The Edge September Issue 2015

contents

September 2015

Read more of the edge at www.theedge.me

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56 Feature story : Doha’s new port of call

With the country’s new port slated to open next year, Qatar’s logistics sector is expected to receive a major boost.

cover story 46

With oil prices stagnant at less than USD50 (QAR180) per BELOW barrel and the future prices of the A BARREL commodity highly speculative, the onceambitious economic growth projections of Qatar and its fellow hydrocarbon-exporting Gulf neighbours have had to be sharply revised, writes The Edge’s global energy editor, Simon Watkins.

Business Interview: Connecting industry and academia with Tafawoq director Bader Al Jaidah

Bader Al Jaidah, director, Tafawoq, tells The Edge, “Our learning portfolio caters to the needs of project professionals, who are at various stages of their careers, taking into account diverse roles and circumstances.”

features

sectors

Business Interview : Tafawoq: Bridging the gap 40

Finance & Markets 25

Bader Al Jaidah, director of Tafawoq, shares the innovative learning approach his organisation follows by bringing in both industry players and academic institutions.

Vol. 7 No. 9

- September 2015

- QATAR’S BUSINESS MAGAZINE - Vol. 7 No. 9 - Issue 71 - September 2015

$40

How the current oil price paradigm is redefining Qatar's economic approach

PLUS:

Port of Call: Doha’s new logistics hub Qatar’s low-cost housing challenge Converging MENA IT infrastructure

Business Interview : Improving conditions 52 Joseph Lebaron, vice chairman of Daruna, a real estate firm, discusses its corporate plans, what the company will add to the Qatari landscape, and its contribution to improving the living conditions of migrant workers.

The Middle East and North Africa region has recorded private equity activity worth QAR9.5 billion and Initial Public Offerings (IPOs) worth QAR3.3 billion.

Energy & Sustainability 29

Given increasing competition in many of its traditional markets for liquefied natural gas (LNG), Qatar continues to develop new avenues of opportunity for exports.

Real Estate & Construction 33 Amid soaring housing rentals in Qatar, the country’s growing labourer and low-income groups face challenges in finding affordable accommodation.

Connect with us online www.gingercamelmedianetwork.com/edge facebook.com/theedgeqatar twitter.com/TheEdgeQatar linkedin.com/company/ the-edge-magazine-qatar

Qatar has historically seen limited supply of housing for lowerto middle-income households. (Image Arabian Eye/Corbis)

The Edge | 3

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Introducing...

The Edge's Weekly

PODCAST

The Edge now has a business news podcast on the Ginger Camel Media Network.

Tech & Communications 37

Mobile users in Qatar are set for an upgrade as both of the country’s telecom firms, Ooredoo and Vodafone, have announced plans to significantly enhance their 4G capabilities, offering speeds of up to 375 megabits per second.

Business Insight

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Chad Dunn, EMC’s senior director of product management and marketing, discusses the company’s hybrid cloud initiatives; and Marios George, founder of Nozomi, talks about his luxury restaurant that opens at Marsa Malaz Kempinski, The Pearl-Qatar in September.

Hosted by our Managing Editor Miles Masterson and

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featuring the editors of The Edge and QCN magazines as well as special guests, The Edge Business News podcast covers business news, current affairs and analysis of the main news stories across all sectors related to the economy and society in Qatar, as well as Arab countries and the rest of the world.

Please subscribe to The Edge Qatar Business News podcast and download our weekly edition for up to date insights into the world of business in Qatar and beyond.

“Protecting the perimeter of a data centre is not sufficient. You need to protect the data not only through encryption, but also through access,” says Chad Dunn, senior director of product management and marketing, EMC.

regulars From the Editor For more info go to www.gingercamelmedianetwork.com/edge

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Qatar Perspectives Products

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publications director mohamed jaidah m.jaidah@firefly-me.com general manager joe marritt j.marritt@firefly-me.com managing editor miles masterson m.masterson@theedge-me.com senior business editor aparajita mukherjee a.mukherjee@theedge-me.com deputy editor farwa zahra f.zahra@theedge-me.com special projects editor roisin bailey r.bailey@firefly-me.com

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The Edge is printed monthly Š 2015 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by The Edge or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in The Edge. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

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Special advertiSement

The Urgent Case: a tool for stealthy contractual parties in Qatar Parties to construction contracts in Qatar often rely on urgent cases (‫)إثبات حالة‬ to obtain official expert reports documenting the status of the works, but also as a tool to exert pressure on the other party. Filing an application for an urgent case enables a party to obtain an official report from the Court of Urgent Matters in Qatar (“Court”). The official report is prepared by court-appointed experts and documents evidence that the applicant fears may be at imminent risk of becoming unavailable or disappearing by the time parties commence arbitration or litigation proceedings in respect of their dispute.

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Urgent cases in the context of construction contracts Parties to construction contracts in Qatar rely on urgent cases primarily to preserve evidence but also as a strategic step to exert pressure on the other party. Generally hearings in urgent cases are held on a weekly basis with the first hearing usually being held within a week of the filing. Hence an employer, contractor or subcontractor may find itself receiving a summons to appear in an urgent case hearing as defendant the very week that it receives the summons.

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from site but would like the defective works and the subcontractor’s failings to be officially documented.

Subcontractors have also relied on urgent cases to document the extent of works as well as to document instances of delay where the site is unfit to receive the subcontract works. In some cases, subcontractors have been known to depart from site without completing the contract following the issuance of the official report.

The scenarios noted above merely provide an overview of instances where filing an urgent case may benefit a party to a construction contract.

Parties considering urgent cases are advised to consult with legal experts prior to commencing an urgent case as in certain cases filing an urgent may possibly be detrimental to a party’s interest.

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Zehra Manni Associate Al Tamimi & Company z.manni@tamimi.com

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editor’s letter There is an English-language saying of obscure origin, but that many believe is Chinese: “May you live in interesting times.” One could think of many eras fascinating enough in which to exist. But, arguably, there is no time like the present, where the twin threats of depressed oil prices and potential global recession - even looming depression, if the most pessimistic analysts are to be believed – threaten economic growth in many countries, though for different reasons.

The fact that the Chinese devalued their currency by two percent against the United States (US) dollar in mid-August may or may not be related to the origins of the above phrase, but what is sure is the direct effect it had on the world economy, including China’s own beleaguered stock market.

The action by the Chinese also caused increased uncertainty in markets across the globe resulting in notable declines in the US, European, Asian and Australian bourses. The pressure was felt in countries with strong trade ties with China, manifest in a sharp devaluation of a cluster of emerging market currencies, including the Russian rouble, the Brazilian real and the South African rand.

Most analysts agree the Chinese are taking drastic steps to bolster their flagging economy, which has been a driving force in global recovery since 2009. But the effect of the current slowdown, when viewed through the prism of depressed energy prices, becomes even more acute for oil and gas exporting nations, many of whom have relied to some degree on Chinese growth in recent years.

Of course, neither the Chinese slowdown and market crash, nor their fiddling with the value of the Renminbi are wholly responsible for the low oil price – which dropped below the USD40 (QAR146) benchmark price in the US on August 21, to reach a six-year low – but it does not make an uncertain situation any better. No, a glut of oil on the market in a period of low demand (and the refusal by the Saudis to reduce production), growing supply from North Africa – and potentially Iran, post-nuclear deal – and the attributable effect of shale fracking in North America, and increasingly elsewhere, bear most of the responsibility for that.

Regardless of the origins of the status quo,

there is the harsh reality for oil and gas exporting nations that rely on these for the majority of their gross domestic product (GDP) and income for state budgets. Due to the current low oil price – arguably unthinkable even a few years ago in the heady days of USD100 (QAR364) or more a barrel – they have had to redefine their fiscal policies drastically.

Such is the urgency of this for many Gulf Cooperation Council (GCC) states, including of course Qatar, that budget deficits are due to be posted, for the first time in more than a decade, in 2015. The state budget for Qatar has thus been revised from what was previously considered a conservative baseline of USD65 (QAR237) per barrel of oil, to USD45 (QAR164) – though some financial analysts and industry insiders believe the oil price may drop even lower this year, rising inexorably post-2016. However, instead of following Qatar’s approach, the United Arab Emirates (UAE) has embarked on, or advocated, other cost cutting remedies, including deregulating domestic fuel prices by removing state subsidies and setting fuel prices based on global benchmarks. The UAE is also considering introducing forms of taxation, such as Value Added Tax (VAT), as well as other corporate and remittance taxes to counter low energy prices, triggering debate in the region about how taxation such as VAT can only really work if implemented across the GCC. Nevertheless, with Moody’s estimating that fuel deregulation could contribute at least 0.4 percent to the UAE’s GDP - more if the oil price rises again – this approach seems sound, the potential effect on inflation and consumer spending notwithstanding.

Other Gulf fuel-subsidising countries, including Qatar (which has the second lowest global fuel pump prices behind Saudi Arabia) will be watching the outcome with keen interest.

The current oil price situation is clearly an unprecedented challenge for Gulf nations, who have enjoyed a long period of high energy prices, budget surpluses and growing demand for their exports. Fortunately, doomsday sages aside, most observers believe that these low prices will soon begin to rise and this current time of alarm will pass.

Whatever happens, to reference another quote said to be Chinese, it is arguably wise for all living in the region to “be frugal in prosperity, fear not in adversity”. Interesting times, indeed.

Twin threats of depressed oil prices and recession threaten Miles Masterson global economic growth. Managing Editor 8 | The Edge

Double volley 10 | The Edge

photo of the month

Members of the Qatar national volleyball team launch a dual defence against a Chinese opponent in the semi final of the 18th Asian Senior Men’s Volleyball Championship held in Tehran, Iran in August. China narrowly won the tightly contested match, going on to place third, with Qatar finishing in fourth place. The tournament, which was won by the Japanese team, was a precursor to the 2015 FIVB Volleyball Men’s World Cup, which will be held from September 8 to 23 in Japan.

(Photo by Amin Mohammad Jamali/ Getty Images) The Edge | 11

news

business news

Qatar must step up its diversification efforts

main story

With oil prices not expected to rebound anytime soon, and Gulf Cooperation Council (GCC) population growth outpacing the rest of the world, stepping up diversification efforts is now crucial in order to achieve fiscal, environmental and resource sustainability, writes Michael Armstrong.

HE Suhail Mohamed Faraj Al Mazrouei, the UAE Minister of Energy has announced a new oil regulation policy that aims to support the national economy, lower fuel consumption, protect the environment and preserve national resources. (Image Arabian Eye/Corbis)

According to the Economic Insight: Middle East Q2 2015, the region is continuing to see the effects of consistent low oil prices, and economic diversity and sustainability seem very much the way forward for the ‘GCC+5’ (United Arab Emirates (UAE), Bahrain, Saudi Arabia, Oman, Qatar, Kuwait, Egypt, Iran, Iraq, Jordan and Lebanon).

All members of the GCC+5 need to look to diversify sources of revenue in the medium and long term. Qatar has the second highest rate of oil exports as a percentage of total exports among its fellow GCC countries, more than 70 percent of the total exports, according to the International Monetary Fund (IMF).

Tourism is a sector that has shown some bright and promising potential. Qatar has also recently emerged as a force in the world art scene through, for example, the commissioning of renowned architect IM Pei to design the Museum of Islamic Art and the acquisition of a number of the world’s most highly valued paintings.

With low oil prices looking like they are here to stay, GCC+5 governments will need to look at ways to cut their expenditure. Most countries have enough of a fiscal buffer (in currency reserves) to avoid extensive cuts in the short term.

But subdued oil revenues offer an opportunity to consider where spending could be cut. One area that needs tackling is public 12 | The Edge

With low oil prices looking like they are here to stay, GCC+5 governments will need to look at ways to cut their expenditure. subsidies, especially fuel subsidies. Lower oil prices can act as a catalyst for reducing subsidy spending in two important ways.

First, diminishing government revenue will create a more pressing need to limit spending. Second, if fuel subsidies are removed during a period of subdued oil prices, the inflationary impact will be felt less sharply by the population.

In July 2015, the UAE announced a new oil regulation policy that aims to support the national economy, lower fuel consumption, protect the environment and preserve national resources. The policy should support the national economy in the longer term while also helping consolidate government finances. Similar actions from the Qatari government would also have a positive impact on that country’s economy.

Environmental sustainability needs to be given more attention. The GCC countries

have some of the highest rates of carbon dioxide (CO2) emissions in the world per capita. The region faces a number of problems in tackling this, and given the abundant supply of oil and gas there is less incentive to manage these resources efficiently. Qatar has the highest CO2 emissions from fossil fuels among the other GCC countries, accounting for 40 percent per capita, which is 35 percent above the world average per capita, according to the Global Carbon Atlas.

In general, government backed programmes to tackle energy efficiency have been few and far between across the GCC, but this is starting to change. In Qatar, the country’s megaprojects – from the National Museum of Qatar to the Lusail Multipurpose Sports Hall – are using the most advanced Building Information Modeling (BIM) technology to design, build, and operate the construction projects.

This technology will allow organisations to deliver projects on time, on budget, and with a goal towards sustainability.

We hope to see the business community self regulate and push this agenda further – it is their responsibility to ensure they are pursuing environmentally conscious practices and the accountancy profession has shown it can help by setting benchmarks. Another interesting area to watch is how the region tackles the growing problem of water efficiency – in the face of a rapidly growing population, the infrastructure must be put in place to tackle this issue.

This year, we at the ICAEW expect Qatar’s gross domestic product to grow 7.1 percent as the country is less dependent on its hydrocarbons resources than many of its fellow GCC members.

