Construction is currently underway on Katara Plaza, spread across an area of over 38,000 sqm. Another family entertainment centre, that opened doors to public this year in The Pearl-Qatar, is Megapolis, covering a space of 5000 sqm. Over the last 12 months, Qatar’s construction sector has seen ongoing challenges. Whether it is the shortage of labour and materials or increasing construction inflation amid the oil price dip, the country’s construction sector appears poised to continue its growth trend ahead of the 2022 World Cup and beyond.

2016 | QCN YEARBOOK | 19

sector analysis

Although challenges in the construction sector remain, the government of Qatar is working towards improvement with steps such as the Qatar Construction Specifications 2014 and the recent labour reforms. (Image Damon McDonald)

Tough questions: Tackling the issues in Qatar’s construction industry From the prospects of foreign investment to labour conditions, and from construction inflation to oil price decline, Jack Stanton answers some of the tough questions surrounding Qatar’s construction sector today. Junior- and seniorlevel skills are readily available in the region. It is the expatriate engineers who are really in high demand in Qatar.

20 | QCN YEARBOOK | 2016

n the statistical surface, the construction sector in Qatar is unblemished. A look over its growth statistics shows nothing but positives: the market is expected to grow at an average rate of 10.2 percent over the next decade, according to BMI Research. In fact, the entire Middle East and Africa’s (MEA) construction sector continues to get larger and stronger. Between 2016 and 2020, Timetric’s Construction Intelligence Centre predicts the MEA region’s construction sector will expand at an annual average rate of 6.9 percent. However, like every industry, everyone who works

within it recognises that there are problems, which need to be addressed. Here we will take a closer look at the issues facing the construction sector in Qatar and break them down.

Will foreign investment hold?

The 2022 World Cup has been a main source of frustration and speculation – particularly for foreign investors and contractors. Preparation for the event will result in the construction of at least eight stadiums, well-connected

sector analysis road and rail networks (including a metro service), and airport upgrades. However, there have been continuous allegations of corruption thrown at FIFA involving how and why Qatar was selected to host. Speculation over whether or not the event will even take place has declined lately, but remains in some quarters. The World Cup only accounts for USD10 billion (QAR36.4 billion) of the USD200 billion (QAR728 billion) being spent on developments in Qatar, according to Arab News, while Meed reports that only USD4 billion (QAR14.5 billion) is budgeted for stadiums and linked facilities. However, the tournament is having a significant impact and delaying other projects, making it tough for foreign firms. Several large developments, including a chemical plant costing several billion dollars located north of Doha, have been postponed. Foreign investment has played a key role in the construction boom up until now, but these postponements are seemingly making Qatar appear a less attractive proposition. A source from an international construction firm operating in Qatar told Reuters, under condition of anonymity, “Qatar…fears being taken for a ride by international consultants – that this is a gold rush, a boom town, and companies are going to fleece them for as much money as they can.” As a result, international firms are only able to apply for projects worth more than QAR200 million. Even when they do, seeing their money returned when projects are temporarily shelved can take a long time. However, not all international firms have as hard a time. According to Reuters, companies from the Middle East, as well as local joint ventures, fare better as they are seen as long-term investors in the country.

How bad are the labour conditions?

Qatar’s labour conditions have been a widely discussed topic in the press, particularly in the West. The Washington Post published a graphic indicating that 1200 migrant workers had died during construction for the 2022 World Cup – drastically more than the deaths ahead of the Sochi Olympics in 2014 or the Brazil World Cup the same year. This figure is shocking, and is said to be predominantly a result of working in the relentless heat, as well as low pay for migrant workers. It is important to remember, though, that what is considered low pay in some countries is not so in others. Having said that, Qatar is a rich country and India is not, so it goes without question that more should be done for these workers. However, this figure of 1200 construction deaths is not entirely accurate. The Washington Post later corrected itself to state that they are unable to verify how many deaths, if any at all, are linked to the World Cup construction. Plus, a report by the International Trade Union Confederation found that a third of migrant workers in Qatar did not even work in construction, and that the deaths counted include workers from varying lines of work and multiple causes of death, from road accidents to heart attacks. As many of the migrant workers in Qatar come from India (as well as Nepal and Bangladesh), the Indian Embassy has released a press release stating, “Considering the large size of our community, the number of deaths is quite normal.”

Qatar is heavily dependent on expatriate workers, and shortage of labour is one of the biggest challenges facing the construction sector right across the Middle East. According to a report commissioned by the organisers of the Big 5, junior- and senior-level skills are readily available in the area. It is the expatriate engineers who are really in high demand in Qatar. To address the issue of migrant worker treatment, the Qatari government has announced several changes to its labour laws. The country’s ‘sponsor’ system – which requires workers to be tied to a single employer the whole time they are residents – has been abolished, allowing migrants and expatriates to change jobs and leave the country without a two-year ban once the law is implemented.

The price of construction aggregate such as sand and gravel has increased by 3.5 percent, glass by 2.5 percent, concrete blocks by 1.5 percent, and tiles and cement by one percent.

The cost and price inflation

Another potential problem for construction firms readying to develop projects in Qatar is the rising cost of materials, and the price inflation, which could change noticeably over the course of a project. The cost of steel bar, used in reinforced concrete, actually dropped by 14 percent in 2015 due to less demand in China, according to The National. However, it is the cost of local materials that is the issue. For example, the price of construction aggregate such as sand and gravel has increased by 3.5 percent, glass by 2.5 percent, concrete blocks by 1.5 percent, and tiles and cement by one percent. Oil prices around the world have also dipped. Donal O’Leary, director of commercial services at project management consultancy Faithful + Gold, said that if oil prices remain low, we will see the effects in Qatar in about 12 months. “The oil price is starting to bite now, and there are things that aren’t happening,” he said. The good news though? Wages are rising. Skilled trades such as blocklayers can really reap the rewards of the copious construction projects in Qatar (and Dubai) that require their skills.

What’s being done?

Back in 2013, an international thinktank was established in Doha which aimed to be “the global centre of excellence to support the USD70 trillion infrastructure (QAR255 trillion)”. London mayor Boris Johnson and more than 50 other senior officials attended the launch of the notfor-profit Institute for Infrastructure Studies, at which a five-year plan was outlined to provide “original thinking and research into the appraisal and better management of risks associated with large, complex infrastructure programs”. While this group ties in with Qatar’s plans for new infrastructure in time for the 2022 World Cup, controversy remains. Sachin Kerur, head of the Middle East practice of Pinsent Masons, sums up the situation, as quoted in The National, saying, “Sure, there absolutely are problems that still need to be addressed and tragic accidents do, sadly, happen from time to time, but I know these issues are taken seriously by the authorities.”

Jack Stanton is a journalist working on behalf of Randstad MENA.

2016 | QCN YEARBOOK | 21

sector analysis

Civil contracting amid oil price dip in Qatar The field of construction comes with its own set of challenges. For Qatar, however, a major issue for contractors has been the lack of balance in contract conditions here. Ahmed Fouad of Integrated Consultancy discusses some key concerns around contracting, while also looking at the impact of oil price dip on contractors.

or contractors, operating in Qatar means an opportunity to add major strategic projects to their company profile – projects that are known for being done in challenging circumstances and are landmarks worldwide. The Doha Metro project, for instance, had 21 tunnel boring machines (TBMs) combined, working simultaneously, which is a world record for the number of TBMs operating in one project. Then, of course, there are the 2022 World Cup stadiums targeting extraordinary levels of sustainability. Qatar’s booming construction market, along with the nature of contracts makes the country a challenging place for contractors, requiring only the best teams to deliver projects on time and within budget, without compromising on the required quality. Contractors and employers working in Qatar use several types of contracts with various parties involved in a construction project. As a common practice, main contracts are lump-sum contracts for major engineering, procurement and contracting (EPC) projects. In the case of EPC contracts, major subcontracts are usually back-to-back lump-sum contracts. On the other hand, in the case of build-only projects, it is either unit rate contracts or lump-sum agreements, depending on the stage of design at the time of award and if the contractor is a specialised subcontractor. In the context of unit rates, there are daily rate manpower supply contracts when shortage needs to be filled. Construction contracts in Qatar are often perceived as one-sided in favour of owners. This is mainly due to the nature of the lumpsum contracts, yet there is always a room for improvement as long as the employers are willing to change some of the lump-sum contract clauses. International contract forms, such as the

22 | QCN YEARBOOK | 2016

In addition to delayed payments, it is expected that there will be a reduction of scope for ongoing projects, which has already started to happen on some projects.

ones governed by the International Federation of Consulting Engineers (FIDIC), provide balanced contracts, which can be used with minor amendments to suit project objectives. Using a balanced contract will lead to reduced contractor’s risks and more of balanced risk distribution between parties, since contractors integrate the value of the risks of the project into their bids. This will lead to lower values of contractor bids and eventually less contract award value and less funds required to finance the project. Using these contracts along with clear definition of project scope and requirements and interface by the employer can lead to less contract value by contractors as the risks will be reduced for the project as a whole, and will be shared between owners and contractors.

since hydrocarbon revenue constitutes a major portion of the nation’s gross domestic product. In the field of construction, the oil price decline will likely impact the timing of payments to contractors. Once delayed, payments usually tend to get further delayed, which leaves a significant impact on the contractor’s cash flow and its obligation to pay staff, subcontractors and vendors. This will also require more financing from banks to contractors to close the negative cash flow gap, and the extra finance interests will eat up a part of the contractor’s profit. In addition to delayed payments, it is expected that there will be a reduction of scope for ongoing projects, which has already started to happen on some projects. This means less cash income to contractors, which will reflect on their profit. To reduce expenses and maintain their profit margin, contractors often start releasing project resources and try to look for cheaper suppliers even if it means delayed delivery or reduced quality. On the project level, extra financing costs and lost profits due to delayed payments can be claimed under contract obligations and unjust enrichments. Contractors can renegotiate the contract, in the case of significant descoping, which is around 25 percent or more, depending on the contract definition. In any case, contractors should obtain legal advice before they decide to move the issue to arbitration and/or court, if they are not happy with the situation after descoping.

Oil price dip

The oil price decline is bound to impact contractors in Qatar. In a way, it can be seen as similar to what happened during the global economic crisis, with the impact on many ongoing strategic projects and operations

Qatar-based Ahmed Fouad is the director of Integrated Consultancy Inc – a Canadian company specialised in project management and construction claims consulting.

sector analysis

Project financing in Qatar: a case of evolution

Amid the ongoing oil price dip, the need for diversification becomes even more crucial for Qatar. While the non-hydrocarbon sector will take its time to develop substantially, the government is considering a variety of project funding models to support the country’s construction industry among other sectors, writes Dani Kabbani of Eversheds LLP.

atar, like other countries in the Gulf, has seen the effect of lower oil prices on its budget. Some less urgent projects have been postponed, but the momentum continues with regard to the 2022 World Cup related projects. Most of the construction contracts were signed before the oil price decline, and the fixed deadline means that these projects are going ahead. Generally, low oil and gas prices are considered to be part of a cyclical process and the belief that prices will sooner or later improve means that Qatar is mainly making use of this period to restructure government entities, such as the recent ministerial reshuffling and merger of portfolios, and concentrate on core business in the oil and gas sector by moving away from previously owned companies providing add-on services. World Cup-related projects such as stadiums, roads and metro projects are the priority at the moment, along with the extension and modification of the infrastructure to cope with the population growth. Funding for those projects will mainly continue in the same way, although the government is looking at alternative structures mainly through publicprivate partnerships (PPPs) for upcoming hospital and school projects. In fact, the Ministry of Economy and Commerce is in the process of drafting the PPP law for Qatar. For now, Kahramaa generally finances its projects through a hybrid but effective PPP model that will most probably continue until a detailed law is in place.

Project funding models in Qatar

In terms of financing models, all kind of alternatives are being considered at the moment, and any opportunity to raise funds through conventional and less conventional ways is being tackled. These vary from bonds

24 | QCN YEARBOOK | 2016

Plans are underway to encourage SMEs to obtain financing by creating a register for mobile assets provided as a security by SMEs.

to global depositary receipts to sukuks. There is also a flurry of initial public offering activities where even small- and medium-sized enterprises (SMEs) are trying to raise funds through public offerings. Qatari banks have kept funding projects and international contractors working in Qatar. Although there may be some pricing revision, fees and interest rates will continue to be very competitive but emphasis will be on increased security and scrutiny on profitability or return on long-term projects. Plans are also underway to encourage SMEs to obtain financing by creating a register for mobile assets provided as a security by SMEs. Such a drive to push investors towards moving ahead with their projects and encouragement of banks to continue lending such projects is part of the state’s effort to diversify the economy away from oil and gas. Governments in the region are seeking to diversify their economies, as they are involving the private sector to accelerate economic growth. Furthermore, the drive towards encouraging the enhancement of the investment climate and competitiveness;

the increased employment of nationals in the private sector, and the improvement of government services in key sectors (education and health) reflect Qatar’s emphasis on the private sector’s development as a key national goal. In this realm, Qatar was among the first adopters of the PPP model in the region mainly in the power generation projects. Eversheds is assisting the Ministry of Economy and Commerce in drafting the PPP law and settingup a governance and supervisory framework. Although the programme has leadership support, certain challenges will need to be addressed, such as clear risk allocation and well-defined costs and returns on investment. A dedicated PPP legal framework will help increase transparency, improve and unify the procurement process, and identify security rights granted to lenders. Export credit agencies have always played a major role in project financing in Qatar, being engaged mainly in major oil and gas, petrochemical as well as power projects. In the future, we see their involvement to continue within relevant projects, although these particularly large projects will generally be reduced in number. Eventually, Qatar’s diversification drive and private sector empowerment will mean that investors from various sectors will be looking to the country. Despite the lower oil and gas price, as long as the cost of production remains one of the lowest in the world, Qatar will continue to see further investments in the oil and gas sector albeit in more specialised sectors of the industry, particularly downstream.

Dani Kabbani is managing partner, Qatar, at Eversheds LLP.

sector analysis

Green infrastructure required to support Qatar’s sustainability agenda To tackle pressing sustainability challenges in Qatar, the country needs a comprehensive green infrastructure strategy, writes Dr. Cynthia Skelhorn, research specialist at Qatar Green Building Council.

n recent decades, the issue of climate change has gone from one that existed on the periphery to taking centrestage. Rising temperatures, changes in rainfall patterns, overuse of natural resources, rising sea levels, and a decline in air quality are a few of the climate change impacts that present serious threats to ecosystems and communities while placing an immense burden on economies. The National Oceanic Atmospheric Administration in its report, titled Explaining Extreme Events of 2014 from a Climate Perspective, reviewed 29 extreme weather events experienced across the globe in 2014, including heat waves, extreme drought and floods, to estimate the likelihood that the events were influenced by climate change. While not all, at least 14 events were found to be linked to human-induced climate change, often costing governments millions of dollars in damages. For Qatar, predicted effects of climate change include not only air temperature increases, but also increased frequency and intensity of dust storms and sea level rise (SLR). The Arab Environment: Climate Change report titled Impact of Climate Change on the Arab Countries states that Qatar is one of the most vulnerable countries to SLR in the region, when taking into account projected figures that estimate the country could lose as much as 2.7 percent of its total land mass should the sea level rise by one metre. Given that most of Qatar’s development is in coastal areas, this could have significant impacts on the current mega projects. To address these issues, governments and relevant organisations in the Gulf Cooperation Council region have launched various sustainable urban development initiatives focused on alleviating the growing threats of climate change. In Qatar, Qatar Green Building Council established Green Infrastructure Interest Group (GIiG) in 2012 to promote awareness

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and protect the environment for generations to come. GIiG, currently being expanded and set to be renamed as Green Urban Planning and Infrastructure (GUPI), aims to achieve this by developing guidelines on best practices for urban development, including parks, streets, urban plazas, coastal locations and even car parks. Furthermore, the interest group plays a vital role in encouraging public understanding of Qatar’s natural ecosystems and their role in sustainable development of green infrastructure. GIiG is also in the process of compiling ‘Doha: A Rough Guide to Healthy Cities’, which is due to be released this year. Highlighting the benefits of planning and designing a healthy city, the guide provides design and planning professionals, senior school students and advocates of sustainability, with practical guidelines on how to create a healthy city. In a major step towards a sustainable future, Qatar’s Ministry of Municipality and Environment (MME) recently completed the Qatar National Development Framework (QNDF) and the Municipal Spatial Development Plans. The former is a national-scale urban planning document while the latter has set out plans that allocate each municipality in Qatar with 22 codes identifying their respective land use zoning. The MME has also announced its plans to invest QAR1.5 billion to develop 59 public parks in the country with development set to begin this year. A recent study conducted by Qatar University on climate change awareness in the country found that a significant number of the population are aware of the effects of climate change and are eager to see adequate steps taken to tackle the immediate and long-term effects. The study cites that “nearly two in three respondents (63 percent) replied that they would like to see an increase in the number of parks and other green spaces in Qatar.” Despite all these initiatives, a comprehensive climate change strategy is yet to be fully

In a major step towards a sustainable future, Qatar’s Ministry of Municipality and Environment recently completed the Qatar National Development Framework and the Municipal Spatial Development Plans. developed. The QNDF includes extensive acknowledgement of the need for climate change management and adaptation plans. Therefore, the time is critical to continue planning initiatives that integrate the climate change projections for Qatar. To create a thriving and sustainable environment that supports and conserves the existing ecology, Qatar must continue on the current path of considering the scientific evidence for projected changes, and develop adaptation strategies that are aligned with development goals in the long term. Although the projections of climate change are worrying, Qatar is far better equipped than before to formulate an all-encompassing approach that addresses the economic, social and environmental effects of climate change. The growing scientific and research community in Qatar means we have the knowledge and expertise at our disposal to implement a viable and realistic green masterplan – a plan that will work towards ensuring a sustainable future for Qatar, while making a significant contribution to alleviating the effects of climate change on a global scale. Dr. Cynthia Skelhorn is a research specialist at Qatar Green Building Council, where she conducts research on Qatar Passivhaus case study, co-leading the Green Infrastructure Interest Group.

sector analysis

Qatar’s real estate to remain stable in 2016, despite oil price dip Anurag Gupta of KPMG, discusses the impact of the oil price dip on Qatar’s real estate sector, while providing an overview of all four subsectors – residential, commercial, hospitality and retail.

n 2016, Qatar is expected to have a fiscal deficit for the first time in the past 15 years, a situation which is expected to stay unless oil prices do not move beyond USD70 (QAR255) per barrel range. Lower oil prices for the next four to five years could mean a cumulative deficit between QAR200 and QAR300 billion. However, markets are hopeful that oil prices would move upward, and the impact will not be this severe. The country’s real estate market, especially residential and retail, are highly dependent on the government spending on capital and current expenditures. Given Qatar is facing a fixed deadline for the 2022 World Cup, major capital expenditure increased in 2015, but the government was successful in bringing down the current expenditure (not including wages and salaries) level by a whopping 45 percent. That said, the country is expected to continue spending on the committed capital projects (although certain projects integral to the World Cup have been prioritised with increased efficiency), which should keep the market stable for a significant period, and hence would not bring any sudden impact on the real estate sector. Therefore, in our view, Qatar’s real estate market is expected to remain stable in 2016. We do expect some corrections in the land property transactions. If we analyse the property prices growth, land price in Qatar alone has doubled over the past few years. Given this price surge, most of the projects have become unprofitable. We believe the year 2016 will be a year of market correction. Based on the recent trends, the land prices in Doha, Rayyan and Wakra have already started exhibiting signs of reduced speculation. Historically, Qatar has not been a destination for significant external investment. Given real estate markets are expected to

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be stable over the next few years, oil prices climbing back to comfortable levels, and also in view of the maturing of Qatar’s legal and regulatory system, we believe the investors would start to prefer Qatar. Based on our discussions with developers, we understand that property transactions and new purchases are happening, but at discounted prices. The same is expected to continue in 2016. In general, real estate transactions in Qatar are still dominated by land transactions – an indicator that it still is in an early stage of development. However, there are signs of emerging maturity, which is evident from the fact that the proportion of land transactions have come down to around 35 percent in 2015 from 69 percent in 2011. For most developed markets, this ratio has been seen to be in the range of five and 10 percent.

Subsector overview

In Qatar’s residential asset class, we see a high captive demand for the middle-income segment category housing, resulting in very high occupancy of more than 80 percent. However, for the luxury apartments and villas, occupancy is significantly lower. We foresee no major deviation in this trend until the supply in the middle-income segment matches the inherent demand. This may also mean marginal

Real estate transactions in Qatar are still dominated by land transactions – an indicator that it still is in an early stage of development.

growth in the low- to middle-income segment, given the continued demand-supply mismatch. Speaking of commercial properties, the current occupancy level in office real estate in Qatar is around 65 to 70 percent. We foresee this will remain stable in the next few quarters, with a slight upward push in occupancy due to an increase in skilled white-collar workforce in the near future at a faster rate than the quantum of future supply. Last year, Qatar witnessed an addition of 5000 keys to its hospitality stock, while approximately 8000 keys are expected to be added in 2016. Assuming 60 to 70 percent of this planned supply actually hits the market, downward pressure on occupancy and prices is inevitable. Signs of pressure in occupancy and prices are visible now, as occupancy in February 2016 was 16 percent lower than the occupancy during a similar period last year. On the retail front, the current supply of major organised retail developments is around 850,000 square metres (sqm), and the occupancy is around 90 percent. Close to 1.5 million sqm of additional future supply is at various stages of construction, and will be delivered in the coming quarters. As a result, we foresee a significant price correction in the organised retail category with a shift towards partial transference of the business risk from tenants to developers, that is from a pure rental model to a revenue-sharing model in the coming years. Major malls currently in the pipeline include the Mall of Qatar, Doha Mall, Tawar Mall, Doha Festival City, Northgate Mall, Markhiya Mall, and Place Vendôme Qatar.

Anurag Gupta is director, Real Estate Advisory, KPMG Qatar.

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sector analysis

Smart Buildings: a sustainable alternative to Qatar’s conventional construction Real estate developers in Qatar must make use of the innovations that digital technology and the Internet of Things (IoT) provide, and stay up to date with the new requirements and demands of property users while tackling energy management needs, writes Mohammed Hammoudi of Cisco Qatar.

n the real estate market, owners are bringing value to tenants and providing enhanced visitor and occupant experiences with the rising use of digital technologies and by embracing the Internet of Things (IoT). They provide an ecosystem wherein large volumes of data collected and analysed, especially in buildings, helps create environments that are more personalised, efficient, functional and profitable. In a digital world, buildings are becoming more connected and increasingly intelligent with software platforms that allow the convergence of systems to enhance productivity, prepare for greater physical and cyber security, and reduce carbon footprint through data analytics. With an explosion in the mobile workforce as well as consumers, digital transformation will be necessary in the real estate sector and will play a crucial role in the way they work, shop and live. For offices, it will enable employees to work anywhere, anytime, and will determine how they are more connected, in addition to facilitating greater collaboration and raising productivity. The use of digital technology in retail environments increases the value to tenants, which helps boost their revenue streams and generates higher levels of operating efficiencies. Consumers on the other hand gain tremendously from smart technology, including better climate control, digital signage, internet access, voice and video services, security, and online shopping, etcetera. Within Qatar, one of the most striking examples of the use of ‘smart’ initiatives is the Lusail City project, which includes islands and multipurpose residential, mixed-use, entertainment and commercial districts, that will deliver efficient and sustainable services

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through an integrated ICT infrastructure. The PwC-sponsored report titled Global Construction 2030: A Global Forecast for the Construction Industry to 2030 reveals that global construction will grow by 85 percent to USD15.5 trillion (QAR56.4 trillion) by 2030, with commercial and institutional buildings accounting for approximately one-third of the spend. It is estimated that commercial and institutional buildings account for about 25 percent of total energy consumption with over 30 percent of this energy taken up by heating, ventilation and air-conditioning (HVAC) systems, and 25 percent by lighting. Currently, almost one-third wastage of this energy is due to obsolete systems, inefficient design and wasted resources. Across the globe, there are rising energy costs, drastic environment apprehensions, and more governments laying down laws to curb environmental disaster. New technologies are available to help in measuring, reporting and reducing the power consumption of the network infrastructure and attached devices, and help in achieving lower energy costs and better sustainability. The network forms the foundation for an intelligent building infrastructure that adds value to every kind of real estate project. By combining different networks such as light, air, physical security, waste management, among others, on the IP network, it is possible to manage buildings more efficiently and provide comfort for the occupants. For instance, in an integrated energy management system, building managers can switch off or reduce unneeded systems. Centralised monitoring of HVAC, facilities and elevators can ensure that the building can exceed performance standards. Another example entails cost savings. The convergence of applications and solutions

Within Qatar, one of the most striking examples of the use of ‘smart’ initiatives is the Lusail City project.

onto a single IP network reduces capital investment and ongoing maintenance and operational costs. This can be done by migrating existing investments into an open, inclusive platform which enables monitoring and controlling building systems to operate seamlessly as one homogenous resource. Building owners can add revenuegenerating services by providing video conferencing, digital signage, and WiFi that help in raising the value of the property. This is once again made possible through the converged network.

