INFRA MENA 3

JORDAN’S JEWEL Ali Kolaghassi on the development of Saraya Aqaba Page 32

TAKING THE NEXT STEP Atkins CEO Keith Clarke on building sustainability Page 34 www.menainfra.com • Q4 2009

LOOKING

UP?

GREENER BUILDINGS With Jeff Willis of the Emirates Green Building Council Page 82

THE MASTERPLAN HE Abdullah Rashid Al Otaiba on Abu Dhabi’s transport future Page 120

After a tough 12 months, can Dubai – and the rest of the Gulf – learn from recent problems and send growth skywards?

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PLUS Brian Bruce CEO, Murray & Roberts Raouf Ghali President, Hill International George Bellew CEO, Oman Airports COVER.indd 1

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Ups and downs With an economic recovery now widely predicted, who are the winners and losers of the past 12 months?

fter a hellish 12 months, investors are more optimistic about the outlook for real estate markets across the region than they were six months ago – at least they are according to the results of a recent Jones Lang LaSalle survey into market confidence. The report’s authors believe that there has been a significant shift of sentiment, from denial of the extent of the crisis to a more realistic acknowledgement of what has been termed “the new normal”.

It’s real progress given the cynicism and negativity that permeated the sector as recently as just a few months ago. But how are individual economies expected to fare in the much-anticipated upswing?

The good news for Dubai is that expectations for economic recovery in the GCC are, on the whole, pretty high; the not-so-good news is that the its local rivals may have edged ahead in the race for overseas investment dollars. While it is still widely regarded as the regional leader in terms of its infrastructure and nation-building

A

“Successful mergers can give leading Middle East players the critical mass and a competitive edge on the international scene” Dr Dick Buchta, MD, AT Kearney Middle East (p46)

achievements, concerns remain regarding Dubai’s short-term liquidity and supply-demand dynamics. A return to 2007 pricing coupled with the successful overhaul of the regulatory environment could see it solidify its position as the leading regional and international destination for investment, but much remains to be done in terms of rebuilding investor confidence in a fragile economy before the full impact of the economic recovery will be felt.

There is better news for the other GCC countries, however. Abu Dhabi, Saudi Arabia and Qatar – unlike Dubai, all energy-rich economies – are expected to recover quickest and experience the greatest increase in pricing and performance during the next 12 months.

Abu Dhabi is considered by investors to have the greater economic strength and future potential, along with a reasonably strong and transparent regulatory framework, and Qatar and Saudi Arabia are not far behind.

“Although they recognise that not all markets have yet bottomed, there is a real sense among in-

Ben Thompson Senior Editor

“The Middle East does have a great appetite for innovation, and they will take risk along with it”

“In terms of delivery, our goal is to push ahead on all the developments we currently have underway”

Raouf Ghali, President of Project Management, Hill International (p62)

Gurjit Singh, Chief Property Development Officer, Sorouh Real Estate (p72)

vestors that the worst is generally behind us,” confirms Ian Ohan, Head of MENA Investment Transactions at Jones Lang LaSalle. What is more, investors have a clear expectation of what is required from governments to support the recovery: a framework to rectify and solve real estate issues created by the excesses of the past, an improvement in the regulatory environment, strong economic stimulus, market transparency going forward and a commitment to capitalise on the momentum and achievements of the past decade.

The message is clear: those governments that improve the quality of their regulatory environment and increase market transparency stand the greatest chance of attracting greater levels of investment. And that, at the end of the day, will be key to any kind of recovery effort.

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CONTENTS 5

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40 Dealing in the downturn Brian Bruce, CEO of global engineering giant Murray & Roberts, on how his company has dealt with the recession and what the future holds for the firm in the Middle East’s construction sector.

From boom to bust… and back again?

To outside observers, the collapse of Dubai’s property market has been nothing short of spectacular. But can it recover from the crash? And what lessons must be learnt from the mistakes of the past if Dubai – and the rest of the Gulf – is to weather the storm?

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62 The man with the plan Hill International’s Raouf Ghali, talks about why managing the Middle East’s most ambitious projects requires a unique blend of vision and experience – and a solid plan of work.

Taking the next step With over half of the world’s infrastructure investment now taking place in emerging economies, the need to increase awareness as to the importance of sustainability is growing.

Keith Clarke, CEO of design and engineering firm Atkins, explains why.

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ROUNDTABLE DISCUSSIONS 76 Construction 86 Paints and coatings 130 Power and energy

ASK THE EXPERT 48 Hans-Josef Kloubert, Bomag 50 Hazel Young, Hazel Young 56 Alexander Greschner, Ammann Group 114 Anke Matijssen, Deerns 124 Peer Fischer, Siemens

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72 32 The jewel of Jordan

60 Diversifying the access industry

96 Nano from nature

Ali Kolaghassi, shares his thoughts on the impact of the global economic crisis

With Hydro Mobile’s Vincent Dequoy

The benefits of natural nano-structured fillers

70 Covering up

98 Safety in numbers

Alexander Oelsner examines floor coverings in the GCC

Musharraf Khan discusses health and safety in the construction industry

72 Building sustainable growth

100 Keeping safety simple

Gurjiit Singh outlines why Abu Dhabi is taking the lead in sustainable building

Alan Bennett outlines his findings on health and safety management for megaprojects

82 LEEDing the way

102 The long arm of the law

EmiratesGBC’s Jeff Willis gives an insight into the concept of green building

Dubai Police offer an insight into safety and security in the emirate

94 GCC paints and coatings

104 No smoke without fire

A rosy picture for the region’s industrial paints and coatings market?

How Tyco is thriving in the challenging area of fire protection

46 Real estate focus The long-awaited consolidation wave in the GCC’s real estate industry has begun

52 Raising standards Geoff Holden explains why standards are the cornerstone of safer lifting

54 Safe and efficient lifting Why safety and efficiency are at the heart of one crane manufacturer’s activities

58 Breaking new ground Greater collaboration is leading to some significant industry shifts at the CIOB

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106 Pandemic preparedness

126 Rush hour

John Breedlove evaluates the importance of decontamination in buildings

Mohammed Serroukh explains the challenges in managing road infrastructures

IN THE BACK

108 Challenges of fire protection Barry Bell reveals the importance of detection technologies in the sector

128 New horizons

110 Blue-sky thinking

Ahmed Al Arbeed, CEO of Dana Gas, tells how his company is revolutionising the energy industry

George Bellow outlines his vision for Oman’s airport expansion

134 Power up

116 Flying high

Phil Burns examines the latest trends and developments in the power industry

With Roberto Gonzalez, President of the International Aviation Organisation

136 Energy ambitions

120 A world-class transport system An insight into how Abu Dhabi is planning it’s all-encompassing transport system

A look at Abu Dhabi’s winning bid to host the International Renewable Energy Agency

138 Vantage point: Qatargas 2 140 Technology: IBM Smarter Planet 142 On the shelf: Book reviews 144 Final word: Mishal Kanoo

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The Ritz-Carlton Sharq Village & Spa, Doha, Qatar 9-11th November 2009 Chairman/Publisher SPENCER GREEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS Worldwide Sales Director OLIVER SMART

Editor BEN THOMPSON

Next Generation Oil & Gas MENA Summit 2009

Associate Editor REBECCA GOOZEE Deputy Editors NATALIE BRANDWEINER, DIANA MILNE, JULIAN ROGERS, STACEY SHEPPARD, MARIE SHIELDS, HUW THOMAS

Creative Director ANDREW HOBSON

The Next Generation Oil & Gas Summit is a three-day critical information gathering of C-level technology executives from the oil and gas industry.

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A Controlled, Professional & Focused Environment The NGO&G Summit is an opportunity to debate, benchmark and learn from other industry leaders.

It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

Sales Executives DALE STONE, AARON MARSHALL, ELLIOTT LEE, DANIEL ARCHER

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A Proven Format This inspired and professional format has been used by over 100 CIOs and CTOs as a rewarding platform for discussion and learning.

Director of Business Development RICHARD OWEN Operations Director JASON GREEN Operations Manager BEN KELLY

Subscription Enquiries +44 117 9214000. www.menainfra.com

“A good investment of time: It was scheduled to continue talks with several potential contractors. Excellent organization” Mikhail Ivanov, CEO, Volga Gas Plc

General Enquiries info@gdsinternational.com (Please put the magazine name in the subject line) Letters to the Editor letters@gdspublishing.com

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“Many thanks for the excellent organization of the Summit. Everything was great! Once again, many thanks” Sergey Ryzhov, Chief Geologist, Samara-NAFTA

Queen Square House, 18-21 QueenSquare, Bristol BS1 4NH. Tel: +44 117 9214000. email: info@gdsinternational.com

Legal Information The advertising and articles appearing within this publication reflect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2009 MENA Infrastructure.

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13/10/09 10:55:34

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UPFRONT THE BRIEF

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An Iraqi labourer works at a construction site in central Baghdad. The real estate market is booming in the relatively more secure neighbourhoods of Baghdad following the signing of a security pact with the United States, with many people facing difficulties buying a house or renting an apartment due to high demand

THE LAND OF OPPORTUNITY Iraq is shelling out US$15 billion this year on modernising its civil infrastructure, but the fly in the ointment is crude oil prices – tumbling around US$100 from last summer’s record high. The sky-high price was seen as an oil bonanza that would provide an additional boost to state budgets.

The subsequent nosedive forced overall 2009 spending plans to be slashed from US$80 billion to less

than US$60 billion, with some officials panicking about the country’s future spending power. The downturn is one reason why the Iraqi National Investment Commission is looking to attract US$500 billion of foreign investment by 2015. It could include overseas firms being allowed to own land (as opposed to the current leasehold arrangement) in a bid to make investment in the crumbling country a more juicy prospect.

Despite its obvious opportu-

nities for big business, Iraq isn’t ty situation, although vastly imwithout its problems and any proved compared to the bloodwould-be investor is more bath witnessed just a few years than aware of this. For ago, spiked again in starters, the regulaApril and May with a The Iraqi tory and legal National Investment spate of deadly suiCommission is looking cide bombings; buframework of the to attract Investment Law reaucratic red tape 2006 appears fuzzy can prove a vexing and vague in places obstacle for foreign of foreign investment by 2015 companies unfamiliar to say the least, while government agencies and with doing business in the ministries don’t always sing from Middle East; and Iraq has susthe same hymn sheet when entained a significant ‘brain drain’ forcing the laws. Also, the securiwith skilled professionals either

US$500 billion

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killed in the conflict or choosing able the rebuilding of the country to flea abroad to escape the bloodvery quickly.” shed. Then there are practical And with coalition troops problems like unreliable telecomwithdrawing and investment munications and a sporadic elecpouring in, Iraq is coming off its tricity supply, which are hardly life support machine but the crux conducive to a quick recovery. of Iraq’s recovery will depend on “Essential services have not long-term peace and the governimproved much,” concedes ment being able to squeeze every Mohamad El-Tai, CEO of Iraqi drop of profit out of its abundant satellite TV broadcaster Al natural resources. And, of course, Fayhaa. “Electricity is still unstable drumming up the right levels of and shut off several times a day, foreign investment. Apart from which constitutes a significant hotels and accommodation for problem affecting many aspects of foreign workers and visitors, the lives of Iraqis.” Indeed, estithere is a chronic shortage of mates suggest Iraq will need an housing. It’s thought that Iraq additional 20,000 megawatts of needs between two and three electricity to repair the million new housing country and provide units. This could Iraq will need power for new lead to a whopping an additional homes and busiUS$35 billion of nesses. It currently foreign investmegawatts of elecproduces 6750 ment in real estate tricity to repair the megawatts of interfor 2009, according country mittent supplies but a to US-based Dunia slump in oil revenues has left Frontier Consultants. a US$2 billion shortfall in the budLikewise, Timothy Mills, former get assigned to develop power President of the American supplies.

Chamber of Commerce in Iraq, Putting the troubles to one suggests this shortage will fuel a side, El-Tai believes investment sharp upswing in construction opportunities for overseas firms, projects: “You will eventually see particularly those involved in oil a building boom because there is and gas, outstrip Iraq’s neighbours a need for several million housing in the region. “Iraq is a promising units and there is the developmarket with numerous investment of a nascent mortgage inment opportunities,” he asserts dustry to support this.” He even enthusiastically. “The foreign foresees Dubai-esque developcompanies have a strong and ment. “Over the next five to 15 competitive wish to invest in Iraq years the capital will be redeveland the government has put foroped and you will see a core of ofward facilities to encourage this.” fice towers in downtown He is also upbeat about the counBaghdad – similar to Sheikh try’s future when asked to gaze Zayed Road in Dubai.” Quite into his metaphorical crystal ball. whether Baghdad will ever be “I am optimistic, despite the diffilined with shiny skyscrapers culties that Iraq and Iraqis are facpiercing the clouds remains uning at present, I believe the certain. But there is no getting tremendous riches of Iraq – be it away from the fact that 10 years oil, gas or other minerals, agriculfrom now the capital and country ture and water resources, will encould be unrecognisable.

NEWS IN PICTURES: DUBAI METRO

Dubai Metro opened to much fanfare on September 9 2009, with a reported 110,000 people using it in its first two days of operation

20,000

The government will spend Dh12.5 billion more than originally forecast to build the Red and Green lines of the Dubai Metro, confirmed Mattar Al Tayer of the Dubai RTA

There will be a total of 87 five-car trains for the Red and Green lines, which unusually for a mass transit system will have three classes of accommodation: Gold Class, Women and Children Class and regular Silver Class

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UPFRONT NEWS & NUMBERS

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STEEL AND CEMENT DEMAND DOWN 20% According to Deloitte Middle East’s report The GCC Powers of Construction 2009, analysts predict that the GCC is likely to see a 20 percent decline in demand for steel and cement, due to the slowdown in the construction industry. Analysts go on to predict that

1 2

demand will pick up around two percent in 2010, and around a further 10 percent in 2011.

At the height of the region’s construction boom in 2008, the Middle East was the largest importer of steel, when demand rose a whopping 39 percent from 2007.

The price of steel in Saudi Arabia fell 55 percent in the year to end-June, but the commodity recorded a near-nine percent rise since the start of 2009 Prices for cement at the end of June also fell. There was a seven percent drop from a year earlier and 1.9 percent below their level at the end of 2008

THE FUTURE OF PUBLIC TRANSPORT Driverless pods A four-seater vehicle that runs automatically along a guideway. There will be no timetable, so it is anticipated to run more like a taxi service than a bus service, with the advantage of bypassing current traffic congestion and travelling at speeds of up to 32km/h.

Leading example: Heathrow Airport, London Positives: Uses one quarter of the energy per passenger per mile of a car Zeppelins Zeppelins are making a comeback 70 years after the Hindenburg disaster. Environmentalists are favouring this alternative to airplanes due to their low usage of fuel and the low altitudes at which they fly.

Leading example: Zeppelin NT, Germany Positives: Does not need a runway to take off Backpack helicopter A backpack helicopter consists of strapping a helicopter motor and rotor to an individual’s back. It has been suggested that it will function significantly better than a jet-pack, which has had very few successful flights.

Negatives: Significant training will be required to use them

Segway A two-wheeled mode of transport running from electricity, which allows the user to travel at speeds of up to 20km/h along a pavement.

Negatives: Is not classified as a bike and is not often allowed on the roads, limiting how fast the user will potentially be able to travel

Source: www.euinfrastructure.com

WORLD’S LONGEST MARINE CAUSEWAY TO START CONSTRUCTION BY 2010?

With construction starting on the Qatar-Bahrain Friendship Causeway, the world’s longest spanning a mass of water, we look at the top 10 longest bridges in the world.

A 40km long bridge, will connect Bahrain with Qatar, cutting through the Arabian Gulf, which is one of the most highly charged waters in the world containing high percentages of chlorides, sulphates and moluscs – the triple killers of structure.

Cost: US$2.3 bn Duration: Five years 14km of dams connected by 22 bridges and viaducts will now include a rail line for freight and passenger services.

To travel the full length it will take:

9 40 hours

mins Source: Bahrain-Qatar Causeway – “Bridging” the Arabian Gulf Report

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AROUND THE WORLD IN 80 DAYS SkyTran Computer controlled, personal sized vehicles that ride on guideways built above ground. They will run like a non-stop freeway with designated exits and entrances to SkyTran stations, with a top speed of 100m/p/h in cities.

Negatives: It will cost approximately US$10 million per one mile of track

Electric bicycles In an attempt to solve the problem of increasingly congested streets, the electric bike combines the convenience and simplicity of riding a bike with electric power, thereby increasing the speed and ease at which you can get around.

Leading example: YikeBike (US$3,500) MagLev trains Using magnetic-levitation, trains are propelled forwards at higher speeds than wheeled mass transit systems, with the potential to even reach speeds of 6400km/h. Not only being significantly faster than conventional trains, they will emit less CO2 and will be much quieter.

Leading example: Transrapid, Shanghai, China Negatives: Incompatible with existing tracks Slidewalks Similar to the travelators found in airports, Slidewalks will replace a high percentage of conventional pavements in major cities, allowing passengers to travel at higher speeds than walking whilst also reducing pedestrian congestion Leading example: Trottoir Roulant Rapide, Paris, France Top speed: 9km/h during tests Negatives: Cost of implementation

The Qatar-Bahrain Friendship Causeway, a 40km long marine causeway featuring a 22km bridge and 18km of embankments connecting the west coast of Qatar to the east coast of Bahrain, is scheduled to begin construction in 2010. The US$3 billion project was originally scheduled to begin last year in May 2008, however in a statement from Bahrain’s Works Minister, Fahmi alJowder, the new deadline was announced: “Work on the project will start in 2010 and it is expected to take four and a half years to complete.

Negotiations are still under way regarding the cost and are expected to be finalised by the end of the year, but initial estimates hover around the US$3 billion mark. Bahrain and Qatar have already allocated a budget of $500m to start the project.”

When completed, the causeway will be the longest in the world and will also boast a 13 metre wide railroad bridge. Travel time from Qatar to Bahrain by car is expected to be reduced from four and a half hours to around 30 minutes.

Construction contacts were awarded to KBR, an engineering company head-quartered in Houston, Texas, ‘To provide design, project and construction management services for the Qatar-Bahrain road and rail marine crossing’. Other groups involved include the Qatar and Bahrain Causeway Foundation and a consortium of companies led by French construction major Vinci Construction and the German Company HOCHTIEF Construction AG and CCC and Qatari Diar Real Estate Investment Company.

Our guide to the last quarter’s global events – and their impact on your business.

SCRUTINISING INVESTORS Investors in Mexico will be able to buy shares in infrastructure projects, a measure meant to increase financing for highways and other public works. Under the plan, infrastructure projects will be sold to investors who stand to gain from the projects’ success.

MEI impact rating: ***

SPENDING FALLING US construction is expected to fall 12 percent this year and four percent next year according to a report by HIS Global Insight.

However, the outlook is good in 2011 and 2012 when spending is set to hit double-digit growth.

Bring on 2011.

MEI impact rating: *****

HYDROGEN INFRASTRUCTURE A comprehensive nationwide infrastructure for hydrogen refuelling will be in place in Germany by 2015. Confirming The H2 Mobility initiative has set a threephase plan of action, which will hit the road by 2015. Will other countries follow suit?

MEI impact rating: ****

SOARING FUNDING Infrastructure spending in the GCC is expected to reach US$205 billion by 2013. Saudi Arabia alone accounts for more than 50 percent. However, analysts and bankers predict a slow recovery in the project finance market during the next two quarters.

MEI impact rating: *****

STRATEGIC RESERVES China has begun construction on a 5.4 million cubic metre strategic oil reserves site at Dushanzi. The first phase of three million cubic metres is due to be finished by July 2011. Our prediction? Look out for controversy in 2010.

MEI impact rating: ***

SUSTAINABLE PRACTISE London’s 2012 Olympic Park has been highlighted as a best practise project in the government’s Strategy for Sustainable Construction report. The London 2012 venues and infrastructure are a great example of sustainable construction in action.

MEI impact rating: ***

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UPFRONT MARKET UPDATE

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ACTIVE TAGS LOCATE PEOPLE AND ASSETS The Ekahau T301BD badge tool to improve staff safety. A staff provides accurate location track- member is able to send an alert if ing of personnel inside your ex- being attacked or help is needed. isting Wi-Fi networks, enabling The alarm, which includes the loeasy two-way communication cation of the person at the time of with other staff members the alert, can be programmed to and processes by pressing call security, re-point cameras buttons on the tag to the area or control and receiving doors, all customisalerts via LEDs able for your A staff member is able to and a buzzer. environment. send an alert if being The badge inThe badges use corporates a a high-energy bright display rechargeable or help is needed for sending and battery that works receiving text mesfor weeks without sages, creating a powerrecharging. Batteries can ful paging capability. The badge be charged using individual desk replaces manual searches for chargers or a rack charger, which staff across campuses. Their lo- can recharge up to 10 tags at cation can be queried quickly a time. from web browsers. The text At the centre of the solution messaging capability, combined is the Ekahau Positioning Engine with accurate real-time location, (EPE), which collects location inprovides a powerful means for formation from the badges, analyremote management of even a ses the data and creates reports large number of people. for customer review and processThis badge is also an ideal ing. The EPE has an API, enabling

attacked

Ekahau data to be incorporated into back-office systems. Ekahau Vision provides a highly visual means of interaction with this information, including presentation of badge locations on a floor plan and the ability to query badges.

The T301BD is part of the Ekahau tag family. Other solutions include long-life asset tags and temperature monitoring tags and those designed for operations in hazardous locations.

For more information and for specifications please visit: http://www.ekahau.com

THE QUEST FOR HUMANE BUILDINGS Recent research has revealed that buildings account for an impressive 50 percent of global warming pollution. To carefully plan and execute an edifice will therefore generate huge savings.

By compacting buildings, various functions and tasks combine, leading to surprising possibilities and organic solutions.

A staggering reduction of national eco-footprints is particularly achievable by cleverly redesigning megastructures, such as airports. A Starrport (a more humane airport developed by the American environmental expert Jim Starry) is exemplary for this task. Its most noticeable feature is an inclined airstrip. Planes are gently stopped by a progressively slanted runway, that leads directly to the top of the 10 floor

high terminal and means that taxiing is no longer necessary.

Passengers alight directly from the parking area or public transport to the gates. Security checks can be done in elevators, and boarding will become literally a matter of minutes.

Departing airplanes leave at scheduled times, without idling in penalty boxes, smoothly rolling down a decline for a comfortable take-off.

Cleaner air for passengers, personnel, visitors and surroundings is a direct result. This ingenious design causes considerably less noise and saves half of the fuel generally used during landing and take-off. Multiply this by thousands of daily flights, and the magnitude for savings is unveiled.

To address different needs, we now present three particular solutions:

1

2 3

The world’s 500 biggest airports are most suited to become full-fledged Starrports EXEC

Starrport ZENO approaches new smaller airports and airports in transition The emerging trend towards personal car planes is served with Starrport MINI. While it is currently difficult to reach small cities and neighbourhoods, as well as private hubs, the Starrport MINI will bring the comfort of rapid transport to your own backyard Please visit www.starrportcorp.com for analyses and calculations.

DUBAI HOTELS HIT 97% OCCUPANCY Dubai’s Department of Tourism and Commerce Marketing (DTCM) has said that five-star beach hotels had recorded 97 percent occupancy rates, while fivestar city hotels have posted 76 percent occupancy rates during

the second week of August. Fourstar hotels had recorded 81 percent occupancy, DTCM has said.

Dubai presently has 58,147 hotel rooms, a 17 percent increase compared with last year’s figure of 49,656 hotel rooms.

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UPFRONT MARKET UPDATE

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QATAR ROADS GET FUNDING BOOST

GOING THE EXTRA MILE

Qatar’s Public Works Authority (Ashghal) is implementing numerous road projects to help support the country’s booming economy.

Ashghal’s first five-year plan (to 2012) comprises 60 major projects costing more than QR25 billion, which constitutes 50 percent of the authority’s budget for major road, drainage and public buildings projects. Ashghal plans to use state-of-the-art road technology to ensure traffic security and safety, and the remarkable Doha Expressway project with its 13 phases is the first attempt in the state

The main application for long reach excavators is river maintenance and landscaping work around waterfront areas, where a machine cannot normally reach without sitting on delicate river frontage. However, the Case CX models are not just about long reach, they retain the respected Case digging and excavating capabilities, maintaining productivity for the customer and boosting ROI. For an extended reach machine to retain durability and reliability it has to be designed as a long reach model from the outset, not simply converted from a standard excavator. Case has many years experience of producing special attachments and booms for its excavators, to suit a number of industry sectors. Now, with the introduction of the dedicated Case Special Excavators (CSX) division, the company is even better prepared to meet the needs of long reach customers worldwide.

All LR models use an exclusive upper structure on a reinforced LC long undercarriage. The rotating frame is reinforced and extended, and carries additional counterweight to compensate for the long reach equipment. Swing motor relief valve settings are revised and the hydraulic system features upgraded

to streamline traffic flow across the country. The project includes major roads and interchanges, including 22 February Road, Amir Road, Industrial Interchange, Rayyan Interchange and Jowan Interchange.

While some of these projects have already completed others are now in the final phase.

The major roads include the first stage of Salwa International highway, which was originally expected to be ready in March last year; the Umm Birkah Road, a 16km-long road extending from Zubarah Interchange to Ras Laffan; and the Dukhan road project, which starts from Thani bin Jassem Interchange and ends at Zekrit Interchange near the Dukhan Industrial area. The other roads are the Industrial Interchange, D-ring Road Interchange and Messaimeer Road.

NEW GUIDELINES FOR WORKING AT HEIGHT Falls from height remains the duce and eliminate falls from most common and the single height. BSU focus group number 5, biggest cause of workplace fatal- launched and led by Rod Gray, Operations Manager of Ak ities and one of the main Ahmadiah causes of minor inContracting and jury. In 2008, Build In 2008, Build Trading, had a Safe UAE (BSU) Safe UAE recorded goal to identify, recorded (eight develop and out of 20) fatalifatalities and 81lost promote best ties and (81) lost time injuries relating practice guidetime injuries reto falls from lines for working at lating to falls from height heights in the construcheight. Unfortunately, tion industry of the UAE. Over the causes of these incidents are not new and clearly there is a six months his team produced a free guidance document under huge scope for improvement.

Earlier this year, the Chairman BSU to raise awareness and imof BSU set down with the groups prove the current standards of main contractors and it was decid- practice for all construction stakeed more needed to be done to re- holders in the region.

8 out of 10

The document is available for free download on the BSU website www.buildsafeuae.com

check valves and circuitry. Each boom and dipper stick combination is built specifically for long reach use, with larger diameter pins and bushes, a stronger arm and bucket cylinders. Additional auxiliary circuits can be supplied for attachments such as weed cutters and tilting buckets.

However, the machines retain all of the positive features of the current Case CX-B series excavator and offer real profitability through low fuel cost and reduced maintenance requirements. There is real comfort for the operator, thanks to the CX-B low noise cab.

LR machines also have the same engine and hydraulic mode selection system as the regular CX series excavators, ensuring real operating performance through the standard auto power boost function.

Whatever the operation, Case has a long reach machine capable of handling the task. Designed specifically for extended reach applications, Case long reach excavators, with the support of the Case dealer network, go the extra mile to ensure that the job gets done.

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UPFRONT PROJECT WATCH: QATAR

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WATCH THIS SPACE An oil and gas-rich nation, Qatar has experienced rapid economic growth over the past several years on the back of high oil prices. And while the state will most likely remain reliant on these utilities, it is determined to become a role model for economic and social transformation in the region. Indeed, with the current rate of development in combination with revolutionary projects such as Energy City and The Pearl-Qatar, the state is joining the ranks of Dubai and Abu Dhabi in terms of its megaprojects.

AL SHAQAB ACADEMY Project: Encompassing 800,000 square metres, the Al Shaqab Equestrian Academy features a dynamic architectural design highlighted by a central horseshoe shape. Among its many state-of-the art amenities are multiple performance arenas designed for international show jumping and dressage competitions, a full-service riding academy and equestrian club, the region's most advanced veterinary clinic, hospital and research facilities, an endurance training centre, and a breeding centre.

Cost: US$407 million Status: Under construction as of Q3 2006 Completion: Expected Q2 2010

LUSAIL Project: Lusail is a large development of approximately 21 square kilometres located to the north of Doha. Bordered by the sea to the east, Al Khor expressway to the west and extending seven kilometres north of the Ritz Carlton Hotel, Lusail is a vibrant and spacious masterplanned urban development, which will be home to a self-sustaining community comprising residential, commercial, retail, hospitality and entertainment venues.

Cost: US$3 billion Status: Under construction Completion: Due to be completed in 2011

BARWA CITY Project: Built on a sprawling 2.7 million square metre land in Musameer, just outside Doha, Barwa City offers its home owners and investors 128 apartment buildings, 6000 flats and 1024 studio units, as well as schools, hospitals, parks, shopping complexes, mosques and health facilities.

Cost: QR 4.89 billion Status: Under construction Completion: 2010

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UPFRONT PROJECT WATCH: QATAR

THE GATE

ENERGY CITY QATAR

Project: The Gate has been designed to become a shopping and commercial magnet. Offering international brands to reach cultured and stylish consumers with high disposable incomes, The Gate is surrounded by the fashionable West Bay. Combining futuristic design and the best infrastructure has been used to create a radical new experience in mixed-use development.

Project: Energy City Qatar is currently in design as a residential development covering around 700,000 square metres of land including 5000 residential units, marinas, a mall and golf courses. As the Middle East’s first energy business centre Energy City Qatar will cater to the commercial, technical and human resource needs of the oil and gas industry operating in the Gulf region.

Cost: US$155 million Status: Under construction as of Q3 2007 Completion: Expected in Q1 2010

Cost: US$2.6 billion Status: Under design, construction is due to start in 2010 Completion: 2013

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THE PEARL-QATAR Project: A 985-acre reclaimed island off the coast of Qatar, the Pearl-Qatar is an investment in a place of outstanding beauty and cosmopolitan charm. The Pearl-Qatar is the country’s first international urban development venture, its largest urban development and the first to offer international investors freehold. The four-phased mixed-use development comprises of 10 distinct, themed districts to be developed over five years housing beachfront villas, elegant town homes, luxury apartments as well as five-star hotels, marinas and schools, retail and restaurant offerings.

Cost: US$5 billion Status: Still under construction with some residents set to move in in 2009 Completion: 2011

SILHOUETTE TOWER Project: Silhouette Tower, located in West Bay, Doha, is 208 metres high, comprising of a two-level basement parking area that will accommodate 530 vehicles, a ground floor and 59 additional floors with 324 residential apartments.

Cost: US$200 million Status: Construction has been ongoing since 2006 Completion: Estimated Q4 2009

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UPFRONT 18 A CONFIDENT OUTLOOK CEOJOE SITA EXPLAINS HOW NAKHEEL HOTELS HAS ACHIEVED A US$4BILLION HOTEL PROPERTY PORTFOLIO IN THE SPACE OF JUST FOUR YEARS. “Our strategy has always been to be partnered in the luxury segment with the best of the best in terms of brands. It’s interesting that such a small portfolio of hotels can garner such interest and such a loyal following from its marketing. I put that down very simply to the quality of the hotels in terms of the experience that’s offered in terms of the physical product, because every one of the One&Only products is absolutely stunning.”

“Nakheel Hotels is really a hotel investment and development company. We’re not a brand per se. Nakheel is a very well known brand obviously but as Nakheel Hotels we’re a fully integrated investment, development and asset management company. We’re not operators of hotels – we invest in hotel companies and real estate, then we appoint operators such as Kerzner to brand and run the hotels for us.”

“We see great growth potential for branded budget hotels in the Middle East. The Middle East is well known for its luxury hotels but we do see a significant gap at the lower end of the market in the branded hotel segment. There are certainly many two and three-star unbranded hotels in the Middle East but there are very few in the budget sector and we see great opportunities for products in that market” “We currently have two hotels under construction in Bali and a number of other sites that have been acquired in Malaysia. Our plans for that are still the same but with the current economic conditions we’ve slowed down a little bit.”

“Nobody is immune to what’s going on in the world and we’re no different. But by virtue of the quality of the assets that we’ve invested in I’d like to think that we are reasonably well placed. We’re having our issues like everybody else. We’re focused on very active asset management of our portfolio and we’re working with our partners to mitigate the impact of cash flow in all our investments.”

“We have a very specific strategy in terms of the segments that we operate, both the luxury and branded budget segment. And we stay focused on those two segments. We actively look for high quality partners such as Kerzner, Starwood, Tune Hotels and EasyHotel. We don’t get too distracted from that and therefore don’t dilute our efforts over the whole spectrum of hotel products and that allows us to be very focused and very successful in what we do.”

FIVE-MINUTE EXECUTIVE

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UPFRONT MARKET UPDATE

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FLEXIBLE AND COST-EFFECTIVE POWER MANAGEMENT Power management for important applications ComAp Systems (SA) explains the features of the such as hospitals, utilities, power distribution net- custom-designed control system: “The two sysworks and water treatment plants are now bene- tems installed in the King Fahad Hospital on behalf fiting from high technology control systems that of Al Sayad Group Construction were designed esbring increased flexibility and total integration for pecially to replace an outdated distribution board. primary, stand-by and fully automated power.

The new control package delivered fully automatIn the majority of typical applications reed synchronisation and paralleling switchgear liable power is the absolute minimum for the Detroit powered stand-by genneed; but new fully integrated conerators with the addition of autoThe new trol systems bring much more matic parallel and transfer control package delivincluding, easier installation, switches, fully controlled bus ered fully automated greater compatibility, increased coupling panels, high-tech automation and continuous mains protection units for the and paralleling monitoring capabilities with remains supply and (p)Control switchgear mote communication. These software for effective plant supervihighly beneficial custom-designed sion. Now the system is fully capable packages are equally attractive to engineers, of delivering the power load in the event of power distribution companies and infrastructure mains failure and automatically stopping on mains developers as they are to end-users. restoration – making it easier to operate and mainNew technology systems have the extra ad- tain for the customer.” vantage of being retrofitted to existing power apComAp Systems can meet the needs of proplications bringing them up-to-date without the fessional engineers and end-users by providing a need to replace the entire installation. A recent ex- complete package and total service based on ample of this type of upgrade was the installation proven experience and the necessary resources to of two complete systems for the King Fahad ensure an efficient commissioning process from Hospital in Al Baha City. Mohammed Qaraqi of start to completion.

synchronisation

For more information contact: ComAp Systems, M.A. Qaraqi, Riyadh 11393, P.O.Box 365185, Saudi Arabia, Tel: +966-1-4995603 and Fax: +966-1-4995607, email: info@comapsystems.com

A NEED FOR SPEED Speedar Limited (formerly Ottery Electronics) is the original UK designer of the distance/time measuring system known as Vascar. This system has been widely used in police vehicles as a means of computing the average speed of a vehicle over a pre-determined or measured distance.

New from Speedar is the handheld version – Video Vascar. In its standard format, text information is displayed on the screen of the handheld control unit. On activation the screen displays time and distance since activation and the speed of the Police vehicle computed from inputs received from the vehicle. On completion it displays the distance travelled, elapsed time, average speed of the target vehicle and the date and time that the reading was completed. Video Vascar is capable of being integrated with any in-car video system. This handheld controller is equipped with positive ‘feel’ switches

and audible indication that the switch has been activated. This system is designed for easy retrofit into existing vehicles.

Speedar Limited is now in the process of designing its own in-car video system for integration with Video Vascar. Some clever design features and sourcing of quality components ensure that this unit meets the stringent requirements of the UK Home Office HOSDB specification.

TOP 10

Projects in Abu Dhabi Despite the global economic crisis, the construction sector is still firing on all cylinders in Abu Dhabi.