The continued investment in ambitious projects such as Education City as well as less stringent restrictions on foreign firm ownership should also support growth.

Global commodity prices are driven by Chinese industrial activity 25.0

CRB Commodity Index (year-on-year % change, right axis)

20.0

60 40 20

15.0 0 10.0

5.0

0.0 2001

-20

China’s industrial production (Year-onyear % change, left axis) 2003

2005

2007

-40 -60 2009

2011

2013

2015

Sources: Bloomberg, China National Bureau of Statistics and QNB Economics analysis

Michael Armstrong is ICAEW regional director for the Middle East, Africa and South Asia.

business quotes

news

“I would go in and take the oil and I’d put troops to protect the oil. I would absolutely go and I’d take the money source away.”

United States (US) Republican party presidential nomination frontrunner and real estate billionaire Donald Trump, discussing his ideas for US foreign policy, in terms of combating the presence of the Islamic State or ISIS in Iraq. “Believe me, they would start to wither and they would collapse,” said Trump. “I would knock out the source of their wealth, the primary source of their wealth, which is oil,” Trump added, “but I’d put a ring around it and I’d take the oil for our country.”

“It doesn’t help if we are all nice with each other now, only to have a situation in two to three years where we are worse off than today.”

German Chancellor Angela Merkel in a recent German media interview, ostensibly tackling speculation that the International Monetary Fund (IMF) would not agree to the new conditions and thus participate in a new bailout agreement for Greece set to begin next month. “[Christine] Lagarde, the chief of the IMF, made very clear that if these conditions are met, then she will recommend to the IMF board that the IMF takes part in the programme from October,” added Merkel.

“The euro crisis has already lasted too long.”

The Edge | 13

news

business in quotes

“I would like to tell the bomber that if he wants to be safe, then he should turn himself in to officials and they will find a way to protect him.”

Thailand’s prime minister Prayuth Chan-ocha during a press conference, amid fears that if the prime suspect was apprehended by member of the public he may be killed and this would not assist the Thai authorities in further investigating a suspected group behind the August bombing at a temple and tourist attraction in Bangkok. “From this incident, it is apparent that there are active individuals or groups that harbour the intention to damage Thailand, who may be pursuing political gain or other intentions by damaging the economy and tourism,” the prime minister added.

“I think the construction sector too has to be competitive when it comes to pay scale.”

Ahmad Jassim Al Jolo, chairman of Qatar Society of Engineers and one of the founding members of Qatar Green Building Council, discussing the need for more Qataris in engineering and other construction sector vocations in the current edition of The Edge’s sister publication, QCN (Qatar Construction News) magazine. “When you compare [pay scale] with oil and gas sectors, those fields are attracting more people due to higher salary,” said Jolo, adding. “The decision makers here have to take the salary of construction engineers more seriously.”

Business News in Brief Qatari sponsors support ROTA to give youth a voice on global stage

Reach Out To Asia (ROTA), a member of Qatar Foundation for Education, Science and Community Development, has unveiled the names of the six local Qatari organisations that will sponsor the first-ever Global Youth Consultation for the United Nations Office for the Coordination of Humanitarian Affairs. The sponsors are: Qatar National Bank (QNB), Qatar Airways, Qatar Petroleum (QP), Nakilat, Sheikh Thani Bin Abdullah Foundation for Humanitarian Services (RAF), and United Muslim Relief.

There will also be a number of international partner organisations participating, including the International Federation of Red Cross. & Red Crescent.

80 students admitted to the college of medicine

Eighty students were granted admission to Qatar University College of Medicine (QU-CMED), which will open its doors this month as the country’s first national medical college. The student body comprises 64 percent nationals, includes 51 Qatari nationals and 29 non-nationals. They were selected from a total of over 700 applicants.

Approximately 50 students will go directly into the MD programme. The rest, who do not meet the English and mathematics entry requirements, will go through Foundation.

All Qatari applicants who achieved the minimum high school GPA requirement were granted admission to the college.

Silatech-supported youth employment centre launches in Somalia

Silatech and local partner Shaqodoon have launched a ‘One Stop Shop’ for youth employment and business support services in the Somali capital of Mogadishu. This is the third in a series of One Stop Shops now open 14 | The Edge

business in brief and bridging the gap between job seekers and the local business community. These One Stop Shops serve as knowledge, advice and career guidance hubs for young job seekers and entrepreneurs, as well as for business owners looking for skilled youth to employ.

Renault introduces new Duster Saleh Al Hamad Al Mana Co, Renault’s exclusive agent in Qatar, has launched the new phase of Duster. The new Renault Duster has been widely upgraded while retaining its own model personality. The upgraded version now casts a reasserted exterior design and a renewed inner space. It features new technological features aimed at improving the drive, and comes at a starting price of QAR51,900.

Qatar launches online service for UAE visas

Pictured here is Major General Khalifa Hareb Al Khaili, assistant undersecretary of the Ministry of Interior for Naturalization, Residency and Ports.

The Ministry of Interior, represented by the Naturalization, Residency and Ports Sector, recently launched an online service to allow Gulf residents and their escort to get their United Arab Emirates entry permits (visas) via the various ports across the country, through the ‘Fawri’ portal on the ministry’s website www.moi.gov.ae. Major General Khalifa Hareb Al Khaili, assistant undersecretary of the Ministry of Interior for Naturalization, Residency and Ports, indicated that the new service comes in line with the Ministry of Interior’s keenness to keep pace with technology advances.

news

Start-up Watch FotoArabia Launched last year, FotoArabia is one of the largest Qatar-based stock photography websites specialising in Middle Eastern and Arabic-themed photography, offering high-quality royalty-free images worldwide. In an exclusive interview with The Edge, Tom Dibaja, managing director, FotoArabia, shares the intention behind starting the company, and what makes it different from other photographic agencies.

What was the idea behind starting FotoArabia?

FotoArabia was originally conceived by Qatari entrepreneurs Mohamed Jaidah and Abdul Salam Abu Issa who felt that the region lacked a reliable source for high-quality and affordable Middle Eastern images. As owners of several other ventures in the creative space, they had become acutely aware of this need and set out to address it by creating a dedicated platform to serve the market. FotoArabia opened its doors to the public in March 2014.

What have been the main challenges in setting up this company?

The overall challenges that FotoArabia has faced are similar to other early-stage businesses in the region. We have been fortunate to be able take advantage of the infrastructure of our parent company, Firefly Communications, which has helped us reduce time spent on admin-related issues, but recruitment of talent has been a challenge, and we have also had to do some work around introducing the concept of selling photography online to certain parts of the local photography community.

There are other stock photography websites present in this region. What is the USP of your company?

There are two main advantages of working with FotoArabia. First, unlike with other services in the region, all of our images are royalty-free and have no usage restrictions.

This means that there is no need to keep track of complex licence terms or to worry about what can be used and where. Second, our prices are more affordable than those of other comparable services, and FotoArabia offers incredible value on bulk purchases.

What has the response been like so far from the market? What kinds of clientele do you cater to?

The response to FotoArabia has been universally positive, and we use customer feedback to continuously improve the service. Our clients range from individual graphic designers to creative agencies and large multinational companies worldwide.

How do you foresee the company evolving in the coming years?

Our immediate plans are to expand our image inventory to offer an even better selection of regionally relevant images to our clients and continue to grow the business.

What role are you looking to play in the growth of the media and publishing industry in Qatar or in this region?

We work with media companies and publishers regionally to help them create great content and great campaigns by providing access to high-quality Middle Eastern imagery at affordable prices. We see our role mainly as that of an enabler and partner to their activities. www.fotoarabia.com The Edge | 15

news

events

Business events calendar SEPTEMBER-October 2015 4-7 October ISQua 2015 International Conference

One of the main topics of discussion at the conference will relate to healthcare technology.

The 32nd International Conference of the International Society for Quality in Health Care (ISQua) will be held at Qatar National Convention Centre, under the theme ‘Building Quality and Safety into the Healthcare System’. This will be the first time ISQua will be holding its conference in the Middle East since 1996.

It presents a valuable opportunity to meet over 1500 delegates from around the world and network and learn from each other’s experiences. Some of the topics of discussion will include patient centred care, external evaluation systems, clinical audit as a quality improvement process, and medication safety.

26-27 October Power Qatar Summit 2015 Power Qatar Summit, one of the premier power generation, transmission and distribution events in the region, will take place at the Ritz Carlton West Bay, Doha.

Held under the patronage of Kahramaa and incorporating the Solar Qatar Summit, the event is expected to attract over 300 senior level executives to discuss progress, future developments and best practices across industries and sectors for the State of Qatar. The Power Qatar Summit 2015 will showcase several methods of power generation including plants, turbines and renewable sources such as solar PhotoVoltaic (PV) and CSP facilities. The event promises a good platform for networking and interacting with industry experts and business leaders.

Events Listing September 7-8 September Future Interiors Qatar 8-9 September 4th Annual ITS & Road Safety Forum

October 4-6 October QBX Expo 11-13 October Employee Health and Wellbeing Conference

The Power Qatar Summit was hugely successful last year.

16-22 November Global Entrepreneurship Week, Qatar Global Entrepreneurship Week (GEW) will return to Qatar in November to build on the ambition of the country’s youth by providing aspiring entrepreneurs with the tools and knowledge they need to excel. The fourth edition of the event is expected to draw more than 3000 attendees who will assemble for a week to discuss various issues relating to business, startup, innovation, besides regulatory and financial policies. Launched in 2008, the weeklong event inspires people everywhere through local, national and global activities designed to help them explore their potential as self-starters and innovators.

12-14 October Kitchen and Bathroom Accessories Exhibitions 13-14 October Qatar Transport Infrastructure 2015 14 October Back2Business 13-15 October HQ 2015 - Hospitality Qatar 25-26 October Gulf Economic Forum

Delegates speaking during last year’s Global Entrepreneurship Week in Qatar.

16 | The Edge

26-27 October Future Landscape & Public-Realm Qatar

qatar perspectives

Global tax issues for Qatari investors Ian Anderson is a senior consultant at international law firm Pinsent Masons.

Arguably the most significant development is the on-going initiative by the Organisation for Economic Cooperation and Development (OECD) to challenge what was perceived to be an unacceptable level of aggressive international corporate tax planning. The Base Erosion and Profit Shifting (BEPS) project aims to combat the artificial shifting of profits from multinational groups to low tax jurisdictions, and the exploitation of mismatches between different tax systems so that little or no tax is paid.

Tax authorities in the Gulf Cooperation Council (GCC) have already had to deal with the reporting responsibilities of the American Foreign Account Tax Compliance Act (FATCA). No doubt influenced by this, the OECD, together with the Group of 20 nations (G20), developed a global Common Reporting Standard (CRS) for the automatic exchange of financial information between tax authorities in different countries. To date, 61 jurisdictions have agreed to start exchanging information under the CRS from 2017. Qatar, Saudi Arabia and the United Arab Emirates have all committed to implementing the CRS at a later date.

Qatari investors with operations in Europe may also need to consider the impact of on-going European Union (EU) state aid enquiries. In 2014, the European Commission launched indepth investigations into tax incentives given to Apple in Ireland, Starbucks in the Netherlands and Fiat Finance and Trade, and Amazon in Luxembourg. Shortly 20 | The Edge

The global tax environment is going through an unprecedented period of change. Businesses in Qatar, which have operated in a low or even tax-free environment locally and benefited from attractive tax planning opportunities overseas, are not immune to these changes, writes Ian Anderson. after these investigations were opened, over 340 multinational companies were exposed for securing secret deals with the Luxembourg tax authorities in order to save billions of dollars in taxes.

Leaked documents showed some companies paying an effective one percent rate of tax on profits moved from higher tax jurisdictions to Luxembourg through the use of private tax rulings.

The European Commission has since committed to scrutinising these papers and has extended its investigation to all 28 EU member states, specifically investigating whether the tax incentives breach EU “state aid“ rules.

There is now a notable risk that Gulfowned businesses that have secured a favourable tax ruling in the EU could be affected. If a tax ruling is found to constitute unlawful state aid, the recipient could have to repay to the state

in question, the difference between the tax charged and the tax it would have paid without the ruling. Interest may also be charged. The amounts to be repaid could be very substantial.

It is therefore imperative that Gulfowned businesses whose effective tax rate in any EU country has been reduced by a ruling should consider the potential impact of the state aid challenges and whether their existing investment structures need to be revisited.

In all likelihood, policy decisions in Qatar, and the wider GCC, will be influenced by these global tax initiatives, potentially impacting the terms of existing tax treaties, and certainly leading to greater disclosure and reporting obligations.

Businesses that do not plan and monitor their international investments could risk unexpected and potentially significant tax exposures.

There is now a notable risk that Gulf-owned businesses that have secured a favourable tax ruling in the EU could be affected.

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qatar perspectives

Qatar’s past, present and future The opportunity to invest in the future of Qatar is clear. What is not so clear is the relationship that the state’s oil and gas industry wishes to build with the public, writes Antony Ryman.

Anthony Ryman is managing director of branding agency Grow Qatar.

and interacting with them not only to deliver outstanding service, but also as good corporate citizens. How do you develop powerfully differentiated brands and communications strategies that grow businesses and reinforce reputations, while also being useful and relevant to communities?

The secret lies in putting the customer at the heart of your reason for being. This may sound strange to oil and gas companies, who for the past 50 years have been focused on extracting gas from the ground and bringing it to market. The opportunity now is to really engage with the public in Qatar in a meaningful and relevant way that is both deeply enriching and rewarding.

The world has moved on from B2B and B2C. We now need more human-to-human contact. We want to know what you are really doing to engage with our community for the

greater good of our cities, our nation and yes, even our planet.

