INFRA MENA 4

www.menainfra.com • Q1 2010

Planning for growth With Aldar Properties’ Head of Infrastructure Talal Al Dhiyebi

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Confidence builder Why Arabtec CFO Ziad Makhzoumi is looking forward to the year ahead

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Meeting local demand Is affordable housing the next opportunity for developers?

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As Dubai struggles with debt, could the next 10 years prove to be Abu Dhabi’s decade?

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John Cowling Faithful+Gould

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FROM THE EDITOR 3

A decade of growth If the progress made since the turn of the century is anything to go by, the Middle East can look forward to a fascinating few years ahead.

W

ow, where did the last 10 years go? It’s been a rollercoaster ride of a decade, and no mistake. It only seems like yesterday that the Burj Al Arab opened its doors to welcome the new millennium and usher in an unprecedented period of growth for the Gulf and the wider MENA region. Consider what we’ve achieved in that timeframe: whole cities built from scratch; new islands reclaimed from the sea; coastlines redefined; and heights reached that have never been reached before. In terms of what has been achieved, the decade has been an unparalleled success.

Nevertheless, there are lessons that must be learned if the second 10 years of the 21st century are to be as successful as the first. While the decade began brightly, the last 18 months have been marked by significant struggles within the construction and real estate industries across the region. Most notably, the recent furore over Dubai World’s inability to pay back billions in loans serves as a cautionary tale for those that fail to consider the sustainability of their actions.

Dubai was built on boundless ambition and

a relentless drive to be the biggest and the best; admirable to be sure, but in pursuit of that dream certain economic fundamentals were largely ignored. The emirate’s troubles are a glaring example of financially unsustainable business practices, and directly mirror the environmental sustainability challenges now facing the construction industry as a whole: just as we cannot rely on an inexhaustible supply of easy credit, so we cannot expect the Earth’s resources to be limitless, either.

Traditionally, sustainability issues have generally been viewed as little more than an imposition, a box to be ticked if a company is to meet its corporate social responsibility targets. But a change is coming and those that fail to respond will see themselves left behind. Design and construction companies need to stop thinking of sustainability as a chore and get serious about building it into their processes from the ground up. If the rewards of protecting the environment don’t seem significant enough on their own, look at the drive towards sustainability as a tool for improving how the business works. Making better

use of resources and streamlining processes to generate less waste makes sense regardless of exactly why it’s being done. Being known as a low carbon company will also have advantages in the kind of clients it is possible to attract and the kinds of people who want to work for you. Green credentials are becoming increasingly valuable as a business differentiator.

In this regard, Abu Dhabi is leading the way.

The emirate is positioning itself as a sustainability pioneer through its groundbreaking work on the Masdar initiative, and other projects are soon to follow. Such forward-thinking will be vital over the years (and decades) ahead. If Dubai’s plight has taught us anything, it is that taking the supply of an essential resource for granted can have grave consequences for the future. n

Ben Thompson Senior Editor

“We need hands-on experience with the day-to-day problems and practical implementation of the projects rather than a purely theoretical approach” Imad Al Jamal, Vice Chairman, UAE Contractors Association

“We have a very disciplined approach to growth, based on liquidity. If you don’t have the money to build it, don’t build it. It’s as simple as that” Amin Al Arrayed, General Manager, First Bahrain

“From a congestion and efficiency standpoint, I would say that managing a road network today without an ITS infrastructure is unimaginable” Caroline Visser, ITS Manager, International Road Federation

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CONTENTS 5

Power shift Does the change in the balance of power between Dubai and Abu Dhabi hold deeper implications for the UAE?

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44 Building confidence With the rest of the UAE reeling in the wake of Dubai’s recent debt concerns, Arabtec’s charismatic CFO Ziad Makhzoumi is betting on his firm’s sound financials to see it through the downturn and beyond.

34

82 An oasis in the desert Facing a housing shortage of two million, Saudi Arabia is in dire need of middle-income and affordable accommodation – could this sector prove to be the saviour of the housing market?

Urban evolution Undertaking multibillion-dollar civic projects to help develop Abu Dhabi into an international business magnet and tourist destination, Aldar Properties’ Talal Al Dhiyebi reveals the firm’s outlook for 2010.

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CONTENTS 6

130

Leading the way

120

Part of the process

Intelligent transport systems

42 The shifting sands of the project management landscape

62 A demand-driven approach

By Gregory Balestrero, President and CEO of the Project Management Institute

Why First Bahrain Real Estate Development Company is focusing on local needs rather than foreign investment

52 Part of the process

64 Commodities to products

John Cowling explains why he believes the risk management industry has come a long way

Understanding the customer is key to sales success, says Medhat Stefanos

52

ROUNDTABLE DISCUSSIONS 68 Paints and coatings 88 HVAC 98 Water and wastewater 120 Intelligent transport systems

56 Sustainability in construction

66 Adding a gloss to the construction industry

Michael Sagermann underlines the importance of sustainability

The importance of quality in the paints and coatings sector

Why it’s vital that the MENA region learns to manage its existing water resources more efficiently

58 Resolving contractor differences

76 Protective solutions

106 Making a splash

With the complexity and volume of contractual disputes on the rise, is a new approach to contract resolution needed?

Idil Yurdakul Peker on silicon products

With HE Dr Rashid Ahmed Bin Fahad, the UAE Minister of Environment and Water

60 A line of defence

An exclusive interview with Kansai Paint

PANOLIN’s Patrick Laemmle examines the latest trends and developments in lubrication

80 Innovative solutions in the paint market

94 High and dry

108 A fast paced evolution Suvarna Jeetandra gives the low-down on the wastewater sector

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IN THE BACK

110 On the right track

126 Traffic management

Serco’s Ramadan Abdullah reveals how the Dubai Metro is set to revolutionise transport in the emirate

Poul Svensgaard explains the importance of road signs and markings

128 The business of aviation 114 Driving smart Caroline Visser details the benefits of intelligent transportation systems

By Gordon Rosen, President of the ASI Group

130 Leading the way 118 Streets ahead A look at Abu Dhabi’s extensive road network audit

How new safety standards are improving the fire safety industry

134 Practical preparedness

ASK THE EXPERT Photo finish

138 In my view: Marc Dardenne 140 Vantage point: The World 142 On the shelf: Book reviews 144 Photo finish: Dubai Fountain

40 John Best, McLanahan 78 Michael Back, Nutshell Natural Paints 86 Martin Malek, ComAp 132 Barry Bell, Wagner Fire Management

Dennis Smagac argues why multi-hazard response systems should be a part of every emergency response plan

136 Improving data capture How airborne geophysical methods are improving information capture

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98

Reliability in automated power control

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Water and wastewater

Paints and coatings

The Ritz-Carlton Sharq Village & Spa, Doha, Qatar 6-8th April 2010

Chairman/Publisher SPENCER GREEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS Worldwide Sales Director OLIVER SMART

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

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UPFRONT

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THE CHANGING FACE OF THE MIDDLE EAST Looking back over the past decade, it’s fair to ample, has a US$400 billion fiscal stimulus packsay that the Middle East has transformed – and age to be implemented through to 2013. That even over the last 12 months circumstances said, it will take a lot for Dubai to get back on have rapidly changed: from the heady heights track following the Dubai World debacle. And of the Dubai Metro and the hugely successful beyond the coming year, the region may have Abu Dhabi Formula One Grand Prix, to some more tough times in store. It appears that policy historic lows. There is no doubt that in 2009, makers are set to see a whole host of challenges things started slipping for the Gulf region. Last beyond 2010. Jordan, for instance, may have to summer, two vast family-owned conglomerates hold back on public spending due to funding in Saudi Arabia defaulted on billions of dollars constraints. And countries like the UAE – that of debt repayments. Then in December, Dubai protected the fi nancial sector from the downWorld announced it would not meet turn – may well have to consider lift ing billions of dollars of debt repaythese measures. ment obligations, on top of a Nevertheless, according to Property prices slumped real estate market the 2010 Real Estate Global have fallen by up to in which prices halved in the Opportunity Index from year following the August consultants AT Kearney, the 2008 highs. Added to that are Gulf region holds the most the $500 billion of planned real estate development potenin Dubai since infrastructure projects that tial around the world. Dubai’s 2008 have been abandoned or postexperience, where prices have poned as funding dried up. dropped up to 50 percent in the last However, despite facing difficult decisions year, should offer a cautionary tale for the other for the next decade – Gulf leaders must push GCC countries to manage supply in accordance through reforms to improve economic com- with demand. At the same time, though, Dubai’s petitiveness, increase productivity and meet capacity to rebound fast should not be underesthe growing population’s employment and timated. Both Dubai and Abu Dhabi recorded housing needs, for example – there are indica- their best real estate results in almost a year tions the region’s fortunes may once again pick during and since the summer. 2010 certainly up. Economists have noted that the effects of kicked off in the right way with the celebrations the global economic crisis are less pronounced surrounding the Burj Khalifa; however, it is unthan elsewhere, and that oil prices have dou- clear exactly how the next decade will turn out bled since the lows of US$33 per barrel seen in – and while it’s looking pretty positive from this January 2009. perspective, one thing is for certain: it cannot The London-based Economist Intelligence have as many ups and downs as the decade that’s Unit believes that MENA economies will grow been left behind.

4.7 percent in the coming year, while the InDECADE IN PICTURES ternational Monetary Fund predicts economic

1

50%

growth of 3.1 percent in 2010. While a jump in oil revenues will give a much needed boost to the region, it seems oil exporters may well use 2010 to diversify investments and break away into manufacturing, fi nancial services and tourism.

Whatever happens, it seems the construction and real estate sectors will undoubtedly benefit.

Indeed, for many other Middle Eastern economies, the outlook for the coming 12 months is set to see a boost by ongoing public spending programmes – Saudi Arabia, for ex-

MenaInfra4_Upfront.indd 10

2

1. The centrepiece of Mecca’s Abraj Al-Bait complex will stand as the tallest hotel in the world 2. The decade was dogged by controversy over working conditions for foreign labourers 3. Construction on Abu Dhabi’s landmark Sheikh Zayed mosque was completed in 2007 4. The decade kicked off with the opening of Dubai’s Burj Al Arab in 2000 5. The Bahrain World Trade Centre integrated large-scale wind turbines within its structure 6. On the eve of the decade, the 828-metre high Burj Khalifa reached completion 7. KSA has six megacities planned for completion over the coming years, with KAEC its flagship project 8. Man-made islands like the Pearl Qatar literally reshaped the region’s coastline

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THE KING ABDULLAH FINANCIAL DISTRICT The King Abdullah Financial District is a major part of Saudi Arabia’s economic diversification plan, which aims to make Riyadh a major fi nancial centre in the Middle East.

“Everything is being done from scratch,” confi rms James Goettsch, President of Goettsch Partners and design partner on the project. “It is an ambitious project.”

The development is focused on providing a new financial centre for Riyadh, Saudi Arabia and the Gulf Coast region. “There is a feeling that they see what has happened in Dubai and Abu Dhabi, and they want to be part of that forward-looking, business development,” confirms Goettsch.

Construction work began at the beginning of 2009 and once completed the KAFD will offer floor space of some 3.3 million square metres.

Around 55,000 jobs will be created, as well as

MenaInfra4_Upfront.indd 12

high-quality residential buildings and leisure facilities on an area covering around 16 hectares. In addition, the concept of the new city district includes a monorail and giant skywalks – large bridges in the sky linking multi-storey buildings – in order to optimise the quality of living and minimise the use of cars.

The financial district will be the headquarters of the Capital Market Authority (CMA) and the Saudi Arabian Stock Exchange (Tadawul), and will also provide a base for fi nancial institutions and other service providers such as accountants, auditors, lawyers, analysts, rating agencies, consultants and IT providers. The area also boasts a fi nancial academy with places for 5000 students. The Financial District project should be completed in 2012 – after a construction period of only three years.

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UPFRONT

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Fast facts • The King Abdullah Financial District is set to become the leading fi nancial centre in the Middle East, providing an attractive working environment for the growing workforce in the fi nancial sector • Conceived as part of the overall economic diversification programme • Designed to meet the existing and growing demand for Type A office accommodation • Located north of Riyadh, the site is 1.6 million square metres and the development will have floor space of over 3 million square metres • In addition to world class office space and housing, the King Abdullah Financial District will also have a Financial Academy and recreational facilities • The fi nancial academy will build on an already significant investment in education and training • A fully integrated development including offices, hotels, conference centre, shops and recreational facilities with easy access to the airport and well served by the road system • Close proximity to the main business district of Olaya • Construction began in 2007, creating thousands of construction and related jobs over a three-year period • The land owner and prime developer is the Public Pension Agency

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18/1/10 09:04:56

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AN INTERNATIONAL PERSPECTIVE EU Energy Commissioner ANDRIS PIEBALGS discusses the progress Europe is making in pursuit of sustainable, competitive and secure energy supplies.

Interdependence means that a country does not take energy decisions in isolation but takes the opportunities provided by other Member States into account. This is where huge welfare gains have already been reached and can further be developed.

Our electricity system has to be adapted to the new circumstances: more distributed generation, more variable generation, more large-scale distant (and variable) generation. The electricity transmission and distribution infrastructure has to be reinforced; new lines have to be built: incorporating intelligent solutions, building new interconnections, using operational measures.

The diversification of energy sources, transport routes and suppliers is crucial for ensuring energy security; its importance has been underlined by the gas crisis in January 2009, but it has been recognised also before the crisis.

In the Second Strategic Energy Review An EU Security and Solidarity Action Plan adopted

by the Commission on 13 November 2008, the Commission proposed a number of initiatives aimed at increasing EU energy security.

Despite the fact that at the EU level, gas supply is reasonably well diversified, at national level, however, a number of Member States rely on a single supplier for 100 percent of their gas needs and a number of others on just a few suppliers.

Diversification is thus important to spread and reduce individual risk, as well as to fully benefit from an integrated and interconnected marketbased system.

Fostering the transition towards a low carbon power generation system is a high priority for the European Union. The massive deployment of renewable energy in the electricity sector will require a lot of investment, both in power generation capacities and in transmission networks. By 2020, according to the scenarios prepared by the Commission in 2008, renewable energy should represent 33 percent to 58 percent of the total power generation capacity necessary to meet the future demand and to replace ageing facilities. Appropriate policies are needed to support this deployment. National plans for the promotion of renewables – to be adopted by Member States in 2010 – will be crucial. Any investment or choice of technology contributing to decarbonising the electricity sector will be relevant.

Renewable energy sources have traditionally gained the reputation of being a costly investment. In the 1990s, this was true, as the oil price

MenaInfra4_Upfront.indd 14

was low. It is however important to realise that costliness is relative to the alternatives. As the oil price rose, even in the years before the fi nancial crisis, renewable energy sources became more and more attractive.

An important factor is the price of carbon and its meaning. Carbon allowances are issued to or bought by those who emit greenhouse gases.

Th is means we place a price on emissions. Conversely, renewable energy sources have low or no emissions at all and therefore do not carry with them the price of carbon, as no allowances have to be bought.

Today, we see the need to accelerate our work on technology. Th is implies an increase of the R&D budget level. In the Communication on Investing in Low-Carbon Technologies adopted by the Commission on 7 October 2009, we set out the needs and technology roadmaps that can take us there. We estimate that we will need to spend â‚Ź8 billion per annum, by public and private sectors combined, on the technologies identified in these roadmaps during the next 10 years. The debate on this is just beginning. Mobilising these resources will make a crucial contribution to achieving our 2020 objectives.

Technology is nowadays helping to reduce production costs of equipment used to generate renewable energy sources. Production processes become mature and their costs are lower, while raw materials meet an increasing demand and factors of scale are reducing their market price. As a result, these types of product become commonplace with more producers and a growing market putting pressure on price.

New transmission needs include transporting electricity in seas, cables using direct current technology seem suitable for this purpose. Some people think that direct current could also be interesting on land. As a result, a meshed direct current network could become a new pan-European electricity super highway, ensuring our renewable energy goals and enabling solidarity between Member States.

15/1/10 16:50:04

UPFRONT 15 AROUND THE WORLD IN 80 DAYS

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

UAE SALARIES REMAIN FLAT Salaries in the real estate and construction sector are likely to remain flat this year and any hikes that happen will occur on a caseby-case basis, say analysts. Matthew Carter, Managing Director at McArthur Murray, told Emirates Business: “I think the property and fi nancial services sector may well remain flat during the coming year. There may be isolated cases of salary reviews where a particular skill or knowledge set is required.”

And according to Wassim Karkabi, Partner, Regional Practice Leader EMEA, Industrial Practice at Stanton Chase: “Real estate and construction fi rms involved in residential and commercial continue to suffer. As projects are scarce and companies focus their business outside of the UAE, construction companies have shifted their attention outside of the country. Th is is not anticipated to change to a large extent over 2010. Some exceptions may occur, but there will not be too many such opportunities to cause the market to shift,” he said.

Source: www.zawya.com

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STRICTER SECURITY

UK SLUMP

The US has introduced tougher screening measures for passengers arriving by air from 14 nations that the authorities deem to be a security risk. However, the X-ray machine produces ‘naked’ images of passengers revealing any concealed weapons or explosives, which has unsurprisingly drawn criticism.

Construction activity fell in December for the 22nd month in a row.

Although the slowdown in the sector has eased markedly since February 2009, the weakness in December continues a pattern of only limited recovery

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UTILISING WIND

TRAFFIC SURGE

Nine European countries, including the UK, have signed up to develop an integrated off shore grid in the North and Irish Seas in order to utilise wind power and cut down on carbon emissions as well as become more energy secure. Interesting times for the industry.

The International Air Transport Association (IATA) has said that Middle East carriers recorded a 16.5 percent rise in passenger demand in November, outpacing global growth, which stood at 2.1 percent. Will this trend continue? Only time will tell.

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ON TRACK

NO VACANCIES

India’s Road Transport and Highways Minister Kamal Nath has announced it has increased its per-day construction of roads to nine kilometres, and the target of developing 20 kilometres daily would be accomplished by April. Opportunities aplenty for construction companies in the country.

In December 2009, Australian Transport and Infrastructure Minister Anthony Albanese declared Sydney’s airport at full capacity, while also delaying a decision on the site for a second airport until 2011, pushing construction further into the future. Potential for air traffic tension.

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UPFRONT 16

KUWAIT One of the richest countries in the world, Kuwait has the world’s fifth largest oil reserves and is one of the most attractive investment destinations in the region.

With a per capita income of US$60,800 and a GDP of US$295 billion, the Arab state is one of the fastest growing economies in the region; Kuwait also has the second-most free economy in the Middle East, according to the 2008 Index of Economic Freedom, making it one of the best places in the region to conduct business.

Increasing oil prices since 2003 have resulted in a surge in Kuwait’s economy and a booming construction sector. For instance, with the country’s oil production expected to reach four million bpd by 2020, Kuwait Petroleum Corporation plans to invest US$51 billion by 2012 to upgrade and expand the country’s existing refineries.

And with the Central Bank of Kuwait injecting US$5.15 billion into the economy for a much-needed boost following the financial crises, impressive investment levels look set to continue for the near future at least.

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KUWAIT INTERNATIONAL AIRPORT EXPANSION Kuwait Directorate General of Civil Aviation plans to expand Kuwait International Airport to increase its capacity to 20 million passengers a year from six million. The expansion project involves the construction of a new terminal building that will be connected to the existing terminal building via a tunnel, the two existing runways will be extended up to 600 meters and a third runway will be constructed. The electrical infrastructure of the airport will also be upgraded to include a new control and communication system. A new airspace system plan will be developed consisting of a control centre and national meteorology centre to improve the airport’s operating performance and to meet international standards.

Project Value: US$2.1 billion Completion: 2013 Sector: Infrastructure Consultant: Joint venture between Dorsch Consult and SSH International

JABER AHMED AL-JABER AL-SABAH HOSPITAL The project calls for construction of Jaber Ahmed Al-Jaber Al-Sabah Hospital in Surra, Kuwait – a 1120-bed facility with a total built-up area of 270,000 square metres.

The hospital will provide a comprehensive range of medical services comprising diagnostic and treatment services, a trauma centre and ER facility, outpatient services, dental services, obs/gyn services, inpatient care services, VIP suites for visiting heads of state and also another wing for VIPs. Kuwait Arab Contractors Co. was awarded the main construction contract in August 2009, and construction is expected to be complete by the end of 2012.

Project Value: US$1.1 billion Completion: 2012 Sector: Civic Infrastructure Main Contractor: Kuwait Arab Contractors

18/1/10 09:05:06

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MADINAT AL-HAREER Madinat al-Hareer (City of Silk) is a proposed 250 square kilometre planned urban area in Subiya that, upon construction, would include the 1001-metre tall Burj Mubarak al-Kabir, a natural desert reservation and areas that concentrate on media, health, education and industry. The city will be built in individual phases with total completion within 25 years. Construction on the actual site has already begun, with bridges, highways and roads being laid down as basic infrastructure to facilitate future construction of structures within the city.

Project Value: US$27.5 billion Completion: 2035 Sector: Infrastructure/Real Estate Project Manager: Tamdeen Real Estate Company

MenaInfra4_Upfront.indd 17

BURJ MUBARAK AL-KABIR Part of the Madinat al-Hareer project, the Burj Mubarak al-Kabir skyscraper is planned to top out at 1001 metres in order to reflect the Arabian fairy tale One Thousand and One Arabian Nights. The building will include seven vertically stacked 30-storey ‘neighbourhoods’, including apartments, offices and hotels. Linking the neighbourhoods will be several four-storey ‘town squares’. In order to cope with high winds, the building is designed as three interlocking towers, each twisting 45 degrees to help stabilise it. Work on the tower has progressed slowly. It was originally slated to be completed in 2016.

Project Value: US$7.4 billion Completion: 2016 Sector: Real Estate/Mixed Use Architect: Eric Kuhne & Associates/CivicArts

AL HAMRA Due to rise to 412m in height, Al Hamra will be the world’s tallest ‘sculpted’ tower and Kuwait’s tallest skyscraper, creating a dramatic focal point that is visible throughout the city. Facilities at the tower will include six levels of retail; a rooftop garden held above the retail sector; the largest business centre within Kuwait at 2400 square metres build-up and 1800 square metres leasable; a Sky Lounge restaurant; 40 elevators to help you reach those dizzying heights; two refuge floors that can be used in an emergency; and a multi-storey car park. With the collaboration of project manager Turner International and main contractor Ahmadiah Contracting, Skidmore Owings & Merrill hopes to reach completion by the third quarter of 2010.

Project Value: US$543 million Completion: 2010 Sector: Real Estate/Mixed Development Consultant: Skidmore Owings and Merrill

18/1/10 09:05:09

UPFRONT

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TOP 10

THE POWER TO DELIVER

From infrastructure to waterfront developments, we take a look at the top 10 megaprojects in Bahrain.

1 2 3 4 5 6 7 8 9

Water Garden City US$7 billion Durrat Al Bahrain US$6 billion Diyar Al Muharraq US$3.2 billion

The wind energy industry installs nearly 20 GW in new capacity every year, representing more than a US$40bn global industry.

New capacity additions will exceed 25 GW this year, with that number expected to nearly double over the next decade. Driving this growth is investment by the world’s leading utilities and energy companies, as they strive to diversify their portfolios, respond to public policy and address climate concerns. Th is growth has been a boon to ailing industrial sectors in Europe, North America, China, India, Australia and many other regions of the world. Among the wider range of economic impacts generated by the wind industry, various studies have shown that every 100 MW installed creates, after construction, five to 10 long-term plant jobs and twice as many non-plant jobs.

These ‘green jobs’ include trained turbine technicians, utility and transmission services, and various subcontractors to ensure the ongoing operation and maintenance (O&M) of the utility-scale wind plants that represent the industry’s future. Work includes performing inspection, preventative maintenance and repair on the internals, blades, hubs and towers of today’s turbines.

Turbine availability and energy output is fundamentally linked to technicians working safely and productively at elevation.

Wind plant O&M service providers face growing challenges as turbines have grown larger in recent years, now reaching up to 160m tall: these include increased healthcare issues and employee attrition. Costs are associated with repetitive manual climbing fatigue and the need for expensive external cranes for certain maintenance operations.

Turbine technicians receive over 200 hours of training, and cost up to US$20,000 to replace when all hiring, training and contingency costs are tallied. Annual technician attrition ranges from 25 percent to 33 percent industry-wide, with certain locales approaching 50 percent. Take the case of the US, where projections call for over 15,000 turbine technicians by 2020. Replacement costs alone could reach more than US$100m at current attrition rates.

Power Climber Wind maximises the safety and productivity of wind generating assets by providing operations and maintenance support – an important but perhaps undervalued aspect of the drive to make the most of this abundant resource.

Please visit Power Climber Wind at www.powerclimberwind.com for more information.

Qatar-Bahrain Causeway US$3 billion Marsa Al Seef Development US$2.5 billion Al Dur IWPP US$2 billion Durrat Marina US$1.5 billion Bahrain Monorail – Green Line US$1 billion

10

Marina West Development

US$700 million Villamar Towers US$650 million

Source: www.constructionweekonline.com

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UPFRONT 19

CASH INJECTION?

MEGA SPORTS STADIUM

Investment company Aabar, which is 71 percent owned by the UAE Federal Government, has made an offer to purchase 70 percent of Arabtec in the form of a convertible bond at a conversion price of Dh2.30 per share. Arabtec Chairman, Riyad Kamal, told Gulf News that it would be a great opportunity that would strengthen the Dubai-based construction company.

“It will give it the potential for investment in acquisition or participation in equities in future projects, and in opening the potential for further projects in Abu Dhabi.

That will defi nitely open the doors for us for further work in Abu Dhabi,” he said.

Despite already hosting the 2009 FIFA Club World Cup and successfully holding its fi rst F1 Grand Prix, Abu Dhabi is planning to build a new sports stadium capable of holding 65,000 people, possibly to aid an Olympic 2020 or FIFA World Cup 2022 bid.

When built, the new stadium will overtake the Zayed Sport City Stadium, currently the largest stadium in Abu Dhabi (60,000

capacity and the host of the 2009 FIFA Club World Cup along with Al Jazira Mohammed Bin Zayed Stadium).

Abu Dhabi currently has US$100 billion worth of construction projects under way, including the Saadiyat Island development, the US$22 billion Masdar city project and Khalifa City – the single biggest project in the capital, with a budget of US$40 billion.

MEYDAN RACECOURSE ON TRACK

Meydan facts: • The grandstand is 5166 feet or 1.6 kilometres • The Meydan Hotel has 290 rooms and suites • Falcon car park has 8622 parking bays • The horse tunnel is 2 kilometres long • The rooftop Bubble Lounge is 787 feet long and has capacity for 4500 people • The racecourse has a turf track and an allweather track

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UPFRONT

20

KEEPING UP The global requirement to reduce injury and death on our roads, many caused by excessive or inappropriate speed, has resulted in technology being designed to counter this socially unacceptable activity. Speedar Limited (formerly Ottery Electronics) was the original UK designer of the distance/ time measuring system known as Vascar.

Th is system has been widely used in police vehicles as a means of computing the average speed of a vehicle over a predetermined or measured distance.

New from Speedar is Video Vascar, which is designed to meet the latest system technical requirements for in-car use. It integrates the Vascar system with on-board video cameras, recorder and in-car audio to provide the irrefutable evidence required for enforcement. It may also be supplied with an on-board computer that will provide ANPR and Sat Nav capability.

Also available for incorporation into existing video systems is the handheld version, Vascar 21, designed for easy retrofit into existing systems and capable of being integrated with any in-car video system 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.

Some clever design features ensure that this unit meets the stringent requirements of the UK Home Office HOSDB specification.

These systems will be on show for the fi rst time at Intertraffic Amsterdam 2010.

For more information please visit www.speedar.co.uk

FAST FACT

The number of cranes in Dubai has dropped by 50% from peak construction levels

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DISTRICT COOLING HEATS UP District cooling is fast emerging as the most viable cooling solution in the Middle East, where the temperature frequently exceeds 45°C and air conditioning requirements consume 70 percent of the power during peak electricity demand. With power shortages common in this region, governments are turning to district cooling to cool buildings as a cheaper and greener alternative to air conditioning. Th is solution can not only mitigate the power crisis in the Gulf Cooperation Council countries but also help reduce carbon footprints through increased energy efficiency and lower CO2 emissions.

New analysis from Frost & Sullivan entitled Analysis of the District Cooling Market in the Middle East Region finds that the market earned revenues of US$580 million in 2008 and estimates this to reach US$2 billion in 2013 at a compound annual growth rate of 28 percent.

With the GCC becoming home to the biggest shopping malls in the world, there is a distinct need for district cooling in not only the residential sector, but also the commercial sector. The United Arab Emirates alone is expecting to have 80 million square feet of office space by 2010, widening the scope for

district cooling companies. “The market is also expected to benefit from the environment-consciousness of governments, high oil exports, abundance of energy, a construction boom, and harsh climatic conditions,” say Frost & Sullivan Research Analysts Suganya Rajan and Darwin Kishore Selvaraj.

Among all Middle Eastern countries, Saudi Arabia seems to have the most untapped potential, with more than US$100 billion worth of construction projects underway. Its rapidly expanding industrial base and population have increased the demand for power, which averages an annual growth rate of nearly five percent. The rising air conditioning needs account for almost 70 percent of this growth in power demand. By 2013, the district cooling market is expected to have an additional capacity of 4.5 million tonnage of refrigeration, mainly contributed

by Saudi Arabia and Qatar. “Although there is a continuous rise in the demand for power in almost all GCC member countries, power is still provided at subsidised rates for the residential sector,” notes Suganya. “Th is puts a huge drain on the region’s utilities, as power costs account for around 50-60 percent of the district cooling production cost.”

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UPFRONT

21

TORNADO TOWER: ‘BEST TALL BUILDING’

FAST FACT With the Dubai Metro proving to be a massive success, it looks like other emirates in the UAE are following Dubai’s lead.

Last month, Qatar and Bahrain signed a

$25 billion contract with German rail operator Deutsche Bahn to build rail and underground lines in the regions

ROAD SAFETY MEASURES Emerald Group Publishing, the leading publisher of transport books, launched the second edition of the Handbook of Road Safety Measures (previously published in 2004) during September 2009. Th is new edition gives state-of-the-art summaries of current knowledge regarding the effects of 128 road safety measures. It covers all areas of road safety including: the design of roads; traffic control; vehicle design and vehicle safety features; vehicle inspection; driver training; publicity campaigns; police enforcement and general policy instruments. With many of the original chapters revised and several new ones added, extra topics covered in this edition include: environmental zones, DUI legislation and enforcement, speed cameras and post-accident care.

More than 2000 evaluation studies have been reviewed and their fi ndings summarised by means of meta-analysis in the new edition of this important reference work. Authoritative and unique in its broad coverage, this handbook serves as a comprehen-

MenaInfra4_Upfront.indd Sec1:21

sive reference manual for road safety professionals worldwide.

Praise for the first edition includes: “In summary, an important, timely and useful book that should benefit researchers and practitioners alike,” Will Murray, Research Director, Interactive Driving Systems in a book review in Logistics and Transport Focus.

“This handbook offers an enormous amount of information for the interested reader. Furthermore, the reputation of the authors and their approach ensures that this book is a valuable addition to worldwide road safety research.