1 2 3 4 5

6

7 8 9 10

Khalifa City US$40 billion Yas Island US$39 billion Burooj Properties US$24 billion Saadiyat Island US$28 billion Masdar City US$22 billion Al Raha Beach Complex US$18.5 billion Ghantoot Green City US$10 billion Al Reem Island US$7.8 billion Sheikh Mohammed Bin Zayed CityUS$6.5billion Abu Dhabi Light Rail /MGM Grand Hotel both US$3 billion

Source: www.constructionweekonline.com

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UPFRONT IN FOCUS

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YAS ISLAND Yas Island is 25km2 (approximately 7.5km long by 6.5km wide) and is located on the North East side of Abu Dhabi’s mainland. Offering 32km of waterfront, the development is a 30-minute drive to the main island of Abu Dhabi and 50 minutes from Dubai Marina; it is also well positioned in relation to transport links, being only a 10-minute drive from Abu Dhabi International Airport. Yas Island is an unrivalled destination with scores of hotels, three theme parks, a super regional mall, golf courses, several marinas, and commercial and residential developments. Yas Marina Circuit is the venue for the 2009 Formula 1 Etihad Airways Abu Dhabi Grand Prix, and the island will feature the only open Ferrari driving school in the world. The first phase of development is expected to be complete by the end of 2009.

YAS MARINA CIRCUIT Yas Marina Circuit, featuring a racetrack designed by the world-renowned circuit designer Hermann Tilke, will host the inaugural 2009 Formula 1 Etihad Airways Abu Dhabi Grand Prix and is packed with unique and innovative features. Every Grandstand seat will be covered – a first for any Formula 1 circuit – while the Yas Hotel straddles the track, allowing guests to experience the sensation of racing cars passing underneath. The track also offers a number of firsts for the drivers themselves: cars in the pit lane re-enter the circuit via a tunnel, while drivers who miss their breaking point at the end of the longest straight in Formula 1 will traverse a run-off area beneath the West Grandstand. In addition to the circuit itself, the ancillary facilities include a drag racing strip along the eastern waterfront.

GOLF Yas Island will be opening the first ‘links’ golf course in the Middle East region. The course will be an 18-hole championship course with rolling hills and seashore green locations designed by world renowned course designer Kyle Phillips, best known for The Kingsbarn Course at St Andrews, Scotland, and The Grove in London.

There will be six hotels within close proximity of the course, a floodlit driving range and practice/academy course as well as a 4000m2 luxurious clubhouse.

The western shore where the links course is situated is of immense ecological significance to Aldar and the Yas Island Project.

This is substantiated with the new mangrove plantations totalling 130,000 plants.

The course is on schedule for a soft opening at the end of 2009.

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FERRARI WORLD

THE YAS MARINA

Yas Island will feature the world’s first Ferrari theme park, Ferrari World Abu Dhabi, which when completed will be the world’s largest indoor theme park. Derived from the classic double curve of a Ferrari GT car’s body shell, the roof will cover an area of approximately 200,000m2.

The stunning Yas Marina – illuminated underwater – will offer 143 berths with mega-yacht capability and is an integral component of the waterfront developments being designed and built by Aldar Marinas. Landside amenities include yacht brokerages and charter companies, chandlery, a provisioning store, crew lounge and meeting facility. Meanwhile Yas Yacht Club, with its signature architecture, will sit at the entrance of the marina and provide an exclusive retreat for luxury yacht owners and guests. Once complete, the marina will also house fuel docks, a water taxi service and emergency response vessels.

Ferrari World Abu Dhabi is a theme park for the entire family with numerous attractions including interactive shows and rollercoasters with many restaurant and food/beverage locations on offer to visitors. The park will also contain VIP services, lounges and amenities to cater for every need.

YAS HOTEL The Yas Hotel will quickly become an internationally iconic structure associated with the inaugural 2009 Formula 1 Etihad Airways Abu Dhabi Grand Prix, as the hotel spans the Yas Marina Circuit. Its futuristic and sophisticated design, along with its unique position overlooking the marina, will make it a talking point well beyond the Grand Prix. The structure incorporates a striking cloak of steel and glass, mimicking a gown dancing in the breeze, which fuses two buildings accommodating 252 deluxe rooms, 247 executive rooms and suites, and boasting 14 food and beverage outlets. Interiors are awe inspiring with signature designs both ultra modern and contemporary.

The hotel has been developed by Aldar and will be operated by Aldar Hotels and Hospitality as a five-star property. It will open for the 2009 Formula 1 Etihad Airways Abu Dhabi Grand Prix that takes place in November.

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UPFRONT 22

INDUSTRY DIGEST Beirut tower project unveiled Lebanon’s Antonios Projects has launched a new 200-metre skyscraper that is set to be Beirut’s tallest building when completed in 2014. The 50storey mixed-use project – called Sama Beirut – will consist of residential, commercial and retail space. Details of the value of the development have not yet been released. The tower will be located near downtown Beirut, in Ashrafieh.

Bridge contract awards delayed Abu Dhabi government-owned Mubadala is delaying the award of the US$218m contract to design and build two bridges connecting Abu Dhabi and Sowwah Island. Firms bid for the contract in December last year but, following an extended evaluation period, Mubadala is putting the tender on hold. One source told MEED he does not expect the contract to be awarded this year.

International Airport to cope with the increase in passenger traffic, fleet size and capacity. This includes the opening of a brand new transit terminal at the eastern apron, the expansion of the first floor Business Class lounge, and the doubling of duty free space.

Aramco FEED contract awarded Foster Wheeler and Sofcon have been awarded the pre-front end engineering and design study for the first phase of a programme to develop gas supplies from the Shaybah field in the Rub AlKhali by Saudi Aramco. The development includes construction of a plant with six trains to liquefy the natural gas over a period from 2014 and 2033.

Multiplex wins resort deal Australia’s Multiplex has won a US$272m contract to build the Eastern Mangrove resort in Abu Dhabi.

TDIC is developing the 223-room resort, which has a five-star hotel, marina and quayside promenade with shopping areas and restaurants. According to TDIC’s website, the resort should open in the first quarter of 2011. Contractors have comQater pleted 10 percent of the project.

US firms to manage Cairo project Doha-based Qatar Project Management Company has awarded the airport has plans contract to manage the constructo invest Dubailand’s DLC on track tion of the US$6.9bn Barwa New for 2012 Cairo project in Egypt to a USSaleh Construction, a major UAE on infrastructure based joint venture of Hill expansion construction and engineering International and Louis Berger. The company, has won the Dh400 million Barwa New Cairo project will be built on main contract for the first phase core and an 8.4 square-kilometre site on the east side of Cairo shell construction at Dubai Lifestyle City (DLC), and take 12 years to complete. according to a senior official of the project. DLC, Doha airport to get upgrade a subsidiary of the ETA Ascon Star Group, is loQatar Airways has plans to invest US$1bn on in- cated in Dubailand and the project is on track for frastructure expansion at the existing Doha completion by end-2011 or first quarter of 2012.

US$1 billion

AL-BATEEN WHARF PROJECT Belbadi has started construction work on Abu Dhabi’s $435m Al-Bateen Wharf project. The waterfront development covers an area of 54,000 square metres and includes a 400-

room, 15-storey hotel tower and a smaller 14storey tower with 200 serviced apartments. The marina will include berths for over 300 boats.

Singapore’s Surbana is the masterplan consultant.

Dohaland has awarded contracts to leading industry experts as the company begins work on the first phase of its ambitious Heart of Doha project, which seeks to revive the historically important centre of Doha. The project is being developed in a 35-hectare site in the Mohammed bin Jassim District, close to where Qatar's capital city began, over five phases ending in 2016.

DOHALAND PROJECT Bid deadline for Doha port Qatar has set a bid deadline of December 28 for the first major construction job – marine works – at its multi-billion-dollar New Doha Port project in Mesaieed. New Doha Port will replace the existing Doha Port on the city’s Corniche which, logistics groups complain, is too small to cope with the volume of cargo that Qatar wants to import and export.

Yemen signs water deal Yemen’s Environment Minister Abdulrahman alEryani has signed a draft agreement for the design of 19 water projects with the Japanese International Co-operation Agency. The water projects, which would cost around US$16 million (to be financed by the Japanese government), are to be carried out in the rural areas of Sana’a, Taiz, Dhamar, Mahweet and Ibb. Downturn hits KSA Saudi Arabia has put on hold or cancelled 80 construction projects worth around US$20bn due to the current global slowdown, according to research firm Proleads Global. The Saudi construction market, however, remains one of the strongest globally with 320 projects currently under construction.

The market in Saudi Arabia is expected to maintain current levels throughout 2010.

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UPFRONT COMPANY INDEX A BIG LIFT In the lifting industry, sling inspection is not a choice, but a requirement. Federal standards require every sling to be inspected on, as a minimum, an annual basis. It also requires the user to have a written inspection report on file for the most recent inspection. As companies that perform sling inspections know, inspection is a great service to offer, as it often helps to differentiate one from the competition, as well as assist to solidify business relationships between them and their end users. But on the other hand, inspections can be a costly experience due to the labour intensive processing of information using current practices.

Crosby’s QUIC-CHECK Inspection and Identification System combines electronic inspection software with RFID (Radio Frequency Identification) technology in order to provide a package that greatly streamlines the inspection process. The system, designed to meet the stringent requirements of various federal standards around the world, allows the user to inspect wire

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rope slings, chain slings and synthetic slings as well as a wide variety of Crosby products that incorporate factory equipped RFID chips.

Sling inspection is a labour-intensive process in which one person inspects the sling and dictates his findings to another person who writes them down. Not only does this interject the potential for error, it takes a lot of time, both during the inspection process itself and in later efforts to retrieve the documentation from a file cabinet. The arrival of computer spreadsheets have helped speed up things a bit, but well short of the speed of RFID specific software.

Director of Marketing, Mike Wheeler, says that for the Crosby distributor, this means a “potential reduction of the total inspection process time by up to 65 percent”.

An important feature of the system is the ability for the user, utilising the portable electronic device, to scan a tag on a product utilising the RFID tagging system, and quickly check the status of the respective sling. The Crosby QUICCHECK Inspection and Identification System is patent pending.

DON’T MISS...

62 THE MAN WITH THE PLAN An exclusive interview with Hill International’s Raouf Ghali

COMPANY INDEX Q4 2009 Companies in this issue are indexed to the first page of the article in which each is mentioned.

Abu Dhabi Planning Council 120 Hill International 62 Abu Dhabi Transport Authority 120 HSI Fire & Safety Group 66 Aeroquest 75 Hoffman Mineral 4, 96, 97 Aggreko 134, 135 Hyder Consulting 2, 76, 77 Ammann Group 56, 57 Hydro Mobile Inc. 60, 61 AT Kearney 46 IBM 140 Atkins 36 Intelagard 106, 107 Atlas Copco 76, 79 International Civil Aviation AWE Paints 95 Organisation (ICAO) 116 Bay Shore Systems 76, 81 International Protective Coatings (IPC) 86 BOMAG 48, 49 International Renewable Energy Agency (Irena) 136 Build Safe UAE 98 ITS-Arab 126 Case CE 15, 51 Jotun Paints 86, 90, IBC Chartered Institute of Building 58 Kansai Paints 86, 88 Cinterion 130, 133 Kanoo Group 144 ComAp Systems 19, 137 KBR 100 Crosby Group 23, 43 Lifting Equipment Engineers Association (LEEA) 52 Dana Gas 128 Masdar 120 Deerns Airport System Consultants 114, 115 McLanahan Corp 69 DMG World Media Dubai 31, OBC Morris Material Handling 54, 55 Dubai Police 102 Murray & Roberts 40 Ekahau 14, 141 nora systems GmbH 70, 71 Emirates Green Building Council (EmiratesGBC) 82 Oman Airport Management Company 110 Frost & Sullivan 94 Power Climber 29 Hazel Young 50 Qatar Gas 138

RAXTAR 60 Ricochet AS 119 Roads and Transport Authority (RTA) 98, 102 Saraya 34 Siemens IFC, 124 Sigma Paints 86, 93 Sorouh Real Estate 72 Speedar 19, 122 Starrport Corp 14, 85 Tyco 7, 104, 105 United Nations Framework Convention on Climate Change (UNFCCC) 116 Varmekabel Teknik 125 Vestas 130, 131 Volvo 37 Wade Adams Middle East 98 Wagner Fire Safety 108, 109

82 LEEDING THE WAY How building and planning codes around sustainability have vastly improved

110 BLUE-SKYTHINKING George Bellow on Oman’s airport expansion plans

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COVER STORY

From

boom bust‌ to

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?

back again

To outside observers, the collapse of Dubai’s property market has been nothing short of spectacular. But can it recover from the crash? And what lessons must be learnt from the mistakes of the past if Dubai – and the rest of the Gulf – is to weather the storm? By Ben Thompson.

I

n an unassuming room at an understated press conference on a clear October morning, Olivier Blanchard, Chief Economist to the IMF, finally uttered the words both private and public sector leaders have been hoping to hear for the last 12 months. “The recovery has started,” he announced with the merest flicker of a smile.

“Financial markets are healing. And in most countries, growth will be positive for the rest of the year, as well as 2010.” The low-key statement, made at the IMF’s annual conference in Istanbul, was a far cry from the chest-thumping bullishness that has often characterised the boom of the past decade; clearly, austere times call for a more muted approach. But nonetheless, the announcement was welcome news for those hoping for an end to one of the most difficult economic periods in living memory.

And few economies will be more relieved to hear talk of an upswing than beleaguered Dubai.

In just short of a decade, Dubai – through a formidable global marketing campaign and the boundless ambition of its ruling family – captured the

imagination of the world. Positioning itself as a hub for global trade, commerce, finance and tourism, the emirate embarked upon the fulfilment of a vision with remarkable success. Bigger, better, taller; Dubai was a city of superlatives that became emblematic of the Middle East’s desire to be a major player on the world stage.

The construction industry was one of the prime beneficiaries of this political vision. Since the start of the millennium, architects, contractors and investors have been pouring in to the tiny Gulf state and transforming the skyline with some of the most iconic developments of this – or indeed any – generation. The massive revenues accumulated by the region as a result of global demand for oil facilitated unprecedented investment in infrastructure and real estate projects, while the ease of access to finance – combined with a growing appetite for risk by both capital providers and investors – allowed governments, quasi-governmental enterprises, corporations and individuals to leverage themselves far beyond normal levels to finance all forms of investments. Dubai’s rise to prominence was meteoric.

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en by an s has been driv first half of 2008 were unsustainable and the bubble had to burst at some stage.

Dubai’s succes of rt pa e influx of rg e la A sector, and th ism Short-term speculation was the order of the day and greed was prevalent.” ur to ul sf es e economy, incredibly succ l health of th al er Dr Samir Pradhan, Senior Economist at the Dubai-headquartered Gulf ov e th to l stors and tourists is vita potential inve to Research Centre, agrees. “While in many ways Dubai represents the success te ira em e r travellers introducing th n-seekers. Fo su as of a state-led capitalist development model, it also exposes the cataclysmic efl el w as s even more entrepreneur bai became an fects of unbridled market forces,” he explains. “Demand growth, Du , rs lla do 2009 as paying in US e first half of th in higher asset prices, easy liquidity, higher expectations, specun io at in st om the attrac tive de 26 percent fr ll fe lation and artificial leverage created the real estate bubble in ty ci e th i also hotel rates in

by Abu Dhab ar Dubai; the fact that it burst was inevitable.” ne in s te year before. Ra rooms with US ng The construction and real estate sectors have been yi bu e os Number . dropped for th t year-on-year en rc hit particularly hard by the crash. Since the recession pe 9 by of Middle Eastern in dollars, falling r hotel rooms fo began in late 2008, some 556 Middle Eastern construcng yi pa rs projects shelved For U K visito bai dropped a Du tion projects have been cancelled or shelved, the majorin s te ra since the recession sterling, room while year on year, t ity of them in Dubai, and according to a survey conducted en rc pe 4 t began 15 more modes tually rose by ac by Arabian Business, almost 40 percent of people quesrs le el av tr rates for U K a result, fewer As i. tioned believed that the sector will never return to the dizzying ab Dh u percent in Ab Dubai in ellers visited av heights of 2008 – a time when property prices were at their peak tr n ia ss Ru British and s from the US d more visitor an and billion-dollar deals were common.

Indeed, while many commentators re09 20 of the first half e. ac main hopeful that the overall Middle East construction market will stage a repl r ei th and Italy took covery in 2010, most agree that the industry focus has shifted away from Dubai towards other, more stable, economies. In a recent survey published by legal expert Norton Rose Group, 55 percent of respondents with interests in the region’s construction industry expected the effects of the economic slump to fade within 12 months and for the sector to stage a recovery next year; howA collapsing market But as the buildings rose higher, so did the mountains of debt. It was a ever, 71 percent now said their primary markets were based in Saudi Arabia, market that was ripe for a crash, and in the wake of the global economic criAbu Dhabi and Qatar, with only five percent choosing Dubai. sis Dubai landed harder than most. “Real estate values were always headed for Even those with a significant stake in the emirate are looking at other a correction,” insists Mohanad Alwadiya, Director of Dubai-based Harbor markets as the fallout from the recession is felt. Dubai-based contractor Real Estate, pointing out that some industry observers were forecasting this Arabtec, for instance – the largest in the United Arab Emirates by market as early as the fourth quarter of 2007. “The price increases witnessed in the value – has won contracts in Saudi Arabia and Abu Dhabi so far this year as

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It’s not all doom and gloom in Dubai. The ex Burj Dubai, th terior of the e world’s talle st to wer and one of emirate’s flags the hip projects, is complete and will open befo the building re the end of the year, acco developer Em rding to aar. “The final he ight of the to revealed whe wer will be n it opens late r this year,” th in a statemen e co mpany said t. The Burj Du bai will featur residences, re e of fic es, tail and the w orld’s first Arm Armani Residen ani Hotel and ces, in line with Dubai’s yen fo brands. Work r luxury on the interio r of th e building is cu being complet rrently ed, Emaar said .

it ventures further afield in order to weather the property downturn in its home market. “People talk about [the Dubai market] turning around, maybe by the middle of next year, but I don’t think it will ever achieve the scale and the heights that it was at before,” said CEO Thomas Barry in a recent interview with news agency Reuters. “We will always bid for projects in Dubai, whatever happens and however limited that may be, but our focus has shifted to Abu Dhabi, which has more oil money to use for development.”

Rebuilding the brand It is a perception that those within Dubai are only too aware of. “There has been a disproportionate amount of negative press regarding Dubai since the economic crisis began, and this will have damaged investor confidence in the emirate,” concedes Alwadiya. “It was not so long ago that Dubai was capturing the admiration and awe of the world. Unfortunately, the world’s view of Dubai has taken a turn for the worse and that reputation now needs to be rebuilt.”

So what do the authorities need to do to restore confidence in Brand Dubai? While acknowledging that the pace and magnitude of the emirate’s economic recovery – and by extension, the health of its real estate industry – will be largely dependent upon the global economic recovery, Alwadiya believes there are a number of domestic issues that need addressing as a matter of urgency if Dubai is to entertain hopes of kickstarting its own recovery. Rebalancing the supplydemand axis is high on that list of priorities. “The issue of oversupply has received a lot of attention, with some commentators suggesting that property vacancy rates – currently estimated to be around 15 percent – could double by the end of 2010,” he says. “This is a daunting prospect; however, we need to look at the supply situation in tandem with demand. It’s impossible to address one without considering the other.”

Alwadiya believes that the effect and magnitude of the oversupply issue on the performance of the market will be determined by a number of factors that will help generate demand for property. For one thing, Dubai’s population growth rate needs to increase and the slide in population – accelerated by the recession and currently estimated at anywhere between eight and 20 percent – must be arrested. Ensuring that Dubai remains an attractive proposition as a location for business activity is therefore essential. “As the prime driver of population growth going forward will be commercial activity, Dubai needs to ensure that, as the world economy starts to recover, it has positioned itself competitively as a great place to do business,” he says.

For that to happen, confidence will need to be nurtured carefully. Like the rest of the world, Dubai is suffering from a tightening of credit and contraction of consumption. People are losing their jobs due to companies restructuring, expatriates are either being sent home or looking for new jobs, construction projects are being delayed, governments are scrambling to shore up the financial sector and tourism is down. Alwadiya believes a number of recent initiatives could have a beneficial impact on reversing some of these trends,

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In addition, the ongoing pursuit of transparency is paramount. “The nascent Dubai real estate industry is maturing rapidly; nonetheless, regulation and transparency, while improving, still have some way to go,” he says. “Investors need assurance that their rights are protected with a logical and equitable set of regulations, overseen by a system of governance that is trusted to eliminate the corrosive corrupt practices of the past. The pursuit and highly publicised prosecutions of those found to have been unlawful and unethical in their business practices has gone some way to easing investor uncertainty.”

One of the reasons for the current lack of confidence in the industry is the dearth of reliable information and data. While some progress has been made, the industry is a long way from having centrally stored, accessible, reliable, up-to-date and relevant information to base decisions upon. “The regulatory environment appears to be credible, but it is not robust in terms of actual implementation of rules and regulations on the ground,” says the GRC’s Pradhan. “Market transparency is the sole objective of any regulator, but has not yet been fully achieved anywhere in the GCC region. As an emerging economic block, all stakeholders – government, property firms, investors, financial institutions – need to set standards on a par with global norms and regulate the speculative counter-marTotal value of ket forces to enable a level playing field.” construction citing reductions in the cost of fees and charges on business The establishment of RERA and investor represenprojects in the entities in Dubai, and a move to end the current sponsorship tative bodies, along with the introduction of codes of pipeline across the Middle East system for foreign companies wishing to set up business in the practice for real estate practitioners and laws relating to emirate, as two positive steps. “The vision of having free entry for freehold ownership, escrow accounts and strata titling, have companies with few or no barriers is a grand one and, if approved by the certainly helped address some of the concerns of expatriate and forexecutive council, will provide a major boost towards establishing Dubai as an aceign investors. Even so, transparency around industry data remains an ongocessible and cost competitive place to do business,” he says. ing concern. “Investors and owner-occupiers require, particularly in these In tandem with this, the cost of living must also be addressed. Doubletimes of uncertainty and sensitivity to risk, a clearer view on all matters redigit inflation in the period leading up to the recession, along with spiralling garding decisions they are about to make,” says Alwadiya. “The inability or rent costs, meant that many expatriates or companies importing talent from reluctance to disclose data fundamental to making important investment deoverseas found living costs prohibitive. However, a recent Reuters poll found that cisions only heightens uncertainty, distrust, risk perception and a reluctance residential property prices in Dubai are likely to fall another 10 percent in 2009 to invest. In the end, this lack of transparency is inhibiting growth.” as financial woes linger, with residential rents in Dubai expected to plummet by 45 percent by the end of 2009 and a further 10 percent in 2010. While the fact A tentative recovery that prices and rents have fallen and inflation is less than half of what it was eight So given the many challenges facing the emirate, both internally and in months ago is bad news in the short-term for developers and landlords, this pheterms of the global economic climate, what are its chances for recovery? nomenon will ultimately be important in attracting renewed interest in the emi“Because real estate is one of the prime movers of the Dubai economy, Brand rate and stimulating a higher level of activity in the real estate market.

Dubai has been affected economically, but it is important to remember that the of the have escaped the worst “Saudi Arabia appears to ure,” fut lthy hea and ht brig ea recession and looks to hav e country Mohanad Alwadiya. “Th asserts real estate agent ted 50 ic profile, with an estima has a unique demograph has US$160 under the age of 25, and percent of its population five years. investment in the next billion slated for project e is committed to massiv The Saudi government umulated acc es enu rev g isin util infrastructural spending, ng demand the past five years. Housi during the oil boom of of pers are taking advantage remains high, and develo ually halved al costs, which have virt construction and materi m. New regional construction boo since the height of the ber of firstwill also increase the num consumer finance laws own their than half the population time home buyers [less es are still surprisingly low homes] while selling pric yields can be realised.” and above average rental

US$3.1 trillion

Open and honest Real estate industry management and regulation will also be key, and while the efforts to protect rights, lift standards of professionalism and establish a transparent, credible and functional framework are to be applauded, there is still a long way to go before the industry can be said to be in the final stages of maturation. The Dubai Real Estate Regulation Authority has been considering the viability of a number of projects and reports state that at least 27 projects, will be cancelled. This form of oversight is a positive sign, as any rationalisation of developments currently being planned can only help alleviate any oversupply situation. Alwadiya is hopeful that a full, robust and decisive review will be completed soon and the necessary actions continue to be taken, as marginal or non-viable projects can only be considered “toxic assets” both to the industry and the overall economy.

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sector is fundamentally cyclical in nature and bound to be influenced by overall economic health,” argues Pradhan. “As per anecdotal reports, the recovery has already started in some segments of the market, but I would bet on long-term recovery of the real estate sector beginning in the third quarter of 2010, if the overall economic growth fully recovers by then, which at the moment looks likely.”

Alwadiya paints a similar picture of restrained optimism. “I believe that the market is in a phase of fragile stabilisation,” he says. “The long-anticipated recovery cannot be claimed as yet, despite indications through the second quarter of 2009 suggesting the market had bottomed out and the green shoots of recovery were upon us. However, the encouraging news is that the world economy appears to be improving, with many countries claiming an end to the recession. The regional economies will benefit from this, and the Dubai real estate industry will start to rebound. I think we will see tangible improvements in the late part of 2009 or early 2010.”

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Across the emirate, those in the industry are playing something of a waiting game and, as such, even potential good news is tempered with a note of caution. For example, while price declines in Dubai have begun to level off in recent months and investors are once again looking at the market with the expectation that it is close to the bottom, the Kuwait Financial Centre has warned against snapping up property in Dubai despite those rock-bottom prices. The centre warns that Dubai’s exposure to real estate and financial services, which account for around 25 percent of its GDP, leave the city state vulnerable to prolonged price stagnation, potentially locking investments for years and diluting returns.

Once again it comes down to managing supply and demand; value has become the new watchword, and in the future Dubai developers will need to spend more effort considering what buyers truly want rather than what will make them the quickest buck if they wish to be sustainable over the long-term. “The biggest challenge today is customer appetite,” agrees Khalid al Malik, Group Chief Executive Officer of Dubai Properties Group, the newly created property division of Dubai Holding. “Before, that appetite was driven by speculators. Now it’s a different beast. You have to be careful with the product design.

This is reshaping the way companies operate in Dubai.”

The recent Cityscape conference at the Dubai International Convention and Exhibition Centre was a prime example of the new, more subdued mood in the emirate – but participants remained upbeat that the recent reality check would prove constructive over the longer term. “There was an element of oneupmanship before, but I think we are starting to see people come back with a sense of reality as to what you should and shouldn’t do,” said Donald Trump Jr, son of the famed tycoon, in his keynote address. “Has Dubai changed? Of course it has. But it has been unfairly and harshly criticised by the world media. Based on them, you would think Dubai is a dust bowl with no lights turned on.”

The reality, of course, is very different. Dubai remains a vibrant urban environment and an exciting place in which to both work and live, with some of the most interesting developments on the planet still very much under way. Contrary to the widespread belief that all construction has stopped, there are still considerable projects in the pipeline across the Middle East, worth a total value of US$3.1 trillion, and the UAE leads the project market, accounting for 42 percent of total project value.

Even so, whether the current correction comes to be viewed as just a bump in the road or the beginning of the end will depend to a large extent on how the emirate responds to the lessons of the last 12 months – not least those pertaining to the dangers inherent in aiming for short-term gains over long-term results. “There are many lessons to be learned from this recession and they can all be traced to addressing the fundamentals of economic management,” concludes Alwidaya. “Regardless of what sector of the economy you are in, the fundamentals that have proven important throughout history – such as long-term planning, sustainability, sufficiency, balancing supply and demand, limiting exposure to world events and adhering to contingency and risk planning – cannot be ignored. Rapid growth is as dangerous as it is exciting. With careful planning and controls, it will be sustainable; without such checks, it will be destructive.”

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The visa issue, which has placed a lot of pressure on recently retrenched expatriates tryin g to find alternative employment or heading back hom e, is another area that needs addressing urgently.

Employees who lose work in the UAE automatically have their visa rescinded, generally giving them 30 days to leave; with defaulting on debt or bouncing a cheque punishable by jail, most expatriat es in financial difficulty know the safest bet is to take the next outbound flight. At the airport, hundreds of cars have been abandoned in recent months; keys are left in the ignition, with maxedout credit cards and apology lette rs in the glove compartment.

Predictably, the recent slew of layof fs has left many disillusioned with the Dubai drea m. “This will not be forgotten quickly, and will certainly be a consideration for those who might consider making Dubai their long-term home,” says Harbor Real Estate’s Moh anad Alwadiya.

At the recent Cityscape exhibition, many others felt the same. The system of cancellin g visas for people who were laid off was “ostracising the same people who took the leap to come here,” Donald Trum p Jr told reporters.

“You should be welcoming these people. If you throw them out, they are not likely to com e back in six months when you need them.”

From an investor point of view, the Department of Naturalisation and Residency has recently implemented a law that will grant a six-month rene wable visa to those who invest in freehold property in the UAE. While this is a positive move to instil confidence in potential investors, the six-month period is considere d too limited in duration to be meaningful to many investors . Some commentators believe the federal law should matc h the Dubai law, whereby investors were eligible for a three-year residency visa provided they visited the emir ate at least once every six months. This approach would appear to be far more appealing and enticing.

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REAL ESTATE FOCUS

The jewel of Jordan Jordon-based property developer Saraya Holdings is one of the region’s fastest growing real estate companies. Vice Chairman Ali Kolaghassi, shares his thoughts with MENA Infrastructure on the impact of the global economic crisis and the company’s flagship project.

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nvesting in emerging markets and emphasising the geographical positioning of its destinations, Ali Kolaghassi explains that Saraya’s strategy revolves around positively impacting the local economies and communities in which it invests. In addition, Saraya looks to partner with both the private and public sectors in order to benefit from the synergies each offer and maximise investment value. “Part of our success to date is attributed to our business model, where we have looked at value-added services that supplement our core business and in a manner that meets our clients’ primary needs,” explains Kolaghassi. “As a result, we have introduced Saraya Skies, a private aviation service, Saraya Realty and Saraya Entertainment.”

As such, Saraya has so far announced five luxurious mixed-use tourist destinations providing a range of residential units and a number of outstanding facilities including premium hotels, retail space, entertainment and leisure and sport facilities. Saraya AqabaJordan was announced in 2005, followed by the announcement of Saraya Ras Al Khaimah-UAE, Saraya Dead Sea-Jordan, Saraya Bandar Jissah-Oman and Saraya Sochi-Russia. “Our growth is a result of having a team of highly qualified executives that set the focus of Saraya’s work scheme. Saraya’s mission is to offer an exclusive experience in luxury travel, tourism and lifestyle by turning locations into luxurious mixed-use tourist destinations. Additionally, our destinations are planned in an environmentally sensitive manner, thereby safeguarding

the identity and beauty of the selected locations,” says Kolaghassi. “In terms of growth, what we have managed to achieve in the last four years, was rapid. Yet in light of the recent financial crisis and prevailing conditions, the pace which we grow will indeed be impacted; nevertheless, we will continue to grow in a sound manner, consistent with the environment we operate today.”

Infrastructure challenges Indeed, Kolaghassi believes that the latest global financial crisis warrants serious attention and measures, regarding it as the biggest infrastructure challenge facing the Middle East at present. Although it has negatively impacted the region he believes that compared to other regions around the world the Middle East has seen a significantly lesser impact.

“The actual impact has varied from one developer to another and even from one country to another, depending on their position, exposure and overall business strategy. At Saraya we have witnessed the impact in two ways, the pace of growth and the overall development. Our business strategy remains focused on strong fundamentals and strong partnerships with an un-elevated sense of risk mitigation. We consider this period as an opportunity for us to reassess our current projects and future plans.”

And with five ongoing projects, including one in Russia it appears that the company has a lot on its plate. That said, Kolaghassi explains that the company is always looking for opportunities that fit investment criteria, so it seems that the company could be on the lookout for additional projects.

“Given that we have local partners in each country, each project is con-

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sidered to be at home,” he explains. “However, each location is unique and hence presents its own set of infrastructure challenges regarding regulations, capabilities and readiness. These are initially mitigated through clear and concise development agreements outlining the obligations of each concerned party.

Furthermore, we always turn to our local partners and consultants to negotiate with utility providers, navigate through local requirements and obtain any approvals. We also ensure that any knowledge and experience gained in one of our projects is transferred to other projects, thereby benefiting our local partners.”

Ali Kolaghassi

Saraya Aqaba One project that does just that is Saraya Aqaba, the real estate giant’s flagship project. Emerging as Jordan’s second economic centre after the capital, Amman, the city of Aqaba and the establishment of the Aqaba Special Economic Zone (ASEZ) in 2001 has been vital to the city’s development. Crucial to its long-term development are luxurious new hotels and resorts such as Saraya Aqaba and Ayla Oasis.

Saraya Aqaba is one of the most ambitious projects ever to have been undertaken in Jordan. Located right in the heart of Aqaba, the project boasts 617,000 square metres of land, adding 1.5 kilometres of beachfront to the coastline in the form of a man-made lagoon. Kolaghassi appears to have selected some of the best design and project management personalities in the region to realise the complete vision of Saraya Aqaba.

Saudi Oger, which has an expansive portfolio of successful projects to its name as well as a US$130 million project inside the King Abdullah Economic City, will be responsible for the design and building contract.

Khuan Chew, founder of the international interior design firm KCA, will also be involved, lending her expertise to the project. Chew has previously worked on the Burj Al Arab, the only 7-star hotel in the world, as well as Abdul Aziz, the largest private yacht in the world, and several other fivestar hotel groups such as the Four Seasons, the Starwood Group and the InterContinental Hotel Group.

And like all projects in Saraya’s portfolio, Saraya Aqaba takes an important view of environmental and sustainability concepts. “In a region where natural and non-renewable resources are scarce, any developer acting responsibly needs to seriously address environmental and sustainability concerns. As such, all of Saraya’s projects are rooted in and inspired by their local environment. They are planned and executed taking into consideration green issues at all levels of design, starting from site layout, to water conservation measures and materials selection,” explains Kolaghassi. “Environmental measures integrated into Saraya’s projects include efficient master plan and unit layouts, preservation of salient features of the site, minimising earthworks and development footprints, drought resistant and native landscapes, pedestrian friendly environments, centralised district cooling and solar heating panels.”

Looking ahead Kolaghassi believes that in the aftermath of the global financial crisis, today’s customers are more sophisticated and demanding. They have higher expectations, pay closer attention to details and seek the best value

for their investments. He also says that customers are more cautious with their money and seek honest developers and contractors with a proven track record. Environmentally and design conscious they are highly aware of health and lifestyle trends. “All of this translates into a new customer profi le that drives the real estate industry and in return the construction industry,” says Kolghassi.

“As developers we have to differentiate ourselves and respond by teaming up with world-class designers, architects, contractors and engineers. We also have to plan environmentally sustainable communities and strive towards greener and more energy efficient buildings.

We believe that the greatest challenge of the Middle East Real Estate sector is to be positioned to compete with global and mature regions, which will entail an introduction to and the creation of innovative products with competitive standards.”

And with a business model built on differentiation, competitiveness and innovation there is no reason for Saraya not to succeed.

Saraya Aqaba masterplan

Saraya Aqaba Situated in the ancient Arab port city of Aqaba, Saraya Aqaba is located on the western tip of Aqaba and is set to commence operations by 2011. Its man-made lagoon will add approximately 1.5 kilometres of beachfront to the Gulf of Aqaba. The project covers around 634,000 square metres of planned development combining hotels, shopping, dining, entertainment, cultural activities and freehold residences. The project features luxurious hotels, grand villas, villas, grand townhouses, garden and terrace townhouses, duplexes, lofts and apartments, as well as a water park, a convention center and business offices, an old souk and an amphitheatre, all set within lush gardens and sparkling waterways. The project construction totals over US$1 billion.