If your brand is useful and relevant, that is good. If your brand can inspire, that is great.

If your brand is responsible and actively contributing to the greater good, then that is remarkable!

Qatar is blessed with enormous reserves of gas under its territory. Energy touches everyone, whether it is light, heat or the development of some of the downstream products from Qatar (for example, methanol). So from the individual heating or cooling their home, to the business utilising electricity to manufacture products, to the nation, and indeed every nation, energy is part of our lives.

It is this expression of brand, and the experience around it, that we believe should be embraced, harnessed and communicated, at the individual level, and globally.

It took 26 long years after the North Field, the world’s largest non-associated gas reservoir, was first discovered in 1971 for Qatar to start shipping its first liquefied natural gas (LNG) to Japan. Today, Qatar exports the most LNG and Gas to Liquids (GTLs) in the world, with a global supply chain. Gas has enabled Qatar to invest heavily, expanding and upgrading its economic and social infrastructure to build a long-term legacy for future generations.

Qatar’s National Vision 2030 (QNV 2030) clearly describes where Qatar is going.

Sustainability and prosperity have become the core pillars to inspire the country to preserve wealth and ensure a prosperous future for generations to come. The QNV set out the broad economic, social, human and environmental attributes of sustainability and emphasised their interdependence.

The mission (or the ‘how’) to achieve this vision of sustainable development was set out in the National Development Strategy (NDS) 2011-2016. The future goal is to create knowledge assets or what we call intellectual capital: capacity building of Qataris, growing the small and medium enterprise sector, building an entrepreneurial mindset and diversifying from hydrocarbons.

The opportunity to invest in ‘futureproofing’ the nation is clear and in process.

What is not so clear is the relationship that the oil and gas industry wishes to build with the public it serves. Most of the communication has been focused on operations, and growing capacity and capability.

The nature of powerful brands is that they resonate with the public, speaking to their needs and aspirations, engaging 22 | The Edge

The opportunity now is to really engage with the public in Qatar in a meaningful and relevant way that is both deeply enriching and rewarding.

finance & markets

In terms of fund raising activities during the period, the MENA region undertook 16 IPOs worth QAR3.3 billion. As for size, Egypt-based industrial manufacturing firm ASEC Company for Mining raised the largest amount with QAR546 million. Pictured here is the traders’ floor of the Egyptian stock exchange in Cairo. (Image Arabian Eye/Reuters)

MENA recorded 16 private equity deals worth QAR9.5 billion in H1 2015 The Middle East and North Africa (MENA) region has recorded private equity activity worth QAR9.5 billion and Initial Public Offerings (IPOs) worth QAR3.3 billion reveals Al Masah Capital Limited in their latest biannual report.

T

he staggering figures come on the back of a steady economic outlook for the MENA region, which is forecast at 2.4 percent in 2015 for oilexporting countries.

Surveying wealth creating vehicles and funds, the International Monetary Fund (IMF) has forecast a growing economic

landscape in the MENA despite a slump in oil prices and increasing regional conflicts.

Oil exporting countries shall remain steady at 2.4 percent in 2015, while growth in oil importing countries will strengthen from 3.0 percent in 2014 to 4.0 percent in 2015, supported by the ongoing recovery in the eurozone’s

7

The number of IPOs in Egypt in H1 2015.

The Edge | 25

sectors | finance & markets

Surveying wealth creating vehicles and funds, the IMF has forecast a growing economic landscape in the MENA.

improved domestic confidence and more accommodating policies.

The international body also posed a growth forecast for Gulf Cooperation Council (GCC) at 3.4 percent, while the non-GCC MENA countries are expected to register 2.0 percent growth in 2015. The recent economic developments entailing robust growth in non-oil sectors in the GCC, driven by diversification strategies employed by the region’s governments, will help partially offset the decline in oil prices.

Analysing wealth vehicles in the region, Private Equity (PE) activity in the MENA region has also shown an increase. With 16 PE deals worth QAR9.7 billion during H1 2015 compared to 126 deals worth QAR4.7 billion in H1 2014, the deal value has been higher compared to the same period of the previous year. Saudi Arabia and the United Arab Emirates (UAE) both witnessed the largest number of deals in H1 2015, while Algeria led in terms of value.

Commenting on the ongoing developments in the world of private equity, Al Masah Capital founder and CEO Shailesh Dash said, “Our experience in market research suggests a pickup in PE activity during H2 2015 with stabilisation in oil prices, especially in consumptionled sectors such as healthcare, education, retail and F&B. The UAE, Saudi Arabia, Lebanon and Egypt are expected to be frontrunners in PE activity during the second half of 2015.”

Private Equity Deals in H1 2015: Total number: 16 Total value: QAR9.7 billion

Al Masah Capital founder and CEO Shailesh Dash said, “Our experience in market research suggests a pickup in PE activity during H2 2015 with stabilisation in oil prices, especially in consumptionled sectors such as healthcare, education, retail and F&B.”

26 | The Edge

Sectors such as IT, retail and healthcare followed by telecom, financial services, industrial manufacturing, food and agriculture, oil and gas and media observed dynamic movements in private equity during H1 2015. A total of four exit deals were reported during H1 2015, with Egypt, Jordan, Lebanon and the UAE witnessing one deal each. Of the four exit deals, two deals, worth QAR131.8 million, were in real estate.

In terms of fund raising activities during the period, the MENA region undertook 16 IPOs worth QAR3.3 billion. As for size, Egypt-based industrial manufacturing firm ASEC Company for Mining raised the largest amount with QAR546 million, followed by Saudi Company for Hardware (QAR489.2 million) and GB Auto SAE in Egypt (QAR462.6 million).

Country-wise, Egypt recorded seven IPOs, the largest during the period, followed by four in Saudi Arabia.

In terms of value, Egypt and Saudi Arabia commanded IPOs worth QAR1.1 billion and QAR1 billion respectively.

Financial services led in terms of volume and value, with six IPOs worth QAR1 billion, followed by industrial machinery with four offerings worth QAR1 billion.

The global economic activity continues to show strength. Analysts view this as substantial fuel to ignite economic growth within the MENA region, thereby providing a positive outlook for investments in major sectors such as IT, oil and gas, retail and real estate.

IPOs in H1 2015 Total number: 16 IPOs Total value: QAR3.3 billion

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energy & sustainability Qatar opens up new LNG route to Brazil

In August the first cargo of LNG from Qatar was delivered to the Bahia Re-gasification Terminal located in Baia de Todos os Santos, in the state of Bahia on the eastern coast of Brazil.

Given increasing competition in many of its traditional markets for liquefied natural gas (LNG), Qatar continues to develop new avenues of opportunity for exports. The latest example being last month’s first delivery of a cargo from RasGas to the Bahia Re-gasification Terminal located in Baia de Todos os Santos, in the state of Bahia on the eastern coast of Brazil. By Simon Watkins.

T

he Q-flex LNG vessel Al Huwaila – one of RasGas’ integrated shipping fleet of 14 conventional ships, 12 Q-Flex and one Q-Max vessel – marked another first for Qatar in that it is the largest vessel to arrive at the Petrobras-owned terminal, the Brazilian government-owned company’s third and most recently-opened LNG receiving station. “The arrival of the fully-loaded Q-flex vessel at Bahia extends RasGas’ larger ships’ reach to 56 terminals in 18 countries across the globe allowing for greater cost efficiency for the customers,” said Khalid Sultan R. Al Kuwari, chief marketing and shipping officer, RasGas. “Receiving this fully-loaded Q-flex vessel at our Bahia Re-gasification terminal is an important milestone, as it increases our capacity to receive larger LNG ships in Brazil,” said the Rio de Janeiro-based executive manager for gas and power marketing and trading for Petrobras, Rodrigo Vilanova. “LNG is a key source of supply to the Brazilian natural gas market The Edge | 29

sectors | energy & sustainability

Oil break-even price by country USD/barrel

USD250

USD250 USD215

USD200

USD200

USD150

USD150

USD100 USD47

USD111

USD100

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30 | The Edge

USD103

USD50

wa

and RasGas is a strategic LNG supplier to Petrobras,” he added.

The export by Qatar has consolidated its position in its newer LNG export market of Brazil. The prospect of increased competition from a post-sanctions Iran has brought about the renewed talk of Qatar being involved in a second jointly-financed LNG receiving terminal in Italy, given that Europe is a key target market for Iran’s export-boosting plans. “Even before the July 14 P5+1 deal, Iran was talking about moving gas export volumes back up to pre-sanctions levels by buying equity in TANAP [the Trans Anatolian Pipeline], which will carry Azerbaijan’s gas to the major European markets, and the pipeline could easily be used to transport Iranian gas as well,” Christopher Cook, director of global energy consultancy, Wimpole International, in London, told The Edge.

Even a more direct threat to Qatar’s LNG export position in Europe, he added, was the comment by Iran’s Petroleum Minister Bijan Namdar Zanganeh just before the July 14 deal was agreed that Iran could also be ready to help Europe develop its LNG options if and when sanctions were eased.

“It was made very clear that Iran would be able to step up very quickly to offer LNG into Europe in the event of any delays to the TANAP project,” said Cook. More specifically in terms of timing, he said, although

USD78

USD73 USD59 USD71

USD93

USD50

Ku

The arrival of a fully-loaded Q-flex vessel at Bahia extends RasGas’ larger ships’ reach to 56 terminals in 18 countries across the globe, allowing for greater cost efficiency for the customers, said Khalid Sultan R. Al Kuwari, chief marketing and shipping officer, RasGas. (Image RasGas)

USD88 USD89

Source: EIA and The Wall Street Journal

sanctions resulted in Iran slowing down plans to build out a USD3.3 billion (QAR12 billion) LNG plant, Zanganeh stressed that the country can cover LNG infrastructure costs and has USD10 billion (QAR36 billion) earmarked to boost oil production at its western Karun fields by 700,000 barrels a day, in order to ensure no undue stoppages in supply.

As the TANAP is expected to be connected to the Trans-Adriatic Pipeline (TAP) that will bring gas to Europe via Italy through Albania, the Qatari idea of financing a second jointly-held LNG receiving terminal with Italy would make sound commercial sense, adds Cook. Initially the notion was mooted in the early part of this year, with the Italian ambassador in Doha, Guido De Sanctis, explicitly stating: “Both countries are planning to build their second LNG receiving terminal in Italy to enhance capacity, in addition to discussions on many other investment proposals in the pipeline.”

Given Italy’s lack of its own meaningful sources of energy, the country has been one of Qatar’s largest trading partners in Europe since it started importing LNG from the Gulf state in 2010, with bilateral trading figures on each of the imports and exports side of over USD1 billion (QAR3.6 billion) last year.

The existing Adriatic LNG Terminal, located 15.5 km from Porto Viro in Porto Levante, and the first offshore gravity-based structure in

The Brazil cargo has renewed the possibility of Qatar being involved in a second jointlyfinanced LNG receiving terminal in Italy.

the world for the unloading, storage and re-gasification of LNG, is already running at or near full capacity permanently. So, as De Sanctis underlines, a second joint terminal would not only allow Italy to further diversify its energy security sources but also to act as another major hub entry point for Qatar to other European markets.

energy & sustainability | sectors

Could producing more Qatari oil plug the balance of payments deficit?

With Qatar’s overall balance of payments having recorded a deficit of USD0.5 billion (QAR1.8 billion) in the fourth quarter of 2014, according to official figures, it is little surprise that the Gulf state is looking to optimise all flows from the hydrocarbons sector that dominates its economy.

The month of July saw Qatar making an announcement that the country’s crude oil production rose to 642,000 barrels per day (bpd) in May 2015 from 635,000 bpd in April and that this level of production is to be sustained for the foreseeable future.

Although only a moderate increase, at the current year average of around USD55 (QAR200) per barrel of Brent, the increase would generate just over USD140 million (QAR510 million) per year in extra revenues.

Given this, the natural corollary question would be why does Qatar not pump more oil to plug the balance of payments deficit?

“There isn’t a lot of scope for further such increases,” Sam Barden, CEO of Middle East energy consultancy and trading firm, SBI Markets in Dubai, told The Edge, “with all of

642,000 barrels

Qatar’s daily crude oil production in May, up from 635,000 barrels per day in April.

the fields about maxed out.” Indeed, the three oil fields that still account for slightly more than 85 percent of Qatar’s crude oil production capacity (Al Shaheen, Dukhan, and Idd Al-Shargi) have already been subject to extensive enhanced oil recovery (EOR) techniques, thus leaving little left to do to exploit these sites further. There has only been one new significant discovery made in the last 20 years; the Al Rayyan field, which still produces just 8000 bpd.

The same lack of further options to increase oil output applies to the country’s second-tier fields of Bul Hanine (45,000 bpd), and Maydan Marjam (22,000 bpd), both of which have also been subject to extensive EOR operations. Indeed, even according to Qatar National Bank (QNB), projections now are for Qatar’s crude oil production levels to reach 800,000 bpd by 2017 instead of the 1.2 million bpd target previously held by the government.

Having said this, a new economic imperative may act as a further impetus on Qatar to redouble its efforts in the oil development sector, given the benefits of this particular source of income. “Qatar’s oil sector does not suffer from the same

A new economic imperative may act as an impetus on Qatar to redouble its efforts in the oil development sector. commercial or political pressures as are brought to bear on those of its neighbours, in that it is neither the cornerstone of the Gulf state’s hydrocarbons industry nor is it wasted by heavy use in the domestic power market, so basically any incremental increase in oil output is easy extra money for the country,” concluded Barden.