As far as I know, this book has no competitor,” Fred Wegman, Managing Director of SWOV, in a book review published in the European Journal of Transport Infrastructure Research.

Eat your heart out Burj Khalifa, for Qatar’s Tornado Tower has been awarded the accolade for Best Tall Building in the Middle East and Africa by the Council for Tall Buildings and Urban Habitat. Standing 656ft (200m), the Tornado Tower houses 52 floors of office space in Doha.

The building was designed to minimise effects on the natural environment through proper site utilisation, innovative uses of materials, energy reduction, reduced emissions and water consumption.

‘Bringing fresh ideas’ The Council for Tall Buildings and Urban Habitat (CTBUH) is the world’s leading authority on the design, construction and development of tall buildings and, in its own words, recogn-

ises projects that “contribute to the advancement of tall buildings, bringing fresh ideas and innovative processes”.

In the Tornado Tower’s case, the building was credited for demonstrating relevance to the contemporary and future needs of the community in which it is located, by adding economic vitality to its occupants, owner, and community. The Tornado Tower won acclaim, when it was constructed in 2008, due to its innovative unitised facade solution which allows the curvature of this iconic building to be expressed without the need for curved glass. Trapezoidal panels and their collection of angles give the building its signature curve and hyperboloid shape that is meant to depict “a whirlwind in a desert storm”.

Emerald Group Publishing is very proud to be the leading publisher of books in transport. To see more books in our collection please visit http://info.emeraldinsight.com/products/books/

15/1/10 16:50:30

UPFRONT

22

RAILWAY SAFETY REVIEW After the flash floods in Saudi Arabia in November 2009, the General Organisation of Railways has announced that they are to review the construction of bridges, tunnels and train lines for the Al-Haramain Train Project.

The President of the General Organi-

Tower’s spire visible from

60

miles away

project cost about

US $4.1bn

sation of Railways, Abdul Aziz Al-Hiqail, made the announcement after saying that the route of the proposed train project would remain the same despite the recent flooding.

8million

Burj Khalifa Tallest building in the world

cubic feet of

concrete used in construction

Speaking to Asharq Al-Awsat newspaper, Al-Hiqail said, “The previous designs

22

to review them in light of the recent flash

spent building structure

potential alterations were found to be needed, the cost of the project may have to rise. However, he said that only the speci-

mosque

man hours

the world's highest

nightclub

floods.”

Unsurprisingly, he added that if

the world’s tallest

million

but the organisation has deemed it proper

detailed bridges, tunnels and train lines,

26,000 glass panels for th e exterior claddin g

308.8m taller than Taipei 101 (world’s next tallest building)

fications of bridges and tunnels would be reviewed to ensure that they are able to tolerate difficult weather, while the route would remain the same.

10°C

cooler at the top than the bottom

The proposed Al-Haramain project will see high-speed rail transport between Makkah and Madinah, and link the two cities to Jeddah and King Abdullah Economic City in Rabigh. Once completed,

160

room hotel

you can see I

R A N

height of the

Residential suites

designed b y

Georgio Armani

the service will be able to transport over 20 million people per year.

Al-Hiqail said that to make way for the railway, 27 real estate units out of 61

3,000

the world’s highest

swimming pool

stairs f rom bottom to to p

would have to be demolished. However, he did say that the owners would be suitably compensated.

US $217m cost of the exterior

Dubai Fountain

height of the

Armani hotel

part of enti re new

Downtown Dubai

US $20bn

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UPFRONT

23

FAST FACT

One of Qatar’s major construction projects has begun as Dohaland, a subsidary of Qatar Foundation, starts work on the ‘Heart of Doha’. The US$5.5 billion project will see a 350,000 metre squared area of Doha’s city centre, rebuilt to showcase ‘a city within a city that merges the best characteristics of the past with modern technologies’. The scheme was envisaged by the Emir of Qatar, HH Sheik Hamad Bin Khalifa Al Thani and his wife HH Sheikha Mozah Bint Nasser Al Missned, and it is hoped that it will be completed by 2016.

COMPANY INDEX Q1 2010

Panolin 60, 61 Power Climber UF, 47 Project Management Institute 42

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

Heubach 68, 73

Roads and Transport Authority (RTA) 110

Hyder 37

Saudi Aramco 66

Insulaad 68, 71

Segura Consulting 94

Abu Dhabi Authority for Culture and Heritage

AWE IBC

Intelagard 134, 135

Serco 110

(ADACH) 34

Birdair IFC

International Desalination Association (IDA) 94

Speedar UF, 117

Abu Dhabi Department of Transport (DoT) 118

Blue Stream Environmental Technology

International Private Water Association

Starrport 113

ADC 88, 89

108, 109

(IPWA) 94

Tech Traders 68

Aeroquest 137

Bomag OBC

International Protective Coatings (IPC) 68, 69

Telegra 120, 123

AkzoNobel 68, 75

Burj Khalifa 24

International Road Federation 114

The World 140

Aldar 34, 82

CB Richard Ellis (CBRE) 82

Jones Lang LeSalle 82

Total 107

Alupole 119, 120

ComAp 7, 86, 87

Kansai Paint 80, 81

Titan Cement Egypt 64, 65

Amana Contracting 66

Delta 4, 126, 127

King Fahad Hospital 86

Trojan 98, 103

Aqualyng Holdings 94

Dow Corning 76, 77

Landmark Properties 82

Urban Planning Council 34

Aquaris 98, 105

Dubai Metro 110

McLanahan 40, 41

Utico 98, 99

Arabtec 44

Emerald Books UF, 141

Monodraught 88, 91

Volvo 49

ATEÏS Middle East 130, 131

Faithful+Gould 52

Nalco 92

Wagner Fire Management 132, 133

Atlas Copco 56, 57

Ferrari 34

Nutshell Natural Paints 78, 79

Water Standard 2, 98, 101

Aviation Software, Inc. (ASI) 128, 129

Frost & Sullivan 66

Optelecom 120, 125

Yas Island 34, 66

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COVER STORY

POWER SHIFT?

With Dubai still taking stock after its recent debt restructuring, Abu Dhabi looks set to eclipse its flashier neighbour in attracting investment dollars over the next few years.

But does this shift in the balance of power hold deeper implications for the UAE?

BY BEN THOMPSON

A

s acts of defiance go, the opening of the world’s tallest building was some spectacle. Shrugging off its recent debt problems, Dubai threw the biggest party the emirate has seen since the height of the boom in honour of its new icon’s inauguration, with a combination of 10,000 fireworks, light beams, choreographed water displays and sound and music effects illuminating the night sky. The extravaganza was watched by thousands of UAE residents crowded onto the Dubai Mall promenade and a further two billion people live on TV. And if the festivities lacked the ostentatious displays of excess witnessed at the unveiling of The Atlantis Hotel back in 2008 – the world’s most expensive private party at an estimated $20 million – then given that we’re in the middle of a recession the organisers did their best to run them close. Despite the economic climate, the emirate still managed to prove that when it comes to celebrating on a gargantuan scale, there’s no-one quite like Dubai.

And yet amidst the revelry and backslapping over completion of the city’s latest architectural wonder, one topic inevitably dominated the conversations, gossip columns and discussion board threads in the hours and days following the lavish ceremony: the record-breaking structure’s surprise rebrand from the Burj Dubai to the Burj Khalifa. “Th is is the tall-

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est building ever created by the hand of man,” A tale of two cities announced Dubai’s ruler Sheikh Mohammed Dubai’s recent problems have been wellBin Rashid Al Maktoum at the ribbon-cutting documented, particularly in a Western media ceremony. “Th is great project deserves to carry that has positively revelled in the schadenthe name of a great man. Today I inaugurate freude of seeing the desert dream come crashBurj Khalifa in recognition of Sheikh Khalifa ing down. The city’s once buoyant property bin Zayed Al Nahayan.” market is currently blighted by oversupply, The gasp of the watching millions was yet another 32,000 new homes are expected by almost audible. Many immediately turned the end of 2010; house prices, already down their attentions to the practical implications some 60 percent from their 2008 peak, are set GCC CONSTRUCTION of the name-change: the cost to souvenir to fall a further 10 percent in the next year; manufacturers and producers of merchandisand more than 500 construction projects have Elsewhere in the region, ing; the numerous changes that will need to been suspended or cancelled in the United Saudi Arabia has 847 active be made to signage, maps and tourist guides Arab Emirates alone, with Dubai the most projects valued at $417.9 around the emirate; and the bill facing the severely affected. According to a leading crane billion, while Kuwait is company that reportedly spent more than manufacturer, the number of cranes in Dubai US$500,000 on Burj Dubai branded uniforms has slumped by around 50 percent from peak moving forward with 160 for security and hotel personnel. Others, construction levels and current orders have projects worth $142.8 billion. however, focused on the reasons behind the ground to a halt.

In Qatar, 186 projects valued name change, speculating as to why – at the And then came the news that rocked the at some $48.2 billion are on very moment the emirate should have been fi nancial world last November, when Dubai celebrating its greatest triumph – it chose announced it would ask creditors of Dubai track, and Bahrain currently to honour the ruler of near-neighbour Abu World, the conglomerate behind its rapid has 232 active projects worth Dhabi instead in an uncharacteristic display expansion, and Nakheel, builder of its palm$40.3 billion. Oman’s 116 of self-effacement. shaped islands, to agree to a standstill on projects are valued at $38.5 And while some saw nothing strange in billions of dollars of debt as a first step to rethe desire to acknowledge Sheikh Khalifa, the structuring. It was, says Eckart Woertz of the billion in total. current president of the UAE, as patron of the Gulf Research Council, a “watershed event” Source: Proleads tower, many more believed the gesture was in the economic development of the emirate. linked to the US$10 billion bailout he recently “Before this, markets had assumed an implicit extended to Dubai to help with its debt restructuring. Some even muttered government guarantee for such companies; now that such guarantee darkly that the handout did, despite official protestations to the contrary, has not materialised, refi nancing on international markets will be more actually have strings attached after all. But whatever the real reason, the expensive or even impossible,” he explains. “As Dubai’s access to internasymbolism behind the move was undeniable: anyone looking for evidence tional capital markets has diminished, it will need to rely increasingly on of Dubai’s waning influence and the growing role of Abu Dhabi as the Abu Dhabi as well as making the necessary restructuring moves.”

Gulf’s real economic powerhouse could see it clearly in the 828-metre tall Indeed, as Dubai’s star has dimmed it is difficult not to compare building towering above them. it to the powerhouse city-state emerging just to the south. Abu Dhabi

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YAS ISLAND

Developer: Aldar Propertie s Date for completion: 20 14 accounts for about 60 percent of the national economy of the UAE and ranks amongst the world’s richest cities, with GDP per capita amongst the highest in the world. As the world’s sixth largest oil producer, it is a major exporter and is linked to many of the largest global economies by trade. Th rough sovereign wealth funds such as the Abu Dhabi Investment Authority – considered to be the world’s largest investment fund – the emirate has multiple strategic overseas investments, and its development of globally recognised projects such as the Masdar Initiative mean Abu Dhabi is becoming ever more dominant on the world stage.

More importantly, the emirate has weathered the recent economic crisis much better than Dubai. “Abu Dhabi remains the wealthier emirate with manageable debt levels compared to its balance sheet,” says Alia Moubayed, Senior Economist at Barclays Capital. “It has a very ambitious economic development and investment programme, and the ‘catching-up’ process the emirate is undertaking to build its infrastructure to Dubai’s level naturally implies that more project work will be done there. International investments will certainly flow into these ventures given the size of the proposed plans in the industrial and infrastructure sectors.”

In fact, the respective health of the two real estate sectors makes for interesting reading. Since Abu Dhabi’s real estate market proved more resistant to the overheating that hit others in the region, it has held up well against the global downturn. Moreover, its reputation for a more sustainable style of development has largely prevented the evaporation of investor confidence that has plagued much of the rest of the Gulf. A rising arts and culture scene – based on ambitious collaborations with the Louvre, Guggenheim and other global leaders – is also helping to make the emirate more attractive to foreigners and, with more than half of the population under the age of 30, demand from the youth market should help to keep the commercial real estate segment strong over the coming years. In contrast to Dubai, National Bank of Abu Dhabi expects a shortage of more than 20,000 homes by the end of 2010, with demand rising due to a population increase and limited supply – both of which will further stimulate the construction sector.

Indeed, whereas Dubai is suffering from a chronic surfeit of luxury property, in Abu Dhabi the timing of the slowdown caused developers to reassess their projects and cancel or scale back the more ambitious ones.

In many ways, the downturn has been a blessing in disguise. “Most proj-

W

hile Saadiyat Island has been designed to be the cultural heart of the emirate, Yas Island will be its entertainment hub. The 25 square kilometre development off the coast of Abu Dhabi will be a key part of the government’s strategy to build its tourism industry. Its main attraction will be Yas Marina Circuit racing track which played host to the inaugural F1 Etihad Airways Abu Dhabi Grand Prix last November. The track winds its way around Yas Island’s landscape and was designed by Hermann Tike who created Shanghai’s main racing circuit. In keeping with the racing theme, Ferrari World Abu Dhabi will be the world’s largest indoor theme park and is housed in a building covering 200,000 square metres with a roof designed to look like the body shell of a Ferrari GT car. The island will also host the Warner Bros. Theme Park, which will feature attractions based on Looney Tunes, Hanna-Barbera and DC Comic characters.

Meanwhile Yas Island Water Park, for which no completion date has yet been set, will boast aqua themed rides.

No development in the UAE is complete without a mall, and Yas Mall, featuring three department stores and 500 luxury units, will break the mould in terms of its cutting edge design and the international brands it aims to attract. It will cover an area of 296,000 square metres and will feature a car park with 16,000 spaces and several triple-level stores. In terms of accommodation, both residents and tourists will be well catered for. Residential villas and apartments will be built alongside the island’s various waterways and canals, including at the top-end, duplex waterfront apartments on the banks of the Yas Lagoon. Yas Hotel will be the island’s flagship hotel and will be joined by several branded hotels along the Northern Crescent and Beachfront Esplanade. In all, there will be over 2500 guest rooms. In terms of its transport infrastructure, the developers are planning to include a public transport system and a 10 lane highway connecting Yas Island to both Abu Dhabi and Dubai which will reduce the drive time to the capital city to just 10 minutes. The environmental impact of such a road network will, the developers hope, be offset by the green initiatives taking place on the island, including the monitoring of the effects of the development on local waterways and the planting of 80,000 mangroves on the western shores of the island, adjacent to the island’s links golf course. www.menainfra.com 27

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AL REEM ISLAND

Developers: Sorouh Real Estate, Reem Invest ments, Tamouh Date for completion: TBC

A

l Reem is a natural island 600 metres off the coast of Abu Dhabi. However once developers have completed their US$30 billion project, it will be a very different place. The island is currently being jointly developed by Sorouh Real Eastate, Reem Investments and Tamouh, each of whom has staked their claim to one of the emirate’s most ambitious real estate projects. Over 22,000 residential units are to be built on the island, which will be connected to the mainland by two or three bridges. The island has been designed to cater to a permanent population of residents rather than as a tourist attraction and will feature schools, medical clinics, shopping malls, restaurants, as well as hotels and a 27-hole golf course.

The centrepiece of the island will be Shams Abu Dhabi, which is being developed by Sorouh Real Estate, owner of 20 percent of the development.

Shams will be a self-contained city in its own right, home to 45,000 residents and designed around canals and parks.

At the heart of Shams will be Central Park, which, as its name suggests, will be modelled on the New York version and will feature a theatre district, waterside restaurants and shops. At the entrance to Shams will be the Gate District that will be made up of eight skyscrapers for both residents and businesses and a luxury shopping mall. The Shams project is expected to cost US$6.9 billion in total and will occupy 25 percent of the island.

The residential areas will account for 90 percent of the project while the remaining 10 percent will be used for commercial and recreational areas. It will contain 100 skyscrapers, 22,000 residential units and a one million square-metre park. Other developments will include the 83-storey Sky Tower and the five million square-metre Abu Dhabi Towers. The first phase of Shams is expected to be completed later this year.

ects have faced some kind of delay as developers take stock of potential defaults from purchasers and experience cash flow issues,” confirms David Dudley, director of the Abu Dhabi office at property consultant Jones Lang LaSalle. “The vast majority of announced projects for which construction has not commenced are being put on hold until the market picks up, and the delay or cancellation of these projects means that markets will remain more stable during the current period of suppressed demand.”

The sleeping giant First-time visitors to Abu Dhabi today might fi nd it difficult to imagine the emirate as one of the world’s most exciting cities. Unlike Dubai, swathes of the desert remain untouched by urban sprawl and its relatively low-key skyline contains none of the iconic landmarks associated with its brasher, flashier neighbour. Indeed, this is a city that can best be described as a work in progress. Evidence of what the future holds can be seen in the construction work currently underway around the clock, building the foundations for the projects that will transform it into a modern-day metropolis to rival any in the region – or for that matter, the world.

The driver behind these changes is the Abu Dhabi 2030 Urban Structure Framework Plan, a 25-year programme of urban evolution aimed at building an economically sustainable city that is able to support a population of up to five million residents. Plan 2030 aims to cement Abu Dhabi’s identity as the capital of the UAE, but also to make it a global fi nancial, trade and tourism hub. The government has also committed to investing around US$100 billion to developing Abu Dhabi’s western region, which accounts for 83 percent of the emirate’s land mass but currently houses just eight percent of its residents.

Craig Plumb, Head of Research for the MENA region at Jones Lang LaSalle, believes that the emirate is on an upward curve. “Abu Dhabi was probably the fastest growing market last year from a tourism perspective and has big plans to continue this,” he says. As such, Plumb expects it to

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be one of three Gulf economies, along with Saudi Arabia and Qatar, to recover fastest from the impact of the global real estate slowdown.

Key to this development will, of course, be the expansion of its transportation infrastructure – currently undergoing improvements and expansions across all segments to ensure infrastructure keeps pace with strong growth elsewhere – and its construction sector. According to a 2009 report from the Oxford Business Group, while Abu Dhabi did feel the effects of the downturn, overall the emirate remains well protected from the recession thanks to strong internal dynamics and ambitious public infrastructure plans. As with everywhere else in the region, the effects of the slowdown have made project fi nancing more difficult and competition between contractors for existing projects is fiercer; on the fl ip side, however, the global crisis – coupled with volatile oil prices and falling inflation – has caused materials prices to fall significantly, a boon for well-capitalised builders.

Th is softening of construction costs has also changed the nature of the market to a certain extent. While oil and materials prices were high, developers were largely compelled to build luxury developments in order to keep profit margins healthy.

Now that costs have come down, however, developments with a lower price tag are increasingly getting the green light, clearing the way for much-needed activity in the middle and lower-income segments. Overall, the real estate market is undersupplied and affordable housing developments such as Al Reef Villas, the first in the segment to come online in 2009, could make major strides in closing the supply gap.

The government too is keeping contractors busy with a raft of infrastructure projects planned in line with its broader goals and backed by stable energy (and therefore cash) reserves. Key projects such as Masdar – the world’s fi rst zero-carbon city – Saadiyat Island and Yas Island are expected to keep developers and contractors busy over the next few years, and while 2010 will likely post some challenges for the sector as uncertainty in the global market remains, it also presents significant opportunities in Abu Dhabi, where fundamentals remain strong.

Taking centre stage As a result, Abu Dhabi is now in pole position to assume a dominant role in the affairs of the region, and its recent bailout of Dubai suggests it is now ready to flex its fi nancial muscle. “From the market viewpoint, Abu Dhabi is now in the driver’s seat, and all eyes are watching to see how it and the UAE Central Bank will manage the fallout from recent events,” asserts Moubayed. “Abu Dhabi’s bailout indicates that the management of Dubai’s debt crisis, and the adjustments to its growth model, will be part and parcel of the reconfiguration of power-sharing arrangements among the different emirates and the wider process of strengthening the UAE federation.”

TRANSPORT IN ABU DHABI April 2009 saw the Department of Transport’s unveiling of the Surface Transport Master Plan (STMP), which looks forward to the year 2030. Given rapid population growth – which averaged six and seven percent between 2005 and 2008 – the emirate is eager to support the next wave of urban development.

R

oad congestion extracts a heavy toll on Abu Dhabi’s economy in both urban and rural areas and, as a result, the government is prioritising projects like the widening of the Mafraq-Ghweifat highway, the corridor from Abu Dhabi to the western border with Saudi Arabia. Within the capital, the Department of Transport hopes that the introduction of the urban public transit system will take a significant number of vehicles off the road. In a style typical of the emirate, the STMP calls for environmentally friendly public transport.

As air traffic steadily increases, so has the capacity of the Abu Dhabi International Airport and other airports overseen by the Abu Dhabi Airports Company (ADAC). The emirate’s main airport, unlike other major international hubs, has not seen a decrease in passenger traffic over the past few years and the government is investing accordingly: about half of the planned US$6.8 billion worth of expansions have already been completed.

Major changes are afoot at the emirate’s ports as well. Under the auspices of the Abu Dhabi Ports Company (ADPC) and the Department of Transport, the emirate is preparing to shift operations at the main port at Mina Zayed to the massive Khalifa Port in the new industrial area at Taweelah currently under development.

Finally, in a first for the UAE, the federal government created an inter-emirate transport network in March 2009, setting in motion a long-discussed plan to connect all seven emirates via rail. The US$3 billion railway project will eventually connect with the larger 1940-kilometre rail development that aims to connect all six countries of the GCC. As of mid-2009 Abu Dhabi seemed undeterred by the global credit crisis and was pushing ahead with its wide-scope development plan, ensuring that the emirate will be able to more efficiently handle future growth and a larger population.

Source: Oxford Business Group

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18/1/10 10:59:22

Al RAHA BEACH

Developer: Aldar Properties Date for completion: 2019

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l Raha Beach has been dubbed the new gateway to Abu Dhabi. It will be a waterfront city and home to the emirate’s new World Trade Centre building, residential areas and a central business district. The island will accommodate 120,000 residents and, in a bid to encourage foreign investment, will be one of the first designated areas where non-nationals can invest in leasehold property in Abu Dhabi. Al Raha will be split into four distinct districts: Al Zeina, Khor Al Raha, Al Seef and Al Dana. Al Zeina is described by the developers as the ‘garden city’ and will be located at the island’s quieter eastern end. Villas and apartments will front a beach and the community will feature a retail arcade, shops and cafes. Khor Al Raha, at the eastern mouth of Al Raha Beach’s Grand Canal, will have restricted public access and cars there will be kept to a minimum. Buildings will be tiered from three to 14 floors and will have sea views. Al Bandar will be an island set around a marina with moorings for resident’s boats.

For those wanting to live in a livelier area, Al Seef will feature a vibrant residential, commercial and hotel district. Three islands offshore will provide facilities for watersports. Meanwhile Al Dana, formed around a circular marina, will be built as a series of semi-circular zones that will increase in height. Al Dana’s marina will also be the main transit stop for water transport. There will be several other districts within the development, including the cultural district, Al Shaleela, which will feature galleries and art studios as well as a media museum. Al Razeen, the ‘Arabian Water District’ will be made up of secluded villas on an island parallel to Al Shaleel and will be connected to the mainland by a series of waterways and bridges. A sophisticated public transport network will be developed to ferry people around Al Raha Beach, including a light rail system with 14 stops, a bus service, catamarans, ferries and water taxis. Road traffic will be minimised with the central boulevard roads, leading straight into underground parking areas for each precinct. Although it is a short distance from Yas and Saadiyat Islands, there will be plenty of entertainment on Al Raha itself, including a 300,000-square metre shopping and exhibition centre, two marinas and several parkland golf courses.

In fact, many commentators feel that Abu Dhabi will use Dubai’s recent debt standstill as an opportunity to push its own agenda of greater centralisation of the UAE. “Abu Dhabi’s support for Dubai in the current financial crisis is selective and not unconditional,” explains Woertz. “It has shown that it is ready to practise tough love and force a restructuring of Dubai’s business entities that are currently not viable or might not fit into its own and the UAE’s overall development plans. Speculation about trade-offs is increasingly shift ing from rumoured secret buyout arrangements that are impossible to verify to a power shift to Abu Dhabi within the federal structure of the UAE.” Woertz thinks the payoffs for Abu Dhabi’s bailout might be political rather than fi nancial. “Abu Dhabi could demand a strengthening of federal authority, while Dubai would need to relinquish certain sovereign rights, such as control of customs, which so far remains on the level of individual emirates,” he says.

A more tightly knit federation would have other benefits, too. For one thing, the UAE needs increasing unification of policies and standards for its ambitious development drive. It also needs substantially improved statistics – which so far are often not available in a timely, complete and consistent fashion. Like elsewhere, there will need to be more regulation of capital markets, while a unification of the stock markets in Dubai and Abu Dhabi could strengthen the position of the UAE as a niche player in international capital markets. Meanwhile, urban development is increasingly intertwined with people living in one emirate and working in the other and coordinated planning will be required, especially in the field of transport networks and railroads – a point echoed by Moubayed. “Greater federation will also be reflected in growing support for countrywide integrated infrastructure networks that will constitute a non-negligible part of project works across the UAE, such as the recently announced national railway system,” she says.

Not over yet It’s clear that in the next few years we can expect to see considerable changes in the way the UAE is run, with Abu Dhabi – always the traditional heart of the country but often eclipsed by the brighter lights of Dubai in recent years – taking the lead. But even so, Abu Dhabi will need a strong Dubai if it is to make a success of its centralisation efforts.

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And many in the industry, while conceding the emirate faces significant challenges, believe it is too soon to start writing Dubai off just yet.

“There is a real need to get back to basics, for sure” asserts MAG Group Chief Executive Officer Mohammed Nimer. “We need to focus on solid market fundamentals as opposed to sentiment – that’s the true path to recovery.” But despite recent setbacks, he maintains that Dubai is still an icon for business. “Among the reasons for optimism are the fact that the city has the best infrastructure in the UAE and remains the primary hub between East and West,” he explains. “Dubai also has the most diverse fi nancial sector in the region, as well as being a focus for tourism and retail. Furthermore, the benefits that Dubai offers in terms of free zones and 100 percent ownership for foreign companies should not be discounted. For example, the Jebel Ali Free Zone is now playing host to some 6000 fi rms.”

Moubayed agrees. “Dubai has many strengths that will help it recover,” she asserts. “It possesses a state-of-the-art infrastructure and is able to attract a skilled and productive labour force from around the world given its open societal model. It is by the far the most advanced trade hub in the region, offering high quality transport and logistics services between East and West, and has also forged a strong brand for itself as both a tourist destination and a fi nancial centre. One must also not forget Dubai’s fast-growing economic and fi nancial relations with the rest of the Gulf and MENA economies, as well as Asia’s emerging economic powers (notably India and China), which will open opportunities that Dubai can and will harness in the medium-term. Most importantly, Dubai’s position within the UAE and the support it gathers from Abu Dhabi constitute a critical factor that will help Dubai slowly recover as it goes through its restructuring process.”

She maintains that Abu Dhabi has a stake in ensuring that Dubai’s exit strategy from its current woes be as smooth as possible in order that it contributes to a reduction in risk premiums across the UAE as a whole.

And Abu Dhabi’s rulers would be wise to learn the lessons – both good and bad – from the Dubai experience if the emirate truly has aspirations of building sustainable and successful growth. For one thing, the crisis confi rmed the critical need for greater transparency and accountability in the conduct of business and government affairs, and stronger corporate

governance rules and mechanisms for their implementation. “Such rules would have avoided excessive leverage across many Dubai Inc. entities, and allowed for a better pricing of risk,” suggest Moubayed. “By the same token, the recent episode brings to the fore the importance of having solid and well-tested insolvency frameworks and legal and institutional mechanisms to protect creditors’ rights. It also highlights the need to improve the regulatory framework governing real estate markets, in order to curb speculative flows that may be conducive to an asset bubble.”

Channelling resources to develop sectors that are less vulnerable to cyclical downturns and global turmoil is something else that Abu Dhabi will need to consider, inasmuch as it needs to devise a clear strategy for fiscal and debt management and build a track record of implementation that will earn greater credibility amongst investors and creditors.

Where next for the UAE? So despite the global economic crisis and Dubai’s recent debt troubles, there are signs of optimism for the UAE. Dubai-based market

SA ADIYAT ISLAND

Developer: TDIC Date for completion: 2018

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ocated just 500 metres off the mainland, Saadiyat Island is set to transform Abu Dhabi into one of the cultural capitals of the world. It will feature two of the world’s most prestigious cultural landmarks, the Guggenheim Abu Dhabi and the Louvre Abu Dhabi. The latter has been designed by the Pritzker prize-winning architect Jean Nouvel and will be located at the heart of Saadiyat Island’s Cultural district. Even more spectacular in design, and the centrepiece of the District, will be the Guggenheim Abu Dhabi, which has been designed by Frank Gehry. It is made up of several conical-shaped buildings and incorporates a twist on the UAE’s traditional cooling wind towers. The Guggenheim will feature 13,000 square metres of permanent and temporary exhibition space and will be the largest museum in the cultural district. Extensive work has gone into creating a sustainable infrastructure for Saadiyat Island, which includes a storm water drainage system, sewerage systems, electrical grid stations and a water supply and reservoir systems. This will support not only the millions of visitors that are expected to visit the island every year, but also the 160,000 residents that will live there permanently.

The island will be split into six districts; Al Marina, featuring berthing for 1000 boats; the Cultural District with museums and galleries; Saadiyat Park, a mainly residential area with waterfront villas and apartments; Saadiyat Beach, a tourist area with nine kilometres of natural beaches and a golf course designed by Gary Player; South Beach, a family beach resort; and The Wetlands, which will feature a championship golf course and parkland. In total, the project will cost a massive US$27 billion to build and it is expected to attract 1.5 million visitors a year by the time it is completed in 2018. www.menainfra.com 31

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intelligence firm Proleads sees some 3398 civil building projects worth US$1.35 trillion still active in the Gulf region, 853 of them in the UAE alone with a total project value of US$661.4 billion. And while a significant portion of the region’s major projects have been cancelled or placed on hold, market analysis shows that nearly 75 percent of all announced projects in the region are still progressing. “Projects are always put on hold, even during boom times, but from our cash flow projections for the industry, we see the UAE construction market beginning to stabilise at current levels and showing some signs of recovery during 2010,” says Emil Rademeyer, Director of Proleads. “There is still a lot of liquidity in the market in this region, and it’s one of the few places in the world – like Brazil and China – where this is still the case. As a construction player, you need to be in places like this.”

Rademeyer’s view is supported by a recent report from HSBC that suggests business sentiment in the region over the last three quarters is becoming more confident (although it remained a long way below the

THE WAY FORWARD FOR DUBAI The current restructuring process within Dubai Inc. is a great opportunity for the emirate to look back at its past achievements and reassess its strategy moving forward, believes Alia Moubayed of Barclays Capital.

“Dubai needs to reconfigure its sources of growth by focusing on its own comparative advantages and embracing a different financing model,” she explains. “Excessive reliance on leverage, and speculative/rent-seeking activities in the real estate sector will not be sustainable, nor can they generate the productivity gains necessary to support a healthy economic growth trajectory in the long-term. Limiting the sources of growth to sectors that are highly vulnerable to cyclical downturns is a risky proposition.”