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DESIGN FOCUS

TAKING THE

NEXT STEP

With over half of the world’s infrastructure investment now taking place in emerging economies – where over US$1.2 trillion will be spent on infrastructure projects during 2009 – the need to increase awareness as to the importance of sustainability is growing.

Keith Clarke, CEO of design and engineering firm Atkins, explains why.

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nvestment in infrastructure has always played a leading role in economic development, from the roads and aqueducts of ancient Rome to the railway boom in Britain in the mid-19th century. Basic infrastructure – roads, railways, airports, energy generation and distribution, water supply and sanitation – underpins the sustainable development and economic transformation of emerging economies. Morgan Stanley predicts emerging

economies will spend almost US$22 trillion on infrastructure over the next 10 years, of which China will account for 43 percent, India 13 percent, Russia 10 percent, Brazil five percent and the Middle East four percent. In fact, over half of the world’s infrastructure investment is now taking place in emerging economies.

Clearly, the global engineering community has a huge role to play in this development – particularly given the increasing importance

of sustainability on the global development agenda. Rapid worldwide urbanisation is increasing the demands for urban infrastructure, and by 2025 the percentage of the world’s growing population living in urban environments will have increased from 40 to 60 percent. Th is and the expected growth in income will substantially increase urban electricity requirements, communications and demand for airports, roads, rail and mass urban transport infrastructure as travel becomes more popular and accessible. Developing such networks in a sustainable way will be imperative as the world continues to address the climate change challenge and the increased need for energy and resource efficient solutions.

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Bahrain World Trade Centre The Atkins-designed Bahrain World Trade Centre is the ďŹ rst time that a commercial development has integrated large-scale wind turbines within its structure. Through its positioning and the unique aerodynamic design of the towers, the prevailing onshore Gulf breeze is funnelled into the path of the turbines, helping to create power generation efďŹ ciency. The wind turbines, measuring 29 metres in diameter, deliver approximately 11-15 percent of the energy needs of the building, or 1100-1300 megawatt-hours per year – enough to provide light in 300 homes for over a year.

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DIFC Lighthouse Tower Atkins provided architecture, civil and structural engineering, MEP engineering, sustainable design and construction supervision services for this 400m-high, 64-storey office tower for Dubai International Finance Centre. Atkins designed the Lighthouse Tower to be the world’s first hot-climate, low-carbon, high-rise tower to aspire to a LEED Platinum rating. It integrates multiple active and passive solutions into the fabric of the building – passive solar architecture, low water engineering solutions and photovoltaic panels.

Atkins’ solution will result in up to 50 percent reduction in energy consumption and up to 40 percent reduction in water consumption when compared to a typical Dubai design.

The project was commended for demonstrating that high-rise buildings have significant potential to be designed and constructed to meet sustainability targets.

“I think it’s probably the biggest challenge we’ve ever had as an industry,” says Keith Clarke, CEO of design and engineering giant Atkins. “But if we can crack it, some of the age-old chestnuts for the construction industry will get changed as well – interdisciplinary working, knowledge transfer, communication down the supply chains, etc. You can’t get to a sustainable future without doing all those things better than we’ve ever done before.”

Atkins is approaching the issue from a number of different perspectives. “We’re doing four streams of work,” says Clarke. “The first is an education process to make people aware of why climate change and sustainability is im-

portant. The next stream is researching certain outcome models in order to give people tools that they can use to try and calculate the value of decarbonising projects. The third stream is about using different types of teams, because you can’t necessarily accomplish carbon reduction with your traditional skill sets; it’s about knowledge transfer and teamwork. And then the last stream is how to talk to clients about that. And what we’ve found is that you need to make a journey down each of those four streams simultaneously, and you can’t necessarily give people a defi nitive answer to any one of those streams right now because the answer doesn’t exist yet. We’ve got to invent it.”

Such an approach is challenging, but Clarke maintains that the pace at which sustainability is becoming established in the mindsets and agendas of the business community is also incredibly exciting. “I think it’s an accelerating curve,” he says. “Two years ago, you wouldn’t see a special page on green technology in the Sunday Times business section as a matter of course. But it’s becoming mainstream at such a rate that you can see in a year’s time there won’t be a ‘green’ page for the business section at all.

It’ll be embedded in all aspects of business.”

But this doesn’t mean that every company will be able to embrace the concept of sustainability successfully; Clarke believes it will take hard work and a real commitment to changing the status quo. In short, it will require construction and engineering fi rms to be more innovative than they have ever been before. “The thing about innovation is that the companies that do it, do it regardless; those that don’t either don’t do it because there’s a recession on or they don’t do it because they’re too busy – and if you want an excuse not to change, there’s always an excuse not to change.

That’s the brutal reality of it,” he says. “We’ve had a good market for 10 years now, and if you haven’t innovated in that period you sure as hell aren’t going to suddenly start now.”

However, Clarke feels that innovation will be essential to business success over the next few years. “I think companies are beginning, if anything, to realise that a long-term recession means if you don’t improve your business, you won’t get through it,” he says. “If anything, it’s a spur towards the poorer performing companies disappearing. And I’m not saying whether that’s a good bad or a bad thing. It’s just an observation that tough markets tend to show who has the ability to adapt and cope with them.

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Designing the Burj With a long established and proven track record as a major consultant in the Gulf region, Atkins was approached by a key client in the early 1990s to design and deliver a unique project – an iconic hotel that would be instantly recognised as an architectural icon.

What followed was five years of design and build activity resulting in a technically challenging, aesthetic masterpiece that has thrust Dubai forward onto the world stage and, even today, stands as a measure of excellence and innovation.

In drawing upon Dubai’s nautical past, the concept solution was based on a large sail, and the company began the design and delivery of the 321-metre tall structure with a dedicated multidisciplinary team based in Dubai. Imposingly set on a man made island 300m out to sea, the first challenges were to assess the impact of such a feature on the existing shoreline and to develop a solution for the construction within a confined cofferdam. Atkins incorporated concrete armour units that present a sloping surface to the sea to absorb wave impact without throwing water onto the island.

A steelwork exoskeleton, with trusses as long as 85m, provides wind bracing and defines the building’s dramatic triangular shape. The sail theme is continued in the unique geometric double skinned fabric wall, which insulates the building from solar gain as well as allowing diffused natural light to the interior. Encapsulated behind this is one of the most defining elements of the building – a 182-metre high atrium, the tallest in the world, which sets the internal ambience of the duplex-floored interior.

“Our concept and structural designs set the precedent for what was expected to be delivered within the interior of the building,” says Clarke. In accomplishing this, the material specification for the hotel interiors is unparalleled in its quality: the same marble as that used

by Michelangelo to create his sculpture of David, and 8000 square metres of 22 carat gold leaf integrated into the interior design are but a few examples. Hidden from the casual observer are some of the most sophisticated system technologies in the electromechanical designs, which ensure the fastest lifts and a level of guest service facilities that remain uncontested anywhere else in the world.

Commensurate with the innovation within the building, there were also several water and lighting effects that were incorporated into the design to ensure that the Burj Al Arab’s aesthetics were as stunning as it’s architectural design. These include an animated display of water and fire that greets guests at the entrance, and an internal atrium water sculpture composed of fibre optic lit water arches complemented by a 50-metre high water shooter.

Today, the Burj Al Arab still holds the record for being the tallest all-suite hotel in the world. It has gained international media exposure throughout the world, forming a backdrop for innumerable global events and has been featured in the National Geographic TV series Megastructures. “Most importantly, because of the performance of our designers, project managers and other professionals associated with its delivery, the Atkins name is now synonymous with internationally acclaimed architecture and design, delivered in a very challenging environment to a most discerning client,” says Clarke. “It has been one of the springboards for our current reputation as a designer of excellence and has established a platform from which numerous high profile commissions have followed.”

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Dubai Metro Atkins was appointed as the lead designer responsible for all civil works associated with the Red and Green Lines of the Dubai Metro, which included the full multi-disciplinary design and management of the civil works including geotechnical and site investigations; bored tunnels (using earth pressure balancing tunnel boring machines); cut and cover tunnels; viaducts and bridges (utilising post-tensioned, segmental bridge construction); route alignment; elevated, at-grade and underground stations (utilising top-down constructed station boxes with diaphragm walls); depots; and additional specialist services such as fire and ventilation, environmental impact, concrete durability, noise and vibration reduction, and landscaping.

And if you’ve got a major design determinant like decarbonisation coming in, those that can cope with that are going to do well, and those that wait for someone else to do all the hard work, well, there’s nowhere for them to hide.”

According to Clarke, Atkins is taking the view that the current economic conditions could be around for a while. “It’s not a ‘hold your breath’ recession,” he says. “You can’t just hope it will go away and defer training courses and conferences and hope it will be alright in six months. It won’t be. Your business has to perform in this environment, which could be the environment for another couple of years.

And in those couple of years, you need to improve your product because the world is changing fast. It’s time to manage. It’s not time to watch.”

The recession is also having an impact on the industry in other ways, too – not least in terms of human resources. “Last October I was

going to the Middle East to tell clients why we didn’t have the capacity to do any more work – largely because we couldn’t grow quickly enough to service the market at the quality we demanded of ourselves,” says Clarke. “We were resource constrained. In November, we were no longer resource constrained.”

The Middle East is clearly a key market for the UK-headquartered Atkins, one of the world’s largest multi-disciplinary design and engineering firms. As well as its pioneering work on the iconic Burj Al Arab – the design and construction of which helped put Dubai on the map and heralded the dawn of a ‘golden age’ of architectural innovation for the tiny Gulf state – the fi rm has also worked on a number of other key projects across the region, such as Bahrain’s World Trade Centre and the Dubai International Finance Centre’s Lighthouse Tower. Sustainable design and construction has been a feature of all three projects, and permeates Atkins approach to the region.

“We started investing in the carbon issue a number of years ago in the Middle East, before we did it anywhere else,” he explains. “For instance, we sponsor a chair of sustainability at a university in Dubai. We’ve done it for four

years, and we did it there because we thought that this region was capable of changing the question quicker than anybody else. Firstly, they have a vested interest. At some point, most of those economies are going to run out of oil, so they have a resource issue. Secondly, if you look at Abu Dhabi and the ruler’s statement on the environment, he wants to be a world leader on environmental issues. He staked his ground with Masdar and other developments. Dubai is not far behind. Oman’s waking up to environmental codes and most of the emirates are on the journey of seeing it as an integral part of being a world destination – and if you’re going to play in the global marketplace, you’ve got to be seen to be responsible.

“I also don’t think they get credit for what they’ve done,” he continues. “Many in the West still see them as oil-rich Arabs, driving big cars. Well, actually Masdar’s the only project like that being done in the world. There isn’t one being done in China, for instance. I know they get a lot of things wrong. But they also get an awful lot of things right, and they do it quicker than the rest of us. So I think sustainability is on the agenda. And it will remain on the agenda when liquidity comes back.”

Atkins at a glance Established: 1938 Headquarters: UK Locations: More than 200 permanent offices worldwide Workforce: 18,000 employees (as of April 2009) Turnover: US$2.4 billion Chief executive: Keith Clarke Fast fact: Atkins is the fourth largest multidisciplinary consultancy in the world www.menainfra.com 39

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THE BIG INTERVIEW

DEALING IN THE DOWNTURN MENA Infrastructure talks to Brian Bruce, CEO of global engineering giant Murray & Roberts, about how his company has dealt with the recession and what the future holds for the firm in the Middle East’s construction sector.

Interview by Huw Thomas.

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ome fi rms have handled the recent economic crisis better than others, but even so the resilience of South Africa-headquartered Murray & Roberts, a major player in the Middle East’s construction sector, has been remarkable. As a result of the termination of a number of high-profi le projects – including the Trump International Tower and Hotel in Dubai, the Salam Resort Project in Bahrain and Abu Dhabi’s Tameer Towers, to name just a few – the value of the fi rm’s order book plummeted 40 percent from the US$8.2 billion peak that the group reported last year, a process that also resulted in the company shedding significant numbers of jobs.

For most firms this would have been a crippling blow. But Chief Executive Brian Bruce believes the company has weathered the storm well and is now firmly focused on expansion. “The order book has since settled at a level of US$5.4 billion, which means that over the past four months we have been winning as much work as we are doing on an ongoing basis,” he

says. “We are now looking at further acquisition opportunities, and our international operations have plans to expand their markets in the Middle East, South America and Asia.”

Significantly, Bruce is backing his words with positive results; earlier in the summer, the company announced it had won a joint venture contract worth about US$5.5 million to develop a major resort on Saadiyat Island in Abu Dhabi – its biggest deal since the series of project cancellations and postponements that came about in the wake of the Wall Street meltdown – and expects more contracts in future in the Middle East. “Clearly the economic circumstances at the moment have brought additional challenges into the marketplace,” he says. “But we’re confident we’ll get through those. One of the tenets of good contracting is to be flexible, to be able to go where the opportunities are, to not get stuck in one marketplace. And I think in that respect, we’re very well-placed.”

Here, Bruce explains how Murray & Roberts has dealt with the crisis, why partnerships and collaboration are essential to success, and where the bright spots are in the Middle East’s construction sector.

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balance, which it then tries to recover over extended periods – generally having to impair some of it at some stage in the future. It’s a modern approach, if I can say that. I know a lot of the leaders in the global construction engineering sector and most of the leaders today are much more risk-aware, certainly in terms of major contracts. They are very conscious of reputation, very conscious of sustainability issues, very conscious of cash flow. So they’re more likely to make these decisions, perhaps, than the construction leaders of the past, for whom a contract was a contract – their view was that ‘a bird in the hand is worth two in the bush’.

The best firms see recession as an opportunity rather than a crisis.

So maybe you could give us some idea of how you responded to the market forces that caused so much disruption to so many companies, both in the construction space and beyond?

BB. Within a few weeks of terminating our involvement in a range of projects, which added up to about a third of our order book, we had

“Our brand is effectively one of our greatest assets in the Middle East, and we’ve been able to pick up new work as a consequence”

The last 12 months have been difficult for everybody and I know that Murray & Roberts saw a significant proportion of its order book cancelled in the four months between November 2008 and March of this year. What impact did this have on your operations?

Brian Bruce. The fi rst thing was to deal with what we call project terminations, because not all of the projects were ‘cancelled’. We walked away from two projects in the Middle East where we saw trouble ahead in terms of increased working capital and potential for dispute, terminating our involvement on breach of contract. In the other contracts that were terminated, we had initiated fairly urgent engagement with our clients to make sure – particularly where we saw clients were vulnerable, either because they were highly leveraged or for some other reason – of their future payment profi le. The minute we got a sense that they were going to have difficulty paying us, we agreed to step away from those contracts.

I think this approach is quite unusual because the construction industry, historically, hangs on to its work and builds up a working capital

already released resources and we no longer had to spend management time trying to manage a past situation. We were effectively able to focus our critical resources onto the future. And that future is complex, particularly in the Middle East.

Construction markets, in our view, have value primarily if they’re funded from free cash, but when construction markets are funded from debt, then generally the situation becomes a little less value enhancing for contractors. Dubai was a debt-driven market. A free cash market would be something like we are now seeing in Abu Dhabi and Saudi Arabia, where oil revenues do provide significant free cash. Immediately, we started to monitor where free cash markets were. We were already established in Abu Dhabi and Saudi Arabia, although a more challenging market, became an attractive option. These are two of the most important in the Middle East, together with Qatar, of course. With Dubai out of our hair, so to say, we were able to focus resources on the potential of the Saudi market, which we hadn’t looked at before, because we were just so busy in the other parts of the Middle East.

I’m pleased to say that, yes, our order book is eroded in the Middle East, but it was pretty large relative to turnover and we’ve hardly noticed the reduction. We’ve since picked up some new work and we’ve been able to improve our pipeline of engineering talent. A year ago, we were struggling to fi nd the best skills to put in many of our projects because of the boom in the market; but since the crisis, we were able to deploy the best people we had and that were becoming available in the market.

And the value proposition suddenly increases on a project when you’ve got the best people.

So in many ways, you’ve taken a very proactive and confident approach to the downturn?

BB. We’ve got a good brand in the Middle East. A lot of people were worried about the fact that we withdrew from some contracts – the Dubai Concourse 3, in particular – and that this would put a dent in our brand.

In fact, it enhanced our brand. Clients know that Murray & Roberts isn’t going to be messed around, that we approach things very professionally.

Our brand is effectively one of our greatest assets in the Middle East, and we’ve been able to pick up new work as a consequence.

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In terms of the economic crisis itself, do you feel that the worst is over? Do you think the infrastructure markets remain on course for long-term growth?

BB. Overall, I would say that we are not through the crisis yet. The construction industry is a lag industry. Our order book tends to carry us through a little bit longer than other sectors that feel the impact instantaneously, like retail. We did see a period where there were virtually no new orders being issued, certainly in the first quarter of this calendar year, and that extended into the second quarter. Therefore you’ll see a slight hiccup in order book development for just about all contractors.

But that’s starting to pick up now. Governments have got fi xed investment programmes. Oil prices have recovered to a reasonably stable level at around US$70 a barrel. A number of commodity prices have improved significantly, up to 33 percent in some instances, and we’ve tended to get out of those showing no signs of improvement, and focus our attention where the improvement is. I have to take my hat off to our executives, they really were able to refocus very quickly. But there is always a lag between losing work and acquiring new work, and I guess that 2010 is going to be the year where this lag is felt. My personal view, and it is one shared by the company, is that we see significant global demand for infrastructure for quite a long period ahead.

BB. We run Murray & Roberts on a federal basis, so we’ve got a very small corporate office in South Africa. We spend most of our time dealing with macro issues. We identify where we think the trends are going to be and what strategic interventions are required, but we don’t run our individual businesses from corporate. We’ve got 25 operating companies that focus on specific aspects of the markets we’re active in. About 50 percent of our business is focused on international markets.

But the company has grown about 400 percent over the last five years, so trying to coordinate the actions of 25 companies is a little challenging under these circumstances. What we’re doing is changing the authority and discipline arrangement. We’ve clustered our operating companies around six markets, key areas of focus or opportunity, and those clusters deliver through the underlying operating companies in a more cohesive way. We believe that you’ve got to be a little bit more centralised in times of crisis, but at the same time you’ve got to maintain the appropriate level of decentralisation. This allows us to decide how we can add to each cluster through new opportunities and acquisitions.

So instead of bringing in an acquisition or major project on the outside, we can now bring it into the appropriate cluster structure and enhance its value.

A number of commodity prices have improved significantly, up to 33 percent in some instances

You’ve alluded to your ability to focus on the projects of key value to Murray & Roberts. So how do you decide which projects are of strategic importance? What do you do to ensure such projects are successful?

BB. First we try to identify what we call mega-trends. These are partly related to the skill sets we already have and partly related to the markets we currently serve. We look for the opportunities that have got the potential to offer high levels of value, and how we can bring them into the group. We have developed quite a rigorous formalised opportunity management system, which provides a set of fi lters that all projects of interest have to go through. We are principally geared towards delivering above market margins, therefore we effectively segment the market to look for the types of opportunities that will give us better value. Our opportunity management system fi lters opportunities into our pipeline on the basis of a set of predetermined parameters that we, through our many years of experience, have identified as leading to higher value. As a value rather than volume contractor, we have to hunt a little further for our opportunities. We have to be a little more patient. They’re generally bigger projects, so we’ve got to invest a lot more in procuring them, but the rewards are there at the end of the day. And once we’ve won the contract, the implementation phase is where we ultimately deliver the value.

One thing you’ve recently spoken about is the idea of reframing Murray & Roberts: taking your existing business model and placing it within the context of a post-financial crisis environment. What does this mean for the company, and how are you achieving it?

The downturn in Dubai has enabled Murray & Roberts to take a look at other markets in the region, such as Saudi Arabia. “We hadn’t had to look at Saudi before, because we were just so busy in the other parts of the Middle East,” says Bruce.

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Murray & Roberts is not letting the termination of high profile projects such as Dubai’s Trump International Towers and Hotel (left) and Abu Dhabi’s Tameer Towers (right) dampen its enthuasisim for working in the Middle East.

How important are local partnerships for you when working in a region such as the Middle East?

BB. Very important. It is one of the risk management non-negotiables in Murray & Roberts, that when we work in any environment outside our domestic market, we engage in a partnership. We prefer to do it with a local partner that’s got some level of substance; working with small players doesn’t really help. So in the Middle East, our partnership with Al Habtoor has been very successful. We have worked in Asia with Leighton International for many decades. Leighton, of course, now has a stake in Al Habtoor, so that has enhanced that relationship. We’ve got a partnership with the Nass Group in Bahrain, which is probably the major player there. And we’ve also now tied up with Saudi Oger in Saudi Arabia. So they’re very important for us, these local partnerships.

One of the big trends in construction at the moment is sustainable development. So how is Murray & Roberts building a greener focus into its design and development processes, and reducing the environmental impact of its large infrastructure projects?

BB. The fi rst thing that we’ve got to do is properly and accurately measure the impact of our activities – not just what we do ourselves, but the impact of the materials we use, the suppliers we work with, etc. Until we do that, we don’t know what it is that we’re trying to improve on.

We measure, disclose and report on a number of sustainability metrics and we’ve got a proper structure for doing that in place now. Next year, we’ll have a much more comprehensive sustainability report as part of our annual report.

Secondly, the environmental impact of contractors is largely a function of our clients’ activities and needs. Now as an engineering and

design fi rm we do try to introduce sustainability principles to the clients that we have, but to a large extent, if they are not yet committed then we have a short-term problem. Moving to more sustainable ways of working is a progressive process, but we need to fi nd an impetus to do it faster.

Do you see the Middle East as particularly open to the idea of more sustainable, greener practices?

BB. In the Middle East, there’s been hardly any thought towards this.

It’s probably been one of the great disappointments of the last 20 years, that the opportunity to create a brand new built environment has hardly taken sustainability into consideration at all. In fact, my long-term concern in the Middle East is that the cost of maintaining the development that has happened there probably exceeds the viability of the environment. You have to desalinate all your water. Everything has to be airconditioned. It is just an enormous maintenance challenge, certainly in the Dubai region.

So do you think there are lessons that the other emerging economies in the Middle East can learn from the way that Dubai has approached its development? Can they avoid some of the pitfalls?

BB. My personal view is that some of the developments in Dubai have not really considered their environmental impact. I think there’d be a lot of debate on the sustainability of The Palms, for instance, if they were to be started now. The strategy there was effectively development at any cost, but I think the green debate is now catching up with everyone so we have to find some effective solutions.

I look at the Middle East and I look at Africa and I can’t see how we will achieve human development in this part of the world without some

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new ideas on how it’s going to be done, because we can’t really aspire to the same developmental profi les as currently exist in Western Europe or North America. The natural resource demand would be too great. There’s got to be more appropriate technology applied to the process. The inevitable development of what is currently the less-developed world will have to follow a different trajectory to the way that the developed world has evolved.

So what do you think is going to be the main driver for sustainable development going forward?

BB. He who pays the piper calls the tune. So at the end of the day fi nanciers hold the key to this. We do a lot of PPPs, and the fi nanciers have a significant influence on the way, ultimately, that a project will develop, simply because they apply these conditions to their funding. I see that fi nanciers will ultimately control the process and governments will legislate. Clients will always tend to operate at the minimum level of legislation; there’ll always be a few who’ll want to lead the way, and contractors will generally do what they’re told to do, but without direction from the people controlling the funding then progress on fully integrating sustainability into the building process will be slow.

body else’s plans, and rather takes more ownership of the way in which a project is designed and built and contributes towards that process, I think we will create a very different industry, one that attracts the best brains and people into it.

On that note, what is your outlook for the global construction industry over the next two to three years? What do you see as the key trends?

BB. A lot of the infrastructure that’s been built over the past 50 years is in poor shape. It’s falling apart. It hasn’t been properly maintained. You don’t solve society’s problems by just building new infrastructure, but you do need to create new nodes of development. So I see that there’s going to be an increased commitment by most sovereign economies, both developing and developed, to get their infrastructure right. It is a global competitive advantage. That’s going to require more resources. The critical thing is how we use resources more effectively and efficiently than we have in the past?

And this is really where the leading design, engineering and construction firms, who truly think about sustainability, can come to the fore.

And I guess that will involve a good deal more collaboration between different industries – not just between participants within the construction industry, but between the construction sector and the technology, transportation and energy industries, for instance, in order to capitalise on the developments that are happening there?

BB. The truth is that there must be more collaboration between different types of industries to try and solve the particular problems we currently face. Some firms are going to see it and move in that direction fairly quickly, and some are just going to stay where they are. There’s always going to be a demand for traditional players – the consulting engineer, the professional consultant, the professional architect, the resource-based construction company. But the leading firms and players are going to find different ways to bring different types of solutions for different types of requirements. And it will open up a whole new realm of business opportunities for those firms.

Do you think green buildings standards, such as LEED, can play a role in this?

BB. Absolutely. One of the frustrations that we have at the moment is when you have traditional architects who will often sacrifice energy efficiency for design prerogative, so you get inefficient lighting systems, poorly designed layouts, etc., that require high levels of energy to keep them efficient. But there is now a new generation of architects coming to the fore, who first and foremost look at the impact of a particular structure and how design can influence things like energy efficiency. This is a change that we’re seeing every day. We’re doing buildings today that are designed by architects at the request of clients that are very efficient and environmentally friendly.

We did the Microsoft head office here in South Africa, for instance, and the specifications demanded of the architect required high levels of resource and energy efficiency. So this is good. Progressive clients are saying, “I want my company to be associDubai Airport Concourse 3 ated with what’s good for the future, rather than what In April of this year, the worked in the past.” Competitiveness remains one Al Habtoor Murray & of the principal drivers of performance and value.

Roberts Takenaka (HMRT) joint venture reached And what we find, as we adopt these processes, is a mutual agreement that we attract different types of people into the induswith Dubai Civil Aviation try. So 10 years ago, any young person looking for a to withdraw from its career would probably have shunned the construction contract to construct Dubai International industry totally. It was seen as backwards, dinosauric Airport Concourse 3. in a way. But today, we’re finding young people are HMRT was awarded the very excited by the principles that companies like ourcontract in December selves are espousing and working towards, and they 2008, but concluded that a mutually acceptable want to be part of it because they can align their concontract was not possible tribution. That, in itself, triggers a whole different new given the current market dynamic in the organisation: you’re not defending the conditions. The joint past any longer; you’re effectively trying to build the venture has been working with DCA to finalise future. These are subtle but very important shifts in acceptable contract terms emphasis. As the construction industry moves away since then. from effectively just fielding resources to build some-

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REAL ESTATE FOCUS

Based on the results of a recent study, global strategic consulting firm AT Kearney believes that the long-awaited consolidation wave in the GCC’s real estate industry has begun.

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ccording to international industry consultancy AT Kearney, Middle Eastern developers are increasingly looking to mergers as a means to help consolidate their position in the wake of the global economic crisis.

What is more, they are mindful of lessons learnt from past real estate cycles in other markets, where companies that survived have built strong differentiated capabilities and diversified across the value chain to stabilise sources of revenue.

Most regional markets have been confronted with strong oversupply – which peaked last year at over 100 percent in the high-end residential and commercial segments in some GCC countries. “With most property developers being cash-strapped, with banks restricting lending and homebuyers defaulting on payments, the primary aim of consolidation is

to pool resources to enable firms to survive the downturn,” says Dr Dirk Buchta, Partner and Managing Director for AT Kearney Middle East.

He cites similar markets such as Singapore and Hong-Kong that were hit heavily by real estate cycle crashes in past decades, where only two to three major developers survived and reinforced themselves. As such, Buchta says, recently announced merger plans – such as that between competitors Emaar and Dubai Holding; between Dubai Holding subsidiaries Dubai Properties, Sama Dubai, Bawadi, Remraam and the Tiger Woods golf course; between Barwa and Qatar Real Estate Investment Co; and the consolidation of land from distressed developers into companies like Dubai Real Estate Corporation – come as no surprise.

However, the report notes that planning for a merger is paramount to its success. Almost 70 percent of mergers fail, often due to such basics as lack of preparation, communication, unclear strategies or poor execution. “For example,” says Buchta, “in Spain recently, poor timing and

CAN CONSOLIDATION STOP THE CONSTRUCTION SLUMP?

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planning of a merger between two major developers resulted in bankruptcy for the new company within six months of the merger. Of those companies that do merge successfully, only 29 percent achieve increased profitability.” If developers are to merge, they need to ensure their company is on sound ground and research their prospective partner carefully before deciding this is the best solution.

“The main objective for a merger should not be size, which makes little sense in a quality-driven business like real estate development,” continues Olivier Laroche, Senior Manager of AT Kearney Middle East.

“The merged entities will have reinforced position on different parts of the value chain, but risks will also increase. Th is can be linked to a stronger focus on a risky market like Dubai, in addition to liquidity issues or ‘doubling’ activities that will have to be rationalised.”

Instead, Laroche believes now is the perfect time to review the corporate strategy of the new entities in light of the new market conditions and an analysis of the growth path of the most successful real estate developers worldwide such as Hines in the US, Hochtief and Nexity

“Successful mergers can give leading Middle East players the critical mass and a competitive edge on the international scene” in Europe, or Capitaland in Asia. “The time of endless growth for opportunistic projects driven solely by land and cash availability is over,” he says. “Developers will compete for buyers, and they need to defi ne a convincing strategy why buyers should buy from them and not from the other developer.”

According to the study, mergers in the real estate sector typically fall into two categories: merging of similar companies, or merging of complementary companies. The reasons to merge two similar companies are often to achieve synergies and operational excellence or to balance risks and diversify. While mergers focusing on achievement of operational excellence have not been common in the region, mergers focusing on balancing of risks and portfolio of assets are especially pertinent for master developers with Dubai interests, who are driven by project and investment portfolio rationalisation.

The other option for companies is to use diversification along the value chain. Most successful Western developers – such as Hochtief and Bouygues Group – have in the past followed this diversification path through mergers, joint ventures and organic growth, and a growing number of mergers between complementary players aiming to integrate the chain both up and downstream have recently occurred in the region.

Emaar has started following this path with the acquisition of Singaporebased Raffles for its education business and joint ventures in the construction, brokerage and facilities management segments, for instance.

The success of the merger lies in key restructuring actions in terms of project portfolio and customer base. Deyaar has shown a lot of maturity in this field compared to the lack of transparency in the region. A detailed strategy is paramount for the development of the core business of a new entity, as well as a specialisation strategy on development segments like low-cost housing, hospitality or retail, where niche players dominate the market. Careful geographic diversification – first at a regional rather than an international level – coupled with a balanced portfolio of activities and assets (both physical and fi nancial) will be essential pillars for success, in line with the evolution of regional markets and competitive landscape changes.

Successful mergers can give leading Middle East players the critical mass and a competitive edge on the international scene, based on the long-term potential of the regional market and easier access to liquidity than other competitors worldwide. “Defi ning a rigorous growth strategy for the merged entity will be key to ensure shareholder and customer buyin, but this needs to happen before the merger is actually announced,” concludes Buchta.

Creating a construction giant With combined assets of Dh194 billion, the proposed merger between Emaar Properties, the UAE’s largest property developer, and Dubai Properties, Sama Dubai and Tatweer, property firms owned by the business conglomerate Dubai Holding, would create the largest property developer in the world.

“It will take some time, as it is a big exercise to merge big companies who have got a lot of assets, but we are on time,” said Ahmad al Matrooshi, Managing Director of Emaar Properties UAE. Mr al Matrooshi said decisions on whether the new entity, which is yet to be named, would take on developments such as Dubailand (a Tatweer project) and The Lagoons (a Sama Dubai project) were still being made.

“Emaar will pick up what’s attractive to it,” he said. “At this moment, we don’t know which projects will be taken by the joint venture. It depends on the valuation exercise [of the projects]. We will do it in a very professional way, it will be good for Emaar and the shareholders.”

The proposed merger is the most solid sign yet of consolidation in Dubai’s property sector, which is striving to cut costs after a dramatic slide in demand and asset values.

Property prices, while showing recent signs of stabilising, have fallen almost 50 percent since their peak in the third quarter of last year.

Consolidation has been one way to help developers streamline operations, cut costs and better manage the construction of their projects. Dubai World said in June that the property activities of its subsidiaries, Leisurecorp, Dubai Maritime City and Dubai Multi Commodities Centre, would be managed by Nakheel, also owned by Dubai World.

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ASK THE EXPERT

The right technique Asphalt must be able to cope with the expected transport loads as well as load burdens resulting from weather and temperature stress. Hans-Josef Kloubert, reknowned expert for compaction techniques, explains the key points in compacting asphalt.

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sphalt layers of a road pavement should be able to reliably carry traffic loads and it must be able to discharge these loads to the substructure or sub-base, in order to prevent harmful deformation. Besides the mix composition and the paving, the compaction of the mix is of utmost importance with respect to the quality and the service life of the road. For asphalt compaction you need the right technique, knowledge and experience.

Compacting asphalt already starts with the fi nisher – in case you use a fi nisher with low pre-compaction you probably need breakdown rolling, which includes the use of too heavy rollers or early compaction with vibration that might affect the evenness of the layer or even cause undesired displacements and misplacements in the material. If you use a fi nisher with high initial compaction you can start earlier using vibratory rollers and fi nal compaction can thus be achieved by only a few roller passes. Th is is because vibratory rollers are very powerful, versatile and require considerably less passes than static rollers.

The vibration reduces the internal friction of the aggregates in the mix, so that the interaction between deadweight and dynamic load increases the density. Besides the static

linear load, other factors like vibrating mass, pavement and is optimally and continuously frequency and amplitude are also decisive for adapted to the actual conditions. Grain damthe compaction effect. But also the number ages and disturbances of the asphalt layer are of passes – too many might cause harmful effectively prevented and the system automatloosening of material and disturbances in the ically limits compaction power for example, structure of the asphalt layer. where there is a risk of over compaction. At Today a great part of it can be provided by the same time asphalt mix stiff ness and comsystems using intelligent compaction; vibrapaction progress, surface temperature, travel tion systems that are automatically controlling, speed, exciter frequency and selected amplioptimising and documenting compaction, a tude are continuously displayed to the roller technique where BOMAG has led the way for operator and can be printed out on-site using many years. The core of these systems is based the data recorder. Due to this adaptability on directed vibration, offering an enormous and the continuous control and optimisarange of compaction performance and depth tion, rollers with Asphalt Manager are highly effect from low-vibration suitable for the complete surface compaction up to enspectrum of asphalt applicaHans–Josef Kloubert is Head of Application Technology hanced depth effect vibration. tions. Drivers can also select at BOMAG. For the past 20 To control, optimise a manual mode. Th is can be years he has been BOMAG’s application expert in soil and document compacused in the case of the comand asphalt compaction and compaction measurement, tion, BOMAG developed the paction of layers on bridges or deeply involved in the Asphalt Manager. Th is is a pavements close to buildings, development of new technologies. system that in automatic mode where low-vibration compacmonitors compaction progtion might be recommended. ress and adjusts compaction performance However, for up to 90 percent of all applicamany times a second, which eliminates drum tions, drivers use the automatic mode. bounce and operator error. Asphalt Manager Asphalt is the ‘royal league’ of compaction requires no special user training and the conwhere quality is dependant on a huge variety trol panel is self-explanatory. During comof factors. Modern intelligent compaction fapaction the dynamic energy leads into the cilitates significant quality.

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ASK THE EXPERT

completion and as each unit is completed the fi nal payment is made making the construction company’s cash flow more efficient.

The Middle East, with its traditional family businesses, is now threatened by outside competition and the recession. The whole family concept of business must now be completely reviewed, from top to bottom as tradition looks to compete with global markets. With leadership the most important part of any business, the eldest son may not be the right leader material so the business may well

“It is important for construction companies to find ways to fund projects and sell quickly; having more options available for buyers is a good marketing tool”

Times are changing The global recession has hit everyone from individuals to banks to corporate businesses. And, in view of the many megaprojects in the Middle East, the construction industry is having a tough time of it.