“The three oil fields that still account for slightly more than 85 percent of Qatar’s crude oil production capacity (Al Shaheen, Dukhan, pictured, and Idd Al Shargi) have already been subject to extensive enhanced oil recovery (EOR) techniques, thus leaving little left to do to exploit these sites further,” Sam Barden, CEO of SBI Markets, in Dubai, told The Edge.

The Edge | 31

real estate & construction

Shortage of affordable housing continues to affect low-income group

Qatar has historically seen limited supply of housing for lower- to middle-income households.

(Image Corbis)

Amid soaring housing rental in Qatar, the country’s growing migrant worker and low-income groups continue to face challenges in finding affordable accommodation as the supply remains disproportionately low against demand, writes Syed Ameen Kader.

A

ccording to some market estimates, Qatar currently has over a million labourers, and an annual increase of between seven and 10 percent is anticipated over the next five years. The 2010 census indicated that there were approximately 920,000 workers accommodated in more than 36,000 compounds of varying sizes located throughout the country. Findings of the most recent census have not been released yet. Nick Witty, director, real estate, Deloitte, Qatar, said, “The current forecasts suggest that there could be additional demand for between 500,000 and 1 million beds in the run-up to the 2022 World Cup.” Historically, the availability of housing for lower- to middle-income households has

been relatively limited in Qatar. However, industry observers suggest that in recent years there have been some initiatives by both private and quasi-government entities such as Ezdan Real Estate and Barwa Real Estate who have each built extensive residential facilities such as the Ezdan Village compounds and 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,” said Witty.

But why does the market have such a limited supply of affordable housing despite a growing demand? “This has been due

500,000 to 1 million

The expected number of beds that will be in demand in the run up to the 2022 World Cup.

The Edge | 33

sectors | real estate & construction

Nick Witty, director, real estate, Deloitte, Qatar

to a lack of enforcing labourers’ housing regulations,” said Edd Brookes, general manager for DTZ Qatar. However, he added, the government has expanded the number of inspectors to 300 (up from 150), with plans to expand this to over 400 inspectors in the near future.

Another major factor for developers’ low interest towards building affordable housing is the high cost of land. Land in Qatar, like many Gulf countries, is traded as a commodity without the ultimate owners necessarily having 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 such the focus is on higher end, higher quality products which command higher rents and in turn higher investment returns,” explained Witty.

In order to mitigate this problem, he suggested 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.

However, the Qatar property market has already started seeing that trend. “In the past there was a focus of private developers going 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 square metre per labourer and on-site health facilities for all accommodation featuring over 100 labourers, added Brookes.

Qatar is certainly leading the way for improving labour standards within the Middle East. “But these changes take time to implement. Perhaps increased powers to fine and shutdown labour accommodation that does not meet the minimum standards would help in the long run,” Brookes concluded.

“Land is often too expensive to develop into low-cost accommodation as the developer will not be able to secure the returns he requires.” – Nick Witty, director, real estate, Deloitte, Qatar

Qatar Rail unveils architectural works opportunities for Doha Metro stations Qatar Railways Company (Qatar Rail) recently unveiled the architectural opportunities in the works for the Doha Metro stations.

In a gathering of over 300 attendees, representing project managers, design and build contractors as well as current and prospective suppliers, Qatar Rail shared its procurement strategy, the packages and prequalification process, and the projects including the interior fit-out for the stations, the structure 34 | The Edge

for the elevated stations as well as the landscaping plans. The first phase for the Doha Metro’s architectural works, covering 37 stations, is slated for completion by 2018 with the second, extending to 60 stations, due by 2030. Qatar Rail has already launched a third prequalification round to attract more participants. This round is expected to be completed by September 2015.

Qatar Rail’s guidelines suggest that the branding for the project’s architecture elements will pour into three subsets of: network identity, line identity and station identity.

The event was attended by over 300 delegates, representing project managers, design and build contractors, and suppliers.

tech & communications

Qatar’s two telecommunications service providers, Ooredoo and Vodafone, are in a battle to win consumer loyalty, using new technologies being introduced to the country, including the latest in 4G mobile capabilities.

Qatar-based telecom operators engage in speed race Mobile users in Qatar are set for an upgrade as both of the country’s telecom firms, Ooredoo and Vodafone, have announced plans to significantly enhance their 4G capabilities, offering speeds of up to 375 megabits per second (Mbps) – up from a theoretical previous maximum of 225Mbps. By M. Iqbal.

B

oth carriers will be aiming to achieve these download speeds by the roll-out of Three-Band LTE Carrier Aggregation. Vodafone has said that the service is now live along Doha Corniche and the Qatar Science & Technology Park, with more sites to be added by November this year. Ooredoo has not specified a timeline for the roll-out of its ThreeBand LTE Carrier Aggregation, which it is branding as SuperNet. Existing Vodafone 4G+ customers should also expect a bump in their

speeds, according to Vodafone Qatar chief technology officer Ramy Boctor.

“All Vodafone 4G+ customers can now see improvements in speed bringing the maximum speed up to 300 Mbps over the existing 225 Mbps.”

Neither network has indicated the real world speed that consumers can expect with this upgrade. Both operators have been engaged in fierce competition in Qatar, frequently introducing new services and packages aimed at consumers at both ends of the spectrum.

Both operators will be aiming to achieve faster download speeds by the roll-out of ThreeBand LTE Carrier Aggregation.

The Edge | 37

sectors | technology & communications

300

The speed in megabytes per second (Mbps) the new 4G technology should introduce, up from the current maximum of 225 Mbps.

According to Vodafone Qatar chief technology officer Ramy Boctor, existing Vodafone 4G+ customers should also expect a bump in their speeds when the new service is rolled out. (Image Vodafone Qatar)

In February 2014, Ooredoo announced that it would no longer charge consumers for access to its 4G services. Later that year, in June, Vodafone caught up by rolling out its own 4G service. Ooredoo took the lead once more in December 2014, by rolling out its 4G+ service, increasing the speeds it offered from 150 Mbps to 225 Mbps and doubling the real-world 4G speeds. Vodafone again played catch-up in May 2015, announcing the roll-out of its own 4G+ network. The two networks also engaged in a social media competition in May, encouraging their users to post screenshots of speed tests online.

This time, Vodafone seems to have taken the lead, with its faster network already in testing and a promise of wider coverage by November this year.

However, Three-Band LTE Carrier Aggregation will mean little to the end consumer in the short run: none of the devices available in the market support the technology just yet. Current high-end mobile phones support a maximum of 300 Mbps via LTE Cat6 (Samsung Galaxy S6, LG G4, Huawei P8). Others, such as the Apple iPhone 6 and the Sony Xperia Z3 and Z3 Plus, go up to 150 Mbps with LTE Cat4.

The data packages currently available are also limited, a throwback to the 3G era. For instance, both networks offer 6 GB of data on their prepaid connections for QAR100.

To put this in perspective, an hour of high definition video streaming (1080p) on YouTube can consume about 1 GB of data.

While Ooredoo offers its end consumers the option to go truly unlimited on their mobile 38 | The Edge

phones for QAR400 per month, Vodafone maxes out at 12 GB for QAR200 on prepaid and 60 GB on postpaid.

New security challenges

As the focus of telecom operators in Qatar moves away from voice to data, and as user demand for bandwidth increases, they have started deploying Private Cloud and Software Defined Networks (SDN) in a bid to cut costs and boost margins. They have started to adopt server virtualisation, SDN and Network Functions Virtualisation technologies to

reduce footprint of their architectures and networks, according to Brocade, a network provider for data centres.

This switch itself, however, puts the service providers at new risks, according to Yarob Sakhnini, regional director, (Middle East Mediterranean) MEMA at Brocade.

One of the major advantages of deploying SDN is that the management of all systems within the network has a centralised controller, but this also creates a “significant target” for any malicious activity. Without sufficient protection, the controllers could be compromised, which would pose a significant threat to the network and the data which have interacted with it, according to Sakhnini.

In a traditional network environment, internal data was protected by firewalls and security breaches were easier to identify.

However, in a hybrid or cloud environment, potential threats and rising issues become much less visible, added Sakhnini.

“Telecoms companies should therefore be building security measures into every layer of the network. Analytics is particularly important here. Cross-industry collaboration will be very important here,” he said. “Telecoms companies should be sharing data about threats [with each other]. This pooling of knowledge will help the industry to adapt to emerging threats much faster, which is essential to protecting customers.”

Qatar’s connectivity and smartphone penetration rates Qatar is one of the highest connected countries in the world (second highest in the Middle East and North Africa region) and has one of the highest smartphone penetration rates regionally.

Total country connectivity (TCCM) MENA* Country - Internet % - Mobile % - Fixed % Bahrain

90

182

Qatar

85

186

UAE

88

171

Oman

66

185

5

Kuwait

79

162

13

61

180

KSA Jordan

44

MENA

55

Egypt

44

World

40

14 10 12

9

154 131 115 96 10

3

5 7

Internet Mobile Fixed

Smartphone penetration in selected countries Country - Penetration % KSA

79

Qatar

75

UAE Jordan

50

Egypt Morocco

73

26 16

*Not all MENA countries shown. 2014 data.

Source: ictQatar E-commerce CSA Report April 2015: International Telecommunications Union; Arab Advisors Group; Internetworldstats.com; Cisco; Ipsos; Team Analysis.

business interview | project management

Bader Al Jaidah, director, Tafawoq, tells The Edge, “Our learning portfolio caters to the needs of project professionals, who are at various stages of their careers, taking into account diverse roles and circumstances.�

40 | The Edge

project management | business interview

Tafawoq:

Bridging the gap between industry and academia Director of Tafawoq Bader Al Jaidah, in an exclusive interview with The Edge’s Aparajita Mukherjee, speaks about how Tafawoq was founded and discusses the innovative learning approach it follows by bringing in both industry players and academic institutions, in addition to the company’s pivotal role in supporting the Qatar National Vision 2030.

The Edge | 41

business interview | project management

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42 | The Edge

Al Jaidah handing out the certificate of completion to one of Tafawoq’s successful participants.

NET

ader Al Jaidah is the director of Tafawoq, a regional project management centre of excellence that seeks to play a pivotal role in developing the competencies of project management professionals through a variety of learning courses and programmes.

Tafawoq has been a collaboration between Shell, Qatar Petroleum (QP), and Hamad Bin Khalifa University (HBKU) since its inception in 2011. Qatar Shell and QP contribute to Tafawoq their accumulated regional industry experience in managing capital investment projects, while HBKU provides the academic home for Tafawoq.

Explaining the structure of the initiative, Al Jaidah mentions that each partner brings with them valuable expertise in their field.

“The collaboration between the private sector (Shell), the government (QP) and the academia (HBKU) brings to Tafawoq an exceptional combination of assets that provide project professionals with unique skills to enable them to deliver Qatar’s capital investment projects and lead its future sustainable growth in line with the Qatar National Vision 2030 (QNV 2030),” adds Al Jaidah.

In Al Jaidah’s opinion, by addressing all levels of project management competency from awareness, through to knowledge, skill and mastery, Tafawoq contributes to building local capacity for the delivery of capital investment projects across a range of industries.

The Tafawoq method of education is based on Shell Project Academy’s Pentagon Model, an internationally recognised programme which ensures that project professionals receive both an executive education and experience-based competency development. Al Jaidah tells The Edge, “Tafawoq also builds on QP’s extensive experience in building large-scale capital projects. HBKU has also contributed significantly by providing Tafawoq with a permanent home to ensure the centre’s continued sustainability and development of Qatar’s project management professionals.”

The Tafawoq integrated programme is based on the five internationally recognised dimensions of professional competency development, originally devised by the International Project Management Association (IPMA). The Tafawoq Pentagon Model adopts a five-dimensional approach to competence development (illustrated in the diagram above right).

ASSURANCE RECOGNITION

EXPERIENCE SHARING CULTURE

GUIDANCE FROM LEADERS IN THE COMPANY

The Tafawoq integrated programme is based on the five internationally recognised dimensions of professional competency development, as devised by the IPMA.

At Tafawoq, the foundation of the participants’ knowledge will be laid through classroom instructions. Once attained, their learning will then be developed through practical ‘on-the-job’ experience, designed

to allow them to master their newly acquired skills. Furthermore, to ensure their continued professional development, an established community of professionals who will support them through active

project management | business interview

“The collaboration between the private sector (Shell), the government (QP) and the academia (HBKU) brings to Tafawoq an exceptional combination of assets.”

coaching and mentoring will augment their learning process.

“Finally,” says Al Jaidah, “we offer international accreditation through the Association for Project Management (APM), where participants will be required to undergo an assessment of their newly obtained skill sets.”

Connecting the aims of Tafawoq with the QNV 2030, Al Jaidah says that one of the most important pillars of the vision is human capital. “Thus, when we at Tafawoq are engaged in training the participants, we are developing human capital,” mentions Al Jaidah, adding “Qatar, over the next decade or so, will have a huge pipeline of projects, especially around the 2022 World Cup, such as creating the rail infrastructure, the highways, the surge in housing demand, over and above the hydrocarbon projects and it made sense for us to aim to achieve excellence. This is why we named the initiative Tafawoq, which means excellence in Arabic.”

Speaking about the operational structure within Tawafoq, Al Jaidah says, the steering committee is a governing structure that comprises representatives from QP, Qatar Shell and HBKU who provide directions, review proposals and initiatives and approve the yearly budget.

“The continuous guidance of the Joint Steering Committee is critical for Tafawoq’s success,” says Al Jaidah.

Training programmes and beneficiaries

Tafawoq’s programmes cover the span of the project life-cycle, explains Al Jaidah, adding “and our teaching methods involve a blended learning approach comprising virtual learning, work-based activities and face-to-face instructions using live case studies, based on the internationally recognised and accredited Shell Project Academy (SPA) Curriculum, and QP’s extensive experience in building largescale capital projects.”