Moubayed feels Dubai is best placed to capitalise on its logistics infrastructure. “With access to a talented pool of capital and the ability to develop high value-added productive sector activities, the emirate should further integrate into international supply chain production and distribution networks, as we saw Asian countries do in the 1990s,” she continues.

In addition to this strategic rethink, an easing of restrictions aimed at improving the quality and availability of information that financial markets need to operate efficiently is a must. “Greater transparency in the conduct of business and government affairs and better disclosure both at the level of the public and the private sector is essential,” she says. “In particular, improved frameworks for setting and implementing fiscal and debt management policies, bankruptcy laws, and an efficient judicial system able to deal with business disputes are reform elements investors will be looking for. The ongoing restructuring process offers the opportunity to accelerate such reforms, and is a first test that will be critical for shaping markets’ perception of risk in Dubai and anchoring expectations for the recovery path over the longer-term.”

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exuberant mood of 2007 and early 2008). “If I were to characterise the mood of the region’s business people, I would say they are cautiously realistic,” confi rms Simon Vaughan Johnson, HSBC’s head of commercial banking for the MENA region. “2009 was a difficult year for the GCC economies, but there is a feeling that 2010 will be a year of improvement, tempered by a realism of expectation.”

The ability of cities in the Middle East to thrive in the decades ahead and accommodate urban growth issues such as demographic and population shifts, the globalisation of capital markets, the provision of adequate housing and infrastructure, technology changes, environmental preservation and land conservation will be a key determinant for success.

And as the new decade dawns, it is Abu Dhabi rather than Dubai that is showing the way forward.

ABU DHABI: ADDRESSING THE CHALLENGES Given the rapid pace of change from a new country to a world-class city within just 60 years, Abu Dhabi will inevitably face challenges.

The Etihad Towers under construction in Abu Dhabi. When finished, the five-tower project will feature a shopping mall, offices, apartments and a five-star hotel

•Q Quickly i transforming the economy: Abu Dhabi’s current strength is derived from its oil-and gas-based economy. To achieve genuine economic diversification into other high growth sectors will take time and will require major transformation of the city’s population, skills base and business clusters • Improving transparency: Establishing a legal framework and a business environment comparable to other developed economies.

Progress is being made but there is continued work to be done to establish a legal regime that will sustain high levels of foreign investment • Achieving balanced population growth: Abu Dhabi’s population is small with a comparatively low proportion of UAE nationals and a large, relatively transient expatriate population. Abu Dhabi needs to continue to attract and retain the best talent to fuel its economic growth whilst managing social integration • Enhancing city competitiveness: While Abu Dhabi has major advantages including a low-tax environment, a strategic location and an emerging quality lifestyle offer, it needs to continue to develop its global marketing initiatives to attract foreign investment. At the same time, it needs to ensure lower costs for the occupiers of real estate • Complementing Dubai: Whilst Abu Dhabi has some significant strengths relative to Dubai, the ultimate success will come from the two emirates converging to become the dominant force, as the MENA region increases its global significance • Controlling land release: It takes longer to develop and diversify the economy and grow the population than to construct new real estate developments. Inevitably this leads to a short-term imbalance of demand and supply which needs to be actively managed to keep prices competitive whilst avoiding damaging boom-bust real estate cycles www.menainfra.com 33

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Planning

Undertaking multibillion-dollar civic projects to help develop Abu Dhabi into an international business magnet and tourist destination, Aldar Properties’ Talal Al Dhiyebi reveals the firm’s outlook for 2010.

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s Abu Dhabi undertakes its 2030 Urban Structure Framework, which has been developed by the Urban Planning Council to optimise the city’s development, infrastructure has become an increasingly essential part of the transformation. In essence, Plan Abu Dhabi 2030 sets out a roadmap for sustainable urban evolution to create a socially cohesive and economically sustainable community that preserves the Emirate’s unique social heritage. And as Aldar is Abu Dhabi’s leading property development, management and investment company, the plan and its guiding principles are central and critical to the entire development process.

Talal Al Dhiyebi, Director of Planning and Infrastructure for the fi rm, explains that creating developments that are truly integrated and ‘future-proofed’ means that infrastructure considerations for 2030 and beyond, “must be at the very heart of what we do”. And to that end, Aldar’s approach to planning and developing infrastructure involves high quality real estate, catering for a wide range of customers, across the spectrum of property types and sizes, for the long-term benefit of Abu Dhabi. “We are committed to delivering communities – integrated and sustainable developments that meet the demands of a growing and developing population,” says Dhiyebi. “In terms of specific infrastructure planning, this is very much a part of the detailed Master Planning carried out on our developments. Aldar ensures that its infrastructure is in line with the latest sustainability and Estidama guidelines. And this is done by utilising

URBAN EVOLUTION

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the latest management tools to ensure that the level and quality of the infrastructure is equipped to handle future expansion.”

With experience that spans every type of project, from commercial and cultural to retail and residential, Dhiyebi explains that working on such a variety of development projects is a challenge in itself, particularly given the sheer scale of some of the projects. At Yas Island, for example, Aldar recently delivered all the elements required for the inaugural Formula 1 Abu Dhabi Grand Prix, including Yas Marina Circuit, Yas Marina and seven hotels plus all the infrastructure requirements to cater to not only the fi rst stage of the project but also future elements that will include the world’s fi rst Ferrari theme park, the Middle East’s first Links golf course, and beyond that commercial and residential developments.

As part of this project, Aldar delivered a major section of a new highway connecting Yas Island to the heart of Abu Dhabi and was responsible for the delivery of a 23-kilometre section that including 22 highway bridges, 17 entry/exits and four underpasses, as well as a light rail transit bridge in preparation for the future transport requirements of Yas Island. “Delivering to a fi xed deadline and coordinating the sheer volume of people working on the project was the main challenge we faced,” reveals

Al Raha Beach Eventually home to 120,000 residents, Al Raha Beach is a mixed-use master development in a sunny waterfront location. Stretching over 11 kilometres, 11 precincts are designed to appeal to various clients; some feature quiet family villas while others are more vibrant with up-market apartments in lovely districts offering retail outlets along with galleries, restaurants and cafes. Residents also have the ideal opportunity to enjoy the beaches and all kinds of marine sports. A central business district pierces the skyline, where iconic office towers and residences are set around an impressive circular marina – home to the new World Trade Center building.

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the location of the original Abu Dhabi souk and this permeates through all elements of the redevelopment; this is particularly true of the new souk, which embodies the heritage and architecture of the original, albeit in a modern setting. Examples of this lie in the ornate external mashhrabea screens, creating a powerful visual impact, whilst serving a practical cooling effect; the colonnades with spill out areas for tenants; central squares that bring a meeting point and sense of community to the local area; a strong mix of tenants arranged to provide concentrated uses; winding internal streets to enhance the sense of discovery; roof gardens, high ceilings, ornate timber, bronze fi nishes and water features.”

Tightening the belt

Opening in 2010, Ferrari World Abu Dhabi is set to be the world’s largest indoor theme park

Dhiyebi. “With 68 different contractors and close to 50,000 workers involved, this project required logistical organisation of a military precision – keeping communication channels open was vital in this process.”

Beyond project delivery, Aldar is working to improve and innovate approaches to project management as well as ensure that the region’s cultural heritage is maintained in the face of all the new developments. “We have expanded our project teams to include all stakeholders from an early stage in order to fully engage them throughout the entire design process,” explains Dhiyebi.

“Project managers attend corporate level strategic planning sessions in order to get acquainted with the organisation’s long-term goals and understand how to implement these at the project level.”

Dhiyebi goes on to explain that the culture of the UAE plays an integral part in the planning of all Aldar developments, and that the company works closely with the Abu Dhabi Authority for Culture and Heritage (ADACH) to ensure that the cultural aspects of the development are integrated at the master planning stage through a Preliminary Cultural Review (PCR) process. The redevelopment of Central Market is an excellent example of how Aldar integrates UAE heritage with architecture into a modern development, says Dhiyebi.

“The site is historically and culturally important, being

While no-one has been immune to the global economic crisis, Abu Dhabi was and is particularly resilient. Dhiyebi believes that the underlying economic strength of the emirate has been a major factor, but as the leading developer in Abu Dhabi, the visionary approach to urban development that is Plan Abu Dhabi 2030, means that the organisation are working towards long-term strategic goals. “Despite the economic crisis our mission remains the same: Aldar has a mandate to build the nation and that means focusing on creating communities where local emirates and expatriates alike can create their lives and those of their families,” states Dhiyebi. “Aldar is a flexible business that responds rapidly to changing market demands and as such this has led us to adapt some of our development to cater to a broader range of customers, allowing for easier access to property ownership for new segments of the population.”

“With close to 50,000 workers involved, this project required logistical organisation of a military precision”

Dhiyebi goes on to explain that the company’s strong position allows it to meet all current and potential further commitments as well as chart a clear and confident course through the prevailing turbulence, whilst actively preparing for future success. Indeed, back in April 2009, Aldar CEO, John Bullough, said that it would be around six to nine months before any major improvement would be seen in the market. While Dhiyebi doesn’t

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Central Market

Yas Island

Designed by Foster + Partners, the former trade hub combines traditional charm and modern architecture culminating in three towers. The new Central Market will dominate the prestigious downtown neighbourhood with an integrated mix of up-market retail, business, residential and leisure facilities.

Located on the North East side of Abu Dhabi’s mainland, Yas Island is approximately 7.5 kilometres long by 6.5 kilometres wide and offers 32 kilometres of waterfront. An unrivalled destination with over 20 hotels, three theme parks, a Super Regional mall, golf courses, six marinas, commercial and residential developments, the first phase of development was completed in 2009.

wish to make predictions on the state of the market he does concede that Abu Dhabi will continue to remain attractive because of the underlying fi nancial strength of the economy, the planned and controlled approach to development and the plan for diversification away from oil dependency.

“Abu Dhabi has always been a great believer in infrastructure projects” “Abu Dhabi has always been a great believer in infrastructure projects and with the comprehensive development programme in place – Abu Dhabi 2030 – many infrastructure projects have already been launched such as the Sheikh Khalifa Freeway, Yas Southern Tunnel, Salam Tunnel, Al Raha Beach Interchanges, Mid-Field Terminal at Abu Dhabi International Airport and the new port at Khalifa Port & Industrial Zone – and we can expect to see many more in the years to come,” says Dhiyebi.

Sustainability and innovation While Aldar is continuing to roll out a high number of projects, the continuing objective is to create sustain-

able communities that meet the needs of current and future generations, and balance economic, environmental and social requirements. And as an increasing number of companies are championing the importance of sustainability, Dhiyebi explains that Aldar is continuing in it’s quest to bring a green focus into its design and development processes and reduce the environmental impact of large infrastructure projects.

Dhiyebi goes on to reveal that Aldar are endeavouring to incorporate the principles of sustainable development throughout the key stages of development; from conceptual master planning, through to detailed design and onto operation and management of assets and facilities. “We recognise that this is a labour and time intensive process, but we feel we are starting to see the fruits already,” he says, before adding, “For example, through our formalised Development Control Process we are engaging Aldar’s multi-disciplinary teams to ensure technical, commercial, environmental and social aspects are taken into consideration at each development stage. We are also supporting the Urban Planning Council’s Estidama initiative and seeking to use the draft guidelines that they developed to inform our design, where possible.”

There is no doubt that sustained innovation is also critical to the industry’s growth and development, particularly when improving green concepts, yet many firms

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are understandably wary of unproven techniques and approaches. Not so at Aldar. Dhiyebi says that innovation in infrastructure is essential to creating development that will stand the test of time. And, using Yas Island as an example, says that the implementation of world-class and environmentally friendly infrastructure systems not only benefits the operation of current facilities, such as the hotels and Yas Marina Circuit, but also the future phases that will open over the coming years.

“For example at our Yas Island development we have installed two state-of-the-art systems to benefit both cur-

rent and future users. The first is a natural gas network that consists of an intricate 28 kilometre network of polyethylene and steel pipelines with a future capacity in excess of 60,000 m3/hr to cater for all current and future developments on Yas Island.” Indeed, the clean burning natural gas is used to supply energy for cooking and hot water and is the preferred fuel of choice for the many new restaurants now open at the island’s seven hotels, says Dhiyebi. The system will also cater to residents at Aldar’s Al Raha Beach development following the completion of an extension.

The second state-of-the-art system is an Envac vacuum waste handling system, explains Dhiy Dhiyebi. Waste is transported at an avers e id v ag age speed of 75 km/h through a sealed o r p HQ l a n o underground network of pipes to a ti c n flexible, fu e central collection point, located apc ffi lan o and open-p proximately three kilometres away, ation accommod where it is sorted automatically. As ational n r te in well as the environmental benefits to t buil A e d of waste separation and recycling a r G n o a at source, the Envac system can also ti a specific hel help reduce traffic volume, provide a cleane cleaner living and working environment and reduce operational costs.

“Th is is the fi rst vacuum waste handling system in the world to service a major motorsports circuit – the system can handle up to 30 tonnes of waste per day, deposited at any one of the 36 inlet points currently located within the Yas Marina Circuit paddock, Yas Marina and the seven hotels. As with the gas network, the Envac system has been designed to cater for all future phases of the Yas Island project.”

While there is no doubt that Yas Island was Aldar’s most high profi le project in 2009, the developers have also delivered projects including Al Raha Gardens, a major residential project, Al Muna School, the third Aldar Academy and high quality office developments like Mamoura. Looking forward into 2010, Dhiyebi hopes to continue this track record of delivery with the completion of aspects of the major residential and commercial projects such as Al Raha Beach – a major waterfront development – and Central Market – a major redevelopment of the traditional commercial district of Abu Dhabi – as well as the completion of the HQ premium office building. At Yas Island there will be the HQ addition of Yas Yacht Club, Yas Links golf course and Voted ‘Best Futuristic Design 2009’ by the Building Exchange Conference, Ferrari World Abu Dhabi ahead of next year’s race. “In HQ represents the a striking addition to the Abu Dhabi skyline. Part of the total, we are going to deliver 3500 residential units and Al Raha Beach project, HQ provides flexible, functional and open-plan office 140,000 square metres of commercial space in the next accommodation built to international Grade A specification. Set upon an 18-24 months,” says Dhiyebi. “Consequently 2010 is elevated peninsula affording spectacular views of the city, canal and sea, HQ’s going to be a very important year and one in which there location provides an unparalleled working environment. will be lots of activity coming to fruition.”

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McLanahan ATE_7dec10 15/01/2010 16:15 Page 40

ASK THE EXPERT

Hybridising US sand washing John Best reveals how the sand washing industry has moved forward in the last two decades and why the hybridised approach has a proven background and strong future.

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mere 20 years ago the US market was dominated by a process technology which used classifying tanks (horizontal trajectory classification) and dewatering screws for the classifying and dewatering of construction sand products. Contrasting this to Australia, sand washing was based almost solely on pumps, sumps and cyclones; European producers (specifically in the Netherlands) were evolving a new design of plant using hindered-settling classifiers in ‘fractionation plants’ often known as ‘Recipe Plants’ – this design splits the sand products into three or four discrete fractions e.g. 4.25 mm x 2 mm, 2 mm x .5 mm, .5 mm x .3 mm and .3 mm x 75 μm.

These fractions are stored and are re-blended to create multiple, accurately graded, final products.

In 1998, this Recipe Plant technology was finally accepted in the US with the first installation of a four-fraction plant in central Florida; this was the most technically sophisticated plant of its type anywhere and was used in a fine, dune type sand deposit where glass sand was a primary product and multiple construction and industrial sands were needed.

The plant was unique in that the operating software monitored dredging conditions, blended the fractions, monitored incoming feed mass and storage-levels of the fractions, and provided prompts to the plant operator when fractions were at high or low levels actually providing suggestions on possible alternative products based on feed and residual fractions.

This reduced downtime and maximised production of high dollar value products.

This plant produced excellent results, based on product quality, product consistency, final-product mix (14 different products), reduced cement usage (reports of >USD $1.10/M3 saving in cement), but most importantly deposit yield. Over subsequent years, several more plants of this design were installed, but more recently with the move to more and more manufactured (crushed) sand and fewer permits issued for natural sand, this technology has somewhat stagnated for the construction industry but remains active in the industrial/specialty sand (frac sand) market where the same principals of fractionation are used. For certain types of deposit and certain markets, the Recipe Plant technology is still very valid.

In the late 1990s, plants based on dewatering screens and cyclones started to make inroads particularly for the manufactured sand market where the main requirement was

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to adjust the bottom end (<75μm) of the product gradation.

These plants grew in popularity because the recovery of usable fractions in the ~150μm size was vastly improved over dewatering screws and the resultant dewatering screen product was much drier (around 10 percent lower moisture for any given sand fraction). In later designs, the combination of variable screen aperture, divided decks, cyclone geometry changes and other adjustments allowed for more flexibility than normally associated with such a simple concept.

Today, for natural construction sand applications, classifying tanks are still being used where a middle fraction (e.g.

300μm x 600μm) requires adjustment. However, these plants have become more hybridised with the use of cyclones (for

“Producers can have confidence that the hybridised equipment and process designs have a proven background” John Best desliming/dewatering) and dewatering screens for final products; even in manufactured sand there has been a crossover in technologies. A good example is a 1000tph wash plant in Texas, US, where cyclones, classifying tanks and dewatering screens were combined to produce a manufactured sand for both specification concrete and mason sands.

It should be remembered that the equipment once considered ‘new’ in the construction sand industry (particularly hindered setting classifiers) was used, modernised and proven for over 40 years in the minerals industry. The initial reticence in construction sand industry was often explained by ‘not wanting to be the ‘first’’. Producers can have confidence that the hybridised equipment and process designs have a proven background; however, the plants are, as with most things, only as good as the people providing the technology and the back-up service. n John Best is the General Manager of the Aggregates Division of McLanahan Corporation. Starting in 1974, he has been actively involved in the design, application, selection and operation of hydroclassification and dewatering equipment in the mineral and construction aggregate industries in Australia and North America.

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PROJECT MANAGEMENT

The shifting sands of the project management landscape Gregory Balestrero offers his thoughts on how the project management industry is changing – and what it could look like in the future.

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t was 40 years ago that the Project Management Institute (PMI) came to life through the vision and dedication of a small group of working project managers. Four decades on we fi nd ourselves in the 21st century, with a wholly different landscape for the project management profession to the one that existed 20-30 years ago – and also to the one that will exist in 20-30 years time.

If we look back to the 1980s for example, the main trends in project management were limited to publications on human resources, team building and leadership. In 1984 PMI launched its fi rst certification programme and in 1996 project management started to develop increasingly organised ideas and processes – as evidenced by the publication of the first edition of the Guide to the Project Management Body of Knowledge, currently in its fourth edition. Fast forward to today and we can see that there has been a significant move towards more project-based work as organisations begin to realise the value in using project management to implement their goals and strategies.

So what can we expect from project management in the future? Certainly there will be an increase in the breadth of project types that will appear. The emergence of megaprojects that run across multiple markets and in multiple languages – such as Masdar, the zero carbon city in Abu Dhabi – will compound project complexity, leading to a growth in demand for multicultural and multi-lingual capabilities.

Moreover, we will also see three overarching factors – environmen-

tal sustainability, technology and social responsibility – play increasingly integrated roles in the planning, execution, delivery and legacies of programme and project management work.

Firstly, environmental sustainability is no longer the idealistic vision of an environmentally sensitive CEO. The current environment is forcing a change in business values. Visionary organisations are recognising they cannot depend solely on their fi nancial returns for ongoing success.

They know a smart customer will make ‘buying’ decisions based on the organisation’s environmental and social footprint as well. Th is requires innovative project management capabilities that establish sustainable, socially responsible and fiscally prudent programmes that will become essential in looking to add quantifiable value to their organisations.

Sustainability considerations vary considerably by sector, but nearly all industry sectors have reported at least some of these impacts in recent years. The recent spike in global energy prices brought sustainability to the forefront of nearly all projects, and the complexity of bio-additives such as ethanol create a tension between energy needs and food supply. As society reacts to address climate change, project managers are likely to be faced with ever increasing megaprojects to meet energy demands as well as new population centres and new transportation systems.

Secondly, from a technology perspective, it is clear that IT has already become and will continue to be more tightly integrated with innovative project activities through the use of tools such as virtual networking, surface technology and the mobile internet. Projects will be even more distributed and involve virtual teamwork. The information conveyed is the same, but the way in which it is conveyed has evolved and will continue to evolve as technological advances alter the way we share and communicate information.

New tools will be developed that will allow the project team to

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simulate virtually every project management decision, built using advances in technology used for the current generation of games, adapted and enhanced to apply to all situations that might arise in the typical project. The soft ware development genius behind games such as Grand Theft Auto and Nintendo’s Wii Fit will be unleashed on project management’s simulation development to produce platforms to train and enable project managers to fully understand decision ramifications.

Finally, social responsibility will dramatically impact human resources in global supply chains. Global suppliers are focusing on the workforces of suppliers, and evaluating them according to rigid and strict guidelines. As project professionals, the leader will have to be rigorous and vigilant with the supply chain and be ready to make decisions accordingly. It is clear that responsibility for the entire supply chain and its social and environmental impact will fall squarely on the shoulders of the project leader.

It is also important to acknowledge that the understanding of what constitutes project success is changing. In future, judgments on project success will include an even broader set of criteria than they do today and will span the entire business lifecycle, rather than just the project lifecycle. Th is wider approach leads us to look at how business strategy will become an increasingly dominant aspect in

this field – the awareness that project management can be linked directly to strategy, environmental and social responsibility, and innovation is evolving and will continue to do so. Project management is rapidly moving from a professional capability to an enterprise competency.

As a profession, project management will continue to be an experiential discipline, best learned by practice, credentialing, mentoring and job shadowing. Training, consulting and mentoring will play a large role in developing the skills of future project managers, but there will be a greater focus on a keener understanding of the relationship of their projects to business value, more sophisticated governance abilities and better communications skills. Much of the training will be simulation-based and will be embraced by the generation of project managers that grew up with computer games, iPods and mobile phones.

The project management community is poised for a period of extraordinary productivity, efficiency and integration due to technological advances, and even greater changes will come as a result of globalisation, collaboration and innovation in the industry as it takes its place fi rmly in the 21st century.

Gregory Balestrero is President and CEO of the Project Management Institute.

Interest in project management remains low

Construction companies are showing little interest in project management despite the need for cost control during the downturn and the urgent requirement for on-site safety. “There is a big misunderstanding, especially in the Middle East region, about the importance of project management and education in general. I know many people who will agree with this,” says Mounir Ajam, CEO of project management consultancy and training firm Sukad. “Some people view it as a bureaucracy and they don’t see that proper project management will help them improve efficiency, reduce costs and increase value for their project over the long-term.”

Quality and safety is expected to suffer for the next couple of years and construction companies are unlikely to invest in project management,

continues Ajam. “Obviously, in a fast-track environment, people want to produce buildings very quickly and usually the first thing they sacrifice is safety and quality. If people want to cut costs they usually do so by cutting corners.”

Ten to 15 years ago, there wasn’t a single university that offered project management, which has lead to limited skills in the field. However, the situation is getting better: “Usually the people who practice project management are technical people, for example business analysts,. These people are technically trained and then all of a sudden they are asked to manage a project with no prior experience. This situation is improving and universities are starting to offer training in project management.”

Source: www.constructionweekonline.com Written by Sarah Blackman on December 8, 2009

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THE BIG INTERVIEW

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Building confidence Crisis? What crisis? With the rest of the UAE reeling in the wake of Dubai’s recent debt concerns, Arabtec’s charismatic CFO Ziad Makhzoumi is betting on his firm’s sound financials to see it through the downturn and beyond.

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iven the building (not to mention fi nancial) excesses witnessed in the emirate over the last few years, it is refreshing to hear a Dubai-based senior executive at a major construction fi rm extolling the virtues of a measured approach to construction. And that is exactly what Ziad Makhzoumi, Chief Financial Officer at UAE contracting giant Arabtec, believes has enabled his company to weather the worst of the storm.

Since it first opened its doors for business in 1975, the fi rm’s successful execution of a vast array of major projects has forged its reputation as one of the industry’s most respected players. Today, its diverse portfolio spans the sectors of high-rise developments, hotels, residential, commercial and industrial, airport developments, stadiums, villa communities, mixed developments, entertainment and offshore oil and gas installations. Drawing on a multinational workforce of over 70,000 employees, as well as state-of-the-art plant facilities and equipment, Arabtec is uniquely qualified to tackle even the most complex and iconic of projects – including the recently completed Burj Dubai, the world’s tallest building, on which it was the main contractor.

Indeed, Arabtec shrugged off a difficult year that included ongoing payment disputes with developers and controversy over living conditions at its construction worker camps (claims vehemently denied by the firm) to fi nish 2009 strongly with a rise in its share price and the signing of several new contracts in locations such as Russia, Saudi Arabia and North Africa. And with a sound fi nancial base in place, Makhzoumi hopes for more progress in 2010.

Obviously the last 12 months have been tough for everybody in the industry. What have been your key areas of focus over that period – both as a company, and in your role as Chief Financial Officer?

Ziad Makhzoumi. Well, there are two issues. We were planning for a downturn from the end of last year. Around the end of the fi rst quarter

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of 2008 we expected things to get worse, and we started planning for them then. But, like most companies, no one could have predicted how fast it would hit, how severe the crisis was going to be, and what impact it would have. Nonetheless, we’re in reasonable shape for two reasons.

First of all, we concentrated on managing our cash – our receivables and payables – very well, and are trying to balance those as much as possible. We talked to our banks and confi rmed that there wouldn’t be any restrictions on the movement of cash or extra credit facilities – not that we needed any. So we prepared ourselves from the point of view that you have to be liquid to be able to meet your financial obligations. We talked to our suppliers and we came to an agreement with them in preparation for harder times, and we also talked to the developers and other parties about payment terms. So that was a function of my role as CFO to manage the present situation and the expected downturn.

On the other hand, we knew that Dubai was going to come to a standstill for many reasons. We have a big backlog of work that will keep us going for another two years here, but we’re lucky in the sense that we’re not looking for more work in Dubai. We knew we wouldn’t get any more major projects for the foreseeable future, and we had in fact already taken steps to expand our business during the previous year in

Qatar and Abu Dhabi, and we have long been planning for a move into Saudi Arabia. We had previously delayed our expansion there because the Saudi market was not as open as it is now and we were too busy on the numerous projects we were working on in Dubai, but now the timing is perfect for that move. So, these are the two things that really helped us in coping with the disaster that hit the market.

Do you think the slowdown in the property market has allowed developers and contractors to refocus on the infrastructure side of things?

ZM. I’m sure it did. The margins were higher on the residential side because people wanted their projects fi nished yesterday and were ready to pay a premium to get things done quickly. They wanted the cash to build bigger, more expensive projects, and that led to the frenzy that caused the prices to go up. At one stage, we were working on many sites seven days a week, three shifts a day. So I think it did lead many firms to focus on the residential sector.

Now everybody thinks they can get into infrastructure. It is not easy, however; you need to be qualified for the job and you need to be specified by the government, as most infrastructure work, unless it’s a

NEW HORIZONS

As Dubai’s construction industry continues to falter, Arabtec has strengthened its position by enhancing its portfolio in alternative markets.

Okhta Social & Business Centre

Nation Towers

Lamar Towers

St Petersburg, Russia

Abu Dhabi, UAE

Jeddah, Saudi Arabia

Situated in St Petersburg, the old imperial capital of Russia and its second biggest city, the project comprises a 400-metre high tower taking the shape of a flame (resembling the logo of its client, Russian gas giant Gazprom), three podium buildings as well as massive underground structures and special external works.

The tower will feature office space for the client and its subsidiaries, leisure and entertainment facilities, as well as a library and sports centre.

Located on the Abu Dhabi Corniche seafront, the award-winning Nation Towers is a mixed-use development project covering a total built-up area of over three million square feet that is expected to be commissioned by the end of 2011. It features a 64–storey residential tower, a 50-storey luxury hotel and office tower and a retail podium. A sky bridge at the 48th level will connect the two towers while an underground tunnel will link the tower to a beach club.

The SAR2 billion Lamar Towers project is an important strategic high-rise luxury project on the Jeddah Sea Front Corniche consisting of two towers of 60 and 68 floors respectively, and incorporating residential and commercial units as well as a shopping mall. The main investor in the project is Zahran Real Estate Company while the main developer is Cayan Investment & Development Company. The project represents a joint venture with Al Saad Contracting.

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private development, is government-backed. You can’t just go in as a foreign company and say, ‘I want work’. It doesn’t happen that way. You cannot go in if you’re not specified in Abu Dhabi and bid for work. You have the same issue in Saudi Arabia. So it’s not as easy as just moving the people over from residential to infrastructure projects, because you need the right background skills and qualifications. But having said that, there was defi nitely a movement towards a greater focus on infrastructure and the concentration is on that sector now. Oil and gas projects are also seeing a renaissance. When the price of oil was less than $30, lots of countries held back on spending on maintaining/upgrading their oil and gas projects, offshore platforms and so on. That is moving again, so we see a lot of potential in that, too.

Obviously, financials are having a huge impact on the way construction firms are operating through this downturn. So how do you see the role of the CFO changing, and how are you effecting that change at Arabtec?

ZM. The CFO can no longer be just a bookkeeper. They have to be a planner, they have to be a strategist, they have to be a supplier of resources.

Money is a commodity, it’s not something that grows on trees, so you have to manage it exactly the way you manage your stock, exactly as you manage your receivables. People assume it’s virtual, but it’s not. It’s physically something that can make things better or worse.

We are going in the right direction. We do have more sophisticated fi nancial systems that probably were not needed two years ago, but that have put us on a sound fi nancial footing. Now we are expanding, we have to prepare to export that control system to other countries and deal with taxation, import duties, etc. that we didn’t face before. That is the challenge.

The CFO also has to act as an advisor or a Chief of Staff, to tell the board and the CEO whether a project or a decision is viable. Not just because of regulatory reasons, although of course that is one important dimension, but also in terms of what you can afford and what you cannot afford; you need to advise the board on the best way of achieving your goals as a company. So the role of the CFO has to go beyond just historic data reporting. It has to be about planning, it has to be about control, it has to be about governance. It has to be all these issues that we are talking about. That’s how I see it.

Do you think it will also involve a greater knowledge and understanding of the technical and engineering sides of the business, and how they impact on the financial side?

ZM. Defi nitely. These are business issues and project-related issues. I believe a CFO has to have more actual hands-on business experience and knowledge, and not just behind-a-desk experience of business. We are a public company. I have to communicate with the media, so not only do I have to be a very good numbers man, I have to be a good communicator and I have to be a strategist. Because running in parallel to the commercial strategy is the financial strategy, and you cannot implement one without the other. In this climate – in any climate – there should be no such thing as blank-cheque management. We have to manage our balance sheet. So, it’s not just an accounting function anymore. It’s more of a leadership function, a specialist function, a creative function, to

An icon in the making Burj Khalita is the centrepiece of Emaar’s Downtown Burj Dubai, a $20 billion, 500-acre downtown development billed as the most prestigious square kilometre on earth that has provided a number of major construction challenges.