HAZEL YOUNG

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here was immense vision, investment and construction in the Middle East until the recession arrived.

But, with banks closed and no longer able to provide bank guarantees, they were unable to provide the necessary loans for companies to continue building, let alone think about funding future projects. So what impact has this had on the construction industry? Firstly, housing proj-

ects no longer have a buyer as they cannot afford to buy, so construction companies are then stuck with unsold developments and therefore cannot move onto the next phase of the project or a new venture. To address this problem, construction companies are looking at different ways for people to fi nance or be able to afford a house. Th is also seems to be the case for commercial developments, and as such developers are looking for new ways to be attractive and affordable, as well as look at fi nance options available to buyers. But why must the construction companies arrange this? Well, it is important for construction companies to fi nd ways to fund projects and sell quickly; having more options available for buyers is a good marketing tool. And if the construction company is planning a new development, they need deposits on the development properties from buyers in advance to cover the cost of the development, followed by the balance at

need to look to bring in someone from outside.

The next stage is to look at the structure of the business and have strategies in place, from marketing to fi nance.

Financial planning will need to be reviewed and research is required as to the different types of funding that can be made available for projects. However, the construction industry has one major advantage: it has assets in the form of land and developments that can be sold at the end of the day. Private placement programmes are an excellent way to raise money whilst earning money at the same time from the investment in the programme.

Bank guarantees are also useful as well as a whole array of other available funding options. And if you don’t qualify? Consider joint venture partners and share profits.

It is vitally important to spread the risk, and by choosing construction projects that are essential, like housing, as the basis of the business. The construction company will then be able to consider a bigger project as a long-term future plan.

Hazel Young has a background in Accountancy and Enterprise Development, and was educated to Masters level in marketing/management/female entrepreneurship together with business mentoring.

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EQUIPMENT FOCUS

Geoff Holden, Chief Executive of the Lifting Equipment Engineers Association, explains why standards are the cornerstone of safer lifting.

RAISING STANDARDS

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ith a history that stretches back to the building of the Pyramids, overhead lifting continues to play a critical role right across the construction industry. And whilst attention often tends to focus on high profi le equipment such as tower cranes, overhead lift ing actually involves a diverse array of both powered and manual solutions, including many relatively simple items, such as slings and load lift ing attachments.

Th is is significant, because it is all too easy to overlook items that play a key role in the safety

and efficiency of construction projects. Unfortunately, lift ing related accidents remain all too common; in the worst cases, this can result in death and serious injury. But even when such tragedies are avoided, the implications in terms of damage to the load, equipment, plant or buildings can be dramatic. Equally, disruption to work schedules can hit the bottom line hard. Almost invariably, a commitment by management to improve standards of overhead lift ing safety in the construction industry is also rewarded with measurable improvements in overall operational efficiency.

The causes of dangerous and inefficient

overhead lift ing are many and varied. However, the positive news is that tools and guidance to address them are readily available. Of course, some of the measures that are required will be guided by prevailing regulations and health and safety legislation in the country concerned.

Where such a framework is lacking, or perceived as insufficiently robust, many companies have chosen to observe the relevant UK legislation – most notably the Lift ing Operations and Lift ing Equipment Regulations (LOLER). In any case, there is no doubt that much can be gained from following this modern, risk-based approach to overhead lift ing, along with the related standards and codes of practice.

Ensuring that the equipment employed in overhead lift ing is fit for purpose is clearly one of the foundations of any programme. Th is is particularly true of the construction sector, where all such plant and equipment tends to lead an arduous existence, exposed to the elements and a wide array of loads that can all threaten its long-term integrity. Furthermore, given the rapid increase in ‘budget’ lift ing equipment that is now on the market – typically manufactured in low-wage countries in the Far East – it is fair to say that the need for vigilance has never been greater.

In addressing the question of basic product quality, an understanding of the scope and status of relevant standards undoubtedly puts

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the buyer in a strong position. In the absence of appropriate national standards, the best advice is to look for a relevant Harmonised European Standard (CEN). Within the EU, these have a quasi-legal status, in that a product made to a relevant CEN is deemed to meet the essential health and safety requirements demanded by the Machinery Directive. For those working outside the EU, they still provide a near watertight means of ensuring a satisfactory level of product quality.

In using such standards, it is worth reiterating the key role played by the less glamorous members of the lift ing equipment family. In particular, this applies to below the hook equipment such as slings and lift ing attachments, as these are solely responsible for actually securing the load throughout a lift .

Furthermore, they tend to be vulnerable to damage and abuse each and every time they are used. Attention is therefore drawn to one particular standard – EN13155: Cranes-Safety-Non-fi xed load lift ing attachments. With the exception of general purpose slings, this encompasses just about anything that can be hung from a crane hook.

When standards are discussed, attention tends to focus exclusively on products.

However, when it was introduced in 1998, one of the key characteristics of LOLER was its emphasis on the importance of the ‘human’ factor. In doing so, it correctly identified that most accidents can be traced back to failures

in planning, supervision and inadequately trained staff. In terms of selecting the right equipment, this is reflected in the fact that many accidents on construction sites involve last minute attempts to cannibalise slings or lift ing attachments to suit an awkward load.

No matter the quality of the equipment, if it is simply the wrong choice to suit the load and lift ing operation, the results can be disastrous.

Proper forward planning, in the shape of a comprehensive specification that details all the relevant characteristics of the load, lift ing operation and working environment, is every bit as important as ensuring that products meet relevant national or European standards.

The same is true when it comes to ensuring that the equipment remains fit to use throughout its working life. If the requirements of LOLER are being observed, part of this process will be to subject all lift ing equipment to periodic thorough examination by a competent person. It must be stressed that thorough examination is a rigorous process that requires specialist skills. As such, particular attention should be paid to the need for a genuine competence on the part of the examiner.

On occasion, the apparent vagueness of the term competence allows inadequately trained or inexperienced staff to undertake this safety-critical function. But, as with product standards, independent verification of the skills of the examiner is readily available. The LEEA’s Diploma examination programme is established as the industry-recognised qualification for lift ing engineers undertaking thorough examinations. To reinforce this, the LEEA recently began issuing TEAM (Test, Examine And Maintain) identity cards to engineers that pass the Diploma. Employees are urged to insist it is shown by any engineer proposing to undertake a thorough examination of their lift ing equipment.

Ensuring the safety and efficiency of overhead lift ing in the construction industry is a wide-ranging task that involves many disciplines, including planning, supervision, training, specification and the maintenance and examination of equipment. Fortunately, those responsible can draw on a number of readily available resources for assistance. These include robust product standards such as CEN, and the Approved Codes of Practice that accompany legislation such as LOLER. Trade associations

About the LEEA Established in 1944, the LEEA campaigns vigorously for higher standards of safety within the lifting industry. In addition to providing members with training and expert technical advice, the association works closely with organisations such as the Health and Safety Executive in the preparation of regulations and British, European and International standards. Member companies include those involved in the manufacture, hire, repair, refurbishment and use of lifting equipment; all are responsible for the test, examination or verification of lifting equipment.

Applicants are subject to an initial technical audit before full membership is granted, and then to a continuing programme of assessments. Further details on the activities of the LEEA can be found at: www.leea.co.uk

such as LEEA, which operate examination and registration schemes for lift ing engineers and also subject member companies to technical audits, can also provide invaluable assistance.

Beyond such practical measures, it is also important for those working in the construction sector to recognise the wider benefits. Above and beyond meeting legal requirements, a more professional approach to overhead lift ing can deliver genuine economic benefits. Often the outlay is modest. It may simply involve better procedures for planning of lifts and specification of lifting equipment. Equally, investment in relatively inexpensive items, such as a purpose-designed load lifting attachment to suit an awkward load, can reap a significant return in terms of the speed and labour efficiency with which lifting operations can be completed.

LiftEx 2009, the LEEA’s one-day exhibition dedicated to overhead lifting, takes place at the UK’s Chester Racecourse Heathcote Pavilion on November 20, 2009.

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SA A NF E EF D L I FI C F T IE IN NT G

INDUSTRY INSIGHT

Why safety and efficiency are at the heart of one Middle East crane manufacturer’s activities.

L

ift ing heavy loads and installing heavy pieces of equipment is, by its very nature, inherently dangerous, while processes requiring overhead lift ing and material handling need to be efficient to be economic. For these reasons, safety and efficiency are at the heart of Eastern Morris Crane Company’s (EMC) activities, where a combination of management commitment, competent employees, advanced design systems and a leading product and service portfolio enable this crane manufacturer to provide safe and efficiency enhancing solutions to its clients.

With a base in Dammam, Eastern Morris Crane Company is a joint venture between the Zamil Group of the Kingdom of Saudi Arabia, a global investment company with diverse interests and capabilities, and Morris Material Handling Ltd. Morris is a UK-based company that benefits from more than a century of experience delivering overhead crane and hoists. The joint venture offers comprehensive crane manufacturing, sales and after sales support facilities offering unsurpassed service to its clients.

“Customers of EMC benefit from utilising some of the most technologically advanced products available,” says Abood Ali Humaid, the company’s General Manager. “Along with safety features you would expect such as overload devices, anti-collision and zone avoidance systems, further safety and efficiency benefits are offered via conditionmonitoring systems.”

These solutions provide valuable data on the actual operational activity of a crane’s lifting device and allow effective preventative maintenance planning based on actual hoist-use, minimising downtime. The safe working period available prior to service can be calculated based on actual usage and, in addition, a summation of loads lifted between multiple cranes or hoists can be monitored to ensure that building structures are not overloaded.

EMC and its clients also benefit from Morris Material Handling Ltd’s dedicated training school, which is a full member of the Lifting Equipment Engineers Association (LEEA) and runs accredited training courses both internally and for external clients. Available LEEA-accredited courses include Managing Lifting Operations, Rigging and Slinging, and Lifting Equipment Inspections. “Participants of such courses gain awareness of the hazards associated with heavy lifting and learn how to minimise the risks associated with performing lifting operations,” explains Abood Ali Humaid. “Of course, ensuring that lifting equipment is appropriately inspected during its life is paramount to its ongoing safety.”

When identifying a solution to a client’s lifting problem, EMC use specifically developed design software.

This software uses internationally recognised design rules and standards when selecting electro-mechanical components and calculating steel structures. As a result, structural design and component selection is consistent and proven, as are the production instructions increasing the quality, safety and suitability of the resulting product. Design rules developed by the European Federation of Materials Handling (FEM) – Europe’s manufacturing association for materials handling, lifting and storage equipment, whose activities include establishing guidelines and encouraging technical progress and safety at work – are most commonly adopted by EMC. The company’s management also demonstrates its commitment to quality by ensuring that BS EN ISO 9001:2000 accreditation is maintained. Whilst it can be argued that this does not necessarily guarantee safety or quality, it certainly promotes control of activities to ensure that client expectations are met.

“A well-trained team aware of the hazards inherent in their work, combined with the use of available technology, allows clients across the spectrum of the industry to improve materials handling efficiency, reduce downtime and avoid accidents,” concludes Abood Ali Humaid.

“A well-trained team aware of the hazards inherent in their work, combined with the use of available technology, allows clients to improve materials handling efficiency, reduce downtime and avoid accidents”

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NEXT BIG THING

Intelligent compaction goes global Alexander Greschner reveals how innovative compaction technologies are being introduced into the Middle East to develop and improve quality control.

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oday, the Ammann Group is one of the leading supQuality monitoring pliers for asphalt plants and road building equipment With the expanding utilisation of satellite positioning systems, worldwide. Founded in 1869, when Jakob Ammann additional benefits will be generated for operators and quality control. set up his own workshop in Switzerland, a pioneering Combined with a GPS application, the complete compaction process and spirit motivated the company’s first owner to keep on results are visualised to the operator in real-time. Th is visualization is expanding his customer base as well as his range of seen on an industrial PC screen that displays all relevant quality inforproducts. The core business of Ammann is the development, production mation to the operator in simple coloured graphs detailing compaction and distribution of compaction equipment. For owners and operators of results and the number of passes, for example. Th is indication gives a such equipment the main challenge is quality control. high level of process quality, self-control and operator Over the past few years a number of compaction guidance, generating time savings of up to 40 percent measuring devices have been introduced. Mostly based compared to conventional compaction equipment. on relative measuring, such systems show the relative inACE and ACEPLUS can be equipped on vibratory crease of the compaction result between two passes with tandem rollers for asphalt application and on single a percentage value. These devices display the actual result drum compactors with smooth or pad foot drums for as a kb value that correlates with basic physical measursoil compaction. Ammann is also introducing ACE deing as the gyratory plate test and the Proctor sample test, vices on reversible plate compactors and its Rammax which indicates the load bearing capacity of the comtrench roller products. On these hand-guided compacpacted material. tors the system displays the increase of compaction to The next technological step was to feed the meathe operator and also indicates when the maximum sured value into the machine control system and compaction is achieved.

Alexander Greschner is Director of Marketing and Sales for achieve an automatic adjustment of the vibration paThese products are introduced currently to jobBusiness Area Machines and has been with the Ammann Group rameters: amplitude and frequency. With the Ammann sites as well as the laboratory and testing departments since 1997. Prior to his current Compaction Expert (ACE) Ammann introduced just of contracting businesses because they represent a position, Greschner was active in the Strategic Marketing and such a ‘Compaction Automat’ that has proved to be the highly mobile measuring device, beside being a proDevelopments of Ammann and responsible for the start-up of most efficient automatic compaction measuring and duction machine on the job.

Ammann in the US. control system in the global market.

With ACE being one of numerous innovative technologies engineered by Ammann, it underlines the Intelligent compaction company’s ambition to be one of the leading suppliers for compaction Introduced in the European, North American and Asia-Pacific marequipment and asphalt technologies. kets, ACE offers maximum efficiency and quality control for compaction jobs on soil and asphalt materials. In 2009, Ammann introduced the first Intelligent compaction: A definition ‘intelligent compaction machines’ into the Egyptian market. With this introduction, a new generation of compaction technology has been launched An intelligent compaction device will: in the Middle East market.

The ACE measurement system indicates the material stiff ness, • Measure an absolute (not relative) compaction value of the material during the compaction process which correlates with the achieved compaction quality during the • Control and adjust automatically the compaction compacting process. Th is value is then used to regulate and adjust the parameters (amplitude and frequency) according to compaction parameters – amplitude and frequency – automatically to the measured values ensure an exact achievement of the targeted compaction result. Avoid• Generate a complete documentation of the process and results ing excessive compaction passes also prevents the over-compaction or destruction of the material.

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INSIDE STORY

Breaking new ground New demand for greater collaboration and exchange of information is leading to some significant construction industry shifts – none more so than at the Chartered Institute of Building.

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omen have made some fantastic in-roads into industries that have historically been dominated by men, but despite this, the gritty world of construction has remained a man’s world. In fact, with under 10 percent of the industry made up of females, construction is still considered a daunting environment for women to enter.

But with the appointment of its new president, the Chartered Institute of Building is breaking new ground – in more ways than one.

A pioneer in construction management in her home country of China, Li Shirong’s work spans academia, industry and government and reflects her strong belief in the need for sustainable urbanisation. As a member of the CIOB since its early connections with China (and as such regarded as a major factor in its growth there), Shirong is keen to use her term to ensure that international communications remain high on the agenda. “As the world becomes smaller, it’s easier to share experience about how to make the best use of our resources. But the world is still challenging – we need communication and collaboration internationally, particularly during the current economic crisis,” she says.

Her appointment is certainly an important milestone for the 175-year-old organisation; as well as being the fi rst female president, this is the fi rst time that the CIOB has selected someone from outside of the UK to take on the top role. And while Shirong is no stranger to the issues presented by the CIOB’s core market – having studied in Europe and through her work with the institute, she is well aware of the problems faced by the UK’s construction industry – she is keen to use her presidency to foster a more international approach.

“Communication is so important in terms of sharing experiences and creating new opportunities, so this is something I really want to concentrate on,” she says. “I think it is exciting but also challenging work

for both the CIOB and myself. We have members around the world, and I think to have a president from outside of the UK will help bring a different viewpoint and help encourage a dialogue of communication between our various members in the international environment.”

One such area of focus is particularly close to her heart – that of the development and growing influence of China. “China’s economic development has produced a building boom of a scale not seen in modern history, and it is important that China learns from the experience of the West,” she explains. “However, because China can build in technology at an earlier stage of its infrastructure, it is also able to incorporate previously untried environmental innovations and ideas. Therefore the West can learn much from China, too. Th is

situation underlines the acute need for a twoway exchange of ideas and experience.”

It also highlights the wisdom of the CIOB’s latest appointment. Shirong’s strong connections with her home city of Chongqing – now regarded as the world’s largest city – certainly provides her with experience that will be valuable to all CIOB members. The city is making huge investments in urban construction, has a fast-growing population and a large construction workforce, and Shirong has played a central role in its development in recent years. As such, she is perfectly placed to advise on the various challenges presented by rapid urbanisation – with sustainability chief amongst them.

“Sustainability needs to be a major focus of our discussions as an industry,” she suggests. “I always tell people the city is a museum of buildings – that we don’t just build build-

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A LIFE IN CONSTRUCTION Li Shirong began her working life on a wheat farm, mixing fertile earth from the surrounding mountains into the sandy soil towards the end of the Cultural Revolution. When Chinese policy changed and young people were allowed to take examinations to enter universities for the first time in over a decade, Li Shirong first studied civil engineering (her father’s profession) before going on to become one of the first in China to study construction management, a field in which she later became a professor.

In 2003, the government of Chongqing (a region of 32 million

ings, we create communities, influence society, stimulate economic activity – and I think our members should be very proud of that; however, with that comes a certain responsibility, and the need to focus on sustainable development. Construction is an incredibly important sector – particularly for those countries that are going through rapid urbanisation.”

The related concepts of conservation and maintenance will also be key areas of focus for Shirong in the coming months. “Conservation is a comprehensive process and requires a lot of knowledge,” she says. “You need to do a lot of investigation before making a decision on whether to conserve or demolish. Do you conserve the whole area or one single building or

people) asked her to help in its modernisation process. She became vice-mayor of the Shapbingba District, leading a team to create an entirely new ‘university town’, relocating farmers and building around 10 universities for 80,000 students.

Shirong was only the third Chinese national ever to join the CIOB and has encouraged membership in China ever since. She has also been instrumental in joint schemes between the CIOB and the Chinese construction industry, currently involving training, and is an ambassador to the Chinese Ministry of Construction.

Which leads us back to Shirong’s core competency: construction management. Looking at urbanisation in such a holistic way really requires an integrated approach between many different stakeholders – between architects, developers and planners, local governments, environmental groups and suppliers. There are a lot of different constituencies that all need to come together to really work on making sustainability a realistic goal. So what can be done to improve the way that these different groups and types of stakeholder work together?

“It’s simple,” she says. “Management is about dealing with people. It’s about leadership. Th is is why I always say that the CIOB is a good forum for talking about construction

“Sustainability needs to be a major focus of our discussions as an industry, I always tell people the city is a museum of buildings – that we don’t just build buildings, we create communities, influence society, stimulate economic activity” even just a part of the building? Is a historically significant but dilapidated building worthy of repair and restoration, and if so, should you use traditional methods of building that are true to the spirit of the building or more efficient and cost-effective modern methods?

These are big decisions.”

management; we should be working together in a partnership. The CIOB is really trying to show the value of conservation, linking it to sustainability through a series of seminars and events; we’re trying to start a dialogue about the value of conserving your heritage. We’re very much embracing the knowledge within

our membership, and using those members to spread the word and show the actual value.”

Part of that value is, of course, in the growing role tourism plays in emerging economies.

Again, Shirong uses the UK as an example.

“For many overseas visitors, tourism in the UK is actually about coming to the country and experiencing the culture and the heritage, and if you sacrifice that then you actually sacrifice quite a bit of your economy. There are lots of countries out there that have a strong cultural identity, and keeping that is important for those economies.”

Shirong has certainly come a long way since her fi rst job labouring in the mud of a wheat farm at the tail end of the Cultural Revolution 30 years ago, but symbolically, she is still breaking new ground. Modestly, she puts the achievement within a much wider context. “I am just a normal person from China,” she says. “For the institute to trust me and elect me is a big thing, for both myself and my country. I will never forget my daughter’s reaction to the news. She said that this was the most important thing in my life, as it shows that as a professional I got to the top. But this post really isn’t about me. It’s about changes in China, and changes in the attitude of the industry. Th is couldn’t have happened 30 years ago, under the planned economy. Th rough the open door policy and reform, we changed – to be able to compete in an international society.

It’s an historic achievement.”

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INDUSTRY INSIGHT

Diversifying the access industry After over a year of presence in the Middle East, Hydro Mobile’s platforms and access equipment are already in full operation on the region’s major construction sites, explains Vincent Dequoy, President of the access company.

B

e it residential, institutional or commercial structures, high-rise or low-rise edifices, the equipment combined with the full array of services provided by Hydro Mobile, are making it possible for contractors to increase productivity and avoid costly delays and overruns.

Located in Montreal, Canada, Hydro Mobile designed the first hydraulic mast-climbing work platform in the mid-eighties, to provide the masonry industry with a safer and more productive alternative to traditional scaffolds. Twenty-five years later, the company has developed a complete range of mast-climbers to answer the specific needs of any trade in the industry. We decided to diversify our offer to provide access solutions for any construction or restoration project. We know that the whole industry feels the pressure from the economic slowdown, an increase in competition, stricter time constraints and workforce shortages. It is getting harder for contractors and subcontractors of any size to be profitable and the financial context is driving growth in the mast-climber market, as our access equipments considerably improve productivity, safety and working conditions.

Hydro Mobile offers a complete range of mast climbers that includes the F-series, the most flexible platform on the market. With the highest speed to capacity ratio available today, it is best suited for heights of 100 feet or higher and can accommodate multi-trade work, covering a wide variety of types of work: windows, EIFS, stucco, painting and even bricklaying. The F-Series combines a speed of 38 fpm and a capacity of 15,000 lb. What’s more, platforms are independent and can be operated separately to work at different heights simultaneously.

The E-Series, Hydro Mobile’s most recent model, was designed for a wide variety of works, outdoors or indoors: roofing, painting, glazing, caulking, restoration, inspection, cleaning, main-

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“Hydro Mobile has made customer service and safety its priorities”

Vincent Dequoy is the President of Hydro Mobile Inc. and a very influential figure in the access industry. He is Chairman of the ISO 16369 Standard and a member of ANSI 92.9 and 92.10 Committees.

tenance and so on. Fully electrical, it climbs at 21 fpm and carries up to 5840 lb.

The P-Series is perfect for smaller jobs that require high loading capacity and for restrained work areas. The P-Series combines a small transportation size (it fits in a 36" opening) with a not negligible load capacity of 10,000 lb and a speed of 10 fpm. The P-Series is ideal for multi-residential or small commercial masonry jobs ranging between 15 and 100 feet in height. The M-Series is most commonly used for facade works that require high loading capacity. Supporting weights of up to 20,000 lb, it has one of the highest load capacities in the market.

In addition, Hydro Mobile has developed a multitude of accessories that adapt to these models, allowing the platforms to conform to an extended range of architectural configurations, whether it comes to angles, corners or circular shapes.

In 2007, Hydro Mobile joined forces with RAXTAR, a European passenger and materials hoist manufacturer that offers reliable, costeffective and innovative products. RAXTAR’s

and Hydro Mobile’s masts are fully compatible, which leads to important cost reductions, as mast climbers and hoists can function in parallel on the same mast.

In all of its active markets, Hydro Mobile has made customer service and safety its priorities. The company emphasises user training to help optimise not only jobsite safety, but also productivity. A designated team of skilled engineers also offers technical support and designs custom solutions.

In order to keep up with this level of service, yet unmatched in the access industry, Hydro Mobile chooses its local partners with care, for the distribution and servicing of its products.

Together with leading industry players like the Kanoo Group in the UAE, Hydro Mobile offers the experience and expertise to satisfy the needs of every contractor: higher productivity, better flexibility, ease of use and greater safety.

To download complete specifications, learn more about Hydro Mobile’s products or find a distributor in your area, please visit www.hydro-mobile.com.

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PROJECT MANAGEMENT

man

The

MENA Infrastructure meets Hill International’s President of Project Management, Raouf Ghali, to talk about why managing the Middle East’s most ambitious projects requires a unique blend of vision and experience – and a solid plan of work.

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plan

with the

By Ben Thompson

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SHAMS ABU DHABI LOCATION: Abu Dhabi, UAE CLIENT: Sorouh Real Estate SERVICE: Project management PROJECT VALUE: US$2.7 billion Hill provided project management services for the Shams Abu Dhabi, which will offer 82 million square feet of residential, office, hotel, retail, entertainment and parking space. The first project to be built will be the Sky Tower, a planned 83-storey residential and commercial skyscraper that will be the tallest building in Abu Dhabi.

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KING ABDULLAH FINANCIAL DISTRICT LOCATION: Riyadh, Saudi Arabia CLIENT: Public Pension Agency SERVICE: Project management PROJECT VALUE: $7.8 billion The King Abdullah Financial District is anticipated to be the biggest financial district in the Middle East and a strategic development for the city of Riyadh. With floor space of over three million square metres it is expected to be the headquarters for the Capital Market Authority, the Tadawul Stock Exchange and other major financial institutions.

A

s challenges go, the problem facing Raouf Ghali, Hill International’s head of project management, is an enviable one given the current climate.

“We’ve just got so many projects on the go at the moment,” he says with a wry smile. “From Abu Dhabi to Qatar to Saudi Arabia, we’ve got lots of exciting and challenging projects under development. And they are keeping us very busy indeed.”

Naturally, Ghali is hardly complaining. In an economic downturn that has seen thousands of the region’s construction workers laid-off and dozens of projects cancelled, such a large volume of high-profile work can only be a

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good thing. The company is programme manager for Sorouh’s SHAMS project, which involves the construction of a large community on Reem Island in Abu Dhabi. It is also doing project management work on the Jumeirah Etihad towers for Sheikh Suroor, in the Khalidiyah area in Abu Dhabi; project management for the King Abdullah Financial District in Saudi Arabia; and is working on the Barwa Financial District and Barwa City in Qatar. Add this to the project management work Hill is doing on Dubai’s US$2 billion City of Arabia complex and the fact that it is programme manager for villa construction on the Palm Jumeirah, and it is clear that the company’s portfolio covers some of the largest and most prestigious developments in the Gulf.

“As far as our involvement is concerned, the first thing we like to do on a megaproject development is plan the work,” Ghali explains. “In forward planning, you learn how to anticipate problems. At the end of the day, project management is nothing else but managing risk and managing changes. These could be changes in design, changes in the industry or changes in the economy as a whole – such as those we’ve seen in the last year or so – but planning the work is an essential part of looking forward rather than being reactive.”

It’s a philosophy that’s reflected in a popular phrase within the company: plan the work and work the plan. “That’s a pretty good summation of the way we approach our projects,” laughs Ghali. “It also provides us the ability

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to do what-if scenarios in order to avoid unexpected delays or problems before they actually happen. So our involvement at the initial stage is identifying the work, planning it and then starting on the implementation.”

Project management takes off

Hill International recently announced that it has been awarded a contract from Bahrain Airport Company Sourcing the right results to provide project management consultancy services in Such a common-sense approach is geared towards reducing risk in the connection with a major expansion programme at project development process. Ghali explains that procurement strategy is Bahrain International Airport (BIA) in Manama. The probably one of the most important elements of the planning process, because contract includes a four-year base term with a four-year it is here that you start defining in which direction you want to push the risk. optional extension period. The contract has a potential “You need to decide how much of an appetite does the owner have to take on estimated value to Hill over its full eight-year term of the risk themselves as opposed to pushing it out to the contractor,” he exapproximately US$35.6 million. plains. “Just because you push the risk to a contractor doesn’t mean that the BIA is experiencing unprecedented growth and is owner doesn’t pay for it. It just means that most likely the contractor has attracting more international airlines to use the airport priced for the risk that you’ve given him and it’s now being managed by him as a regional transfer and aviation services hub. BIA rather than by the owner. So a good procurement plan – one that’s well eshandled 7.3 million passengers in 2007 and the number tablished and that identifies what level of risk the owner wants to maintain in of passengers continued its growth in 2008. The terms of managing it themselves versus paying for somebody else to expansion programme at BIA includes two new manage it – needs to be defined as early as possible.” passenger terminals, aprons, separate piers, a That process of managing construction risk and pricing people mover system and their associated it properly is one of the key challenges currently facing the facilities such as car parking, necessary road industry. Hill’s approach is to judge each project on its network expansion and utilities own criteria. “One size does not fit all in this regard,” infrastructure. The programme also Total revenue at says Ghali. “Each project and each owner has certain includes the development of an adjacent Hill’s Project objectives and goals for his project, and to reach those Airport City with state-of-the-art facilities Management Group goals there are certain associated risks. Once you’ve and infrastructure, including hotels, in Q2 2009 identified both the goals and the risk associated with them, conference centres, retail and recreational then you make a procurement plan. Just because a procurefacilities. Upon completion of the programme, ment plan works for one situation doesn’t mean it’s going to work total combined capacity at BIA is expected to exceed for another. Identifying those, evaluating them and then finding the best 30 million passengers per year. way of procuring for them is the issue, and that’s where the planning Hill’s responsibilities will include planning, time process comes into its own.” control, time management, preparing and evaluating Of course, it is essential that a certain amount of flexibility be built into contractual documents, design overview, value those plans as well. “Flexibility is the name of the game, because as things engineering, technical, legal and financial support services, change, you have to adapt to those changes in order to manage the risk,” staff augmentation and project administration and he says. coordination in order to achieve an efficient performance A case in point is the external pressure currently being placed on deof the design and construction of the project. “BIA plays a velopment projects as a result of the recent financial crisis, and Ghali feels significant and integral role in the economic development that attitudes to construction risk have certainly changed over the past 12 of Bahrain,” says Raouf Ghali. “We are honoured to be part months in light of the global credit crunch and the economic conditions of their ambitious expansion programme.” that followed. “We have seen very few new projects being launched since the economic crisis,” he concedes. “Most of the megaprojects that we are managing are projects that were launched and under implementation prior to the crisis. However, with the economic crisis came an opportunity to analyse whether the need, the requirement and the demand for certain projects or components remained the same, and depending on the results of that analysis, we were able to shift certain priorities and risks and re-phase certain projects.”

Indeed, Ghali believes that a number of opportunities have been revealed as a result of the economic crisis, particularly with regard to the fact that the price of construction has gone down. “Some of our clients have taken the option of exploiting this situation and completing their assets based on conditions that are more favourable for them,” he explains. “They’ve renegotiated some of their contracts, bringing down the risk of possibly not having the de-

US$38.8 million

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mand that they had a year-and-a-half or two years ago. They will now have a much more competitively priced product with the hope that by the time they’re finished, the economy will have turned around. Again, it comes back to flexibility and having that ability to adapt to changing conditions.”

Unique challenges In a region as fast-moving as the Middle East, the ability to shift gears quickly is essential. Indeed, up until recently, the pace of development was one of the most challenging aspects of working in the region for project managers such as Hill. “Up until the economic crisis, our biggest challenge was the pace and the speed at which the Middle East wanted to do things,” confirms Ghali. “Everybody wanted their development to be done in record time, with superior quality levels, the lowest possible cost, and often using techniques that had never been used before – and as you can imagine, these are forces that are fighting against each other when you’re trying to develop a project. This was our biggest challenge: managing owners’ expectations about what can be done, and it challenged both the engineering field as well as the management field to try and deliver those projects to the meet those high expectations.”

Raouf Ghali Since the economic crisis, however, those deadline pressures have been relaxed – allowing Ghali to concentrate on improving the quality, the value and the risk versus return proposition.

“I think we are now looking at some more realistic timeframes. Regarding unique challenges, I wouldn’t say there’s anything unique about the region other than the unique aspects of the projects themselves.”

These, however, provide challenges aplenty.

After all, over the last two decades, the Middle East has hardly been shy in terms of its appetite for innovation and risk-taking in the construction industry. So given that project management is largely about mitigating exposure to risk – and that innovation is an inherently risky proposition – how are the region’s developers balancing pioneering design and construction with effective risk management?

“It depends how you define the risk element,” he asserts. “Is it the risk of having a valuable product at the end of development that you can sell easily for a profit? Or is it the risk inherent in the process of creating that product? I think when you’re being innovative and bring in elements that nobody has done before – for instance, sustainable products with zero emissions – there are certain risks and cost overruns that could result because these are often technologies that haven’t yet been proven. There’s also risk in maintaining a product that may turn out to be excessively expensive to run. So there are a lot of risks associated with innovations in the construction process, but unless we try those innovations out we will never find out where the risks lie and how to resolve them. For every risk there’s a resolution, if you put your mind to it.”

The region certainly has its fair share of pioneering projects. “Look around the UAE and other parts of the Middle East and you’ll find a lot of iconic buildings and developments – such as the Palm developments – that nobody had ever dared to do before,” continues Ghali. “There are many assets in this region that nobody thought could be or should be done because of the risks and difficulties they presented, and yet they have been a great success. So the Middle East does have a great appetite for innovation, and they will take the risk along with it.”

Raising standards Hill International’s experience in project management spans every type of development from residential to commercial to retail to leisure. The company is active in the transportation, power, telecommunications, industrial process, manufacturing and building construction sectors, and as such has a vast repository of best practice upon which it can draw. Sharing such knowledge, skills and experience across the different projects on which it works has been critical to the company’s success.

“Again, it’s a matter of assessing risk, seeing what works in one sector and establishing whether it will work in another,” Ghali explains. “The sectors don’t really differ much in terms of best practices, which are generally applicable across all verticals. It depends more on the type of contracts that you want to let out, not whether it’s a transportation project or a mixeduse development. I think the processes are very similar, and the ways in which you manage them are very similar. Of course, you will need expertise in each area to manage them effectively because they have different qualities and different challenges, but I think the best practices in managing the risks are the same across the board, and you can cross-reference them.”

He also believes the Middle East has truly high standards when it comes to construction. “They’ve adopted both the British and the American standards, so they have a pretty high level that they’re working towards, be that in terms of infrastructure, civil works or buildings,” he says. “I don’t think they are short of any other Western country that we’ve worked in. They’ve come a long way in a very short period of time in terms of implementing pretty much any standard that you can think of in building design and construction.”

One such area is in green certification. Regional developers have embraced standards such as the LEED Green Building Rating System, while homegrown environmental standards such as ESTIDAMA are driving a new culture of sustainable development in the Middle East. “As far as sustainability goes, I think they’re probably one of the top regions in the industry,” insists Ghali. “You’ve got Masdar in Abu Dhabi, which is really pioneering the idea of trying to create a city with zero emissions. Such developments represent the future, and the firms that embrace sustainability first are the ones that are going reap a lot of the gains and profits – maybe not on their first asset, but certainly on the reputation that they can do it, will be able to do it, and can redo it again.”

“The Middle East does have a great appetite for innovation, and they will take the risk along with it”

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THE PALM JUMEIRAH

national firms importing skills and knowledge into the Gulf. “Given the global economy and globalisation, there’s no doubt in my mind that in the near future you’re going to find expertise coming out of the Middle East that will be sought and bought by other countries – both in the West and in Asia and the Far East too,” he asserts. “They are creating their own industry, they are setting standards and with the innovation and the investment that they’ve put Hill managed the reclamation of The Palm Jumeirah in the in, they will be able to export that, certainly.”

Arabian Gulf off the coast of Dubai, UAE. Hill is currently For the moment, though, there are still plenty of opportunities to keep both managing construction of 1300 villas on the island's fronds. regional and international developers busy in the Gulf itself. “We’re seeing a lot The trunk of the island provides public entertainment, of activities in Qatar; we’re seeing a lot of activities in Saudi Arabia; and we are amusement, shopping, dining and some residential facilities maintaining activity levels in the UAE, with Abu Dhabi leading it,” says Ghali. while the fronds are dedicated to upscale housing.