Elaborating further, Al Jaidah informs The Edge, “Our learning portfolio caters to the needs of project professionals, who are at various stages of their careers, taking into account diverse roles and circumstances.”

The portfolio includes three key modules, according to Al Jaidah: a foundation module that provides participants with a broad introduction to the project management subject matter; a core module that will equip participants with advanced competences pertaining to project management, and a focus module that provides an in-depth training on critical topics related to project management.

In the words of Al Jaidah, “Tafawoq’s programme targets professionals who are eager to learn the basic principles of project management, as well as professionals who wish to develop and enhance their skills in the implementation of projects.”

Tafawoq is a collaboration between Shell, QP and HBKU, which provides the academic home for the initiative. (Image Arabian Eye/Corbis)

The Edge | 43

business interview | project management

A session in progress during a Tafawoq mid-year community event which focuses on issues relevant to the project management industry.

The courses, says Al Jaidah, are open to Qataris and non-Qataris. So far, Tafawoq has an alumni of more than 450 project professionals from Qatar, Oman, and Kuwait who form the foundation of the first project management community in the region.

In the three years of Tafawoq, how has the training programme evolved? Although the Tafawoq method of education is based on the Pentagon Model, “our programme,” mentions Al Jaidah, “has further developed from the original SPA curriculum to suit the community we cater for and to include live 44 | The Edge

case studies based on the existing largescale capital projects in Qatar. Taking into consideration that our teaching approach – blended learning – is a new concept in Qatar, we have included specially designed face-to-face coaching sessions throughout the virtual phase to assist the participants.”

In this context, Al Jaidah tells The Edge that their ‘Essentials of Project Management’ course has been awarded international accreditation by the UKbased APM in recognition of its growing reputation.

“This is an achievement we are greatly proud of. The APM is an IPMA membership organisation and the largest independent professional body of its kind in Europe,” adds Al Jaidah.

Does Shell, as an international energy company, deliver this kind of training programme elsewhere in the world? Did Shell’s learnings from its international presence help in the Qatar programme?

“Indeed, Shell aims to transfer its international expertise and knowledge to Qatar,” says Al Jaidah. “Therefore, we bring our international high quality standards to

project management | business interview

Through its regular community events and online portal, Tafawoq is actively contributing to an information sharing and knowledgetransfer platform.

450

Tafawoq participants in 2015. co-delivers the programme along with an industry expert having extensive experience in the field, thus bridging the gap between industry and academia.

Al Jaidah continues by saying that their teaching method involves a blended learning approach, “which is a new educational concept that we have brought to Qatar”. He points out that during the programme, this approach offers the participants the ideal mix of theory and practice to provide a quality learning experience which impacts business where it matters.

Achievements and plans

everything we deliver in this country. Our programme is based on the success of the SPA that was founded in association with four of the top universities in the world – Cranfield School of Management (United Kingdom); Delft University of Technology (Netherlands); University of Texas at Austin/McCombs School of Business (United States) and Queensland University of Technology (Australia).”

Commenting on the role played by these universities in the course delivery

by Tafawoq, Al Jaidah mentions that a facilitator from one of those universities

Tafawoq, according to Al Jaidah, is increasing the competence level of the project delivery community in Qatar at all levels. “This is clearly evident through the growing number of participants: Tafawoq had 50 participants in 2012, 150 in 2013, more than 350 in 2014 and over 450 in 2015.”

In Al Jaidah’s opinion, Tafawoq is playing a vital role in supporting the nation’s long-term goals as outlined in the QNV 2030. Tafawoq, he says, is now being recognised as a hub for quality project management education within the Gulf Cooperation Council region. By way of citing the achievements, Al Jaidah says that individuals from Oman and Kuwait have participated in Tafawoq’s learning courses.

“Further in Tafawoq,” cites Al Jaidah, “we also cater for specially designed courses to suit the training needs of different organisations involved in the delivery of complex infrastructure projects. As an example, we have created and delivered a

bespoke ‘Best Practice Risk Management’ workshop for Astad Project Management.”

In a continued cycle of improvement, Tafawoq recently received accreditation on its ‘Essentials of Project Management (EoPM)’ course from the APM. Tafawoq also hosts events and workshops throughout the year to explore challenging issues that could impact Qatar’s development. So far four events have been conducted successfully with more than 250 guests attending.

Through its regular community events and online portal, Tafawoq is actively contributing to an information sharing and knowledge-transfer platform, while laying the foundations for a thriving regional community of project management professionals representing different industries.

Tafawoq has been honoured as the best Corporate Social Responsibility initiative in Qatar’s energy sector at the inaugural Al Sharq CSR Awards ceremony.

As a blend of innovation and continuity, Tafawoq, in the opinion of Al Jaidah, looks forward to continuing to develop the project management competencies to be able to positively impact the society to deliver Qatar’s portfolio of capital investment projects in line with the QNV 2030. Al Jaidah adds, “We aim to grow our programme offerings and grow our reach in terms of participants; not only from the oil and gas sector but also professionals within the infrastructure industry.”

Furthering on their course development plans, Al Jaidah adds that they plan to add two additional advanced courses to the core module in the coming years.

The Edge | 45

BELOW USD40 A BARREL How the current oil price paradigm is redefining Qatar’s economic approach

With oil prices recently dipping below USD40 (QAR146) per barrel, and the future prices of the commodity highly speculative, the once-ambitious economic growth projections of Qatar and its fellow hydrocarbon-exporting Gulf neighbours have had to be sharply revised, writes The Edge’s global energy editor, Simon Watkins.

46 | The Edge

The Edge | 47

cover story | qatar economy

I

n September 2014, Qatar National Bank (QNB) stated that at current production rates Qatar’s natural gas reserves would last at least another 156 years. Last month, it revised its estimate, stating that at current production rates Qatar’s natural gas reserves would last at least another 138 years. But it is recent events – rather than theoretical figures that tell the story of a region for which the global hydrocarbons market has become one of increasingly marginal returns and even greater competition in the future.

Indeed, the July 20 deal that saw the P5+1 group of nations agree to lift sanctions on Iran, which was then approved both by the European Union and United Nations, has signalled the potential return of a major oil and gas player into the region.

This is added to other existing pressures on already depressed hydrocarbon prices, including the emergence of competition in the liquid natural gas (LNG) supply space from the likes of Australia and from fracking in the United States (US) and economic slowdowns in Asian clients such as China.

Thus, one indisputable fact is that in the broadest terms, the result is that the bottom line of the country’s budget is suffering. For the first quarter of this year as a whole, Qatar’s trade surplus fell by 50 percent from a year ago, weighed down by the lower value of energy exports, even to its core export destination of Asia, which over the past couple of years has accounted for around 75 percent of Qatar’s hydrocarbons export revenues. The latest published figures (June 2015) were almost as bad, showing that the value of the country’s total exports fell by 40.4 percent compared to the same time last year, with a 44.6 percent drop in hydrocarbons export revenues.

This is entirely in line with what had been predicted for the economies of the Middle East’s hydrocarbons superpowers once the global oil swing producer, Saudi Arabia, embarked on its strategy last year (ostensibly to stymie the nascent shale energy revolution threat coming out of North America by depressing the worldwide hydrocarbons pricing complex through sustained high production levels). “The potential scope for oil-driven local economic loss was evident simply by looking at the size of the local energy sector without regard for the destination of that production,” says Damien Courvalin, a New York-based commodities analyst for Goldman Sachs.

48 | The Edge

Qatar Petroleum (QP) chief executive officer Saad Sherida Al Kaabi, announced at the end of June that the state-owned hydrocarbons behemoth had embarked on a staff reduction programme and has decided to exit all non-core businesses. (Image courtesy QP)

It looks as if more cost-cutting will be required in Qatar, and its neighbours, simply in order to contain fiscal deficits to the relatively modest governmentpredicted levels.

USD45 (QAR164) per barrel instead of USD65 (QAR237) per barrel is indicative of a new level of financial discipline in Qatar due to the recent decline in oil price.

qatar economy | cover story

In this context, Qatar is among the most vulnerable states in the region, with petroleum and LNG still accounting for at least 70 percent of total government revenue, more than 60 percent of gross domestic product (GDP), and around 85 percent of export earnings. Given this, and the 60 percent decline in oil prices since Saudi began its anti-shale offensive, Goldman Sachs maintains that nominal GDP in these most hydrocarbon-centric economies could decline by more than 25 percent, which is greater than the damage experienced in the aftermath of the 2007 to 2008 global financial crisis.

Challenging times

Despite what may be construed from the reserves numbers published, Qatar does not in reality appear to be under any illusion as to how difficult the next few months and possibly years may be, especially when factoring in the multi-billion dollars of spending committed ahead of the 2022 World Cup. Indeed, according to the International Monetary Fund (IMF), even the Qataris’ own – thus, conservative – stated spending commitments are expected to tip

the Gulf state’s fiscal balance into deficits of 2.2 percent of GDP this year, 3.4 percent next year, and 3.7 percent in 2017.

It is no surprise then that Qatar Petroleum (QP) chief executive officer, in Doha, Saad Sherida Al Kaabi, announced at the end of June that the state-owned hydrocarbons behemoth had embarked on a staff reduction programme and has decided to exit all non-core businesses.

This comes after the move earlier this year

by QP to begin the process of absorbing its wholly-owned subsidiary, Qatar Petroleum International (QPI, which was formed in 2007 as a foreign investment arm) into the parent firm. It also follows the scrapping of plans by QP and Royal Dutch Shell for the USD6.5 billion (QAR27.7 billion) Al Karaana petrochemicals project in Ras Laffan in January.

Against a backdrop that undermines the notion that the Saudis’ strategy to subvert US shale oil is working – the Organisation of Petroleum Exporting Countries (OPEC) saw its market share shrink to a 12-year low in 2014 (to 41.8 percent, down from 43.3 percent a year earlier), in large part due to still-evident increased competition from US

2%

The net budget deficit predicted for GCC countries (totalling USD69 billion or QAR251 billion), down from a surplus of 11 percent in 2013 (amounting to USD401 billion or QAR1.4 trillion).

shale oil – much of the other side of Qatar’s budget equation (increasing income streams) also looks less than positive. The chances of its oil sector seeing at least the maintenance of current revenues pledged

by QP at the beginning of March looks easier said than done. Three oil fields - Al Shaheen, Dukhan, and Idd Al Shargi - still account for slightly more than 85 percent of Qatar’s crude oil production capacity, with only one new significant discovery having been made in the last 20 years: the Al Rayyan field, which still produces only 8000 barrels per day (bpd).

The Edge | 49

cover story | qatar economy

Qatar’s plans to offset any decline in hydrocarbons revenues by a concomitant increase in revenues from its gas sector also look optimistic. Quite aside from the fact that the final completion date for the flagship QP/ExxonMobil joint venture Barzan Gas Project (BGP) is a subject of considerable debate, there is the potential for disputes over the wider development of the 9700 square kilometre North Field basin that Qatar shares with Iran.

“While the trans-border issues between Qatar and Iran on this basin have yet to result in serious disagreement, as the fields are becoming more mature, Iran’s significant ambitions seem to be sowing the seeds of future disagreements,” Richard Mallinson, senior geo-political analyst for international energy consultancy, Energy Aspects, in London, tells The Edge.

Moreover, as seen in the July issue of The Edge, news that India is in talks with Qatar to import at least 10 percent less LNG this year may be a portent of a broader trend among Qatar’s key export markets in Asia, as global gas prices continue to remain low.

Consequently, for the time being at least, it looks as if more cost cutting will be required in Qatar, and its neighbours, simply in order to contain fiscal deficits to the relatively modest government-predicted levels. According to a statement from the IMF at the beginning of this year, earnings from oil and gas for the Gulf Cooperation Council (GCC) countries are likely to drop by around USD300 billion (QAR1.1 billion) this

year alone, due to the low hydrocarbons pricing environment, with Saudi Arabia likely to be top of the list of the most negatively affected of the member states.

Indeed, says Alp Eke, senior economist for the National Bank of Abu Dhabi, losses for Saudi Arabia in 2015 are likely to be around the USD160 billion (QAR582.5 billion) level, while the United Arab Emirates (UAE) will lose around USD55 billion (QAR200 billion).

Oman and Bahrain, in the meantime, are expected to sustain fiscal deficits of about 13 percent and 13.5 percent, respectively, in the same period. Overall, according to the Institute of International Finance in Washington, the hydrocarbons price drop implies a shift in the GCC aggregated fiscal balance from a surplus of 11 percent in 2013 (amounting to USD401 billion or QAR1.4 trillion) to a net deficit of about two percent in 2015 (totalling USD69 billion or QAR251 billion).

Key strategies

One key strategy for keeping deficits under control going forward, says Shanta Devarajan, the chief Middle East and North Africa economist for the World Bank, is to reduce fuel subsidies. However, the practical political difficulties in doing this were highlighted at the beginning of January when Kuwait increased threefold wholesale diesel prices, only to reverse the decision just a couple of weeks later. “Once you start removing subsidies and move to direct transfers [of the saved money to net

This file photo shows an LNG carrier leaving Qatar bound for Singapore. Qatar has seen a slowdown in demand for its primary export to Asia recently, although on a positive note Pakistan recently announced its intention to sign a 15-year deal with Doha. (Image RasGas)

50 | The Edge

8000 barrels

The per day production of Qatar’s only new oil field discovery in the last 20 years – the Al Rayyan field – which amounts to roughly 15 percent of crude oil output.

household income], you not only see more consumption of other goods, but also a lot of other advantages, such as less pollution, and less traffic,” he said. In this vein, UAE Energy Minister Suhail Mohammad Al Mazroui has announced a new oil regulation policy that aims to support the national economy, lower fuel consumption, protect the environment and preserve natural resources.