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he tower has been designed to manage the effects of wind and seismic movements, with a super-structure made up of high-strength concrete supported by large reinforced concrete mats and piles. The 80,000 square feet foundation slab and 50-metre-deep piling are waterproofed and feature cathodic protection. The steel bars that reinforce the structure weigh a total of 31,400 tonnes, and if laid end-toend would stretch more than a quarter of the way round the world. The concrete used is equivalent to a 1.5-metre wide pavement over 1200 miles long, and is equivalent to the weight of 100,000 elephants.

Primary materials of the exterior cladding system include reflective glazing, aluminium, textured stainless steel spandrel panels and vertical stainless steel tubular fins that accentuate the height and slender design of the tower.

The structure also poses a number of challenges in terms of energy efficiency. At peak cooling time, for example, the tower will require 10,000 tonnes of cooling per hour, equivalent to the capacity provided by 10,000 tonnes of melting ice in one day. Meanwhile the tower’s water system will supply an average of about 946,000 litres of water per day, the building’s peak electricity demand is roughly equivalent to 360,000 100-watt bulbs all operating at the same time, while its condensate collection system will provide around 15 million gallons of supplemental water a year, equivalent to nearly 20 Olympic-sized swimming pools, which will be pumped into the site’s irrigation system for use on the tower’s landscape plantings.

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be able to cope with the challenges and obstacles and find ways around them. In some cases, CEOs have not faced such a crisis before, and it is a fi nancial crisis, nothing else. And unless you have that knowledge, you have a problem.

be some clarity in terms of what-if scenarios. And there are some cases that will test the system that we want to see the outcome of; hopefully it’ll be positive because it’ll add to the image of Dubai as a fair and open and transparent place to work, to live and to do business.

On that note, there’s been much in the news recently about various disputes between contractors and developers. What has been your experience with that issue in the past 12 months, and how have you managed that process to minimise the impact?

ZM. Of course, when things are going well no one gets angry or goes into dispute. And when things are bad, one of the ways of resolving that dispute is go for arbitration or litigation of some sort, in the hope that an official body will arbitrate and try to resolve the issue. And those types of incidents have gone up in the last year or so, because people are panicking about getting their cash – if you don’t get paid, you can’t pay your employees or your suppliers. Your suppliers might then sue you or your workers might go on strike, and then you’re in a difficult position.

I think some of the most recent events highlight the fact that we possibly need more clarity on regulation, or even more regulation. I’m not a person who likes more red tape just for the sake of it, but there needs to

You also mentioned about the importance of people in the construction business. So how are you really driving that culture of people development?

ZM. I’ll give you an example. If you pay $90 million for a jet plane but you don’t have a pilot, it’s just a very expensive piece of junk. So you have to have the right people who will take your assets and maximise their revenue. Yet in many businesses – not in Arabtec, because we value our people very highly – people are not considered an asset. Th is is a mistake.

People are the most important asset you have as a company, because it is them that implement the strategy; after all, you can’t do everything on your own. We have 70,000 employees, so we can’t go in and make decisions for each one of those workers. They have to make those decisions on how to build the buildings, how to deliver work on-time, how to be safe. We want to ensure that they follow procedures and so on, but unless you train them well and you work with them and incentivise them in a way that will produce that, you will not achieve your aims.

And we believe we’re one of the better companies. I’m sure we can always improve.

“In this climate there should be no such thing as blank-cheque management”

T

ROOM TO GROW Ziad Makhzoumi outlines Arabtec’s expansion plans for Saudi Arabia, Qatar and Abu Dhabi.

hese are three very different markets in the sense that their dynamics are different to Dubai. For one thing, Dubai is more dependent on foreign investors buying property.

In addition, the scope and the ambition of the projects in Dubai is so huge. It has the world’s tallest building. It has a metro where no one else in the region has. They’re talking about building a rail system from scratch. They are already building a new airport, extending the seaport, and so on. And it even has clusters of new islands that have redefined the shape of the coastline.

Abu Dhabi is different. The government there is more conservative in its views. Abu Dhabi’s population is growing and there is a shortage of dwellings there, so building affordable housing is increasingly important. A few years ago, people who used to live in Abu Dhabi would come to Dubai, but now it’s the other way around; they live in Dubai and travel to Abu Dhabi.

Rates are still higher in Abu Dhabi, because there is a housing shortage, but what is different is that demand is coming not only from external investors or buyers, but also from the people who actually live and work there. So that more conservative attitude to investment has helped. Abu Dhabi is also one of the biggest producers of oil in the world, so they have an income that can support those projects and that expansion. Plus, the infrastructure work that they’re doing is helping. If you look at Abu Dhabi, there

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We’ve been in the press recently for the wrong reasons – unfairly in my view, because following all the negative publicity we invited the press to visit our labour camps and they came and saw that much of the stuff mentioned in the programmes was untrue, incorrect and out of context.

However, this doesn’t mean we cannot improve. We are always improving. We follow the labour laws and go beyond them. But, we also need guidance. And when you’re growing as quickly as we are – up to 70,000 people from less than 20,000 four years ago – you’re bound to miss some things and not get everything perfectly right.

As a result, we always review our processes, and we always talk to our people. My staff have an assessment meeting every three months.

We talk and discuss targets. They have access to me whenever they want.

We have a hierarchy, accept our responsibilities and are very active in putting things right. Our CEO, Riad Kamal – who is a brilliant and visionary leader, as well as a great communicator – is trying to push that culture all the way down through the organisation. We are close. But, we also accept that everyone must take individual responsibility for what happens in the organisation.

So you have quite an open culture in terms of lines of communication between members of the management team, but what about communication between senior management and those people on the lowest rung of the corporate ladder? Is there an opportunity for those workers to have a voice?

ZM. There is an official process for that, of course. But in addition to that, every month we go and visit the camps and have dinner with our workers. For instance, we had a big Indian night last month where there were 5000 people, including myself and other members of the manage-

are many projects. There are six hospitals that we are aware of being built. You’ve got two museums that are being built. You’ve got universities being built. There’s also the expansion of the airport, the seaport, the new downtown that they’re talking about. So, the new UAE construction market is Abu Dhabi – and how fast or how slow that grows is a function of how fast the government wants to go. And of course, that will be triggered by the surplus of cash generated by oil prices.

Saudi is a completely different story, because they do not build at all for foreigners. Very few people are going to buy a holiday home in Saudi. One the other hand, it’s a very big population and a very big country, and is in greater need of infrastructure development. And it’s not necessarily just roads and airports, although they’re looking at renovating both. We’re talking about universities. We’re talking about developing more opportunities for a sector of society that wasn’t previously as active: women. The government also wants to be a centre of excellence for information technology, so they’re pushing that in Jeddah. You’ve got the development of the economic cities that are happening. So, the market there is completely different, and in theory, it will be much bigger than the whole of the GCC put together. We think that Saudi will be, eventually, the biggest market for us – or any contractor in the GCC.

ment team. And we do talk to them: sometimes they say thank you and sometimes they complain, but we’re always open. Sometimes they have a genuine grievance, and sometimes they don’t. It’s like a big family, and there are brothers and sisters and cousins; not everybody is happy with everything all the time, and there’s jealousy, there’s all sorts of disputes.

But there’s also respect, and we try to keep that culture going. We’re always improving, and I hope we can always get better at what we do.

And as I said, there are bound to be some mistakes made when you are trying to please 70,000 people. You learn from it, and you hope that it will not happen again.

And so, going forward, what will be your key areas of focus in the short term?

ZM. As a company we have to keep the momentum going and maintain our current business, while at the same time looking at expansion into other areas – be that geographically or in different sectors – which we are doing. We need to excel in certain areas that we’re very good at to ensure that we keep that uniqueness about us, that we deliver quality in everything we do. As a CFO, I need to make sure I support that expansion and give it all the resources I can. It’s not only people; on a strategic level people are extremely important, but to implement the strategy successfully you need resources, and one of them is money. And that’s my job.

We’re expanding outside Dubai. And we’re going to areas where they’re many years behind Dubai, like Libya, Algeria and Russia. These are new economies that are oil and gas dependent. They need the infrastructure and they need the skill, so I think for the coming 10 years we’re quite well set. Hopefully, by then, we’ll have new strengths and new skills and new opportunities, and we’ll create new sectors.

Qatar is in a unique situation in that is has gas, and is the third biggest producer in the world. Again, they are trying to emulate Dubai, but I think that is going to slow down as a result of the current confidence in the market. I don’t think growth there will be stopped, but it’ll be slowed down. So, instead of finishing projects in two years, they might finish in four or five years. As far as we’re concerned it doesn’t matter, because somebody has to finish those projects and we are there to help them. And plus, with all the infrastructure work that they need on the gas side, there will be plenty of work.

North Africa is also big for us. Libya, we think, is a very important market. We’re pursuing some projects there. Algeria is a very big market. Egypt has always been interesting, but only if there is a specific project where we have a competitive edge; we can’t compete on price because the locals will be cheaper. We have projects in Syria and I think, again, that’s a very interesting market for us. We have a project in Jordan, but I think that will be affected by the economic recession and the political situation in the area.

Plus we have a major project in Russia, which we were invited to bid for and were awarded the project because of our experience and reputation. So, we have a brand name. We have credibility. We have a very good product and service that we can build on, and that was basically our strategy for extending our operation outside Dubai. www.menainfra.com 51

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MANAGING RISK

PART OF THE PROCESS Is risk management finally being fully embedded in the way projects are planned and managed? Faithful+Gould’s John Cowling explains why he believes the industry has come a long way in a short time.

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ithout doubt, enhanced collaboration across project teams and disciplines is transforming the construction industry – and nowhere is this being illustrated more clearly in the Middle East region than at Faithful+Gould. Whilst the company – a subsidiary of Atkins – is globally recognised in the construction industry for cost management and quantity surveying services, the firm also offers additional value-added services including project and construction management, strategic facilities management, asset management, risk and value management and sustainability. John Cowling, Head of Risk at Faithful+Gould, believes this depth of service is one of the keys to the firm’s success. “Whenever I require assistance, such as an enquiry outside my remit, I know I have this comprehensive knowledge base I can call on from across the broader global Atkins Group,” he explains. “I can receive very positive, rapid and accurate responses from across the worldwide Atkins business, which comprises around 16,000 staff.”

Risk management is one area that has benefited from this more collaborative approach. Faithful+Gould sees integrating risk management into organisational processes as an important part of any company’s continuous improvement cycle; often clients have a need to integrate risk management with value management and value engineering, because the two dovetail really well together. And as the market matures, Cowling believes there is significant potential for clients to further enhance their regional capabilities through the application of risk management systems, tools and techniques.

John Cowling

For many people, managing projects means managing risk. What kind of approach do you take to risk management, and how do you embed that into the project management aspect?

John Cowling. Firstly, it must be said that Faithful+Gould has risk management embedded as a key component of our project management process.

However, we also offer complete consultancy services across entire client enterprises. We are grateful that many of our clients consider the benefits that flow from implementing a risk management framework in enhancing their existing business processes and decision-making process. We often talk in terms of the concept that risk management enables you to operate with ‘your eyes wide open’.

When our clients commence a project with their eyes wide open they usually have a clearer understanding of the issues, resulting in more informed decisions being made and a lesser likelihood of falling into the normal sort of problems or issues that you might otherwise encounter. We find that as the expatriate community often has a higher turnover of personnel then perhaps in other more established parts of the world, it is more important to have robust processes in place to ensure that there will be a legacy of continuity with-

in the client’s operation. It’s very important to get these processes embedded early throughout the organisation as the benefits have potential to extend beyond current projects – and by integrating lessons learnt into their processes, their continuous improvement cycle continues, which adds further value to their organisation.

So it becomes a cultural element as opposed to just a project management element?

JC. Exactly. A large part is about change management, and managing the risks inherent in changes to an original project plan. People have been using risk management on their projects for centuries, from the building of the pyramids and the aqueducts in ancient civilisations, to the building of the Burj Al Arab. They all applied risk management in their processes. It’s just that in recent years we’ve developed more sophisticated models that produce more consistent results. These make it easier to determine the likelihood and impact of negative risks, and what we could do subsequently to transform these threats into opportunities. For us here at F+G, it’s about how we can do it better, as well as making it easier and more userfriendly. Our client-focused philosophy is for making risk management more of a process driven and scientific model that produces tangible results. This ensures that collaboratively, with our clients and stakeholder, we improve consistency.

Now, obviously, the last 12 months have been tough. Have you seen attitude to risk change during that period?

JC. I look at the construction industry in the last few years as a bucket full of holes, but instead of being filled with water it’s been full to the brim with money. But the water or money level never got down as far as the holes because no matter how many holes you had, there was so much money pouring in with the pace of development that it really didn’t matter.

Well, now it matters. Now, I find clients looking for ways to ‘plug the holes’, and one of the tools they can use to do this is to employ risk management which proactively assists them to more efficiently use their resources.

Clients are much more receptive to the concept of managing risk now than they were perhaps two or three years ago. They’re saying, “We need to work smarter, not harder – we need to also stay one step ahead of the rest.”

And that’s what I see as being the opportunity right now. Our risk management philosophy has always been ‘think, plan, do.’ When we enhance our ‘thinking and planning’ stages, we significantly enhance the efficiency of the ‘doing’ stage.

So really, managing the risk has become a way to drive value and reduce a lot of those inefficiencies?

JC. That’s right. Recently in discussions with a client we were evaluating risks in their supply chain and procurement. As they were sourcing their sanitaryware from an international firm outside the region, we had identified several

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project risks that included disruption to the manufacturing process, currency fluctuations, and transportation / logistical concerns, all of which could cause delays and increase costs. As we considered how we could mitigate these risks, and balance the function of the required items versus costs, we discovered that there was a local manufacturer who could directly supply the specified quality and quantity within a 30-minute drive. We had effectively mitigated the risks associated with the potential impact of currency fluctuations and the potential impact of transport delays. At the same time, we identified how the client could save a significant amount of his budget, which also allowed him the opportunity to use these funds elsewhere. An additional benefit was that this allowed the client to increase his percentage of locally manufactured materials assisting with the local economy, one of the key drivers of the overall project.

This is one example of why we at F+G prefer to embed risk management with value management (value engineering), as they are not standalone processes and their integration into a project process can have significant benefits for the project as a whole. We believe risk management is about seeking opportunities for solutions.

Our clients often ask us for assistance to further empower their personnel through training and the provision of processes and tools, such as a userfriendly risk register that includes a reporting capability that enables their project teams to track and monitor their progress. In many instances these additional services provide our client’s teams with extra competencies that enable them to achieve enhanced management skills.

Now, this region is renowned for the pioneering nature of the projects it undertakes; they’re daring and ambitious, both technically and in terms of their scale and scope. And obviously, the industry as a whole needs those innovative approaches in order to grow and to develop further. But, having said that, many firms are understandably wary of embedding innovative new processes if they’re not proven; they’re wary of jumping into the unknown. So, how do we balance that risk/innovation equation – or better still, take risk out of the innovation process altogether?

JC. When we initiate a project, often in a workshop together with the client and their major stakeholders, we’ll look at project objectives, stakeholder engagement, issues and a whole range of defined criteria. This process efficiently assists us all to define the project specifications and provides us with an accurate overview of what the client actually needs and wants – for example, whether they desire their project to be perhaps iconic or purely functional. We find it critically important to thoroughly understand our client’s needs, and understanding what our client wants to achieve through this specific project. Communication has to flow across all aspects of the project, and is essential to assist in the mitigation of potential risks.

As the market matures, particularly within this region, clients and developers are increasingly looking for best practice, world-class methodologies.

With the publication of the recent ISO 31000, the new international standard for risk management, many industry leaders not only recognise that risk management is a standard international best practice, they also demand that risk management processes be implemented in their businesses.

This region thrives on innovation and new ideas, and often once we demonstrate how implementing a risk management system delivers tangible benefits, such as assisting as a tool for measuring the likelihood of success for innovative options, our clients immediately understand how these processes provide them with greater comfort when making early stage decisions.

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The idea of sustainability has been around for a while. What challenges do you think need to be overcome for sustainability to become part of the fabric of everything we do as an industry, rather than as a standalone topic in its own right?

JC. It’s interesting. From a risk point of view, if governments regulate the need for sustainability then it becomes part of the project objectives. And it will assist in reducing some of the risk, because right now there’s a lot of discussion about whether or not to include sustainable thinking and specifications in your design, and how far to go in terms of implementing standards, of which there are many.

Design standards are, in part, still in the development phase in certain emirates and once all standards are fully enforced, design teams will have no option but to embed sustainable solutions into their designs. This is a good example of where a perceived threat can be turned into an opportunity as innovation in sustainable solutions may impact on the desirability of completed projects. A perceived restriction can be turned into a positive outcome in terms of environmental impact, commercial return and brand desirability.

Once financiers, clients, developers and designers grasp this opportunity, the challenges may be mitigated somewhat.

How much do you think the region is really embracing the idea of sustainability? Given the huge development that’s taken place there over the last 15 years, do you think Dubai, in particular, has missed a trick by not embedding the concept of sustainability into all its processes from an earlier stage?

JC. It would be inappropriate and unfair to focus solely on Dubai in terms of the idea of embracing sustainability, as over the last 15-year period the implementation of sustainability varies broadly across both the developed and developing world. What is clear from our experiences in this region is that sustainability, facilities management and asset management have become far more embedded into design team solutions. There does seem to be a positive shift in thinking towards whole-life appraisal rather than the previous norm of the short-term view.

Many currently consider the financial cost of sustainable or ‘greenfriendly’ items as somewhat prohibitive. Once the cost of such items significantly reduces, then the implementation of sustainability will increase. From a risk perspective, the benefit of a greater focus on sustainability is that we will have less risk attached to the supply of energy, because we’ll use more renewable energy techniques, energy-saving processes and materials. Over the longterm the application of sustainable infrastructure will actually reduce risks associated with utilities, which is a positive outcome.

Our in-house sustainability experts are working with several large regional clients to determine the cost benefit ratios attached to a number of sustainable applications, which in turn often leads to life cycle modelling to ensure the most cost efficient solution is implemented.

Do you think it’s still the case that if people are given the option of specifying a sustainable product or a cheaper product, then they’re still going for the cheaper product? I mean, I guess it’s particularly pertinent in the current climate.

JC. It really depends on how people perceive cost and whether a developer, for example, is going to retain the management of the completed asset. Obviously there is the one-dimensional financial cost consideration but this needs to be

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balanced against the social and environmental savings that can be had. A What opportunities does the transportation sector present to contrac‘cheaper’ option in financial cost terms can in fact be the more expensive optors and construction firms within the region? tion over the whole life cycle and we see more organisations investing in JC. The opportunity for the F+G/Atkins group is certainly to participate in greater strategic long term planning and modelling. world-first infrastructure projects, to do things that haven’t been done beSociety as a whole can have a great impact on the built environment if fore and to be instrumental in delivering a tangible benefit not only for they direct their choices towards developments that can demonstrate government, but also for the community. Within the F+G/Atkins group ‘green’ credentials. If we, as a society, strive to make our choices based on we’ve had the opportunity to be involved in major transportation projects strong sustainable principles, the built environment and those responsiacross the region, including the Dubai Metro here in the UAE, the ble for it will have to rise to that challenge.

Makkah Metro in KSA and the Gautrain in South Africa. We’re also acThe client’s vision for the project is tive in a broad range of coordinated serparamount. In our workshops, defining and vices covering planning, infrastructure, confirming with a client what their objecutilities and buildings across a number of Risk management: a definition tives are is key to defining the terms and dimarket sectors. These all provide us with Risk is defined in ISO 31000 as the effect of rection of the project. We’ve been called in the opportunity to provide tangible beneuncertainty on objectives (whether positive or to help on projects that were experiencing fits to local and global communities. We negative). Risk management can therefore be difficulty both with programme and budget can proudly state that what we have considered the identification, assessment and – yet when we facilitated a risk and value achieved has actively improved people’s prioritisation of risks, followed by coordinated management workshop with the client and lives. We all work collaboratively together and economical application of resources to their major stakeholders and defined the and the opportunities for everybody are minimise, monitor and control the probability client’s objectives, we achieved a moment of amazing. There are a considerable number and/or impact of unfortunate events or clarity for everyone in the room. Suddenly of regional mega projects still being conmaximise the realisation of opportunities. Risks you could see all the different stakeholders structed, which equates to considerable can come from uncertainty in financial markets, comprehending what the client wanted and opportunities and rewards for all conproject failures, legal liabilities, credit risk, needed from the project, and then we cerned. accidents, natural causes and disasters as well as worked with all the participants to ensure deliberate attacks from an adversary. Several risk an agreed course of action to ensure the And as the risks come down, those promanagement standards have been developed project would have a greater opportunity jects become more attractive. including the Project Management Institute, the for success. We find these moments excepJC. Our aim with project risk management is National Institute of Science and Technology, tionally rewarding as we are actively assistto assist our clients to identify and manage actuarial societies and ISO standards. ing clients in achieving their goals and the likelihood and the impact of threats to Methods, definitions and goals vary widely objectives. the project. When we reduce either the likeaccording to whether the risk management When client objectives include sustainlihood or the impact – or preferably both – method is in the context of project management, then effectively we are making the project ability parameters, then we can ensure that security, engineering, industrial processes, financial more attractive to our client, their investors all stakeholders understand their deliverportfolios, actuarial assessments, or public health and their customers. We encourage ables and thus we can ‘plan, design and enand safety. The strategies to manage risk include our clients to engage in our able’ accordingly. If the client’s objectives transferring the risk to another party, avoiding the processes – to identify, analyse, don’t include sustainability, then obviously risk, reducing the negative effect of the risk, and evaluate and control or mitigate those considerations become less important accepting some or all of the consequences of a their risks.

Once we have mitigated in the overall delivery of the project. particular risk. those risks, they invariably find that Certain aspects of many risk management the potential for cost overruns or What are the biggest challenges the restandards have come under criticism for having no project delays have also been region faces in terms of its future develmeasurable improvement on risk, even though the duced. With these demonstrable opment? confidence in estimates and decisions increases. tangible benefits of risk management, JC. One of the great regional challenges innot only does our client reduce the risks to cludes transportation, both domestic and their project or business, they’ve also opened international. Many of the countries in the up avenues for greater opportunity and greater sucregion are experiencing tremendous growth in cess. It’s the F+G/Atkins formula – to take enormous pleapopulation which demands a corresponding insure in assisting our client to achieve greater success, as everybody crease in their role as a major hub for people and wins. We aim to have our processes embedded in our client organisation’s freight to move in and out of the region. Whilst transculture and processes to ensure their greater success – not just for this project portation is going to be a huge challenge, the GCC rail proposals will adtoday, but for their projects of tomorrow. Our risk management philosophy dress several of these issues. Currently, the UAE is leading the region, with is really about assisting our clients to plan for success. n Dubai one step ahead in the opening of the Dubai Metro.

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INDUSTRY INSIGHT

Sustainability

in construction Michael Sagermann underlines the importance of sustainability at the Atlas Copco Group and reveals how the company is looking to improve sustainability through product development.

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ustainability was significant to the Atlas Copco Group long before sign phase of its new products and in continuous product development. this area became a popular business trend. A significant part of the The Atlas Copco Group’s main environmental impact is related to CO2 emissions during the use of the products. Atlas Copco’s products and soludesign phase in new product development is paying close attention tions are continuously improved in regards to customers’ demands relating to reducing the environmental impact of our products – the belief to quality, costs and efficiency, as well as in regards to ergonomic, environbeing that there is always a better way of doing things. And from a corporate mental and health and safety aspects. responsibility perspective our aim is to provide The Atlas Copco products sold into the best products and services to our customers, The three dimensions of sustainability the Middle East meet or exceed the latest with the minimum negative impact to the local Atlas Copco has grouped its main sustainability European norms related to noise and excommunity and environment. activities in three dimensions: haust emission levels. We have a local reFrom the point of view of sustainability, sponsibility to the community and its Atlas Copco’s vision is to become and remain Community engagement: for example, our residents, and therefore we offer only the first in mind for its key stakeholders. This vision Water for All programme of providing assisEuropean norm products. The benefits is also the driving force of the group’s sustaintance to develop clean drinking water access are not only to the environment and ability strategy, and the objective is to be a good in regions where potable water is scarce local community, but there is also the corporate citizen in each market. As such, Atlas benefit of increasing our customers’ Copco is committed to making a positive impact Re-engineer internal processes: for example, profitability through more efficient soluwithin its sustainability framework: through the ISO 14001 in all production processes, supplitions in their processes – either by reduceconomic, environmental and social dimensions, er evaluations and HIV/Aids programmes ing the operational costs, or increasing and through the pride among employees in the their productivity, or both. group’s values.

Re-engineer the larger environment: for exThe Copenhagen Climate Change For the fourth time, Atlas Copco has been ample, launch innovative products that shape Conference has brought worldwide atselected as one of the 100 most sustainable comthe regulations and push the industry to tention to the effects of our actions on panies in the world. By and large, the group’s proadapt to new standards the world’s climatic changes. Atlas duction units are ISO14001 certified and Copco believes that it is our responsibilsuppliers are encouraged to have an environity to take actions to address this probmental management system. lem, from local to global levels. Our hope Locally, Atlas Copco Services Middle East has engaged with the comis that our customers, and potential cusmunity through a career development programme under the STEP PROtomers, appreciate the benefits of our GRAM banner, to develop local Saudi people within our aftermarket business products to save their profits while at the area. They participate in a training programme designed to provide all the same time helping to save the planet. necessary skills to become certified compressor and generator service techni-

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cians – potentially furthering progress in career paths and reducing reliance on foreign resources.

The environment has been a key concern in developing new products.

Atlas Copco products have their main impact on the environment, not when they are produced, but when they are being used through the energy required to operate them. Atlas Copco works to reduce this impact already in the de-

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Michael Sagermann is the Regional Business Line Manager, responsible for the Portable Division product lines, with Atlas Copco Services Middle East. With 16 years’ experience within the Atlas Copco Group, having worked in sales and production facilities in Canada and Belgium, Sagermann is presently based in Bahrain.

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DISPUTE RESOLUTION

Resolving contractor differences With the complexity and volume of contractual disputes on the rise, is a new approach to contract resolution needed?

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s development projects have become larger and more complex over the last three or four decades, the incidence of disputes and their complexity have both increased. Whether the disputes flow from inadequacies in briefing, inadequacies in the procurement processes or inadequacies in the management of the construction process itself, they are often so complex that few, if any, individuals can comprehend a dispute entirely.

Dr Imad Al Jamal, Vice Chairman of the UAE Contractors Association and a leading expert in contract development, mediation and arbitration, believes the increasing number of contractual disputes within the construction industry call for more simplified, straightforward and clear contract documents with clearly defined time limits on actions, decisions, determinations and responsibilities with regard to employers, contractors and engineers.

“The game has changed drastically over recent years with the advent of the computer age, privatisation, the need for more qualified experience and the fact that specialised contractors are having more input into the design, construction and implementation of engineering projects,” ex-

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plains Al Jamal. “What is needed is the introduction of design/build contracts and engineering procurement contracts that clearly define the design and consultancy role of the contractors and the need for a specialist practical expertise and knowledge in an ever expanding and complex engineering world.”

Since its establishment in 1913, many in the industry have looked to the International Federation of Consulting Engineers (FIDIC) for guidance in the field of contracts preparation and development. But Al Jamal believes tackling the latest developments in the construction industry requires both greater clarity and the active involvement of the contracting industry. “FIDIC in its early stage of development relied heavily on legal terminology and phrases that contained substantial ambiguities and uncertainties and couldn’t be implemented easily by engineering professionals,” he explains. “However, the present economic situation – and the problems and disputes arising as a result – require a more affirmative and simplified approach, as well as concise documents to deal with the divided and overlapping lines of contractual, legal and financial responsibili-

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ties and duties on the part of all participants.”

For one thing, he believes that the heavy use of vague and improper terms such as ‘as soon as possible’, ‘as soon as practicable’ and ‘within reasonable time’ should be completely omitted and replaced with clearer and more concise timeframes, bearing in mind the precise and calculated nature of engineering and construction contracts.

Secondly, he feels that the active participation of contractors would enhance the standards and knowledge needed in various advanced and complicated engineering fields, and could potentially reduce the number of disputes arising in the first place. Indeed, with many major contractors establishing their own in-house engineering and design arms, contractors are often able to provide expertise and knowledge in terms of planning, design, construction, completion, testing, handover, maintenance and operation of projects that is well above the standards and expertise of some consultants. As such, the exclusion of contractors from the preparation of and involvement in FIDIC task forces and committees designed to tackle contractual disputes (traditionally influenced by consultants and legal experts to a large extent) must be addressed. “We need hands-on experience with the day-to-day problems and practical implementations of the projects rather than a purely theoretical approach,” explains Al Jamal.

Even so, disputes will always arise, and the major dilemma for most contractors and subcontractors is resolving disputes arising from or during their works in a cost-effective, timely and controlled manner. Yet Al Jamal feels that current dispute-resolving procedures such as legal action through the courts, arbitration, conciliation and other such techniques are failing to achieve the desired results. Instead, he proposes what he calls a ‘time-bound arbitration’ approach to dispute resolution that requires an ongoing arbitration panel to be formed at an early stage and meet regularly during the construction period to resolve any issues.

“The formation of the TBA panel should be carried out during the tender stage or at the time of the contract/subcontract agreement as negative attitudes, bad feelings and tensions do not exist at this early point,” he says. “This will make it easier to agree on qualified and competent arbitrators in a short time period and with-

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TIMEBOUND ARBITRATION The advantages of the time-bound arbitration approach include:

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Speedy resolution of disputes if and when they arise Drastic reduction in time spent on litigation and ordinary arbitration Reduction of correspondence, filing, cost and time involved in following up disputes over long periods Prevention of minor disputes developing into major and complicated problems that will be difficult, expensive and timeconsuming to resolve Completion of all works with minimum disputed items, which reflects positively on relations within the construction industry Prevention of cash flow problems for smaller contractors due to withholding of large sums of money by the main contractor or owner because of lengthy and costly disputes Relieving the judicial system from the burden and time of handling contractual and specialised disputes Enhancement of relations between clients, contractors, sub-contractors, suppliers and consultants

out the tension that is usually experienced during the construction stage.”

Both parties to any dispute should refer their claims to the panel 30 days prior to its official meeting date, which will give panel members ample time to study and verify documents, as well as the various claims and counter claims from each party. The panel will then have the responsibility to analyse and resolve the dispute, and provide any recommendations and judgment within 30 calendar days from the convening date. “The panel’s decision should be firm and binding for both sides, with no room for further recourse to litigation or other dispute resolution methods,” says Al Jamal. “This should be clearly stated in the contract.”

He believes such an approach would contribute towards minimising and avoiding the “snowballing nature” of expected disputes and problems that arise during the practical execution of the contract between the parties.

“Dealing with engineering disputes from the outset is essential in order to ensure the smooth running, completion and handover of the engineering contracts,” he says. “What is more, the expense involved in setting up a time-bound arbitration committee is minor compared to the heavy costs involved in ordinary arbitration and legal proceedings, where an open-ended time span is often experienced.