“Dubai will soon be back, as well. Oman is another place where I believe we’ll see some good opportunities. It’s gone a little bit quiet of late, but we feel in the near future, as soon as the economic situation improves, there’s going to be high demand in terms of growth there. But right now, we see the Kingdom of Saudi Ghali believes there’s a real opportunity – given the rapid pace of develArabia, Qatar and Abu Dhabi as being the three leaders.” opment and the huge volumes of infrastructure investment being poured And as to the effects of the downturn, Ghali is wary of makinto the region – for the Middle East to set the agenda in terms of ing any predictions of how long the recession will last or how standards development and take a lead in the global construcdeep it will be. “If I knew the answer to that one, I would be tion industry’s approach to sustainability. “I would expect At a rich man by now!” he jokes. Yet despite his reluctance that they would be taking the lead in setting certain stanto make any firm predictions for the coming year, Ghali dards and showing the way,” he says. “They’ve showed is fairly optimistic on prospects for the next 12-18 that in the construction industry over the last 10 years. square feet City of months.

“We’re starting to see some signs of owners The high media profile of Dubai has really showed the Arabia’s mall will coming back to the table, of tenders coming out,” he says. rest of the world what the region is capable of doing – be the biggest in “I think a lot of the activity is going to be spurred by the what they can build and how quickly they can build it – so the world governments of UAE, and in particular Abu Dhabi and I have no doubt that they will be setting standards in nuDubai. We’re also seeing a lot of infrastructure projects being merous areas of the industry, including sustainability.” announced, which are generating other developments, and so the A global leader cycle is restarting again. If I was a guessing man, I’d say by mid-2010 we’re Indeed, Ghali feels that Middle Eastern companies will soon be expandgoing to start seeing activity in the construction industry rising again.” ing overseas and using their expertise to drive project development in other And until that time, Ghali has more than enough work to keep him parts of the world – in a direct reversal of the recent trend that has seen interoccupied.

LOCATION: Dubai, UAE CLIENT: Nakheel Corporation SERVICE: Programme management PROJECT VALUE: US$2.8 billion

20 million

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EXECUTIVE

MENA INTERVIEW

COVERING UP Could you tell us something about your business connection in the GCC Countries?

Alexander Oelsner. For decades our floor coverings have been installed in more than 150 airports worldwide. Among those there are also numerous projects in Saudi Arabia, Bahrain and the United Arab Emirates. In the past, our floor coverings have been installed in various prestige airports like Sharjah International Airport, Bahrain International Airport, King Abdulaziz International Airport and King Khaled International Airport.

Since 2008, we have intensified our business in the GCC. In the GCC and North Africa we are represented by exclusive distributors being present in each of the countries to ensure the high quality of service for which nora stands.

Th is was recently reiterated during our fi rst nora GCC Partners conference.

Which technical experience do you offer in comparison to competitors? What advantages do you offer in regards to maintenance?

AO. We do not act as vendor, but as a system provider who offers long lasting solutions, and for that reason we partner with important players in the building industry to provide more than just a floor covering. It is important to ensure best customer satisfaction to our esteemed clients in the GCC as we are long-term oriented. Allow me to elaborate: in the GCC we teamed up with Henkel, a company with expert experience in subfloor preparation and adhesives. We recommend the use of Henkel and

Alexander Oelsner, Export Area Manager for nora systems GmbH, examines floor coverings in the GCC.

nora products now also for the GCC, especially AO. Our floor coverings do not only have a since Henkel operates a local plant in UAE. The better footfall sound absorption in contrast clients will benefit from our joint 10-year warto other floor coverings, they also have a ranty on the integrated flooring system build positive effect on the overall, room acousup. This shall pay tribute to the fact that high tics – it has been shown that nora provides a exposure projects like airports and hospitals much better sound clarity compared to hard demand an extra attention. Always remember, or carpet floor coverings. As a result, the the cost of floorings is only three percent of normally noisy impression on an airport with the building cost. However, once the project is passengers walking and baggage’s being rolled operational all you see is ceilon the floor is considerably ing, walls and floorings, which reduced and better sound leaves the flooring with a 33 clarity can be achieved. percent exposure.

To manufacture ecoOur biggest advantage friendly products are a matter over other floorings is the easy of course for nora systems in maintenance of norament Germany: we manufacture floor coverings. Thanks to this only from high-quality infact the flooring does not need dustrial and natural rubbers any coating or waxing, which mixed with mineral fi llers helps to keep the operational plus environmentally friendcosts very low. On the environly colour pigments, nora Alexander Oelsner joined nora systems GmbH in 1994. mental side this easy cleaning floor coverings are installed Quickly working his way up the company, Oelsner is process keeps even the used using eco-compatible adhecurrently in change of the water free from contaminants. sives. All floor coverings are business in the MENA region.

It is all thanks to the machinery regularly subjected to very and know-how accumulated stringent quality checks by over more than 60 years here in our German top-ranking institutes and are awarded with plant. Nora floor coverings are extremely wearmany eco-certificates meeting requirements resistant, and for that reason a perfect solution laid down in standards such as LEED, BRE or for highly utilised airport projects. the newly found DGNB. Th is is why our floor coverings are ideal Footfall sound absorption is a product feafor sustainable buildings and gentle on reture that is absolutely necessary for floor sources. Our floor coverings were installed in coverings in airports. Which specialities do various environmentally awarded buildings your rubber floor coverings offer? worldwide.

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PROPERTY DEVELOPMENT

Building sustainable As the industry shifts towards more sustainable building practices, Gurjit Singh, Chief Property Development OfďŹ cer at Sorouh Real Estate, outlines why Abu Dhabi is taking the lead.

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S

orouh Real Estate is one of the largest real estate developers in the Middle East. Based in the heart of Abu Dhabi with a reach that stretches across the UAE and the wider Gulf region, the company currently has more than AED70 billion worth of projects under development. But as the fallout from the global credit crunch continues to be felt in the region’s once booming construction industry, is the firm’s growth sustainable?

Gurjit Singh, the firm’s Chief Property Development Officer, certainly thinks so. Even in the face of toughening market conditions, the developer recently reported full-year growth for 2008. And while conceding that it has been impacted by the credit crunch, Singh maintains that Sorouh’s long-term strategy leaves the company well placed to successfully navigate the downturn. “We have been impacted, as have all real estate developers around the world,” he admits. “But Abu Dhabi has a strong high net worth economy and therefore is in a stronger position than most other markets, and we remain positive about the future outlook.”

He believes that Abu Dhabi is strongly positioned to weather the current economic crisis, and that the real estate market will be one of the main beneficiaries. The source of his confidence is Plan Abu Dhabi 2030, a policy document published by the Urban Planning Council in 2007 that aims to ensure growth is sustainable and benefits all Abu Dhabi residents and businesses.

The plan is designed to help Abu Dhabi respond to current and future development needs, establish a planning culture and introduce strong guiding principles for new development. It also provides a sustainable foundation for Abu Dhabi’s growth, taking into account building heights, land use, density and many urban development related issues.

It’s a policy that appears to be paying off.

In a recent Jones Lang Lasalle study, Abu Dhabi was forecast to be the strongest performing MENA real estate market over the next two years. Through so-called ‘pump priming’ – government actions taken to stimulate the economy – and the implementation of various infrastructure development programmes, Singh expects the population to experience steady growth over the coming decades, which will have a huge multiplier effect on the economy and create a derived demand for real estate. Add this to the strong economic fundamentals of the emirate,

which has one of the highest levels of per capita GDP in the world, along with high hydrocarbon revenues and future reserves, and Singh believes the future looks bright.

“There is a virtuous circle of supply and demand factors in Abu Dhabi,” he says.

“Sorouh will be able to play an important role in capitalising on that relative strength because we are involved in developments that are an important strategic element of the city’s framework Plan 2030 for Abu Dhabi and Al Ain, the economic Plan 2030, and the surface transport masterplan.”

Singh explains how over the next 12 months, Sorouh’s strategy will focus on two key areas: customers and delivery. “With our customers, we are looking at ways to help them through the current global financial situation.

That means initiatives such as new financing packages on all our properties – for example, our new re-pricing initiative at Alghadeer,” he says. “In terms of delivery, our goal is to push ahead on all the developments we currently have underway. The first phase of Golf Gardens is about to be handed over and we are making great progress on Sky and Sun Towers, on the Gate Towers and at Alghadeer. These have been challenging times for all real estate developers, but with these areas of focus, we are confident of our future path.”

His firm’s approach is symptomatic of a subtle but significant shift in industry thinking in recent years. “Property developers are no longer just constructing buildings,” he explains.

“They are creating places and destinations. We are involved in the creation of SHAMS Abu Dhabi as a unique destination, both as a viable extension to the Abu Dhabi central business district as well as an investment destination.

Here within SHAMS Abu Dhabi, our place making is taking shape with the topping out of the Sun and Sky Towers development. We are also making place making progress with the Gate Towers, Alghadeer, Golf Gardens and Lulu Island.”

And whereas companies in the Middle East previously competed to offer the highest, biggest or most luxurious developments in the world, today this focus has changed to reflect the need to develop buildings and communities that are more sustainable and offer greater long-term value. In this respect, Abu Dhabi is something of a pioneer.

Sustainable development Conceived to support the realisation of Plan Abu Dhabi 2030, Estidama is initiated under the direction of Abu Dhabi Urban Planning Council in collaboration with a number of government agencies and developers who share the vision to transform Abu Dhabi into the sustainable Arab capital. The aims of the Estidama programmes include: • Reducing energy consumption • Reducing CO2 emissions • Reducing land consumption • Raising the quality of the urban environment • Reducing the government subsidies for water and energy • Sustaining the image of Abu Dhabi

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GOLF GARDENS Start: May 2006 GBA: 142,000 sqm Completion: 2009

Golf Gardens is the first residential development in Abu Dhabi to combine golf and real estate.

With its beautiful villas and townhouses overlooking Abu Dhabi golf course, this development sets a new standard for property development.

THE GATE DISTRICT

ALGHADEER

SARAYA

Start: September 2005 GBA: 5.1 million sqm Completion: 2013

Start: March 2006 GBA: 620,000 sqm Completion: 2012

Start: October 2008 BUA: 2.7 m sqm Completion: Late 2012

Start: December 2006 GBA: 730,000 sqm Completion: April 2009

SHAMS Abu Dhabi on Al Reem Island will be a distinctive urban location and self-contained community. It has been designed to accommodate 45,000 residents and will be a blend of luxurious buildings and manicured green spaces.

The Gate District comprises a cluster of eight towers at the entrance to SHAMS Abu Dhabi, encompassing architecturally renowned designs for residential, office and retail space. It will include the 74-storey Sky Tower and the 65storey Sun Tower.

Various residential developments, offering charming villas, townhouses and apartments, will provide a cosmopolitan lifestyle that is complemented by a range of leisure facilities and amenities within each community.

A mixed-use, high-rise development in a prime location on the Abu Dhabi Corniche, Saraya includes residences, offices and a hotel with views across the Arabian Gulf.

SHAMS ABU DHABI

“Abu Dhabi has always had a pragmatic approach to sustainable development,” he says.

“More and more emphasis is being placed on sustainability. Property and facility managers have to include in their skills the management of carbon footprint reduction. Abu Dhabi is taking a lead in this respect, and this is clearly illustrated in the comprehensive framework of Plan Abu Dhabi 2030. There is a clear focus on better management of its coastline, as well as the incorporation of sustainability elements into all developments. In addition, Abu Dhabi has introduced sustainability certification ratings through the Estidama principles and rating system, which not only applies to buildings but also to communities.”

Estidama was launched in May 2008 as a joint collaboration between the Abu Dhabi Urban Planning Council, The Environmental Agency, Abu Dhabi Municipality and Masdar.

The word means ‘sustainability’ in Arabic; however, the primary objective of the programme is to ensure sustainable design, operation and maintenance of all types of buildings and communities in the emirate. The first programme of its kind that is tailored to the region, Estidama aims to promote a new ‘sustainability at large’ mindset among the government, developers, operators and individuals.

“Sustainability has deep foundations in place management and sound economics,” says Singh. “The initial cost of sustainability is almost always perceived as a burden. But of the cost is assessed as part of a long-term lifecycle cost over the entire life of a development, then

the benefits of sustainability have a positive payback in energy conservation and lowering of operational costs.”

As such, Sorouh is keen to integrate concepts such as sustainability and greener building into its projects. “All of our developments are aligned to meet the Estidama rating system and we work closely with the Urban Planning Council to ensure our projects meet the Emirate’s overall objectives,” explains Singh. “Abu

“In terms of delivery, our goal is to push ahead on all the developments we currently have underway” Dhabi leads the world in creating the right environment for sustainable development, with specific sustainability principles. Sorouh Real Estate takes its role in developing Abu Dhabi’s future seriously, and follows these principles closely in its developments such as Alghadeer and SHAMS Abu Dhabi.”

Of course, rapid urbanisation is putting pressure on built-up areas everywhere, and Singh feels that developers who follow a sustainable approach to managing urbanisation, with sound place making and place management frameworks in place, will be the longterm winners in the UAE real estate industry.

“Rapid development growth causes impacts on the all aspects of the urban environment,” he says. “Place-making and place-management frameworks address these needs and must be set in place at the onset of urban development management. A sustainability programme implemented early in the development process will ensure that the costs of place management operations over the lifetime of the development will be lower. This management of longerterm operational costs will go a long way in optimising the quality of a development for its inhabitants; it will become value accretive and hence will be an asset enhancement to the development and improve the balance sheet of the individual investors.”

Ensuring projects work within the context of their local environment has become a key requirement for real estate developers, and Singh is acutely sensitive to the need for close collaboration with both city planners and infrastructure developers in order to create the right synergies. “It is essential that as developers we understand fully the plans and requirements of Abu Dhabi in our place development,” he concludes. “In this regard, we are guided by the framework plans for Abu Dhabi and Al Ain as well as the infrastructure requirements in the Abu Dhabi surface transport masterplan. The Plan Abu Dhabi 2030 is a good guide to the coherent place-making and place management framework for Abu Dhabi, as it brings together the principles of balanced sustainable development in the creation of new urban areas within the capital.”

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ROUNDTABLE DISCUSSION

GRAND DESIGNS

Despite the global economic crisis affecting development in the Middle East, construction still goes on. MENA Infrastructure asks a panel of experts for their opinions on where the sector is heading.

Wael Allen, Regional Managing Director, Hyder Consulting Middle East

Adam Minatre, International Sales Manager, Bay Shore Systems

Michael Sagermann, Regional Business Line Manager, Atlas Copco Service Middle East

Performance is a critical element of any piece of construction, be it equipment or consultancy. In your opinion, does the Middle East offer any particular or unique challenges in terms of performance requirements?

Wael Allen. Designing sustainably to reduce maintenance requirements is a critical success factor in achieving maximum performance across an asset’s lifecycle. The Middle East operations and maintenance capability is at an embryonic stage, which poses unique challenges. Attention should focus on ‘operability and maintainability’ to realise an asset’s true cost and value.

Constructability, commissioning and operability must be aligned to achieve optimum use of an asset. Constructability reviews and value engineering seeks maximum value for money and companies need to maximise project value through this approach, rather

than traditional cost cutting practices. For example; a communication network system that facilitates future changes, may not necessarily have the lowest initial cost, but its future value, lifecycle cost in terms of its expansion and technology upgrade capabilities are worth exploring. Lack of or poor maintenance will result in loss of value of an asset, therefore, the choice of material and equipment must take account of the lifecycle cost.

Adam Minatre. I don’t think the Middle East is anything out of the ordinary from the rest of the developed world. Performance is required on any project, large or small. Of course there is the heat, which can take its toll on the people and equipment but other parts of the world have similar extremes, such as the cold. Certain countries have had supply problems, concrete for example, but so have many other parts of the world. So, of course

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there are unique challenges in the Middle East but the rest of the world sees variants of these challenges as well.

Michael Sagermann. Extreme temperature puts enormous pressure on operating limits.

High ambient temperatures and the frequency of airborne dust, plus the extended working hours (some cases 24/7), create a working environment challenging the performance, reliability and durability of any piece of equipment.

“Lack of or poor maintenance will result in loss of value of an asset, therefore, the choice of material and equipment must take account of the lifecycle cost” - Wael Allen

In consulting, extreme climate must be considered to make the right product choice.

For example, at +50°C a generator needs derating as much as 20 percent, meaning the need to oversize. If this is not considered it could result in performance shortfall or even unusable equipment.

Lastly, the Middle East region is one of the few markets still active. Naturally everyone worldwide is looking for business in active markets, bringing some challenges with low quality, low cost products not previously sold here. The market can sometimes seem very crowded.

There has been a growing focus on sustainability and greener construction evident in the sector over the last few years. What impact have you seen this trend have on business?

AM. Our products are very customisable. One major area of customisation is that we allow the customer to choose the excavator that our equipment will be mounted to. Th is may not sound very ‘green’ but all new excavators at least meet or exceed tier three emissions, are equipped with an auto idle programme and some with an auto shutdown after 10 minutes of idling. Th is all reduces the amount of fuel used per day. The state of California has been

one of the first US states to take strict emissions steps. This is a huge step forward but contractors are now facing extraordinary costs in repowering older equipment (which still works perfectly well) or replacing their fleet with new equipment. Look for higher construction costs if the rest of the world has similar plans.

MS. A major focus within the Atlas Copco Group is the environmental impact of our products. Some years ago we introduced our ‘Because We Care’ campaign promoting the environmental advantages of our products.

We had undertaken the challenge to be greener long before it became a trend. All our products incorporate great attention to reducing their environmental impact, and are manufactured in ISO 14001 production sites. Using more fuel-efficient engines reducing exhaust emissions, spillage-free bases and centralised drains preventing spills to the ground, and lowering noise emissions, all contribute to a better environment.

Atlas Copco has developed an innovative fuel savings device, FuelXpert, on our larger portable compressors further reducing fuel consumption by 10 percent, significantly lowering carbon monoxide, hydrocarbons and other harmful gases emitted. It’s been calculated that if all compatible Atlas Copco compressors were fitted with FuelXpert we would save over 150 million litres of diesel fuel per year.

WA. From a developer's perspective, there are clear benefits associated with pursuing a greener model. Innovative design solutions can result in energy and water use that is more efficient, reducing capital and operating costs. From a user's perspective, international experience has shown buildings, which offer users an enhanced indoor environment, better access to public transport, community space and lower utility bills are more likely to pay a premium. Therefore, we are likely to see such developments attract higher prices and retain higher occupancy rates in the future.

We are increasingly seeing developers not seeking to bolt-on sustainability as an afterthought. Hyder has long understood sustainability is not the exclusive reserve of dedicated sustainability professionals. Our approach is to identify and develop sustain-

ability champions across our business, to shape and inform the sustainability of our solutions. We see this integrated design approach as the future of design consultancy.

The current global economic crisis is without doubt affecting the construction sector in the Middle East. What do you perceive as the key opportunities in these challenging times?

MS. For Atlas Copco the crisis has allowed us to get even closer to our customers and to further build the strength of our relationships. We continue to be product driven and customer focused, which we consider a cornerstone to our success. For new potential business, our products offer better return on investment through lower operational costs, so our customers can increase their profitability. Fuel use alone accounts for up to 80 percent of lifecycle costs of equipment. Offering more fuel-efficient products lowers customer costs and increases their profitability.

Expanding customer share and market penetration shows greatest potential. As a market leader in compressors the current economic climate opens opportunity to further strengthen our market position. For generators, our goal is to grow aggressively with the increasing demands for more available power. With the right approach and by demonstrating the benefits of our products we foresee great opportunities.

“Offering more fuel-efficient products lowers customer costs and increases their profitability” - Michael Sagermann

WA. The economic crisis has had a significant impact on the property sector. Incomplete construction opens up new challenges and opportunities of re-adapting distressed assets into a usable form. Uniquely positioned to capitalise on these opportunities, Hyder offers expertise and knowledge to help clients with their distressed assets.

Social infrastructure remains a top priority for the region’s governments and the

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private sector alike. Demand for effective healthcare is rising, as the population ages, new medical needs emerge and the disease burden of the developing world increasingly resembles that of the developed world. Hence, we see a strong demand for social infrastructure projects including education and healthcare establishments.

AM. Now is the best time to evaluate your equipment and processes. When you are busy it is easy to overlook inefficiencies and areas you should explore. While used equipment is not very easy to sell right now, new equipment can be purchased at a bargain price. Successful companies are buying now what they need to be ready when the market does improve, for the jobs they have and need to get done quickly and efficiently and to give them an edge over their competition.

If there is a process that your company currently does not specialise in but would help you to offer a turnkey solution, now is a perfect opportunity for research, planning and implementation.

“Now is the best time to evaluate your equipment and processes.

When you are busy it is easy to overlook inefficiencies and areas you should explore” - Adam Minatre

Community engagement is currently a hot topic in the construction sector. What are your thoughts regarding this and what do you hope to see achieved in this area?

WA. Unlike other parts of the world, community engagement on development projects is not a statutory requirement in the Middle East; most projects in the region are not subject to fi nancing by the World Bank where public consultation would be a requirement.

However, more developers in the region appreciate community engagement can assist with stakeholder buy-in for their projects, option appraisal and resettlement of affected groups. Hyder regularly facilitates public exhibitions for its clients where environmental

and social concerns are considered during the planning and design process to facilitate approval and avoid negative PR. Proactively engaging the local community before and during construction on potential nuisance impacts and explaining how they will be managed can help avert bad publicity for developers. Providing the public with access to information during construction will help manage public perception and prevent unnecessary complaints. Hyder staff regularly assist developers and contractors with resolving complaints during construction.

AM. It is excellent when any company is fortunate enough to share their prosperity with those around them, whether this is shared with the local community or within your organisation’s internal community. Bay Shore Systems, for example, has an annual golf tournament and sponsors a local or national charity. Last year we donated close to US$30,000 to the Make-A-Wish Foundation with the help of our employees, vendors and customers. The Make-A-Wish charity was proposed by one of our customers. Th ey took the money we raised and used it in another fund raising event, which increased the total close to US$250,000. We were also fortunate to share a large amount of our profit with our employees. Aft er all, in the US we can share extra profit with Uncle Sam or with the people around us. We chose the latter.

MS. We all have a social responsibility to the communities where we work. Being part of the community, we should help improve the quality of life for everyone. Th is year we celebrated the 25th anniversary of our ‘Water for All’ programme. ‘Water for All’ has funded projects across the world bringing sustainable water supplies to more than one million people. Funds are raised through monthly member donations and matched by Atlas Copco.

Locally, we’ve implemented our STEP Programme aiming to increase local knowledge and employment opportunities in our Saudi operations. There’s enormous reliance on foreign work resources, we’d like to see local resources develop opportunities.

For the near future, we would like to see a greater attention to environmental con-

cerns in this region. Europe has always been the benchmark and we should aspire to reach their level of attention to this important aspect for the benefit of future generations.

What new developments can we expect to see from you over the next six to 12 months?

AM. We are taking the time to expand our product line and our business capabilities.

Aft er all, our sales people are working hard but not necessarily busy taking orders. We are seeing where our customers want to expand so we can evaluate if we agree and want to follow. We are also looking at what we can offer to other industries. Globally we will expand our distribution network and entertain some new business development prospects. From a manufacturer’s perspective, I am focused on how well the competition is doing. Many companies grew too fast when times were good and are in serious trouble.

Th is is something the purchaser should be wary of too.

MS. Th is year has been very busy as we have introduced new ranges of high pressure (25 to 35 bar) compressors, a new 250-500 kVA generator range, and a new dedicated lighting tower. Today more than 85 percent of our current product range is less than three years old in design, reflecting our commitment to our customers’ superior productivity through interaction and innovation. The next six to 12 months shouldn’t be much different, despite the current economic climate we continue to invest in developing new products.

WA. Market penetration is a key strategy for Hyder, hence our recent restructure into three main sectors (Property, Transportation & Infrastructure, Water & Environment). Diversifying services in the current climate is a risk, providing engineering solutions through our core competencies is the way forward.

Hyder will focus on addressing the issue of distressed assets throughout the region.

Within our property sector, we will expand our focus on commercial and residential development towards social infrastructure projects that include hospitals and medical centres, to meet the demands of the Gulf ’s health challenge, and education establishments.

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GREEN PRACTICES

LEED The concept of green building in the Middle East is nothing new and the emerging notion has already attracted some of the biggest developers in the region. So when will we see region-speciďŹ c building and planning codes around sustainability? In an exclusive interview, Emirates Green Building Council Chairman, Jeff Willis explains.

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he Middle East has not traditionally been known for its focus on energy efficiency or sustainable buildings. However, that attitude is changing. Indeed, a not-for-profit organisation, the Emirates Green Building Council (EmiratesGBC) was formed in 2006 with the goal of advancing green building principles for protecting the environment and ensuring sustainability in the United Arab Emirates. And back in 2007, Dubai ruler and UAE Prime Minister His Highness Sheikh Mohammed bin Rashid Al Maktoum, passed a decree to implement green building in line with the region’s strategic plan. He is reported as saying: “All new buildings to be constructed in the emirate will have to comply with green building standards from January next year. Owners of residential, commercial and other buildings will have to implement the decision according to the highest international standards that are suitable for Dubai, to maintain a healthy city that follows the global benchmarks in sustainable development.”

Chairman of EmiratesGBC, Jeff Willis, explains that this means a developer needs to demonstrate that they have achieved a result that would comply with the highest national green building standard – exactly which one is not specified. It could mean that compliance is demonstrated through the lowest level of certification as measured by LEED, BREEAM or Green Star. Furthermore it does not explicitly state that the certification is essential. So has Sheikh Mohammed gone far enough?

Well, according to Willis, reactions have been varied. And despite projects like Dubai World achieving a number of LEED credits as part of the new compliance process, Dubai Municipality has been in the process of writing new building regulations, which have promised to address this.

Confusion While LEED is currently being facilitated in the Middle East there is no doubt that there is a need for region-specific building and planning codes around sustainability. While LEED is an internationally recognised green building certification system, providing third-party verification that a building or community was designed and built using sustainable techniques and materials, it was developed by the US Green Building Council (USGBC). Despite the fact that the certification system is internationally recognised confusion has arisen because of the different rating systems available. “We believe that a region specific set of building regulations and a sustainability assessment method would be beneficial because there is currently confusion over which system to use

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The results are in…

Global Green Building Trends, SmartMarket’s report on market growth and perspectives from around the world, has been published and major findings include: By 2013, 53 percent of responding firms expect to be largely dedicated to green building (on over 60 percent of projects), up from 30 percent today The fastest growing regional green building market is Asia, where the population of firms largely dedicated to green building is expected to jump from 36 percent today to 73 percent in 2013 86 percent of firms expect rapid or steady growth in sales and profit levels associated with green building Solar power is the most common form of renewable energy in every region, used by over half (52 percent) of industry professionals today and expected to grow to 76 percent in the next five years The most dramatic growth is expected in wind power use (57 percent expected in 2013, up from 20 percent today), followed closely by geothermal power (expected to double from 22 percent today to 45 percent in 2013) “The right thing to do” is the top business reason driving green building around the world. “Supporting the domestic economy” is prominent in Sub-Saharan Africa and the Middle East/North Africa, while “environmental regulations” are driving market activity in Asia and Europe

generated by the differences between local authority codes from area to area,” says Willis.

BREEAM or BRE Environmental Assessment Method is another assessment method for buildings, and reportedly the most-widely used internationally. It is said to set the standard for best practice in sustainable design, addressing wide-ranging environmental and sustainability issues enabling developers and designers to prove the environmental credentials of their buildings. While specific versions are available for the UK, the Gulf and Europe, it is yet another set of guidelines that could potentially confuse both designers and producers of sustainable buildings.

Willis explains that despite the confusion over which codes to use, he has seen a considerable increase in interest from all developers, from one off smaller developments to the megaprojects. This has led to a number of improvements both in energy efficiency and water consumption in the design of new buildings. In fact, a number of developments have incorporated more sustainable philosophies in the master plans, although as yet it is too early to see how those get through the process to implementa-

tion. There are many benefits including a more integrated and improved design, less energy and water consumption and a reduction in waste.

“Local authorities, such as the UPC in Abu Dhabi are leading the way with new requirements for building permit applications, which enforce and integrate sustainable design attitudes,” explains Willis. “A new assessment system named Estidama is being developed by the UPC, which will raise the bar considerably in that emirate.” Indeed, although Estidama, meaning sustainability in Arabic, is an aspiration as opposed to an actual rating system, the desire is to achieve a sustainable way of living in the Arab world incorporating multiple facets of daily life.

Looking forward On the 1 September 2009, EmiratesGBC announced its revised vision and mission at the annual general meeting. Both the vision and the mission statements were refreshed to reflect the progress made by the UAE since the council’s establishment in 2006, as well as inspire performance for the next five years. In regards to the revised statements, Willis says that he felt the focused intent provided a clear mandate and direction for activities across the UAE. “As the new vision and mission were collaboratively developed by our members and endorsed by our Board of Directors we know that they accurately represent our industry’s position.

The council has aligned its business plans to deliver on these ambitious goals and take the lead on continually improving the performance of the UAE’s built environment.”

Daniel Hajjar, Vice Chairman of the Emirates GBC, adds: “The mission is succinctly explained so that all our members and stakeholders can engage with us in mainstreaming green building practices. As an industry forum we will be arranging regular events and gatherings across the UAE for professionals to meet and discuss how we can integrate sustainability into the entire building supply chain.”

While the council is currently fi nalising its programme for the coming six months, including a Ramadan Sohur, evening seminars and training workshops covering the full range of green and sustainable building issues, it seems the EmiratesGBC is here to stay and will be leading the UAE in terms of green and sustainable building practices.

EmiratesGBC Vision Announcing it’s revised vision and mission at the 2009 Annual General Meeting in September the new statements are: Vision statement: EGBC will actively support the UAE to be one of the five global leaders in the reduction of the built environment’s ecological footprint by 2015.

Mission statement: The EGBC is an independent non-profit forum that helps shape policies for the built environment and facilitates collaborative solutions to promote sustainable practices in the UAE.

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A More Humane Airport is Possible.

Today’s megastructures present an opportunity to target tough economic challenges. The Starrport, an environmentally-friendlier airport developped by the American eco-designer Jim Starry, offers 123 green technologies for a responsible use of resources. By landing uphill, no time-consuming and polluting taxiing is needed because the slightly slant runway leads directly to the top of the airport.

Substantial savings in handling time and walking distances are a direct result. Taking off downhill at exactly the scheduled time, allows smooth take-off and reduced noise. The gigantic reduction of fuel burn at the airport means cleaner air for passengers, personnel, visitors, and adjacent communities.

© 2009 - Starrport design patent pending 1987-2009 by Jim Starry

Calculations with background informations and investment proposals see: www.starrportcorp.com Economy and ecology are compatible: www.essence-sum.com (Emile van Essen) www.earthwiseint.com (Jim Starry)

EARTHWISE INT.

Clean Solutions

RECYCLUS

ESSENCE-SUM

Vision and Promotion Mediation Corporate Identities

1.600 UN Certified CO2

Eco-Strategies

Recyclus.com, P. O. Box 63123, NL-1005 LC Amsterdam (the Netherlands), Tel. / Fax (+31)20-683 9606. e-mail: info@recyclus.com Website: www.recyclus.com

Management

Implementation of Climate Technologies

Serious Blue Sky Thinking.©

Contact for the Middle East region: IABA International Airline & Business Academy FZ-LLC, P.O. Box 361, Dubai, UAE Tel: +971 4 390 1063, Fax: +971 4 366 4616 e-mail: contact@iabadubai.com Website: www.iabadubai.com

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DEEP COVER Despite a decrease in activity in the construction sector, the paints and coatings industry is still booming, particularly in terms of greener and more sustainable practices and products.

MENA Infrastructure asks a panel of experts for their opinions on where the industry is heading.

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ROUNDTABLE DISCUSSION

R&D is a big part of operations. What are your current focus areas in terms of new product development?

Nick Crowther. Sustainability and the reduction of our ecological footprint has become a key driver for International Paint and is an integral part of our strategy for research, development and innovation. We are committed to bringing to market new products that offer an environmental benefit to the end user whilst offering even greater corrosion protection and aesthetic qualities than the products that they replace.

We are also focusing heavily on our intumescent fire protection range of products, and have recently launched our Interchar 1120. As a waterborne intumescent coating, its technology allows Interchar 1120 to have zero volatile organic compounds (VOC). Its ability to be combined with water-based primers and topcoats delivers a complete water-based solution for the customer, meaning the system meets the highest environmental standards.

Ameer Hamza Hassan. The environment, sustainability, customer needs and cost reduction are the major thrusts driving our R&D efforts.

As a technology leader in many of the fields, we operate some of the largest R&D facilities in the industry, which have helped us to earn the trust and admiration that is demonstrated by our emphasis on continuous customer service.

In addition to working on completely new technologies, Kansai is also committed to continuous product innovation and improvement in all categories. Currently, in the OEM segment, Kansai is focusing on VOC reduction (water-based automotive paints) and energy reduction paints (three coats and one bake as opposed to three coats and three bakes). For the auto refinish segment we have developed the low VOC PG hybrid coatings, while for industrial segments we offer specialised protective floor and structural coatings for bridges and dams. Kansai has also developed anti-bacterial coatings for hospitals, the pharmaceutical and food industries, such as the Ales-Silver coating system.

Eirik Kristensen. The majority of our operations in R&D revolve around the green concept. We always endeavour to make our products more environmentally friendly without compromising on quality, durability or the variety of colours. We aim to achieve products with lower VOC emission rates and free of lead, mercury, chromium, cadmium, tin, Apeo Phenol Ethoxilate and phthalates. Currently all our water-based products are within the allowed levels and we are working on transforming as much as possible of our oil-based products into water-based ones. The quality and durability of our products helps reduce the maintenance costs of the building, thus resulting in a cost saving benefit for our customers.

The myriad of colours ensures that we can go that extra mile that is required by our customers.

The panel NICK CROWTHER is Business Development Manager for the International Paint business unit of AkzoNobel in the Middle East. He is a NACE-qualified coatings inspector and regularly works with architects, engineers and consultants on high-profile projects in both the infrastructure and heavy industry markets.

AMEER HAMZA HASSAN is the Chief Executive of Kansai Paint Middle East. He has over 25 years of varied experience with leading multinationals including American Express and ICI, with whom he has undertaken assignments in Asia Pacific and Middle East. He is also an entrepreneur and has been responsible for developing and executing strategy for aggressive growth in Pakistan, the Middle East, Central Asia and Africa.

EIRIK KRISTENSEN is Jotun Paints’ Regional Marketing Manager for the MENA region whose responsibilities also include India, Spain and Turkey. Kristensen joined Jotun in 2005 and has previously held senior positions within the marketing and advertising industry.

MARK van DIEMEN joined Sigma Coatings in 1987. Having previously worked as both General Manager of China and General Manager of India for the company, he is currently Managing Director of Sigma Paints Saudi Arabia, responsible for all decorative, marine and protective coatings activities in the Middle East and Egypt.

Mark van Diemen. New technology in the Middle East paint industry is helping to drastically reduce the environmental impact of VOCs in the region. VOCs can release low-level toxin emissions into the environment for years following the application, but scientific research supported by the research and development laboratories at Sigma Paints is helping to drastically reduce the impact. Working closely with PPG laboratories worldwide, Sigma Paints has developed advanced practices that limit the amount of VOC in paints and coatings currently being used on many projects throughout the Middle East region.

Reducing the impact that paints and coatings have on the environment is one of our primary goals. This latest technology helps us to manufacture low VOC products while still being able to offer durable protection solutions to construction projects throughout the region. These developments will revolutionise the paints and coatings industry in the coming year.

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There is a growing focus on sustainability and greener construction in the Middle East, in particular seen in the increase of LEED practices. How is this being translated into the paints and coatings industry? What is your company working on in terms of sustainable products?