If subsidies are not removed, and income streams do not unexpectedly rise, then every USD10 (QAR36.4) per barrel drop in the oil price will continue to shave 3.4 percent and 4.2 percent of GDP off fiscal and current account balances, respectively, in the GCC economy as a whole, according to research from Bank of America Merrill Lynch, in New York.

This will leave no other course of action available but to cut back on capital expenditure elsewhere. “The emphasis in the recent 2015 Saudi budget statement on the funding of projects already suggests that new ventures could be delayed, adding to already tightening liquidity across the GCC,” states a report by Merrill Lynch. “With the increased fiscal pressure of a prolonged oil price slump, we would expect capital expenditures to bear the brunt of the adjustment, as per historical experience.”

Qatar, of course, has been at the top of the global hydrocarbons business for a long time now, particularly in the natural gas sector and the country’s strategies to counterbalance the overall decline in the global hydrocarbons complex – principally targeting value-added products (notably, petrochemicals) and high-growth markets (particularly in Asia) – continues to produce results.

In the case of the former, to begin with,

cover story | qatar economy

Qatar’s international investment savvy Qatar Investment Authority alone is said to have more than USD170 billion (QAR619 billion) in investments overseas) and growing contribution to GDP in the nonenergy sectors of the economy mean that Qatar should be able to survive the current bear market in energy prices. Nevertheless, a return to the heady heights of USD100 (QAR365) a barrel of oil is unlikely in the medium term future at least. The conservative fiscal approach now being taken by Qatar - its new budget is set at USD45 (QAR164) per barrel instead of USD65 (QAR237) per barrel - and its contemporaries in the Gulf region seems, therefore, set to continue, if not increase.

This brings a new level of financial discipline, which is not amiss in a region historically used to large budget surpluses... No matter how much oil and gas remains.

Low energy prices, coupled with numerous construction developments to fund – including state projects such as the Qatar National Museum, road and rail infrastructure growth, and stadiums in preparation for the 2022 World Cup – mean that Qatar has to pay more careful attention than ever to its state finances.

despite consolidation on various fronts, QP continues to focus on developing its target-rich strategy abroad. For example, the USD4.6 billion (QAR29 billion) Long Son Petrochemical Project in Vietnam’s Ba RaVung Tau province – a joint venture between QPI, PetroVietnam, and the Thai-based Siam Cement Group – is set to commence operations in 2019, according to a recent statement by Thailand Ambassador to Vietnam, Piroon Laismit. The 400-hectare complex will produce at least 2.7 million tonnes of polyethylene and polypropylene per year, plus other chemicals involved in the petrochemical industry, according to the three companies involved.

Moreover, in the case of developing business with high-potential Asian markets, despite India’s aforementioned reluctance to take its full quota of Qatar gas, Mobin Saulat, head of Pakistan’s state-run InterState Gas Systems, in Karachi, said at the end of July that the country will sign a deal shortly to import gas (on ships) from Qatar for the next 15 years. With Pakistan historically facing gas shortages and having no significant supplies of its own, the flexible contract will allow Pakistan to import between 200 and 400 million standard cubic feet per day (mmcfd), according to Saulat.

The above examples combined with

Qatar has been at the top of the global hydrocarbons business for a long time and the country has strategies to counterbalance the overall decline in the oil price.

Oil prices Brent (USD/b) 110 100 90 80 70 60 50 40 Sources: QNB, Bloomberg

Aug 14

Oct 14

Dec 14 Feb 15 Apr 15 Jun 15 Aug 15

The Edge | 51

Talking about the near future, Joseph Lebaron, vice chairman of Daruna Development, mentions a Ministry of Municipal and Urban Planning bid that is due in the fourth quarter of 2015 for 28,000 beds. “We are then working with semi government entities,” he says. “One is in the 40,000-bed range and the other two are in the 28,000-bed each and that to us is our market share.”

52 | The Edge

“Daruna Aims

to be a catalyst in Improving workers’ living standards ” As vice chairman of Daruna Development, Joseph Lebaron discusses its corporate plans, what the company will add to the Qatari landscape, and its contribution to improving the living conditions of the migrant workers here, an issue, he concedes will attract international media attention until the 2022 World Cup is completed. By Aparajita Mukherjee.

A

housing solutions company with has four categories of houses to offer: workers’ accommodation; housing for management and staff; hospitality; and those suited for the senior management, Daruna Development has its objectives clearly laid out.

Commenting on what distinguishes each of their offerings, Joseph Lebaron, the vice chairman of Daruna Development, says, “For workers’ accommodations, the distinguishing features are Daruna’s compliance with Qatar Foundation (QF), Ministry of Municipal & Urban Planning (MMUP) and international standards.

Our philosophy reflects a ‘lifestyle’ for guest workers in Qatar to improve their experience, increase their productivity and keep them safe. This is in line with the Qatar National Vision 2030 (QNV 2030).”

Daruna, Lebaron stresses, is aiming to provide all that a person needs to both work safe off site and live safe on site. This includes full catering and laundry services, recreation and special

programmes, health care, retail outlets and consular services.

For all the other categories, in the opinion of Lebaron, it is an adjustment to space and amenities. “But the philosophy holds true – we are providing a lifestyle within our facilities that will significantly increase our guest’s quality of life in Qatar.”

As a housing provider and on a projected spend of USD12.5 billion (QAR45.5 billion) in real estate investments on the back of the 2022 World Cup, what estimate of market share does Daruna have?

Talking about the near future, Lebaron mentions an MMUP bid that

The Edge | 53

business interview | real estate

3D architectural renders depicting Daruna’s standard Workers’ Community, which hosts 4000 guest workers in a single dedicated facility which is designed, built and operated in full compliance with all international and local standards including the QF Worker Welfare Standards 2013, Supreme Committee for Delivery & Legacy 2013 as well as MMUP. There is purposely a significant amount of green landscaping as Daruna plans on having significant amount of recycled water to re-use for irrigation.

is due in the fourth quarter of 2015 for 28,000 beds. “We are then working with semi government entities – one is in the 40,000-bed range and the other two are in the 28,000-bed each and that to us is our market share. We feel that right around between 100,000 and 130,000 beds is our market share, that represents about, depending on the numbers you work against, between five and seven percent of the market share.”

Lebaron is candid enough to admit that no one company can deliver the entire market demand. Having said that, Daruna Development seeks to dominate the Qatari market “as a thought leader and innovator in 21st century housing for Qatar’s migrant workers”.

Lebaron emphasises, “However, we do seek to drive the market. We want to take the lead in taking QF, MMUP and international standards and applying them to the transformation of worker housing in Qatar. We seek to help implement the QNV 2030, in support of the worker welfare committees across the ministries, councils, committees and agencies of the Qatar government.”

Will the quality remain the same with volume? Labaron says that Daruna “cannot control what the quality is beyond that which we build but we can, by building to 54 | The Edge

this high standard, create pressure in the market to deliver more such housing that meets these standards. We want to be the catalyst for that.” This is in tandem with what the Daruna Development website says, “setting the standard”.

The partners

Daruna Development has a total of 12 partners, primary among which is Global Building Solutions, a United States-based property developer.

Commenting on the criteria that Daruna Development adopted to choose its partners, Lebaron tells The Edge, “Our partners were chosen for their commitment to the QF’s standards for worker welfare and for their demonstrated success in the marketplace. They will play crucial roles in Daruna’s holistic solution for worker welfare in Qatar, from recruitment to worker community management.”

Elaborating further, Lebaron mentions that Daruna was looking at only those potential partners who could operate at that high level of commitment, add value, and at the same time, help them innovate and develop a holistic solution. “So we have put together what we think is a highly compelling, 21st century solution to these challenges that Qatar has faced,” he explains.

“We want to take the lead in taking QF, MMUP and international standards, and applying them to the transformation of worker housing in Qatar.”

real estate | business interview

5-7%

Projected market share of Daruna Development in Qatar.

Terms of offering housing

Daruna Development offers facilities on: annual leasing; discounts of long-term tenants; build, operate and transfer (BOT); and design and operate to suit.

Describing the key features of each, Lebaron says that the annual leasing option is based on a fixed annual cost per bed available to clients seeking worker housing as part of their own commercial activities, adding, “Multi-year discounts are available for clients seeking long-term tenancy for their workers in a Daruna worker community.”

The BOT arrangement includes building and operating a worker community for the owner of the worker community and only then transferring responsibility for the operations to the owner at some agreedupon date.

Specifying a caveat, Lebaron mentions, “Daruna will require, however, a commitment from the owner that worker community’s operation, including maintenance, will meet QF, MMUP and international standards.”

For the design, build and operate category, says Lebaron, Daruna will also design the worker community to suit a specific company’s needs and wants in

accordance with QF standards.

What are Daruna’s learnings about the market place, based on the four ongoing projects? How will these learnings modify Daruna’s later offerings in the Qatari marketplace?

Lebaron tells The Edge, “We have learned that the government of Qatar is fully committed to the improvement of worker housing, from design, to maintenance and operation and importantly, equally committed to ethical recruitment. As we learned more about the market place and the Qatar government’s vision for 2030 and its plans for the 2022 World Cup, we expanded our own offerings so that they constituted an integrated and holistic solution set for Qatar’s migrant worker community.”

Worker accommodations

Daruna Development has a number of worker accommodation plans announced.

Commenting on when these are expected to be ready, Lebaron mentions that the first two projects are expected to get underway in the fourth quarter of 2015 with completion before the end of 2016.

A recently announced planned worker accommodation is dubbed as “advanced”.

Clarifying what Daruna means by advanced, Lebaron says, “By advanced, we mean its design, its operations, and its services.

The design is in full compliance with QF standards and international standards.

Its operations are as well. Its services go beyond that. They are innovative.”

Explaining what he means by innovative, Lebaron mentions offering health care

A workers’ community being developed by Daruna Development.

“We are providing a lifestyle within our facilities that will significantly increase our guest’s quality of life in Qatar.” programmes, onsite health care, and cashless retail services that are unique in Qatar.

“We use new technologies to augment the health, safety, and welfare of the individual worker resident in our worker communities.

We plan to have consular services available by participating embassies from countries with guest worker nationals here.”

Commenting on international media scrutiny on the issues of migrant worker living conditions, Lebaron assures that, as a company, Daruna Development “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 and now, along with the Qatar government, we believe in partnering to help it change and transform the marketplace, especially in the the supply of quality migrant worker housing.”

Lebaron is candid enough to admit that no one company can deliver the entire market demand. Having said that, Daruna Development seeks to dominate the Qatari market “as a thought leader and innovator in 21st century housing for Qatar’s migrant workers”.

The Edge | 55

With the country’s new port slated to open next year, Qatar’s logistics sector is expected to receive a major boost – something that will also improve the availability of raw material, goods and products as well as help to accelerate economic growth.

By Aparna Shivpuri.

56 | The Edge

W

hen Qatar built Ras Laffan port in 1996 the state probably did not anticipate having to build an even bigger one close to a decade later. This is just one sign of Qatar’s rapidly growing economy and its increased requirements for goods, products and raw materials that have matched the country’s unprecedented increase in population and infrastructure demand.

With Qatar getting closer to achieving its two major milestones – the 2022 World Cup and the National Vision 2030 (QNV 2030) – in less than 15 years from now, the country’s infrastructure and logistical demand will reach its pinnacle soon. The most critical element that could possibly prevent Qatar from reaching these milestones is the country’s infrastructure – most specifically, its ports – if they are not developed in a timely manner. But in all probability that may not be the case, considering the fact that Qatar is developing its infrastructure quite rapidly, and its new port project, Hamad Port, is expected to complete its first phase as early as 2016.

Talking about the impact that the new port will make, Ranjeev Menon, group CEO, Gulf Warehousing Company, says, “Hamad Port welcomed its second commercial vessel on August 13, steering towards an early operation by the end of 2015. By end of Phase I, the new port will have a capacity of 2 million 20-foot equivalent units (TEUs) a year and 2 million tonnes of general cargo by the end of 2016.” When the project is completed, he adds, the port’s capacity will be more than 12 million TEUs a year.

Located south of Doha, the QAR27 billion ambitious megaproject will include a new port and Qatar Economic Zone 3 as well as a new base for the Qatar Emiri Naval Forces. The project will span over an area of 26.5 km square (km2) and the port’s basin will be 3.8 km in length, 700 metres wide and 17 metres deep. With seven major contractors involved, the project is witnessing massive progress, involving a workforce of over 9000 with 2000 pieces of equipment.

In total, 70 million cubic metres (m3) of granular material will be excavated; enough to fill 25,000 Olympic-sized swimming pools.

To be developed in phases, the port will feature three multipurpose container terminals with a capacity to store over one million tonnes of bulk grain cargo, 500,000 vehicles and 37,000 livestock per year.

The first container terminal will bring two million TEU capacity on line when it opens in December 2016 and will provide a supply chain system along with the free zone.

The Edge | 57

feature story | port sector

Logistics Village Qatar is a self-contained logistics hub providing world-class services for businesses in Qatar. (Image Gulf Warehousing Company)

This will promote trade as exports and imports can come in directly, therefore saving time and money. One must also not forget that, Hamad Port will increase the number of vessels coming through Qatar from 2016, which means more traffic, and which will lead to more trade, more repair work and greater potential for infrastructure growth. Therefore the development of this port goes beyond the mere purpose of meeting the immediate infrastructure need for the 2022 World Cup and is part of a much bigger plan. The increased capacity and world-class facilities of the new port will act as a catalyst for economic growth, promote economic diversification and create a more sustainable economic base, all in line with the QNV 2030, which has sustainable development at its core, thus making the country more resilient against changes in the global economic environment.