Mohammed Hammoudi is the general manager at Cisco Qatar.

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sector analysis

Sustainable MEP in Qatar – a matter of legislative change Given Qatar’s hot climate, heating, ventilation and air-conditioning (HVAC) makes a major energy consumer. Incorporating green technologies, however, can substantially reduce the amount of energy consumed and produced through conventional sources. Jaygopal Kottilil of Tanween explains why the growth of sustainable mechanical, electrical and plumbing (MEP) in Qatar requires a legislative initiative.

ecent statistics prove that electromechanical systems consume a major share of electricity in all major sectors – residential, industry, commercial and public services – in Qatar. Within the residential and commercial sectors, a large portion of energy goes into HVAC systems, making up around 60 percent. In industrial and public services, however, much of the energy is expended in running machineries. The oil and gas segment, which takes one of the largest portions of electricity consumption in Qatar, requires excessive energy for extraction, transportation, processing and dispensing. Much of the energy generated in Qatar comes from conventional sources, leaving high levels of carbon emissions. Moving its power generation capacities to innovative solutions such as solar plants can significantly reduce the country’s carbon footprint. When compared regionally, Qatar’s MEP market is reasonably advanced. However, on a global level, the country still falls short of latest green technologies currently being used in advanced and developed countries. While the government of Qatar is working towards sustainability, highlighting it extensively in Qatar Construction Specifications 2014, green construction – a large part of which comprise MEP works – is still considered as an option for private projects and most developers in the country. Some organisations driving the growth of sustainable MEP in Qatar include Qatar Green Building Council, and the Gulf Organisation for Research and Development (GORD), that has developed a green rating system considering the specifics of regional climate not incorporated in the international rating systems such as the Leadership in Energy and Environmental Design (LEED). Having support

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Only when green construction becomes a norm in Qatar can one expect the growth of sustainable HVAC in the country’s construction sector.

and systems in place, however, is not enough. A major factor hampering the growth of green MEP is the lack of developers’ willingness, and, in some cases, insufficient awareness about the potential benefits of having green technologies in their projects. Only when green construction becomes a norm in Qatar can one expect the growth of sustainable HVAC in the country’s construction sector. To facilitate the transfer of advanced green technologies to Qatar, an essential prerequisite would be the introduction of new legislations on sustainability measures to be strictly enforced in all new and refurbishment projects. Some advanced MEP technologies that can substantially reduce energy consumption are district cooling (DC), variable refrigerant flow, central AC technology, geothermal cooling, absorption chiller technology, solar photovoltaics, and solar water heating, etcetera. In a desert country like Qatar, airconditioning of habitable spaces is unavoidable. To meet the country’s climatic needs with least toll on the environment,

district cooling (DC) is an efficient technology that leads to substantial reduction in energy consumption, and hence energy production, results in conservation of the nation’s precious fossil fuels, and contributes positively to the world community with reduced carbon footprint. However, the DC technology currently utilised in Qatar by private solution providers comes with the objective of running a profitable business. Although the merits of the system are directly reaped by DC providers as well as electricity generating companies, the end user is sadly left behind to bear the higher cost of availing DC service by way of incomparable tariffs vis-à-vis electricity tariffs. That said, a win-win situation could be achieved if DC service is institutionalised as an essential utility governed by a legislation and therefore subsidisation of tariffs just as it is done for electricity and potable water. Such a legislative step will attract more and more consumers to this innovative technology. Looking at the current global oil price slump and its direct impact on economies of the Gulf countries, Qatar’s MEP sector, in my opinion, will slow down in developmental projects while evolving in facility management (FM) sector of existing developments thus, probably, pushing traditional MEP suppliers and contractors into the FM space. For several essential, unavoidable infrastructure projects, the developers are likely to look for an integrated service pattern that would encompass everything from design and procurement through to supply, installation, integration, testing and commissioning.

Jaygopal Kottilil is senior manager, MEP Engineering, Tanween.

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sector analysis

5 recruitment trends we will see in Qatar in 2016 In a time of uncertainty and economic slowdown, every industry in Qatar is expected to undergo restructuring, and the construction sector is no exception. Suhail Masri of Bayt.com, summarises some recruitment trends to look forward to this year.

oday, there is an unprecedented need in Qatar to build a workforce that can support development and cope with the country’s evolving labour market needs in a period of profound economic uncertainty. Organisations large and small are stressing the importance of anticipating the needs of future skills needs to avoid skills gaps, shortages and mismatches. Occupations are evolving as industries undergo restructuring, with some jobs disappearing and becoming obsolete, and new ones emerging, demanding opportunities for continuous acquisition of new skills and competences. Qatar’s construction industry is equally prone to these changes. Here are some recruitment trends expected to emerge in the country during 2016:

According to Bayt.com Middle East Job Index, February 2016, 52 percent of respondents living in Qatar claim that the construction industry is attracting and retaining the best talents in the country.

More emphasis on training

Today, employees in Qatar are eager to build solid career trajectories and advance their professional development. According to the Bayt.com Career Development in the Middle East survey, January 2016, a lack of career development prospects can radically make or break employee engagement and retention. Many professionals feel their company is failing when it comes to equipping them with the learning and training opportunities needed to ensure their career growth, and this leaves employees feeling stifled in their jobs. In fact, the majority of 78 percent say that they would leave their company for better training opportunities.

Increased demand on transferable skills

In an era of high employment turnover and mobility, transferable skills have become the arsenal that ensures employability, increases professional competitive advantage, and eases the transition into a new role. The Bayt. com Middle East Job Index survey, February 2016, has revealed that employers in Qatar are mostly looking for candidates with good communication skills in English and Arabic (63 percent), and teamwork and leadership skills (both at 55 percent).

More career changes

Professionals in Qatar feel uncertain about the future economy, and are looking at other more viable career options. According to the Bayt.com Middle East Consumer Confidence Index survey, March 2016, 40 percent of Qatar respondents believe that there are plenty of jobs available in the country, with 20 percent claiming availability

34 | QCN YEARBOOK | 2016

poll by Bayt.com, is not having active online conversations. In 2016, job seekers are being offered a myriad of ways to share their views and knowledge, source feedback, and discuss topics that affect their life and career. With a majority of employers sourcing talent over the Internet, companies are encouraged to build their own premium company profile on leading job sites, while job seekers are advised to create an online public profile.

across multiple industries. Good news is, 26 percent of survey respondents in Qatar expect the job availability to increase in the next few months. In fact, the job market in Qatar is expected to open up considerably in the next three to 12 months, with seven in 10 employers saying that they will likely be hiring in a year’s time, as revealed in the Bayt.com Middle East Job Index survey.

More online discussions

One of the most critical mistakes that job seekers make, according to professional respondents who took part in the January 2015 Skills and Hiring Trends in the MENA

More jobs by SMEs

According to the February 2016 Middle East Job Index by Bayt.com, respondents living in Qatar claim that the construction industry (52 percent) is attracting and retaining the best talents in the country. This will particularly be the case for small- and medium-sized enterprises, with 74 percent of employers in these companies planning to hire more people in a year’s time. Suhail Masri is the vice president of Employer Solutions at Bayt.com.

sector analysis

Public Procurement Law: A step towards the progress of Qatar’s construction sector With the Public Procurement Law – expected to be effective in June this year – construction projects in Qatar will be directly tendered by the relevant government entity requiring the project, which introduces a step in the right direction for the industry’s progress, writes Zehra Manni of Al Tamimi.

n late 2015, the Emir of Qatar signed Law No. 24 of 2015, the new law on public tenders and bids titled the Public Procurement Law – published in the official gazette No. 19 of 2015 on December 13, 2015, and will come into effect six months from publication in June 2016. The new law will repeal and replace the existing tenders and bids regulatory law (Law No. 26 of 2005 as amended). The Council of Ministers and certain committees have been tasked with drafting the regulations to the Public Procurement Law, which will set out the guidelines and procedures for public tenders and procurement in Qatar. Until the new law becomes effective in June 2016, the existing law continues to be in force. The public procurement of goods, services contracts and works is subject to a centralised tender and bid process, facilitated and processed by the Central Tenders Committee (CTC) and the Local Tenders Committee (LTC). The new law promises to promote transparency, efficiency, free competition and equality. With the FIFA World Cup in 2022 fast approaching, the number of construction and infrastructure projects in Qatar is expected to rise. Once the new law becomes effective, construction projects in Qatar will be directly tendered by the relevant government entity requiring the project. This is a welcome push in the right direction as the decentralisation of public procurement will arguably create more efficiency, which will no doubt help Qatar in meeting demands of the World Cup. The Public Procurement Law applies to all ministries, government bodies and public institutions and entities in Qatar, and may also apply to entities partially or wholly funded by the state pursuant to a resolution of the Council of Ministers. However, the armed forces, police force, military bodies, Qatar Petroleum, Qatar Investment Authority and other public entities for which the Council of Ministers has passed a resolution are excluded from the purview of the

36 | QCN YEARBOOK | 2016

law on the back of the resolution. Subject to some exceptions, contracts relating to the procurement of goods, works and services must be concluded by public tenders. In certain circumstances, such as with large-scale construction projects, procurement by two-stage tenders may be undertaken. The law also allows for restricted tenders, direct agreement, practice (engaging previously appointed supplier, contractor or consultant) or facilitating competitions, provided the required permissions are obtained. The regulations to the law will stipulate a process for the classification of contractors and suppliers.

Notable provisions •

•

Each government body will establish its own tender committee(s) consisting of five to seven members including a chairman and vice chairman of the committee. A representative from the State Audit Bureau and Ministry of Finance will attend committee meetings as a controller. Pursuant to a resolution by the Prime Minister, committees may be established to facilitate procurement for multiple government bodies. Bidders who withdraw their bids during the validity period may forfeit their bonds. The bidders may also be temporary or permanently barred from dealing with the government entity. Bidders will be required to submit tender bonds (tender deposit) with their bids and performance bonds if awarded the tender. The law also encourages more participation in tenders by small- and medium-sized contractors. Such businesses participating in the tender may be fully or partially exempted from submitting the bonds upon a chairman’s resolution and an undertaking from the Qatar Development Bank. For purposes of public interest, the government entity may amend the number or size of the contracts entered. Any

such change will be subject to the same conditions and rates agreed between the parties, and the contractor may not claim any additional compensation from the government entity. This is a significant departure from the previous law under which quantities or scope under contract may be amended up to only 20 percent of the contract price subject to same rates in the bill of quantities. • All advance payments to contractors must be approved by the head of the government body, and secured by unconditional, certified bank guarantees. • In case of disputes arising out of contracts entered into pursuant to the new law, the parties may agree to resolve disputes by arbitration, upon approval of the Minister of Finance and upon recommendation by the head of the government body. • The law provides for the establishment of dispute settlement committees in the Ministry of Finance. A judge selected by the Supreme Judiciary Council and two other members nominated by the Minister of Finance will preside on the committee. The dispute settlement committee will settle all administrative disputes arising prior to entry into the contract on an urgent basis. The decisions of the dispute settlement committee may be challenged at the Court of Appeal. In conclusion, the Public Procurement Law will decentralise the existing procurement process and create a more efficient framework in which the government entities are more involved. The new law can be seen as a step in the right direction in that it allows public contracts to be subject to arbitration and promote participation by small- and mediumsized businesses. Zehra Manni is an associate in Al Tamimi’s Construction and Infrastructure team.

CIVIL

According to BMI Research, Qatar is the strongest construction market in the Gulf Cooperation Council forecasted to have an annual average real growth rate of 10.2 percent between 2015 and 2025. The industry, hence, provides a world of opportunities for local and international construction companies. (Image FotoArabia)

project delays

contracting and trading

engineering

civil

Against the clock: Addressing delays in Qatar construction projects As Qatar continues its race against time in delivering construction and infrastructure projects by the fixed deadline of 2022, and later to achieve Qatar National Vision 2030, Ahmed Fouad, director of Integrated Consultancy Inc, looks at some best-laid plans gone awry, while exploring the causes and repercussions of project delays in Qatar. Since its successful bid to host the 2022 World Cup, Qatarâ&#x20AC;&#x2122;s construction sector has picked up. Projects aimed to meet the World Cup requirements are especially fast paced, with both day and night shifts underway. (Image Arabian Eye/Corbis)

38 | QCN YEARBOOK | 2016

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With heavy reliance on foreign countries for resources, delays in procurement of building materials and labour is one of the core reasons behind project delays in Qatar and the Gulf Cooperation Council. (Image Arabian Eye/Corbis)

A project delay often means that the contractor is not utilising his specialist manpower most efficiently. The resources can be allocated to another site only once the first project has been completed. (Image Arabian Eye)

elays happen on construction sites everywhere in the world, and Qatar is no exception. According to PwC’s Building Beyond Ambition: Middle East Capital Projects and Infrastructure Survey, June 2014, 95 percent of the respondents reported their projects had been delayed, with 45 percent saying their projects had been delayed by more than six months. Because of the collaborative nature of building works, there is always a chance of postponements. In Qatar, with a large number of construction and infrastructure projects underway, project delay is an everyday reality. Irrespective of the causes behind, the ugly truth is that many projects here find it hard to keep up with the initial plans for timely completion. Over the past few years, Doha has seen postponements of many of its mega projects. Some of the most famous project delays include Hamad International Airport. After a series of delays, the project finally opened its doors in 2014, while the original completion date was set for December

2012. Similarly, having missed revised completion dates repeatedly, Sidra Medical and Research Center was expected to open in 2015. However, being four years behind the schedule, according to local media reports, the project is still awaiting a public opening. Investors of Lusail City have reportedly expressed frustration over years of delay. The Qatari construction market is one of the busiest markets in the region. In 2015, Qatar Railways Company was officially recognised by the Guinness World Records for ‘The Largest Number of Tunnel Boring Machines Operating Simultaneously in a Single Project’. In order to make the project operational by the 2022 World Cup, the company has procured 21 advanced tunnel boring machines (TBMs) operating across Doha to construct 113 kilometres of tunnels for the Doha Metro project. This marked a milestone for large-scale transport projects in Qatar and across the region. According to a study published by PMI in April 2014 issue of the PM Network, Qatar is expected to spend USD156.8 billion (QAR571 billion) on megaprojects by 2030. The scheduled construction in the Middle East during 2016 is forecasted to reach a value around USD144 billion (QAR524 billion), while construction inflation in the region and Qatar could peak to a rate between 16 and 20 percent from 2016 to 2019. To meet the requirements of this growing market, 20,000 to 44,000 workers would be needed per USD1 billion (QAR3.64 billion) spent. The figures

Projects worth QAR89 billion were on hold in Qatar, while those worth QAR107 billion were cancelled as of August 2014.

include consultants and managers. Considering Qatar’s reliance on foreign workforce, PMI’s study further reveals that 69 percent of Middle East CEOs say access to skilled talent poses a potential threat to growth. Similar to labour, the majority of building materials in Qatar are imported from abroad. Doha’s old port’s limited capacity is another issue concerning construction contractors here until the new Hamad Port – that started partial operations in December 2015 – is fully operational. These are just a few of the many challenges in Qatar’s construction industry. Put them together and you will find all the ingredients responsible for potential delays on construction sites here. In fact, according to Meed Projects, as of August 2014, 20 percent of the construction projects in the Gulf Cooperation Council were on hold, while 24 percent were cancelled. This meant that projects worth QAR89 billion were on hold in Qatar, while those worth QAR107 billion were cancelled. According

2016 | QCN YEARBOOK | 39

civil

to PMI, in 2012, 80 percent of projects in Middle East were delayed and nearly half of the projects were behind by more than six months. When there is a delay, there is bound to be an extra cost because of factors such as hired manpower, equipment rentals, increasing material cost, and extension of third-party services. It is then no surprise to find that 64 percent of Middle East capital projects ran over budget in 2012. Expressing the same concern, Ibrahim Jaidah, CEO of Arab Engineering Bureau, tells QCN, “The magnitude and complexity of current and planned projects is a historic record for Qatar. Some of the major concerns for any project developers are inflation and meeting deadlines.”

Just as the case with technical workforce, a contractor is unable to utilise specialist construction equipment on other sites in the case of a project delay. This may mean delay in other projects unless the contractor rents out or purchases additional heavy equipment. (Image Arabian Eye/Corbis)

Causes

If a largescale project is repeatedly taking 13 months to complete the works assigned for 12 months, its stakeholders should be concerned.

40 | QCN YEARBOOK | 2016

Apart from those mentioned above, projects can be delayed for an endless number of reasons. Looking from a main contractor’s point of view, there are external and internal challenges that could keep the project from timely completion. The internal challenges are related to the performing contractor or his subcontractors. In my experience, some of the major internal issues leading to delays include the following: 1. Lack of good resources on the contractor’s or subcontractor’s team. 2. Lack of sound planning and its execution. 3. Late mobilisation of actual required resources. 4. Unwise cost-saving decisions on part of the contractor or subcontractor. 5. Lack of adequate market knowledge, especially in terms of regulations and permits requirements and procedures, and procurement constraints. 6. Unwillingness or lack of motivation among staff or labour to complete the job. This could sometimes be a result of less or no job security in the future. While the internal changes are in the control of lead contractors who can fix the issues given the right approach and strong will, there are some externalities that go beyond the scope of contractors. These external challenges are mainly related to the client and geopolitical or environmental circumstances. Major external challenges include, but are

not limited to, the following: 1. Inadequate or unbalanced contract between client and the main contractor. 2. Discrepancies in contract documents, including specifications and drawings. 3. Country regulations and constraints. 4. Difficulties in getting approvals from clients or third parties. 5. Unclear scope or requirements. 6. Change in day-to-day regulations in the country, such as commute times for trucks. 7. Availability of resources, human and materials, in the region. 8. Availability of funding, which according to PwC’s survey is the fourth major external challenge.

Repercussions Regardless of the cause behind a project delay, end users and contractors are the most affected stakeholders. The former especially suffer in case of service projects, such as hospitals, transportation project, schools, and power plants, etcetera. The struggle of parents to get their children to good schools is a growing concern. Similarly, road reconstruction or construction often entails diverted traffic and overcrowded roads, lengthening the commute time of road users until they can enjoy the upgraded facility. For contractors, the impact is

mostly financial as the client or employer applies liquidated damages while the contractor suffers from prolongation costs. Linked to this are legal complexities. The contractor has to submit claims, go for arbitration or use the alternative dispute resolution mechanism mentioned in the contract. This, however, is only applicable in case of legitimate, excusable delay. Once again, legal consultation adds up to the project expenses and requires resources that could be utilised on other projects. On top of that, legal procedures are usually time consuming. A delay often means that the contractor is not fully utilising the resources, that could otherwise be commissioned on other projects if the project had been completed in time. If the contractor is relying on limited resources, the delay on one project can also postpone the follow-on projects as the latter wait for resources. This is especially true for specialist manpower carrying out technical tasks and special cranes for heavy lifts or special lifts.

Remedies Before working on solutions, it is important to understand what is considered as a serious delay. Delay is a subjective word, and it is even more true for construction with long lead times, usually depending on the scale of the project. Theoretically, a

civil

95%

of respondents of the PwC survey said their projects had been delayed, with 45 percent saying their projects had been delayed by more than six months.

project completed even a week after its scheduled date of completion is delayed. What is then considered a serious delay? This again is a debatable issue since there is no fixed formula to define a delay into categories. The complexity of the project is a defining feature pronouncing its delay as crucial or insignificant. However, as a general guide, a month per each year of planned duration is a really serious delay. Stated differently, if a large-scale project is repeatedly taking 13 months to complete the works assigned for 12 months, its stakeholders should be concerned about the progress, and hence take necessary action to expedite the process. Once it is established that a project is facing delays, it is time to take corrective action. In certain situations, the issue can be easily resolved by investing more money into the project. For instance, increasing the number of resources or paying extra for airfreight can recover the delay, but this is not always the ideal case since it is not cost effective, and could still not solve the issue. In other cases, one has to go back to the drawing board to find the root cause and then come up with a solution. This usually is a case where delay comes due to engineering or technical issue. If the delay is due to a third party’s influence, such as the ones linked to permits or approvals by authorities or end-users, which is not under the control of the contractor, the client’s interference can solve the issue. Convincing the client to take such a step, however, needs to come from the contractor. According to M. Vasanth Kumar, CEO of Arabian MEP Contracting, “Any delay in receiving approvals

Primary causes of project delays in the middle east THE CONTRACTOR’S VIEW

THE OWNER’S VIEW

Contractor or subcontractor performance 63%

Changes in scope 55%

Changes in scope 51%

Performance of material and equipment suppliers 45%

Scope definition 41%

Contractor or subcontractor performance 40%

Contracting strategy and risk transfer 27%

Realism of overall time scales 35%

Realism of overall time scales 24%

Project team capability 25%

Performance of material and equipment suppliers 22%

Scope definition 20%

Project team capability 15%

Contracting strategy and risk transfer 20%

Force majeure events 5%

Force majeure events 10%

Source: Building Beyond Ambition: Middle East Capital Projects and Infrastructure Survey, June 2014.

and payments will seriously affect project progress.” Ultimately, communication is the key remedy to avoid delays. Openness, frankness and early problem solving can avoid a domino effect on the project. This can be achieved by making sure that all project requirements are clear, and all stakeholders’ requirements are captured and reflected in the contract, which will lead to reducing the variations orders in the future. Similarly, the contractor’s execution plan should be clear, feasible, and assessed by the performing organisation and the employer for feasibility. In short, all involved parties should work as one team with a single goal of achieving the project objectives. Both contractor and client should keep an eye on anticipated risks. When an issue has been identified, all parties should work together on solving it without entering into a blame game.

This can only be achieved through honest discussions across the board with all stakeholders involved. The advancement in technology has digitalised the construction industry too, but it cannot undermine the importance of supervisors and engineers being on site. Closely monitoring the project’s progress helps in defining a realistic date of completion instead of the dates arrived on under pressure. It is also important to have a smart approach towards work. A smart mindset would avoid overtime, understanding the fact that making the staff or labour stay longer on sites which affect their quality of work in the future. Lastly, in case of a dispute stemming from project delays, contractors should leave the legal battles to legal teams and focus on achieving the project objectives, while simultaneously trying for an early dispute resolution.

Increasing resources or paying extra for airfreight can recover the delay, but this is not always the ideal case since it is not cost effective, and could still not solve the issue.

2016 | QCN YEARBOOK | 41

civil

Planning ahead for any challenges “As a group, the performance of each of our business divisions has been very good. They have managed to add many new things to our respective businesses, which were of a great value for the market and for the business itself,” says Ahmad Nasser Sraiya Al Kaabi, chief operating officer, Al Sraiya Holding Group.

Despite the challenging economic scenario, Al Sraiya Holding Group has managed to win some big projects and close a number of hotel deals in Europe last year, which the company’s chief operating officer, Ahmad Nasser Sraiya Al Kaabi, in an exclusive interview with QCN, says have happened due to their advance planning and strategy.

How was the performance of Al Sraiya Group in the recently concluded financial year? The group’s performance was very good for the recent year. Due to the hard work and performance of our team, we managed to exceed our target. The year was profitable for us as we managed to win many new projects and make some big-ticket acquisitions. For example, our subsidiary Al Sraiya Trading and Contracting was awarded the QAR1.2billion project for Local Roads and Drainage Programme, and for constructing buildings for three governmental schools. Whereas, Al Sraiya Starbag was awarded QAR1.2 billion sewer drainage project, and Zueblin won QAR508 million project for Energy City Qatar. Also, we closed some major deals, which include our Hospitality Group acquiring Marriott Hotel – Munich, Edward Hotel in London, and Presidential Serviced Apartments in London. The acquisition of Mowbray Court Hotel in London is also one of our major business achievements recently.

What do you think has worked in your favour to win some of these big-ticket and critical projects? To be honest, we are always busy throughout the year, and all our work strategies are made based on proper planning. I think what helps us win many projects is that we spend a good amount of time in planning and analysing every project before bidding.

42 | QCN YEARBOOK | 2016

I think what helps us win many projects is that we spend a good amount of time in planning and analysing every project before bidding.

Al Sraiya Group recently completed buildings for three government schools including Saad Bin Mowath Boys Primary School, pictured here.

civil

Last year, Al Sraiya Group completed the Al Ghuwairiya Health Centre, which is spread over 20,000 sqm with a built-up space of 2404 sqm.