AHH. As global environmental problems continue to grow in severity, Kansai Paint is working to develop many types of products that can contribute to environmental conservation, while ensuring products also maintain health and safety practices. Kansai Paint and its group companies strictly follow and practice environmental conservation policies and the company has adopted proactive systems to cope with the potential effects of all its products on the people and the environment. Kansai has developed Ales Eco Clean Series products for interior applications that have low VOC, low odour and include anti-bacterial coatings that also absorb formaldehyde and offers lead EIRIK and mercury-free products.

tinuously informing property owners on the benefits for them on sustainable solutions.

At Sigma/PPG, we understand that sustainability is a driving design factor on projects region-wide and we are committed to making environmentally progressive paint products. These products play an important role in green building. Many of our products have low VOC content enabling them to assist architects, building owners and home builders in building green.

“We always endeavour to make our products more environmentally friendly without compromising on quality, durability or the variety of colours”

EK. In the Middle East, the demand for eco-friendly products has increased as environmental concerns and the awareness about green has increased. Governmental regulations such as Abu Dhabi’s Pearl Rating have been set, green building councils such as the Emirates Green Building Council, of which Jotun is one of the founding members, have been formed, and green projects such as Masdar are being constructed.

As a result, we have to do all it takes to meet these needs. Jotun has been in the forefront of developing eco-friendly products and follows strict European regulations as well as the major environmental standards around the world, constantly focusing on R&D investing US$25 million for product innovations. We have a wide range of water-based (emulsion), low-VOC products, namely the Fenomastic family for interior and the Jotashield family for exterior. Fenomastic Gold has low VOC content, contributing to indoor air quality. Jotashield Thermo has a propensity to reduce the indoor temperature of a home thus having a favourable reduction in energy consumption. Our latest innovation in this domain is Jotashield SuperDurable, which was launched end of 2008. The water-

KRISTENSEN NC. As a business we have welcomed the introduction of environment standards such as LEED as it enables us to stand out from the competition by delivering products that assist in projects attaining LEED accreditation. We offer a prescriptive LEED paint specification for all operating environments and also for Intumescent fire protection systems up to and including a three-hour fire rating. This enables an engineer to select at ease the relevant system for a particular environment, whilst being confident that this will meet the relevant LEED criteria.

Through our laboratories we have developed a full range of environmentally sustainable products, which we market under the ‘ecotech’ banner. We take seriously our responsibility to help our customers use coatings in a safer, more environmentally conscious manner.

There are currently steps being made to implement mandatory legislation in the paints and coatings sector. What are you thoughts on the current state of legislation in the industry? What are your hopes for legislation in this sector in the coming six to 12 months?

EK. Jotun as a company is proactively pursuing to develop stringent industry standards leading to more environmentally friendly products. Jotun works very closely across the region with all governmental authorities and co-operates with all guidelines, rules and regulations that have been defined.

Regarding protective coatings, related measures are mainly in the oil and gas and industrial projects where world-class engineering is evoked, and global environmental protection standards are followed. As for other sectors, legislations are still in various stages of development.

We do trust that regulations will naturally be there in the near future and Jotun is ready to commit to these regulations.

“New technology in the Middle East paint industry is helping to drastically reduce the environmental impact of VOCs in the region” MARK van DIEMEN

based Acrylic product comes as an alternative to the solvent-based polyurethane products and can offer a 20-year span of peace of mind before the first maintenance is required.

MvD. Of course, the first step is to ensure that the products are LEED compliant. Moreover, Sigma is very much focused on sustainable solutions that go further than simply developing a product – it ranges from reviewing the raw material sources and manufacturing practices to con-

MvD. The current status of legislation is still behind Europe or the US. Without the government initiating mandatory implementation, no progress will be made. Our hopes at Sigma include a quick adoption of European legislation not only in VOC limitations but also setting minimum quality standards for coating systems.

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“As global environmental problems continue to grow in severity, Kansai Paint is working to develop many types of products that can contribute to environmental conservation, while ensuring products also maintain health and safety practices”

The emerging concept of green building has already attracted some of the biggest developers in the region, particularly in Dubai’s booming real estate sector. But will the green concept impress not only conservationists, but also investors and developers who are looking for greener fortunes? The answer remains to be seen in this region.

Some of the green initiatives in the real estate and construction industry that have sprung up recently have advocated the LEED rating system. In the UAE, the Emirates Green Building AMEER HAMZA HASSAN Council is drafting a document to push the eco-rating system that is region-specific. Currently, some of the region’s design consulNC. The paint industry is extremely fragmented, particularly in this part tancies follow the LEED-based system. of the world, and the products on offer, whilst appearing similar can vary In Qatar, Kuwait, Dubai and Saudi Arabia we see an increase of greatly in terms of quality and in terms of being sympathetic to the envipaint-related environmental requests, mainly in big projects. In Jordan, ronment. International Paint has been successful in self-legislating and the Al-Mushatta Industrial City aims to attract investors by the instalis committed to reducing the impact of our business on the planet whilst lation of green and energy efficient architectural engineering. And, in delivering more sustainable products and solutions to our customers. the coming years, we expect that other Middle East countries will folHowever, the introduction of legislation or minimum industry standards low in the same footsteps triggered by the growing interest by developwould be a welcome move in helping the general market to raise the bar ers in green buildings, which will clearly define what this booming in terms of sustainability. sector could actually offer.

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AHH. Kansai Paint will support any legislation to encourage paint companies to develop products that are eco-friendly and use materials that are non-hazardous. No doubt, any such legislation will force companies to put in more resources to R&D and develop products that are environment friendly. It will bring a healthy change to the paints and coating sector and we welcome this change. Kansai Paint is already putting in many resources across different paint categories to develop such products in view of the existing stringent environmental laws of Japan.

What do you see as the biggest challenges in the protective coatings industry over the next few years? And what are the biggest opportunities in your opinion?

MvD. The biggest challenge is to convince property owners that durable systems are the most cost effective. The training of painters to increase the quality of their activities and thus the durability of the solutions is also a top priority for us.

NC. What drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. This benefits our customers because we sustain their future competitiveness by continuing to develop new products. Challenges will come in many forms as the market place is rapidly changing; never has this been more apparent than in the last 18 months. More so than ever our customers are looking to us for ways that they can improve efficiency and do more for less. This has created an opportunity for us offering paint systems that give a real cost benefit to the client through utilising the latest technologies. As a business we are extremely optimistic about the future market in the region. We have seen in these uncertain times, customers are looking to a supplier they can rely on to help them add value to their business.

“The paint industry is extremely fragmented, particularly in this part of the world, and the products on offer, whilst appearing similar can vary greatly in terms of quality” NICK CROWTHER AHH. The biggest challenge in the protective coatings industry is to keep up with innovation and the complexity in structures, which require a high degree of customisation of paint coatings. Most of the GCC countries have started to increase the pace of spending, and are putting in place major programmes to upgrade their social and physical infrastructure. The overall paradigm shift toward strengthening the domestic economies of GCC states is evident from the huge investments made in infrastructure. A lot of investment is being made in the region on new infrastructure like rail transit systems, bridges, heavy steel structures, housing schemes and new industries like petrochemicals. The massive spending in these sectors has created the need for specialised paint coatings. While all these changes have driven growth in the paints and coatings sector in these countries it has also made constant innovation a survival necessity.

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EK. When it comes to protection, Jotun is among the pioneering companies worldwide and our products have an excellent reputation in the market. The focus lies in meeting the level of protection we provide today in more environmentally friendly products. R&D’s challenge lies in developing more benign products – either by reducing the use of solvents, and thus the emission of VOCs, or by the utilisation of an allergic binder; or ideally both.

Nevertheless, we can see three opportunities through which we can serve our customers better: colour, protection and function. When it comes to colours we continuously offer our customers new colours based on their need and the understanding of colour psychology. As for protection, Jotun is known for that, and to always meet our customers’ expectations we benchmark our products against testing standards ISO 12944 and 20340. Moreover, the most challenging and innovative development over the coming few years will be in the area of functionality, mainly to develop products that exceed the traditional functions of coatings being limited to protection and/or aesthetics to new functionalities such as temperature indicating, thermo-chromic, lifetime indicating, gas detection and fire protection.

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ANALYST VIEWPOINT

GCC PAINTS AND COATINGS MARKET SET TO SHINE New research suggests that the diversifying economy paints a rosy picture for the Middle East’s industrial paints and coatings market.

D

ue to high volatility in the crude oil market, it’s necessary for many of the Gulf Cooperation Council countries to invest in diversifying their economy and reduce their dependence on oil, as well as invest in infrastructure development.

According to Frost & Sullivan, this would indirectly benefit the paints and coatings market. The research firm’s recent analysis of the Middle East paints and coatings sector found earned revenues of $1.33 billion in 2007, with estimates to reach $2.7 billion by 2014.

Analysts said these countries need to develop hubs for other industries, such as light manufacturing, fi nancial services and global trading, to attract foreign investments.

The influx of foreign investments will not only be economically rewarding, but will also introduce large-scale infrastructural and industrial projects. The paints and coatings market will also reflect the effects of such moves by becoming more dynamic.

“Companies can stay ahead of the competition by introducing technologies that provide better results” “An increase in disposable income, as well as changing lifestyles, has led to higher expectations from end-users,” says Frost & Sullivan's principal consultant, Dominic Louis Britto.

“Th is, in turn, is driving the demand for paints and coatings – especially architectural paints, which account for about 64 percent of the total market revenue.”

With the expansion of industries, there has been a significant rise in demand for con-

sumer and industrial goods in these countries.

Many countries in the GCC have also started to promote tourism, which has fostered the hospitality, infrastructure and allied industries, resulting in a rise in infrastructural projects. Analysts said this has increased the demand for paints.

As the potential of the paint and coatings market becomes increasingly apparent, more participants have been flocking to it, making the business a high-volume, low-margin one.

To top this, end-users are gravitating toward low-value products due to their lack of aware-

ness regarding the quality and usage of paints and coatings.

Manufacturers can disseminate information about the quality of paints by training the professionals to make them aware of the advantages of superior quality paints. They also need to create a powerful brand image through a conscious, brand-building exercise. Analysts said they could also promote their products’ ability to meet industry standards.

“In a market where no quality standards are set or followed, a company needs to develop its own standards to set as an industry benchmark,” notes Britto. “These campaigns will not only help the companies target the retail segment, but also allow them to tap the rural market, which remains unexplored.”

Companies also need to leverage the fi rst-mover advantage in these countries, as it will rapidly increase their market share.

Analysts said companies can stay ahead of the competition by introducing technologies that provide better results, and thereby command better prices.

Source: frost.com

Driving demand For an example of how infrastructure investment can impact the paints and coatings sector, the middle east need look no further than the South African industrial paint market, which is benefiting from the country’s infrastructure spending and other capital-intensive projects in the manufacturing sector. Efforts by construction firms to complete projects in a timely manner will result in an increased usage of industrial paint and coatings in the coming years.

New research finds that the market earned revenues of over US$137.3 million in 2007 and estimates this to reach US$195.1 million in 2014. “The booming infrastructure and construction industry is fuelling demand for industrial paint and coatings,” notes Frost & Sullivan Programme Manager Mani James. “More spending by the government on public infrastructure projects will result in extensive usage of industrial paint and coatings during the pre and post construction phases.”

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INDUSTRY INSIGHT

Nano from nature Neuburg Siliceous Earth is a naturally occurring nanostructured filler material, whose specific particle structure imparts coatings with very good mechanical and chemical resistances, while being easy to incorporate into the formulation.

Figure 1 A Scanning Electron Microscope (SEM) photograph of Sillitin Z 86

T

he extraction of natural mineral fillers has been pursued for more than 200 years. During this period, the requirements placed on such fillers, and consequently the products themselves, have changed considerably. With respect to product consistency, purity and functional properties, functional fillers have to respond to ever higher and more stringent demands.

In connection with innovations in paints and coatings, there is often reference made to ‘nanotechnology’. In this context, quite frequently, products and materials are proposed which – in view of a missing, generally accepted definition – do not really deserve this designation. In theory, an ultrafine natural mineral filler with a mean grain size <1 μm could be called a nano filler, which would mean ‘nano from nature’. Neuburg Siliceous Earth, with primary particles of way below 500 nm, would easily fit into this category.

There do not exist uniform rules yet, but from scientific publications it can be concluded that only products with grain size distributions <100 nm should be considered as nano materials. The majority of natural mineral fillers do not meet such a requirement.

However, from a technical application standpoint, it is often not of critical importance whether or not a material can be called a nano filler. It is rather the total (eventually composite) particle structure observed on the nanometer scale which gives rise to specific technical application effects in coatings. This refers not only to dispersion, stability and rheology, but also to flattening, elasticity, hardness, wear resistance and corrosion protection.

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Figure 2 Wood flooring

The particle structure of Neuburg Siliceous Earth offers an outstanding example of such a situation (see Figure 1). The image covers an area about 12 μm wide. Distinctly visible is the natural fusion of the kaolinite particles of rather conventional appearance with a corpuscular quartz. The particular character of Neuburg Siliceous Earth lies in the fact that the corpuscular quartz consists of a high number of aggregated, partly dispersible primary particles, which rarely exceed a size of 200 nm.

On the other hand, in this functional filler the kaolinite is found in a state that indicates it has already been subjected to extensive delamination.

The combination of these two particle phenomena as created by nature gives rise to a number of beneficial properties in paint and coatings systems, which very often cannot be matched the same way by other natural or synthetic fillers, including the so-called nano fillers – and this is without including costs. Another advantage: because of its fine particle size and the rounded grain shape of the quartz portion, Neuburg Siliceous Earth only exhibits very low abrasivity vis-à-vis dispersion aggregates and processing equipment.

In view of the mineral hardness of the quartz, the coatings formulated with Neuburg Siliceous Earth offer outstanding abrasion and scratch resistance (see Figure 2, wood flooring). These are important reasons for Sillitin and the surface-treated Aktisil to be used in wear resistant parquet floor coatings. In addition, the flattening action of Neuburg Siliceous Earth allows for the elimination of additives otherwise intended for such effects.

The fine particle quartz also has a positive influence on the resistance against chemicals, which is why the siliceous earth is eminently suitable as

Figure 3 Sedimentation

a functional filler for use in chemically resistant and anti-corrosion coatings.

The natural combination of corpuscular quartz and lamellar kaolinite ensures rapid incorporation and excellent dispersion – in particular, in aqueous systems – along with a basically low sedimentation tendency (Figure 3, sedimentation). Plus, if a sediment is formed, it will be easily redispersed. This way, Neuburg Siliceous Earth can also serve as a functional filler to ‘stabilise’ coarser particle size fillers.

The good integration of the filler into the polymer network leads to excellent mechanical properties.

This effect of good ‘integration’ into the polymer network can be further enhanced by a surface treatment (e.g., with silanes). By modifying the filler surface, the compatibility with the polymer is increased, which leads to outstanding rheological properties as well as good mechanical characteristics and excellent resistance against abrasion and chemicals.

The effects enumerated confirm that the properties of coatings cannot be improved with synthetic nanofillers only. In fact, nature has developed some ‘natural nano-structured fillers’ that make it possible to develop high quality coating formulations with very good performance.

Hoffmann Mineral is an innovative filler specialist whose products are based on Neuburg Siliceous Earth, which the company extracts, improves and distributes. The company’s know-how and production plant are also used for third-party toll conversion.

The company prides itself on a century of supplying Siliceous Earth products, while continuously developing materials for a variety of applications.

Find out more: www.hoffmann-mineral.com

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EXECUTIVE VIEWPOINT

SAFETY IN NUMBERS “One of the key challenges facing the construction industry in the 21st century is protecting workers’ health and safety in a global economy characterised by a ferocious competition,” says Colonel Musharraf Khan, HSE Manager for Wade Adams Middle East.

MENA Infrastructure investigates.

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olonel Musharraf Khan is adamant that the main challenges in the occupational health and safety profession are the tough competition in the industry revolving around keeping production costs low, reduced cooperation between workers and employers and the non-implementation of safety culture in projects, combined with a lack of awareness among workers regarding safety on site. All this adds up to a potential catastrophe just waiting to happen. At Wade Adams, Khan is tackling challenges by attempting to create a safe and healthy working environment based on a non-negotiation of safety. By implementing a culture to prevent all occupational injuries and illness through continuous awareness and training programmes, Khan hopes to make employees competent and responsible for all safety issues. “Wade Adams has employed experienced and competent health and safety professionals who ensure implementation of robust health and safety policies, procedures, work instructions and guidelines on site and also ensure that they achieve the highest level in the occupational health and safety standards,” explains Khan. “We are striving to develop programmes that strengthen vigilance and monitoring as regarding occupational safety and workplace hazards.”

So just how is Khan promoting health and safety practices within the company? Well, fi rst he is working to clearly defi ne practices of health, safety and environmental policy as well as objectives and putting these into the forefront of employees’ minds. By incorporating the legal requirements and through committed compliance to international standard OHSAS 18001:2007, Khan hopes to achieve strict adherence and effective implementation on site. He is providing the

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resources necessary to implement health and safety practices as well as strengthening the management system of health and safety practices through a continuous review of all procedures, work instruction and guidelines. Alongside this has been the integration of a health and safety culture into all the operational levels, monitoring and analysing the effectiveness of the system on site.

“Wade Adams has a well defi ned policy in place with corporate objectives guided by the policy,” says Khan. “We are procuring the latest personal protective equipments of EN conformance and competent health and safety personnel for risk analysis and control measures.”

Best practices Wade Adams is involved with, and an active participant, in Build Safe UAE’s health and safety initiatives, which are going a long way to promote best practices in the region. “We constantly share our best practice and safety alerts that occur on our sites with the organisation,” says Khan. “In fact, recently six of our best practice alerts were posted on Build Safe UAE’s portal. These alerts are then conveyed to project heads on site for effective implementation of HSE values. We share our safety statistics monthly with Build Safe UAE for the shared safety statistics database and our health and safety professionals regularly attend the meetings and share their views with the organisation. Our senior executives are also members of the focus groups and our HSE manager is a member of the steering committee for Build Safe UAE. On site With all the training programmes, it remains imperative that health and safety guidelines are used on site. Khan believes in site-specific risk assessment, site walks, training, awareness and motivational programs and has also created site HSE committees, making these responsible for preparing and reviewing risk assessments for every activity based on the method statements. Khan also recommends a utility check for conveying risks and their control measures to the workforce before commencement of any activity. “Any worker can stop if he thinks that work will endanger his life or those of his workers, and a constant review of the risk assessments prepared on site alongside valuable input from the corporate health, safety and environment department improves the risk rating. Stipulated daily inspections, user checks and counter checks by both execution teams and the project HSE advisor should ensure achievement of the management programme,” concludes Khan.

And his advice is certainly working; Wade Adams was awarded the ‘Best Construction Safety’ award for best practices in Occupational Health and Safety by Dubai’s Roads and Transport Authority (RTA), launched earlier this year to support and encourage good practices and implementation of occupational health and safety standards at sites. Khan says that the company feels immensely honoured to win the safety award. “While this is not the fi rst award for us in recognition of our quality performance in the area of health and safety, we feel that it is a particular honour as the RTA

BUILDING SAFE Wade Adams is one of a number of active participants in Build Safe UAE, a not-for-profit organisation aimed at improving the health, safety and welfare conditions of all construction industry stakeholders through the free exchange and sharing of information between organisations working in the UAE. By encouraging companies to pool information, Build Safe UAE hopes to prevent accidents by raising awareness and communicating potential dangers and lessons learnt throughout the industry.

Build Safe UAE consists of a number of major developers, contractors, consultants, project managers and service organisations of the UAE construction industry who have agreed to share their best practice safety information in the form of risk assessments, safe working methods, safety presentations, safety alerts, ‘tools box’ talks and best practice case studies for the greater good of the whole industry in an effort to improve general health, safety and welfare across the UAE.

is a prestigious client of Wade Adams. The RTA award is an excellent endorsement of the effort that we have made and this award gives us encouragement to constantly keep improving our safety standards to the highest level on all our sites.”

Looking ahead There is no doubt that the industry has seen significant improvement over the past couple of years in the UAE construction industry, just look at the number of fi re incidents in the region during 2009 compared with 2008. Khan has also seen improvement at Wade Adams. “The incident rate and the frequency rate per million working man hours have drastically reduced over the years. The workers have taken note of the constant efforts undertaken by the company to improve safety and health conditions in the workplace, which has resulted in a reduction of the likelihood of incidents. There are considerable improvements in the cooperation from the line management towards health and safety and more awareness created among the workforce in the aspects of health and safety.”

Khan expects both the fi rm and the industry to continue to trace an upward trend of progression and improvement in the coming years, with more stringent procedures coming from the HSE management system and continuous monitoring of the effectiveness of the system and through more involvement of the workforce in occupational health and safety.

“We constantly share our best practice and safety alerts that occur on our sites with the organisation”

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SAFETY FOCUS

Alan Bennett, HSE Manager at KBR, outlines his thoughts and ďŹ ndings on managing health and safety for megaprojects in the Middle East.

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he objective of my paper, Managing Health and Safety On Mega Construction Projects in the Middle East, is to outline a practical methodology for achieving good health and safety standards on large construction projects within the UAE. In most cases, the client will be a developer; however this is no guarantee that they will have previous experience of health and safety management on large-scale construction projects. The general low level of understanding of health and safety of the workforce presents enormous challenges to all directors, managers and supervisors of the organisations involved in the construction process.

Any organisation will not achieve the highest standards of health and safety without the active involvement of its directors, both at board level and project level. Health and safety culture really does â&#x20AC;&#x2DC;start at the topâ&#x20AC;&#x2122;.

Without the commitment of directors and senior management, it is very difficult to cascade any health and safety ethos from the organisation down

to the project. The appointment of the project director as the individual ultimately responsible for health and safety will send a clear message to all parties that health and safety accountability starts at the top.

It is probably fair to say that in the Middle East health and safety is sometimes seen as a burden or necessary evil. There are several reasons for this, including a lack of understanding of the costs of poor health and safety and a lack of awareness and training at many levels. A useful vehicle for an organisation is to set up a separate health and safety committee as a subset of the main board, chaired by a senior director.

The frequency of the meetings would depend on the project, but once a quarter would be typical. Th is should ensure that key health and safety issues are considered and addressed in a structured way. Such a committee, if properly constituted and empowered, can safeguard against time being wasted on trivial risks. It is paramount that whatever decisions or agreements are made at this forum be cascaded down through the or-

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ganisation and project teams. Equally importantly, actions are tracked through to resolution.

One method to encourage the right behaviour in regard to health and safety is to assess an individual’s health and safety performance as part of an annual appraisal. For example, 20 percent of any annual salary increase, or bonus, could be linked to an individual’s approach and/or attitude towards health and safety.

It is very easy for a tendering consultant or project manager to submit a tender at the lowest price possible in order to win the work. In today’s competitive market, to a degree, that is understandable. However, with regard to health and safety there is a price to pay for this approach. This can result in inadequate resources to undertake the work, which in turn can affect the level of management input for effective control of health and safety.

Competence There has to be a reasonable approach to acquiring competence in health and safety, particularly in the Middle East. Perfection is a noble goal, but realism must also prevail. A balance has to be struck between competence and the cost of it being achieved. Irrespective, it is extremely important that personnel appointed to manage packages of work have health and safety experience, knowledge of construction, and understand how to manage their particular scope of work. It is beneficial that contracts clearly lay out the level of competence required to discharge health and safety responsibilities. Failure to achieve an adequate level of competence within the management teams will result in the management and control of health and safety being left to safety managers.

Staff Organisations within the UAE that are willing to advance the safety culture must reach a sensible balance in the number of safety staff they appoint. If the safety staff is too large it can give the impression that safety is the province solely of the safety department; too few safety staff and they are unlikely to be effective. It is necessary to ensure that stakeholders do not feel that safety is the business of safety practitioners and that they can therefore stand back from their health and safety responsibilities and accountability.

Letting contracts When contracts are let or memorandums of understanding raised, mechanisms are required to provide information to suppliers, consultants and contractors on safety rules, the safety plan, local codes and the client’s health and safety policies and procedures applicable to the project. These suppliers and contractors may originate from any part of the globe and, quite understandably, may be unaware of what is required within the UAE. This information should be issued by the organisation that is undertaking the tendering process.

Monitoring The monitoring of health and safety on site is an essential element of achieving adequate health and safety standards. As in any profession there, are those who are committed and those who are not. It is important that project and individual site senior management provide support to their safety manager or officer, Should this relationship fail to develop, the result

is that health and safety issues will only be actioned by safety staff. This is at odds with the goal of management taking ownership and providing leadership in health and safety.

To achieve effective monitoring, a significant number of people are required. A proven method is the establishment of a joint weekly health and safety inspection by project team managers. A possible construct is for the project health and safety manager to select four teams weekly, each with four managers in a team. These teams are allocated different areas to visit for one hour to conduct a health and safety inspection, following a briefing from the project health and safety manager. On completion, each team debriefs the project safety manager on the findings. A report is completed on the same day and this is despatched to all the relevant stakeholders for action. The teams have the authority to stop work if unsafe activities are observed. Importantly, no safety staff are involved in the actual visits.

Training It is essential that all parties involved in a project are appropriately trained in health and safety in order to deliver on their responsibilities.

Larger contractors, particularly those originating from or experienced in working in more advanced countries, may have an experienced, welltrained management team that can implement and control health and safety efficiently. Other contractors may not be so well equipped. To assist in the health and safety education process of the latter, consideration should be given to the delivery team’s health and safety department providing a training programme for all the contractors.

Documentation Health and safety documentation is a sensitive subject. It is well known that in the UK there is serious concern being expressed by the health and safety executive about the excessive paperwork generated to meet the requirements of legislation. Similar concerns exist in the UAE. The creation of elaborate health and safety paper systems may not serve any useful purpose.

These are time consuming and may actually be a distraction from managing the risk on the ground. An example is the case of a large contractor requesting a risk assessment and method statement for the lifting of three portakabins from the back of a lorry to ground level. It took three weeks before the requesting safety officer was satisfied that all the paperwork was adequately completed.

In summary, companies operating in the construction industry in the UAE should recognise that the country has developed considerable infrastructure, cities and townships in the last 40 years. It is essential that management of health and safety is kept simple and practical. The aim should be to encourage personnel to buy in to the wider health and safety ethos and to believe in what organisations are trying to achieve. Personnel should not be dismissed for contravening safety practices; this only sends the problem elsewhere. Education, support and awareness will be more effective in the longterm.

Begin with effective policies that are workable and practical. Try to establish a commitment from all stakeholders, both at the organisational and personnel levels. Most importantly, all levels of management should be visible in their efforts to promote health and safety. This in itself will go a long way to promoting a positive safety culture throughout the organisation or project. Most of all, keep it simple.

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SECURITY FOCUS

THE LONG ARM OF THE LAW IN DUBAI In an exclusive interview with MENA Infrastructure, Major General Khamis Mattar Al Mazinah, Deputy General Commander of Dubai Police, reveals how the force is working to improve safety and security in the emirate.

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stablished in 1956 in Port Naif, the Dubai Police force has been serving the emirate for over half a century and in that time Dubai has changed immensely. “Dubai Police was founded as the fi rst police system in Dubai because we needed a foundation of security,” explains Major General Khamis Mattar Al Mazinah, Deputy General Commander of Dubai Police. “The law maintained stability, safeguarded the rights, regulated transactions and spread security among the people of Dubai.”

In 1968, the late Sheikh Rashid bin Saeed Al Maktoum issued the decree under which His Highness Sheikh Mohamed bin Rashid Al

Maktoum, Vice President, Prime Minster of the UAE and Ruler of Dubai, was appointed Chief of Police and General Security in Dubai. Since this time H.H. Sheikh Mohammed has set a mandate to concentrate on building and developing a modern and contemporary foundation in support of quality of life, economy, education, health, transport and sport.

“Over the past 53 years, tremendous achievements have been made by Dubai Police General Headquarters in its mission to maintain and support the security, stability and development of our homeland,” explains Al Mazinah.

Challenges

“The rapid development of science and technology in the world has a positive and negative impact on communities,” he continues. “Unfortunately, there are those who have endorsed the huge developments of science and knowledge to develop criminal methods. On the bright side, this helps us develop more sophisticated means of detection and prevent criminal activity. We not only stay up-to-date with these recent criminal techniques and methods, but we must also deal with them before they occur, eliminating criminal activity through proactive processes and pre-emptive strikes.”

Al Mazinah goes on to point out that security officers and policeman are responsible for maintaining the protection of society. “Dubai Police General Headquarters works hard and offers tremendous sup-

UAE policemen and members of the Civil Defense gather at the scene where a building collapsed in Dubai United Arab Emirates on 16 August 2009.

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port, both fi nancially and technically, to develop the capabilities and capacities of our criminal experts. We raise the performance level, professionally and technically, for those who work in all fields of criminal science, traffic and administration, providing them with the basic skills to cope with ongoing challenges, particularly the patterns and type of crimes that have become common in light of the rapid development of modern techniques.”

Highlighting that security authorities around the world are dealing with the same challenges, Al Mazinah says that the Dubai Police work in accordance with the vision that security overcomes crime and they look to combat and reduce opportunities for criminals. As such, much time and effort has been given over to develop and upgrade the human

Safety for Dubai Metro There is no doubt that the Dubai Police will play an important part in the safety of the Dubai Metro. A new police unit has been established to provide security along the line and almost 200 officers will patrol the 74 kilometres of track and 47 stations.

Al Mazinah explains how he foresees the role shaping up: “I can’t sing the praises enough of the signing of the memorandum between the Dubai Police and the Roads and Transport Authority for the security services of the Dubai Metro. In particular, the memorandum is in place to ensure the security of the metro stations under the responsibility of the Dubai Police. We have appointed specialist staff to carry out and discharge all the tasks of the Dubai Metro safety and security by attending training and courses on secure facilities methods.”

us to provide officers to share their expertise in the detection of the obscurities and mysteries surrounding the solving of global crimes, such as the robbery case in Wafi Shopping Centre, the murder of Lebanese singer Suzan Tamim and the murder of Sulim Yamadayev.”

He added that the Dubai Police General Headquarters will establish the Modern Laboratory for Criminal Evidence and Criminology at Dubai Police HQ, the fi rst of its kind in the world. It is due to include the Administration of Physical Remains and Effects, Administration of Criminal and Social Evidence, Administration of Forensic Specialist, Administration of Forensic Technology and Administration of Forensic Engineering. “Many tests will be carried out in the new laboratory, including hair and fibre tests, analysis of fi ngerprint and images, chromosome tests and test for weapons of mass destruction, as well as DNA tests,” explains Al Mazinah.

“The police force is always looking to activate partnerships with different community organisations and various community members” Improving the city

resources team and provide them with the training to provide the best security and police practices internationally through an annual forum.

Al Mazinah goes on to explain that Dubai Police have also established a department annexed to the General Administration of Criminal Investigation in Dubai and have sent a number of officers to attend educational and training programmes in research and investigation.

“We have managed to gain the confidence of all international security agencies who are keen to exchange experiences and information with Dubai Police,” says Al Mazinah. “Some countries have even asked

The Dubai Police force have a lot on their plate: from strengthening security for construction projects to implementing new rules and regulations for safe living conditions for labourers and the huge traffic problems in the city. “Dubai Police and other bodies and authorities such as Dubai Municipality, the Roads and Transport Authority, the Civil Defence Department and the Ministry of Labour all work together.

We work in accordance with the vision and message of the United Arab Emirates Government,” explains Al Mazinah. “The police force is always looking to activate partnerships with different community organisations and various community members to provide a decent and dignified life for both UAE citizens and expatriate residents.”

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EXECUTIVE INTERVIEW

On the front line Investing millions of dollars each year into R&D and product development programmes, Paul Janusz, VP of Sales for the EMEA region for Tyco Fire Suppression & Building Products, explains how the company is thriving in the challenging area of fire protection.

Fire protection is one of the most challenging areas of the infrastructure sector, particularly in the Middle East. What are the key challenges from your perspective and how are you working to tackle them?

Paul Janusz. The Middle East continues to flourish and develop its own personality through its growing reputation for construction innovation, unique building design, and its rising influence as a manufacturer of raw materials and finished goods. The Middle East fire protection market presents unique challenges, combining prescriptive, code-driven water sprinkler markets with more complex engineered systems found in gas extinguishing solutions, driven by insurers and loss prevention philosophies.

This environment presents technological and commercial challenges which Tyco Fire Suppression & Building Products (Tyco FS&BP) has thrived in for many years, resulting in the company becoming one the biggest fire protection players in the region.

PJ. The fire protection sector relies on both construction and POG (petrochemical, oil and gas) industries to drive growth. The recent economic crisis has been severe and affected these key sectors so naturally the fire protection market has been impacted, although perhaps not as much as other more exposed industries; perhaps due to safety requirements maintaining a level of activity throughout the crisis.

With some key economies showing signs of growth or at least of bottoming out we anticipate an increase in the flow of projects in the pipeline, leading to a return to growth in the second half of 2010.

The fire protection market in the Middle East is still considered fairly immature. Where do you see the key areas for growth and why?

PJ. We anticipate an increasing demand for more complex fire protection, including gaseous suppression systems and bespoke fire safety systems.

Here, Tyco has significant market share and a

“Tyco has ambitious plans for development in the Middle East region through an expansion of our sales presence: we expect to see an increased sales force operating out of joint operational offices over the next 18 months”

We recognise the technical demands and preferences of the Middle East, together with its expectation of high-quality product and an insistence on proven fire protection solutions.

TFS&BP invests millions of dollars each year into R&D and product development programmes; a strategy which has already created market leading brands such as Ansul and Hygood and products such as Inergen and Sapphire.

How has the global economic crisis affected the fire protection sector in the Middle East in your opinion?

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complete range of installation protection solutions, ranging from sprinklers and the grooved piping products used in their installation, through portable fire extinguishers, gaseous clean agent suppression systems and including special hazard solutions such as specialist foam agents and foam proportioning and delivery hardware.

The growing, high level of Middle East engineering and project expertise has helped Tyco enormously because the same levels of performance and reliability expected by end users defines

our own product performance expectations. In effect, Tyco is engaged in raising the expectation ‘bar’ on a continual basis, reviewing and improving our product range. This includes performance, cost and effects on the environment, all of which will continue to shape our product investment development programmes.

Do you have any plans for expansion in the next 12 to 24 months? If so, where? What can we expect to see from Tyco in this time?

PJ. Tyco has ambitious plans for development in the Middle East region through an expansion of our sales presence: we expect to see an increased sales force operating out of joint operational offices over the next 18 months. TFS&BP will continue to develop its distribution and contractor customer bases in established markets such as Dubai, Abu Dhabi and Saudi Arabia, as well as extending into identified new markets for us, such as Libya, where we are investing to improve our local market understanding and build upon our existing representation channels.

In summary, TFS&BP sees a great future in the Middle East; we understand and respect our customers and users and we have a successful history and very successful brands which we will continue to develop, to the benefit of our distribution and contracting partners and also of our own business.

Paul Janusz is VP of Sales for the EMEA region. A veteran of both Tyco and the fire protection industry, Janusz is responsible for ongoing sales and new business development for the whole range of fire control and suppression solutions within Tyco’s FS&BP product and systems portfolio.

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INDUSTRY INSIGHT

PANDEMIC PREPAREDNESS AND MITIGATION John Breedlove, co-founder of Intelagard, evaluates the importance of decontamination in buildings and facilities.

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oday’s headlines frequently include news about the spread of MRSA (Methicillin-Resistant Staphylococcus Aureus), and swine flu (A/H1N1). The MRSA infection is frequently referred to as ‘staph’.

It is a strain of staph that’s resistant to the broadspectrum antibiotics commonly used to treat it.

MRSA can often be fatal, and most MRSA infections occur in hospitals or other healthcare settings, such as nursing homes and dialysis centres.