It will reflect positively on completive pricing and contribute towards progress and prosperity in the construction, real estate and other related industries. And it will have a positive impact on the economy and development in general, with a greater confidence within the industry that prices quoted by suppliers or contractors are not inflated in order to meet delayed payments due to disputes.”

Of course, some disputes are unavoidable, but adversarial behaviour in resolving the dispute is usually counterproductive, especially when it is complex: it delays the execution of remedial measures, increases legal costs, creates adversaries and thus wastes resources unnecessarily. It also saps the energies of the parties in dispute unnecessarily, diminishing their ability to function effectively in the future. As such it is essential that we create an atmosphere of openness and cooperation within the construction industry – and this is what time-bound arbitration hopes to achieve.

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EXECUTIVE INTERVIEW

A line of defence PANOLIN’S Patrick Laemmle examines the latest trends and developments in the lubrication sector.

What challenges do companies in the construction industry face in terms of their lubrication requirements, and how has the lubricant industry responded to these challenges?

Patrick Laemmle. It is not obvious but lubricants can have a huge impact on the construction business and therefore on all stakeholders in and around the construction industry. Every construction company must be competitive in three different aspects: economy, technology and environment.

Economy: It is the target of every company to have a certain profit. Only this profit enables the company to make investments and therefore guarantees the continuance of the business. Th is economical success is based on hard work in combination with technology and environmental factors.

Technology: Only the right technology guarantees efficient work and contributes to the target of the company – economical success and sustainability.

Environment: We are facing many changes in our business world today, due to both a natural progression and the globalisation of the last few decades. No company can ignore the environment; only respect for the environment contributes to the sustainability of the business. Global trends such as reducing the exhaust emissions of heavy diesel engines in construction machinery are important for the construction industry as well as ensuring a reduced impact on the environment in general.

How can a lubricant assist to achieve these goals?

PL. PANOLINs top tier ECLs (environmentally considerate lubricants) combine several advantages. The good biodegradability and low toxicity reduce the negative impact on the environment, though do not pollute. The synthetic base oils in combination with excellent additive systems provide longevity and

lead to fewer oil changes. And this mitigates the higher purchase price and improves the economy of the entire system. Furthermore PANOLIN ECLs show superiority over mineral oil based lubricants under extremely hot operating temperatures.

A TRIPLE WIN There are thousands of customers operating machinery with PANOLIN ECLs. They benefit from a triple win situation:

Environment PANOLIN ECLs demonstrate good biodegradability and very low ecotoxicology

Technology PANOLIN ECLs reveal excellent high temperature stability and good antiwear performance

Economy PANOLIN ECLs reduce cost by enabling the machine operator to extend oil drain intervals and reduce the downtime of their machinery

What features and attributes should manufacturers and construction companies look for when selecting lubricants for their machinery? Do any particular considerations need to be taken into account in order to choose the right solution for the job?

PL. Manufacturers are designing machinery and components with permanently increased performance, which requires specific lubricants. Nevertheless the technical functionality is not the sole requirement, the need of the construction company to use a lubricant with a better environmental profi le and a greater

life span has to be taken into account when specifying lubricants. More and more OEMs offer the alternative to use ECLs instead of the classic mineral oils.

Construction companies should evaluate whether or not to use ECLs instead of mineral oils. It is important that they seek advice from a lubricants specialist. It might take a bit more time to assess the situation on a job site and to talk to the authorities, however, this can prevent a disastrous failure to the environment and/or to the machine.

Can you give us an example of how your products have been successfully applied in hot regions? What benefits did your lubricant solutions bring?

PL. We have numerous customers operating dredges and excavators in extremely hot regions, where the temperature during daytime is 35-45°C (95-115°F). One customer was forced by the authorities to use an environmentally friendly hydraulic fluid. At fi rst they did operate an excavator with a lubricant from a global oil company based on natural canola oil. The hydraulic tank temperature got so high that they had to stop the machine for an hour daily in the early afternoon. Furthermore they had to do a complete oil change every 500 operating hours. When they changed to PANOLIN ECL they did not have to stop the machine and the oil change was unnecessary for the remaining duration of the job.

Patrick Laemmle is co-owner and Board Member of PANOLIN AG. When he joined PANOLIN AG he soon took over the responsibility for the production unit and later on for the R&D team. Today he is mainly responsible for technology and exportation within PANOLIN AG.

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REAL ESTATE FOCUS

Local projects: a new approach to development?

Identifying supply gaps and addressing those needs may sound like an obvious development strategy, but it’s not one that’s been much in evidence over recent years.

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n the rush to chase the speculative dollars of foreign investors eager to make a profit from property, a lucrative – and just as importantly, more sustainable – sector of the real estate market has been largely ignored in recent years. That’s the view of First Bahrain, an innovative development company operating out of Bahrain and Kuwait that is dedicated to achieving sustainable returns for all its stakeholders through a demand-driven investment approach. “We’re a regional real estate development company,” explains Amin Al Arrayed, the firm’s General Manager. “Our focus is on demanddriven investments, and as such we focus on investments that are really driven by the needs of the local economy. We don’t focus so much on foreign investment.”

It’s an approach that has helped First Bahrain successfully weather the recent economic crisis – a storm that has seen many of its fellow real estate competitors struggle. “You have to be selective in terms of the type of projects you enter into, primarily due to the market conditions,” says Al Arrayed, explaining that there are three main elements to the firm’s strategy. “The first is we don’t undertake projects that require a lot of external financing; we make sure that our funding is sufficient to complete the project. This sets the parameters for the second part of the strategy, which is that the projects that we go for are typically smaller or phased, so we don’t undertake a massive project in one go. Instead we break it into smaller, more manageable pieces that we can complete on-time and onbudget before moving on to the next one. The third part is that we don’t have a sell-bias on our projects. We don’t necessarily look for exits before completion, and we’re quite happy with yield income over exit returns.

So for example, if we were to build warehouses or residential units we could rent those out and still make the kind of returns that would satisfy us, as opposed to needing a quick sale.

Together I think these strategies have worked well for us.”

First Bahrain’s flagship project is its $45-million logistics and warehousing development, Majaal, located within the Bahrain Investment Wharf. Since its launch in October 2009, the development has received a wave of interest from businesses, both local and international, looking for integrated and modern storage solutions with value added services. Majaal offers a prime location, situated within the Salman Industrial City, and is in close proximity to the major transport links of Khalifa Bin Salman Port and Bahrain International Airport. Construction work on phase one of the project – which will deliver 130,000 square feet of secure and cost effective stor-

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age space to its tenants – was completed earlier this year, and Al Arrayed believes its achievement of on-time and on-budget construction puts the company in a good position to execute on projects over the year ahead.

“I think Bahrain may have been a little bit less impacted than some of its near-neighbours like Dubai, which really were at the forefront of the freehold, off-plan model of development,” he says.

“In Dubai, the majority of the projects were traded many times before they were completed and there was a lot of inflation built into the system. We saw that happen here to a much lesser extent, and while there are some projects that are clearly having difficulty being completed due to lack of funding (either because of defaults on the part of investors in the project or because of the lack of bank finance), there are also a lot of very sustainable projects. We’re happy that we chose to make the warehousing segment our first foray into development. For us, it’s worked out very well.”

For Al Arrayed, the key to First Bahrain’s success has been its focus on meeting unmet needs. “It’s less about the difference between local demand and external demand, and more about the difference between real demand

and speculative demand,” he explains. “What you have now is a situation whereby a lot of the speculation has disappeared and a lot of the speculators are no longer in the market, and the only thing left is local demanddriven projects. That suits us just fine, because that was the only sustainable form of demand anyway. Our strategy has been to identify supply gaps in the market and address those.

“For example, when we found that there was a shortage of SME warehousing in Bahrain, we came up with a proposition that would fill that gap, and that’s the way we structure our projects. It’s looking at the market, identifying supply gaps and then coming up with projects to meet those needs, as opposed to continuing to build projects that cater to a segment that really no longer exists.”

Al Arrayed feels that liquidity is going to Amin Al Arrayed be the key challenge for those real estate development companies looking to complete projects over the next few years. “A lot of them were overly dependent on bank finance and their ability to sell units before they complete,” he explains.

“They will struggle, and I know that a lot of delays have happened because many of them aren’t able to secure the cash flows necessary to continue with their projects.”

Bahrain Investment Wharf H believes a tighter regulatory framework across the He Majaal is a warehousing and logistics regi region would go some way to addressing the problem Majaal will facility located on a 716,000 square foot of project financing. “There needs to be some kind of provide plot in the Bahrain Investment Wharf, re regulation to make sure that the money that is collected providing more than 429,000 square f from investors is utilised for its intended purpose,” he feet of warehousing space. Designed s says.

“It’s currently very difficult to make sure that square feet of by the international engineering firm th money you paid towards your flat goes toward the the warehousing space Tebodin Consultants & Engineers, the act actual completion of your flat. So if a developer is going project will be developed in three phases a to announce Project A, we need to make sure that the with the first phase completed earlier this money that’s been collected for that purpose is used for the year. The general contractor is Abdullah H. All completion of Project A, rather than for Projects B and C. Lack Darazi Company and Baker Wilkins & Smith has been of regulation in this area has led to developers taking too many risks and appointed as cost consultants. not being held accountable for their ability to live up to their promises.”

To meet an increasing demand from small and As for the next 12-18 months, Al Arrayed is bullish on prospects for medium enterprises for comprehensive modern both his firm and for Bahrain as a whole. “Within the real estate sector warehousing facilities, the warehousing space will we’re very positive on the potential in the warehousing and logistics be divided into individual units of approximately sector,” he says. “For us, we see that as a growth area. Infrastructure is 2500 square feet each with an option to combine another area where we think that there is room for growth, particularly in units to accommodate larger tenants’ needs. The terms of the expansion of private and public sector partnerships. Governdevelopment aims to bridge an existing gap between ments are going to be playing a much bigger role going forward in terms quality of the space and level of services provided in of development, so the more that they can combine their efforts and align Bahrain’s warehousing property market. their interests with the expertise of the private sector, the better. We see a In addition to the physical warehousing space, the lot of opportunity there. development will boast a range of services that caters “Our view is that the region still has a lot of potential,” he concludes. to the needs of its tenants, including 24/7 security “We’re looking at Saudi Arabia, we’re looking at Oman, we’re looking at service, state-of-the-art ICT provisions, assistance on Abu Dhabi. We are looking for areas where we feel the fundamentals are efficient design and use of space, and a range of value strong, and we’re looking for like-minded partners to help us. It’s a very added services. disciplined approach to growth, based on the liquidity that we have. If you don’t have the money to build it, don’t build it. It’s as simple as that.”

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TROUBLESHOOTER

Commodities to products Medhat Stefanos explains why understanding the customer is key to sales success.

ing within a k r o w r a e y irst This is myngfdepartment in a it marketi ty industry. I find pport our commodi ly challenging to su ective extreme artment with efficks I sales depng; most of the tr ective? marketi n’t seem to be eff ting the know do he key to penetraonsumer?

What is t the Middle East c minds of an rd, Jord Osterga

Medhat Stefanos says:

T

he Middle East market today has grown to become one of the world’s most appealing markets. Everyday new investment is injected in the Middle East to the slowly developing markets.

Heavy industries are moving to developing regions as a result of labour and fuel costs, not to mention the normal growth in such regions.

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In developing markets, a pre-perceived conception is dominant regarding products and their usages. Customers are used to basic products that serve their needs, not recognising the potential they have in advancing their usage and the associated products. That perception is based on the assumption that a better product is more expensive than a basic one. The users are often unable to realise the value added they receive that transcends beyond financial value and overlooks the savings they accomplish. Even with equally priced products, users resist change and drive the market to maintain the same basic product mix. That cannot be more evident than in the construction material sector, particularly cement. Cement is one of the products that are continuously used in the Middle East by many industries. The diversity of cement product development available in the world is significant, offering customers customised products for their exact needs. Nevertheless, the Middle East market tends to use Ordinary Portland Cement for all uses, when there are much better suited cement products.

To realise the investment’s objectives, organisations need to reshape and develop their surroundings. This can be accomplished on a

complete sector level rather than through individual efforts. Titan Cement Egypt has taken the steps to pioneer the market development to assure that customers are using the appropriate product and that the investment is at its full potential.

To accomplish such an objective, Titan Cement Egypt has spent extensive time understanding the true needs of the market and how it uses cement. Conducting extensive market research and segmenting the Egyptian market based on the usage and perception proved to be one of the most efficient investments made.

Understanding our customer has provided us with the keys to developing the whole market.

The Middle East customer has proved that different regions in the world operate differently and developing the market has to come from within and not be enforced by how more developed regions operate. Building our market understanding, Titan Cement Egypt has been able to utilise every aspect of marketing to share with the market the reward of a diversified product mix. We truly managed to change a generic commodity into a sophisticated product that customers demand.

Titan Cement Egypt selected from the world’s best cement products and provided the Egyptian market with the ideal product mix.

The product mix has been an extended success that managed to stimulate the consumer to explore a developed product versus the current market offering. One of the key success factors that contributed to Titan Cement Egypt is the close relation with the supply chain cycle. The extended reach to our customers’ customers has opened a channel of communication that proved invaluable to all relevant parties. The relationship Titan Cement Egypt has developed with the key market influencers has been invaluable in shaping the industry.

Finally, the Middle East is a lucrative market, but definitely not an easy one to master. There is much work that needs to be done and more to be learned. Giving and taking from the market is to strongest key to success. n

Architect Medhat Stefanos is currently residing as Group Commercial Director of Titan Cement Egypt. For 25 years, Stefanos has been of the founders and shapers of the construction industry in Egypt.

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COATINGS FOCUS

Adding a gloss to the construction industry Emphasising the value of quality is the key concern for both paints and coatings manufacturers and applicators alike in the Middle East region.

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ccording to recent research from Frost & Sullivan, the Middle East’s paints and coatings industry is set to reach $2.7 billion by 2014 spurred largely by investment in large-scale infrastructural and industrial projects. But ensuring such paints and coatings solutions are both fit-forpurpose and properly applied will be vital if contractors and end-clients are to reap the rewards of technology innovations in this area.

Jorgen Olsson is Coatings Manager for the Steel Works Division at Amana Contracting, the regional leader in the design-build of industrial and commercial facilities with over 1500 buildings constructed across the region. He has been working in the region for the last 13 years and as such is well-placed to comment on how the coatings industry has matured over that time. He feels that although price is still important, the region is increasingly looking to quality as it seeks to deliver world-class structures and developments. “The cost of both paint and supplier have obviously been a huge concern during the last year given the economic situation – especially in Dubai,” he says. “Nonetheless, oil and gas firms and specified infrastructure companies are still willing to pay for quality paint and applications as they know the cost impact of a breakdown onsite.”

The coating work at Masdar requires the use of modern waterbased products with no VOCs

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Olsson explains that there are a number of specific types of lucrative coating work in the region. The first is in the oil and gas/petrochemicals industry, where big companies such as Saudi Aramco, GASCO, ADNOC and Borouge have excellent specifications for coating and fireproofing developed after the American and European standards drawn up over the last 20 years.

“The specifications are prepared by educated technical service engineers in oilfield services,” he says. “All paint manufacturers must be vendor-approved and pre-qualified, and even specific products need to be approved and tested by the end client. Applicators also need to be vender-approved, and prove that risk assessment and safety are integral parts of their approach.”

The other key area for the use of coatings is in infrastructure development. “Special projects such as Yas Island and Ferrari Experience, as well as major infrastructure developments such as bridges, are always specified and project managed by big international companies,” he explains. “Therefore the use of specifications, quality inspection and documentation is really taking off in this region. Mostly the paint specification comes from the structural consultants in America or Europe, and then as local applicators we recommend which system to use after considering local environments and conditions.”

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Built half on land and half on water, Yas Hotel provided a major paints and coatings challenge Amana is now coating for three main contractors at Ferrari Experience, including 60-minute fire proofing of the main structural steel. Most of the structural steel for clients (usually consultants) in this region is recommended to use a high durability coating designed for environments classified by ISO 12944-2 as C5-1 very high corrosivity (Industrial).

Olsson believes a key concern in this region is that the quality of local paint products and application is poor. He observes that some small local coating companies have been found to paint directly onto raw steel (complete with the mill scale) and without cleaning the base material first. “This is not good practice and quality suffers as a result,” he says. “Naturally such practices are cheaper than preparing the surface correctly, and for an untrained or absent client all he sees is the bottom line. In addition, the coated item may be hidden from view during service so any deterioration is not noticed until it is too late.”

“Going green with paints and applications is a big trend right now” In contrast, professional companies have codes of practice to which they work, and employ trained and internationally certified inspectors who control all aspects of the coating process from cleaning the base material to monitoring all the parameters during the coating process to ensure the client gets the best possible result. “Naturally, doing the job right first time saves money in the long-term, because maintenance is reduced,” says Olsson. “In addition the larger paint suppliers prefer to recommend professional applicators, because whenever there is a problem with the coating the first to be blamed is the coating manufacturer rather than the applicator.”

Despite such concerns, there are still some owners and contractors for whom the initial cost is key. “They believe that the building should look good when handed over and very little thought seems to be given to the cost of long-term maintenance,” says Olsson. “It is almost as if the owners consider that the laws of chemistry do not apply and corrosion will not take place, or perhaps they anticipate that the building will be sold before any expensive maintenance is required.”

Olsson believes that most of the time, poor quality comes down to lack of know-how regarding coating. “There are many civil engineers but hardly any NACE or SSSP certified coating inspectors,” he says. Such ignorance as to the importance of paints and coatings can be witnessed in the sad story of one of the largest steel suppliers in the Middle East, which invested $4.6 million in a new fabrication shop two years ago but failed to provide any investment for a complementary paint shop. “All the steel they fabricate is coated out in the open area,” exclaims Olsson incredulously.

Alongside this quality drive, Olsson believes the other major development to hit the region is that of sustainability. “Going green with paints and applications is a big trend right now,” he says. “I completed the USGBC’s Green Building Design: The LEED Implementation Process certification in October and the market for green building is going to be big over the coming years. For example, Amana is doing coating and fire proofing for

The Yas Hotel Located between the coast and city of Abu Dhabi and Dubai, Yas Island has a range of world-class hotels, theme parks, golf courses, shopping malls, apartments and villas that are all being developed alongside the new Yas Marina Formula 1 Circuit – including the Yas Hotel, one of many infrastructure projects developed to support Abu Dhabi’s bid to become the world’s premier motor racing destination.

From the outside, the LED colour-changing steel and glass gridshell, which mimics the throw of a local fishing net, can be seen for miles, while the impressive interior design makes the hotel a truly iconic structure. The new Formula 1 circuit even runs through the centre of the buiding. But the unique location of the structure – built half on land and half on water – provided a major challenge from a paints and coatings perspective.

It was vitally important that the coatings chosen to protect the structural steel offered the owners superior corrosion protection. With an extensive track record in protecting hotels around the world from corrosion, International Protective Coatings supplied a three-coat system, using the proven anti-corrosion abilities of Interzinc 52, the barrier protection of Intergard 475HS and the durable aesthetics of Interthane 990, to offer extended design life and limit the need for future maintenance.

Masdar City in Abu Dhabi. Masdar is a major development not just for Abu Dhabi but internationally, he says. Lessons learned here will be implemented worldwide.”

The coating work at Masdar requires the use of modern water-based products with no VOCs. In addition to the materials used, Olsson explains how new green procedures are also being developed to minimise the impact of the work on site. “For example, there will be minimal packaging materials and recycling of containers to reduce the overall waste. For the operators and labour, care is taken to provide the most eco-friendly coveralls avoiding disposable plastics. Even non-working activities are considered – disposable drinking cups are banned and each man is provided with his own re-usable mess kit, to be carried in fabric, re-usable bags and not in plastic bags from local supermarkets. Masdar is not just about products and working methods, it is a whole new way of thinking that is being pioneered here in Abu Dhabi,” he concludes. n

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ROUNDTABLE

IMPROVING THE INDUSTRY 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.

Birgit Genn has been responsible for Global Marketing/Business Development at Heubach Group since 2006, with her role expanding in 2009 to include Sales. She has worked in the coatings/pigment industry for more than 10 years, holding various technical and marketing positions prior to becoming a member of the senior management.

David Page is CEO of Tech Traders Inc. and developer of Insulaad insulating additives and paints. In 1995 Page applied to and was accepted to participate in a NASA Technology Exchange programme, and working with United Technologies Page spent over two years in the development of the ‘thermally reflective’ paint additive.

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MENA Infrastructure invites a panel of experts to debate the issues around coatings challenges, recent regulations and sophisticated new solutions in the paints industry.

With its scorching temperatures and arid environment, the Middle East presents a number of challenges in terms of operating conditions for contractors and developers. What are these challenges, and how can the selection of the correct coatings solutions help the construction community improve the longevity and reduce the maintenance requirements of its structures?

Nick Crowther. The Middle East is one of the harshest environments for paint systems in the world, making the specification and application of a good quality system more important than ever. As the largest paint company in the world, AkzoNobel invest heavily in research and development, introducing products offering a longer life to first major maintenance and hence a lower lifetime cost. By specifying the correct system early on, an architect or engineer can set a benchmark for the requirements of the project. Utilising products such as our patented Acrylic Polysiloxane, which offers four times the gloss and colour retention when exposed to UV light than that of a traditional polyurethane, will lead to the desired cosmetic appearance of a system lasting for years longer whilst also offering extended corrosion protection.

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“The biggest issue in the Middle East is the high temperature and the associated energy costs that are connected with a buildings cooling demands” David Page Birgit Genn. Heat is indeed a challenge in terms of operating conditions for contractors as higher temperatures reduce the pot life of coatings, which can lead to a reduced processing latitude influenced by the kind of coating system, fillers and pigments. Extensive application work in cooperation with leading resin suppliers has allowed us to provide optimised solutions even to such regional requirements.

Improvement in the durability of pigments has been one of the major requirements over the past few years due to climate conditions. Our latest product innovation of IR-reflecting pigments is a step further to enhanced shelf life, as well as proving a reduction of the heat build-up that can be correlated with decreased energy consumption. Due to the significant reduction in surface temperature, thermal degradation of the coatings is reduced. In addition, temperature differences between day and night, direct sunlight and shadowed areas etc. will also be evened out. As a consequence thermal warping becomes less pronounced.

David Page. The biggest issue in the Middle East is the high temperature and the associated energy costs that are connected with a buildings cooling demands. All Insuladd products have been designed with this environment as its main target.

Insuladd paints reduce the BTU heat loading on a building in the Middle East 40 percent to 50 percent – more than the white reflective coatings currently marketed and used in this area. This is a critical difference for the consumer since the use of Insuladd products affords the consumer the simplest and most cost effective methods to reduce energy costs associated with air conditioning.

In addition our HEUCOTINT pigment preparations for architectural paints are in compliance with current regulatory requirements (APEO and VOC-free) and do not contain any substances that are under discussion as regards to future regulations.

DP. Insuladd products have always been manufactured with the environment in mind. All Insuladd products are very low VOC or in some cases zero VOC. Insuladd products were ‘green’ long before the word became a buzz-word for environmentally friendly products.

All of the materials that go into the manufacture of Insuladd products as well as the manufacturing process itself are continually scrutinised to ensure that Insuladd products stay at the cutting edge of both thermal and ‘green’ technology.

NC. We continue to focus on incorporating a strong sustainability component throughout the entire value chain. This starts with market research and continues right through to sales and marketing. By applying innovative chemistry, our R&D teams seek to develop solutions that deliver the performance required by customers while improving the eco-efficiency when it comes to product design, manufacture and ultimate disposal. This would not be possible without a progressive sourcing and procurement policy in which we work in partnership with suppliers to ensure business integrity and help us to deliver sustainable value to our customers.

On the manufacturing side, we continue to optimise our manufacturing processes, thereby improving yields and energy efficiency. In sales and marketing, we also work closely with customers to develop long-term sustainable solutions. We use eco-efficiency as a measure of our products, in other words, that is greater value for lower environmental impact.

Currently, close to a fifth of our revenue comes from products that are more eco-efficient than rival products. By 2015, we aspire to increase this figure to 30 percent of our revenue.

Developing ever more sophisticated new technologies and solutions

Recent regulations (such as the EU Commission’s VOC Directive and REACH legislation) and standards (like LEED) have lent a greater focus to environmental considerations and sustainability in the development of paints and coatings. How is your firm addressing the requirement for a greener R&D and procurement focus?

BG. In the past, numerous pigments were available that gave optimum performance but which no longer meet today’s stringent ecological requirements. Heubach’s R&D and procurement focus started addressing these requirements decades ago by replacing the carcinogenic chrome-based anticorrosive pigments and introducing zinc phosphates, the first chromefree corrosion protection pigment, followed by ortho- and polyphosphates, representing the technically most sophisticated anticorrosive inhibitors in today’s market.

We have also worked intensively on lead and chromate replacement in the past and are now able to offer a full portfolio of economical and ecological solutions comprising specially designed highly opaque inorganic yellow pigments to combine with high performance organic pigments, rounded up by easy dispersible, strongly dust reduced hybrid pigments to achieve highly saturated, highly durable and cost effective alternatives.

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is only one part of the challenge facing paints and coatings manufacturers. The other is raising awareness as to the value of such solutions among end-users. How do you approach this, and what unique challenges does product promotion pose in a region such as the Middle East?

DP. Consumers in the Middle East have become used to ‘white reflective coatings’ as they are the most marketed/advertised type paints and coatings in the area. Insuladd marketing and advertising is being used to edu-

“In this region, it is critical that all levels of the contract chain understand the importance of the paint system to the success of the overall project” Nick Crowther

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cate the consumer that there is a major difference between the white reflective coatings currently in use in the Middle East and the ‘thermally reflective’ Insuladd products – which as testing has shown is close to 50 percent more energy efficient equating to substantially less heat influx into an Insuladd painted structure as opposed to that which is painted with the current product offerings in the Middle East.

Raising the consumers awareness of the immediate – as well as long-term – benefits of using Insuladd thermally reflective coatings in the Middle East is our current number one priority.

NC. In this region, it is critical that all levels of the contract chain understand the importance of the paint system to the success of the overall project.

Paint accounts for a very small percentage of the total project cost, however if things go wrong, the costs involved can spiral. Educating the industry about the importance of the paint system doesn’t just relate to the

A customised solution The Burj Khalifa is the latest project in the Middle East to benefit from a revolutionary coatings concept. To complement the 28,261 aluminium-cladding panels that make up the exterior of the tower and its two annexes, the tower required the use of a metallic matt power-coated finish. Trine Finnevolden, General Manager of Jotun Paints UAE, explains that for this unique requirement Jotun developed a specially formulated bonded metallic product.

The 2684 feet spire also required attention and Jotun was able to provide a glass flake reinforced polyester coating that provides outstanding resistance to abrasion, water and most chemicals.

“Building the world’s tallest tower is a tremendous feat that requires the highest quality materials and the expertise of construction innovators. This project has been a perfect opportunity for us to highlight our best-of-breed paint products and solutions,” says Finnevolden.

Jotun’s industry-leading Jotashield brand was used for the tower’s 120,000 square metre basement car park because of its excellent adhesion and moisture resistance features, protecting concrete against salts and carbon dioxide. In addition, 26 custom colour shades of emulsion and enamel paint were used in all interiors of the Burj Khalifa, covering an area of 700,000 square metres.

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paint itself. In the vast majority of cases a failure will occur due to incorrect or poor application.

This brings us back to the importance of all levels of the contract chain understanding these potential issues, from the architect or engineer specifying the correct systems to the main contractor using skilled labour.

BG. The success of innovative pigment and pigment preparation technologies always requires close cooperation with the coating formulators and their customers to prove the value of such innovation in the end-applications. The question is always how to attract the end-user and how to increase the awareness of, for example, innovations which follow the green concept. Besides the standard promotion tools, which spread the message of benefits of the new products, the status of legislation is and has been one of the major driving factors for the acceptance of innovative and greener technologies as seen in a lot of countries around the world.

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â&#x20AC;&#x153;The success of innovative pigment and pigment preparation technologies always requires close cooperation with the coating formulators and their customers to prove the value of such innovation in the endapplicationsâ&#x20AC;? Birgit Genn

What do you see as the most signiďŹ cant driver of the paints and coatings industry in this region over the next few years, and what is the greatest challenge to its future development?

NC. Over the past year, the market has seen some dramatic changes, and many larger potential projects widely talked of in the media now seem less certain to proceed, at least in the near future. However, one upside to the slow down we have seen recently, is the drive for higher quality, better thought out projects. Earlier we talked of the importance of raising awareness of paint systems to end-users. This is made easier with good quality, long-term projects undertaken through a partnership of quality companies. This is what I see as the future for the construction industry we supply to, and hence also for us. The greatest challenge will be changing attitudes to this more long-term focus on projects, creating iconic yet sustainable buildings and infrastructure.

BG. New developments in the field of pigments and pigment preparations must nowadays match more and more demanding economical and ecological requirements. The ever-growing demands concerning functionality combined with the broadest possible range of colours has always been of prime consideration in our product developments.

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But to foresee the future needs of our customers in the different regions and to translate the special requirements in a market and time oriented R&D project in order to sustain the future competitiveness of our customers are the challenges of tomorrow. This will require a high degree of customisation and the highest level of innovation to provide value-added products.

The combination of functionalities such as IR-reflecting, protection, thermo-chromic, and other kinds of indicating properties with the basic properties of pigments, such as durability and colouring whilst meeting increasing environmental awareness, product safety requirements, constantly increasing production efficiency and productivity to compensate for escalating raw materials and declining market prices will continuously drive our industry in the future.

DP. Consumer education is the biggest challenge. Once the consumer better understands the thermal dynamics that take place when Insuladd products are used they will better be able to easily understand the far greater benefits this unique product line has over that presently marketed and used in the region. The second biggest challenge is to better integrate Insuladd products into the local and regional building codes and construction methods as an enhancement to the standard insulation practices in use in the region. n

Tel: 1-800RUST-007 EFAX 1-201-548-5100 WEBSITE: http://rust007.com

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INDUSTRY INSIGHT

PROTECTIVE SOLUTIONS Idil Yurdakul Peker explains how silicon products suit every market need in the coatings industry.

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or more than 60 years, architects, building consultants, contractors and construction material providers around the world have turned to Dow Corning for its expertise and silicon-based, performance-enhancing materials and additives. From lowVOC water repellents, anti-stain coatings and various mortar, cement and dry mix additives to hydrophobic treatments and resin products, silicon-based materials from Dow Corning offer a variety of protective enhancing treatments and solutions for the construction industry, including: Improved material strength, durability and weatherability: Compared to other substrates, silicone offers a unique structure comprised of organic and inorganic polymers that are able to resist a variety of environmental forces, including ultraviolet rays, rain and snow.

Silicone sealants were used in the construction of the worldâ&#x20AC;&#x2122;s tallest building structure, the Burj Dubai, in the United Arab Emirates. Dow Corning experts worked closely with structural engineers to ensure the building could withstand the high wind loads and extreme temperatures in the region.

The flexible nature, hydrophobing capabilities and superior beading properties of silicone resins enable them to be tailored to fit different applications and emulsification in architectural coatings. Their superior water repellency and weatherability make them the products of choice for paint or render applications. For example, Dow Corning IE 2404 Emulsion provides an industry-proven way to improve water resistance and increase moisture vapor permeability of architectural paint and facade render formulations. The hydrophobic properties of silicone resin emulsion Dow Corning IE 2404 helps prevent water from penetrating the coating by binding directly with inorganic materials in the paint. Th is is especially useful on water-sensitive substrates such as masonry, plaster and insulation where moisture can damage the material or lead to microbial growth.