Considering the current economic scenario, what is your outlook for this financial year? So far, our business is going as planned, and we expect this to remain so throughout the year. We have done our homework and planning well, and we hope we will be able to exceed our target as usual.

How do you approach a difficult economic situation like this? What steps do you take to overcome a slowdown in the market? We always plan ahead for any challenges. I think a lot of credit should go to our internal strategic planning team. As mentioned earlier, we have managed to win some key projects in 2015 that will keep us busy for the next two years. Also, we have got some internal investment projects that include real estate, residential furnished apartments and hotels – all these will keep us busy for quite sometime.

You have over 40 companies offering different services for the construction sector. Do you think consolidation of businesses is something that you might consider doing in order to deal with the current situation? Just like any other major holding company in Qatar, I think consolidation is something that can be done anytime – whether the situation is good or bad – depending on the requirement of businesses. But at the moment, we are doing very well and all our companies have a large number of projects.

We have managed to win some key projects in 2015 that will keep us busy for the next two years. Also, we have got some internal investment projects that include real estate, residential furnished apartments and hotels – all these will keep us busy for quite sometime.

Al Sraiya Group has executed a wide range of projects in diversified fields, including the latest commercial building, COM.25, which is located in Lusail Marina.

Tell us about the performance of your other businesses such as hospitality, general services and trading? As a group, the performance of all business divisions has been very good. We have managed to add many new things to our respective businesses, which were of a great value for the market and for the business itself.

Last year, you established the Al Sraiya Holding Professorship at Texas A&M University in Qatar. What was the idea behind initiating this programme? As part of our corporate social responsibility programme and our vision that is in parallel with the Qatar National Vision 2030, we give a lot of importance to education. We feel that any support extended to this sector in whatever possible way will add great value to the country and the group.

What is your expectation from this year’s Project Qatar? Are you going to highlight any new project at the event? We always expect the best from Project Qatar and we have been Integrity Sponsor for the event for the last 13 years. It is a long journey that has enabled us to enter into many new sectors, in addition to meeting new suppliers and exploring new markets.

2016 | QCN YEARBOOK | 43

civil

Ahmad Jassim Al Jolo, chairman of Qatar Society of Engineers, says, “You don’t expect everybody to become engineers because there are other attractive fields such as medicine, business, besides government sector. But it is one of our goals as an organisation to attract more Qataris into the construction profession.”

44 | QCN YEARBOOK | 2016

civil

The next generation: An exclusive interview with Ahmad Jassim Al Jolo, chairman of Qatar Society of Engineers While Qatar has large numbers of construction professionals coming from all over the world, increasing reliance on expatriates is not a sustainable option for the country in the long term. In an exclusive interview with QCN’s Syed Ameen Kader, Ahmad Jassim Al Jolo, chairman of Qatar Society of Engineers (QSE), discusses why the country’s construction sector lacks Qataris, and what QSE is doing to turn the situation around.

hen, in 2007, Ahmad Jassim Al Jolo, and his fellow engineers set up Qatar Society of Engineers (QSE), which currently has 200 Qatarionly members, a motivation behind that was to encourage young Qataris to pursue civil engineering for their professional careers. Clearly, the idea was to expand locals’ share in the country’s construction sector, that was already showing signs of rapid progress in the future. For Qatar’s construction sector to develop in a sustainable manner, Qataris will have to play greater roles sooner or later. “We are a small country with just about 300,000 Qataris. You don’t expect everybody to become engineers because there are other attractive fields such as medicine and business, besides government sector. But it is one of our goals as an organisation to attract more Qataris into this profession,” says Al Jolo, who has spent almost three decades in Qatar’s construction industry, holding key positions in major industry bodies such as the Professional Engineers Committee and American Society of Civil Engineers. A graduate in civil engineering from the Seattle University, Al Jolo tells QCN that the team of QSE regularly visits universities and high schools in Qatar in order to encourage students to study engineering. “But it is a challenge for us and we all are working towards that direction,” he says, adding that he is happy to see that some of the new

generation of Qataris are open to taking up field jobs in the country’s construction sector. Al Jolo acknowledges that the construction sector, in general, has always been a difficult profession to be in, due to the relatively tougher working environment. As a result, many students stay away from civil engineering, and prefer to pursue their careers in other fields such as oil and gas, mechanical, electrical or IT. Another factor that plays a key role in limiting Qataris’ presence in construction is the lack of government job opportunities linked to the field of civil engineering. Being the richest country in the world, Qatar offers its local candidates lucrative job opportunities within the public sector. Add to this lower pay scale in the construction sector, compared to some other industries, and the reason behind the lack of local talent in construction becomes

even clearer. Highlighting the long-term impacts of salary variations, Al Jolo says, “When you compare it (pay scale) with oil and gas sectors, those fields are attracting more people due to higher salary. I think the construction sector too has to be competitive when it comes to pay scale. The decision makers here have to take the salary of construction engineers more seriously; else, all the other fields will just take them away.” Al Jolo says the main intention behind setting up a non-profit professional organisation such as QSE was to form a core group of engineers who can contribute to the construction industry and development of Qatar, in general. “We want to achieve this through coordination within the construction sector and other governmental organisations. We are also trying to become the only regulatory body for engineering profession, with View of a construction site in Doha, Qatar. The country started building actively only a few years ago and it is now seeing a construction boom ahead of the 2022 World Cup. (Image Arabian Eye/Corbis)

“We are going to prove to the world once again that we are capable of holding the 2022 World Cup and many more activities beyond the 2022 [event].”

regard to registration, consulting and setting up offices,” he says. QSE is currently the only government-recognised engineering body that is working towards promoting engineers, locally and internationally. Before its formal registration with the government, it was operating under the name of Forum of Qatari Engineers. With the idea of attracting young graduates towards construction careers, the society has been working with some of the leading academic institutions in Qatar, including Qatar University and Texas A&M University. The collaboration with these institutions includes sharing of knowledge, experience and research with students besides offering them trainings. “Our main goal is to help integrate the profession of engineering and at the same time the engineers. We do present training courses, workshops, seminars, and

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civil lectures. We are also a member of the Gulf Engineering Union, and part of the Federation of Arab Engineers,” says Al Jolo.

Regional competition While the involvement of locals in all key areas are important for national sustainability, for Qatar, the integration of local talent into workforce is even more crucial given the fact that the country heavily relies on expatriate professionals. Today, manpower is one of the most critical issues for the construction industry, not just in Qatar but also across the region. What makes the situation more challenging for Qatar is the increased competition from regional countries such as the United Arab Emirates (UAE), Kingdom of Saudi Arabia and Kuwait, which are also building massively to meet their domestic demand. “I think it (manpower) is going to be a big challenge. I am sure construction is happening almost everywhere in the region – UAE, they are hosting Expo 2020 in Dubai; Saudi Arabia, they have big projects, railways, housing projects, and so many infrastructure works; and Kuwait,” says Al Jolo, adding that those who will pay more will

“The amount of work that you are seeing here, you will not find anywhere else in the world. There is not much construction work happening in Europe or America.”

be able to attract more talent. While the issue of regional competition is there, Qatar is often criticised for its Kafala sponsorship law (labour law). Although the modified law is expected to come into effect later this year, Kafala is widely perceived as restrictive for people working in the private sector, including construction. When asked about the impact of Kafala on the overall attractiveness of Qatar’s employment market, Al Jolo says he sees this more as propaganda from the West. “I am not expecting everything to be 100 percent perfect overnight. The people who are working on this are taking care of the workmen,” he adds.

The growing regional competition for manpower is going to have an impact on Qatar’s construction sector as it heavily relies on expatriate professionals. (Image Arabian Eye/Corbis)

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Civil engineering is not a popular career choice among Qatari students who generally prefer specialising in the finance and energy fields. (Image Arabian Eye)

Overcoming challenges Unlike some developed markets, Qatar does not have a long history of practising advanced construction methods since the sector started to peak only a few years ago. As a construction market, which is on its way towards maturity, how does Qatar cope with the engineering and architectural challenges that these mega projects offer? Al Jolo feels design and innovation are some aspects that do not have boundaries, they cannot be controlled by any one country. He agrees there are some dominant countries such as Europe and America which have excelled in innovation, but says this trend is not going to last forever. Emphasising on the roles of Qatari companies that have earned local experience and knowhow to execute these critical projects, Al Jolo says, “You simply cannot implement something that is applied in Europe or America or in China, as it is too hard to make it adaptable here. That’s why you need shared knowledge between developed markets and Qatar through some sort of joint ventures,” says Al Jolo, adding that one company or country cannot do everything by itself. According to Al Jolo, Qatar offers invaluable experience to

expatriates who are working here in many of the construction projects. “The amount of work that you are seeing here, you will not find anywhere else in the world.”

2022 World Cup Amid the ongoing controversy surrounding the 2018 and 2022 World Cups, how confident is Al Jolo about Qatar’s ability to overcome the ongoing criticism and put up a good show? Al Jolo explains that there were some doubts raised even during the Asian Games 2006. “We proved to the people and the other countries what we are capable of doing. I think we are going to prove to the world once again that we are capable of holding the 2022 World Cup and many more activities beyond the 2022 [event],” he says confidently. Al Jolo points out that what one sees in Qatar has come up in just 30 years or so, in comparison to 150 to 200 years that Europe or America took to build. “I know there are some negatives because when you do things in a hurry, you tend to hear all these. But it does not mean that we have to stop or delay things,” says Al Jolo, who feels one cannot undermine the achievement that Qatar has made in such a short time.

Resources

In meeting FIFAâ&#x20AC;&#x2122;s fixed deadline for the 2022 World Cup, one of the major challenges in the way of Qatar is the shortage of resources. On one hand, the country is struggling to recruit and maintain a pool of talented workforce. On the other hand, Qatarâ&#x20AC;&#x2122;s construction sector is heavily dependent on imports for construction materials and equipment. (Image Arabian Eye/Corbis)

human resources

accommodation

resources

With growth, Qatar’s construction industry is getting more demanding on individuals’ skillsets in specialist areas.

TOUGH choices: Recruitment in Qatar construction Qatar proposed labour reforms in May 2014, but the country is yet to implement any changes in its Kafala sponsorship system. According to Al Sharq, the reforms are expected to be actualised in December 2016. But what happens once the changes are finally incorporated? How will Qatar deal with its 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.

ccording to GulfTalent’s report Employment and Salary Trends in the Gulf, 66 percent of the employers surveyed plan to create more job positions. However, the report also stated 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

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Qatar’s employers seem to rely more on traditional ways of recruitment rather than engaging with the global talent through online social platforms.

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.

resources With a number of projects scheduled for completion before 2022 and 2030, Qatar’s construction industry is facing an urgent need to hire competent candidates from all over the world.

“What is required for the construction industry is quality manpower with a good productivity rate,” says Kumar.

Challenges ahead What serves as a major impediment for many high-skilled professionals is the high cost of living in Qatar, among issues linked to 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 (MEP) 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 competition 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. 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. The employers do not always get visas for nationalities of their choice. “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. 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. What happens if an individual fails to meet the organisation’s expectations? To save the amount of time and money invested in

What serves as a major impediment for many high-skilled professionals is the high cost of living in Qatar, among issues linked to academic and residential facilities.

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bringing labour into Qatar, many companies conduct trainings and workshops to ensure that the individuals can cope in a changed working environment. 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 2014, Qatar proposed worker reforms to its long-established Kafala sponsorship system, which is expected to be replaced with a new system in December 2016. For Azzi, Kafala is one of the major challenges of recruiting in Qatar’s local market. Despite speculations, the message Qatar’s commitment to labour law reforms sends is clear. 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 two-year ban waived from workers leaving their employers, candidates will explore better 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 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,

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Naukrigulf.com, GulfTalent and LinkedIn. Despite the option of reaching out to international workforce directly through social networking 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 profile 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.”

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.

The employers do not always get visas for nationalities of their choice.

resources

“While hiring of unskilled workers from abroad is very easy, attracting skilled workers and technologybased staff is a real challenge.” – M. Vasanth Kumar, CEO of Arabian MEP Contracting.

Assuming the sponsorship system is abolished in the near future, will the state still achieve a better position 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.

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.”

On the other hand, 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.” 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 highskilled 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. This software formulates 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 sixstep procedure to complete an application also ensures that only serious and interested professionals get to reach the recruiters.

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.

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Qatar currently has over a million labourers, and their number is expected to grow at an annual rate of seven to 10 percent over the next five years. (Image Getty Images)

A home away from home for Qatar’s migrant workers

Qatar has been under international scrutiny for its treatment of blue-collar migrant workers, particularly in terms of their living conditions. The country has answered these criticisms by announcing a number of worker accommodation projects meeting international standards. However, despite these efforts, supply remains a challenge, writes Syed Ameen Kader.

mid continuous global criticism for the way Qatar treats its migrant workers, the government’s efforts to improve their living conditions seem to be paying off, as a large number of labourers may soon have access to better housing facilities. Last year, Barwa Real Estate company started renting out units at its ambitious ‘Labor City’, known as Barwa Al Baraha. The 1.8 million-square metre (sqm) project, cited as the largest in the Gulf region, has been planned to house more than 50,000 workers, in decent living conditions – accommodating not more than four persons in a room – besides providing other basic health, safety and community facilities. In order to meet growing demand, the government recently allocated 23 plots of land to private companies for developing temporary labour accommodation on a build, operate, transfer (BOT) basis. This is in line with what Dr. Abdullah bin Saleh Al Khulaifi, Minister of

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Labor and Social Affairs, said last year that Qatar will build seven cities to house 258,000 migrant labourers, many of whom are working at project sites related to the 2022 World Cup. All seven cities are expected to be built by the end of 2016, housing about 25 percent of Qatar’s migrant population. However, considering the fact that Qatar’s labour population is going to reach 2.5 million in the run up to the 2022 World Cup, these numbers may not be enough. The 2010 census indicated that there were approximately 920,000 workers accommodated in 36,000 compounds of varying sizes located throughout the country. These are generally located in relative proximity to the place of work and many of the larger compounds are found in and around the Industrial Area, Mesaieed, Ras Laffan and Al Khor. Also, there is a sizable population that does not fall into the migrant labour category but

represents the middle- to low-income group, which is in need of affordable housing. Nick Witty, director of real estate, Deloitte & Touche, Middle East, says the current forecasts suggest that there could be additional demand for 500,000 to one million beds in the run up to the 2022 World Cup. “Historically, the availability of housing for lower- to middleincome households has been relatively limited,” he explains.

2.5

million

The number of migrant workers expected to be living in Qatar in the run up to the 2022 World Cup.

resources However, Witty adds, in recent years, there have been some initiatives by both private and quasi-government entities such as Ezdan Real Estate and Barwa Real Estate that have built extensive residential facilities such as the Ezdan Village compounds, Barwa City and Barwa Village. “While this has undoubtedly increased supply, there is still a steady demand for affordable housing, especially as the country continues to witness rental growth across all residential asset classes,” Witty tells QCN. Although current supply may not be enough, increased participation of private companies into this segment is expected to ease some pressure on housing demand. For example, Daruna Development, a Qatar-based real estate firm, last year unveiled its plan to build facilities for around 12,000 workers, and subsequently signed a QAR800 million agreement with Wasita Qatar for the management of this residential complex. Joseph Lebaron, vice chairman of Daruna Development, says they expect the first two projects to get completed before the end of 2016. Daruna is also bidding for additional projects for the Ministry of Municipal and Urban Planning (MMUP) and other semigovernment entities.

Building standards Besides supply, the quality and standard of many of the old labour accommodations have been an issue that social activists have raised. With the country having a limited number of inspectors to check the offenders, many contractors take advantage of the situation to cut costs by providing substandard accommodation. “There has been a lack of enforcing labourer’s housing regulations. However, the government has expanded the number of inspectors to 300 (up from 150) last year, with plans to expand this to over 400 inspectors in the near future,” says Edd Brookes, general manager at DTZ Qatar. To deal with the quality issue, Qatar Foundation (QF) in 2013 came up with a new set of guidelines to be followed while building accommodation for migrant workers. Although, the government-backed projects such as Barwa Al Baraha are following these guidelines,

Daruna claims its designs are the first in Qatar to be certified with QF’s Standards for Workers’ Welfare guide published in 2013. (Image Daruna)

there are many developers or contractors who continue to ignore them. According to Andy Reid, business development manager at Qatar International Safety Centre (QISC), the charters set by QF and the Supreme Committee for Delivery and Legacy have definitely helped the improvement within workers’ accommodation. However, “currently not all accommodation camps are signed up to the charters,” he says. To make the charter more effective, Reid suggests, it should be compulsory for all camps to follow their guidelines and therefore have a set standard in Qatar. But with the decrease in oil price, Reid fears, it means that companies could cut back on areas such as health and safety, especially within workers’ accommodation. “In my view, you can’t cut back on areas such as this especially within an organisation – you can’t put a price on someone’s wellbeing.” he says. However, private companies are ostensibly

trying to bring that change. Daruna Development claims that its designs are the first in Qatar to be certified as compliant with QF’s Standards for Workers’ Welfare guide published in 2013. “We want to take the lead in taking QF, MMUP and international standards and applying them for the transformation of worker housing in Qatar. We seek to help implement the Qatar National Vision 2030, in support of the worker welfare committees across the ministries, councils, committees and agencies of the Qatar government,” Lebaron emphasises. Reid points out that accommodation standards are highly important for worker welfare. “Having a respectable level of standards within workers accommodation means employees can take a break between shifts. This helps improve their mental state, level of productivity, as well as contributing to less accidents within the workplace,” he explains. Highlighting some of the minimum housing facilities, which are absolutely necessary in any country, Reid tells QCN, companies should provide comfort, good food, sporting and recreation facilities, and excellent hygiene services such as laundry and overall cleanliness of rooms. “In particular, within Qatar and the Middle East, air-conditioning is imperative to ensure good rest periods. Another necessity within any camp is adequate room,” he says.

Land factors

“The current forecasts suggest that there could be additional demand for 500,000 to one million beds in the run up to the 2022 World Cup.” – Nick Witty, director, real estate, Deloitte & Touche, Middle East.

According to Andy Reid, business development manager for Qatar International Safety Centre (QISC), the charters set by Qatar Foundation and Supreme Committee have definitely helped the improvement within worker accommodation. However, “currently not all accommodation camps are signed up to the charters”, he adds.

One of the major factors that kept real estate companies away from developing affordable housing is the high cost of land. There is a traditional practice of trading land as a commodity in the Gulf Cooperation Council region. This means that the ultimate owners would not necessarily have any intention of developing it. “As a result, land is often too expensive to develop into low-cost accommodation as the developer will not be able to secure the returns he requires and as

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MIGRANT WORKERS’ ACCOMMODATION SCENARIO

Workers Population 2010

2022 920,000 2.5 million

2022

Demand to reach 50,000 to 1 million beds.

Joseph Lebaron, vice chairman of Daruna Development, says, “We are certain we will fill our worker communities as fast as we can build them. The challenge has been finding unencumbered land parcels that are large enough and situated in the right areas.”

2016 Housing supply: 2010 such the focus is on higher end, higher quality products which commands higher rents and in turn higher investment returns,” explains Witty. In order to mitigate this problem, he suggests the government could look at releasing further tranches of land in certain areas solely for the development of workers’ accommodation and either entering into public-private partnership (PPP) style arrangements with private sector developers/investors or promoting further development through the quasi-government developers such as Barwa Real Estate. Brookes says that such a trend is already happening as in the past, private developers generally went for higher- and middle-income residential schemes. “However, there is now an increasing contribution by the private sector to provide labour accommodation which meets government standards. This includes a maximum of four labourers to a room, a minimum or four sqm per labourer and onsite health facilities for all accommodations featuring over 100 labourers,” he adds. Although Qatar property market has already started seeing this trend, the existing players still face challenges in acquiring land parcel for developing affordable housing projects. Daruna’s Lebaron says, “We are certain we will fill our worker communities as fast as we can build them. The challenge has been finding unencumbered land parcels that are large enough and situated in the right areas.” MMUP is taking an ambitious programme to launch facilities across Qatar. “We applaud that effort. There is still need though, for more land allocation,” he adds. With the introduction of the likes of Barwa Baraha and Daruna, the quality and standard of workers’ accommodation has witnessed considerable improvements in recent years. Brookes tells QCN that Qatar is certainly leading the way for maintaining high labour

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36,000 compounds

Government constructing 7 labour cities to accommodate 258,000 workers. Daruna building accommodation for 12,000 workers.

A picture of the new Labor City in Doha, which is built by the govern ment and will be hosting a large number of migrant workers. (Image Arabian Eye/Reuters)

standards within the Middle East. “But these changes take time to implement. Perhaps increased powers to fine and shut down labour accommodation that does not meet the minimum standards would help,” he suggests. Increasing international media scrutiny has definitely helped to bring Qatar’s labour issues to the centre of attention. Lebaron says that as a company, Daruna Development “welcomes that scrutiny. We want that scrutiny because we think we have a great story to tell, we think we

are part of the solution to a problem that the international community has identified and that the Qatar government has itself identified.” “The MMUP, QF and other standards that are now becoming the norm in Qatar will increase the price of accommodation. The increase, however, is a small price to pay for the added value of increased worker productivity, compliance with Qatari and international standards and mitigation of reputational risk,” Reid concludes.

SUSTAINABiLITY

The Qatar National Vision 2030 focuses on four pillars: social, economic, human, and most importantly environmental development. With green technologies such as solar panels and district cooling, the countryâ&#x20AC;&#x2122;s construction sector can play a crucial role in cutting down the levels of carbon emissions.

construction waste

sustainable hvac

solar technology

sustainability

Trash to treasure Recycling construction waste in Qatar

Since managing the construction debris has become a major challenge in the region, civic bodies and companies are looking for alternative ways to get rid of this waste – cost-efficiently and sustainably – to not only make this into a viable business proposition but also save the environment, writes Syed Ameen Kader. The production of recycled aggregate underway at Qatar’s Rawdat Rashid recycling plant, which has a current capacity to produce around two million tonnes annually (mta). This is a small proportion of the total demand for aggregate, but has the potential to reach over 10 mta.

s the Gulf region undergoes massive development and urbanisation due to rapid population growth, the volume of waste generated at various construction sites has increased substantially, making most civic authorities across the region increasingly wary of the issue. Since space is a major constraint for cities such as Doha, Dubai or Abu Dhabi, the authorities are fast realising that prevailing practices for disposing construction and demolition (C&D) waste into landfills is not a long-term solution. Working towards this direction, Abu Dhabi, for instance, has set up Tadweer, the Center of Waste Management, with an aim to set regional standards for C&D waste reduction, as part of Abu Dhabi’s waste management masterplan. Eisa Saif Al Qubaisi, general manager, Tadweer, says, “Construction projects are rapidly increasing in the region with Expo 2020 preparations in Dubai, and the 2022 World Cup

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to be hosted in Qatar. With these developments, municipalities across the Gulf Cooperation Council are recognising the need for robust strategies to minimise the negative impact of large amounts of C&D waste.” For a country such as Qatar, which is building a diverse range of infrastructure projects – executing close to QAR1 trillion worth of construction work – the problem of C&D waste is even more critical. According to the statistics available for the period of 2008 to 2012, as reported by the Ministry of Development Planning and Statistics in 2014, Qatar generates around 10 to 12 million tonnes of solid waste every year – almost 80 percent of which comes from C&D activities. This waste, however, can be turned into a revenue-generating source if recycled efficiently and effectively. The opportunity seems imperative for Qatar as the country relies heavily on imports for construction raw materials. Nicola Maxwell, sales manager,

Averda – a waste management company operating in Qatar – says, “It is understood that the quality of C&D in Qatar is fairly good, and certain projects are in the process of carrying out testing and quality of performance of such locally-sourced aggregate.” Referring to a report released by Qatar Development Bank a few years ago, she says that the revenue potential for the solid waste value chain in Qatar could be around USD663 million (QAR2.4 billion). “There are significant opportunities for revenue generation from C&D recycling (USD105 million or QAR382 million), household recycling (USD100 million or QAR364 million) and commercial collection and recycling (USD176 million or QAR641 million),” says Maxwell, who is also the chairperson of Solid Waste Interest Group – a part of Qatar Green Building Council (QGBC). Qatar recognises these business opportunities in C&D waste management, and

As the use of recycled aggregate is relatively new in Qatar, it is recommended to use specialised contractors who can separate different types of wastes on site.

sustainability accordingly has taken some initiatives under the Qatar National Development Strategy 2011-2016. These involve setting up a target of recycling 38 percent of the country’s total solid waste by 2030, up from the current figure of four percent. Explaining Qatar’s initiatives towards waste management, Matthew Kitson, regional director, Hilson Moran Qatar, says, “Qatar has already implemented a number of policies and frameworks to reduce C&D waste including the application of the Global Sustainability Assessment System (GSAS) developed by the Gulf Organisation for Research and Development.” He adds that this local sustainability assessment system is currently being applied to a number of new construction projects across Qatar. “Part of the assessment focuses on promoting a high degree of recycled content in construction materials and responsible sourcing of materials from local supplies,” says Kitson – a GSAS-certified professional. Most large-scale projects in Qatar, such as those under Qatar Railways Company, QDVC, Qatar Foundation and Lusail Real Estate Development Company have construction waste management and recycling strategies, but the uptake level has been low among smaller construction companies as they are not fully aware of economic benefits of using recycled aggregates.

use of recycled aggregate in construction’, which was executed by TRL in collaboration with other government agencies such as Qatar Standards in the Ministry of Environment, Qatar University, and the Public Works Authority (Ashghal). Dr. Hassan, who drove the project at the ground level, believes the experiment has been working. The outcome of this pilot project helped the government amend its latest version of Qatar Construction Specifications (QCS 2014), which now allows construction companies to use recycled aggregate in various construction applications in Qatar. “This specification has been developed based on local evidence for building trials constructed in 2013, that exhibited great performance over more than two years,” says Dr. Hassan, who was responsible for testing the quality of recycled waste material in new construction projects such as buildings, roads and other infrastructure. The pilot project also helped the government develop codes of practice for sorting wastes at source before sending them to landfill sites. Now, Qatar has a government authority, Qatar Standards, which has been entrusted with the job of inspecting the product’s conformity with specifications and certifications. Meshal Al Shamari, director of

QGBC, agrees the whole process needs to be regulated in order to meet certain quality standards. “You have to apply certain standards and specifications before a recycled material can be used in construction. Sure, we care about the environment, but we also care about the quality of construction,” he says, adding that developers can earn certain credits for green building certification based on how they manage dust or reuse materials onsite. “But even the rating systems give you a limit for using recycled materials. You cannot use 100 percent,” he adds. Considering all these factors, efforts are currently being made to allow more types of recycled materials to be used for various construction applications. Following the success of the first project, QNRF has decided to fund another project entitled ‘Implementation of recycled aggregate in construction projects’. “In this project, TRL and Qatar Standards will work jointly with government clients, consultants, contractors, and suppliers on implementing recycled aggregates in fullscale construction projects,” says Dr. Hassan, adding that the new project will mainly focus on government projects. Undoubtedly, such initiatives will help promote the usage of more recycled aggregates for construction purposes.