Influenza A/H1N1 virus is a subtype of influenza virus A and the most common cause of influenza in humans. Some strains of H1N1 cause a large percentage of all seasonal influenza. H1N1 strains caused roughly half of all human flu infections in 2006. Other strains of H1N1 are endemic in pigs (swine influenza) and in birds (avian influenza).

In June 2009, the World Health Organisation declared that flu due to a new strain of swine-origin H1N1 was responsible for the 2009 flu pandemic.

This strain is commonly called swine flu by the public media. A strain of Influenza A/H1N1 was also responsible for the 1918 ‘Spanish Flu’ pandemic. The good news is that solutions exist to help mitigate these threats.

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Easy DECON DF200 EasyDECON DF200 is a powerful and effective chemical/biological decontamination formulation that’s been extensively tested and used by the US and other militaries, as well as other government agencies and industry for a number of applications. Testing facilities include ABC Laboratories (Biodegradation Tests), Battelle Research Institute, the US Marine Corps Systems Command, US Central Command Urgent Needs Requirement

“New technology that will provide on-demand decontamination capabilities is currently being developed and tested” Testing, US Naval Surface Warfare Center (NAVSEA Dahlgren Division), Edgewood Chemical and Biological Center, Rice University, US Soldier Biological and Chemical Command, US Environmental Protection Agency, IIT Research Institute, West Desert Test Center (Dugway Proving Ground), and Kansas State University.

Inherently biodegradable, EasyDECON DF200 was used to decontaminate parts of the Hart Senate Building, the Trenton Postal Facility and the Ford and Dirksen buildings of weaponised anthrax.

It was also used at Voz Island to kill a number of dangerous pathogens. It is a three-part aqueousbased solution that works through an oxidation process. It can be deployed as expanded foam, liquid or as a fog in enclosed spaces.

EasyDECON DF200 has also been tested and proven effective against MRSA and A/H1N1. Due to the effectiveness of the DF200 formulation, Sandia National Laboratories tested it against the swine influenza A/H1N1 virus as a surrogate for the avian influenza virus, H5N1. Reduced concentrations of the active ingredients were used for the experiments. A 1:1 ratio of virus to disinfectant was used. The results indicated that even with reduced concentrations of the active ingredients in the formulation, DF200 “is highly effective at complete inactivation of the Influenza A tested in this study, swine H1N1”.

MRSA testing was performed at Microbiotest Laboratory facilities. The Microbiotest report concluded that EasyDECON DF200 was effective at killing MRSA. Using EasyDECON DF200 as a cleaning agent will kill any existing MRSA and A/H1N1. EasyDECON DF200 has a residual effect that inhibits the return of the organisms as well.

New technology New technology that will provide on-demand decontamination capabilities is currently being developed and tested. This system can produce Chlorine Dioxide (ClO2) and Hypochlorous Acid (HOCl) solutions for the effective decontamination of numerous micro-organisms. The advanced technology allows the user to easily adjust and customise the formularies depending on the specific need. Key benefits of the on-demand technology include the ability to generate highly effective, environmentally benign solutions from dry components and available water sources, greatly reducing logistical burdens. The ability to customise the formulas by adding dispersants, chelants, surfactants and other materials provides maximum flexibility to target the decontamination formula to the incident.

John Breedlove co-founded Intelagard in 1991, and still continues to develop innovative emergency response systems.

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EXECUTIVE INTERVIEW

Challenges of fire protection Fire protection is increasingly hitting the headlines. Barry Bell outlines the main fire safety risks and examines the importance of detection technologies in the sector.

In your opinion, what are the main challenges regarding fire safety in the Middle East region?

How does your solution work to tackle these challenges?

Barry Bell. Obtaining uniformity in design regulations is certainly a major challenge. For the time being, our goal is to support the design process by assisting architects and engineers that are engaged here from all over the world in the application of international codes and standards generally applied here and the specific requirements of local authorities. Another important challenge is sustaining a building’s fire protection features, both passive and active, throughout the lifetime of the building.

To meet this challenge, we form part of a team of approved fire engineering consultants that are charged with the annual inspection of buildings, enforcing remedial action wherever necessary. Such actions ensure that a building remains safe for continuous occupation and particularly safe with regards to the specific operations and activities that are being conducted within the building. This inspection regime applies to residential, commercial and industrial buildings and facilities.

As buildings get taller and more innovative in design, the fire safety issues become more complicated. What unique challenges do highrise buildings present?

BB. Life safety is a major challenge in high-rise

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do pay great attention to public safety. In general, there are tight controls on the materials and equipment used on new projects, and some of the best technologies available are in demand here.

The only issue that I see is the sustainability of performance of complex technologies after project completion. This will be covered to some extent by the mandatory annual fire safety inspections, which also focus on the standard of maintenance being provided and current functionality of life safety and fire protection systems.

What we don’t influence at the moment is the education of maintenance providers. Without manufacturers’ support, we cannot ensure that maintenance engineers or technicians actually have the expertise necessary to provide sophisticated maintenance for complex technologies.

Local authorities do however have examination procedures in place for the approval of maintenance company employees that service standard systems such as fire detection, alarm systems and water-based fire suppression systems.

We would like to encourage more enforcement of certification by manufacturers, ensuring that maintenance staff have adequate training, up-to-date technical documentation and software tools that allow correct preventative maintenance, testing and technical support for their specific systems. Not to mention a guarantee of original replacement parts for a period of at least 10 years.

buildings anywhere. Even when code compliance in the design of passive and active fire protection is achieved, escape and rescue from high-rise buildings remains a unique challenge to both occupants and emergency services.

We, like other specialists that operate in this region, are assisting the fire departments and regulatory bodies in the development of unique strategies that will enhance the safety of occupants residing in high-rise buildings and at the same time provide protection for emergency services that fight fires and conduct rescue operations. Of Fire standards and regulacourse, this means adaptation of tions are definitely imBarry Bell is the Senior principles that are already estabproving the approach to Engineering Consultant and Managing Director for the Middle lished in other countries that have fire protection in the reEast at Wagner Fire Safety. the advantage of longer experigion. What are your views ence. Adaptation is important beon standards and regulacause the strategies have to be tions in place? Do you harmonised with the region’s cultural, social and think they go far enough? logistical capabilities.

BB. Because the base standards applied are preThe Middle East region is famed for its mega projects. How are the latest technologies helping to protect such developments from fire safety risks?

BB. Mega projects, such as large shopping malls and public assembly venues, obviously result in extraordinarily high occupant loads within these facilities. This acknowledged, the local authorities

dominantly of US or UK origin, the standards are more than adequate if applied correctly.

Because of the culture, climate and other unique differences between the Middle East and other parts of the world, the region has also created some unique standards of its own that fill the gaps where provisions within current international codes are deemed unsuitable for application here.

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BLUE-SKY

THINKING Omanâ&#x20AC;&#x2122;s airport expansion plans aim to establish the country as a premium destination for both tourist and business travellers. George Bellew, the man charged with orchestrating the operation of the airport infrastructure, outlines his vision.

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arely has the designation ‘greenfield development’ seemed less appropriate. The 8km by 8km parcel of parched land situated some 30km outside of the city of Adam in Oman’s desert heartland is as far from the lush, verdant images conjured up by the phrase as it is possible to get. Dusty earthworks litter the site in preparation for the next phase of construction, while the newly built, 4km runway stretches across the hot, arid sands with barely a tree or a blade of grass in sight. As misnomers go, calling this a greenfi eld site is up there with the best of them.

George Bellew, CEO of the Oman Airport Management Company (OMAC) and the man charged with heading the development and operation of the country’s airport infrastructure, laughs when I suggest this to him. “I guess the term is a bit inappropriate in this context,” the native New Zealander admits with a grin. But while chromatically incongruous, he insists the phrase does reveal an essential truth: that Oman is committed to new infrastructure development, and is looking beyond the existing urban environment to do so. “It shows the government’s enthusiasm for expanding and investing in the aviation sector, bringing air travel to new segments of the population and opening up new areas of the country to development,” he asserts. “Simplistically, it means diversification of revenue and growth for the economy.”

The airport at Adam will serve as a gateway to the vast central region of the country, while three other brand new facilities – at Ras Al Hadd in the northeast, Duqm on the central east coast and Sohar in the northwest – will further expand access across the country. Along with multibillion-dollar expansions of the existing amenities at Muscat International in the north and Salalah in the south, the new builds reflect the Omani government’s desire to diversify away from a heavy dependence on oil and oilrelated products towards other economic engines such as tourism. “There is a considerable upside to growing tourist visitor numbers to Oman. They bring additional spending power and geographic diversification of that spending power as well,” says Bellew.

And it’s not just tourist dollars that could help boost the domestic economy. “The tourist industry is certainly one important element of that, but there is also the development of the cargo industry, as well as the enabling impact of good connectivity and how that drives commercial enterprise in general,” he continues. “If you can enable or facilitate ease of travel for business people and traders to and from Oman, this will be catalytic in terms of developing trade.” The expansion plans will have a big impact on internal trade, too – after all, Muscat to Salalah is over 1050 kilometres by road. “It’s a long way, and is the main reason we need to expand the regional airports as well as the main international ones.”

Attracting new partners and working with existing carriers to develop additional frequencies and new points of connection to stimulate such development has been a key area of focus for Bellew and his team over the past few years. “It’s part and parcel of developing and driving the business for an airport, and something that we work at continually,” he explains.

“We work closely with the Ministry of Tourism, with individual operators in the tourism sector, existing airlines and potential airlines, not to mention cargo operators, industry associations and other interested parties.”

Operational excellence As the operating company for the existing Muscat and Salalah airports and their expansion projects, as well as the firm behind the management of the four additional regional airports, OAMC has a vital role to play in the development of the country’s infrastructure. As such, collaboration and communication in the development process is essential. “We are a major stakeholder, so we work quite closely with the government, the designers and with the project managers to establish what will be delivered, because as the operator we’re a bit like a new father,” he explains. “The contractors, designers and project managers help us bring the child into the world; an important role, for sure, but ultimately that child will be our responsibility. We have to take it home, nurture it and make it successful.”

According to Bellew, work on the modernisation programme is progressing well, particularly at the key sites of Muscat and Salalah. “There’s been a lot of enabling work, mainly civil works, that have been undertaken on the Muscat site,” he says. The first construction contract in terms of above-ground works – dubbed MC1 – comprising ground improvement works, the construction of a new runway, taxiways, aprons, electrical substations, chiller plants, a fuel hydrant system and all electromechanical works, has been let to a combination of CCC and its joint venture partner TAV Construction. Recently it was announced that the maintenance, repair and operations facility will be designed by Ghafari of Chicago, and other projects are currently at the bid stage.

Denmark’s Cowi and the local Larsen Architects & Consulting Engineers prepared the concept designs for the project, while a joint venture between France’s Aeroports de Paris and Pakistan’s National Engineering Services Pakistan & Partners has been appointed project manager.

Salalah is at a similar stage of development, while the four new greenfield airports are at varying stages of progress. “All are basically at the preliminary concept design stage, although in some cases runways are being constructed,” says Bellew. “For example, with Adam, we’ve already fi nished building the runway, and ancillary work such as apron construction is under way right now. But the degree of progress to date varies between the various regional airports.”

“If you can enable or facilitate ease of travel for business people and traders to and from Oman, this will be catalytic in terms of developing trade”

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MUSCAT INTERNATIONAL

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he proposed new terminal at Muscat International Airport will be completed approximately by 2012 and have the capacity to handle 12 million passengers annually. Further expansions planned in three subsequent phases will ultimately boost the airport’s capacity to 48 million passengers by 2050. The programme aims to have the new control tower and second runway completed and operational by the end of 2010, and the passenger terminal and other buildings ready by the end of 2012.

The new Muscat International Airport would feature a new passenger terminal building with 32 boarding air bridges, a second runway, control tower, cargo terminal to handle 200,000 tons of cargo annually and a car parking capacity for 6000 cars. The passenger terminal, an imposing structure incorporating a blend of modern international class airport design elements and Omani traditional motifs, will be built between the two parallel runways.

The new terminal building will have a net floor area of 290,000 sqm and a capacity for 12 million passengers a year. Shopping arcades, restaurants, cafes, elegant lounges and an 80-bed airside hotel for transfer passengers are also envisaged. The airport will also feature a 101-metre-high control tower and a new air traffic management centre.

The project has been designed to allow for the airport to expand its capacity size for up to 48 million passengers annually through a second passenger terminal building planned in the next phase that will be linked to the first via a system of high speed trains. Furthermore, the existing runway at Muscat International Airport will be upgraded and supplemented with a new runway. It will be able to handle the world’s largest passenger plane, the Airbus A380.

The project also includes a motorway to the airport with three lanes in either direction, complete with a companion interchange feeding into the existing motorways.

Of course, one of the biggest challenges of any airport modernisation programme, is how to simultaneously maintain service levels at existing airport facilities whilst expansion work is taking place. In this regard, Bellew believes Oman is in a fortunate position. “The expansion that’s taking place on both the Muscat and Salalah sites is actually quite geographically separate,” he explains. “Although on the same airfield, it’s removed from where our terminal operations are at the moment.

So here in Muscat, for example, we’ve got a site that is quite large and that already has an operational runway, and we essentially operate on the southern side of that site. If you look across to the northern side of the site towards the sea, you would see a lot of earthworks that have already been done in preparation for building the new runway and associated sites. And because of our parallel runway configuration, the new midfield terminal will be built over there too, essentially in an area that, during the construction phase at least, is really not part of the operational airfield terminal site. So we will be able to maintain the service at the existing airport and then integrate the new facilities as and when they come online.”

Planning for growth It goes to show the huge amount of planning that goes into such projects, and in this respect Bellew and his team have been working hard to ensure Oman’s new airports don’t suffer from the same teething troubles experienced by other high-profi le terminal openings in recent years.

“Alongside the operations people who are looking after the day-to-day running of the airport, I’ve also got a team of experienced specialists who are driving the forward-looking preparation that has to be done to ensure that on day one, when we have to operate those airports successfully, we are ready,” he says. “You can’t afford to drop the ball, particularly when you’ve got the media looking at you, and this is why operational readiness and training (ORAT) is so important.”

The aim of ORAT is to employ specialists focused on the process of ‘de-risking’ the opening of a new airport facility. While it’s not a new concept, the emphasis currently being placed upon it is. “At the headline level you’re bringing in a team of specialists to work with your own people and the various contractors and suppliers to ensure an opening that is as trouble-free as is possible to achieve,” says Bellew. “They work with and through the various project management teams, but report to us as the operator. After all, as I said before, the paternity rests with us.”

As Bellew readily acknowledges, overseeing such developments so that they reflect well on Oman and help facilitate the country’s economic growth strategy is a big responsibility. But he’s also quick to recognise the wider implications of operating an aviation infrastructure in the

“Geographically, the Gulf is pretty much at the centre of the world, so it’s a logical destination for an aviation hub. We’re pretty confident as to the future”

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context of a regional and global airspace. For one thing, with such a huge amount being spent on expanding the aviation sector across the Gulf, air space management and having a large volume of international airports in a relatively small geographical area becomes more challenging. “For certain airports that are expanding considerably in this region, airspace management – and the attendant constraints that it brings – will be a challenge. Fortunately with Oman we are further to the east and are relatively uncluttered because of our geographic position.”

Nonetheless, managing that growth in traffic will be key, and technology will play an important role in this regard – in fact, it is IT that is making the huge expansion of the region’s infrastructure possible. “There is no doubt that air traffic management technology is changing, and allows for the safe intensification of traffic within a particular region,” explains Bellew. “Separation between aircraft can be safely reduced, so therefore your number of fl ights into a particular airfield per hour can be improved. You can get more precise patterns being flown so that you don’t get aircraft flying all over the sky and interrupting with other approach patterns, and so on. With new technology, the whole drive is fi rst and foremost to reduce risk.”

A competitive landscape The other impact of this region-wide upgrade of the aviation infrastructure is that competition is set to increase dramatically. The last few years have seen a number of Oman’s near neighbours make some aggressive moves in terms of positioning to capture their share of a growing regional market, and some of those – Dubai in particular – have already established a role as a regional hub. It’s a fact not lost on Bellew, a veteran of the private sector. “We are competing in a market that is very competitive and as all these new facilities come onstream, it will become even more competitive,” he says. “However, I’ve lived all my life with competition and know the stimulator effect that it has. It acts as a spur to make sure that you try and achieve best performance, and so I think the disciplines of the marketplace are pretty fundamental to our growth in this region.”

In fact, he is fairly bullish on prospects for the industry – optimism based on the fact that the market for air travel in the GCC has continued to hold up better than any other region in the world. “This is partly because it is still a relatively underdeveloped market,” Bellew says. “We’ve also probably been less affected – not unaffected – by the ravages of the banking crisis. Air passenger numbers in Oman for the seven months ending July, when compared to the same period last year, are up by eight percent – which if you look at the international statistics is pretty good.

And I think in general that’s reflected across the rest of the region. To put that figure in context, last year we were growing at 18 percent, so of course we’ve seen a slowdown; but eight percent, even in normal market conditions, is still pretty respectable. If you compound that forward at eight-10 percent, it still means quite substantial growth in real terms over a number of years.”

He also cites a number of other factors – including an appreciating oil price that will help bring wealth back into the oil-producing countries of the GCC; and the rise of near-neighbour India, only a few hours’ flying time away – that will serve to boost the Omani economy and help drive the growth of the country’s aviation sector.

SITE PREPARATION

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ne of the great challenges in building the new airport in Muscat is to provide adequate drainage of the area; it seldom rains in Oman, but when it does, run off is heavy and sudden. Water cascades down the mountains behind Muscat in great quantities and on into the Gulf of Oman.

In order to get to the sea, the rainwater passes the stretch of plain on which the new runway will be built.

This is a flat, low-lying area, separated from the ocean only by a coastal road, where water can temporarily pond in the shallowest spots after the infrequent and shortlived downpours.

As the first part of the project, the grounds are being raised by three metres to ensure the new runway and the new roads never end up underwater (during the extreme weather conditions of Cyclone Gonu in 2007, the existing runway and taxiway were not flooded). This is being done by importing 10-12 million cubic metres of desert sand and crushed rock to the site.

In order to protect the rest of the airport site from flood surges, as well as a nearby development of luxury residential coastal properties, one of the first steps in the building process was to install three giant outlets, or culverts, to the Bay of Oman. The three culverts will have a combined capacity of 500 cubic metres of water a second.

“It seldom rains in Oman, but when it does, run off is heavy and sudden”

Indeed, Bellew believes it is the region’s unique location that will do most to ensure it remains competitive as a global transportation hub.

“Geographically, the Gulf is pretty much at the centre of the world,” he concludes. “If you were to draw a circle for say, six hours’ flying time from Muscat, you would cover a significant proportion of Southeast Asia, Europe and Africa, so it’s a logical destination for an aviation hub.

We’re pretty confident as to the future.”

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ASK THE EXPERT

TACKLING AIRPORT DESIGN The Middle East region is currently undergoing strong growth in the aviation industry. But what challenges does this present from an operations perspective? Anke Matijssen explains.

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irports in Dubai, Abu Dhabi, Doha, Cairo and Kuwait are all in the process of significant expansion. Such upscaling means not only an increase of resources such as power and water, but also an increase in staff. People are necessary to support specific airport operations such as passenger processing, baggage handling and servicing aircraft, and also for retail purposes and cleaning, and all those people need to be trained for the task they have been appointed for – not least because they will be working in areas where only screened passengers are allowed.

Th is is not so very different from other parts of the world, but fi nding the right people in a region where the dependency on expatriate labour is already quite high increases the challenge, especially where specific skills are required.

After fi nding the right people, the challenge becomes one of how to set up a programme to guarantee all employees are properly prepared to do their jobs – starting on the opening day. One option is to consider how staff numbers can be reduced without affecting the operation of the airport. Balance must be found between relying on automated processes (which is often not the case before the airport is modernised) and incorporating self-service systems that don’t leave passengers with the impression that staff are not visibly involved. One example is the presence of self-service kiosks where passengers can choose to check themselves in and drop their baggage or go to a check-in desk; another is the use of biometric immigration gates next to conventional ones.

Behind the screens there are many other ways to limit the required amount of staff.

Take CCTV, where it is technically possible to mount cameras throughout the complete public area to collect information and moni-

“Deerns Consulting Engineers are trained to design in such a way that the systems fit in to the architectural design whilst maintaining the opportunity for future developments” tor it at a central location. The monitoring job The design schedule can influence an is a huge one if this information is not fi ltered airport’s ability to have the latest technology in any way. Deerns Consulting Engineers on opening day. Starting with a programme develop concepts in which the requirements of requirements and going through several of the airport and stakeholders are taken into design stages before construction can even account with regard to the monitoring task. If start is time-consuming; add to that the necessary, solutions such as video analytics are period it takes to have the building ready from applied to reduce the number of staff and make a security and operational standpoint and you the job more easy to execute. could be looking at as much as five years from Another aspect of the modernisation and design to opening. And considering the speed expansion of an airport is the legacy of existing at which technology develops, the specified systems, combined with the need to keep upequipment could already be out-of-date before dated on the latest technology. it has even been installed.

For example, the equipment Deerns Consulting Engifor security and airport operaneers are trained to design in tions the airport uses before such a way that the systems fit modernisation might not be in to the architectural design at the end of its lifetime at the whilst maintaining the opmoment the expansion beportunity for future develcomes operational. Basically, opments. The timing for the there are three options: 1) reprocurement of the systems place the equipment, which is must be right; sufficient time possibly a large disinvestment; is required for installation, 2) extend the existing equipconfiguration and testing and Anke Matijssen is currently Manager ment, meaning the equipment for staff training. On the other of the airports department at Deerns is outdated from the outset hand, it must be late enough Consulting Engineers. Deerns is based in the Netherlands and has wide and increasing the risk of early that you can incorporate the experience in airport systems design. replacement; or 3) use new latest technology. equipment in combination The combination of with old equipment, which is not favourable having legacy systems in the already operafrom an operational point of view. tional airport and the long lag between design None of these solutions are ideal, but if the and actual installation results in the need to problem is identified at an early stage of the approach the design process with both the exdesign process then measures can be taken, isting situation and the new concept in mind. disinvestments can be avoided and the latest The solution must be found, in collaboration technology can be applied. with both the client and its stakeholders.

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AVIATION FOCUS

Flyinghigh Aviation Emissions In its fourth assessment report published in 2007, the ICAO reported the following findings related to aviation emissions: • Due to developing scientific knowledge and more recent data estimates of the climate effects of contrails emissions have been lowered and aircraft in 2005 are now estimated to contribute about three percent of the total of the anthropogenic forcing by all human activities • Total CO2 aviation emissions is approximately two percent of Global Greenhouse Emissions • The amount of CO2 emissions from aviation is expected to grow around three-four percent per year • Medium-term mitigation for CO2 emission from the aviation sector can potentially come from improved fuel efficiency. However, such improvements are expected to only partially offset the growth of CO2 aviation emissions 116 www.menainfra.com

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Roberto Gonzalez, President of the International Aviation Organisation, explains the huge challenges around reducing greenhouse gas emissions and how imperative it is to have the right leadership in place in order to make the United Nations Millennium Development Goals a global reality.

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uring the United Nations Framework Convention on Climate Change (UNFCCC) talks held last year, Japanâ&#x20AC;&#x2122;s participation was significant, when it raised a number of important issues related to a future climate regime, as for example how to consider sectoral approaches. During these talks, a number of delegates stressed the urgency of developing concrete proposals for the meeting in December 2009, in Copenhagen, where the objective will be to produce a new climate agreement.

The aviation community shares this sense of urgency and is appreciative of the opportunity to present its vision for addressing greenhouse gas emissions from international civil aviation. First and foremost, it must be recalled that, so far in the UNFCCC discussions leading up to the Copenhagen meeting, no consensus has appeared on how to consider international emissions, also referred to as â&#x20AC;&#x2DC;Bunkersâ&#x20AC;&#x2122;. The Kyoto Protocol stipulates that emissions from international aviation are to be dealt with through the International Civil Aviation Organisation (ICAO) while emissions from domestic aviation are included in targets.

There is much merit to this approach. First of all, emissions from international aviation are, by definition, global in nature; they are not contained within national boundaries. Assigning international emissions is an extremely complex task at best and even more difficult to implement or enforce. Second, achieving consistent improvements in the energy efficiency of air transport requires globally harmonised environmental aviation standards, procedures and practices that need to be co-operatively established and universally accepted and implemented. And third, optimum compatibility between environmental sustainability and the safety and efficiency of the global air transport system must never be compromised. An environmentally friendly aviation industry that is not safe or efficient is not viable.

Putting things in perspective, we must also remember that international aviation represents a relatively small source of emissions contributing to climate change.

International aviation According to the International Panel on Climate Change, domestic and international operations together account for an estimated two percent of human produced CO2, the major greenhouse gas. International aviation alone is responsible for slightly more than half of these emissions. The problem is that the growth in traffic is outstripping the substantive progress of the industry in reducing emissions.

Moreover, the aviation industry has a remarkable track record of continuously improving the efficiency of its operations in minimising the impact of air travel on the environment and specifically climate change. For decades, airlines have systematically employed new technology as soon as it became available and they continue to do so. The typical aircraft today is about 70 percent more fuel efficient than their counterparts of 40 years ago. New aircraft entering production are even more fuel-efficient.

Overall, all stakeholders are searching and finding ways to making aviation operations as environmentally friendly as possible. For its part, ICAO has been active in addressing the full range of environmental issues for more than 40 years and today brings to

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the table considerable experience and expertise in dealing with the climate change challenge. Coordinating our efforts has been the ICAO Council’s Committee on Aviation Environmental Protection (CAEP). CAEP has, among other accomplishments, been recommended for approval by Council Standards related to nitrogen oxides, compiled operating procedures to improve fuel efficiency, developed guidance for states wishing to include international aviation in emissions trading programmes and developed a ‘Carbon Calculator’ to estimate CO2 emissions from aircraft.

Through these and countless other activities, ICAO has, and continues to, fulfil its mandate as the official, international forum for developing globally harmonised environmental aviation standards, policies and practices, all of which have contributed significantly to improving the energy efficiency of air transport worldwide. ICAO is also in the unique position to ensure optimum compatibility between environmental sustainability and the safety, security and efficiency of the global air transport system, without which the continued integrity of air operations could be compromised.

the results in a carbon-offset programme. The calculator is universal, neutral and transparent, and applies the best publicly available industry data. The reaction so far from member states, industry and users is very positive and we intend to apply suggestions received to continually improve the calculator.

Recently, as part of the UN climate neutral initiative, the ICAO Carbon Calculator was approved as the reference tool for all UN bodies taking action to offset emissions from their air travel. ICAO continues to co-operate with its sister organisations by producing an interface that will facilitate the use of the calculator on an organisational level.

Opportunities

Turning to the policy side, I would like to underscore our first ‘Aviation and Carbon Markets Workshop’ held in June of 2008. Our objective was to bring together concerned stakeholders and sensitise them to the full range of issues related to aviation emissions and carbon markets. We addressed a variety of approaches, including emissions trading and carbon offset programmes. We also initiated discussion on other Kyoto flexible mechanisms, opportunities for a An essential role global aviation market and on emerging discussions relating to possible fundThe 36th Session of the ICAO Assembly in September 2007, recognised ing options for mitigation and adaptation. the essential role played by ICAO in this area and called on Regarding the issue of funding adaptation/mitigation the organisation to exercise even more leadership. One asmeasures in relation to climate change through levies im“The world sembly resolution called for the creation of the Group on posed on international aviation, ICAO is concerned over the aviation International Aviation and Climate Change (GIACC). The proliferation of charges and taxes on air traffic, with aviation community is group consists of 15 high-level government officials from debeing too often used as an easy target to raise revenue in varentirely committed veloped and developing states whose task is to develop and recious fields. It is important to remember that whenever levies to reducing ommend to ICAO an aggressive programme of action for are applied to address the protection of the environment, the greenhouse gas international aviation and climate change. The intention is to principles of non-discrimination, transparency and cost-reemissions” consider the recommendations in a high-level meeting in ICAO latedness enshrined in the UNFCCC and the ICAO policies in connection with the 15th Conference of the Parties to the on charges and taxes should be taken into consideration, as UNFCCC in Copenhagen. well as the impact on all parties concerned, in particular the At the second meeting of the GIACC last summer, a number of issues were developing countries. discussed, including the possible establishment of short, medium and long-term In summary, the aviation community, under the leadership of ICAO, is goals for fuel burn. Three smaller working groups were formed to expedite work totally committed to continue its progress employing the full range of techon goals, measures and means to evaluate progress to reduce aviation greenhouse nological, operational and market-based options. These include newer, more gas emissions, respectively. We were pleased to welcome at that second meeting efficient aircraft, improved air traffic management, better maintenance praca representative of the UNFCCC. His participation underscored the fact that tices, more efficient airports, alternative fuels and possibly other emerging and both our organisations, the UNFCCC and ICAO, are generally moving in the innovative solutions such as emissions trading and carbon offsets. As imporsame direction, debating similar issues and likewise setting their sights on simitant, they must be developed on a global scale and in a manner that does not lar outcomes. As we advance along these parallel streams of activity, it is vital that discriminate and that takes into account the specific realities of states and rewe continue building on the excellent cooperation we have developed and nurgions. This is particularly important given that air transport is a driver of ecotured over the years, most notably in quantifying the volume of CO2 emissions nomic activity and, as such, a key contributor to achieving the United Nations attributable to international aviation. Together, we can better identify what meaMillennium Development Goals, particularly in less developed and island sures need to be implemented so that aviation emissions continue to be propercountries, which rely on air transport to reach international markets for their ly addressed. Also since the assembly, ICAO has been very active in developing goods and for attracting business and tourist travel. measures and programmes to enhance its contribution to the climate change ICAO is well placed to ensure the development, promotion and implechallenge. It has made substantial progress in responding to the request of the mentation of such an approach. But I feel compelled to say that ICAO, like all organisation’s governing body, the council, to prioritise and intensify all activiUnited Nations agencies, is simply an agent of its contracting states. We can ties related to greenhouse gas emissions. This includes greenhouse gas emission only move as far and as fast as the collective political will of its contracting quantification, fuel burn goals and metrics, operational measures to reduce globstates. The world aviation community is entirely committed to reducing al emissions and market-based measures. greenhouse gas emissions from its operations and ICAO stands ready to conLast year, ICAO launched its Carbon Calculator. The user-friendly caltinue providing the leadership that is essential to transform this commitment culator is freely accessible on the organisation’s website. It makes it possible into a global reality. Our challenge is great, yet our will to succeed is greater, to consistently estimate the emissions attributed to a specific flight and to use for it reflects the collective will of all parties.

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TRANSPORT FOCUS

A world-class transport system Abu Dhabi has a vision for the future that calls for a world-class, sustainable transport system that incorporates efficient services, integrated technologies and innovative policies. MENA Infrastructure examines just how the emirate is looking to achieve such an ambitious scheme.

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n September 2007, the Government of Abu Dhabi announced the establishment of a new Urban Planning Council and released Plan Abu Dhabi 2030: Urban Structure Framework Plan (Plan 2030). The comprehensive guide was designed to plan for the development of the city over the following 25 years and the council was put in place to oversee its implementation as well as the further development of urban planning policy. In February 2008, the Surface Transport Master Plan (STMP) was commissioned by the Department of Transport to develop the conceptual transportation strategy outlined in Plan 2030 into a detailed implementation programme for the entire emirate. Finalised in April 2009, the STMP comprises a comprehensive set of policies and plans for passenger and freight transport that aims to deliver a world-class sustainable transport system.

Commenting on the launch and implementation in April, His Excellency Abdullah Rashid Al Otaiba, Chairman of the Department of Transport, said: “The Surface Transport Master Plan 2030 comes in line with Plan Abu Dhabi

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2030 and aims to introduce a highly sophisticated transport network throughout the emirate of Abu Dhabi, and to take it to the forefront of globally acclaimed and modern cities and districts. This plan is the result of harmonious co-operation among Abu Dhabi’s Executive Council, Executive Affairs Authority, Department of Municipal Affairs and the Department of Transport, who are jointly working to realise the forward-looking and comprehensive vision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates and Ruler of Abu Dhabi, and under the guidance and direction of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of Abu Dhabi Executive Council.”

As well as developing a comprehensive transport plan calling for infrastructure investments, including highways, freight rail, various public transport components and pedestrian amenities, the STMP has delivered an achievable delivery guide to ensure that the recommended policies and plans

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THE PLAN The integrated, multi-modal system includes: ROADWAYS with highway improvements, advanced technology, trafďŹ c solutions and enhanced connections HIGH-SPEED REGIONAL TRAINS featuring the fastest trains in the world to provide a high-quality intercity service METRO NETWORK with 130 kilometres of two-way tracks and frequent stations TRAM NETWORK supporting the local transport needs in highdensity development areas BUS SERVICE outside of the metro and tram networks. Airconditioned vehicles will provide frequent and regular services FERRY AND WATER TAXI SERVICE integrated with land-based services and serving offshore business, residential, leisure and tourism destinations FREIGHT TRANSPORT improving efďŹ ciency and minimising impacts on the environment

are implemented in time to serve the phased construction of the city.

Involving both the public and private sectors, the timetable is aligned to ensure that the investments and policies will coincide with the phased growth of the city as per Plan 2030.

Transport for all Plan 2030 states that infrastructure should serve all people in the emirate targeting all family sizes and income levels. From an infrastructure perspective this translates into providing public transport systems that are accessible and attractive to a wide variety of people, from business people to tourists as well as the young and the elderly. And the advantages from providing such a system include reduced traffic congestion, an attractive urban environment and a sustainable, low carbon future. Indeed, due to the population growth alongside increased land development and economic expansion, the Emirate is set to see the number of trips per day grow from two million in 2008 to 10

million by 2030. Without significant modifications to the infrastructure, roads will become progressively more congested and negatively impact the quality of life as well as the physical environment.

The STMP has responded to this by diversifying the amount of resources available to the public. The plan includes traffic management policies that will make the most efficient use possible of the highway network. For example, realtime driver information will be used to inform drivers of up-to-date traffic conditions and present alternatives to avoid congested routes and advise passengers of potential delays. Measures will also be in place to suit the different traffic demands of the various areas within the city or emirate. This could mean that traffic will be limited on residential streets while major traffic routes provide high capacity for moving travellers. Road safety initiatives are also due to be introduced, with driver education improved and children educated about crossing the road safely. Audits and better design will also lead to increased safety benefits.

There is no doubt that technologies will play a huge part in the STMP and with technological advancements bound to improve over the coming 20year implementation, the plan has allowed flexibility and is designed to evolve. Innovations are said to be fully considered to ensure that Abu Dhabi citizens benefit from the best technology possible. Abu Dhabiâ&#x20AC;&#x2122;s Masdar initiative is currently being monitored due to its focus on sustainable travel and transport in an urban environment. For starters, the city will be car-free, powered by renewable energy with services digitally managed.

With a maximum of 200 metres to the nearest transport link and amenities, the transport system is something that the Abu Dhabi Planning Council are hoping to recreate. The Masdar initiative is looking at implementing the Personal Rapid Transit (PRT) concept, which features small two to four person pod-like vehicles that run on powered pathways underneath the city so that streets will be a pedestrian-only environment. The

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solar powered vehicles are seen as being the most cost-effective method of future urban transport.