Idil Yurdakul Peker, Major Market Leader at Dow Corning, is leading the building assembly and building material protection markets in the EMEA region. She holds a bachelorâ&#x20AC;&#x2122;s degree in Civil Engineering from Istanbul Technical University, MSc degree in Structural Engineering from Bosporus University and a MBA degree from Bilgi University in Turkey.

Extended material surface life: Maintenance engineers are increasingly turning to silicone-based sealants and water repellents to protect and repair bridges and roadways. Dow Corning provides chemical treatments that slow the erosion of concrete bridges, supporting joints and roads that are often generated by chlorides. Treatments are easy to apply and dry at a relatively quick rate to reduce water penetration to the substrate material and are often used as post-treatments to protect against corrosion, efflorescence, freeze-thaw damage and water penetration.

When the Colorado Department of Transportation needed to reseal joints along I-70 in Glenwood Canyon, US, Dow Corning products provided easy to install, cost-effective solutions that continue to be used by transportation authorities throughout the United States.

Preservation of building aesthetics and versatility: Everyday exposure to water, oil, stains and sunlight can take a toll on the aesthetic appeal of a structure over time.

Reduced maintenance and cost: Selecting the right materials for the right application not only strengthens the longevity of the structure, it also helps building contractors improve overall productivity and cost effectiveness. Choosing materials that can stand the test of time saves contractors time and money required to constantly repair and maintain a structure that uses less durable materials.

Sustainable, more energy efficient structures: In addition to lower cost and longer lasting buildings, Dow Corning building materials protection products are also contributing to more energy efficient structures by reducing heat loss from evaporation of absorbed water in untreated materials and enhancing the thermal conductivity of the structure.

Localised technical knowledge to fit specific needs: Leveraging its proven performance silicone technology and construction and chemical expertise, Dow Corning works with customers to supply the next generation of durable building materials and global resources. Â&#x201E;

To learn more about Dow Corning solutions for the building materials protection market, visit www.dowcorning.com/buildingmaterialsprotection

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Nutshell ATE_4August 15/01/2010 16:16 Page 78

ASK THE EXPERT

The green light for natural paint solutions Michael Back, Managing Director of Nutshell Natural Paints, offers his advice for demonstrating eco-credentials in the paints and coating industry.

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uilding material suppliers the world over are increasingly desperate to demonstrate their eco-credentials as those involved in procurement and specification narrow their shopping lists to items that can be seen to be pro-planet. This is not just about sustainability and reducing carbon output.

It is also about providing eco-friendly products that are practical, inherently healthy for people right now as well as in the future, cost-effective and energy saving.

Nutshell Natural Paints are pioneers in this area. The product range delivers all the requirements of traditional paints, stains, colour washes and varnishes, but without any of the environmental downsides and potentially harmful chemical cocktails contained in acrylic and solvent based products.

Nutshell paints are water-based which can be enhanced by using pigments manufactured in the UK using only naturally sourced renewable ingredients including oils, herbs and minerals. They are microporous, biodegradable and offer a radical alternative to paints manufactured with vinyl resins and petrochemical solvents. They contain no VOCs – which can pose serious health issues including headaches and sore throats, as well as damaging plant life.

Paints that claim to be VOC-free may not actually be free from other damaging ingredients such as formaldehyde, acetone or ammonia. In the case of Nutshell natural paints, they are.

Nutshell products are virtually odour free. Rooms painted with Nutshell Emulsions don’t have to be vacated or aired. They are emission neutral and allergy free.

The paints are especially appropriate for public places such as nurseries, schools, hospitals and even Olympic villages, all places where a healthy environment is essential. Even the packaging is recyclable furthering the brand’s reputation for environmentally positive policies and emphasising its holistic view of all the issues in-

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“The use of non-VOC paints is becoming more established amongst specifiers and Nutshell’s products are ticking all the right boxes for them”

volved in sourcing materials, manufacture, application and disposal, i.e. the whole life span of a product.

Insulate The use of non-VOC paints is becoming more established amongst specifiers and Nutshell’s products are ticking all the right boxes for them. However, new product development is now enhancing the benefits of using these products. Using nanotechnology, Nutshell has launched a new thermal insulating paint that offers thermal radiation reflection. In other words, used internally or externally the paint will reduce heat loss from inside a living space by reflecting up to 92 percent back into the room resulting in lower energy requirements and money saving.

In addition, applying Nutshell’s thermal insulating paint will also reduce the amount of heat able to penetrate from outside by 92 percent, keeping cooled environments cool, reducing the work load on air conditioning systems and doing its bit to cut the world’s carbon output. The remarkable characteristics of thermal insulating paint are the result of a specialist additive consisting of nanoparticles that are widely available but cannot be used in traditional solvent-based paints. Nutshell is the only natural paint manufacturer to offer a product with the additive pre-mixed.

There are other benefits, too. The nanoparticles are water repellent further increasing thermal insulation qualities. The additive also helps to reduce temperature variation and protects against condensation and mould. Along with a proprietary paint and varnish remover, Nutshell’s thermal paint is the company’s only product to contain traces of VOCs, however, the tiny amount is 20 times below the European Commission 2010 limit As a business, Nutshell set out to provide paint and related products that are sustainable and healthy and this has been achieved in a way that contributes to environmental well-being as well as offering an immediate impact in terms of personal health and cost-saving. Industry’s collective goal should be to convince more people to embrace pro-planet attitudes and environmentally positive consumer behaviour by offering products that not only contribute to long-term eco-aspirations, but have immediate and practical benefits in terms of improving health, reducing energy requirements and saving money. n

For more information please visit www.nutshellpaints.co.uk Michael Back is the Managing Director of Nutshell Natural Paints. Back is also responsible for the research and development of new environmental and energy saving technologies, as well as for increasing the international awareness of Nutshell Natural Paints and finishes.

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EXECUTIVE INTERVIEW

environment conservation is central to any new design feature. Kansai’s history and continuous focus on strong R&D has enabled it to meet the challenges of delivering innovative solutions to our customers.

R&D is one of Kansai’s core competencies – what new technologies are you bringing to the market?

AHH. Kansai has recently introduced some leading technology based products; examples

Innovative solutions in the paint market In an exclusive interview, Kansai Paint’s Ameer Hamza Hassan reveals how the company have established themselves in the MENA region and why the sector is going green.

Tell us a bit about Kansai Paint and why it has been relatively less active in the MENA region.

Ameer Hamza Hassan. Kansai Paint was established in 1918 in Japan and has grown to become Japan’s largest and the world’s seventh largest paint company. Kansai currently has operations in more than 40 countries of the world.

It is focused on developing leading-edge coatings technologies and products in a wide range of categories that include automotive OEM and refinish, decorative and industrial products.

Kansai Paint has remained focused on markets with large automotive production where it now enjoys leadership positions. With the establishment of a dedicated company to develop the Middle East, Central Asia and Africa markets, Kansai is moving to address the gap created by its absence from this region; Kansai is now offering the full range of its products in these markets covering all major categories.

Kansai Paint Middle East is a relatively new venture. What has led Kansai Paint to establish a company in the Middle East?

AHH. The growth of the MENA markets over the last few years has necessitated the creation of a dedicated operation that focuses exclusively on these markets. Kansai Paint Middle

East (KPME) is the regional company that is in turn establishing subsidiaries in all the key markets of the region to develop sustainable market positions. KPME was formed in March 2008 and has already established three subsidiaries, two manufacturing plants and sales channels into 11 countries of this region.

“The growth of the MENA markets over the last few years has necessitated the creation of a dedicated operation that focuses exclusively on these markets” What are Kansai’s key strengths and how do they enable you to differentiate in an already crowded market?

AHH. Kansai’s fundamental business philosophy is to ‘contribute to society by providing value added products and services that satisfy our customers’. We strive to continuously improve our offering of products and services through a very strong R&D platform where

would include ‘ALES SHIKKUI’ – an ecofriendly plaster coating for interior fi nishes.

Similarly another product – Aqua Zola Coat – a multi-pattern, multi-colour aqua-based coating for exterior and interior has been launched in the market.

In the auto refi nish segment, Kansai has introduced its PG Hybrid range, which offers a saving on material usage, higher productivity (less spray time) and meets environmental regulations. The superiority of this system has been widely acknowledged by leading automotive manufacturers and it is fast replacing conventional solvent-based systems across the workshops in Asia and the Middle East.

In protective coatings, a one-coat New Forte DX product has been launched in the Middle East market. Th is is a high build surface tolerant epoxy giving unmatched application productivity and long term durability on a wide range of substrates.

There is undoubtedly a drive towards greener technology in the paints and coatings sector. What role do environment friendly technologies play at Kansai?

AHH. Kansai Paint is designing products with reduced environmental burdens throughout the lifecycle of the coating material and coating fi lm. As a company fully committed to the preservation of the environment, we follow a proactive approach where higher than mandated standards are voluntarily set by the company. Our approach is about producing eco-friendly products and in Japan we achieved an eco-product ratio of 60 percent in 2009 and have set ourselves a very challenging target of 65 percent for the current year.

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 the Middle East.

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CONSTRUCTION

in the

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Facing a housing shortage of two million, Saudi Arabia is in dire need of middle-income and affordable housing – could this sector prove to be the saviour of the market?

By Rebecca Goozee

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hen the US subprime mortgage sector imploded – driven by excessive leverage and inadequate regulation – it led to a much broader fi nancial crisis for the world economy. It was only a matter of time before the bubble burst in the MENA region: speculative investment, based on off-plan premises that failed to materialise, plus a dip in oil prices led to a knock-on effect on the region’s real estate sector, which has since meant access to funds has become increasingly difficult and the fundamentals of supply and demand forgotten.

However, while Dubai has been left increasingly resembling a giant construction site, Saudi Arabia could potentially become an oasis for the real estate and construction sectors. One of the few markets to witness demand despite the global economic slowdown, the kingdom is in desperate need of affordable housing. In fact, current estimates by CB Richard Ellis (CBRE) predict that Saudi Arabia is currently facing a shortage of around two million homes and that the kingdom will need an additional 1.4 million additional homes in the next decade to meet the rising demand from a growing population, which is projected to hit 33 million in the next 10 years. And with 35 percent of residents currently under the age of 14, the shortage will soon see a much tighter squeeze as more potential homeowners hit the market.

Supply and demand The large gap between supply and demand is attributed to the higher prices of property. As the real estate sector has commonly focused on the high-end and luxury part of the market, it’s unsurprising perhaps that middle-income, or affordable housing, has become the most underserved accommodation segment in Saudi Arabia. CBRE research indicates that the higher prices of property have resulted in 60 percent of people being unable to afford their own homes. According to market experts, affordable housing represents a huge untapped market for developers as the demand for housing is only likely to pick up.

Jones Lang LeSalle’s MENA House View 2009 report concurs with other research on the subject concluding that the greatest opportunities to increase the number of developers and investors in Saudi Arabia can be found in the affordable housing sector. John Harris, Head of KSA for the consultants, believes that a number of developers and investors will take advantage of this. “We know a number of local family groups are looking at the market, looking at what’s affordable, trying to defi ne what the consumer wants at an affordable level and putting strategies together to create development to meet those needs,” he says. “We also know that some of the local groups are setting up joint ventures with overseas developers and investors, who perhaps have some experience at developing affordable communities.”

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The report goes on to identify four key priorities that need to be “However, Qatar and Abu Dhabi will probably not focus on affordable addressed to provide sufficient affordable housing to accommodate the housing as much – these are markets with relatively small populations Kingdom’s young and fast growing population, namely: providing more and a fairly high per capita income profi le.” home fi nance; improved community planning; use of innovative building techniques to reduce construction periods and deliver lower cost units; Abu Dhabi and, new business models with greater cooperation between the governOver in Abu Dhabi, Mohammed Al Mubarak, Chief Commercial ment and major private sector developers. Why are these criteria so imOfficer at Aldar responsible for sales, leasing and property and asset portant in order to provide sufficient affordable housing? “If you look at management, explains that all development must be considered within other countries, these issues have the context of Plan Abu Dhabi usually been addressed,” answers 2030, an Urban Structure Expected Timing of Market Recovery Harris. “It’s pretty hard to do Framework created to optimise something truly affordable in a the city’s development through Saudi Arabia developing country unless you’ve a 25-year programme of urban Qatar got all four developed. Engineerevolution. He reveals that beAbu Dhabi ing is very important – you need cause of the long-term plan, Oman to be able to build – and in order the company’s focus has not Bahrain for projects to be feasible, you changed significantly as a result North Africa need to be able to build quickly. of current market conditions.

Levant You also need to be able to develThat said, in February 2009 Kuwait op to a high quality, so that people it was announced that Aldar Dubai have confidence in them. Low was changing the strategy at its 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% costs are also important and a lot Al Raha Beach development, of the way construction is done, placing a greater emphasis on 3-6 months 6-12 months 12-18 months 18-24 months particularly on a small scale, is low-cost housing. Al Mubarak not cost-effective to do things on Source: Jones Lang LeSalle Investor Sentiment Survey, April 2009 plays down what he calls ‘minor a piece-by-piece base. Then, in changes’ but agrees that certain the business models, again, the areas have been modified to Future Price Expectations government in Saudi Arabia has provide a greater mix of housbeen leaving the private sector to ing options. “Once complete Al Saudi Arabia try and address affordable housRaha Beach will be an 11 kiloQatar ing. But unless there is some kind metre, mixed-use mini city in North Africa of public-private partnership or its own right and consequently Oman some ability to reduce the cost of you expect to see different areas Levant the land or something like this, for different individuals of Abu Dhabi it’s going to be tough.” different means,” he explains.

Bahrain Investors expect Saudi “While our approach is very Kuwait Arabia to be the fi rst market in much a long-term one, in line Dubai the MENA region to recover with Plan Abu Dhabi 2030, we from the current downturn, will always monitor market -90% -70% -50% -30% -10% 10% 30% 50% 70% 90% mainly because of two factors conditions and, where appro(-sentiment) Net Balance (+sentiment) Net Balance that have existed in the rest of priate, take action.” the Gulf: speculation by retail inAl-Falah, another Aldar Source: Jones Lang LeSalle Investor Sentiment Survey, April 2009 vestors and end users and banks development, will be a master lending significant multiples above the loan base. These factors did not planned community focused around affordable housing for UAE naexist in Saudi Arabia. The banks are conservatively regulated and the tionals, providing around 5000 homes for middle-income families. amount of lending was limited to 90 percent of the deposit base, which Located to the east of Abu Dhabi International Airport and the Abu was a big help. Coupled with the fact that consumers had not extended Dhabi-Dubai highway it has been designed as a practical and sustainable their balance by speculating in real estate has meant that the sector has community that moves away from the typical grid design approach. It stayed pretty solid. is hoped that the design will encourage community gathering through “Saudi Arabia fares quite well in most categories, whether it’s housa number of open parks that connect the residential, commercial and ing or even commercial space, because they didn’t build and the excess leisure elements. “We are very proud to play our part in building susof construction can get absorbed pretty quickly. We also see Abu Dhabi tainable communities to cater to the growth needs of Abu Dhabi,” adds and Qatar recovering sooner than some of the others,” explains Harris.

Al Mubarak.

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Affordable?

Charles Neil, CEO of Landmark Properties, one of the leading real estate firms in the Middle East, believes that standard quality developments are certainly becoming increasingly affordable from both a renting and buying perspective. However, he maintains that there are still few, if any, projects that can be considered truly ‘affordable’ housing in the sense that they are priced for low-income individuals and families.

“We do think this will change,” admits Neil, “especially as the cost of construction has come down. According to our own index, the cost of construction has declined by 35-40 percent since the peak in July 2008.”

Neil goes on to explain that there has also been an increase in home loan fi nancing recently, although the impact on the market has been minimal due to income levels slipping and the risk of redundancy higher due to the global economic crisis. “We’ve seen an increase in the percentage home loan fi nancing deals from around 17 percent at the beginning of the year to approximately 30 percent of purchases being covered by mortgage financing currently.” However, the volumes are much lower

“While our approach is very much a long-term one, in line with Plan Abu Dhabi 2030, we will always monitor market conditions and, where appropriate, take action” then they were a year ago and at these levels the commercial and retail banks are able to cope with demand, but unable to increase volumes due to limitations they face with liquidity ratios.

“Another factor holding back the growth of loans is the high level of interest rates being charged, and potential home-owners simply cannot afford to take on mortgages at the rates currently being offered, which generally vary between eight and 10 percent, combined with the tight conditions being imposed by the banks. With income levels being lower and the risk of people losing their jobs higher, the credit risk for banks is higher than it was and it is unlikely we are going to see any major increase in loans in 2010,” says Neil.

Neil goes on to explain that he does not see average housing prices rising significantly until 2011 at least. He says the bottom of the market will be reached by 2009 and in 2010 expects to see housing prices remaining flat overall before beginning to rise in 2011 as economic activity begins to grow. “While we expect average prices to decline at this time, we are seeing prices stabilise and even increase in some developments or for specific buildings. We have seen the bottom in a few segments of the market – mainly higher quality residential projects in completed or nearly completed master developments like the Marina, JBR, Emirates Living – Springs and Meadows – and Arabian Ranches,” says Neil who goes on to explain that there will be further declines in some areas. “In developments of standard quality, those projects that have under-delivered on the promised quality, projects with additional supply coming online and projects currently in poor locations or master developments far from completion will also decline.”

Key criteria To meet the affordable housing challenge, Jones Lang LaSalle has identified four sets of criteria that need to be addressed to provide sufficient affordable housing in the Kingdom: • Home finance: Increasing the level of home finance is critical for the development of affordable housing. The approval of the much awaited mortgage law will also give a muchneeded boost to the market.

• Community planning: An affordable housing format has to be appropriate and acceptable to the local population.

Community planning needs to be improved to create a better balance between utility and social preferences.

• Engineering: Project costs can be reduced by applying innovative building technologies and economies of scale.

Such practices will improve affordability and increase the supply of lower cost units. Initiatives by a Saudi institution to develop an integrated building system will certainly result in higher construction quality, reduce project cycle times and ultimately higher affordability.

• Business models: Innovative business models need to be adopted involving greater cooperation between the government and major private sector developers. Currently, there are hardly any public private partnerships (PPPs) in the Kingdom’s housing development initiatives.

In addition Neil indicates that commercial office and retail properties in Dubai can expect to see further significant declines in rentals and property vales. Landlords will have to offer extremely attractive features and quality amenities to attract clients and despite this he says, millions of square feet of space will continue to remain unoccupied, particularly older buildings, that may offer Grade A space, that will lose their attractiveness as newer and better quality buildings offering superior facilities come on the market.

Indeed, with weak demand and further volumes coming on to the market in 2010 and 2011, stability may only be achieved in late 2012 in the office space sector. “In the future we could see more redevelopment opportunities emerging in the older parts of town, such as multi-storey car parks, pedestrian link ways, the refurbishment of building and a virtual moratorium on commercial development once the building phase ends,” suggest Neil.

So while commercial office and retail properties continue to decline it seems Saudi Arabia’s affordable and middle-income housing sector could certainly prove to be one of the strongest performing real estate markets in the MENA region over the next 12-24 months. “It’s going to be tough, I think, for the private sector to deliver housing that the bottom 50 percent of the society can afford, but I think over the next two years we’re going to see all of this work and discussion bearing fruits for these Saudi housing markets,” concludes Harris.

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ASK THE EXPERT

Reliability in automated power control Reliability is a vital factor in the specification of control systems for automated power management systems in built applications like hospitals, banks and call centres, claims ComAp’s Martin Malek.

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oday, modern electronic control systems provide a seamless interface between mains power, building load and stand by provision utilising highly tailored system design, programming and installation to meet the specific requirements of the building. Typically, UPS systems provide a short-term solution to power loss, taking load between the mains going off and the generating starting, synchronising and coming onto the grid.

However, complete reliability is delivered through the selection of a suitable control system that uses the latest electronic communication technology to manage this critical event effectively by monitoring multiple power supplies simultaneously and synchronising different sets to the mains without the need for human intervention.

From the moment the power’s lost, these systems immediately attempt to start the generator – trying at least three times if required before deciding how much load to give each generator, dependent on the building load at the time. The system is then capable of monitoring the load and changing the configuration to ensure full load is delivered reliably and consistently.

A good example of a highly reliable conthe ATS will change over from standby synch trol system can be found at the King Fahad power supply back to mains supply. The genHospital in Al Baha City, Saudi Arabia, where sets will be commanded by the ATS controllers a recent upgrade saw the replacement of the to cool and shut down when required. old distribution panel with a new control The second system is set up so one mains solution installed by ComAp Systems Saudi is feeding the load and the second mains Arabia. The complete system acts as standby. If the prior was tailored to the needs of mains gets the fail comthe hospital and programmed mand, standby will feed the to deliver continuous power load and if the second also in the event of failure. The experiences failure, then the two systems operated in the standby power generation following way: will start running and synch The first system is proon dead bus after what the grammed so that when one, BTB will close feeding the two or all of the ATS(s) exload from standby power. If perience AMF, a command one of the mains is restored, Martin Malek is the Managing from the synch system is sent Director of ComAp Systems Group. the BTB will open and the He’s worked in the company since its to start over, synchronise and inception in 1991, and now looks after restored mains will feed the get ready to supply the failed one of the ComAp divisions – ComAp load and the standby power Systems Group. The company designs, ATS(s). The mains breaker produces, supplies and commissions, will cool down and stop. control systems, complete switchboard is tripped and the ATS bus and switchgear solutions and related Reliability of operation breaker will close to the load systems for the power generation is an inherent and essential market. providing the power supply part of modern electronic from the standby synch switchgear. Th is will control systems ensuring that business critical start a load sharing process and start or stop applications like hospitals and banks benefit the number of working gen-sets upon load from an embedded ‘guarantee’ built into the demand. When the failed ATS(s) are restored, design of each standby control system.

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HEAD TO HEAD

Vital ventilation ADC’s Gary Douglas and Monodraught’s Tony Cull discuss the key opportunities in the HVAC sector.

What do you see as the biggest challenges in the HVAC industry over the tems are under scrutiny. Secondly, never before have we been made so next few years? aware of the irreversible damage the human race is doing to the environGary Douglas. The major challenges for the HVAC industry in the next few ment, and the corresponding need to reduce energy consumption and caryears are the market shift towards renewable energy resources, higher energy bon emissions. Finally, the environmental conditions inside a building efficient machines and the banning of certain refrigerants. Power consumpmust be healthy and comfortable to maintain occupant well-being and help tion has always been an issue when talking about air conditioning in the them to perform to their potential.

Middle East. It is known that more than 60 percent of We at Monodraught are designing and manufacture a building’s energy consumption is spent on air condilow energy products that help to meet the all three examtioning. With the current shift towards renewable enples by being cheap to run and maintain, having a low imergy resources and the demand for high efficiency pact on the environment and by helping to provide a machines, the AC industry will have to go through sighealthy and comfortable indoor environment. nificant technology advancements to satisfy current market needs in the coming years.

There is a growing focus on sustainability and Refrigerants is another critical issue in the HVAC greener construction in the Middle East, in particindustry. Refrigerants currently used in the HVAC inular seen in the increase of LEED practices. How is dustry will either have a high global warming potential this being translated into the HVAC sector? What effect or ozone depletion effect, or both. Countries is your company working on in terms of sustainworldwide are continuously working on regulations able products?

Gary Douglas that minimise, phase out or ban certain refrigerants to GD. As an EPC contractor for District Energy Systems, eliminate the negative effect on the environment. This we are not directly involved in building construction also means that major technology changes in the HVAC industry will be reand thus, LEED practices. However, in all of our projects, system efficiency quired, but true direction unknown to date. through minimising utility consumption (such as power and water) is always top of our agenda. Our engineers are fully aware of LEED and other sustainTony Cull. The HVAC industry faces a number of challenges to meet curability standards and are applying them when possible to reduce energy conrent economic, environmental and social concerns. Here are three represumption and increase efficiency. In the near future we will be seeing similar sentative examples. Firstly, the recent economic meltdown has brought standards to LEED for industrial buildings such as District Energy Plants. cost issues to the fore, and both the capital and running costs of HVAC sysAs for the effect of greener construction on HVAC, it has simply led to re-

“The current market tendency is moving towards the utilisation of renewable energy resources and enhancing system efficiencies”

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TC. Heating, ventilation and air conditioning are considered by some to be everyday commodities that can be taken for granted, and essential for the wellbeing of the population. Whilst this is certainly true for heating and ventilaTC. A hot climate is not one to be colonised and controlled, but experienced tion, air conditioning is facing the toughest challenges to its credibility. Air and lived within sustainably, and so air conditioning should not be used to conditioning systems are sometimes associated with prosperity, and status, and solve the problems caused by architectural inadequacies; glass may be aesare used to convey these attributes and not because they are necessary for the thetic but it is not a suitable façade material in any clicomfort and well-being of a building’s occupants, or mate. Middle Eastern buildings have long been because they are the most energy efficient approach. naturally ventilated and so it seems sensible that archiAlthough there are many proponents of an airtects return to vernacular principals to create buildings conditioned indoor environment who cite their conthat reflect local culture and heritage, and impact lighttribution to personal freedom and increased ly on the environment. Therefore, it is encouraging productivity in some regions of the world, air condithat LEED practices are increasing in the Middle East. tioning does not always bequeath an indoor environBuildings that are built according to its guidelines conment that is satisfactory for occupants. In fact, when sider the sustainability of the site, water efficiency, encompared against buildings that are naturally ventiergy consumed, atmospheric emissions, materials and lated using wind and buoyancy forces, occupants resources employed, indoor environmental quality, often perceive the indoor environment to be better in Tony Cull and innovation in the design process. a naturally ventilated building and report fewer sympAccordingly, Monodraught has developed a range toms of sick building syndrome (SBS). For many peoof sustainable products that apply traditional solutions used in vernacular arple air conditioning has come to be viewed not as a solution to discomfort and chitecture in a way that is compatible with modern requirements. For examSBS symptoms, but as part of the problem. Therefore, Monodraught believes ple, the Monodraught Windcatcher is a roof mounted natural ventilation the key opportunity for the HVAC sector is the application of natural and low system that employs tried and tested principals widely seen in Middle Eastern energy ventilation systems to modern buildings. vernacular architecture. It channels a controlled quantity of fresh air into a room from roof level, whatever the wind’s What new developments can we expect to see from you over the next direction, and without mechanical assissix to 12 months? tance. The Windcatcher provides a flow of GD. As I mentioned before, the current market tendency is moving towards fresh air in a room that raises the operathe utilisation of renewable energy resources and enhancing system efficientive temperatures and gives greater opcies, on that line, we are diversifying into providing EPC solutions for renewportunity for thermal adaption. able energy systems (we are currently Furthermore, the Sola-Boost uses the working on a major solar air conditioning Tony Cull has been with Monodraught for 20 years, Windcatcher technology in coordination project). We are also looking at the cominitially as a design engineer, he with a solar powered fan to guarantee bined heating and cooling and power enthen became the Technical Director in 1989. Monodraught ventilation on sunny days. Both systems hancement projects. was acquired by VKR Holdings in 2007, in April 2009 Cull are intelligently controlled by a patented In addition to diversifying in our EPC became Managing Director. iNVent demand-control system that uses solutions, we are also expanding geoGary Douglas has over 30 years of experience in operations a combination of internal temperature graphically into other countries in the remanagement. He spent the and carbon dioxide concentration to gion. Our aim is to position ourselves as majority of his career in Australia. Douglas relocated to maintain good indoor air quality and an EPC provider of energy solutions in the the UAE in 2002 as a Group Director in one of the largest thermal comfort.

MENA region. duced load demand and more efficient use of cooling capacities in buildings.

Overall, this reduces capital cost for HVAC systems and utility consumption.

“The key opportunity for the HVAC sector is the application of natural and low energy ventilation systems to modern buildings”

FMCG companies in the UAE. In 2008, Douglas joined ADC as the General Manager in Dubai.

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

GD. The current economic crisis returned serious competition on value to the market place. Today, clients are studying the value addition from using one company over the other more seriously. In our industry, this means higher demand for creativity and an ‘out of the box’ approach to projects, which is stimulating the future designs. These are opportunities for companies that are built on sound bases. It is the sustainability of a competitive price for HVAC systems while providing high quality, high efficiency products that presents today’s challenge.

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TC. Monodraught has always sought to explore, develop and create innovative lowenergy building services solutions. By maximising naturally available energy from the wind and the sun, Monodraught products are helping to build for a better future.

In the next six to 12 months, Monodraught is looking to develop its Windcatcher and Sola-Boost products to meet the demands of a Middle Eastern climate. For example, in very hot climates, it is accepted that untempered supplied air may not be appropriate and so Monodraught is actively investigating passive cooling techniques for the Windcatcher and Sola-Boost natural ventilation systems.

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SPECIAL FOCUS

It is vital that the Middle East region learns to manage its existing water resources more efficiently, but will the region overcome critical challenges and harness new infrastructure and technology to vastly improve its underdeveloped water systems and processes?

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h MENA region is he home to six percent of the global population, but currently has access to less then one percent of the planet’s renewable freshwater reserves – with an average of only 1400 cubic metres of renewable water resources per capita, the region is far below the World Bank average of 8500. Indeed, the region also consumes almost 80 percent of the fresh water it has, which is in stark contrast with regions such as Latin America where countries consume only about two percent of the volume available.

With such short supplies many countries in the region supplement the growing need for potable water with the desalination of seawater.

Countries like Kuwait, Saudi Arabia and the UAE in particular depend on desalination for potable water requirements. This heavy usage leaves little room to accommodate an expanding population, which in turn means it is vital that the region learns to manage its existing water resources more efficiently, take advantage of new technologies and improve on its relatively young and underdeveloped systems.

“There is no question that the water and wastewater side in Saudi Arabia, and even in Dubai, is undeveloped,” says Eric Jankel, former

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CEO of Aqualyng Holdings. “The physical facilities and the treatment capacity are not at modern day standards. And there’s going to be quite a bit of work to bring the wastewater treatment systems up to those modern standards and apply wastewater reuse technologies and programmes to those networks.” Jankel, who has over 30 years’ experience in the water business, goes on to explain that in most cases each of the countries in the MENA region has made positive policy changes in the last two to three years. “In Abu Dhabi they’re privatising the wastewater system. In Oman they’ve brought in management contractors to improve service delivery and improve the technology. Even in Egypt they’re trying to get financial backing for a new Cairo project. So there are certainly examples where there has been a change in direction and a momentum going forward to upgrade the standards of the systems,” says Jankel.

However, despite the huge desire to improve the water and wastewater systems in the Gulf region, there are still critical challenges to overcome. Specifically, the Middle East needs to fi nd ways to manage existing water resources more efficiently. To move forward with this goal the region must improve and expand its focus on a number of issues, including increasing water reuse options, better water conservation efforts, more desalination project development and improved irrigation modernisation. Ark Pang, Chief Development Office for Kharafi National, believes that fi rstly, greater awareness and implementation of water conservation measures must be seen in the region in order to help preserve fresh water stocks. “It is often said that seawater is the unlimited reservoir and desalinated water will solve mankind’s water scarcity problem. On the fl ip side, municipal wastewater is also a highly reliable source of water and if properly treated should be a critical resource in the government’s overall water management scheme.”