The percentage of construction waste currently recycled in Qatar.

A file picture of a demolished area next to the Plaza in Souq Waqif, the central market in Doha.

The challenge Dr. Khaled Hassan, country director, Transport Research Laboratory (TRL), Qatar Science and Technology Park, says, “Despite the large quantities of construction waste generated, the use of recycled aggregate is still very limited. There is great potential to convert construction waste from a landfill material, harming the environment, into quality aggregate generating income.” In order to do so, experts feel that the country needs to create a complete ecosystem, towards which some progress has been made in the last few years. In 2011, Qatar National Research Foundation (QNRF) funded a project called ‘Innovative

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sustainability How to handle C&D waste? Managing waste sustainably and profitably is a specialised job. Ideally, if the project is large, this process should start at the initial stage and on the site, in order to derive better results. At present, almost all recycled aggregate production takes place at Qatar’s Rawdat Rashid facility. However, it could be economically feasible to set up a recycled aggregate plant on a site which generates sufficient volume of feedstock. For example, sites carrying excavation waste from the Doha Metro could be ideal for recycled aggregate production. The obvious advantage of an onsite recycling is that the materials can be reused with minimum disposal to landfill. That also means one will have to extract less amount of virgin or raw materials for new construction. “Additionally, fewer materials are transported to and from site with savings in transportation and energy costs. This also results in reduced traffic congestion and project delay due to materials supply,” points out Dr. Hassan. Whether or not a company is able to create its own recycling

system, it must allocate an area at its project site to stockpile all recyclable materials, collected during the course of construction. “This is usually the responsibility of the site health and safety executive (HSE) officer or the site supervisor. At the end of the project, the finance team members of the construction company along with their site HSE officer should review the recyclable items to see if any of those can be reused in their next projects or should be returned to the supplier,” says Salman Shaban, senior manager, Lucky Star Alloys – a scrap recycling company with operations in Qatar. Thereafter, he adds, the site HSE officer or the site supervisor can choose any of the three methods of disposing their recyclables: (a) assign a professional waste management company to dispose of the recyclables to the respective recycling facilities; (b) make arrangements directly with the local recycling companies to collect the waste from their construction sites; or (c) deliver the materials themselves to the recycling facilities.

C&D waste management in qatar 20,000 tonnes – Construction waste generated every day.

QAR40-50 per tonne – Cost of recycled aggregate for use in concrete.

2 million tonnes – Annual production capacity of recycled materials at Rawdat Rashid landfill.

20% – Potential percentage of total aggregate Qatar can recycle.

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As the use of recycled aggregate is relatively new in Qatar, it is recommended to use specialised contractors who can separate different types of wastes on site and then process them to meet different applications as per the QCS 2014. Maxwell of Averda, a company which currently handles around 700 tonnes solid waste daily, says, “It is much less of a burden on any company, both logistically and financially, for a specialised waste management company to come in and manage the waste for them.” She explains this would avoid the asset investments, logistical and manpower investments, environmental impacts and also potential permits and legal requirements. “It would also ensure that the waste is handled as per the environmental standards of Qatar and according to corporate responsibility ethos.”

“You have to apply certain standards and specifications before a recycled material can be used in construction. Sure, we care about the environment, but we also care about the quality of the construction,” says Meshal Al Shamari, director of QGBC.

Cost implication As recycled aggregates are generated from waste, there is a common perception that these materials should be used in low-value applications. Dr. Hassan of TRL explains that “this perception is incorrect, especially in Qatar where there is a shortage of quality aggregate with great potential to convert waste into

Qatar recognises there are huge business opportunities in construction and demolition waste management.

sustainability

“There are significant opportunities for revenue generation from C&D recycling,” says Nicola Maxwell, sales manager, Averda.

a high-value product generating income.” Supporting his argument, he cites the example of the 2008 construction boom scenario when the price of imported gabbro climbed to QAR120 per tonne from the previous level of about QAR75 per tonne. “This scenario has been repeated in 2015 with the price of imported aggregate exceeding QAR150 per tonne.” By contrast, he points out, the cost of recycled aggregate for use in concrete is in the range of QAR40 to QAR50 per tonne, depending on the application. The current production of recycled materials at Rawdat Rashid landfill is around two million tonnes annually (mta), which is a small proportion of the total demand for aggregates, but has the potential to reach over 10 mta. “In the long term, recycled aggregates could contribute over 20 percent of Qatar’s aggregate supply,” estimates Dr. Hassan. As a prevailing practice, some companies in Qatar have set up their own temporary concrete crushers. They crush the concrete as per their needs and reuse it within their sites. Maxwell says, “Financially, it would not be easy to recover the costs by reusing or selling out the recycled products. This will become more feasible though when further legislation, codes of practices and/or landfill

HOW TO ManagE construction waste

levies are put into place.” Shaban of Lucky Star Alloys points out that many companies still prefer to dispose waste into the landfill as it is a convenient and economical option for them. “However, on a positive note, we are also seeing that the awareness for recycling is increasing among individuals and companies,” he says. As the awareness is increasing, he feels, companies are also getting monetary value for their recyclables to cover the cost of labour and transportation. “At times, they also manage to get additional monetary net value for their waste,” Shaban adds. With the implementation of stringent sustainability and environmental agendas across major infrastructure projects in Qatar, Kitson of Hilson Moran Qatar says an increasing number of main contractors are turning to the employment of full-time environmental managers. The manager has a role to oversee the implementation of a whole host of project-specific environmental management plans and report back to the government on evidence-based compliance. “In essence, onsite sustainability and environmental management in Qatar has turned to the highest level of international standards and corporate responsibility,” concludes Kitson.

•

Assign the responsibility to HSE officer or the site supervisor.

•

Allocate an area at the project site to stockpile all recyclable materials.

•

If the volume is high, look for setting up an onsite recycling facility.

•

Use the Rawdat Rashid landfill recycling facility.

•

Disposing can be assigned to a professional waste management company.

•

Direct arrangements can be made with the local recycling companies to collect the waste.

•

Alternatively, deliver on your own to the recycling facilities.

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sustainability

The impetus is there for the Gulf’s construction industry to produce energy-efficient buildings In an interview with QCN, Andrew Pack, Global Technical Support manager, Kingspan Insulation LLC, discusses why insulation is integral to improve the sustainability of buildings across Qatar and the wider region. Please tell us about Kingspan Insulation and its presence in the Gulf?

Kingspan’s insulation panels being installed during the construction of a facility in the Gulf region.

Kingspan Insulation is a division of Kingspan Group plc – one of Europe’s fastest growing building materials manufacturers. Kingspan Insulation is at the forefront of the energyefficient building drive, helping architects, engineers and developers get the most energyefficient building envelope and building services performance. As governments across the Gulf Cooperation Council (GCC) commit to cutting carbon emissions, the impetus is there for the Gulf’s construction industry to produce low-energy buildings. As such, the demand for better performing insulants will grow. With a manufacturing facility in Dubai, and an office in Doha, Kingspan Insulation is now positioned to service the Gulf.

Considering Qatar and the Middle East’s climate, what are the best insulation materials that can be used here? Insulation products that are suited best for the Gulf region are those with the lowest-aged thermal conductivity. Many insulation materials are better performing as soon as they come off the manufacturing line; this can be termed as an ‘initial Lambda value’. However, this is not representative of the value the material will match when it is installed. When calculating U-values, it is important to make sure a building performs as designed, and this can be helped by looking at a thermal conductivity, which is aged. In addition, insulation materials with a lower thermal conductivity will reduce the heat gain from outside of the building, by slowing the heat transfer between the floor, roof or external walls. This is particularly important in the summer months when the temperatures throughout the Gulf can reach above 50 degrees Celsius. Currently in Qatar, cooling accounts for up to 80 percent of the energy usage in a single building. Slowing the heat transfer from outside to inside a building can reduce the cooling load as the internal temperature will remain more constant. This can, in turn, have energy-saving benefits. For soffit, floor and external walls, the

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“[Sustainability] assessment methods and rating systems can help to create a sustainable built environment, but the challenge is to prove their worth.” most thermally-efficient product commonly available in the Gulf is a closed-cell rigid thermoset phenolic insulation. For roofs, the most thermally-efficient product commonly available here is a closed-cell rigid thermoset polyisocyanurate (PIR) insulation. Comparatively,

these insulants can be thinner than those which are worse performing, as they are more effective at achieving the required U-values stipulated in the regulations across the Gulf.

What are some of the major challenges of dealing in a Gulf market? European building standards are much more onerous than the regulations and standards currently employed across the Gulf. The regulations within the Gulf can be weak, by comparison, and this can provide us with an inefficient building stock. However, the development of assessment methods, which are easily employed within the GCC, such as the Global Sustainability

sustainability

According to Andrew Pack, Global Technical Support manager, Kingspan Insulation LLC, insulation products that are suited best for the Gulf region are those with the lowest-aged thermal conductivity.

“A region-wide study has shown that the value of energy saving, recovered by installing additional insulation and improving the U-value specifications, can lead to consistent and remarkable return on investment.”

Assessment System (GSAS), shows a move in the right direction towards rating systems such as the Leadership in Energy and Environmental Design (LEED) and Buildings Research Establishment Environmental Assessment Method (BREEAM). These assessment methods and rating systems can help to create a sustainable built environment, but the challenge is to prove their worth, which is why Kingspan Insulation asked Mott MacDonald to research the energy-saving benefits of improving U-values and the return on investment (ROI) this can provide from the improved efficiencies.

How important is the role of thermal insulation in a green building? A region wide study from Mott MacDonald has shown that the value of energy saving, recovered by installing additional insulation and improving the U-value specifications, can lead to consistent and remarkable ROI on the cost of the insulation. For its study, Mott MacDonald developed six generic building models, representative of building stock across the Middle East. These models included a villa, low-rise residential, high-rise residential, low-rise commercial, highrise commercial and a hotel. The firm then compared the effects of installing additional insulation in the floors, roofs and external walls of each of the building models. To analyse this, energy usage was calculated by using Sefaira software, and each of the models was put into the geographical and cost profile of the five different cities: Abu Dhabi, Dubai, Muscat, Riyadh, and Doha. The model considered actual construction costs, annual energy usage, projected annual energy savings and ROI. As expected, the study showed an initial rise in project costs for all six of the buildings modelled, when the U-value specification is improved. However, despite this increase, the modelled results for the buildings showed that an overwhelming ROI could be achieved even when the insulation specification is increased.

Can you share the study’s findings specific to Qatar? One building Mott MacDonald looked at was a typical three-bedroom villa in Doha. Using the baseline insulation specifications, outlined by Kahramaa, within Doha, for the external walls, roof and floors. Mott MacDonald then improved

these U-value specifications, which gave an outstanding ROI of over 260 percent. Overall the strongest returns were seen across all residential developments, but the study also revealed significant returns for all building types. For example, the ROI for improving the U-values of a low-rise commercial building was over 150 percent. Moreover, internal BBA approved calculations have shown that using alternative insulation materials, with a higher thermal conductivity, can have unforeseen implications. Matching the targeted U-values with poorer performing insulations materials is more difficult, and will require a significantly thicker insulation to be specified. This can have an impact on the construction, especially in wall build-ups, such as cladding or external insulation finishing systems (EIFS) used, which will affect the internal floor space.

Are there enough providers of sustainable insulation in Qatar? There are many manufacturers of insulation within Qatar and the Gulf, from local manufacturers to multinational companies. However, Kingspan Insulation was the first insulation manufacturer in the world to be awarded Excellent as per Responsible Sourcing of Construction Products certification BES 6001. Raw material supply chains of insulation manufacturing can have

an all-too-easy-to-ignore impact on a business’ sustainability performance. Manufacturers should be conscious about what they are putting into their insulation as much as they are about where it is going. The certification applies to Kingspan Kooltherm, KoolDuct, Therma and Cavity Closer products manufactured at Pembridge and Selby, United Kingdom, manufacturing facilities.

How many kinds of insulations does Kingspan’s product range cover? Kingspan Insulation’s product range covers nonfibrous thermal insulation for a variety of building fabric and building services applications. For building fabric, Kingspan Insulation’s range includes optimum-performance OPTIM-R vacuum insulation, premium-performance rigid Kooltherm insulation, high-performance rigid Therma insulation, and high-performance rigid extruded polystyrene Styrozone insulation. These insulation products cover floor, soffit and roofing applications, and are used within external wall systems such as cladding and EIFS. For building services applications, Kingspan Insulation’s product range includes FMapproved premium-performance rigid Kooltherm insulation for pipework and ductwork, and premium-performance KoolDuct panels and high-performance rigid PalDuct panels for the fabrication of pre-insulated ductwork.

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sustainability

Across the Gulf Cooperation Council’s desert climate, a major factor weakening the capacity of solar panels is dust, which needs to be cleaned regularly to maintain optimum performance. (Image Arabian Eye/Corbis)

While the sun shines:

Exploring solar opportunities for Qatar projects Qatar’s sun-rich environment provides the ideal host for solar projects. With an aim to produce 20 percent of its energy capacity from renewable sources by 2030, the government has a highly ambitious target of achieving 1.8 gigawatts (GW) by 2020 – also the year by which the cost of photovoltaic (PV) systems is expected to be reduced by 40 percent. With increasing opportunities, however, come some tough questions: Is Qatar’s dusty and hot environment really a perfect place for solar? Does the country have solar professionals and companies to drive the growth in this sector? Are developers ready to invest more to have projects with solar features? Speaking with sustainability experts in the region, QCN’s editor Farwa Zahra addresses these concerns, while looking at some recent projects in Qatar capitalising on what is one of the cleanest forms of energy available.

or the Gulf Cooperation Council (GCC), solar is the most abundant form of clean energy that can be capitalised on to meet its growing energy demand. But is the region sufficiently exploiting its natural resources? Ostensibly, governments in the region are well aware of solar’s potential. In 2015 alone, the value of awarded contracts for renewable energy projects in the Middle East and North Africa (MENA) region reached USD7.7 billion (QAR28 billion), representing a 450 percent increase from USD1.4 billion (QAR5.1 billion)

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in 2014, reported Meed. The rise in renewable energy projects also meant their share increased to 24 percent of the total power generation projects awarded during 2015. A key focus of sustainable power generation projects was linked to solar energy, followed by wind and more conventional hydropower. In fact, 58 percent of renewable projects awarded comprised solar utilities. Compared to the neighbouring GCC states, Qatar still has to grow its renewables sector as a part of its development drive towards the 2022

World Cup and Qatar National Vision 2030. Giving a comparative analysis of the region, Salman Zafar, founder of EcoMENA, says, “Qatar has been a bit slow in joining the solar energy bandwagon, though the government has a highly ambitious target of 1.8 GW by 2020.” At the end of 2015, he adds, the installed solar capacity in the country was a measly 10 megawatts (MW). In contrast, United Arab Emirates and Saudi Arabia have current installed solar capacities of 100 MW and 50 MW, respectively. Both

sustainability

“Depletion of fossil fuel reserves, transition to low-carbon economy, and adoption of sustainable development goals are major motivations for Qatar to embrace solar energy.” – Salman Zafar, founder, EcoMENA.

countries, Zafar says, have several large-scale solar power projects in development stages. On the other end of the spectrum are Kuwait, Oman and Bahrain, lagging far behind in the renewable energy sector. According to Khaled A’amar, general manager at Al Emadi Solar, Saudi Arabia will soon become the region’s largest market for solar. “In other parts of the GCC where there are regulatory pressures or opportunities to secure financial incentives, the interest and roll-out is greater,” says Dr. Neil Kirkpatrick, head of sustainability, Middle East, for Faithful+Gould. Drawing examples from Abu Dhabi, he explains that the Estidama Pearl Rating System, a government-owned building and community rating system linked to the planning process, includes mandatory requirements to ensure that a proportion of the energy supply for hot water generation for villas is provided by renewable energy. With no such mandate in Qatar, Kirkpatrick says, “Faithful+Gould is only recently beginning to see leaders and pioneers emerge both in the public and private sector where we are being asked to explore the possibility of incorporating renewable energy solutions.”

Growth opportunities As a country with significant reserves of hydrocarbons – readily available at low rates – it comes as no surprise that a large part of Qatar’s energy demands are met via conventional sources. Nevertheless, sustainability experts believe the region’s newfound inclination towards solar and renewables is a product of a few key factors which include reduction in the cost of implementing solar technologies, increasing demand as a result of growing population, and the government’s active stance on saving natural

Qatar National Convention Centre, pictured here, meets 12.5 percent of its energy demands through solar power. (Image FotoArabia)

resources. With Qatar being one of the major generators of greenhouse gas emissions, Mounir Bensegueni, Middle East business development director, OCS Group International – a subsidiary of Tadmur Holding – says, solar power generation development falls within Qatar National Vision 2030.“Leaders in the construction industry are starting to explore the possibilities of benefitting from the use of renewable energy solutions. We believe this has been driven by a sustained reduction in the prices of renewable energy solutions as well as the continued development of new products entering the marketplace,” says Kirkpatrick.

Providing some statistics on the cost of solar panels, Luc Graré, REC’s senior vice president for Europe, the Middle East and Africa, says, “During the last six years, global PV system costs decreased by half. By 2020, a further decrease of 40 percent is expected, and will reach a global average of five to eight USD cents per kilowatt hour (kWh).” Summarising Qatar’s motivation to use solar energy, Zafar says, “Depletion of fossil fuel reserves, transition to low-carbon economy, and adoption of sustainable development goals are major motivators for Qatar to embrace solar energy.”

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sustainability Projects In capitalising on the current opportunities to grow Qatar’s solar sector, a lot will depend on the willingness of the country’s construction sector. According to Zafar, “Qatar’s global horizontal irradiance is 2140 kWh per square metre (sqm) per year which makes it wellsuited for rooftop solar PV systems. However, the construction sector is yet to capitalise on it as the country is lacking a coherent off-grid and on-grid renewable energy policy and feedin-tariff mechanism.” That said, considering the fact that Qatar’s government has indicated to mandate green construction over the coming years, it makes more sense for contractors and clients to be proactive in their move from conventional to sustainable construction, a large part of which will comprise solar. Among some current projects using solar as a major source of energy is Qatar National Convention Centre. With gold rating as per the Leadership in Energy and Environmental Design (LEED) standards, the facility is equipped with 3500 sqm of solar panels which meets 12.5 percent of the centre’s energy needs. Apart from solar rooftop installations, the higher percentage of energy conservation is also achieved by energy-efficient LED lighting system. Another such project is the recently launched Evergreen Building built in accordance with Energy City Qatar Design Guidelines. Explaining its solar features, Bensegueni says that the project’s design-and-build features enhance energy saving through PV solar cells installed on top of the circular structures of the building used to generate electric power which shall bring “energy saving of up to 15 to 20 percent of the lighting load on the common areas and the sub-ground car parking as well as the central domestic hot water system”. On the infrastructure side, Qatar Railways Company is working towards maximising the use of solar technologies for energy conservation, working closely with Global Sustainability Assessment System that provides specific guidelines for green rail projects. In July 2014, the company signed a memorandum of understanding with Qatar Solar Technologies for the installation of up to 80 MW of solar technology across its various rail projects underway in Qatar. Summarising Qatar Rail’s interest in exploring solar solution, Engineer Abdullah bin Abdulaziz Turki Al Subaie, managing director and chairman of the executive committee of Qatar Rail, told media, “Solar energy development is one of the main green aspects of our project.” Driven mostly by government projects, as solar energy makes inroads in Qatar’s construction practices, experts believe encouraging independent power producers (IPPs) will boost the scope of solar in Qatar.

Challenges With opportunities also come challenges that Qatar needs to be prepared for. With the concept of solar technologies new for the country,

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“Solar energy development is one of the main green aspects of our project,” said Engineer Abdullah bin Abdulaziz Turki Al Subaie, managing director, Qatar Rail.