Environment With one of the main goals of the STMP to deliver a world-leading performance in environmental sustainability, Masdar will indeed be looked at closely as a model for sustainability. Abu Dhabi is committed to reducing carbon emissions and protecting its environmental resources as well as protecting and enhancing cultural heritage, landmarks and monuments. And as the STMP undertakes the most ambitious transport system in the world, the project is also looking to be one of the most sustainable, emerging as a global leader in low carbon technologies integrated into a transport system. There is a commitment to lower CO2 emissions in all aspects of transport from design to construction to operation. All the electricity is due to be obtained from low carbon sources of renewable energy, such as high-tech solar cells. Sponsor of Masdar, the Abu Dhabi Future Energy Company, is set to collaborate ideas with the Department of Transport As outlined in Plan 2030, and upheld by the STMP, the plan calls for attractive urban developments that appeal to both residents and tourists as well as strengthen the emirateâ&#x20AC;&#x2122;s identity. Transport infrastructure makes up a large percentage of what is seen in the public realm and as such has a huge part to play in ensuring the character of roadways, intersections, pavements and transport stations. There are several underlying beliefs that the objectives and strategies of the STMP are based on, including basing land development and construction on connected centres, public and open spaces, as well as human-scaled, interconnected streets that will optimise mobility within the emirate.

PUBLIC TRANSPORT Many policies in the STMP are intended to frame public transport as the preferred travel choice as opposed to private cars.

PARKING MANAGEMENT AND PARKING CHARGES within the central business district and capital city are designed to better match the supply and demand of parking spaces at various times of day. For example, parking during the peak morning commute hour will be much more costly.

PARK AND RIDE FACILITIES at key public interchanges outside of the central city will help travellers park easily and continue their journey via rail, metro, bus or ferry.

POLICIES TO SUPPORT THE REMOVAL OF FUEL SUBSIDIES or the introduction of fuel taxes will help reduce the perceived economic advantage of private car use. The resulting funding stream can be used to support the provision of high-quality public transport services.

CONGESTION PRICING will be instituted to charge cars for driving on to Abu Dhabi Island. This charge will inspire many users to select public transport and will ensure relatively uncongested travel conditions for those who are willing to pay.

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ASK THE EXPERT

Keeping it moving Peer Fischer, Vice President for Middle East and Asia at Siemens Traffic Solutions, explains how he is looking to ensure urban traffic flows more smoothly.

parking solutions for off-road and on-road parking, public transport prioritising and management systems, processing systems for traffic information and electronic toll collection.

Today, Siemens is the preferred partner for many projects in metropolitan areas around the world – from Berlin to London, from São Paulo to Los Angeles, from Moscow to Beijing – and an experienced supplier of mobility solutions for large-scale events such as the Olympic Winter Games in Salt Lake City 2002 or the Olympic Summer Games in Athens 2004 and Beijing 2008.

“Managing and preserving mobility in conurbations is one of the key challenges for urban and transport planners”

U

rbanisation and globalisation create more commuters and more freight traffic in the world’s ports. Traffic congestion cost the US economy US$78 billion in 2005, resulting in 4.2 billion lost hours, as well as pollution and wasted fuel. These costs are growing by eight percent per annum.

The economic costs of congestion in New York alone are close to US$4 billion a year.

Various studies estimate the cost of congestion – in developed and developing cities – to reach between one percent and three percent of GDP. In emerging market cities, car ownership rates are currently a fraction of the 75-90 percent of OECD countries. With car ownership growing from less than one in 10 people to one in three or higher, even greater strain will be placed on the transport infrastructure.

Managing and preserving mobility in conurbations is one of the key challenges for urban and transport planners as well as for politics and police. Siemens Traffic Solutions offers the technical solutions that help ensure mobility, increase safety for all road users and minimise environmental impact by means of modern traffic control technology.

The era of traffic management began in 1924 with the deployment of the first automated traffic controllers for the first traffic lights in Berlin, and the traffic control systems at the Chicago Loop in

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One of the central tasks of Siemens is the integration of different technologies and services the US. Ever since, Siemens has been committed into new solutions for a modern traffic manageto developing and marketing new traffic management that supports increased mobility. Based on ment solutions. In 1965, Siemens installed the intelligent traffic systems developed by Europe’s first traffic computer, and in 1976 the Siemens, this holistic approach enables the intercompany developed the first microprocessorplay of different technologies for the acquisition, based traffic controller. Today, Siemens’ business processing and transmission of a wide variety of activities cover everything from intraffic data, creating an all-intelligent traffic data acquisition clusive traffic management with the autonomous traffic sensor system for all road users. system Traffic Eye Universal, right An installed basis of more up to advanced traffic managethan 1000 traffic control cenment centres like the VMZ in tres and over 170,000 traffic Berlin or the ‘Ruhrpilot’ in Essen. controllers makes Siemens the These two large-scale systems market leader. This solid basis are pioneer projects of successful enables Siemens to realise expublic-private partnerships for cellent technical solutions taimobility management in large lored to the needs and cities and conurbations. The new requirements of individual Smartlink technology makes it countries, regions and cities possible to deploy, with little iniaround the globe.

As Siemens Traffic Solutions VP for Middle East and Asia, Peer tial investment, urban traffic conThe most recent projects Fischer has been responsible for trol systems that offer safe, are the ones in Abu Dhabi on the Siemens Traffic Solutions global portfolio since 2005. reliable and cost-efficient options Yas and Reem Island, as well for short-distance communicaas in Prague and Athens. Here tion. Siemens supplies, impleSiemens is installing local traffic ments and operates modular and standardised signal controllers equipped with open-standard solutions for local and area-wide traffic control communication options, central control computsystems in urban areas, wired and wireless comers with advanced algorithms for controlling the munication networks, traffic management sysentire network, wireless networks of intelligent sentems for motorways, freeways and tunnels, sors and energy-saving traffic signal installations.

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TRANSPORTATION FOCUS

Rush hour Rising traffic levels and overstressed transportation infrastructures have created a number of transport issues in most of the major cities in the Middle East region. Mohammed Serroukh, Director General of ITS-Arab, explains the challenges that governments face in terms of managing road infrastructures.

T

he next decade is set to see exponential growth in traffic on the roads – both passengers and freight – and with much road infrastructure increasingly overstretched, the Middle East has reached a breaking point. The region is in dire need of dynamic traffic management to better control the flow of traffic on the roads. Mohammed Serroukh is Director General of ITS-Arab, a not-for-profit organisation dedicated to promoting a partnership between transport professionals, decision makers, academic institutions and the industry. Serroukh believes that while the challenges facing the Middle East are no different to anywhere else in the world, he admits that the region as a whole is still quite busy building the infrastructure itself, whether that be bridges, new roads or bypasses. However, such a scenario is not necessarily such a bad thing; while elsewhere in the world is maximising the use of existing infrastructure, the Middle East has an opportunity to build new systems and take advantage of emerging traffic control measures, jumping ahead of the technology curve.

“Governments have recognised that they are able to take advantage of new technology and many of them are now focused on intelligent traffic solutions (ITS) because they want to get ahead. We’ve actually seen a number of full-scale ITS projects already on the way and then there are

a number of pilots, not to mention the numerous studies, consultancy areas and master plans taking place across the region,” says Serroukh.

While all technology is being considered, Serroukh goes on to explain that there is yet to emerge any specific solution that is ahead of the pack. “In Saudi and Bahrain, for example, they still see charging for the use of the road as being politically unacceptable and the situation

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hasn’t reached the point in which it actually warrants the use of such technology to try to reduce congestion.” As such, softer ITS measures have since been more popular, such as technology that helps manage congestion and safety.

Competition While all areas are concentrating on dynamic traffic management, there certainly seems to be a variety of different approaches taking shape.

Serroukh explains that Dubai, for example, prefers to build something first then go back and correct any mistakes later, whereas Saudi Arabia is more likely to implement a master plan and engage various stakeholders on key issues before any deployment. “Everybody has a slightly different approach, but they all have the same appetite. They all want ITS and they all want it now,” confi rms Serroukh. He cites a combined dynamic traffic management project in Saudi Arabia called ATVAM, as an interest-

“Everybody has a slightly different approach, but they all have the same appetite. They all want ITS and they all want it now” ing example. “They’ve identified a number of corridors and main roads across the kingdom as a whole and have divided the contract into three regions. The basis of the project is that it does an average speed check and also monitors junctions for red light violations, U-turns and other traffic safety related issues. And in terms of traffic management, it is defi nitely the leading project across the region because all the other regions are deploying radar-based speed cameras.”

ITS has been used fairly extensively throughout the US and Europe, as well as the Far East to a certain extent, so does Serroukh see innovative approaches that could be adopted in the Middle East region?

“There’s been a number of visits that have taken place over the last year or so to see traffic systems in action in both the UK and Germany. So we’ve looked at equipment control rooms and the history behind it, as well as a visit to local authority traffic control centres to get an idea of both urban and inter-urban sites. And there is another visit planned to either the US or Asia to identify innovative solutions and what can realistically be implemented in the region.”

Holistic systems Yet as much as the region is focused on ITS solutions, it is important that it also concentrates on developing public transport systems to a higher standard. With 97 percent of all trips in Saudi Arabia made via private transport combined with an exponential rate of passenger transport expected in the next decade, it is vital that public transport infrastructure is developed if the region is able to cope with the rate of growth. Serroukh believes that this need has been recognised and it is only a matter of time before its development in this sector becomes more widespread. “One of the problems within the region is that public

Dubai Metro The latest public transport initiative to be launched in the Middle East is Dubai’s Metro system. According to the Roads and Transport Authority (RTA), the Metro carried 1,018,030 passengers in the first 16 days after the 52-kilometre Red Line opened on September 9, proving that public transport infrastructure is indeed in demand in the emirate.

Dubai Metro in numbers: 3000 CCTVs in trains and stations 643 passengers accommodated per train 90 km/h is the fastest speed of trains in automatic mode 87 trains in the system 75 km long in total 51 trains in service on the Red Line by 2010 47 stations, nine underground 29 stations on the Red Line 5-car trains 3 classes 0 percent carbon emissions

transport is either inadequate or almost non-existent. There are places like Cairo that operate a reasonable underground system and bus network, and then there is Dubai, which although recently has invested heavily in light rail is yet to see a whole system in place so there is much work to do.”

Serroukh goes on to explain that the whole idea of road and transport management needs to be considered in a much more holistic way so that the whole system is developed together with a focus on technology and operations from day one. “While different countries are approaching this in different ways, they all recognise that ITS is important and that it needs to be dealt with properly. Dubai, for example, has created a division that is equivalent to the UK’s Highways Agency, except that it does everything as a whole, much like in Bahrain. And then in Saudi, because it’s a much larger country, they are actually linking together all the ministries through a committee. Called ITS Standard, that committee is very much focused on having an interoperable transport system that features ITS as a feature in every system from the very start of that particular project. The committee consists of very high level officials for every single ministry that has anything to do with transport in either build or operation. So, as you can see, every country is dealing with it in their own way.”

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GAS FOCUS

Flushed with success following his promotion from VP of Downstream to CEO of Dana Gas, Ahmed Al Arbeed tells Diana Milne how his company plans to transform the regionâ&#x20AC;&#x2122;s energy industry.

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H

aving already established itself as the Middle East’s largest private sector gas company, Dana Gas’ CEO Ahmed Al Arbeed says it is now on the cusp of being one of the world’s most innovative. Its Gas Cities project will revolutionise the way gas is produced and used, with sustainability at the core of the concept. Once complete, the Gas Cities will be fully integrated industrial zones designed to promote economic activity and attract lucrative foreign investment to the region’s burgeoning natural gas sector. The idea is that gas will be produced in the industrial cities and then either converted into economically viable petroleum products or used as feedstock, so that nothing is wasted and each element of the production and supply chain supports the city’s infrastructure.

Breaking the mould Describing the thinking behind the concept, Arbeed says: “It’s a unique idea that is similar to the industrial cities all over the world but with some uniqueness in terms of the fact that it partners exactly with today’s needs. Sustainable development is the key to the distinction between Gas City and other industrial cities. What we are trying to build for the countries of the MENA region is cities whereby you can use the whole gas cycle. You can do this by supplying gas to petrochemicals and other industries, those are what we Ahmed Al Arbeed call the primary industries. Then there are the secondary industries that take the waste and emissions from the primary industries and use this as feed to make many products of different kinds.”

As well as industrial facilities the projects will also include the infrastructure needed to support the workers that will live within the Gas City compound, Arbeed explains: “We will have tertiary services that will provide services to the whole city, which includes the residential area.”

Arbeed goes on to say that although Gas City breaks the mould in terms of modern natural gas production facilities, it is inspired by the era of the European industrial revolution in the 19th century, during which whole towns and cities sprung up around factories and other industrial sites. “This idea goes back 200 or 300 years,” he says. “As soon as industries started to grow, the cities came as a by-product because people moved closer to the area where they worked. We’re trying to set an example of how this can be done in the Middle East and in a sustainable way.”

To date Dana Gas, which is an affiliate of UAE-based Crescent Petroleum, plans to build four gas cities across the Middle East creating “tens of thousands of jobs” in the region. It has already been in talks with the Egyptian government about building one of the first Gas City complexes in the country, where it has a strong presence since acquiring Centurion Energy for US$ 1billion in 2007. Plans are also afoot to build a 461 million square foot site for Kurdistan Gas City. Dana Gas has been supplying the Iraqi region of Kurdistan since late last year after completing a US$650 mil-

lion project. The Kurdistan Gas City project will be built with an initial investment of US$3 billion and is expected to attract foreign direct investment of over US$40 billion during the operations phase. It will be built to support over 20 types of petrochemical and heavy manufacturing plants and hundreds of small to medium enterprises. If successful, the company believes it could create several other similar projects across the Iraqi region – with Majid Jafar, Executive Director of Crescent Petroleum, already having told Reuters last year that it has received interest from local authorities in Anbar in the west and Basra in the south.

The road ahead The scope for Gas Cities and the numbers involved are highly impressive – but they remain, for now, a reality only on paper. No firm dates have been set for the completion of the first project as the economic downturn casts a shadow over Dana Gas’ ambitious plans, which rely for their success on heavy investment by regional governments.

When asked when the first Gas City will be built, Arbeed replies: “It is very difficult to judge really, especially with the [economic] crisis now, because we’re not going to build the Gas Cities alone. There will have to be contractors and owners of the petrochemical companies and we will have partners with us.

We will open the floor to investors because these projects are going to cost billions of dollars. It’s a huge investment and at this stage of course, very few investors will be ready to invest unless the situation in the market continues to improve. But we will always keep the idea live and we continue to talk to countries about it.

We will take the appropriate time to move it quickly and build.”

People power Ahmed Arbeed on how Dana Gas’ international workforce has helped to contribute to its success.

“We recruit people not only from the region but from all over the world. If you look at the Dana Gas management there are eight people at the high level of management and they come from eight different countries. The COO is originally from Iraq but has UAE nationality. We have two from the UAE, I’m from Kuwait, and then the others are from Egypt, Britain and India. They bring exposure to different industries within the oil and gas industries. So we are gaining a lot of benefits from having an international workforce.”

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HEAD TO HEAD

Coming clean Lars Thyroff and Mehmet Ali Neyzi discuss the major challenges faced by the power sector and address the importance of renewable and sustainable energy sources.

What are some of the major challenges faced by the Middle East’s power community, and how do your solutions help address some of these requirements?

Lars Thyroff. The Middle East region is one of the strongest growing regions in the last decade. But this industrial and economic growth brings with it the same problems that established industrial countries have to deal with today – environmental pollution, traffic problems and the need for a safe power supply, as well as the limitation of natural resources such as fresh water. All these major issues are related to the need for power. Oil and gas power plants are large contributors to CO2 emission and air pollution, as are gas powered vehicles. Although oil and gas are available in the Middle East, alternative energy projects must be started today to build the base for an environmentally friendly power supply of the future.

Mehmet Ali Neyzi. The Gulf region suffers scarcity of gas suitable for power generation. Much of the gas has been increasingly diverted for use in subsidised power generation instead of exporting the gas at a profit.

Vestas, as the world leader in the wind energy market, can help address the energy security issue by supporting wind energy as a readily available free source of power and providing wind energy solutions to these countries.

Considering that oil and gas prices will most likely be on a volatile and upwards trend and as more resources are further diverted, wind power can provide a cost-effective energy solution. Above all, Vestas can assist in developing the necessary regulatory framework to plan a smooth transition towards renewable energy, and particularly towards wind power.

As the Middle East looks to become a world leader in sustainable development, new technologies – everything from renewable energy sources to smart grids – are being integrated into the region’s megaproject developments in order to lower carbon footprints and increase energy efficiency. What opportunities are presented by implementing such cutting-edge technologies into the region’s infrastructure developments?

LT. Healthy living, a clean environment and plenty of fresh water are important goals for a society. And new technologies are helping to achieve them. With green renewable energy technologies, CO2 emissions will be reduced as well as the pollution of air, sea and ground water. With smart power grids and increasing efficiency in all areas of daily life, the increasing demand for power can be covered by renewable energy concepts. Renewable energy is fundamental to building new green public transport systems and individual vehicles such as electric streetcars and electric vehicles for passengers and transport. The cities of the future will offer green-powered and CO2-free transportation infrastructure combining public transport systems, as well as electric vehicle charging stations that makes use of electric vehicles feasible.

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MAN. The approach in the Middle East has changed recently due to their commitment to the Kyoto Protocol. The opportunities are clear where there is a right mix of economic background, energy security concerns and coherent government focus. Turkey, Egypt, Morocco, Tunisia and Jordan are beginning to implement renewable energy strategies and private sector incentives. Also, Iran, Syria and Lebanon are beginning to develop framework for renewable energy investment.

There are also opportunities for renewable energy in the oil-rich countries, where governments, businesses and the general public are starting to consider the inevitability of raising climate change issues to the top of the list for social and economic development. Besides, some renewable investment seems to be the best solution in these countries, particularly in certain areas that are remote or isolated.

What appetite is there for concepts such as energy efficiency and renewable energy in the Middle East? How committed are the oil-rich states of the region to going green?

LT. We have seen in the last decade, especially in oil-rich states, growing recognition that it is very important for the future to invest in developing new concepts and approaches to all aspects of society, be it tourism, be it finance, be it worldwide cargo, and even air transportation infrastructure.

Renewable energy and energy efficiency will be the next big step to safe growth in the region.

MAN. The UAE, which is hosting the future International Renewable Energy Agency (IRENA), has dedicated over US$10 billion for water and power projects since the Emirate of Abu Dhabi embarked on its privatisation in 1998. Abu Dhabi in particular has established an enormous investment platform, Masdar, committed to renewable and sustainable energy.

The Gulf seems to be more interested recently in green projects overseas. Saudi Arabia aims to turn into an exporter of renewable energy. The Saudi oil minister Ibrahim Al Naimi stated last year that the country was planning to turn solar energy into an important pillar of the national energy mix.

In the Levant countries, the need for sustainable and local supply is clear and governments are beginning to make these issues a part of their political agenda.

only with other suppliers of M2M solutions but also with urban planners, developers and the local authorities. By tightly working together towards our common goal of boosting adoption of M2M technology – for example, for smart grid and electric vehicle charging infrastructure – we will make the overall solution successful.

MAN. One of our main tasks is to increase awareness of our finite resources, our climate change responsibility and the rise of the energy demand.

Most importantly, we will be working closely with private developers and public sector authorities to drive renewable energy focus and its viability in comparison to traditional fossil-fuel power generation. Vestas is open to a dialogue with the governments and the private sector as they play a key role in stimulating the development of the region’s wind market.

Undoubtedly, the wind industry needs the appropriate governmental support in order to expand in new markets, because governments, together with the industry players play a crucial role in creating confidence and business case certainty for the investors.

In terms of the pioneering nature of its recent construction and engineering work, the Middle East ranks as one of the most innovative regions on the planet.

Is there a similar desire for innovative solutions in the energy industry? And what does this mean for you from an R&D perspective?

LT. As previously mentioned, the region has recognised the significance of groundbreaking new trends and has Lars Thyroff is Chief Marketing Officer for Cinterion and steers the overall business developed these areas very strategically and systemstrategy. Thyroff’s previous posting was atically. The same will take place for renewable energy, Vice President of Product and Portfolio Management at Siemens Wireless Modules. energy efficiency and urban transport. The difference between industrialised countries and the Middle East is that we innovate technology and pilot new technology over several years, but it is hard for us to roll out the new technologies in a short period. When Middle East countries decide to introduce a new technology or a new concept, it is quickly realised and has a strong financial backing as a strategic goal for the nation. This means we have to be ready for these coming projects so as not to miss the race.

MAN. The Middle East has benefited recently from a can-do approach to technology. A benchmark of how Mehmet Ali Neyzi joined Vestas as VP technology will be developing in the region is Masdar Managing Director for Turkey, Middle East City in Abu Dhabi. The US$22 billion project comprises and Central Asia in July 2009, bringing a solid experience of almost 30 years, 11 of them a solar power plant, geothermal, wind energy and hydroholding first level managerial positions. gen power.

Vestas, as number one in modern energy, is ready to offer the most innovative and competitive energy solutions capable of To what extent are you working with urban planners, developers and withstanding a hot desert climate and difficult terrain conditions. Based local authorities in the region to increase awareness and drive the on 25 years of a experience, Vestas has integrated technology R&D as an adoption of such solutions? independent business unit loaded with innovation power. We have seven LT. As the market leader in wireless machine-to-machine communication R&D centres worldwide with over 1400 employees. We also offer active modules, we demonstrate the potential of this cutting-edge technology for knowledge sharing with innovative universities and key partners around many of these new projects. But Cinterion Wireless Modules is just one elethe world. Thanks to these resources, we have the most advanced technolment in a total M2M solution. We see the need to increase cooperation not ogy in the market to enhance wind power development at a local level.

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EXECUTIVE INTERVIEW

decides that an exploration project must be put on hold, the fi nancial damage incurred can be a major blow. Ultimately, renting equipment means that because ownership lies with Aggreko, all risks do as well.

POWER UP Phil Burns, Managing Director of Aggreko Middle East examines the latest trends and developments in the power industry.

How long has Aggreko been providing services to the MENA region?

Phil Burns. Aggreko opened its fi rst regional office in Sharjah in 1991 in order to expand its power and temperature control rental services to the Middle East and North Africa. Today, Aggreko offers round-the-clock service support and availability for the MENA region through a network of 10 locations in six countries: Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the UAE. Using these locations as operational hubs, Aggreko works all over the region; for example, currently we have over 200 MW on-hire in Yemen.

In our 18-year history in the region, we have worked on a huge variety of projects including supplying power and temperature control during construction of the Palm Island development in Dubai, Festival City, Dubai Metro and the The Pearl-Qatar.

How has the global downturn impacted your business in the region?

PB. Although the MENA region has not been affected to the same degree as North America and Europe, the impact of the fi nancial downturn is nonetheless making itself felt around the Gulf, particularly with regard to those projects that are in the early phases

What are some of the latest trends and developments in the power industry?

PB. One of the trends we are currently seeing is customers looking to diversify their energy portfolios. Rather than relying on one type of fuel, they are looking to expand their generation capacity to include two or more fuel types. For example, one of our customers, a cement company in Ras Al Khaimah, has its own gas-powered turbine, but contracted a diesel-powered package from us to provide additional capacity to their facility.

In response to this trend, we have introduced the ADDGas system, which allows customers to substitute a significant portion of diesel fuel with natural gas and gives the customer a considerable saving on overall costs.

of development. However, as a provider of What are your plans for the immediate high-end services and equipment, we are future? fi nding that our services are still in demand.

PB. The slowdown has in some ways provided We believe that this is due in large part to our breathing space for companies such as Agclients looking for ‘turn-key’ rental solutions greko to take stock and evaluate how to imthat enable them to concentrate on their core prove their all-around business models. We business rather than focussee this as an important oping on generating power. portunity to improve some of Renting equipment as our business processes. For opposed to purchasing is an example, we are busy impleattractive option in these menting a back office system times of limited liquidity. For to improve and streamline companies that require largeour customer service proscale equipment, particularly cesses. By taking the time to in the oil and gas sector, the ensure that our systems are enormous cash outlays remore effective, we will be in quired for equipment are a a better position to take adPhil Burns joined Aggreko in 1997 heavy burden to bear, making vantage of the market once and was instrumental in setting rental a good option. the economy improves and up Aggreko’s international headquarters in Jebel Ali We are also fi nding that projects that are currently on Free Zone. He was appointed Managing Director of Aggreko another advantage of the hold start up again.

Middle East in 2004. rental option in this economWe are also currently ic climate is the cushioning conducting an in-depth effect it has for companies who are uncertain market research study, including interviews about the long-term future of their projects. with executives in industries to discuss their By renting equipment, companies can ensure needs and identify where best we can bring our that they will not be left with equipment specialist skills knowledge and equipment to which will sit unutilised; if a company which support the growth and development of indushas purchased large amounts of equipment try in the GCC.

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POWER FOCUS

Energy ambitions Abu Dhabi’s winning bid to host the headquarters of the International Renewable Energy Agency (Irena) is a feather in the cap for the UAE and the region as a whole.

Foundation conference ‘International Agency for Renewable Energies’ (IRENA) in January

“Our victory clearly symbolises the confidence of the international community in the political, social and economic stability of our country. Th is is a proud moment for us and a moment of celebration,” said Dr Rashid Ahmad Bin Fahd, Minister of Environment and Water. Dr Fahd, who was part of UAE’s high profi le delegation to Sharm Al Shaikh, said that the UAE’s bid reflected on how the country embraced a vision for the future.

For the UAE, being the seat of Irena will mark the fi rst time an international organisation has chosen a city in the Middle East to host its headquarters. “Winning [the bid] to host the headquarters marks a step forward for us towards a green economy,” the minister said. “The government is very keen to do its bit in providing the human race with a sustainable planet to live in. Embracing renewable energy is the way forward. Irena will ignite our

passion and help us channel our resources to enter the world of future energy.”

He said Irena would improve the global profi le of UAE. “We have already entered the renewable energy sector with the launch of Masdar in Abu Dhabi and with initiatives such as the green building codes in Dubai.”

The headquarters will be located in Abu Dhabi’s Masdar City, the world’s fi rst carbonneutral, zero-waste city powered entirely by renewable energy, and Dr Fahd said that the fruits of the UAE’s long-term ties with the world were evident. “We have been very supportive of all international efforts. It is this goodwill that has paid off. Our bid was highly supported by many countries of the world and we are very happy about it. Right from the start, we had no doubts about our candidature and were confident that we had the right resources to nurture such an agency.”

“Irena coming to the UAE means a lot; we will become the centre of the world for renewable and clean energy,” said Sultan Al Muhairi, Director of Marketing and Refi ning at ADNOC. “The oil sector will not be challenged by this. From the beginning, it has been said that renewable energy and other forms of energy will be complementing each other and not competing with each other. Th is proves that even though we are an oil producing country, at the same time we strive hard towards a clean environment.”

Al Muhairi lauded the effort of the government to bag the opportunity to host the international agency. “It will benefit the country in several ways. By putting UAE on the international map, by bringing in international expertise, know how, technology and other economic benefits,” he added.

“Hosting Irena will give us the chance to work with all countries in the world on the renewable energy front and facilitate the much needed transfer of technology to developing nations,” said Hamdan Al Shaer, the Director of Environment at Dubai municipality. “Bringing home the agency will hopefully lead us to fi nd better resolutions to curb our high carbon footprint and bring about effective changes.

Locating Irena at Masdar will showcase the efforts of the country for the whole world to see.

It will serve as an ideal platform for innovation and creation of cleaner technology, despite the fact that we are an oil producing country.”

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IN THE BACK 138 VANTAGE POINT

AWAY ON BUSINESS

Stepping on the gas The Qatargas 2 project is the world’s first fully integrated value chain LNG venture, boosting the Qatargas portfolio’s total LNG production to a whopping 42 million tonnes per annum by the end of the decade.

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IN THE BACK 139

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atargas 2 involves the development of two world-class liquefied natural gas trains, each with a capacity of 7.8 million tones per annum (mtpa) and 0.85mtpa of liquefied petroleum gas, 140,000bpd of condensate, three storage tanks, power utilities and water injection systems, a fleet of 14 ships and a receiving terminal.

Onshore construction: • 30,000 people from 50 nationalities worked to create Qatargas 2 • The facility contains enough cable to stretch from Doha to London • Every month, 11.2 million man-hours were worked on site • Onshore construction involved the consumption of 31 million gallons of water, three million litres of diesel, 1200 trucks of sand and 300 trucks of cement • The two trains are powered by a stateof-the-art generating unit producing 200MW of electricity, enough power to run a small town • Over 300,000 separate systematic tests were carried out before commissioning each train

Offshore construction: • All 30 wells were completed a full 27 rig-months ahead of schedule • Pre-fabricated modules weighed up to 1000 tons, equivalent to 700 family cars!

• The three platforms combined will produce 2.9 billion cu ft of gas per day • Qatargas 2 saw the fastest wells ever drilled in the North Field. The record now stands at 14,500 feet of rock in just 33 days, nearly 20 feet per hour • Over 4500 coral colonies were carefully detached from the seafloor, numbered, tagged and moved to new locations.

• The main pipelines are over 34” wide and made from carbon steel almost an inch thick

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IN THE BACK 140

SMARTER PLANET

MAKING THE WORLD GO ROUND Can greater intelligence help provide the solution to today’s most pressing urban infrastructure challenges? By Tom Benson.

I

f space travel had been possible 100 years ago, those early astronauts would have seen the light from 16 concentrations of a million or more people. Today, the crew of the space shuttle can see 450 such shining cities on the globe – the economic, governmental, cultural and technological power plants of an increasingly urban age.

The pace of such development is staggering. At the turn of the last century, only 13 percent of the world’s population lived in cities. Two years ago, for the first time ever, more than half of us were urban dwellers. And by 2050, that number will rise to 70 percent. We are adding the equivalent of seven New Yorks to the planet every year – and putting a huge strain on the planet’s resources and infrastructures in the process. Managing such complex systems in the future is going to take a much smarter approach than the ones we are currently using.

IBM’s Smarter Planet initiative works on the principle that building greater intelligence into our complex networks of devices and sensors can lead to smarter ways of operating. With technology being embedded into everything from cars, appliances, cameras, roads and pipelines to medicine and livestock, we can collect and analyse greater volumes of data and use it to our advantage in the way we manage the world around us.

“We now have the capacity to manage cities as the complex systems – indeed, systems-of-systems – that they are,” insists IBM CEO Sam Palmisano. “And the current crisis in the world’s economy offers an opportunity – indeed, I believe, an imperative – to do just that. We are moving into the age of the globally integrated and intelligent economy, society and planet.”

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The benefits of such an approach are already being felt around the globe. Transportation officials in Singapore, Brisbane and Stockholm are using IBM systems to reduce both congestion and pollution. Public safety administrators in major cities like New York and Chicago are able not only to solve crimes and respond to emergencies, but to help prevent them. A large hospital organisation in Paris is implementing an integrated patient-care management solution to facilitate seamless communication across its business applications Sam Palmisano – enabling them to track every stage of a patient’s stay in the hospital. Smart water management in the Paraguay-Paraná River Basin of Brazil is helping to improve water quality for São Paulo’s 17 million residents. While in Malta, the government is implementing the first countrywide, integrated smart water and electricity system to monitor and manage natural resources more intelligently, and at the same time enable its citizens to make energy choices that are more cost-efficient and environmentally friendly.

Palmisano believes the lessons from these and many other solutions that are already being deployed around the world can provide the best textbook for building a smarter planet. And what is more, there is a real opportunity for the countries of the GCC – currently experiencing their own boom in the construction of new urban infrastructures – to implement such systems from the outset. “Cities are the arena in which to do so,” he insists. “All the ways in which the world works come together in our cities. They are the proverbial melting pot – not only for immigrants, but for systems, blending them together to engender new forms of commerce, of culture, of science, of life and of society.”

12/10/09 16:13:01

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IN THE BACK IN REVIEW

142

On the shelf As climate change and sustainability become increasingly important considerations, MENA Infrastructure reviews the best of this quarterâ&#x20AC;&#x2122;s green book releases.

Disaster Recovery Planning for Communications and Critical Infrastructure

By Leo A. Wrobel and Sharon M. Wrobel This practical book, by two respected industry experts, addresses the vulnerability of critical infrastructure to natural disasters and terrorism. It gives advice on what professionals should be doing to protect their infrastructure from these threats and provides an insight into maintaining command and control in crisis situations and predicting the probability of disasters.

Mena Infrastructure Says: A fascinating read for anyone interested in the major threats to critical infrastructure.

Futurecast 2020: A Global Vision of Tomorrow

By Robert Shapiro Entering an unprecedented age of rapid technological advances, globalization and demographic changes, Robert Shapiro employs his experience in international politics to write Futurecast 2020. A sobering and specific look at the world over the next 12 years, predictions are detailed and reasoned, determining how nations will rise and fall.

Mena Infrastructure Says: A must for anyone planning for the future and who wants to know where trends will originate. A clear vision until 2020.

100 Percent Renewable: Energy Autonomy in Action

By Peter Droege An inspiring look at human survival in the 21st century, 100 Percent Renewable looks to build a world based on the sustainable use of renewable power. An expert on urban design, development and the sustainability of cities, Peter Droege examines the growing number of efforts, initiatives and plans that are helping the world make the change to renewable power.

Mena Infrastructure Says: A thoroughly interesting look into renewable energy using a fantastic collection of initiatives, many of which are currently in use. Droege makes a 100 percent renewable world a reality.

Sustainable Critical Infrastructure Systems By the National Research Council Americaâ&#x20AC;&#x2122;s critical infrastructure systems are now 50-100 years old and require significant improvements. In order to meet some of the important challenges of the 21st century. The authors discuss the essential components of this new approach and outline a framework to ensure that processes, practices, technologies, materials and fi nancing options are better aligned to meet the needs of modern critical infrastructure.

Mena Infrastructure Says: An informative book that provides valuable lessons for any country looking to renew and restructure existing infrastructure systems to meet the needs of the 21st century.

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12/10/09 14:40:08

Your World.

COVERED From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Infrastructure Infrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility.

ALSO AVAILABLE FOR: US & EU

EU Editionn ition

d US E

Find out more: www.menainfra.com

Next Generation Pharmaceutical

Next Generation Power & Energy

Approximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. It is committed to providing information for every step of the pharmaceutical development path.

Available for: EU

A poll of 4000 utility executives posed the simple question: what keeps you up at night? The answers were costs, new technologies, ageing infrastructure, congested transmission and distribution, viable renewables and inadequate generation capacity.

Available for: US

Find out more: www.nextgenpe.com

Find out more: www.ngpharma.com

Oil & Gas

Business Management

Collaboration between Government and multinationals to ensure the energy supply is developing on two fronts. O&G is the definitive publication for stakeholders and service companies to read about the regional projects, technologies and strategies affecting their group.

Available for: MENA, US, Russia

What business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets?

Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision makers in government and private enterprise.

Available for: US, Middle East, Russia

Find out more: www.ngoilgasmena.com

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Find out more: www.busmanagementme.com

12/10/09 16:42:21

IN THE BACK 144

FINAL WORD

WORLD-CLASS RESULTS Mishal Kanoo, Deputy Chairman of the multibillion-dollar Kanoo Group, one of the most successful companies in the region, explains the impact of the global economic crisis on business.

On the recession “The main industry to be hit was the real estate as it has clearly collapsed. However, the collapse within the real estate has had a knock on affect on the banks and, as such, it has taken a toll on nearly every industry. The only question is the magnitude of the hit. It has affected us as a group and there is no way to mitigate that no matter what you do.”

On staffing “The only way to protect oneself from this crisis is to ensure that the people who are any company’s front line are made aware of what is happening and charge them with the safety of the company. In other words, what can they do to promote the company in these bad times whilst preparing for the good times to come in the future – no matter how long that takes to happen.”

On safety “Because of our commitment to quality, and the significant role safety plays in that, we have a dedicated team that overlooks quality and training. They are tasked with ensuring that we not only meet the standards of the city but of the industry as well. Safety of our employees is important as the more down days they have, the more that would affect the productivity of the company.”

On quality “The real issue is whether you are getting what you paid for? The answer is simple. If you want world-class results, you have to buy worldclass machines that help you get to the standard that you wish for.”

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9/10/09 14:56:35

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