The growth of desalination The global desalination market is growing at a record rate. The total capacity of plants now online is 59.9 million m3/d, a 6.6 million m3/d increase on last year and representing the largest amount of desalination capacity brought online in a single year. Seven hundred new plants were commissioned around the world during the year – including the largest in the world, the 880,000 m3/d Shoaiba 3 project in Saudi Arabia – and there are now 14,451 desalination plants online, while a further 244 plants with a capacity of 9.1 million m3/d are known to be under contract or in construction.

The greatest increase has come from seawater desalination. Since November 2007, the installed capacity of seawater desalination plants has expanded by 29.6 percent to 35.9 million m3/d. To date in 2009, 4.6 million cubic metres per day of seawater desalination capacity was added, and demand for seawater desalination is forecast to grow dramatically.

Pang goes on to suggest water metering and a review of subsidised water tariffs in order to improve systems and services. Kathy Shandling, Executive Director of the International Private Water Associa-

“There is clearly a role that effectively structured public private partnerships can play in addressing some of the various issues” tion (IPWA) agrees, saying that it is vital the region moves towards a full cost recovery for water services in order to achieve long-term, sustainable systems. She explains that this will involve the implementation of viable AMR systems to better ensure a more eff ective billing system, including the collection of payment for water/wastewater services rendered. Certainly countries in the region are increasingly seeing their governments turn to the private sector to meet their water and wastewater needs. Shandling believes that when the right partnership is created it can have a very positive impact – although there is a fl ip side to that – and a variety of public private partnerships (PPP) are being implemented throughout the region.

“There is clearly a role that effectively structured public private partnerships can play in addressing some of the various issues,” says Shandling. “PPPs can take the form of concessions, management contracts, corporatised local water companies and so on. A newer PPP initiative will most likely involve different players – particularly the smaller and more specialised private companies. The new PPPs will more likely mirror strategic alliances or partnerships rather than the older, more traditional PPP model that outlines a broader and total outsourcing contract to one particular company.”

Desalination Even as the structure behind the infrastructure changes to make systems more efficient with the introduction of PPPs and water metres for example, it is the technology producing the clean, safe water that is becoming increasingly important. The UAE, for example, has virtually no sources of surface water, such as rivers, so desalination is the major source of water supply. According to Lisa Henthorne, immediate Past-President of the International Desalination Association (IDA), the world’s largest desalination plants, both online and in the planning stages, are those seawater facilities located in the Middle East region. The largest production from an individual desalination installation is the Shoaiba 3 project on the west coast of Saudi Arabia, producing 880,000 cubic metres per day.

Seven other commissioned or contracted plants have capacities in excess of 400,000 cubic metres per day. In addition, Ras Azzour, on the east coast of Saudi Arabia, has a planned capacity of one million cubic metres per day.

“We tend to build these desalination plants in phases, adding on to facilities as demand grows,” she explains. “The Jebel Ali complex in Dubai is a good example, where an additional 600,000 cubic metres per day of capacity was recently contracted.”

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Seawater desalination represents a US$10 billion industry today, and is forecast to be worth some US$16 billion by 2020. According to Henthorne, while the global economic downturn caused the rate of growth in desalination plants to slow somewhat in 20082009, population and economic growth, pollution of existing water resources and climate change continue to drive the need for new and reliable sources of water. “Desalination is one of the answers,” she says. “It continues to be an increasingly important part of global water solutions for the 21st century and for a better world.”

Indeed, desalination is especially important to countries on the Arabian Gulf. Together, the countries of the Arabian Gulf – the

Case study: Jordan In 2000, the government of Jordan set up the Aqaba Special Economic Zone (ASEZ) in the city of Aqaba. The institutional changes embedded in the establishment of the zone opened the doors for other significant changes in Jordan, including some that were to affect the water and sanitation sector.

Prior to the zone being set up, central government agencies were responsible for developing and managing the port, the airport and the utility services, including water and sanitation. The law establishing the zone brought about a direct challenge to the status quo as it explicitly allocated this responsibility to the Aqaba Special Economic Zone Authority (ASEZA).

The opportunities opened up by the ASEZ law for entrepreneurs in economic and political organisations in Aqaba were also perceived by many as a threat to central government organisations operating in the city.

Consequently, intense negotiations were held between the parties to find ways to implement the law while protecting their respective interests. The corporatisation of water and sanitation services was part of these negotiations. The negotiating parties were the Ministry of Water and Irrigation (MWI) and the Water Authority of Jordan (WAJ) on one side, and ASEZA on the other.

The Aqaba precedent had ripple effects in the water sector, as it was a major factor in the corporatisation of Amman services. Aqaba’s services were corporatised in 2004 and Amman’s in 2007. In Aqaba, the government set up the Aqaba Water Company (AWC) to replace a local agency from the Water Authority of Jordan (WAJ), while in Amman the government created MIYAHUNA to replace LEMA, a private company operating under a management contract with WAJ. “It’s critical for countries to be able to make progress in other areas of economic development. I can think of a number of sectors that won’t be able to develop properly if there is no good water service. Tourism, for one, in a country like Jordan is critical, and certainly so in industry of various sorts. So to us it is important that the international lending agencies and donor agencies continue to pay attention to the water sector reform,” says Jorge Segura, Managing Partner of Segura Consulting, the international consulting firm that was involved in the Amman water management project.

“Even as the structure behind the infrastructure changes to make systems more efficient with the introduction of PPPs, it is the technology producing the clean, safe water that is becoming increasingly important”

GCC plus Iraq and Iran – account for approximately 40 percent of the world’s desalination capacity. For example, IDA estimates that 95 percent of Dubai’s water supply is produced through desalination.

At the same time, the unique configuration of the Arabian Gulf – a semi-closed water body with limited fresh water inflow from rivers – requires diligent attention to the potential effects of the process.

In response, IDA has announced plans to form a task force to explore the environmental effects of desalination on the Arabian Gulf and recommend strategies to mitigate potential impacts. According to Henthorne, the task force is part of a larger initiative that IDA is organising to examine best practices, as well as available and future technologies; to address environmentally-related aspects of desalination such as energy consumption, safeguarding of marine life, and concentrate disposal; and promote ways to mitigate potential environmental impacts of desalination around the world. “In many regions, including the Arabian Gulf, desalination is the only way to supply fresh, clean water to growing populations and economies,” she says. “IDA is committed to environmentally responsible practices in desalination, which has become an increasingly important part of the solution to water issues around the world.”

Decentralisation However, Jankel believes that while desalination has proved a good solution to some of the water problems in the MENA region, many of the challenges seen in the water systems today relate to the fact that too many of these desalination plants use thermal technol-

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ogy steamed from power plants, which means they are co-located with power station sites. “In the summer, the peak demand can be twice the base load demand in the winter, whereas the demand for water is relatively constant year-round. Th is poses some challenges and certainly increases the cost of water production in the winter months, when steam is produced simply for the purposes of desalinating the water,” he says. Jankel goes on to explain that this is why reverse osmosis technology is one of the big trends in the region at the moment – it doesn’t use steam and doesn’t have to be co-located at a power plant site and is fundamentally a more cost-effective option.

However, from an operational point of view, he highlights the advantages, including that companies have been using the thermal technology for 25-30 years, are comfortable with it and able to deal with the challenges it presents.

“Reverse osmosis is certainly more challenging and more difficult to operate on a day-to-day basis because of the pre-treatment system, so in some cases there’s been a willingness to take reverse osmosis and go forward, and in some cases there’s been a little bit of hesitancy to embrace the technology. However, where these real estate developments are coming on like the Palm Deira, certain portions of the Palm are served by reverse osmosis plants as opposed to desalination, and likewise in the northern Emirates, basically the government has told developers you can go forward and build your project, but you will not be getting electricity and water form the public sources – you’ll have to make your own as part of your project.”

These circumstances have led to a decentralisation of some of the systems taking place as a result. In many cases this has helped to promote wastewater reuse. Historically a wastewater plant would be out in the desert, away from the community, and the wastewater would be piped out to that plant, treated and piped back. However, with a decentralised system, out on one of the islands in Abu Dhabi for example, the treatment plant is close by as part of the island development, and then the wastewater can be piped back quickly and used effectively. “It makes the economics of wastewater reuse much more advantageous when the plant can be built close to the ultimate end-user of the reuse project,” adds Jankel.

The systems in the region are undoubtedly becoming more rationalised, with efficiency becoming a more important criteria, and likewise the technologies for both water production and for wastewater treatment more cost effective. In that sense the cost profi le is coming down and helping countries participate in a more rational framework for water production, supply and waste treatment, and in particular water reuse, which is a huge factor in the overall cycle of how economies and governments can efficiently use the water resources available.

Jankel explains that the industry is set to remain fractured in the near future. Indeed, with the current system set-up, there are utility companies that own and operate the system, engineering companies that do the design work and then there are equipment suppliers who sell various technologies and equipment to the market. “However,” he says, “I do believe that the governments around the region are beginning to harness the private sector from both a technology and fi nancing point of view, and that can only be a good thing.”

The corporatisation in Aqaba and Amman was a complex process, and the Aqaba Special Economic Zone faced strong opposition because it was perceived as a threat to Jordan’s centralised public administration. As such it involved high-level government officials, technical assistance, and disciplined and cooperative work among government agencies, USAID and consultants.

The government’s intention of providing excellent water and sanitation services posed substantial challenges; however, there are many lessons and recommendations that can be drawn from the water and sanitation services in Amman and Aqaba. Three broad themes seem to be of particular interest for potential reformers: the supply and demand sides of reform, political support and the disciplined approach to reform, and feedback loops.

Firstly, the demand for reform may come from inside or outside the water and sanitation sector. It is essential, therefore, that reformers remain continuously on the alert for events signalling that demand. Aqaba and Amman are examples of these external/internal sources of reform. Aqaba’s source appears to be from outside the sector, while Amman’s appears to be from inside. The impetus for reform in Aqaba came from the law establishing the economic zone because the law introduced the potential for broad institutional change with a direct impact on the water sector. On the other hand, Amman’s push for reform emerged from inside the sector in view of the role played by the experience of Aqaba water services, and the experience with the water and sanitation services in Amman under the management contract.

Secondly, reformers should engage and sustain strong political support for reform. They should also ensure the continuous involvement of high-level government experts and officials on a day-to-day basis. Aqaba and Amman are examples of this approach, through the creation of reform committees led by high-level government officials with a clear mandate and with easyaccess to the highest levels in government. Thirdly, reformers should also keep in mind that in the real world things frequently do not work as expected by decision makers. Public policies must be adapted when they fail or when circumstances change. This adaptability requires setting up systematic feedback loops helping to determine whether the reform is producing the intended results.

Source: excerpt from USAID report Reforming the Water and Sanitation Sector: Challenges in Corporatising Service Provision: The Case of Jordan

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ROUNDTABLE

In deep

water

With the water and wastewater market set to grow to US$1.87 billion by 2013, MENA Infrastructure asks a panel of experts for their opinions on the huge investments in infrastructure currently going on in the region.

The water and wastewater sector experienced rapid growth in 2008 fuelled by huge investments in infrastructure, but the global economic crisis is now expected to restrain market growth. What impact has the crisis had on the sector in your opinion?

Tony Wynes. The restraint on the previously increasing growth of the infrastructure market is most likely to reduce the need for water and the amount of wastewater available for recycling.

This will enable a period of analysis and environmental management planning to take place.

Water is vital for mankindâ&#x20AC;&#x2122;s survival and the effects of climate change must be taken into account. Th is is a time for reflection and the preparation of revised environmental plans to determine each state and countryâ&#x20AC;&#x2122;s total water requirement for personal consumption and the growing of food crops.

As the depth of the oceans increases, sea level landmasses will disappear. Those which survive need to estimate the amount of rain they will receive from the violent storms of climate change to feed the rivers, and build desalination plants to cover the rest. It is vital

to dam rivers and build reservoirs to ensure that there is a large enough reserve of water to overcome hot dry periods with no rain.

David Tomowich. As we all know, water is vital to survival and therefore proper treatment of water, including disinfection, is key to maintaining a healthy community, environment and economy. The global economic crisis has been felt within the industry on a project level as some projects have been delayed or even cancelled due to funding re-prioritisation or lack of residential development and con-

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The Utility Experts

struction. Having said that, the water industry overall continues to grow since water is such a vital resource. Even during tough economic times there is usually a focus on infrastructure that includes developing the supply of safe reliable water treatment.

Lisa Henthorne. I work predominantly in the desalination industry and we experienced some slowdown in growth in 2009 as a result of the economic crisis. In the last few years

our industry has experienced unprecedented growth – 27 percent compounded annually– however in 2009 we saw some project tender dates slip into 2010 and beyond. A few large desalination projects failed to reach fi nancial closure in 2009 and had to be resubmitted for fi nancing or shifted from privatised to government-owned projects.

The planning and construction cycle is lengthy in the water and wastewater sector, so while we are slow to feel the impact of the eco-

The Panel David Tomowich, who has been with Trojan Technologies since 1993, has worked in sales management in the US, Europe and now as the International Sales Director. He has worked on some of the largest UV disinfection applications including storm/wastewater treatment in Southeastern USA and drinking water systems for New York City.

Lisa Henthorne is the Chief Technology Officer of WATER STANDARD and served as the President of the International Desalination Association (IDA) from 2007-2009. Professionally, Henthorne has more than 20 years of experience and has published more than 70 papers on desalination and membrane technology.

Tony Wynes is Managing Director of Aquarius Marine Group, that he set up 37 years ago as a Diving Maintenance and Environmental Consultancy. This led him to invent and coordinate the design of the ‘Aquaerator’ which is patented in many countries. He was a Founder Member of the Environmental Industries Commission, inaugurated at the House of Lords in April 1995 and has worked with six major water companies.

nomic crisis upfront, we will continue to experience it well after the actual crisis has passed.

What are the biggest challenges facing the water industry in the Middle East? How is your solution best placed to tackle these challenges?

DT. The Middle East is experiencing unprecedented growth that will naturally put a lot of strain on the existing infrastructure in place to treat water. A big challenge may be the planning as well as having resources in place to keep up with the growth and demand for water and wastewater treatment – especially considering the water shortages already experienced in most middle-eastern countries. Another challenge for the Middle East will be to put in place and enforce regulations that ensure minimum water treatment standards are being met during this period of rapid growth and beyond.

Trojan’s UV disinfection solutions have played an integral part in hundreds of reuse and water recycling plans worldwide. UV can easily be installed into existing wastewater or drinking water plants to increase levels of public health protection. In terms of meeting sustainability objectives, UV offers a safe chemical-free approach to disinfection with an environmental footprint significantly lower than alternative disinfectants or desalination.

LH. The Middle East has extremely limited renewable water resources. Desalination has enabled development of the region into a global financial hub and premier supplier of fossil fuel that powers the world. But desalination plants are capital-intensive, time-consuming to construct and require considerable power to operate. WATER STANDARD offers a solution that addresses these challenges by bringing a desalinated supply onboard a large ship to water-short cities or industrial areas in a timely fashion (approximately 18 months). We’re also equipped with our own power plant and financing. We simply sell water to the customer – thereby reducing the traditional challenges inherent in tendering, designing, approving, constructing, financing and operating a desalination plant in the Middle East. One of the aspects of WATER STANDARD that I am most proud of is our dedication to protect the environment. Most of the WATER STANDARD intellectual property is associated with treat-

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In my view Richard Menezes is CEO of United Arab Emirates-based Utico, a utilities company specialising in water, sewage, steam, power and related services for clientele requiring reliable, low-cost supply of utilities.

We do not provide luxuries, but the basic necessity for life. Water is life and we ensure it is provided reliably and economically. Because there is a global crisis, people will not stop using less water proportionately unless many industries close down altogether. There will always be some that are building.

However, building additional capacities for drinking water during these times is required – this is a stimulant for growth, both as an employment provider and as a service to industry and population as growth returns.

The trick as usual is to find a balance through phasing, and also between supply and demand.

The biggest challenge to the water industry is to educate the government and consumers about policy and conservation respectively. Governments all over the world must change the way they look at water as a low-cost commodity. What they should do is to differentiate between commercial water supply and domestic supplies by charging more for large consumption from domestic consumers, while at the same time keeping a higher starting tariff for commercial consumers that comes down when their unit average consumption reduces.

This allows the government to reduce liabilities when they commit to longterm off-take agreements with water generation companies, which should not happen in the first place. What should happen is that the government should act as a concession provider for an area and facilitate through policy and regulation that the water generation companies are not merely money and technology providers, but true service providers right to the point-of-use, including billing and collection.

Risk can be mitigated in so many ways that the government doesn’t need to take all the risk. Another challenge is weeding out fast-track moneymakers in the water industry and accepting true service providers in the industry.

Building new capacities and conservation are the growth areas for the future.

Water re-use happens when there is sufficient fresh drinking water in the first place – there is only so much that can be re-used. Conservation is another area where a service provider role should be included, through which the developer, regulator and consumer benefits. We are the only company servicing all these areas – the only true full service provider.

MENA is relatively a water-scarce area; however, the region is not alone in its water problems. Building capacities through seawater desalination as an alterative water source is an area of growth, and water re-use through treated sewage effluent is another. There is also an increasing market for water purifiers, which will help somewhat in overall technology development.

ing water from the sea in such a way that the marine environment is protected.

TW The biggest challenge facing the Middle East is following the huge infrastructure growth – is there enough water retained behind dammed rivers and large enough reservoirs to store at least a year’s water requirements? Trees can be planted on the windward side of these waterbodies that will help the world’s carbon footprint and reduce the effect of sandstorms.

Aquarius has spent 37 years innovating systems that improve the quality of water in reservoirs and our cutting-edge ‘Aquaerator’ is now the scientifically proved answer to many reservoir problems. These include stratification, which causes water below eight to 10m from the surface to be oxygen deficient and have metals in suspension. Unfortunately few people realise that bed water has a higher density than surface water, thus the cheapest form of surface water aeration is provided by the wind. It is vital to place aeration and mixing devices on the bed, using the simple principle that it takes more energy and costs more to force air down from the surface, whereas a bubble plume from the bed rises naturally towards the surface. Our technology, financed by a major EU grant, also rotates the bubble plume. This causes considerable additional entrainment by using an Aquaerator, which has no moving parts to wear out.

Governments in GCC countries have identified municipal wastewater treatment as the priority area for multiple reasons including the achievement of the Millennium Development Goals. Where do you see the main growth opportunities in the water and wastewater sector and what are you doing in this area/s?

LH. Desalination will continue to be a high growth area in the GCC countries but advanced wastewater reuse also represents a high growth opportunity in the water and wastewater sector in the region. Advanced wastewater reuse utilises the available municipal and/or industrial wastewater to produce a high-quality product water that can be used for economic-enhancing purposes. Presently, the GCC countries treat their wastewater to standards for use in greenbelt irrigation but much is disposed in the sea.

As advanced water reuse is less expensive than

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A recent Frost and Sullivan report concludes that the water and wastewater market is set to grow to US$1.87 billion by 2013. What are your thoughts on the water and wastewater industry in the MENA region over the coming three years? What do you expect to see happen and what do you hope for the sector?

TW. It is vital for the MENA region and the whole world to have environmental management plans for water and wastewater. Th is plan should be used as an opportunity to identify the systems that are the most energy efficient in order to ensure the lowest carbon footprint.

I hope the sector will build reservoirs, lakes and dams on rivers to store the planet’s and human beings’ most vital commodity for the progression of life itself, water. Trees can surround the water to reduce the effect of climate change and sandstorms in order to become the oases for future generations. seawater desalination, it should be considered as a primary component of the water supply portfolio of the region.

WATER STANDARD is developing ship-based facilities to treat produced wastewaters generated by the oil and gas industry, to standards for reinjection in waterflooding oil and gas reservoirs. Our approach offers a solution to the growing problem of disposal of these produced waters in an environmentallysensitive manner, as well as creating a resource that adds value to the process of producing oil and gas.

TW. Municipal wastewater treatment is vital to improve the quality of life of the whole population and for increasing the overall water available for recycling.

However, existing wastewater technology still has a high carbon footprint due to the electricity used to recycle it. Thus we have designed an Aquaerator that we consider will prove more efficient by using less electricity. It is also removable from the bed for cleaning and replaced without the major cost of emptying the main operating tank. The prototype will be tested in early 2010.

Future environmental management plans need to show a main growth area in the water and wastewater sectors of building reservoirs and dams on rivers. This enables storage of vast quantities of raw and recycled water to ensure

that each country or state is able to grow its crops and the population does not become ill through malnutrition or dehydration.

Aquarius innovation strategy has been to ensure that our products use as little power as possible and have no moving parts requiring maintenance. The various Aquaerator designs improve reservoirs, lakes, fish farms and fishery water quality.

DT. In the drinking water sector, Trojan is designing and providing ultraviolet systems that protect the public against potentially harmful protozoa, bacteria and viruses. To date, these drinking water installations tend to be on a smaller scale. We are encouraging the adoption of UV disinfection technology by larger facilities – the benefits to the cities and communities are significant. Regulations, installations and experience is available globally and can be drawn upon as needed in the Middle East.

UV disinfection has played a key role in the Middle East for over a decade and will continue to be a growth market. The demand for reliable technology and the use of best design practices needs to be a priority of regulatory agencies, consultants, the end-user and equipment suppliers alike. Meeting the demands of growing populations and addressing water scarcity will only be successful if new standards of treatment are formulated and adopted into future water treatment plans.

DT. We expect to see significant project-related activity including UV applications and significant growth and advancement in the field of water treatment – especially as the economy rebounds and delayed projects move forward.

We need to ensure there is proper design, validation and application of technologies in any rapidly growing market to ensure a successful outcome. Industry leaders, regulators, consultants and end-users all need to play a role to ensure objectives are established and met.

I expect to see rapid growth in the water and wastewater treatment sectors in the coming years. My hope is that we see additional emphasis on inherently greener technologies and that industry participants take an active role in the development and implementation of critical planning projects, policies and regulations that address water scarcity in the region.

LH. Due to the non-renewable nature of water in the MENA region, my hope for the future is that water becomes a truly valued resource. For this to occur, pricing must reflect its value in order for the users to treat it with the respect it deserves and use it wisely. This renewed respect for water will trickle down to its environmental value, and we will be encouraged to consider the environmental impact of its production as well as the impact of the disposal of wastewater in the sea.

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AQUARIUS MG AD_14june 15/01/2010 14:48 Page 1

SUCCESSFUL AERATION AND MIXING DESTRATIFIES ‘LAKESIDE’ DONCASTER AND BLAGDON RESERVOIR, BRISTOL, UK.

Surface of water above an AQUAERATOR at Doncaster ‘Lakeside’

Bubble Plume from 20m depth at Wraysbury Reservoir, London

Doncaster ‘Lakeside’ showing the AQUAERATION SYSTEM in use

Bubble Plume on surface above an AQUAERATOR at Blagdon Reservoir, Bristol

Bed water is a higher density than surface water, thus successful aeration and mixing require a device on the bottom. Our cutting edge, patented AQUAERATOR is the crescendo of 37 years Innovation, developed with an EU Grant €880,000 and scientifically proved to successfully aerate, mix and destratify Blagdon Reservoir, Barrow Reservoirs 1& 2 and Doncaster ‘Lakeside’, including manganese and algal reduction. Our Environmental Management Plans include water, bed silt testing and algal identification. The AQUAERATION System achieves a smaller carbon footprint than our competitors and compliance with the EU Water Framework Directive. The new Fishery AQUAERATOR is oxygenating bedwater at Cross Drove Fishery, Thetford and Avalon Fishery, Glastonbury.

AQUARIUS MARINE GROUP LTD, The Beckery,Glastonbury, Somerset BA6 9NT, UK Tel/Fax: 00 44(0)1458 834 734 Email: tonywynes@AOL.com Website: www.aeration.UK.com

Wastewater ed_4August 15/01/2010 16:26 Page 106

WASTEWATER FOCUS

MAKING A SPLASH A surge in population and the relative scarcity of water in the Middle East have made dealing with wastewater a high priority for regional governments, as HE Dr Rashid Ahmed Bin Fahad, UAE Minister of Environment and Water, explains.

T

he issue of reusing wastewater has gained much importance in recent years due to the steady increase of population on the one hand and the sharp shortage of freshwater around the world on the other. In several countries, reusing water has become a fundamental part of the solution to the severe shortage in water resources.

In addition to the sanitary, environmental and economic benefits of reusing wastewater, it also plays an important role in mitigating pressure on other freshwater resources. However, the reuse of wastewater still lacks broad social acceptance and is confined to limited fields in many countries, creating an urgent need to carry out further studies and disseminate the advantages involved in using such types of water – especially in relation to the aspects of health, the environment and the economy.

The UAE government is working to conserve water resources and to increase water sources by adopting a water rationalising policy for household, industrial and agricultural purposes. We have also adopted a water tariff system and modern irrigation techniques, and embarked upon the construction of dams for replenishing groundwater with rainwater and the building of desalination plants and sewage treatment plants.

The United Arab Emirates has paid special attention to the sanitary drainage issue. In 1963 the UAE set up the first sewage treatment plant in Abu Dhabi, with a production capacity of 3400 cubic meters per day. To cope with the expansion of the urban areas and the spike in population, further treatment plants have been set up in the

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different emirates since that time; they now number 42 plants with a total capacity of 400 million cubic meters every year. It is expected that treated water quantities will increase in the near future as new plants come on line and the sanitary drainage nets are expanded in the different cities of the country. They will operate efficiently in accordance with the most modern techniques and methods, with water being tertiary treated to ensure conformity with international criteria.

“The UAE government is working to conserve water resources and to increase water sources by adopting a water rationalising policy for household, industrial and agricultural purposes” The sanitary treatment plants have provided several benefits. They have turned our wastewater from a harmful environmental element into a beneficial one, provided an additional source of water at reasonable economical cost to the UAE (which suffers from scant water resources in view of its geographical location and the absence of surface water streams) and consequently reduces depletion of the groundwater.

The water issue, including the expanding field of wastewater use, has attracted great attention. The operational plan of the Ministry of Environment and Water includes an evaluation study of the current situation with re-

gards to water resources and future demand.

The plan and strategy for the water sector is also being modernised in the national environmental strategy. Furthermore, the adoption of green building standards will necessarily augment the efficiency of water use and widen uses of wastewater in the buildings implementing such standards.

Despite the fact that treated wastewater in the United Arab Emirates is only used for irrigating forests, parks, green belts and some species of plants that are used as food for animals, there are other fields in which such water can be used – for example, the cooling industry, recreation and fire fighting. Treated wastewater can even be used (at suitable levels) for irrigating other species of plants.

Although it is unwise to resort to using high quality water for purposes that can be done with water of lower quality, there are certain social and technological matters that need to be addressed before expanding the fields and purposes of using treated water. Such concerns should be dealt with earnestly on different levels, including the intensification of outreach programmes on the safety of using treated wastewater in more applications, and harnessing the expertise of other countries in this field. Although we believe in the importance of increasing water re-use in the projects of forestation and green covers, we stress the necessity of having the use of treated water controlled by clear environmental and sanitary standards and stringent control programmes to protect human health and safety.

Exchanging expertise, knowledge, scientific research and the most modern technologies being used in this field is of great importance in developing plans to use wastewater as a basic part of integrated water resources management. We believe that the private sector is our partner in this development process and has got a lot to offer. n HE Dr Rashid Ahmed Bin Fahad was speaking at the WastewaterTech 2009 conference in Abu Dhabi.

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INDUSTRY INSIGHT

A fast paced evolution

Suvarna Jeetandra gives the low-down on the wastewater sector and explains the impact of new technologies on the growing Middle East urban infrastructure market.

U

rban waste management is one of the most essential aspects of modern living. With the growing ‘green consciousness’ among global citizens, waste management has now taken an unprecedented position at leading municipalities and communities around the world. The rapid momentum of recycling efforts have furthered the cause for more sophisticated, humane, practical, cost effective and environmentally friendly methods for waste segregation, collection, transfer and disposal.

With the growing number of preplanned cities in development around the Middle East, municipalities, communities, professional architects, consultants, engineers and other city builders are now actively researching the most versatile, modern and practical solution for waste management in any kind of urban or industrial setup. A solution that combines all kinds of modern waste management technology, including modernised over-ground containers, state-of-theart underground containers as well as semi-underground containers, the collection system must be able to adapt to the various parts of the city including

“With the growing number of preplanned cities in development around the Middle East, municipalities, communities, professional architects, consultants, engineers and other city builders are now actively researching the most versatile, modern and practical solution for waste management in any kind of urban or industrial setup” high rise areas, villa localities as well as medium to low rise areas all with varying population density levels. The new system must also be designed understanding the constitution of the waste in the region, which contains a lot of leachate or liquid waste. This is a cause of major concern among municipal authorities as they try to prevent this liquid waste from leaking to the ground from existing container units. A mobile washing plant which can thoroughly clean and sanitise these containers on a regular basis is also an essential part of the urban demand for responsible waste management.

The young cities of the Middle East such as Abu Dhabi, Dubai, Doha, Muscat, Riyadh, Jeddah etc are now going through a rapid wave of modernisa-

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tion especially in public infrastructure and the municipalities are actively seeking ways to replace the traditional standard DIN Lifting Mechanism, which involve either front loading, rear loading or side loading systems. This 40-year-old system will slowly be replaced by revolutionary technology that will offer the city a much needed waste systems revamp. The change will be towards a more cost effective and long-term economical solution that can slowly be expanded to include recycling and other green initiatives of the local authorities.

Blue Stream Environmental Technology, a decade old regional waste solution provider has identified this growing trend and recently partnered with Nord Engineering s.n.c, Italy to bring the NORD EASY SYSTEM to the Middle East.

The NORD EASY SYSTEM is one such system that offers an integrated waste management setup that includes a single person operated waste collection vehicle equipped complete with robotic lifting arms for emptying containers from the street on the truck mounted compactor. Nord’s ongoing contract with the city of Barcelona has seen the implementation of 27,000 container units and over 55 collection vehicles and an adequate number of washing vehicles. The Barcelona Authorities are extremely pleased with the NORD System and are openly recommending it to their sister cities across the Middle East and Europe. The system is unique in the sense that it is one of the only systems to offer a completely integrated urban waste management solution, tailor designed for the region which includes all kinds of over-ground, under-ground and semi-underground container units collected with the same vehicle with all containers designed to hold up to 250 litres of liquid waste, and with a completely mobile state-of-the-art washing plant. The system boasts one of the shortest collection times in the industry with incredibly reduced container maintenance costs compared to current systems and since both the compactor and the washing unit are designed as roll on/roll off systems this is a blessing to the logistics issues of the municipality.

The Middle East is like no other place in the world and its waste management issues share quite the same story. A custom designed solution for this region is the need of the hour and any waste systems provider with the ingenuity to comprehend this can capitalise on the growing Middle East urban infrastructure market.