It also provides support to the Ras Laffan Port, whose success has enabled the state to export its gas resources to the world. The new port will also create job opportunities, as well as contract and management opportunities for businesses.

58 | The Edge

“Qatar obtained the highest rise in country rankings within entire GCC in the World Bank’s Logistics Performance Index from 46 in 2007 to 29 in 2014. This could be attributed to the largescale development of logistics infrastructure projects.� - Srinath Manda, programme manager, Transportation and Logistics Practice, Frost & Sullivan.

freight and logistics | feature story

QAR

27

billion

The estimated cost of the new port project that is projected to complete its first phase by end of 2016.

Logistical thrust

Qatar has been witnessing a spike in its non-oil sector activities, which reflects the government’s strategy to diversify the economy. The backbone of all these sectors is the logistics sector and major development projects have brought with them the need to enhance capacity building in this sector in line with the country’s growing population and economy. Qatar has been working towards restructuring customs procedures in order to meet international standards, and as a result, the sector has witnessed improvement in cost and time efficiency.

These developments in the port sector are part of a bigger strategy to meet the QNV 2030. The ports are also being developed as integrated logistics hubs inclusive of their own free zones.

The 6.3 km2 logistics and industrial free zone, which will provide 1500 plots of land in South Wakra, Birkat Al Awamer and Aba Saleel, aims to make the country a regional hub for investment and logistics.

The logistics park will include refrigerated facilities for frozen and dry stores, showrooms, commercial offices and labour camps; workshops for the maintenance and storage of cars; assembly and processing workshops for light industry; service centres and warehousing. According to Nael Attiyat, country manager, DHL Express Qatar, “The planned industrial and logistics centre will help boost the country’s business community – spurring more commerce and investments

Logistics Performance Index - 2014 Country

Year

LPI Rank

LPI Score

Qatar

2014

29

3.52

Qatar

2012

33

3.32

Qatar

2010

46

2.98

Qatar

2007

55

2.95

Source: World Bank Logistics Performance Index

which will need strong logistical support. It will open up more growth opportunities for all logistics firms.”

Hamad Port will be next to this industrial zone and will play a crucial role in promoting maritime trade and easing the congestion/ backlog of ships (which sometimes have to wait up to a month at the harbour) with services such as the smart gate.

There is no denying that Qatar is witnessing a significant growth in the import of raw materials and goods, and a technologically-advanced and strategically located port will become a vital part of the country’s logistics sector.

However, the country is already making some early strides. In fact, the transport sector grew by 19.2 percent in JanuaryJune 2015 against 4.6 percent in the corresponding period of 2014. According to Srinath Manda, programme manager, Transportation and Logistics Practice,

Frost and Sullivan, Qatar accounts for approximately a 15 percent share within total reported logistics market of the Gulf Cooperation Council (GCC) countries, the third largest share after the Kingdom of Saudi Arabia and the United Arab Emirates.

The country’s reported logistics market value was estimated at about USD7.5 billion (QAR27 billion) in 2014.

Comparing Qatar to other GCC countries, Srinath says, “Within the entire GCC, Qatar has been the fastest growing economy over the past five years. Also, at an overall level there has been a significant improvement within Qatar’s logistics sector over the past few years.” He adds that Qatar obtained the highest rise in the World Bank’s Logistics Performance Index, rising from 46 in 2007 to 29 in 2014. “This could be attributed to the large scale development of logistics infrastructure projects being pursued by the country across all segments such as

Qatar’s 3PL sector is still in an early development stage. There are only a few companies offering services that add value to customers’ supply chains. (Image Gulf Warehousing Company)

The Edge | 59

freight and logistics | feature story

the country continues to grow, the logistics sector will continue to grow with it.”

The road ahead

However, all these developments aside, Qatar continues to face some challenges in the logistics sector. Attiyat says, “The limited capacity of gateways into the country is creating bottlenecks in the supply chain, while the rapid population growth and urban congestion restrict the movement of people and services. The government has already begun addressing these issues through increased infrastructure investments and stronger public-private engagement.”

Echoing the sentiment, Srinath says that while there have been bottlenecks in terms of limited infrastructure and sea ports, the opening of Hamad Port will make a huge difference to Qatar’s trade scene.

On paper, Qatar has got the right plans for growing its logistics sector through free zones, logistics hub and a mega port. All these are needed for the diversification of the economy, promotion of trade and meeting the needs of a growing economy. How Qatar will deliver on these fundamentals is a waitand-watch game. It is widely recognised that availability of sufficient materials and labour, and the logistics of getting them to the right place at the right time is likely to be a significant challenge in Qatar.

A multipurpose dry cargo ship at Ras Laffan Port. (Image Gulf Warehousing Company.

seaports, airports, free zones, roadways and railways.”

Qatar has also been making headway in the air cargo industry and has been aggressively pursuing serving new routes for cargo. Qatar Airways Cargo already serves to more than 40 freighter destinations worldwide via its Doha hub. In August 2015, the carrier added Djibouti to its freight locations, making it the seventh destination in Africa. Qatar has been consciously investing in modern, state-of-the-art cargo infrastructure as it realises the need to position itself as a major international commercial gateway. Cargo movements also increased by 13 percent with 114,445,235 more cargo movements in 2014 compared to the previous year, due to Hamad International Airport.

Third parties

The slow growth of third party logistics (3PL) has also been a cause of concern. According to Paul Virgo, vice president for Logistics at Milaha Maritime and Logistics, Qatar’s 3PL sector is still in an early development stage.

“There are only a few companies offering services that add value to customers’ supply chains, hence the reliance on internal logistics capabilities rather than outsourcing to 3PL,” he says, adding that the dynamic is changing now, albeit slowly, with the emergence of better quality services and availability of storage facilities to service providers.

The government has been doing its bit towards promoting public-private partnership (PPP) in the logistics sector in 60 | The Edge

order to fill the gap between supply and demand for storage services and secure logistics for effective private sector including small and medium enterprises (SMEs) at competitive prices.

Virgo says, “The sector outlook in the short term looks very good. We are currently experiencing substantial growth and this is forecast to continue for the foreseeable future. The Qatari government has recognised the need for additional logistics facilities and awarded land options for service providers to exploit. As long as

qatar’s New Port Project Facts Site area: Over 26 km2 Port basin: 3.8km in length, 700 m

wide and 17 m deep

Capacity of multi-use terminals: General Cargo 1.7 million tonnes per year

Vehicle Terminal 500,000 vehicles per year Source: New Port Project Steering Committee

Grain Facility 1 million tonnes per year

Livestock 37000 per year

Brief Q&A with

key Qatar-based logistics companies The Edge talks to senior executives from Milaha and Gulf Warehousing Company (GWC) to understand major issues faced by the logistics industry in Qatar.

With Qatar’s economy gradually diversifying from oil and gas to other industries, how is the logistics industry evolving?

What we are witnessing now is the beginning of Qatar’s transformation into becoming a regional and even an international Michel Deleuran, executive vice logistics hub between Europe, president - Maritime, Milaha Africa, and the Far East. As we move toward this goal, the logistics industry will need to embrace new technologies, adopt multi-channel sourcing, increase flexibility to meet customer requirements, and enable local companies to go global.

What are the major challenges faced by the logistics sector in Qatar?

The logistics sector in Qatar is on an accelerating growth path now thanks to the government’s recognition of its importance.

Nevertheless, it is facing some challenges, which is normal at this early stage. These challenges include limited geographic area, inadequate warehouse facilities of the right standard, lack of integrated multiple modes of transportation, and the significantly high demand for short-term contracts as opposed to longer-term contracts that, we as service providers, prefer due to cost considerations.

How do current logistical shortcomings affect the country’s trade and business activities?

Logistics and trade are two closely intertwined activities. Development in both sectors in Qatar is proceeding almost simultaneously with the establishment of Hamad International Airport, the new Hamad Port, and the massive logistics hubs currently under construction across the country. Until these projects are realised and fully operational, local businesses will continue to make sacrifices in terms of what they can import, export or store.

What role is a private company such as yours looking to play in the overall growth of Qatar’s logistics industry?

There is a need for innovation in the way we provide services and manage our facilities. The private sector must step up and complement the government’s investments in the logistics industry, and benefit from the economic growth spurt ahead of the 2022 World Cup.

What is your take on Qatar’s logistics industry?

The government has publicly stated that all of its major infrastructure projects shall move forward, and indeed will begin to pick up pace. An expected QAR113 billion is to be tendered this year in the construction and Ranjeev Menon, group CEO, Gulf transport sectors alone, following Warehousing Company an estimated QAR119 billion already awarded in 2014. These projects will include the airport, ports, rail, expressways and service systems, in addition to sports facilities and facilities dedicated to the 2022 World Cup.

What are the major latest developments in the logistics industry?

Economic zones and other warehousing zones being developed would help Qatar position itself as a strategic hub for the region, Africa and Asia. The Economic Zones Company Qatar (Manateq) in cooperation with the National Logistics Task Force has been taking swift action to bolster the local economy, most recently by securing of QAR1.8 billion in funding for the logistics areas to be constructed in the south of Wakra.

Tell us about a major project you have taken up.

Recently, we have been awarded the contract to develop and manage the GWC Bu Sulba Logistics Park, which is moving according to schedule and should be open to the public in the first quarter of 2017.

“Economic zones and other warehousing zones being developed would help Qatar position itself as a strategic hub for the region.” - Ranjeev Menon, GWC. The Edge | 61

Inside the minds of leading business figures

business insight Converged infrastructure segment in the ME is growing 64 In an exclusive interview with The Edge, Chad Dunn, senior director of product management and marketing for EMC, a cloud computing company, says that the converged infrastructure segment in the Middle East region is growing surprisingly well, and is adapting more quickly than many countries in Europe and even Western Europe.

Japanese luxury restaurant Nozomi to open in Doha 66 After successfully establishing the Nozomi brand in London over the last 10 years, founder Marios George is now introducing fine dining Japanese cuisine to the Middle East. In an exclusive interview with The Edge, he shares why he thinks this region has huge potential for luxury hospitality brands to grow.

66

Nozomi, the Japanese lifestyle restaurant located at Marsa Malaz Kempinski, The Pearl-Qatar, will open in September.

The Edge | 63

business insight | tech industry

CLOUD COMPUTING

Converged infrastructure segment in theMiddle East region is growing When it comes to introducing new IT into their data centres, organisations have two basic options: either acquire all the servers and software from different vendors and try to make them work together, or buy a single appliance that is simpler to set up, but cannot be customised. Cloud computing company EMC offers a third option. The Edge’s Aparajita Mukherjee spoke to Chad Dunn, EMC’s senior director of product management and marketing, about the company’s hybrid cloud initiative, which promises the best of both worlds.

Tell us about EMC’s hybrid cloud initiative.

“In the high end, our converged infrastructure solution VCE is pre-built and ready to use when it arrives at the customer’s premises.”

Most small and medium enterprises operate on a tight budget. How do EMC service smaller enterprises?

device. This is really attractive for SMEs, because you are able to start with a single appliance, it is relatively inexpensive, and when you need more capacity you can purchase another one and cluster them together. So you do not need a big upfront investment; you can basically pay as you grow.

EMC is a big believer in private cloud as a stepping stone towards hybrid cloud. Customers wanted to reduce their IT costs, so they moved to private cloud. Here it is all within the customer’s four walls, but you also want to leverage technologies that make IT more self-service-oriented. You want your users to be able to go to an online catalogue, select a service and have that service order deployed, and then charge that back to their business unit with very little human intervention. The goal is to take as much operational expense out of managing IT as possible. Hybrid cloud is simply the next step in that evolution. So whether it makes sense to run the workload on the customer’s premises or in a different location or on a public cloud, we give them the option to seamlessly move their workload, when, why and where they want to.

When we go to market for small and medium enterprises (SMEs), it is usually with VSPEX, which is one of our converged infrastructures. There are two components to that. One is our reference architecture programme. This is designed to achieve business outcomes rather than just selling EMC gear, so it includes components from alliance partners such as Cisco, HP, Brocade and Dell. These can all be customised, and are all targeted towards a range of different sizes. We build them, test them, validate them, and then we give the partners those blueprints, so that they can customise them to reach the right price-point for these SMEs. The other component is our hyper converged infrastructure appliance, called VSPEX BLUE. Here all the functionality that you would get from a server, software or storage array, is all-in-one 64 | The Edge

Technology adoption can reduce cost and time.

How has EMC achieved this for its clients?

The reason why we do testing and validation documents for our partners is because we want to accelerate the time to value. We want to take the upfront architecture planning and test phase, and shrink that down so that the customer sees the benefit as soon as possible after they make the purchase. We have a number of case studies where deployment times have shrunk from months to weeks.

Similarly, in the high end, our converged infrastructure solution VCE is pre-built and ready to use when it arrives at the customer’s

tech industry | business insight

“Protecting the perimeter of a data centre is not sufficient.

You need to protect the data, not only through encryption, but also through access.”

In this age of cloud computing, how does EMC guarantee data protection?

“What you cannot enforce is human behaviour. So no technology will 100 percent protect all data. There have to be behavioural changes, there have to be organisational changes,” said Chad Dunn, senior director of product management and marketing, EMC.

premises. Then VSPEX BLUE is built using EMC technology and VMware technology, so you are able to take this appliance, connect it to your network, turn it on, and in about 10 minutes you are ready to start provisioning your workload. This is unprecedented ease of use, and unprecedented time to value. We are talking less than an hour, and you are ready to go. That is the way the world is moving, especially in the SME segment.