“Leaders in the construction industry are starting to explore the possibilities of benefitting from the use of renewable energy solutions.” – Dr. Neil Kirkpatrick, head of sustainability, Middle East, Faithful+Gould.

having experts in the field can be a major issue. Speaking about some turnkey solar projects in the GCC, Graré of REC explains the cost of solar is higher compared to European states. A major factor behind this cost differential is linked to the shortage of expertise. “As an emerging region for solar, the local installation expertise is lower than in countries like Germany, hence more labour resources are required to complete installation,” he says, adding that the costs for components are also three to four times higher in places such as Dubai, reflecting transportation costs and custom duty of five percent. Seemingly, Qatar’s sun-rich environment provides the ideal host for solar projects. In reality, however, the country’s arid desert climate also contains high amounts of dust, thereby

increasing both frequency and proportion of soiling on PV modules and solar mirrors. Research work by experts at Boston University suggests that the problem of soiling is linked to decreasing yield of these panels. Another performance limiting factor relevant to Qatar’s environment is the region’s high temperature, which has also shown deteriorating results on solar panels. Ultraviolet radiation, atmospheric salinity and dust accumulation, Bensegueni says, have a direct and significant impact on the performance of PV modules and their lifespan. While soiling can be curtailed by increasing the altitude of panels, strong winds in the region pose another hindrance in doing so. When asked about optical panel contamination, Kirkpatrick agrees that dust and sustained high temperatures are invariably cited as potential issues and challenges when using PV cells or solar thermal water heating. Designed to perform better within a clean air climate, the solar cells’ performance is further reduced due to the lack of rain in the region, says Bensegueni, adding that “it is quite expensive and operationally challenging to maintain a dust-free condition of the solar panels due to the cost of water produced from desalination process.” That said, according to Kirkpatrick, “New materials are being developed to decrease the accumulation of dust as well as to safeguard against a decrease in performance at higher temperatures.” Indeed, with the advancement of solar technologies, companies are now introducing self-cleaning solar systems. For existing panels, there are panel cleaning devices being introduced in the market. In Saudi Arabia, the King Abdullah University for Science and Technology has developed a panel cleaning system called the NO-water Mechanical Automated Dusting Device (NOMADD). Requiring zero manual input, NOMADD can clean 99.6 percent of dust from panels, and can be retrofitted or deployed

sustainability

20%

The percentage of energy capacity Qatar aims to achieve through renewables by 2030.

during the design stage. To ensure these systems work efficiently, Kirkpatrick emphasises the importance of involving facility managers in technical aspects of the building before its handover. For Zafar, the largest barrier to growth of the solar sector in Qatar lies in the lack of renewable energy policy framework, legislations, institutional support, feed-in-tariffs and grid access, “Qatar requires a strong, visionary and coherent renewable energy policy as well as a flagship initiative, like Abu Dhabi’s Masdar City, to accelerate its emergence in regional as well as global cleantech arena.” Another obvious challenge is subsidised energy prices. “With heavily subsidised electricity and falling oil and gas prices, the comparison between renewable energy solutions and conventional, fossil fuel-based solutions, becomes more challenging,” says Kirkpatrick. Zafar expresses similar concerns, explaining that solar power systems are still considered to be highly expensive for Qatar, which has abundant and cheap supply of fossil fuels for power generation. In consensus, Bensegueni says that despite the reduction in installation cost of PV panels over the last few years, the price differential is still significant. “The kilowatt hour of solar energy produced by PV technology costs almost double of that of electricity extracted from natural gas,” he says. According to the International Renewable Energy Authority (IRENA), by 2020, MENA’s investment on renewables will reach USD35 billion (QAR127 billion) per year. GCC’s solar contribution, alone, will represent a share of USD10 billion (QAR364 billion), reports Frost & Sullivan. For Qatar, a part of its target this year will be achieved when operations start at Kahramaa’s first solar power facility with a generation capacity of up to 15 MW, as announced by the state-run company last year. By 2020, the company aims to reach a target of 200 MW solar power. Citing IRENA’s 2016 report, Ahmed Imam, director of business development, Solar Business, MENA Schneider Electric, says, “The Qatari government aims to produce 20 percent of its energy capacity from renewable sources by 2030,” adding that solar is anticipated to be a critical part of this mission. This, Imam explains, can be realised with the state’s support in terms of rising awareness on energy management and environmental protection, along with investment in solar research and development. Indicating a promising trend in Qatar construction practices, Kirkpatrick mentions contractors’

growing interest in renewables with a different perspective, “Contractors are starting to take a long-term perspective where they are looking at renewable energy solutions from the viewpoint of asset management. For instance, contractors [are looking at how they can] use the same renewable energy equipment on successive projects much like a contractor might do when using heavy lifting equipment, etcetera.” For Qatar, the year 2016 started with a memorandum of understanding signed between Qatar Petroleum and Qatar Electricity & Water Company, preparing to establish a solar company. Recently, Qatar Environment and Energy Research Institute announced its ongoing works on a second generation of energyefficient solar cells. In terms of motivation, Kirkpatrick sees a marked interest in the development and implementation of strategies to reduce carbon emissions. “This is being led mainly by the public sector where opportunities exist to make massive changes linked to the construction of new infrastructure and public buildings, not forgetting of course, the buildings and infrastructure being developed to help support and facilitate the 2022 World Cup,” he concludes. Indeed, with right direction and continued support, Qatar can achieve what currently looks like an ambitious target.

Dr. Neil Kirkpatrick, head of sustainability, Middle East, Faithful+Gould, says, “Dust and sustained high temperatures are invariably cited as potential issues and challenges when using photovoltaic cells or solar thermal water heating.”

MENA Renewables in numbers 7%

450%

Share of renewable energy projects among all power generation awards in 2014.

Increase in the value of contract awards for renewable energy generation projects in MENA in 2015.

24%

Share of renewable energy projects among all power generation awards in 2015.

Qatar’s minimum target for electricity generation from solar energy sources by 2021.

58%

Share of solar in renewable energy contract awards in 2015.

USD4.5 billion Value of solar power projects awarded in 2015.

USD7.7 billion

Value of renewable energy generation projects awarded in 2015.

2016 | QCN YEARBOOK | 65

LEGAL AND FINANCE

Qatarâ&#x20AC;&#x2122;s pressing infrastructure concerns are developing in a time of economic and political changes, which are leading to a reconsideration of existing laws whether in terms of labour or construction. (Image Arabian Eye/Corbis)

Qatar construction specifications 2014

Public-private partnerships

project finance

legal & finance

Qatar Construction Specifications 2014 Qatar Construction Specifications, frequently known as QCS, is a guideline document mandating the minimum acceptable technical standards to be applied in private and public sector construction projects. Senior contract specialist, Tony Distin (MRICS) offers an analysis of key technicalities and legalities of its latest edition – QCS 2014, which completely supersedes QCS 2010 in all respects.

he 2014 edition of QCS is an impressively large document consisting of 311 Parts in 29 Sections, covering the majority of construction-related activities. With regard to application, Sections 1 (General), 2 (QA/QC) and 11 (Health and Safety) apply to all constructionrelated projects. Section 7 titled ‘Green Building’ on sustainability applies to projects which include a design element, while Section 29 is specific to railway-related projects. The remaining sections of QCS 2014 are all, in essence, technical specifications to be applied to the construction process, and will apply if that particular material/ system specified in these sections is employed in the project.

Changes you need to know QCS 2014 has provided a major overhaul to QCS 2010 removing duplication and ambiguity, while restructuring and expanding some of the sections to produce a clearer and more user-friendly document. In addition, there have also been amendments to some technical requirements, especially around design standards and sustainability. Clearly, it is incumbent on us all to be aware of all of the changes but to identify the top two, it would be prudent to consider Sections 2 (QA/ QC) and 11 (Health and Safety) to be the most significant, not only because of the improved and enhanced requirements but also because of their ever increasing importance in the industry today. QCS 2010’s Section 1 Part 8 on quality assurance has been considerably expanded to 15 parts and elevated to Section 2 in QCS 2014, in essence ‘swapping’ with

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QCS 2010 Section 2 on building demolition, which in QCS 2014, is now in Section 1 Part 8 (Building Demolition). Section 2 is very extensive in its requirements for quality management, including mandatory minimum standards and references to key performance indicators, and auditing, etcetera. Part 12 of this section provides a table of unacceptable performance criteria against which penalties may be levied, while Part 13 provides the right for the engineer to instruct suspension at the contractor’s risk for serious quality violations. Section 11 on health and safety (H&S) has been significantly restructured, not so much in terms of new requirements, but more in terms of improved clarity and strengthening the foundations laid by QCS 2010. The said section is now split into two parts. Part 1 ‘Regulatory Document’ contains eight chapters. It retains the requirement to comply with the Construction Design Management (CDM) regulations, as adopted from the United Kingdom’s legislation and the table of recommended unacceptable H&S incidents against which penalties may be levied. In addition, some of the major changes include the right for the engineer to suspend activities for serious H&S violations, minimum requirements on the provision of welfare facilities and formal qualifications and experience for safety officers. Part 2 of Section 11 is titled Safety and Accident Management/ Prevention Administration Systems (SAMAS), comprising four comprehensive chapters. As its title suggests, SAMAS provides references to requirements for H&S,

and sets out how these requirements are to be administered. It also includes process maps, sample procedures and forms. With H&S being applicable to all aspects of a construction project, Section 11 must be read in conjunction with the other sections of QCS 2014 for an understanding of the particular H&S standards applicable to each specific construction process. To aid this, Part 1 of Section 11 contains a summary table providing cross references for H&S matters relating to the other sections. In addition to the H&S standards set out in Section 11, Section 1, Part 10 contains the requirement to prepare a H&S plan and introduces the requirement to apply occupational H&S management systems to BS OHSAS 18001 – a framework for an occupational health and safety management system – and lays down, among other matters, the requirements and minimum qualifications for competent persons. In compliance with these requirements, contractors should appoint a H&S manager, a deputy H&S manager and a contractor’s environmental manager.

QCS within Qatar’s wider legal framework QCS 2014 is a technical regulation, which is brought into effect through compliance with Article 6 of the Environment Law (#30/2002) by reference in the contract documents. Technically, it is not a law in itself. Section 1, Part 1 of the document strongly suggests that QCS is not intended to have the force of law, but is rather intended to establish minimum standards and, in a sense,

It is prudent to treat QCS 2014 as establishing mandatory legal requirements, not following which could leave project contracting parties greatly exposed.

Section 1 of QCS 2014 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.

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legal & finance holds the employer responsible to make sure these minimum standards are achieved in construction projects. Together with the Environmental Law, the intention appears to be that an employer can require higher, but not lower technical standards than what is mentioned in QCS 2014. It is therefore a mandatory document to specify in the contract documents, as it can only be enforced through the contract. However, it is prudent to treat QCS 2014 as establishing mandatory legal requirements, not following which could leave the project contracting parties greatly exposed.

Application of QCS on site The standard way for employers to comply with Article 6 of the Environment Law (#30/2002) is to incorporate QCS into their contract documents. However, depending on the contractual definition of the word ‘law’, QCS may be deemed as applicable without the necessity to express reference. For instance, the 1999 standard forms of contract by the International Federation of Consulting Engineers (FIDIC) define ‘laws’ as “all national (or state) legislation, statues, ordinances and other laws, and regulation and by-laws of any legally constituted public authority”. Article 1.13 states that in performing the

contract, the contractor shall comply with applicable laws. Therefore, compliance with QCS 2014 is, in this circumstance, a contractual requirement. This introduces the QCS requirements as minimum requirements to be applied to the project, which are consequently applied as contractual obligations. A key consideration to keep in mind is that QCS’ minimum standards contain a significant degree of overlap with existing legislation, such as those in labour laws. Therefore, application of a number of items in QCS 2014 is not only a contractual obligation but also a legal requirement. Another point to consider is that failure to adhere to what are considered minimum standards under QCS 2014 potentially exposes employers to third-party liability claims, not under the contract but from separate parties, enforcing rights under the civil jurisdiction. Such rights are those equivalent to tortuous duty of care that is not to cause harm. In this respect, the application of QCS minimum requirements is not just limited to the site operations but also extend to the operation of the completed facility. This implies that the exposure to claims may arise well after construction is completed and the project has been put into operation.

QCS on workers’ rights The subject of workers’ rights covers a range of issues, some of which already exist in Qatar’s existing legislation. QCS 2014 addresses workers’ rights by referencing existing laws, mainly Section 1 which makes express reference in particular to Labour Law 14/2004, specifically Part 10: Occupational Health and Safety. In addition to building on existing law, QCS 2014 further addresses areas where existing legislation is sparse. For instance, Section 1 paragraph 10.1.11.4 requires contractors to facilitate contact between project employees and relevant independent bodies offering social support; paragraph 10.9 sets out requirements for welfare facilities, and paragraph 10.10 sets out requirements for labour accommodation. Liability for enforcement of these minimum requirements from a contractual perspective would fall on the following stakeholders: • On the contractor for failing to comply with the contractuallyspecified requirements. • On the supervising engineer in his role as supervising the works (Section 11 has expanded to cover off-site locations including manufacturing premises as well as labour camps).

QCS 2014 does not have any directly enforceable sanctions or penalty regime enforcing its incorporation into the contract documents.

Section 29 of QCS 2014 sets out the minimum requirements for railways, such as 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.

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legal & finance •

Whether or not QCS can work as a source of claims depends on the strategic approach adopted by the parties and also the status of the contract at the time of promulgation.

•

On labour camp managers and owners as ‘controllers of premises’ (deemed to be cognisant). On employers through the CDM obligations contained within Section 11.

That said, the actual routes for prosecution of some of the broader reaches are unclear, but due to the overlap with complementary laws, civil defence and municipalities would have the right to enforce overlapping requirements using legal as opposed to contractual remedies.

Consequences of noncompliance There are at least three potential avenues from which consequences of noncompliance with QCS 2014 may flow. First is contractual. The normal contractual remedies will apply for breach of contract obligation. In addition, both Sections 2 and 11 provide for the engineer to have the right to suspend activities at the contractor’s risk for serious quality and H&S violations. The second avenue comprises complementary laws. Despite QCS 2014 not being binding outside contract, there is a degree of overlap between existing complementary laws and the requirements of QCS 2014, specifically in the area of health, safety and workers’ rights. So even if QCS 2014 was not specified or was not enforced under contract, this does not remove exposure under state legislation. The third route of consequences comes from the duty of care, highlighting that third-party legal obligations must always remain a consideration. With the exception of the right to suspend activities and impose penalties in relation to quality and H&S matters, QCS 2014 does not have identifiable sanctions or mechanisms to provide prosecution. Similarly, the Environment Law contains no sanctions for failing to comply with Article 6. However, the lack of supporting law at present does not mean that this will always be the case. It is therefore recommended to assume QCS 2014 applies and familiarise oneself with its requirements. As QCS 2014 does not have any directly enforceable sanctions or penalty regime enforcing its incorporation into the contract

documents, companies may consider not incorporating the QCS 2014 mandatory standards into their contract documents. This, however, is not advisable because the parties will still be exposed to the specific requirements of applicable/ complementary laws – labour and environmental, etcetera. Furthermore, supporting legislation could well be introduced at any time in the near future.

QCS as a source of claims Whether or not QCS can work as a source of claims depends on the strategic approach adopted by the parties and also the status of the contract at the time of promulgation. For contracts tendered post May 2015, there should be a few avenues for dispute as the document leaves less room for ambiguity compared to its predecessor. Although if the QA/QC and H&S penalty tables are populated with penalties and these penalties are applied in a zealous manner, dispute could arise as to the manner of their application as being a backdoor route to reduce the contract price and unjust enrichment. Also employers may instigate indemnity-related claims against contract drafters for recovery of damages in the event that QCS 2014 has not been incorporated into the contract documents. For contracts tendered before May 2015, this issue is considerably hazy as QCS 2014 contains no provisions for managing the transition or its implementation on live projects.

Reliance on the provisions of Article 3 of the Civil Code, ‘the law at the time of contract execution will be the applicable law to the contract’ may not provide support in the implementation of QCS 2014, as the interpretation of ‘law’ would depend on the contract definitions of law and any additional contract provisions regarding ‘change in law’. Before embarking on any disputes in relation to the implementation of QCS 2014, it is important to consider the true impact as, with the exception of quality and H&S matters, the majority of the changes from QCS 2010 have been made with regards to clarity and usability as opposed to an increase in obligations. Whether the debate is about incorporating QCS 2014 in your contract, enforcing penalties through QCS 2014 or raising claims based on the application of QCS 2014, one should be cautious in arguing that QCS 2014 has introduced significant changes from QCS 2010 or brought new elements to Qatar’s current construction requirements, because it would be difficult to argue that these changes are substantive enough to go beyond good industry practices, and a number of these requirements pre-exist in complementary laws. As industry players await more clarity on the legal aspects of QCS 2014, the prudent would already have incorporated it as a mandatory requirement for new projects.

The technical specifications for future projects must be reviewed by representatives of construction companies in order to ensure they are consistent with the requirements of QCS 2014. Pictured here is the construction site of the Qatar National Museum at night.

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legal & finance

With increasing demand for infrastructure development, governments in the GCC are looking to partner with the private sector for the skills and expertise to develop and execute projects, to bring efficiency in management of projects, and to provide employment for growing young populations. (Image Arabian Eye/Corbis)

Prospects of publicprivate partnerships for Qatar’s infrastructure Philippa Chadwick, head of the global infrastructure group at Squire Patton Boggs, and Susan Bastress, the firm’s Doha office’s managing partner, look into the scope and potential role of public-private partnerships for Qatar’s growing infrastructure sector.

he sheer scale of the infrastructure programme in Qatar across a broad range of sectors makes a public private-partnership (PPP) model more attractive, in particular to leverage private sector investment and expertise. As governments in the Gulf Cooperation Council (GCC) continue to face challenges in addressing the medium- and long-term needs of their expanding populations, some are developing strategies to diversify their economies and build the infrastructure required for growth. Where access to capital diminishes over time, a case for PPP on a more comprehensive basis becomes more compelling. In the next few years, we expect to see a PPP model (or indeed

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a variety of sector specific models) emerge for Middle Eastern countries that acknowledges the structural issues unique to this region, and the rise of a local delivery market tailored to its specific needs.

Drivers for PPP as an option

What are the key issues for Qatar that are influencing and driving the need for a PPP model for infrastructure? Some drivers for PPP here include population growth, increasing accommodation needs and healthcare requirements, and the environmental impact of rapid urbanisation in Qatar. These pressing infrastructure concerns in Qatar and neighbouring states are developing in tandem with

financial and economic changes, which are conducive to the emergence of a PPP-based solution. Changes to project financing are a very new development as few projects have been funded so far using alternative funding methods. That said, the adoption of new financing models in Qatar will still require concrete project pipelines. GCC countries typically have a significant public sector and less developed private sector, though Qatar has seen important growth in this area. Governments in the region are generally looking to partner with the private sector for the skills and expertise to develop and execute projects, to bring efficiency in

The development of a dedicated directorate into a PPP unit to coordinate, market and regulate the projects would be a milestone for the promotion of a PPP solution to Qatar’s diverse infrastructure plans.

legal & finance

As we watch infrastructure developments in the Middle East, it is certain that PPP models developed in mature PPP markets in other regions can be used as a guideline.

management of projects, and to provide employment for growing young populations.

A PPP framework for Qatarâ&#x20AC;&#x2122;s infrastructure

The use of PPP in Qatar to date has been in the power industry and through the use of Design-BuildOperate (DBO) models for certain sectors including road, water, waste and residential accommodation projects. Formalising a framework and law has been under discussion and the creation of a directorate to develop policies and business is a step in the direction of the development of a PPP unit. Among the reasons for taking this approach is the need to properly define a scope of the PPP law, giving the commissioning authority the power to contribute to the projects whether through financial means by guaranteeing revenue streams, tax incentives or providing compensation mechanisms, or more tangibly through land provision. Having a robust and clear PPP law and regulatory framework has been successful in other countries and could be a catalyst for development of PPP across a broad range of sectors in Qatar. In nearby Kuwait, a positive impact of the PPP law has been seen on the pipeline and progress of projects since last year. It has created confidence in the community bidding for projects. Perhaps the development

of a dedicated directorate into a full blown PPP unit to coordinate, market and regulate the projects would be a milestone for the promotion of a PPP solution to Qatarâ&#x20AC;&#x2122;s diverse infrastructure plans.

Challenges and status

While the government is building (and regulating) the facilities, the challenge is to create incentives for foreign long-term investment, balancing the assumption of risk. Qatar has set out plans to invest over USD30 billion (QAR109 billion) in projects across a broad range of infrastructure but particularly focused on transport and connectivity. High-profile projects need to be supplemented by social infrastructure programmes in healthcare, housing and education, all of which are needed to support the development. The commercially available financing for the development of these projects on a project finance basis is a small pool. More locally financed solutions and multi-sourced approaches bringing in export credit agencies, and multilaterals alongside local and international commercial lenders can provide not only the finance but the rigorous due diligence that many projects ultimately require to be successful. The development of local solutions using a variety of financing techniques including shariâ&#x20AC;&#x2122;ah products and contractor financing offsets the decline in activity

since the global financial crisis which has meant that European banks have been less active in the market here. As of now, the public sector investment in projects is strong with that sector participating in many of the existing infrastructure assets as a direct stakeholder. This is an unusual position in PPP models outside the Middle East region but a feature of a number of GCC countries. Holding shares alongside the private sector reflects not only the desire to maintain some direct control, but also acts as a safeguard for key assets of the country while also sharing with the population an interest in key assets. Without a doubt, having the right political support for infrastructure projects is key. Qatar is no different and the government has an identified pipeline, a mix of high-profile and smaller projects and the unstinting support from the government to complete a robust programme. Such certainty is crucial for foreign investors, contractors and fund providers to commit costs to bid for these projects. As we watch infrastructure developments in the Middle East, it is certain that PPP models developed in mature PPP markets in other regions can be used as a guideline. Ultimately, however, states such as Qatar will look to adopt a PPP delivery solution and find their own structures that are adapted to the local market and to government requirements.

Partnership of public and private sectors have worked successfully in a number of countries. Similarly, having a robust PPP law can be a catalyst for the development of PPP across a broad range of sectors in Qatar. (Image Arabian Eye/Corbis)

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legal & finance

project finance in an era of deficit budgets With Qatar’s state budget moving into deficit for the first time in 15 years, clearly a new paradigm for construction project financing is now beginning, Oliver Cornock of Oxford Business Group explains.

atar’s new pattern of budget deficit will likely continue to be the blueprint for sometime, too, as many analysts believe oil and gas prices are unlikely to dramatically turn around soon – further eroding government revenues – while major infrastructure projects will continue to call on the state’s resources in the lead up to the 2022 World Cup. In combination, these factors will mean that deficit budgets are likely to be around for sometime to come. This places an extra burden on alternate sources of financing, with Qatar’s domestic banking sector likely to meet many of the construction sector’s continuing needs. Another source of financing is the capital markets, with bond issues also likely to see a spike in the year to come. At the same time, the willingness of the government to continue financing major projects, despite their budget deficit implications, also shows the level of commitment that there is in Doha to infrastructure roll-out. Cutbacks are thus likely to focus on streamlining existing projects and eliminating inefficiencies – moves that will likely be all to the good, going forward.

Budget crunch

The announcement of a 2016 budget deficit had long been heralded, with the government revealing a projected 4.9 percent of gross domestic product budget shortfall in June 2015. In mid-December, this was given greater definition, at QAR46.5 billion, with the shortfall comprising the difference between QAR156 billion in forecast revenues and QAR202.5 billion in forecast expenditure. The shortfall in revenue was all about falling oil and gas prices. The average price of Qatari crude fell 45.6 percent between December 2014 and December 2015, as the value of hydrocarbon exports shrank. Thus, the government announced a budget deficit for the year ahead, as it was also keen to make sure that there would be no let-up in government expenditure in areas such as

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Bankability will be key, with wellstructured and thought-through projects likely to receive support, while those of a more risky nature may struggle.

infrastructure, health, education and transport. Indeed, major infrastructure expenditure of QAR50.6 billion was still in the budget, with railways, roadways, electricity, water and sewerage works extensions, and the new Hamad Port mentioned specifically for continued financing. The second point emphasised in the new budget announcement was that the government would not be looking to finance shortfalls by dipping into its extensive reserves. Instead, it would be seeking to tap local and international debt markets to fill the gaps. Therefore, the budget deficit will most likely result in further government debt issuances. The deficit also raises questions over the ability of the state’s banks to take on an even bigger slice of Qatar’s project financing, as the government refrains from taking on new initiatives. The good news is that due to a number of factors, Qatar’s lenders are in excellent shape to do this. Firstly, this is because of the large share held in Qatar’s banks by the Qatar Investment Authority. This government backing means that the banks enjoy systemic support when issuing new paper and extending new loans. Secondly, there is the demographic factor. Qatar has a growing population, meaning increasing bank deposits, particularly from

individuals and private corporations. This has, indeed, been balancing out the negative effects of a decline in public sector deposits as a result of declining government revenues and cutbacks. Qatar National Bank’s figures show public sector deposits falling 9.9 percent between October and November 2015, for example, while private sector deposits rose 11.9 percent. This means that the banks are riding out public sector cutbacks better than others, maintaining a strong position from which to extend credit. Thirdly, the country’s banks are also having to shape up for Basel III – a new regulatory regime that seeks to produce an even more robust sector via still greater capital buffers. This will translate into banks issuing more Basel III-compliant securities in 2016 to meet the higher capital requirements. Both eurobond and sukuk issuances are thus expected to spike substantially. Basel III also means the banking sector will be healthier in many other ways too, enabling project financing to enjoy a more secure environment. This may also mean riskier, less credit-worthy projects being filtered out, but this will be all to the good for the banks, as well as for the construction sector itself. This also highlights one other potential implication of the new paradigm. Projects will have another set of people to convince, other than the government, if credit is to be extended. Bankability will be key, with well-structured and thought-through projects likely to receive support, while those of a more risky nature may struggle. Qatar will likely be the healthier ground for this, however, with a stronger role for private sector financing in the longer term likely an important benefit arising from the state’s current deficit challenges.

Oliver Cornock is the managing editor for the Middle East at Oxford Business Group.

INFRASTRUCTURE

76 Ahead of the World Cup and to achieve the goals of Qatar National Vision 2030, Qatar is undergoing a number of infrastructure upgrades. Some of these major projects include Doha Metro, extension of Hamad International Airport, World Cup stadiums, Hamad Port and Qatar Expressway Programme. (Image Getty Images)

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2022 world cup stadiums

FORMWORK solutions offshore construction

infrastructure

After hosting a few games during the 2010 World Cup, South Africa’s Cape Town Stadium has been running at a loss, costing approximately USD32 million (QAR116 million) since 2010.

Ghost Town: Will Qatar’s stadiums fall into disuse after

2022?