What is your sense of the technology change in EMC’s Middle Eastern markets?

The converged infrastructure segment in the Middle East region is growing surprisingly well, and is adapting more quickly than many countries in Europe and even Western Europe. Saudi Arabia and Dubai have been very fast adopters of converged infrastructure, both from the VCE V block perspective, as well as VSPEX reference architecture. We are currently working with our channel partners in the Gulf to expand our footprint with VSPEX BLUE for hybrid-converged.

There are no guarantees in life, but we have come to understand that protecting the perimeter of a data centre is not sufficient. You need to protect the data, not only through encryption, but also through access. It is about detecting intrusion and bad actors in real time. But even in real time, it is a matter of preventing it, or stemming the flow, or stopping it as soon as possible. You look at some of the companies that have had data breaches, and their conversations with us are almost always the same. They say, “We do not want to be the next article in the Wall Street Journal that says we lost 10,000 users of data. We have to be comprehensive about our security.” It is not just about authentication and encryption, it is also about things like mobile device management. Users want to bring their own devices. We cannot stop that. So then we need security and access-controlled technologies that do not feel as intrusive to the end user, but still are going to protect the data. EMC has a product called CloudArray built into the VSPEX appliance, which allows you to share data up to a public storage cloud, whether that is Amazon or Google or whatever. The key is that the encryption takes place on your site, so the data is encrypted in flight and on the public cloud. Importantly, the customer retains those keys; the service provider does not.

Can that be enforced?

For CloudArray it can. What you cannot enforce is human behaviour.

So no technology will 100 percent protect all data. There have to be behavioural changes, there have to be organisational changes.

You have to understand that just by a person being in your facility, they have unprecedented access to your data. I saw a sign from another company that had a picture of a woman and said: “Janice has access to 10,000 personal health records. Janice works at the coffee shop at the hospital.” She is inside. She has access. So no technology can be completely foolproof. The users are human beings. They are the most irrational piece of the equation.

The Edge | 65

business insight | food and beverage

restaurant

Japanese luxury restaurant

Nozomi to open in Doha After successfully establishing the Nozomi brand in London over the last 10 years, founder Marios George is now introducing the same fine dining Japanese concept to the Middle East.

In an exclusive interview with The Edge’s Syed Ameen Kader, he shares why he thinks this region has huge potential for luxury hospitality brands to grow.

What are the unique selling points of Nozomi restaurant?

Nozomi is a contemporary Japanese lifestyle restaurant and celebrity hotspot.

We are launching the restaurant at Marsa Malaz Kempinski, The Pearl-Qatar. The best way to describe Nozomi is that it is an entire lifestyle experience. It provides contemporary Japanese cuisine, which has been adapted very subtly to appeal to Western palates and in turn, to Middle Eastern palates, with the variations that we will be bringing here.

It is a restaurant that also seeks to entertain you in so far as we have a DJ playing music every night. We use a selection of world music choices as a medium to relax the individual, to make the person feel a lot better about things, and as the evening progresses, so the tempo of the music increases.

It is not just a place you come simply to eat. It is a place where you come to – just like our London model which we are looking to replicate here – be seen and to see people, not just celebrities, but people in finance, in the property world and different walks of life. It is for a whole cosmopolitan mix of people.

Tell us more about your Doha outlet.

We will have 130 to 150 covers downstairs, with the sushi chefs on display. Upstairs, we have a lounge bar, which will offer the same music. The only variation here is that we will also have 120 covers outside 66 | The Edge

with a specifically adapted cuisine. The menu has been designed to work with the fluctuating temperatures we have here.

So while the favourites – the tender Kobe beef, the Chilean seabass, the various tempuras, the lobsters and the seabass – will be on offer as the main cuisine, we are also looking to offer something slightly different on the terrace, just to appeal to sitting outside, enjoying the mild breeze.

How many restaurants do you have as of now?

In this region, we opened our first Nozomi restaurant in Riyadh in September 2014.

We have signed other branches in Kuwait, Dubai, Oman and Bahrain. We have also started working in Jeddah. What we are looking to bring to the restaurants there is slightly different as the geography of the restaurant is different.

Besides this region, we are already present in Cyprus and London. Another new European property will also be opening later this year in Monaco.

The plan is to get to about 20 over the next three to five years. We do not envisage having more than one restaurant in one city.

In Doha, for example, we would not launch more than one, but the emphasis will be on growing the brand in the Gulf region.

What variation will you offer to cater to local taste?

What we do is we recognise local produce.

We recognise that there is a whole range

of fish and crustacean available in the Gulf. So there is nothing wrong in adapting and using local produce to accentuate or compliment what we already offer. We did the same in Saudi, where 80 to 85 percent of the menu features our established dishes that we have developed over the years and people know and love. But we allow that 10 to 15 percent of gambling. We find produce people have never even heard of. And we just pay tribute to the country that we are in and trading with. We adapt to it and it does not alter or change the dynamics of what we actually do.

You are already a known brand in the European market. Do you think it will help you attract many expatriate customers who are from that region?

We are not looking to target only the expats.

We are looking to appeal to people who live here, work here and raise their families here. Clearly, the expats may or may not have heard of us, but we see it as bringing something new to the region.

Do you think this is the right time to launch the restaurant as The Pearl-Qatar project is yet to be completed?

The Pearl-Qatar is under construction, the hotel is still finishing, and so is Doha. The entire country is going through massive changes. The amount of construction that is going on – the infrastructure, in terms of roads, metros and hotels – is endemic to

food and beverage | business insight

“In this region, we opened our first Nozomi restaurant in Riyadh in September 2014. We have signed other branches in Kuwait, Dubai, Oman and Bahrain.”

Marios George, founder of Nozomi restaurant, says, “We are not looking to target only the expats. We are looking to appeal to people who live here, work here and raise their families here.”

the region. I think it is fabulous. I think the region is ready to welcome us.

How confident are you about attracting a reasonable number of guests?

I do not think anybody knows before they start a project, a hotel or restaurant. You kind of believe and you know everything is a risk but I think the way Doha is advancing, it is looking to welcome the world to its country. Look at the steps it has taken with the securing of the 2022 World Cup. Clearly, the government and the royal family want to encourage visitors to come to Doha and I think it is only right when they visit Doha that there are fantastic projects to experience.

What has the response to your first regional restaurant in Riyadh been?

Incredible, it exceeded all our expectations. We have been there for a year now, and it has already established

itself. I think the real success of a restaurant is not that it is always full and not that it has a good reputation, but that people come back to you again and again. If people come to you once a month, or once every two months, or they come once a week, or once every couple of weeks, it shows that you have actually penetrated. You have got into the market and they like you and they welcome you.

I have been in the restaurant business for 33 years and have dealt with many people from the Middle East, particularly in London in the last 20 years. They always ask, “Why don’t you come open in our country?”

What is your observation about the nature of this market?

I think you have wonderful emerging markets here. People are being more receptive, they are saying, they do not just want to have local cuisine. There are all these wonderful cuisines coming from various parts of the world. This is the time

when all is going to start happening. And for those reasons, it is more exciting to be part of something that is new than to go and compete against a million other restaurants in New York. I just think it is all more rewarding.

The Edge | 67

products & reviews

Reviews New Beetle

R-Line joins the Volkswagen R family

V

olkswagen Middle East has made a new addition to its Volkswagen R family, with the launch of Beetle R-Line this September.

The Beetle R-Line exhibits the sporty Volkswagen R GmbH racing heritage, racing heritage, with the bumper feature added to feed more air to the turbocharged 210 HP 2.0-litre engine.

The rear of the car presents a lower diffuser and a large spoiler in addition to R-Line door entry sills.

To match the sporty exterior, Volkswagen has fitted the R-Line with a bold interior, including two-tone cloth sport seats, a multi-function leather-

wrapped steering wheel with R-Line badging and a set of sport gauges mounted on the top of the centre console adding racing flair to the R-Line model.

Thomas Milz, managing director of Volkswagen Middle East, said: “Volkswagen motorsport heritage has enabled us to harness racing technology and designs to develop models that are at home both on the track and the roads of the region. The addition of the Beetle R-Line to the Volkswagen R model line-up extends our family of cars developed for people with a taste for the extraordinary.�

Standard features on the new R-Line include a panoramic tilt/slide sunroof and Xenon headlamps with LED separate daytime running lights.

The multi-function leather-wrapped steering wheel with gear shift and composition media radio systems enables greater in-car connectivity with touch screen technology based on proximity sensors, intuitive ergonomic interfaces, and multi-phone connection utilising Bluetooth and USB technology.

The Beetle R-Line will be available at Volkswagen retailers in Qatar, Abu Dhabi, Bahrain, Dubai and Kuwait from September 2015.

The Edge | 69

products & reviews

Read it:

Like a Virgin Richard Branson has penned many business-related books over the years, most relating in some way to his phenomenal success as an entrepreneur and/or the Virgin brand and business group and its companies – which now number in the hundreds, from airlines to banking and fitness centres to space travel. Though, as he writes in this book’s foreword, he considers business schools “wonderful places”, as a famous high school drop out made good, it is not surprising Branson might advocate alternatives to formal education. This is evident the sub-title of this offering Like A Virgin: Secrets They Won’t Teach You In Business School.

Predictably it covers all sorts of personal advice from Branson to aspiring entrepreneurs, all written in his down-to-earth narrative style, which simultaneously engenders a feeling that one is sitting in a room with the squire himself next to a warm fire, but also comes across as slightly simplistic. Indeed, due to this fact, it is arguably hard to read this book for more than a few minutes at a time. But perhaps that is the intention, as it is packaged in short, standalone and quickly digestible chapters that form a combination of interviews with the man himself, responses to questions from acolytes, and random ruminations and musings on what it takes to start and run your own business in the modern world.

Available at Virgin Megastores in Doha.

Read it:

@War

Though it is happening in a place all around us, but that we cannot see – cyberspace – it is no secret that there is a clandestine struggle of apocalyptic proportions currently and increasingly being waged in our world: cyber warfare. Thus argues Shane Harris, author of @War: The Rise Of Cyber Warfare, who through this book says that this goes beyond simplistic impressions us regular folk might have of e-mail and corporate hackers and Wikileaks-type revelations, to the fact that the United States (US) military views cyberspace as the ‘fifth domain’ of modern warfare alongside land, sea, air and space. With most civil infrastructure in most developed and many developing countries now connected in some way to the Internet, this places them in direct danger from conventional enemies, terrorists and ‘hacktivist’ collectives such as Anonymous. While centring almost completely on the US, Harris presents a compelling and disturbing narrative as to how far our embracing of modern technology has placed individuals, companies and nation states under cyber siege, in the end advocating “an alert and knowledgeable citizenry” as the best combat against this most insidious and growing international threat.

Available at Virgin Megastores in Doha.

70 | The Edge

products & reviews

Samsung smartphones Samsung Electronics has unveiled the fifth generation of the Galaxy Note and the Galaxy S6 edge+. The products are designed with wireless charging technology. Both the Galaxy S6 edge+ and Galaxy Note5 blend form and function with industry-leading features. With increased 4GB RAM, both smartphones offer powerful capacity and processing power, enabling users to enjoy more seamless multi-tasking, keep up with messages, post updates to social networks faster, and enjoy graphic-heavy games without suffering lag time.

Sony speaker Sony Middle East and Africa FZE has announced the launch of the MHC-V7D Mini Hi-Fi System. Featuring just one speaker, this audio device is space-saving and easy to carry. The MHC-V7D features powerful Smart High Power technology that channels sound through a specific sound path to increase acoustic pressure and create a clear and full bass. The product has power-saving technologies to conserve energy to minimise electricity use.

Toshiba Satellite L10W Toshiba’s new Satellite L10W is a convertible device that is part laptop and part tablet. It has five modes to suit different users’ needs. With an 11.6-inch screen, the Satellite L10W has latest Intel® processors.

Equipped with the Windows 8.1 operating system, the product has a 360-degree hinge that gives it increased elasticity. With its ample 500GB of HDD storage, the laptop comes in Satin Gold finish.

App Reviews CamCard

By M. Iqbal

(All platforms) With this app you can simply take a picture of a business card to save the details in your phone book or online.

Before saving, the app allows you to manually edit details. Although you can only save a maximum of 200 cards on the free version, the paid version does away with this limitation.

MOFA Qatar (All platforms)

The Minister of Foreign Affairs (MOFA) has launched a new version of its official app that could be very useful while travelling abroad.

The neatly laid out user interface does not make the best use of the screen, but nevertheless does a good job in making relevant information available in both English and Arabic.

You will find addresses and contact details for Qatari missions abroad, other countries’ missions in Qatar, visa requirements for visiting Qatar and travel advice. Qatari citizens travelling abroad may also request assistance in case of emergency.

Camera ZOOM FX

(Android, iOS)

Panasonic printers Panasonic’s new multi-function printers, KXMB2168 and KX-MB2128, come with Secure Print. Its high-level security function helps prevent important documents from being leaked.

The Easy Print Utility, multi-document print application allows for the merging of multiple file types, such as Microsoft® Word and Excel® files into a single print job or PDF file. The new printers also come with a standard Ethernet network port which means the printer can be controlled from any PC on the local area network.

This app may not have the slickest user interface anymore, but it can still find a place in your phone if you want an all-in-one app. You get live previews for filters and frames that you choose, saving you time and the hassle of switching between multiple apps. You also get access to a Time Lapse feature, a Photo Gallery and a Photo Editor – all accessible from within the app. The paid version adds a slew of features on top of this.

The Edge | 71

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