Six years ahead of the 2022 World Cup, Qatar has unveiled designs for five stadiums for the football tournament – all planned to remain post-2022 as part of the country’s emerging sports legacy. However, considering the size of the state, and its newfound love for the game, is it time for Qatar to look into the opportunity of temporary structures for its unreleased stadiums? QCN’s Farwa Zahra approached construction professionals in Qatar and the 2014 World Cup host, Brazil, to explore the feasibility of legacy stadiums and the possibility of introducing temporary structures.

ore than one year after the 2014 World Cup, most of the 12 stadiums Brazil prepared for the tournament have fallen into disuse. Those being used are struggling to make a profit. From the onset, many had exceeded their allocated budgets, crossing a total cost of USD3 billion (QAR11 billion). Also known as Brazil’s most

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expensive stadium, Estadio Nacional Mane Garrincha was completed at an amount thrice the budgeted cost. Overall, the country managed to prepare only two stadiums within their budgeted range. Then there was Arena Corinthians, another stadium that was not complete on the day it hosted the World Cup’s opening game. Going back by another four years,

South Africa spent approximately USD2 billion (QAR7.2 billion) to prepare the necessary infrastructure and 10 stadiums for the 2010 World Cup. While many of these venues are in use today, not all are running in profit. South Africa also overestimated the number of tourists, leading to unnecessary costs during the World Cup.

infrastructure Exceeding the spending made by South Africa and Brazil, Qatar has allocated a hefty budget of USD4 billion (QAR14.5 billion) for its eight stadiums (as of now) and linked facilities. But is it enough to ensure the country does not face the fate of Brazil? This, only time will tell, but a defining factor would lie in how efficiently Qatar spends this capital. While the development of infrastructure such as the new port, airport and metro services had long been a part of Qatar National Vision 2030, not all FIFA venues necessarily have to last after the tournament.

World Cup preparations As of now, Qatar has announced designs of five World Cup stadiums: Al Rayyan, Qatar Foundation, Khalifa International, Al Bayt and Al Wakrah. As the progress on its announced stadiums continues, Qatar is yet to take a call on the final number of World Cup venues. Seemingly surprising, this is not the first time for a FIFA hosting nation to be uncertain about the number of venues. South Africa, for instance, initially planned to prepare 13 stadiums, later bringing it down to 10 only four years before the 2010 World Cup. That said, with six years ahead of the tournament, increasing the number of stadiums from the current minimum eight might call for design and build changes in the venues announced already. Comparing Brazil’s 12 stadiums with Qatar’s eight, Vicente Brandao, architect and partner at Santini & Rocha Arquitetos in Brazil, says, “We had a stadium per host city, 12 stadiums in total. Many of them are now falling in disuse. FIFA asks for eight stadiums because there are eight groups in the first phase. I think eight is a good number.” Speaking about the locations of stadiums in Qatar, Brandao says the presence of some stadiums in the outskirts of Doha is important to represent diverse areas of the country. Linking the location to acoustic aspects of the stadiums, Maro Puljizevic, managing director, Al Mana and Associates, adds,

Pictured here is the site of Al Wakrah Stadium – the first proposed host venue for the 2022 World Cup – where ground breaking commenced in 2014. (Image Supreme Committee for Delivery and Legacy)

“Stadium location should be carefully chosen, main entrances correctly orientated, traffic flow and parking well regulated, and cooling systems acoustically enclosed.” – Maro Puljizevic, managing director, Al Mana and Associates.

“Besides obvious cheering of the fans, public announcements, various side events, increased traffic flow, concerts, shows, noise of cooling systems, etcetera, can all present nuisance for the community. To reduce nuisance to the surroundings; stadium location should be carefully chosen, main entrances correctly orientated, traffic flow and parking well regulated, and cooling systems acoustically enclosed.”

Legacy vs. Temporary structures Stadiums meant for mega events can have either temporary or legacy structures. While the former are purpose-built for the event, later demounted or repurposed, the latter remain as part of the country’s wider sports legacy. With the unveiling of designs for five stadiums, the Supreme Committee for Delivery and Legacy has also announced its legacy plans. Al Wakrah’s seating capacity will be cut down to 20,000, with upper tiers donated to other countries, as is the case with the upper tiers of Al Bayt. Khalifa International will remain as a sports and fitness destination, while the seating capacities of Qatar Foundation and Al Rayyan stadiums will be reduced to 25,000 and 21,000, respectively. Clearly, Qatar has so far only focused on legacy structures. But is it time now for the country to consider temporary stadiums? According to Kadir Kaan Sekerciler, business development coordinator for MENA, Spor Sanayi, Qatar needs more temporary structures than the legacy ones. “The country is small, so when you build 80,000-capacity stadium, it would not do for the country in the long term.” While cutting the number of seats down after the World Cup

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infrastructure is one way to bypass the problem of over-construction, plans to repurpose venues into other facilities right from the design stage can help Qatar avoid post-tournament costs of these stadiums. Andrew Seibel, vice president of Bobrick Washroom Equipment, warns about the risks of having excessive sports facilities once the tournament is over, “Maintenance costs are far greater than initial construction costs on any given facility, and that’s so much more true for stadiums. So making sure that the design community focuses on the needs of the operations and the maintenance community at the backend will be critical for the longterm success of these venues.” With designs for at least three more World Cup stadiums yet to be announced, Brandao says, “I would suggest that the other three stadiums could be totally temporary.” Indeed, adding more stadiums to Qatar’s landscape might endorse the country’s newfound love for soccer, but this legacy would come at a cost, which Qatar may or may not be ready to bear, particularly amid the ongoing uncertainty around international oil prices. To have completely temporary stadiums needs comprehensive planning well ahead of the enabling works. A clear idea on the kind of repurposed facilities needs to come right from the design phase, continuing through the construction and procurement stage. Offering his suggestion about repurposing FIFA venues, Sekerciler says the best way for Qatar is to build modular stadiums. “All those stadiums should be able to be disassembled and then combined to create a much bigger structure somewhere else in Qatar,” he says. In the context of Qatar’s plans to send stadium tiers to other countries, he comments, “Instead of delivering them outside Qatar for charity, you can use them to build a much larger, a giant structure here that can be used for some other purpose… If you have climatised environment, a closed enclosure like that, you can use them even for farming. You can create a huge farm here, or a garden or an exhibition centre.” Across the world, stadiums are given a second life to increase their longevity and avoid demolition toll. London’s Highbury Square was Arsenal Stadium for almost a century

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Built in 1976, Khalifa International Stadium is one of the oldest sport venues in Qatar. Currently going through renovation to accommodate a seating capacity of 40,000, the redesigned stadium (illustrated here) is scheduled to be ready in 2016. (Image Supreme Committee for Delivery and Legacy)

until 2006 when the league moved to a bigger venue, with the stadium turned into a 650-unit apartment complex. In fact, architects of 1Week1Project have suggested design proposals to turn Brazil’s World Cup stadiums into housing units for the homeless. With the field remained untouched, these units can be turned back into seating systems whenever required. Making temporary structures also means saving a large chunk of initial costs. Suggesting some cost-effective strategies, Sekerciler mentions telescopic seating systems that can be transferred to other places. Another way of curtailing the cost is by renting seating systems. “You can rent the seating and then send it back. But for a project as big as 2022, you still need to pay something to the manufacturer because no one will have that much excess ware in their hand that they can rent to you,” says Sekerciler.

Technical challenges Whether it is legacy or temporary structures, construction of these stadiums is not free of challenges. At one hand are the generic issues that blanket the entire construction sector. In the years leading up to the 2022 World Cup, Seibel mentions the challenges of scale, which

involve manpower, materials, and the expertise that are required to go into these sports facilities, and other infrastructure projects. Speaking about some logistics and procurement challenges, Sekerciler adds, “We are hearing reports about how some contractors were unable to deliver the projects on time because of the imports restrictions or because they were not able to bring in the materials they needed here on time.” While the civil contractors are expected to face procurement issues, Atiqul Alam, senior mechanical engineer for Qatar’s infrastructure division of KEO International Consultants, mentions mechanical and electrical contractors on these stadiums have to be extra careful in order to achieve compliance of their design and installations to FIFA standards. “This is especially true for stadium lighting design and its strict technical compliance with the FIFA standards.” While civil and mechanical, electrical and plumbing works make up the backbone of any stadium, technologies such as robust acoustics not only enhance the spectator experience but also add to the value of a sports venue. However, according to Puljizevic, “Certain design aspects get sidetracked due to fast pace

“It is always useful to run a few smaller events in a venue before you host a mega event. It allows you to check if everything is ready.” – Andy Young, senior consultant at Wembley Consulting.

infrastructure

“Maintenance costs are far greater than initial construction costs on any given facility, and that’s so much more true for stadiums.” – Andrew Seibel, vice president of Bobrick Washroom Equipment.

of the project or in favour of good appearance; particularly stadium acoustics, which is more of a hidden design gem rather than a first glance impression-maker.” Subtle acoustic details, therefore, should ideally be considered from the design stage.

Verdict Having planned a number of legacy stadiums for its small size, Qatar is expected to unveil designs for at least three more stadiums. Deciding on the temporary or legacy structure of the future stadiums would partly depend on the size of these stadiums,

following the fundamental rule that larger legacy stadiums would be more expensive to maintain in the short term. Similarly those located far from populated areas would be harder to attract either visitors or tenants. That said, whether Qatar plans to build temporary stadiums at all or not, the country is headed against a definite deadline of 2022. Providing a guideline on the best time of completion, Andy Young, senior consultant at Wembley Consulting, says, “It is always useful to run a few smaller events in a venue before you host a mega event. It allows you to

check if everything is ready and an opportunity to change things if you realise you can make improvements. It also means the people operating the venue have more knowledge and therefore more confidence before staging the mega event.” Based on his experience in the design and renovation of one of 2014 World Cup venues, Beira-Rio Stadium, in Porto Alegre, Brazil, Brandao suggests a one-year rule. “The idea is that one year before, the host cities must be prepared for the event, and during that year you focus in operation and details,” he says.

Repurposed sport venues around the world Pyramid Arena Memphis, Tennessee Originally constructed to host basketball games, the facility was not regularly used until 2015 when it was reopened as a megastore with hotel, restaurants and shops, etcetera.

The Summit Houston, Texas Used for basketball, ice hockey, indoor soccer, and concerts, the stadium was eventually turned into a 16,000-seat worship house.

Arsenal Stadium London, United Kingdom After being the home ground of Arsenal for more than 90 years, the stadium was transformed into an apartment complex, now known as Highbury Square.

Centennial Olympic Stadium Atlanta, Georgia Now known as Turner Field, the stadium was turned into a baseball park in 1997.

Stadion An der Alten Försterei Berlin, Germany Temporarily turned into a giant living room to screen the 2014 World Cup games.

Beijing National Aquatics Center Beijing, China Built for the swimming competitions of the 2008 Summer Olympics, alongside Beijing National Stadium, half of the facility was turned into a waterpark after the games.

Bush Stadium Indianapolis, Indiana Built originally to host baseball games, the stadium later turned into a dirt track and storage facility before it was repurposed to become an apartment complex.

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infrastructure

Qatar is a very important market for Doka In the region, we see Qatar as one of our most important operations,” Ralf Bürger, managing director, Doka Qatar, tells QCN.

oka’s first project in Qatar was a water tank in 1998, and since then it has grown step by step to eventually offer all services in 2002, when the company opened its office here. “We have grown ever since and we currently have 46,000 square metres of office, yard and warehouse facilities here at the Light Industries Area in Mesaieed,” says Ralf Bürger, who took charge as the managing director of Doka Qatar in 2012. He says Qatar is a booming market in the building and construction industry, which makes it very important for Doka. “We have over 100 branches worldwide, and we are active across the Gulf. In the region, we see Qatar as one of our most important operations,” he adds. Doka, which mainly offers formwork solutions, is a market leader in high-rise buildings, but Bürger says, they have executed various other projects, right from small to large buildings, tunnels, and bridges. “I would say our greatest service is not our product, but our engineering – our knowledge in what we do and on what we deliver to our clients.” Bürger adds that the company has large warehouse and yard

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Amstetten-based Doka Group, which offers formwork and engineering solutions, expanded its operations into the Middle East region with the opening of its first office in Kuwait in 1977. With more than 160 sales and logistics facilities in over 70 countries, Doka currently has an efficient distribution network that ensures that equipment and technical support are provided swiftly and professionally. In an exclusive interview with QCN, Ralf Bürger, managing director, Doka Qatar, shares more details about the company’s presence in Qatar, and solutions it offers for Qatar’s growing construction sector. facilities that are capable of storing materials in large volumes. “The availability of our materials is a big advantage,” he says. The company is also capable of manufacturing formwork panels in its yard instead of doing it on site. “Another thing that I would like to highlight in this regard is the quality of our people. Our human resource department at our headquarters takes special care of the education of our people. We have highly skilled people from all over the world, and every year, we offer them specialised and individual training, because we want to have the best team possible,” explains Bürger, who holds a degree of civil engineering and has more than 20 years of international experience in construction. Highlighting some of the key projects being done by Doka, Bürger says his company is currently working on several government projects, such as the Doha Metro, for which Doka is involved in works on several lines, including the Red Line North and South’s tunnelling, Green Line’s tunnelling, and Red Line South and Green Line’s elevated and at-grade facilities. Bürger considers this is a

good opportunity to have their name among the key authorities that will lead the World Cup preparations. In order to deliver now and in the future, he points out that the most important thing is a large yard and extensive stock. “We have the larger yard, and although engineering is

Our greatest service is not our product, but our engineering – our knowledge in what we do and on what we deliver to our clients.

infrastructure

The 46,000 m2 yard, warehouse and office facilities in Mesaieed.

very important, you need to deliver your materials very fast which is the biggest benefit we can show to our clients,” he emphasises. However, projects of such scale and complexity come with their own set of challenges. What does Doka consider as the main challenges of working in Qatar? “I think for the next few years, it will be the timing of deadlines,” says Bürger. He explains that there could be a situation when they have to deliver services at a very short notice due to time constraints. “That means we have no time to plan. However, based on years of working in Qatar and in the Middle East, we can definitely manage it.

Still, that is a major endeavour at the moment, and it will be a challenge in the future,” says Bürger. Sharing the company’s future strategy, Bürger says Doka wants to maintain its position as a market leader. “That is our challenge at the moment, and it is not easy as we are not alone,” acknowledges Bürger. In order to retain that position, the company’s strategy is to implement some more onsite services. “Doka’s engagement with customers initiates from the earliest design stage of a project through to its shell completion. With each project requirement, customers receive value-added services

from us, including consulting, engineering, onsite supervision by Doka formwork instructors, sales, rental, preassembled formwork, material inspection, reconditioning and return,” he tells QCN. According to Bürger, Doka’s ‘ready-to-use’ service plays an important part for its clients as it saves time. “Time is important, so assembling the formworks in our yard and preparing products beforehand is in high demand. Summing up about Doka’s operations in Qatar, Bürger says, “There is a local saying here: Qatar deserves the best, and I am sure we are one of the best.”

The load-bearing tower Staxo 40 and the large-area formwork Top 50 have been used for pedestrian bridges of Lusail.

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infrastructure

Streamlining offshore construction with a modular approach Offshore and onshore fabrication: Opportunities for major savings

A trend that is driven by oil and gas exploration, production and midstream organisations is the standardisation and reuse of designs. Energy firms are looking for engineering, procurement and construction companies (EPCs) to lead the way and adopt a modular design approach, including offshore construction, to save significant amounts of time and money for energy projects, writes Ossama Tawfick â&#x20AC;&#x201C; vice president of sales, MENA, at AspenTech.

roject overruns in the oil, gas and petrochemical industries have cost impacts that extend over the lifetime of the delivered asset, pressuring companies to deliver on schedule and remain profitable. Implementing standardisation designs and adopting a modular approach to process units reduces design, schedule and cost uncertainty and, therefore, saves significant amounts of time and money. For many Middle East EPCs and their clients, getting to the construction phase more quickly is the aim. With the use of model-based software applications, process designs

The Pearl Gas-to-Liquids (GTL) is one of the largest GTL plants in the world. Pictured here is its building site before completion. (Image Arabian Eye)

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can be created for reuse in a modular fashion on similar projects and based on varying locations, applications and scale, thereby increasing overall project management efficiency. Capital projects that overrun their budgets are a strategic issue in the oil and gas industries today. Modular design offers opportunities for savings and the options for onsite fabrication and offsite shop modular fabrication in order to add engineering accuracy and quality efficiency. Modular designs make costs more predictable while reducing uncertainties, such as local workforce dynamics and local resource availability. An integrated

engineering software system that comprises integrated engineering modelling and analysis tools can uniquely support the concepts of repeatable design, standardised design and modular design. This ensures that the data do not need to be re-entered between individual engineering tools and to enable the optimisation of a design across the feasibility study, conceptual engineering and front-end engineering design (FEED) workflow. Many engineering and construction companies (E&Cs) have modular capabilities, including the design and installation of facilities for upstream

infrastructure oil and gas processing, downstream refining, mining and minerals processing, and chemical industries. With an offshore construction project, for example, the installation of structures in a marine environment would typically be pre-commissioned onshore. To optimise the costs and risks of installing large offshore platforms, different construction strategies have been developed. A fully constructed facility onshore can be towed and installed at the site floating on its own buoyancy. Bottomfounded structures are lowered to the seabed by de-ballasting, while floating structures are held in position with substantial mooring systems. The size of offshore lifts can be reduced by making the construction modular with each module being constructed onshore and then lifted using a crane vessel into place onto the platform. In essence, the use of standardised and modular designs helps engineering companies reduce costs and capital cost uncertainties on projects.

Streamlining projects

Breaking the habit of reinventing solutions associated with traditional engineering methods can be difficult. Onsite build can be time consuming and costly where there are logistics constraints and unpredictable local labour conditions. Historically, engineers have often used traditional tools, such as Excel spreadsheets, to model and calculate their project schedules, costs, risks and scope. However, by using specialist integrated engineering software, the strategy behind standardised modularisation offers a different approach and involves dividing a plant into modules that are then reused multiple times. EPCs can reduce direct project costs (related to product equipment units, logistics and installation) by 10 percent or more, and project engineering, procurement and construction delivery can be significantly expedited. Project design is the first key area to embrace a modular approach and reuse standardised design modules for oil and gas plants. Many oil and gas companies design and build customised projects to specific locations with geological conditions. A more effective way of working in design is to reuse existing engineering templates, which unitise the work. This is a typical licensor workflow business model that has also proven to be highly successful.

It has conventionally been thought that upstream oil projects had to be custom-designed for a particular oilfield and crude oil fingerprint. However, recent experiences with modular design approaches have proven to be successful. The concept of offsite fabrication and modularisation in engineering and design can be scaled from small to large projects, such as a floating production, storage and offloading vessels scaled to the oil and gas flow characteristics of the particular well. Something like a compressor module could be standardised because the same equipment design can be reused on many other vessels. For larger facilities, such as liquefied natural gas (LNG) plants, the focus moves to replicating modules that make up the plant. Another example could be less need for heavy lifting equipment and scaffolding, which would save space and costs. Many companies have successfully adopted modular standardisation to apply common design specifications and guidelines across each project such as a refinery or production platform. The use of libraries containing design templates, which include datasheets, equipment lists and line lists is a powerful way of avoiding unnecessary duplication of data entry and copying, helping minimise engineering time and reducing costly overruns. Key to this strategy is aligning the engineering stages from conceptual design through basic engineering to detailed design. Collaboration across the project teams is essential to leverage important documentation.

Leveraging technology saves time

Offsite modular assembly is becoming the preferred method of construction in industrial development. This highly efficient process alleviates the challenges typically associated with tight project schedules, changing site conditions and availability of skilled field labour, and minimises variability in quality of the finished product. The safe and correct assembly of equipment, such as columns and reboilers, is critical to performance and reliability. Units derived from fabrication workshops, such as steel casings, stacks and ducts, burners, and piping, etcetera, can be preassembled for shipping anywhere around the world and modular construction can be more easily

executed with available onsite skills. As modular design and construction projects become the adopted standard, powerful and integrated engineering tools can help engineers to complete datasheets much quicker and allow the ability to communicate with all stakeholders working on the project. Many EPCs have standardised on AspenTechâ&#x20AC;&#x2122;s aspenONE engineering software suite, which contains process modelling analysis and design tools that are integrated and accessible through process simulators. Engineers can optimise process designs for energy use, capital and operating costs and product yield through the use of activated energy, economics and equipment design during the modelling process. EPCs continually seek ways to improve workflow and streamline processes. Aspen HYSYS is the tool of choice with engineers using a modular approach to design. It comprehensively provides access to over 1000 assays representing global

Workers at the building site of the Pearl Gas-to-Liquids (GTL) system in Doha, Qatar. Construction of Pearl GTL was completed on schedule with the complex starting up end of Q1 2011. (Image Arabian Eye)

Onsite build can be time-consuming and costly where there are logistics constraints and unpredictable local labour conditions.

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infrastructure

By capturing process technologies and best practice designs in reusable templates, engineers can apply them repeatedly for dramatic time savings in future projects.

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production, as well as to the worldâ&#x20AC;&#x2122;s most extensive property database. Process units targeted for reuse can be captured as templates and quickly accessed from within the process model when the next project is in design. The tool helps deliver faster project execution, meeting increasing demands and minimising performance degradation, while complying to strict environmental and product quality standards. For EPCs, it is imperative to deliver accurate cost estimation earlier into the concept design and basic design stages. Implementing standard practices and methods ensures design quality, reduces maintenance costs and meets safety compliance. Crucially, it is also important to capture design knowledge to improve the ability of less experienced engineers in delivering high-quality designs. A scalable basic engineering software platform enables global organisations to seamlessly and accurately bring together all aspects of FEED, and basic engineering. Now it is possible to achieve a great competitive advantage by delivering process data packages for licensed technologies and other repeatable designs in half the time currently required. By capturing process technologies and best practice designs in reusable templates, engineers can apply them

repeatedly for dramatic time savings in future projects. In addition, robust capital cost estimating software is powerful for evaluating the efficacy of modules for projects. The software provides estimators with an early look at resource constraints, such as craft, labour and fabrication equipment and then enable them to easily evaluate and quickly shop versus field fabrication, including a whole host of trade-off scenarios.

Modularisation schedules

Many engineering and construction companies have modular capabilities, including the design and installation of facilities for upstream oil and gas processing, downstream refining, mining and minerals processing and chemical industries.

streamlines

With capital project investments under scrutiny in the Middle East, modularisation increases project management efficiency and presents opportunities for trade-offs between onsite fabrication and shop modular fabrication. When modular construction is considered, lead times can be improved and the shop fabricator can efficiently fabricate and then ship. Therefore, early and accurate conceptual design becomes even more important to achieve fast-track designs. Offsite modular assembly is an effective method of construction to help oil, gas and petrochemical companies manage projects more profitably. Standardised modular design gives EPCs the opportunity to gain a competitive position and take advantage of the unique characteristics

of integrated engineering modelling and analysis software tools. This supports the concept of repeatable designs, which save time to re-enter data and to enable optimisation of a design across the feasibility study, conceptual engineering and FEED workflow. The software tools also help knowledge sharing across the organisation and allow efficient access for project delivery teams to streamline and deliver accurate engineering solutions that meet deadlines. In essence, modularisation expedites project execution by compressing project schedules, and integrates global design teams for faster on-time delivery.

REAL ESTATE

86 Qatarâ&#x20AC;&#x2122;s real estate is a predominantly rental market, since very few properties are open to expatriate investors. Among some high-end locations in Doha is West Bay, pictured here.

office market

facility management

real estate law

real estate

Key factors to consider when renting an office space in Doha Sourcing commercial premises as a new or existing company in Doha is not always a straight-forward process. The market is opaque with a number of pitfalls for companies that have not conducted their research. Mark Proudley of DTZ Qatar unravels the complexities of Dohaâ&#x20AC;&#x2122;s commercial market, and provides some guidelines that companies need to follow when renting a new space. Diplomatic District in the West Bay is still considered as one of the most sought-after office destinations in Doha. However, in the long term, construction of the metro project will create a shift in Dohaâ&#x20AC;&#x2122;s property map, making some of the smaller sub-districts with immediate access to well-connected stations prime real estate spots from 2020 onwards. (Image Arabian Eye/Corbis)

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real estate

he expansion of Doha’s office market has historically been driven by demand from the oil and gas industry and government sectors, which together are estimated to account for occupancy of more than 60 percent of built commercial accommodation. The growth of these sectors led to a significant increase in the development of office stock over the last 10 years. Total current office stock in Doha is estimated at approximately 3.8 million square metres (sqm). The Diplomatic District is regarded as Doha’s central business district (CBD), and the location of prime commercial office accommodation accounts for just over 43 percent of the total stock. In comparative terms, all other locations are considered secondary. Office accommodation is also found in districts such as Grand Hamad Street and Airport Road, Al Hitmi, Al Salata, Al Sadd, and along the C and D Ring Roads. Tertiary office stock is typically found above showroom accommodation along Salwa Road and the Industrial Area Road.

Diplomatic District

The Diplomatic District is the new CBD in Doha and the focus of the majority of recent commercial development. Office stock in the district is comprised mainly of medium- to high-rise towers ranging from 20 to 60 floors, and providing 13,000 to 50,000 sqm of leasable area per tower. The average leasable area per

tower is circa 20,000 sqm. Floor plate sizes range from 600 to 2000 sqm with floor plates of 800 to 1000 sqm commonplace. DTZ estimates there is currently 146,000 sqm of space which is built or nearing completion and being marketed as available to lease. That equates to a current vacancy rate of eight percent in this district.

Grand Hamad Street/Airport Road/Al Hitmi/Al Salata

The districts surrounding Grand Hamad Street form an older area of Doha and the original city centre. Heading south east, Grand Hamad Street becomes Airport Road. There is limited new construction of commercial office stock on Grand Hamad Street itself, and available stock is generally older. It was historically referred to as Bank Street but most of the major banks and Qatar Exchange have relocated to the Diplomatic District, and a number of the office blocks have been subdivided into smaller suites offering cost-effective accommodation. Airport Road and Al Hitmi have a greater supply of newer stock, with a few properties under construction. Stock is generally medium rise, G+5 to G+10 floors, with the total leasable area of buildings typically ranging from 7500 to 15,000 sqm. Average floor plates sizes are often 1000 to 2000 sqm. The average car parking in this area is one space being offered per 70 to 100 sqm of the area leased.

Office stock supply by districts (2015) Diplomatic District 11%

Al Salata/Al Hitmi Grand Hamad/Airport Rd

14%

43%

C/D Ring Road Al Sadd

18%

Other 9%

5% Total Market Size: 3.8 million sqm

Source: DTZ

C/D Ring Roads

The C and D Ring Roads are main arterial routes around the historic city centre from the airport. The majority of the stock is recently constructed, though there are some older commercial villa type buildings. The accommodation is mostly lowrise office buildings, typically of G+3 floors with primary frontage onto the ring roads. Buildings tend to range in size from 3000 to 7000 sqm of leasable area. Average floor plates range from 750 to 2000 sqm each. Car park facilities vary greatly but the standard offer is comparatively good at around one space per 50 to 70 sqm of the area leased. There are also some locations which offer additional street parking or temporary parking on adjacent vacant plots, though most of these are now being developed into some other facilities. The main factor driving demand in this area is from occupiers with requirements of 3000 to 10,000 sqm seeking their own self-contained building, which is possible for them to brand.

The Diplomatic District is regarded as Doha’s central business district, and the location of prime commercial office accommodation accounts for just over 43 percent of the total stock.

Al Sadd

Al Sadd is centrally located and offers good access to most areas of the city including West Bay, the old city centre and the airport. The main focus of commercial development is on Suhaim Bin Hamad Street with a number of low- to medium-rise towers, G+10 to G+15. Ground floor accommodation is designated for road frontage retail space. The majority of stock is fairly modern but a lot of it is designed and built to an average standard. Buildings mainly range in size from 10,000 to 20,000 sqm of leasable area with average floor plate sizes of 750 to 1000 sqm. Most buildings provide limited car parking with the average ratio equating to one parking space per 60 to 80 sqm of the floor area leased.

Rental factors

Rental rates are quoted on the basis of Qatari riyal per sqm per month. Rental rates for accommodation can vary significantly according to location but are also affected by a number of other factors including quantum of accommodation being leased in addition to the quality of the space. It is possible for larger space users seeking more than 5000

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real estate

Airport Road and Al Hitmi (pictured here) have a greater supply of newer stock, with a few properties under construction. (Image Arabian Eye/Corbis)

Office stock and vacancy rates in the Diplomatic District (2006 â&#x20AC;&#x201C; 2015) 25%

1,800,000 1,600,000

1,200,000

15%

sqm

1,000,000 800,000

10%

600,000 400,000

200,000 0

2006

2007

2008 2009

2010 2011 2012

Supply-Diplomatic District Source: DTZ

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2013

2014

Vacancy Rate (%)

Vacancy Rate

20%

1,400,000

sqm to secure secondary quality accommodation from rates as low as QAR150 per sqm/month in the prime Diplomatic District. In contrast, DTZ has recorded transactions recently on small suites of less than 300 sqm in prime buildings at rates of QAR280 per sqm/month. Occupiers prepared to commit to lease terms in excess of five years can also secure discounts.

Market trends and terms

Office accommodation was historically offered to tenants on a shell-and-core basis with common parts fully finished. As the market has swung in favour of tenants, more landlords have been developing office accommodation to a Category A (CAT A) standard finish complete with suspended ceilings incorporating recessed lighting. However, there is no consistent approach or standards established in the Qatar market.

real estate

Occupier considerations

initial two or three years with five percent to 10 percent uplifts every two years thereafter.

Rent-free periods There are a number of aspects that new occupiers should consider or be aware of when seeking space in Qatar: •

•

Commercial Registration (CR): Most landlords will require a commercial tenant to provide a copy of their CR. It can be a ‘Catch 22’ scenario as a lease of commercial space is required in order to secure a CR. Most international companies take a lease in the parent company’s name transferring it to the local company once the CR is secured. Civil Defence Certification: A tenant considering space within a multi-tenanted building should ensure that up-to-date Civil Defence Certification is in place for both the building and the designated accommodation within the building. Confirmation of ownership: Before signing an agreement, request copies of the title deed from landlord along with the owners Commercial Registration/ID to ensure the party you are entering into the agreement with is a party that has the right to lease the premises. Lease registration: It is the landlord’s responsibility to register the lease agreement and pay the associated fees. Floor areas: The most common approach is for landlords to charge rent on any areas to which the tenant has exclusive access. However, there is no standard approach in measuring floor areas, and some landlords charge rent on the tenant’s share of the lift lobby area. Serviced offices: These can provide a good alternative solution to traditional space, particularly for new and start-up companies or those only requiring a small suite space. For this, there are a number of international providers operating in Qatar with a variety of centres to choose from.

In most cases, landlords are willing to grant two to three months free of rent to allow tenants a grace period for fitout. In some recent transactions, tenants committing to five-year lease terms have secured rent-free periods extending to six months for shelland-core accommodation.

Rent payments/deposits

Most landlords are willing to accept rental payments quarterly in advance, though some landlords are open to offer rental discounts to tenants willing to pay biannually or annually in advance. A number of landlords now accept payments by electronic bank transfer, as opposed to requesting post-dated cheques for commercial accommodation, which were required until recently. Landlords typically seek rent deposits or bank guarantees equivalent to one to three months’ rent.

Car parking

Car parking is still a key tenant requirement after location and budget due to the lack of available public transport. Parking usually forms part of the tenant’s lease agreement and therefore is included in the rent. The average offer in the Diplomatic District is one space per 50 to 60 sqm of leasable area with Tornado Tower offering the best parking at 1:35.

and maintenance of common parts are usually the responsibility of the tenant, and therefore service charge is not applicable.

Utility charges

Individual offices are usually fitted with separate electricity metres with tenants responsible for their own costs. Other utilities such as water and cooling are included within the building service charge though some landlords with properties on the Qatar Cool district system levy an extra charge for metered cooling.

Reinstatement

Standard practice is for the commercial lease to contain a clause requiring the tenant to return the accommodation in the same condition that it was received, subject to fair wear and tear.

Future prime office locations

In the long term, construction of the metro project will create a shift in the Doha real estate market map. Instead of certain wider districts being classified as prime, there is potential for smaller sub-districts that benefit from immediate access to well-connected stations to become prime real estate spots from 2020 onwards. In addition to numerous prime sub-districts, there are two largescale masterplan developments that are expected to deliver prime commercial districts, which are the Lusail and Msheireb projects. These two projects are expected to deliver in excess of two million sqm of new space over the next 10 years.

Service charge Lease term

Lease terms of three to five years are the most common practice. A number of occupiers are requesting the right to renew or are taking longer lease terms with tenant-only break options incorporated to enable them to write down capital fitout expenditure over a longer period.

Rental reviews

Fixed uplifts during the lease term are commonplace due to the relative lack of transparency in the market, and also to avoid lease legislation that freezes rental increases at market review. Typical increases range between 2.5 percent and five percent per annum though in a lot of cases the rent will be fixed for the

In multi-tenanted commercial buildings, landlords typically recover service charge from tenants to pay for management, maintenance, repair, insurance, cleaning and utility costs of the common parts. Standard practice in Doha is to charge five percent to 15 percent of the rent towards these costs. In some cases, landlords quote their rentals inclusive of service charge, though this provides limited advantage. There are a few commercial properties in the Diplomatic District (Tornado Tower, CBQ Plaza and Burj Doha) that have targeted international occupiers, which have introduced cost recovery-based service charges. In buildings that are leased to single occupiers, the running costs

Mark Proudley is the director at DTZ Qatar.

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real estate

“The group’s name ‘Naaas’ is derived from the term ‘people’, since we revolve around a group of people that operates in all domains,” says Nasser Hassan Al Jaber, chairman of Naaas Logistics.

Competition in Qatar’s facility management sector is fierce

Once the construction and fitouts phase is over, facility management makes the backbone of any real estate project. In an interview with QCN’s Sanae Bougria, Nasser Hassan Al Jaber, chairman of Naaas Logistics, talks about maintaining labour and other residential accommodations, as well as the challenges faced by facility management companies in Qatar.

Please tell us about yourself as well as your experience in the Gulf region?

I am a Qatari businessman. I have worked in various sectors. I think that combining my accumulated experience in the public and private sectors has been a special and fruitful experience. I have established my own logistics company under the name of Naaas Logistics. We have a broader and more comprehensive view of logistics, as logistics is generally viewed as all that which pertains solely to shipping. For us, it includes all supporting services and a much broader concept related to logistics, providing everything under one roof. Our specialised services include managing facilities as well as cleaning and maintenance, food, and transport, which are all projectsupporting services. We have established door-to-door services starting with the workers’ entry into the country to their hiring and down to their departure. This includes receiving them at the airport, facilitating all fingerprint and medical procedures, and moving

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them to their quarters, in addition to providing food and cleaning services, etcetera. We can hence be considered as the ‘spinal cord’ of projects we are involved in.

the Ministry of Labor and Social Affairs’ conditions as well as those of Qatar Foundation, Public Works Authority (Ashghal), and Qatar Rail among international standards.

What is the significance of the word ‘Naaas’ as adopted by your company?

How has the economic slump impacted the facility management side of businesses? What do you expect will be the future of this sector?

The group’s name ‘Naaas’ is derived from the term ‘people’, since we revolve around a group of people that operates in all domains, made of individuals that work in a specific sector for a particular time. Hence, the group’s name.

What are some of your most prominent projects in Qatar?

Labor City is the largest project we are currently managing in addition to a large number of camps and worker compounds all over Qatar. We are proud that with more than seven years since our establishment, we are the most specialised local company in support services. We take into account numerous key approaches adopted by the government in highscale projects according to local standards, taking into consideration

First of all, we cannot deny the fact that there is a stagnation. This is a global reality that has affected the majority of countries. Qatar is a part of this world. It is an important and powerful country, which is why it is affected. However, there are a number of projects in Qatar that have remained unaffected by the economic slump, some of which include the Qatar Rail projects, construction of the 2022 World Cup stadiums, and tourism facilities such as hotels. The real impacts of economic slowdown could be noted in terms of delays in a few secondary projects, which include the restoration of a few buildings or constructing other new buildings, as it is sufficient at

We have established doorto-door services starting with the workers’ entry into the country to their hiring and down to their departure.

real estate

this stage to settle for maintenance. As for reduction, there could be instances of a substantial slash (even to the extent of 90 percent). Yet, they are never completely scratched. With regard to my expectations for the facility management sector, under such economic circumstances, and most notably in Qatar, I foresee a growth ahead of the 2022 World Cup and due to Qatar National Vision 2030, rather than stagnation. However, we expect the year 2016 to be the hardest requiring reevaluation of projects. That said, this phase will surely pass.

“Labor City is the largest project we are currently managing in addition to a large number of camps and worker compounds all over Qatar.”

While some employees work normal working hours (such as security staff), there are some employees who are required on demand (such as plumbers and electrical maintenance workers). How do you manage the latter as their technical skills are not always required?

Tell us about some advanced solutions available to facility managers in Qatar?

We have a comprehensive system that serves this sector. There are projects and designs specific to all works. We conduct daily morning meetings to determine all the requirements, and to follow up on all matters by qualified personnel using software and database to run all services. Every sector has specific software. The maintenance sector utilises software that follows up on defects that require maintenance. There are software that follow up on hygiene. We have also adopted special software that follow up on civil defence services, which around 600 employees and workers proficiently perform. The Ministry of Labor and Social Affairs is witness to the skillfulness reflected in the company’s track record that is devoid of any irregularities in all the managed facilities in Qatar. We are always keen on keeping track of all new updates in the world of technology, and on utilising them to facilitate work in the company.

“There are a number of projects in Qatar that have remained unaffected by the economic slump.”

How is facility management for labour housing different from that of other housing projects? Which one is more challenging/rewarding?

I believe that there are significant and multifaceted differences. For us, the worker is a person who performs a specific task from dawn till dusk. Therefore, he requires care, followup and more services. We are talking today about Naaas which manages more than 60,000 employees scattered in various areas in Qatar. Therefore workers’ private

highly multiskilled human capital that has been gathered from all over the world, including Europe, the United States of America and the Arab states. I am delighted and proud to announce that this human capital has transformed our company into the first specialised company in Qatar that provides comprehensive services under one umbrella.

residential facilities are more challenging compared to other residential projects since workers require full attention. There is not much difference in terms of management of workers’ private residential facilities and the management of personnel housing facilities. However, the management of staff and rents is perhaps more lucrative, as the volume of services requested and provided to this category is the largest.

Do you outsource specialist work or retain your own staff for every specialist field of facility management? The company includes a special follow-up and coordination department, which facilitates the implementation of all offered works and services. We rely on specialised companies in providing all demanding services that include food, apparel cleaning and the transportation. We outsource 60 percent of our external services. Such services are thoroughly managed as companies providing outsourced services are examined on a daily basis. Companies that do not hold their promises are discharged. We are proud to have some of the largest companies in the country that provide various services. Naaas is equally thankful to its

All projects undertaken by Naaas are managed round the clock. There is, therefore, no uninterrupted work since we work 24 hours, 365 days, and tasks are distributed over three shifts (morning, afternoon and night). All sectors, whether administrative or technical, work without interruption except for food, apparel cleaning and transportation. With regard to maintenance, fire control and management, and given the importance of following up on residences that house 32,000 to 40,000 people, departments are committed to work round the clock to prevent any malfunction that might cause the worker any distress.

What are some key challenges of dealing in the business of facility management in Qatar? Competition is perhaps the most prominent of these challenges due to the state’s area, so the competition is fierce. But we take it with a positive outlook as Naaas upholds certain visions and principles. Our prices may be slightly higher than the quoted market prices, those who have worked with us will notice what we provide in terms of project management and quality, which benefits and distinguishes our projects. The interest in the humanity factor is our company’s priority. Companies that hand us the management of their facilities are best fit to illustrate the massive difference in labour productivity (more than 40 percent increase) resulting from better facilities available to their workers.

2016 | QCN YEARBOOK | 91

real estate

Among high-end residential developments in Doha is Qanat Quartier in The Pearl-Qatar (pictured here).

Implications and role of Qatar’s new Real Estate Development Law In March 2014, the Emir HH Sheikh Tamim bin Hamad Al Thani issued the Law No. 6 2014 for regulating Qatar’s real estate sector. Also known as Qatar’s Real Estate Development Law, it deals in areas of the sector not addressed comprehensively in the pre-existing legislature. In an exclusive interview with Paula Boast, partner at Charles Russell Speechlys, QCN’s Farwa Zahra learns about some key regulations, which will serve as a means toward the country’s goal to fully standardise its real estate market.

ith Qatar’s increasing population being the primary reason, insufficient supply of housing units in Doha is also linked to the issue of delays in projects. Over the past few months, QCN asked a number of construction professionals about their key concerns. Many agreed that timely completion of ongoing projects is one of the major challenges for Qatar at the moment. Among the key real estate projects facing delays in Qatar is the Lusail City. Dubbed as the country’s largest real estate project spread across 35 square kilometres, Lusail development is planned to provide accommodation for 200,000 residents once it is completed. The time of

92 | QCN YEARBOOK | 2016

completion, however, remains uncertain, with media reports on investors’ frustration over lengthy delays and unfulfilled promises made by the lead contractor. In such cases, does Qatar’s law provide protection to investors against developers failing to meet project deadlines? QCN approached Paula Boast, partner at Charles Russell Speechlys, to know what rights investors can enjoy as per the new law, among other parts of Qatar’s Law No. 6 2014, (Real Estate Development Law), for regulating the country’s real estate sector. Now implemented, the law comprehensively deals with issues not previously included in the country’s legislature. Considering the large scale of Lusail City, Boast says, delays

were not entirely unexpected. That said, she points out Article 171 of the Qatari Civil Code, which provides that “a contract duly and properly concluded between the parties must be kept, and nonfulfilment of the respective obligations is a breach of that contract.” While there are many exceptions to this rule, Boast says it provides a good basic position to start from when an investor wants to consider their rights and obligations in circumstances where a deal has not proceeded as both parties had originally hoped for. Summarising some of the common disputes within Qatar’s real estate sector, she says, “Issues such as delay in achieving practical completion and handover, non-payment and

termination, including securing possession, are usually the most prevalent [disputes in Qatar].”

Investor’s obligations

rights

and

Lusail City is just one example of a real estate project facing delays. With a number of other properties underway in Qatar, a general awareness among investors about their rights and obligations can help ameliorate the situation by building up pressure on developers. To ensure their rights are acknowledged in the event of project delays, investors must be wary of all terms of the contract before signing. “A well drafted contract should always provide a clear answer as to what a party can do at any point during a transaction. This is particularly

real estate important when there are delays or circumstances have changed after execution. These are matters that need to be carefully considered by the parties prior to signing the contract as the parties’ willingness to accept particular risks is a critical part of the deal,” says Boast, adding that where the contract does not clearly define a party’s rights, a more detailed review of the case and background circumstances may need to be undertaken by a solicitor to advise the investor accordingly. While the above applies to both local and foreign investors, the latter must be particularly informed about the nature of Qatar’s real estate market. “Qatar is a developing market that is going through change at lightning speed. Although this provides investors with some great opportunities, there are a variety of projectspecific and other risks associated with investing in a developing and dynamic market such as Qatar,” says Boast, who advises the investors to realistically manage investment expectations in terms of time, cost and quality of real estate development investments. According to Qatar’s new real estate law published in 2014, development of a property across the country will require an ‘Escrow Account’. For every individual project, the developer is now

Law No. 6 of 2014 has introduced some important provisions relating to the development and sale of off-plan units. Such legislation has given greater protection to investors and end users, which is therefore likely to stimulate increased levels of investment.

A DEVELOPERS’ LICENCE: MINIMUM CRITERIA for QATARI DEVELOPERS

FOR NON-QATARI DEVELOPERS

•

Must be a Qatari company duly incorporated under the laws of Qatar and its commercial activities must include the development of real estate. Must have a minimum of three years of experience in development and construction prior to the date of application. Must not have been declared insolvent by virtue of a final court order.

• • •

•

Must be a company duly incorporated in a foreign country in accordance with the relevant laws of that country and its commercial activities must include the development of real estate. Provide legalised evidence of its incorporation. Establish a commercial presence in either Qatar or another GCC country. Have a minimum of three years of experience in development and construction prior to the date of application and have a good reputation in the market for similar developments. May only carry out development work in designated areas where foreign ownership of land interests is permitted.

Source: Reem Al Mahroos, associate at Charles Russell Speechlys.

required to open an account to hold the amount coming from investors and other stakeholders. However, withdrawals from an escrow account are not allowed until the developer proves it has completed at least 20 percent of the project. Boast describes escrow accounts as ‘half way house’ between a developer/seller and an investor/buyer to protect and hold funds. “An independent third party is engaged as an escrow officer and is in charge of the account. Generally, the escrow officer must ensure that certain conditions are met before releasing the funds from the account,” she says. Providing additional security to investors, the bank holding the escrow account is required to hold funds equivalent to 10 percent of the total project value unless it provides an acceptable bank guarantee. All transactions and access to escrow account must come after the approval by the Ministry of Municipality and Urban Planning.

Commenting on the implications of introducing escrow account, Boast says, “The use of an escrow account boosts consumer confidence in the market, and reduces the risk or perception that developers may re-allocate or misuse the funds for other projects.”

According to Qatar’s recently-introduced Law No. 6 of 2014, a developer cannot withdraw any amount from buyers’ proceeds unless the former shows it has completed at least 20 percent of the project.

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real estate Developer’s obligations

rights

and

When terms and conditions are meticulously reviewed, Qatar’s law provides sound protection to investors. Where, then, do the developers stand? When asked about some provisions providing the rights to developers, Boast mentions the new Real Estate Development Law, which acts as much to protect developers as it does to protect the other contracting parties. By setting out clear definitive guidelines for developments in Qatar, Boast says, “It will certainly assist developers on matters that have previously been unclear, including what is required of them as key stakeholders in the real estate sector. It also importantly sets a standard benchmark for quality in real estate projects and construction, which is important in ensuring that the best developers get to carry out and complete the required workbook of Qatari projects.” In the context of developers’ obligations, the State of Qatar has recently introduced the requirement for developers to obtain a licence prior to authorising their operations in the country. The ‘Developers Licence’ can be revoked if the developer fails to meet certain obligations, including the requirement to start work within six months of being granted permission for off-plan sale of units. Granted for three years, the developers licence sets out the minimum criteria for Qatari and non-Qatari developers. “Together with the other requirements in the Development Law, the licence seeks to encourage property investment by building consumer confidence,” says Boast. However, she points out, it is unclear whether the requirement for developers to have three years of experience relates to the developer’s experience as a whole (that is the entire entity) or individuals within the developer. If the requirement pertains to three-year experience of the entire entity, the introduction of developers’ licence can likely deter new entrants to the market.

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With some great opportunities, there are a variety of project-specific and other risks associated with investing in a developing and dynamic market such as Qatar.

Legislative landscape Apart from developers’ licence and escrow account, other changes that came with Qatar’s new real estate law include ‘Strata-Title’, providing the Ministry of Justice with detailed information about every offplan unit and development. The information will remain as part of the interim register, featuring details about owner, sale price, mortgages and judgments, etcetera. Against the backdrop of frequent project delays, the new law also increases penalties against developers. (See infographic) Commenting on the role of the new real estate law, Boast says, “The legislative landscape is continuing to develop and

evolve… Law No. 6 of 2014 has introduced some important provisions relating to the development and sale of offplan units. Such legislation has given greater protection to investors and end users, which is therefore likely to stimulate increased levels of investment.” That said, Boast believes the new legislation is not an end in itself, but a means toward an end. A number of areas within the real estate market will need to be addressed in order to fully standardise the sector. “Further legislation is still required in relation to a number of areas such as landlord and tenant, strata and the title registration system as well as the establishment of a real estate regulator,” concludes Boast.

Qatar’s new real estate law: Penalties against developers Developer’s offence •

• • • •

•

Failure to hand over the units on the contractual date without an acceptable reason. Failure to meet the contracted standards and specifications. Operating without obtaining the Developers Licence. Misrepresentation or fraud in relation to the sale of an off-plan unit. Use of funds in the designated Escrow Account for purposes other than those prescribed by the New Law. Obtaining financing and using the project as collateral without the approval of the Ministry of Economy & Commerce.

Penalty against the developer Imprisonment of up to one year and/or a maximum fine of QAR50,000.

Failure of a developer to commence work on the project within six months of its approval date without an acceptable reason.

A maximum fine of QAR200,000, notwithstanding any higher penalty.

•

A maximum fine of QAR100,000, notwithstanding any higher penalty.

•

Failure to register the strata titles within two months from the issuance of the completion certificate. Failure to provide all required documentation to the relevant authorities under the New Law.

Source: Charles Russell Speechlys.

technology

96 98 Although at a slower pace, engineers in Qatarâ&#x20AC;&#x2122;s construction sector continue to experience latest technologies â&#x20AC;&#x201C; whether in terms of audiovisual and acoustic solutions, or in the context of modern construction software and apps. (Image Arabian Eye/Corbis)

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technology in pmv

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technology

2016 â&#x20AC;&#x201C; a year of changes within the AV world

As technology penetrates into every area of life, construction is no exception. With smart buildings gaining popularity in the region, the increased role of audiovisual (AV) solutions will be pivotal to the construction industry in Qatar just as anywhere else in the world. D.S. Krishnamurthy of Almoe AV Solutions, Qatar, writes about the significance of AV in modern construction, while also looking at some challenges AV providers in Qatar face today.

AV design and integration for any construction project combines four basic but essential elements â&#x20AC;&#x201C; the hardware, the software, the environment, and the content.

he professional audiovisual (AV) industry, as we all know, has come into its own. Because of its pivotal role in delivery of modern information communications, it has become an integral part of virtually all major construction projects. Fundamentally, AV design and integration for any construction project combines four basic but essential elements â&#x20AC;&#x201C; the hardware, or the physical electronics that are connected together; the software, or programmes that are loaded into the electronics to perform various AV tasks; the environment, or the space and infrastructure within which the hardware and software work; and the content, which includes video,

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audio and data material created and presented using the software and hardware available. Each one of these elements has specific and unique requirements that must be addressed during project design and implementation, and their ultimate interaction with one another will produce the desired solutions. Critical to successful project integration is the careful monitoring and balancing of the systems hardware, the software and the environments, with the nature of content presentation in mind. Proper integration will ensure that the human aspects of AV, that includes the ability to clearly see and hear the presentation, are fully and successfully solved.

Contemporary AV integration is really more about project management and procedure than it is about audio and video or design and construction.

technology On the other end of the spectrum, the mission of any AV equipment and services supplier is to create audiovisual environments that work – and work well. This is more difficult today than ever before, as AV is no longer an add-on to the building project. AV communications systems are increasingly a part of today’s building types, and are critical to the workflow and success of the environments. In pro-AV integration construction projects of today, people from different disciplines are involved – many of whom are unfamiliar with AV ‘techies’. In addition to AV consultants, integrators, manufacturers and technicians, an AV project also combines the skills of architects, engineers, general contractors, subcontractors, building facility managers and a variety of specialty consultants. The AV professional should have direct involvement in all aspects of building design and construction, including space planning, sightlines, lighting, acoustics, electrical and mechanical systems. Quite simply, it means that the AV professional needs to relate to almost everyone who works on a construction project that involves an AV system. In many ways, contemporary AV integration is really more about project management and procedure than it is about audio and video or design and construction. It is about ways in which a project is handled, and how each of the various professionals performs a critical role in the implementation of an AV system. Most, in fact, are there from start to finish and, despite their various job functions, are members of the same team. Be it hotels, offices and business centres, airports, or schools, we believe every AV project demands critical consideration. Every project is usually assigned a dedicated project team and project manager that work to meet project expectations and requirements.

Challenges When it comes to bids, it still happens too often that projects are awarded based on price. The results of this are all quite obvious to see: poorly executed systems, liquidated damages, an unhappy client, and a bad reputation – not just for the

Among recent projects providing modern AV facilities in Qatar is the Doha Exhibition and Convention Centre, pictured here.

firm that submitted an undervalued bid, but also for the consultant and the industry in general. Weeding out low bidders starts with a Request for Proposal (RFP). In this regard, fully engineered drawings have been proven to work: drawings created by project owner that show all of the power connections, connectors, back panels, counts for the linear footage of wire that is required, and so on – as much information as possible so that bidders are not required to do guesswork. All they have to do is literally go down the list and enter in a price. Such level of detail on the front end helps weed out low bidders. Furthermore, large projects necessitate hosting mandatory walkthroughs; the logic being that if you are willing to invest time and money to get on a plane and review the site, you are probably pretty serious about the project. And, if you do not show up, you are not going to qualify for the bid. In some cases, it helps to ask for a tour of one of the integrator’s previous projects. Looking into the future, we predict 2016 to be a year of big changes within the AV world, many

of which are already happening. The AV market is a vast world – video and sound, hardware and software, and the trends will touch upon all these aspects. We expect the worlds of AV and IT to converge further, with AV becoming more IT centric. We also see a growing trend for video walls, which is already the fastest growing sub-segment of AV. Lastly, we anticipate an upswing in the area of interactive displays.

D.S. Krishnamurthy is the general manager at Almoe AV Solutions, Qatar.

The mission of any AV equipment and services supplier is to create audiovisual environments that work – and work well.

2016 | QCN YEARBOOK | 97

technology

One of the leading technologies that improve safety is the Electronic Sta bility Programme, which constantly monitors the dynamic status of the vehicle, and then automatically calls on the engine management and brake system to intervene if the truck threatens to tip over or skid.

Impacts of technology on THE commercial vehicle industry Technological development has definitely led to a sustained evolution of commercial vehicles over the years and substantial improvements leading to quantum jumps in performance, efficiency and ease of use. Dr. Richard Brown of MAN Truck and Bus takes a look at how technology is shaping several facets of commercial vehicles with references to some of the latest solutions.

he world of commercial vehicles is constantly changing in line with industry developments and changing requirements of customers. From a technology standpoint, there is no finishing line, and the usage of advanced technology in vehicles will definitely increase in the future. The construction industry with its challenging conditions and tough working environment will be the beneficiary of these developments.

Telematics: Enhancing operational efficiency One such technology that has led to major benefits for operators is telematics. With the help of this technology, it is now possible to access information and data in real time. This also helps increase visibility of the fleet, determine

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location, speed and direction, and track the vehicleâ&#x20AC;&#x2122;s status on real-time basis. Telematics also leads to increased utilisation and driver performance with an increase of 10 to 30 percent in terms of productivity, which is substantial. It also leads to significant cost reduction, and the income per vehicle can be realised within the first year of the vehicleâ&#x20AC;&#x2122;s purchase. In addition to that, telematics increases road safety. This can be done by measuring driversâ&#x20AC;&#x2122; behaviour over time to see how they perform in terms of safe driving. According to a study conducted by the United States Department of Transportation in 2014, a five percent decrease in average speed leads to approximately a 10 percent decrease in injury crashes and a 20 percent decrease in fatal crashes.

technology

One technology that has led to major benefits for vehicle operators is telematics. With the help of this technology, it is now possible to access information and data in real time.

In the United Kingdom, experience from a fleet operator has revealed that telematics can lead to a 92 percent reduction in speeding. Telematics also enhances fuel optimisation in order to be more environmentally friendly. It can potentially reduce fuel consumption between 10 to 15 percent, and accordingly reduce carbon dioxide emissions by approximately 10 percent. Across the Middle East, there is growing awareness about the benefits of telematics, and end users are looking to avail the advantages and opportunities the system presents to them for their fleet operations.

Improving driving dynamics One example of technology and its impact on improving driving dynamics can be seen in MAN’s TipMatic gearbox control system for trucks. According to the load and road conditions, TipMatic proactively intervenes in the gear selection, and shifts to the most appropriate gear in good time. This assists to ensure there is no interruption to tractive force when going uphill. The TipMatic is also available with the integrated intarder – a combination of automated gear selection, sustained action braking and constant speed control functions – something that can automatically provide braking force on downhills to maintain the set road speed. The automation supports drivers on long distances by taking over the challenging task of deciding what is the best gear for efficient operation of the vehicle.

Improving safety Some of the leading technologies in terms of improving safety include systems such as the Electronic Stability Programme (ESP). This technology constantly monitors the dynamic status of the vehicle and then automatically calls on the engine management and brake system to intervene if the truck threatens to tip over or skid. The new generation of Emergency Brake Assist (EBA) increases the safety even further, and considerably reduces the risk of traffic accidents. The newly developed system combines information from radar sensors installed on the front of the vehicle with data from the camera integrated in the windshield. Thanks to this sensor fusion, the system can detect dangerous situations even more quickly and securely, and initiate an emergency braking in case of serious danger sooner. The EBA is expected to be released for the Middle East market in the coming years. Another technology in the vehicle industry is the unique truck driving simulator used to deliver basic and advanced training for truck drivers to evaluate driving skills in a completely virtual environment. The simulator has onscreen projection directly onto the window of the driver’s cab and is trend setting. The person is completely immersed in the simulation environment and the virtual reality of the exercise. The simulator can simulate various vehicles with different combinations (such as different types of trailers or semi-trailers, vehicle load), special situations (such as side wind, brake failure, tire blow-outs), training in different

Technologies such as MAN’s TipMatic gearbox control system helps improve the driving dynamics by ensuring that there is no interruption to tractive force when going uphill.

environments (mountain roads, urban areas, highways) as well as a manoeuvring course. MAN’s truck driving simulator consists of an original MAN truck driver‘s cab with all functional operating and display elements (speedometer, tachometer, turn signal, automatic and manual transmission, pedals, multifunction steering wheel including cruise control, and switches for driver assistance systems), simulation of return forces on steering wheel, and pedals in addition to an instructor operation station. The simulator allows the instructor to quickly generate scenarios and thus, to optimally customise training for the driver. Using ‘drag-n-drop’, a scenario can be newly created by simple clicking or an old scenario can be easily called up again and changed in real time while driving. From an overall perspective, technology is all set to dominate and increase in terms of influence whether it is in-vehicle technology or aiding driver training to improve safety standards. It has truly transformed the industry for the better.

Dr. Richard Brown is the head of After Sales and Product Management, MAN Truck & Bus Middle East and Africa FZE.

2016 | QCN YEARBOOK | 99

technology

Qatar construction increasingly recognising the role of building acoustics

From where it stood several years ago, Qatar’s construction industry is taking evolutionary steps towards the growth and advancement of building acoustics, writes Maro Puljizevic of Al Mana & Associates.

ow that the 2022 World Cup is no longer a mere mirage, contractors are facing more pressure to wrap up their projects on time. On the other hand, despite this construction rush, Qatar is witnessing a significant inclination of investors and end users towards the quality of construction, durability, energy efficiency, sustainability and interior environment quality. This important change, which finally matured in the local mentality, puts project teams in a rather unenviable position, as they have to reconcile both quality and tight time schedules, which can get extremely difficult at times. Although this transition presents an evolutionary step forward for local construction and real estate, this quality versus time oxymoron is actually one of most serious objectives that Qatar has ever faced. Given these circumstances, project teams are often faced with a challenge that something has to be compromised. When that happens, some areas of construction end up not being given the level of importance that they deserve. Building acoustics is unfortunately one such area. At the moment, requirements for proper dedicated building acoustics are still virtually nonexistent in Qatar. It is especially disappointing that acoustics of the residential sector is completely neglected, and we continue to build a large supply of ‘sick buildings’. In Doha, entire towers and residential areas can be built without any restraints on airborne sound insulation or impact sound insulation. What this means is that it is up to the investor and contractor to choose composition and materials for walls, floors, doors and windows, etcetera. Not so surprisingly, then, cheapest options are usually everyone’s first pick. Results of such decisions often lead to inhabitants clearly hearing their

100 | QCN YEARBOOK | 2016

In 2015, the Ministry of Municipality and Urban Planning set general guidelines related to construction noise, which was causing serious disturbance throughout Doha.

neighbour’s conversation or footsteps. Internationally, it is impossible to put a building to use, or even start a construction, if satisfactory levels of sound insulation between tenancies are not provided. Being acoustically well insulated from neighbours, not causing disturbance to each other, should become a mandatory state requirement, not a voluntary add-on in Qatar. Without an enforced regulation, expecting the investors and contractors to go the extra mile for proper sound insulation in a market such as Qatar is just unrealistic. Things, however, are not the same for every project in Qatar. The country’s high-end market has realised the importance of a good acoustic design and its numerous benefits, such as increased productivity or guest’s satisfaction. Therefore, majority of hotels, resorts, VIP office spaces, conference halls and sport halls incorporate advanced acoustic design features. These features, however, should move beyond high-end projects, towards common residential projects. In 2015, the Ministry of Municipality and Urban Planning set out general guidelines related to construction noise, which was causing serious disturbance throughout Doha.

This was the first time ever that perpetual construction had been banned in favour of residents’ comfort and I am hopeful that sleepless nights due to noise of excavators, generators, trucks, and grinders, etcetera, will soon be a thing of the past. Although still not refined and detailed enough, these construction noise guidelines place certain constraints on working hours, preventing contractors to work round the clock in residential areas. Unfortunately, due to the lack of a dedicated government body to supervise and empower these praiseworthy guidelines, working hours of construction sites still breach the limitations at times. Nonetheless, this is a great initiative which will hopefully include a wider set of regulations in the years to come, encompassing matters of building acoustics, community noise, school acoustics, traffic noise and control of nuisance made by the outdoor entertainment events. Regardless of all the challenges, the building acoustics market is continuously growing as the awareness and benefits of a good acoustic design are increasingly gaining attention. Having seen the market several years ago, when acoustic design was almost unknown, Qatar is taking evolutionary steps. What the country needs right now are more ambassadors of building acoustics, especially among local Qatari engineers. It would indeed be remarkable to see a new generation of engineers, with degrees from local universities, making these long-awaited changes and placing building acoustics among other governed engineering disciplines, where it surely deserves to be.

Maro Puljizevic is the managing director, Al Mana & Associates, Qatar.

technology

BIM in Qatar: The demand and supply scenario

Over the past few years, Qatar’s construction sector has seen a significant increase in the usage of building information modelling (BIM), but the lack of national standards and local capabilities of consultants pose new challenges for supply chain, writes Christoph Weber – managing director, Hochtief Vicon Qatar.

he last few years have shown that Qatar is not only ready, but has also seen an exponential growth in the usage of BIM with more and more projects reaping its benefits. Large-scale projects and clients such as Lusail City, Qatar Rail, Ashghal’s Doha Expressways, Qatar Foundation, Qatar Economic Zones and the Supreme Committee for Delivery and Legacy’s (SC) stadium projects have been leading the industry by demanding BIM in their projects. While this topdown approach is beneficial for the international consultants who are open to incorporate BIM into their practice, it has also negatively affected those participants who are still struggling or have been hesitant to adopt BIM.

Current demand

Large players in Qatar’s ambitious construction industry understand the value that BIM is able to bring. Individual efforts have been made by various clients to establish certain regulations in the tenders to streamline the BIM processes and achieve positive benefits from it. Lusail City is the BIM pioneer in Qatar. It has the largest infrastructure BIM model that has been applied to many business processes such as building permits, marketing, design and construction. Ashghal implemented detailed BIM requirements on their Doha Expressway project, which generated many benefits for all stakeholders. Such BIM requirements are expected to grow in Ashghal’s current highway and tunnelling projects and will soon be adopted as standards. The Supreme Committee has envisioned the stadiums taking full advantage of BIM. The ‘SC BIM Implementation Master Plan’ is a clear example that any potential consultants

interested in participating in these developments will have to possess strong BIM capabilities. Qatar Rail’s Doha Metro project began by adopting British standards into their BIM specifications, which were designed around the information workflow and required implementation and interaction with other management systems. During the project execution, a complete set of BIM standards was developed aiming to take the highest level of benefit out of the contractor’s BIM deliverables. Qatar Foundation/Education City is not only attempting to implement BIM for a specific usecase, but also demands the project teams to actively use BIM across design, execution, construction and operations phases of the project lifecycle. The number of tenders with specific BIM requirements is constantly increasing as clients are gradually reaping the benefits of BIM into their projects. BIM is becoming a pre-qualification requirement in the tenders and a standard that bidders must comply with. The demand for BIM is going up in Qatar and with time, it will only increase its pace, and rise in expectations.

BIM provides a virtual prototype through which the design may be refined and improved prior to the actual commencement of construction.

Along with its rising construction industry, Qatar has seen a significant increase in the efforts to integrate BIM on its largescale projects.

BIM supply

While the demand is clearly rising in Qatar, the supply chain is still coping with the growth, especially in an environment where national standards and regulations for BIM are significantly lacking. There is also a big gap between the BIM capabilities available among the consultants in the market. Some are just starting off, while some specialise only in specific BIM applications or tools. Only a handful of consultants in the market are able to provide a holistic approach to BIM implementation, which is software independent and process

driven. To bridge this knowledge gap, BIM education and awareness programmes need to play a key role in the future. Providing training and accreditations to the students as well as to the consultants could be a direction where Qatar may benefit in building up its supply chain. Organising BIM specific events which are free and open to the public, such as BIM User Day series, organised annually by Qatar

University, Hochtief Vicon and Teeside University since 2011, are good methods to establish a knowledge platform with government, academic, research and industry experts. It also allows Qatar to build a strong professional network as well as position itself as a leading promoter of BIM in the Middle East. Along with its rising construction industry, Qatar has seen a significant increase in the efforts to integrate BIM on its largescale projects. Lack of national standards, a regulatory body, BIMspecific educational programmes and sufficient BIM capabilities of consultants are few of the key challenges that the supply chain is facing while trying to meet the increasing demand. This developing stage of BIM in Qatar should not be seen as a free pass for market players to wait and rest. All consultants wanting to stay relevant and competitive in the Qatar market will momentarily need to assess their in-house BIM capabilities before BIM becomes a standard practice in Qatar. The clock is ticking, are you ready for BIM?

2016 | QCN YEARBOOK | 101

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project qatar

George Ayache, general manager of IFP Qatar, has been in the field of marketing and management for more than 20 years. As the organiser of Project Qatar 2016, he says the show will have a number of product launches this year.

Project Qatar: From tradeshow to a strategic access point

Whether you are an engineer, consultant, contractor, architect, interior designer or procurement manager, Project Qatar is one industry event that has a range of offerings for any construction professional, says George Ayache, general manager of IFP Qatar.

Please tell us about yourself and your affiliation with Project Qatar. As the general manager of IFP Qatar, I head a team of around 30 executives entrusted to organise the group’s largest exhibition in Qatar. For the 13th year now, buyers, suppliers and decision makers are meeting at Project Qatar to network, share knowledge, negotiate, and forge deals. In fact, we have seen Project Qatar evolve from a tradeshow to a strategic access point for reaching key decision makers in a country with a clear pipeline of projects, and one of the fastest growing economies in the world. We are very satisfied with the growth and progress of Project Qatar, and we want to keep positioning the event as the focal point for the country’s growing and diverse construction market.

How different would be this year’s show from the last year? What aspects will make it better than the last year? This year, Project Qatar is happy to announce its move to the Doha Exhibition and Convention Centre (DECC), the new state-of-the-art venue located at the heart of Qatar’s capital, in West Bay. This new venue is easily accessible from Doha’s several main roads, and promises to attract thousands of professional visitors while providing an underground parking with direct access to the registration desks. Apart from that, Project Qatar 2016’s opening hours have changed. This timing is considered specifically convenient for governmental bodies to directly attend the show after finishing their duty at 2 pm. Another key aspect of Project Qatar this year is the accreditation from UFI – The Global Association of the Exhibition Industry. Project

Qatar now bears the industry-wide stamp of approval for tradeshow authenticity and effectiveness. The event is the first construction industry exhibition in Qatar to be associated with UFI, which is the association of the world’s leading tradeshow organisers and fairground owners. Other major highlights we are working on are the workshops organised in collaboration with Qatar Chamber, covering a wide spectrum of topics that are of interest to the people working in the construction field. In addition, we will be organising mega site visits for international visitors coming from abroad, and B2B Matchmaking Platform designed for professionals to meet exhibitors that match their products and work profile. To sum up, the exhibition provides multinational firms from all around the world with the opportunity to establish a presence in the country.

Please give us details about the exhibitors and key sponsors of Project Qatar 2016. Like every year, Project Qatar is grateful for the contributions of Al Sraiya Group, serving as the Integrity Sponsor of the show. Additional contributions have been received from Industrial Standards, Gold and Silver Sponsors, including QD-CPC, ASTM, Nehmeh, Bitumode Qatar, Art Glass, Gulf Crafts (branding sponsor), InterContinental Doha – The City (the official hotel of the show), Airlink (the official freight forwarder), and SEIB (the official insurance company). Project Qatar will once again present solutions to answer the various needs of the entire construction industry, including the latest building materials and equipment, architectural

finishing products, stone, marble and granite products, construction tools and technology, engineering services, infrastructure materials, security, heavy equipment, safety systems and many more.

In general, the oil price decline has affected the pace of construction in Qatar. How is the economic slowdown impacting Project Qatar? Despite successful diversification efforts, the economy in Qatar continues to be driven to a large degree by the hydrocarbon sector. Looking to the future, there is much uncertainty around the fluctuation of the oil prices, and it is difficult to comment on when prices will begin to move upwards again. Low oil prices coupled with a global financial crisis spells a number of challenges for a number of countries that depend heavily on the hydrocarbon sector. The current oil price situation clearly represents an unprecedented challenge for Qatar, that has enjoyed a long period of high energy prices, budget surpluses and growing demand for their exports. Project Qatar is only a reflection of the economy of Qatar and its construction needs, and hence we see this as both an exciting as well as a challenging time for Qatari businesses. The challenge is mostly seen in the procurement side of the business, as companies are now seeking the best and most cost-effective solutions to meet their procuring needs. This is where Project Qatar excels, and our excitement comes from our pride in being the bridge which connects Qatar to the world of the construction industry. With international and regional exhibitors from 40 countries around the world, Project Qatar, being the leading business platform,

2016 | QCN YEARBOOK | 103

project qatar provides companies with the means to access, source and procure from thousands of construction, building and technology related products, thereby saving time, effort and resources.

Please tell us about the events happening in conjunction with Project Qatar. What are the considerations when you decide which events need to be held during the show, and which ones to spread across the rest of the year? The concurrent events represent an answer to the demand for specialist, interactive insights into the challenges and opportunities facing companies within Project Qatar’s product and services profiles. These events will discuss the hottest topics in the construction industry and by attending, visitors can stay up to date with the latest trends, and network with top specialists in their field. All of these small exhibitions are concurrent events, and they will include Heavy Max 2016 – the 13th International Exhibition for Heavy Machinery, and the largest event of its kind in Qatar and the Middle East, and Qatar StoneTech 2016 – the 5th International Stone and Stone Technology Show, in addition to three new events: Qatar Smart Technologies 2016 – the first international innovative smart construction solutions show, Qatar Sports Infrastructure 2016 – the first international exhibition for sports infrastructure, and Qatar Transport and logistics, the first international transport and logistics exhibition. Our strategy is to expand the proportion of our portfolio, and we believe this is a step in

Project Qatar’s specialised conferences in 2016 April 18 – 19 The 1st Annual Smart Parking Qatar

May 9 – 10 The 3rd Annual LightingTech Qatar

May 11 – 12 The 2nd Annual Future BIM Implementation Qatar

September 5 – 6 The 3rd Annual Future Interiors Qatar

October 24 – 25 The 3rd Annual Future Landscape & Public Realm Qatar

December 5 – 6 The 3rd Annual Future Drainage Networks Qatar

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For Qatar’s construction industry, Project Qatar provides the largest platform for buyers, suppliers and decision makers to network, share knowledge, negotiate, and forge deals.

the right direction to provide an in-depth insight about the hottest topics in the construction industry.

How will the change of venue impact the show overall? While a location in Doha’s West Bay can be more accessible, it can also mean possible congestion of traffic around parking area. Project Qatar is the largest exhibition in terms of space and number of visitors. Now with our move to the new venue in DECC, we expect Project Qatar to have an even bigger number of visitors and exhibitors than the previous years. Project Qatar is a business platform, bringing together the suppliers from all over the world to meet the buyers during a period of four days. The new venue, DECC, is easily accessible from several routes, and it is 20 minutes away from Hamad International Airport. As for the parking area, the venue includes a circulation space, as well as two-level basement car parking designed for approximately 2800 cars. The DECC and Qatar’s Traffic and Patrols Department are aware of the congestion during large-scale events such as Project Qatar, and we have taken a number of precautions to avoid this issue.

Tell us about some major product launches to look forward to during Project Qatar. Are there any other special events planned during the show? We have in the pipeline many product launches, some of which will be taking place at the companies’ booths while others will take place in the conferences. The full list of product launches will be available during the days of the show. From the side of the organiser, some of the major highlights or activities we are working on

are the specialised series of workshops, which will be organised in collaboration with Qatar Chamber, in addition to the megasite visits arranged for the international visitors coming from abroad, and the B2B Matchmaking Platform designed for professionals to meet exhibitors that match their products and work profile.

Which subsector of construction is most heavily represented in terms of exhibitors? In Project Qatar, we have expanded our portfolio of sectors to 23 profiles by adding new fields such as smart construction, green construction, sports infrastructure and water technology to name a few. The top three categories represented in Project Qatar will be building materials, interior decorative products and façades and cladding.

Please tell us about the focus of specialised conferences during the show? What are some reasons behind the selection of topics for these conferences? Project Qatar 2016 will host six specialised conferences throughout the year, including two conferences scheduled during the show: The 3rd Annual LightingTech Qatar from May 9 to 10, and The 2nd Annual Future BIM Implementation Qatar from May 11 to 12. The specialised conferences cover the entire construction industry, including the latest innovations and products, new building materials and equipment, as well as innovative construction tools and technologies, and security and safety systems. The main reasons behind selecting the topics of these conferences are the requirements of the construction sector in the country as well as the business opportunities available here.