Suvarna Jeetandra is Managing Director of Blue Stream Environmental Technology L.L.C, UAE and Eco N!rvana Technologies, India. With over 35 years in the MENA region and a direct involvement in the waste management industry, Jeetandra is an expert in urban environmental development and civic waste infrastructure.

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TRANSPORT FOCUS

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One of the world’s most advanced metro lines in the world and the first urban metro network in the Gulf’s Arab states, the Dubai Metro is set to revolutionise the public transport system in the emirate. Serco’s Ramadan Abdullah, Director of the Rail Operations Department, explains the unique challenges and reveals the crucial role of technology for the network.

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ubai’s economy is based on finance, air transport, property development and tourism. However, the rapidly increasing population and high number of tourists is causing severe traffic congestion problems. Indeed, the population is forecast to grow by 6.4 percent annually to reach three million by 2017, and tourist numbers are projected to reach 15 million this year. The Dubai Municipality identified the need for a rail system to relieve growing motor vehicle traffic and support continuing urban development from research that started back in 1997 and came up with the Dubai Metro transport system.

When completed the Dubai Metro will have 70 kilometres of lines and 47 stations – including nine underground. Two lines are currently under construction – the Red and Green Lines – with three more in the pipeline.

Fully integrated within the network operated by the Roads and Transport Authority, a body created in 2005, the masterplan includes 320 kilometres of metro lines by 2020 to cater to the expected 3.3 million population.

There are also plans for 268 kilometres of light rail tracks to act as a feeder system for the metro.

Ground works for the metro system started in February 2006, centred around the 52.1 kilometre Red Line, with a contract worth US$12 billion awarded in the August of that year to start building the Green Line. The Red Line has 29 stations, four of which are underground, although only 10 were ready for the September opening date, and it runs from Rashidiva to Jebel Ali, passing the American University of Dubai. The entire length is expected to take an hour to travel, with an estimated 32,000 passengers an hour. The 22.5 kilometre Green Line will have 18 stations running from Al Ittihad Square to Rashuduya bus station through Deira City Centre and Dubai Airport Terminals 1 and 3.

Trains run on elevated viaducts with the design and aesthetics developed specifically to enhance the urban architecture along its corridor. In no location will tracks cross highways, ensuring full mode segregation. Although taxi, bus and water taxi feeder services are being structured to encourage end-to-end use of public transport, the RTA is also creating three park and ride sites – the largest with 6000 places. A third-rail power supply was chosen to avoid the visual intrusion of overhead line equipment, and all stations, elevated and underground, will feature platform screen doors for passenger safety and to facilitate air conditioning.

In June 2007, Serco (operator of the London Docklands Light Railway) was named as preferred bidder for initial consultation and the system’s operation and maintenance. The UK£400 million five-year contract, relates to the first two lines as assigned by the RTA. Ramadan Abdulla, Director of the Rail Operations Department at Serco, believes that the introduction of the Middle East’s first automated rail transport system has had a positive

Under construction With the Red and Green Lines currently under construction there are a number of other proposed lines on the drawing board: Purple Line: 49 kilometres long the proposed line will run from Dubai International Airport to Al Maktoum International Airport along Al Khail Road. Construction started in 2009 and it is due to be operational by 2012. It will have about eight stations on the route, three with check-in facilities.

Blue Line: 47 kilometres long, the Blue Line will also run from Dubai International Airport to Al Maktoum International Airport, along Emirates Road. This was originally proposed with construction starting along with the Purple Line and completion in 2012, however, due to the recession it was taken under reconsideration and now has a deadline of 2014.

Yellow Line: In April 2008 the RTA announced plans for a Yellow Line, a light rail operation, although details about where it would run have yet to be released.

Red Line extension: An extension to the Red Line this will be 15.5 kilometres long and include six new stations, terminating at the border with Abu Dhabi. Dates for completion have yet to be announced.

impact on the emirate alongside the RTA’s full transportation system for the public, including taxis, buses, marina and modern road network. “The metro has meant that the residents of Dubai can move around much more easily and safely,” he explains. “In the near future – after opening the Red and Green Lines and the Tram Al Safooh network – the Dubai Metro will become the core public transportation system, as proved in the last three months with more than six million passengers using the service.”

Before the launch the Dubai Municipality Public Transport department expected the metro to carry 1.2 million passengers on an average day, 27,000 passengers per hour for each line and 355 million passengers per year once both the Red and Green Lines were fully operational. It is also expected to provide transport for 12 percent of all trips within Dubai. And since Dubai inaugurated its metro network on September 9, 2009, the metro has served an estimated 57,000 passengers per day. Indeed, after the fi rst month of operation – on a limited

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network – the actual rider-ship was 1,740, 578, equating to just under 60,000 passengers per day.

Technology There is no doubt that cutting-edge technology had a huge role to play in ensuring that the metro system has been successful its operation to date.

Technology has played a part in tightening security in particular, with over 3000 CCTV cameras deployed at stations, depots and on trains, forming the core of the Dubai Metro safety and security regimes. Images from each camera deployed are recorded 24 hours a day, seven days a week. “In addition to using CCTV and CCTV recording,” explains Abdullah, “the Dubai Metro also has a comprehensive integrated access control system are to ensure that only approved staff and personnel allowed to gain access to operationally sensitive areas, such as the control and power rooms.”

Abdullah goes on to explain that a wide range of intruder detectors are deployed across the metro to detect and advise the control room staff if individuals have entered a restricted area. “All these systems are integrated into a state-of-the-art control and command system. This enables important information to flow as and when required whilst at the same time providing Senior Operations Management within the RTA Rail Agency, together with Dubai Police Senior Officers, with clear and concise information at all times. The heart of the Control and Command Centre is

Full speed ahead The RTA is also addressing transport issues through a renewal and expansion of the bus fleet, low-emission vehicles for taxi operations, and, most recently, the Al Safooh tram project. First announced in April 2008, the Al Safooh is yet another world first for Dubai, featuring an open tramway of all stops equipped with platform screen doors, permitting full air-conditioning. Allowing for consistency with other RTA modes of transport, including bus shelters, air-conditioning adds to customer appeal in regular temperatures of around 40 degrees Celsius.

The full scheme is for 14 kilometres mainly following Al Safooh Road, linking Madinat Jumeirah and the Mall of the Emirates with Dubai Marina and the Jumeirah Beach Residence. Phase 1 will create a twin-track 10 kilometre line with 13 stops, with a standard platform length of 44 metres.

Mainly at surface level, there will be some elevated track near the Marina. To encourage overall public transport use, interchange with Dubai Metro’s Red Line will be provided at three points.

Phase 1 of the project is due to start commercial services during 2011. Phase 2 would add a further 14 trams and four kilometres of line with another six stops.

Source: www.railway-technology.com

Dubai Metro in numbers Six million passengers in first three months 11,675 passengers per direction per hour on the Red Line 518 buses will be in operation by April 2010 87 trains in the metro system 75 kilometres in total 47 stations 9 underground stations 5-car trains 3 classes; Gold, Silver, Women and Childen 2 transfer stations

advanced communications, detector and video technology thereby ensuring that the Dubai Metro remains a safe and secure transport network for both staff and the public at all times.”

Occupying 10,000m2, the system’s control centre is at Rashidiya depot. The project’s signalling system is moving block and fully automated with in-cab signalling. The driverless, fully automated trains are fully airconditioned and offer three classes of travel; the standard ‘silver’ class, a women and children only section, plus a first –class ‘gold’ section. The fivecar sets are approximately 75 metre long, seating around 400 passengers, plus standing room.

Despite the main control room in Rashidiya not being fully ready for inauguration on September 9, which meant the back-up room in Jebel Ali was used to run trains on the first day of operation, the first three months of operation have run very smoothly in regards to operational aspects, says Abdullah. He explains that the rider-ship figures were excellent, particularly for the weekends and public holidays. “We faced a few tiny problems that were solved easily,” he admits. “One big problem, we had was when the passengers pushed the emergency button and stopped the service in mid-track, disrupting the service for a long time. There was no actual emergency at the time but one passenger pushed the button by mistake.

Otherwise, the operation in the first three months was reliable.”

Abdullah reveals that the rest of the stations will be ready soon, despite recent disputes over contract payments, and will be launched throughout the second quarter of 2010, depending on the rider-ship demand and through the strategy that has been implemented by the RTA. “In addition, the Green Line will be ready in 2010 and we also predict the Green Line extension and Tram Al Safooh coming on line this year – in other words, there will be many projects that will be in operation this year, serving the residents of Dubai.”

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TRAFFIC MANAGEMENT

Caroline Visser of the International Road Federation details the beneďŹ ts intelligent transportation systems can bring, both for travellers and the environment.

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hile the mature economies in the developed world move towards creating integrated transport policies, emerging countries are searching for ways to strengthen their transport infrastructure through technology â&#x20AC;&#x201C; and the Middle East is no different. Due to an increase in traffic congestion and growing road management costs, road building and development have now become critical needs in the region, forcing government ministries to fi nd alternative ways of maximising the road network.

Intelligent transportation systems offer just such a solution.

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“From a congestion and efficiency standpoint, I would say that managing a road network today without an ITS infrastructure is unimaginable,” suggests Caroline Visser, Road Finance and ITS Programme Manager for the International Road Federation. “For road operators, it’s a vital tool and there are so many different ITS applications now – from monitoring and data collection solutions to see what’s happening on the road, to options to guide traffic through dynamic signalling and travel information – that agencies can tailor the solution to meet their specific needs. I would say that road operators today are very much dependent on ITS for not only congestion management and demand management, but also road safety.”

While ITS is still largely a thing of the developed world, Visser explains that many emerging countries are implementing some interesting schemes too, such as those in Latin America, for instance, or South Africa, where much investment has been directed to ITS applications in preparation for this year’s FIFA World Cup. India is also now embarking on an electronic tolling initiative, while a number of countries in the Middle East are exploring the possibilities afforded by ITS. “While the developed world is currently ahead, emerging countries are also developing ITS solutions more than in the past,” she says.

“There’s no reason why the Middle East should be any different. There’s defi nitely an opportunity there to make a greater leap in the technology being implemented because of all the experience already gained in the developed world, which could be used by the Arab region to introduce ITS at a more advanced level.”

Indeed, for Visser, research into the technologies themselves is no longer the main problem. She believes ITS technology is now at the stage where it can get the required results – provided the systems are implemented correctly. “It’s more about taking research results and making them deployable on a large scale,” she explains. “Today we’re at the stage that it’s more the implementation side that seems to be hampered.”

To address this concern, Visser’s team has set up an IRF working group dedicated to transport policies and their relationship with ITS. “Our feeling was that the positive impacts of ITS are sometimes overlooked. ITS is somewhat lacking in visibility, and it’s not usually a very sexy topic with politicians. So what we have tried to do with this working group is raise the profi le of ITS with the high-level decision-makers – ministers, transport secretaries and their immediate advisors, the high-level civil servants responsible for policy decisions – fi rstly to generate enough budget for ITS research, but also to explain its benefits. We want to demystify it. ITS has a technology label attached to it, which can frighten some people, but in actual fact it’s a really wideranging concept. There are so many applications and technologies that are encompassed in that single acronym. The technology is there, and it’s ever-evolving, so that shouldn’t be our main worry – raising awareness is now the key.”

And this is the core role of the IRF as a federation: to bring together stakeholders from all sides of the road development spectrum, from government ministries to transport agencies, from planning departments to environmental parties. Its work encompasses the fi nancing of roads, network optimisation, environmental concerns and road safety – as well as ITS, of course. “Our mandate is to organise knowledge management activities and share best practice among our members,”

says Visser. “We work closely together with the network of national ITS associations and are also open to representatives from international institutions like the World Bank and the United Nations, who are now embarking on a number of ITS initiatives from a standardisation perspective. We have close contact with the European Commission. So it is the IRF that brings together all these different stakeholders to exchange best practices and share their knowledge.”

She believes there are currently a number of countries that particularly stand out in terms of their use of ITS. “Each country has its focus, so I wouldn’t be able to give you a top three because it differs so much between countries and even regions. But the UK is doing some interesting things – I’m sure you’re aware of the London congestion charging scheme, but there’s also an active traffic management project near Birmingham where they are using the hard shoulder of the motorway during peak hours and implementing all kinds of ITS applications around it to help monitor usage to ensure it’s being used safely, to inform travellers of what is coming up, to tell them what the speed limit is, and so on.

“This is the core role of the IRF as a federation: to bring together stakeholders from all sides of the road development spectrum, from government ministries to transport agencies, from planning departments to environmental parties” “Emerging economies like South Africa, Brazil, Chile and India are also developing some interesting solutions. For South Africa, there’s an artificial deadline for ITS implementation because of the World Cup. For example, it’s now introducing electronic fee collections throughout the public transport modes, as well as a bus rapid transit system, which is quite challenging because there’s a lot of opposition from the taxi industry. There are a lot of toll roads in Brazil and Chile, where they use electronic tolling on a large scale. The Netherlands is another good example – a small country, densely populated, that doesn’t have room to expand the network any further. As a result, the Dutch government has already been forced to look into efficiency gains on the existing road network for some decades. They have invested a lot in incident management systems to clear the road quickly after incidents occur and to reduce congestion, and are also planning to introduce a national road-charging scheme, which adds another dimension to ITS. Heavy users will pay more and light users will pay less, while different charges are levied between peak and off-peak hours. So there are many examples, but I think it’s important to point out that every country and region has its own context in terms of policy, but also in terms of needs and priorities.”

Alongside enabling more effective use of the road network itself, there is another area in which ITS can play a key role: that of promoting

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ITS: a regional perspective

By Mohammed Serroukh, Director of ITS Arab

Different countries are approaching the subject of intelligent transport systems in different ways, but they all recognise that ITS is important and needs to be dealt with properly.

For instance, Dubai has created a division within the RTA focused specifically on developing ITS solutions that has really advanced the understanding of how to build greater intelligence into transport systems, within the emirate. Likewise in Bahrain there is a single agency charged with looking into potential ITS deployments. And then in Saudi, because it’s a much larger country, they’re actually linking together all the various ministries and government agencies involved in transport issues – the Ministry of Transport, the Ministry of Urban and Rural Affairs, the Ministry of the Interior, traffic and environmental agencies, the border patrol – through a single coordinating committee. This committee is aimed at developing a common set of standards that each different constituency can use and that will contribute towards an interoperable ITS system from the initial deployment stage, in order to encourage interoperable ITS from day one.

So every country is dealing with it in its own way. But whatever the issues are, we need to tackle them in conjunction with the rest of the international community in order to try to find common solutions. And what we’ve been trying to do in our organisation – in cooperation with entities such as the International Roads Federation – is develop what we are calling an ‘ITS roadmap’ to try to make it easier for people who are new to ITS to understand what ITS is and to better understand what type of solution is appropriate for which type of scenario. The idea of road and transport management needs to be considered in a much more holistic way so that the whole transportation network is developed with a greater focus on technology and operations.

So part of our work has been focused around looking at how a transportation network evolves, and while our work is still in progress, we’re already starting to form some ideas around that. It starts with the development of the road infrastructure itself so that your network serves all the areas it needs to. Then you start to look at things like network optimisation, which is where junction redesign and overpasses,

a green and more sustainable use of the road network. “Road transport doesn’t have a very good image in this regard,” acknowledges Visser.

“It contributes to 74 percent of all transport CO2 emissions. Nonetheless, many of our members are embarking, on a voluntary basis, on initiatives to reduce their own carbon footprint and to come up with innovations to make road construction, maintenance and operation greener. We have several initiatives within the IRF itself. We’re developing a greenhouse gas calculator, which is an instrument that monitors emissions during the lifecycle of a road, and a tool that will enable members to calculate their emissions. ITS is helping because we think that traffic management and congestion reduction – in which ITS plays a big role – is a very important way to make roads and road transport more efficient and sustainable. Traffic management systems combined with emissions monitoring have a high potential in contributing to this. Also, to a certain extent, road-user charging has a part to play as it rationalises the mobility demand. It will not be a miracle solution for

underpasses and bypasses all come into play to ensure you are getting the most out of that network. Once you’ve optimised your road infrastructure, the next step is to improve your public transport infrastructure. And then finally you get to look at areas like demand management.

And of course, when you get to this stage, the information you’ve gathered starts to feed back – perhaps you’ll find that you need to go back and do some more network optimisation or revisit your public transport schemes. It’s not just a one-way stream.

And so we’re starting to map where specific cities are in terms of this roadmap, and it’s important to note that different parts of the region are at different stages of development. In Dubai, for instance, they are basically at the end of their network optimisation stage and are now entering the public transport build-up phase.

Cairo is increasingly looking at demand management. And then in the majority of the cities in Saudi, they are still doing the network optimisation element and spending a large amount of money actually redesigning the road network.

addressing transport growth, but it might do something. For instance, it’s been proven in Stockholm, where they introduced user charging in the city a few years ago, that there have been substantial gains in reducing emissions.”

Encouraging a more sustainable approach to transportation is a key part of the IRF’s philosophy, particularly given rising traffic volumes, but despite the huge strides taken in recent years it remains a significant challenge. “We have not succeeded in decoupling economic growth from growth in transport demand, and we have to look at realistic options to handle this,” concludes Visser. “Rather than just extending roads to accommodate this growth, we need to look more to soft ware and mobility management in order to get the required efficiency gains. From our point of view, this will have a great impact on policy decisions because it will be all about the efficiency of the transport networks in place. ITS and traffic management can contribute to that, but maybe it is only part of the solution.”

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TRANSPORT FOCUS

Streets ahead Abu Dhabi has launched an extensive audit of its road network in order to improve the safety of the emirate’s road users.

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s 2009 drew to a close, safety was top of the agenda for the Abu Dhabi Department of Transport (DoT), with every road and highway in the UAE Capital being independently assessed for potential causes of accidents in an emirate-wide Road Safety Audit due to be completed before the year-end.

Carried out by an independent and specialised local and international expert team, the aim of the Abu Dhabi Road Safety Audit is to develop a set of road safety audit guidelines tailor-made for the emirate that will reflect the current and future road network, specifically the likely use of these routes and the impact of driving behaviour. The audit team was tasked with identifying and highlighting engineering and other physical measures designed to reduce the potential for and severity of road accidents, complementing existing road safety awareness and enforcement programmes. On completion of the audits, a multi-government agency team made up of members of the Abu Dhabi Police, the Department of Municipal Affairs and the DoT will work together to fi nalise the guidelines.

Over 200 checks will be carried out on each road during the audit process, covering elements like signage, visibility, road markings, crash barriers, provision for heavy vehicles, pedestrian access, parking and more.

All checks are due to be carried out twice – once in daylight and once at night – to ensure

potential issues are noted under different driving conditions. On completion of the audit, risks will be evaluated in terms of the likelihood of contributing to an accident, and the ease and cost-effectiveness of required works. These fi ndings will then be assessed and acted upon by the DoT through a detailed implementation plan.

“Reducing the number of accidents and their severity on Abu Dhabi’s roads is of critical importance to the Government and the people of Abu Dhabi,” says HE Eng. Khalid Mohamed Hashim, Executive Director of the Land Transport Sector at the Department of Transport. “Th is DoT road safety audit is a valuable tool in the armoury of accident reduction. It is a quick and proactive approach to identifying potential road safety concerns across the entire emirate, providing ways in which these can be addressed to help save lives.”

In addition to examining existing traffic routes across Abu Dhabi, the Road Safety Audit team will also be advising DoT during the design and development stages of future roads to maximise safe design practices. The audit team provides valuable insights during feasibility, design and build stages into any likely impacts of the ‘human element’ – how drivers, cyclists and pedestrians actually behave, rather than how they should behave according to the rules of the road.

Earlier this year, full audits were undertaken on two major routes: the E22, connecting Abu Dhabi and Al Ain; and the E30, the

truck road running between these locations.

The audit report identified measures to help reduce the risk of potential accidents, including minor works like trimming vegetation obscuring road signs, to more pressing issues like repair of crash barriers. The measures recommended in the audit are currently being implemented by the DoT’s specialised road contractors.

The audits are part of a wider move to overhaul the emirate’s surface transportation infrastructure through the implementation of the Surface Transport Master Plan 2030. For over a year, the Department of Transport has been studying, analysing and identifying the current and future transport needs in the Abu Dhabi metropolitan region, Al Ain and the Western Region, as well as transport needs for inter-regional, inter-emirate and international passenger and freight movements, taking into consideration the Abu Dhabi government’s broader strategies and all relevant social and economic factors such as population growth, urban expansion, industrial development and the considerable rise of Abu Dhabi as a tourist destination and global hub.

“The Surface Transport Master Plan 2030 comes in line with Plan Abu Dhabi 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,” says HE Abdullah Rashid Al Otaiba, Chairman of the Department of Transport.

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Alupole AD_14june 11/01/2010 15:18 Page 1

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5) Mubadallah, Abu Dhabi: Aluminium street lighting pole 2007.

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Transport RT_7dec10 15/01/2010 16:25 Page 120

ROUNDTABLE

DRIVING

FORCE Optelecom’s Tariq Anwer, Alupole’s Albert Lim and Telegra’s Predrag Balentovi debate the issues around intelligent traffic systems.

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THE PANEL

Albert Lim graduated from Imperial College of Science and Technology, London, in 1988, majoring in Advanced Non-Linear Finite Element Analysis for pole structures.

He has 21 years of experience in design, manufacturing and installation of poles up to 80m, telecom towers up to 127m and transmission towers up to 800kV.

Tariq Anwer is the Regional Sales Manager of the Middle East for OptelecomNKF. As a 12 year industry veteran, Anwer has extensive experience with video surveillance and security systems and markets in the Middle East. Previously, Anwer worked for Group 4 Securitas and Al-Futtaim Engineering in the UAE.

Predrag Balentovi has been CEO of Telegra since 2005. Balentovi started with the company as an R&D engineer and was a driving force in the company's technological and business development.

In this role, he has also been a keen observer of and participant in the developments of the advanced trafďŹ c management systems that have taken place in the last 15 years.

Rising trafďŹ c levels and over-stressed transportation infrastructures are creating a number of issues in major cities like Riyadh, Dubai and Manama. What challenges do the governments of the Middle East face in terms of managing their road infrastructures?

Tariq Anwer. The Middle East is expanding so rapidly that roads are congested almost as soon as they open up, and some of the main highways in major cities are infamous for having the highest number of traffic accidents in the region. The road authoritiesâ&#x20AC;&#x2122; biggest challenge is to try to cure this everincreasing traffic headache and improve road safety. Consequently, intelligent transportation systems (ITS) need to be properly and quickly implemented in Middle Eastern countries.

However, with ever-increasing road networks, the number of cameras requiring monitoring in traffic control rooms is growing rapidly, and operators cannot possibly be expected to responsibly supervise this abundance of camera streams. It is therefore imperative that intelligent video analytics are used to help operators with traffic management. By integrating video analysis technologies into network video ITS installations, operators are able to competently oversee a large number of cameras in various places and positions.

Albert Lim. Over-stressed transportation is an inevitable result of rapid development in any country or region. Governments do their very best to plan their road infrastructure. However, many times the demand for roads exceeds their planned construction. There are two main challenges that governments in the Middle East face. Firstly, estimating and planning the demand demo-

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“It is therefore imperative that intelligent video analytics are used to help operators with traffic management” Tariq Anwer graphics, which may result in either under-planning or over-planning the infrastructure. Under-planning results in traffic congestion and loss of productive time for road users. Over-planning results in wasted funding in an area that could be otherwise used to build new roads or upgrade existing ones in other areas.

The second challenge is related to increasing the mix of transportation modes. The main mode of transport in the Middle East is the car. However, governments try to relieve road congestion by having other modes of transport, such as improved bus services and the monorail. To have a paradigm shift towards more use of public service transportation is difficult in the Middle East compared to other parts of the world.

Predrag Balentovi. With the rising levels of traffic two issues appear instantly: first and the most important is safety and the second one is time spent in traffic. The obvious choice would be to improve the road infrastructure and that is, if at all possible, time costly, so governments should find a solution that can bring relief quicker and without big infrastructure upgrades. The implementation of advanced traffic management systems is certainly an answer to these challenges.

Intelligent transport systems are now recognised as critical components of local, regional and national transport strategies worldwide. How are ITS solutions evolving to meet the challenges of congestion, safety and transport efficiency?

AL. Intelligent transport systems have been around for many years in various forms. It was not until the advent of GPS systems being made available to the

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public that ITS found greater potential for its use. However, ITS in its new form with GPS is still very much in its infancy. There are still difficult issues to be dealt with, such as the GPS requires line of sight and tall buildings or elevated highways in urban areas tend to limit its use. Cost-effective solutions to these limitations are needed. ITS solutions are finding their way around their limitations by combining different technologies; for example, the use of in-vehicle communication where motorways merge, and the use of real-time video of roads on 3G mobile phones to check on traffic.

“Advanced tools built into modern systems, such as Telegra’s topXview, emphasise the integration of the various subsystems of urban and suburban traffic” Predrag Balentovi PB. Advanced tools built into modern systems, such as Telegra’s topXview, emphasise the integration of the various subsystems of urban and suburban traffic: VMS and displays, emergency road telephones, LED lighting by the road, video surveillance, video automatic incident systems, traffic counters, overweight and over the height detection systems, speed enforcement and so on. Various information from the road is enriched by new data that is obtained by various complex algorithms – an example is the early warnings on possible traffic jams as a result of various incident detection algorithms.

The system, according to all of the data whether gathered directly from the road or obtained by algorithms, calculates the current situation for the road or

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section of the road and automatically reacts, or suggest a reaction – and reactions can vary, from ramp metering algorithms to synchronising the traffic to run smoothly. This kind of integrated and centralised system significantly increases the traffic safety and reduces the time the vehicle will spend in the traffic.

TA. Modern traffic management systems should be able to monitor thoroughfares and remotely control traffic signals, speed limits and variable message, lane and speed signs, bridges and locks. It is also crucial that information can be easily shared with emergency service providers to take care of crisis situations as quickly and effectively as possible.

The biggest trend in traffic management today is automatic incident detection (AID), which uses software algorithms in combination with network video systems to collect traffic data and trigger alarms for specified events, such as stopped vehicles, speed drops, fallen objects and smoke. There is also an increasing demand for high-quality video recording and live viewing.

One of the most innovative solutions currently available on the ITS market is the Siqura TrafficServer, by Optelecom-NKF. It uniquely offers incident detection, traffic data collection and camera monitoring in a single field-hardened codec that is also capable of simultaneously streaming H.264, MPEG-2, MPEG-4, and MJPEG for viewing or recording purposes.

Which countries are displaying the greatest appetite for ITS technologies? Can you give us any specific examples of countries/cities that are using ITS successfully? Are you seeing any innovative approaches in other countries that could be adopted in this region?

PB. Various initiatives are coming out daily. Apart from the well known ITS markets, there are some interesting examples of advanced ITS usage in a number of countries – outside the region, Croatia is certainly one of those. It is difficult to extract specific projects, as all across the region there are a number of great ones in progress or in planning. Countries like Qatar, Saudi Arabia, Bahrain, UAE and others are striving toward and succeeding in building great and advanced ITS systems.

TA. Due to their rapid developments, the UAE and Saudi Arabia have the greatest potential for ITS technologies in the Middle East. However, it is the Dutch that are the frontrunners in the realm of ITS. This is due, in part, to the fact that the Netherlands is one of the most densely populated countries of the world. The Dutch Ministry of Transport, Public Works and Water Management (RWS) maintains five traffic management centres that monitor and control the country’s highways and waterways, including all the main bridges, tunnels and locks. The traffic management centre in Rhoon, the Netherlands is probably the most high-tech traffic control room in the world.

It even manages the transport routes going into and out of the Port of Rotterdam, which is one of the largest ports in the world.

AL. The very fact that the first ITS conferences in the Middle East were held in Dubai and Manama in December 2007 and April 2008 respectively, goes to prove both UAE and Bahrain have the greatest appetite for ITS in the region. It is not surprising, as both countries suffer similar traffic woes and both care enough for their road users to deal with this issue seriously. Although there are many innovative approaches in countries that have matured ITS technologies, such as the US, UK, Canada and Australia, it is best that simple first steps, taken by to implement ITS in the Middle East. Some very effective

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first steps, which these pioneering countries, were to have camera visuals to automatically control traffic lights in real-time to improve traffic flow, rather than relying on unintelligent timing control. Gantry display systems that warn road users of dangers or congestion ahead can improve on safety and allow road users to take alternative routes. High-speed, visual toll charge systems can be very effective in controlling road usage during peak periods. Regular traffic reports on the radio by other road users offer a very cost-effective solution for those planning their road journeys.

What do you see as the most significant driver of the ITS industry in this region over the next few years, and what is the greatest challenge to its future development?

TA. The economic, industrial and population growth in some parts of the Middle East has been unparalleled in recent decades. This is the driving factor for improving infrastructures and developing safe and secure traffic management and surveillance solutions. Market research shows that the Middle East is one of the fastest growing markets for network video surveillance equipment.

Since there is not a huge installed base of legacy systems, it is possible to implement the latest technologies and innovations available in the ITS industry throughout the Middle East. However, the availability of local expertise for design and implementation of the latest network-based ITS solutions may prove to be challenging. Also, the initiatives taken by ONVIF and PSIA to create open standards for the interfaces of network video products may be a big help in seamlessly integrating various systems and vendors in the long run.

“It is best that simple first steps are taken to implement ITS in the Middle East” Albert Lim AL. The greatest driver in the next few years for ITS industries in the MENA region would be the congestion problems faced by the most active cities. The complaints from the public on worsening traffic flow conditions will be the greatest influencing factor for governments to act to improve traffic conditions. ITS industries have great opportunities when governments start to realise that ITS not only relieves traffic congestion, but also increases safety for their road users. The greatest challenge in the future of ITS development would be to discover and implement solutions that are cost effective. Many of the ITS solutions currently proposed are very expensive and would discourage their use both by the governments and by the public.

PB. Regional governments motivated by the growing population and consequent growth of traffic have already identified the need to increase traffic safety and reduce the time all of us spend in traffic due to congestion. The number of projects will rise significantly in the next few years, thus creating a competitive and stimulating environment for further implementation and the development of even more innovative systems. The greatest challenge for the industry is to constantly improve the conditions on our roads, adjusting to the changing nature of the future traffic and keeping the pace with technology and future innovations. n

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EXECUTIVE INTERVIEW

Traffic management

Poul Svensgaard explains the importance of road signs and markings and reveals why standards are key to improving driving conditions.

Why are road markings and signs important for improving safe driving in the MENA region?

Poul Svensgaard. Driving on roads especially at night-time can be a challenge. US statistics show that driving at night-time increases the risk of fatal accidents almost three times, a figure that is probably not too different from the MENA region. Road markings and signs are important traffic aids in guiding the traffic safely and reducing the risks of accidents. Wear and tear from traffic and sunlight will reduce the retroreflection from road markings and road signs over time, and they need to be maintained or replaced before they lose performance.

Only well maintained road markings and road signs will offer the maximum traffic guidance and safe driving conditions.

How is it possible to know when a road marking or a road sign supporting safe driving needs maintenance or to be replaced?

PS. Road markings and road signs have to be checked at intervals to make sure they perform and provide proper traffic guidance. If they do not meet the performance criteria they need to be maintained or replaced. Performance evaluation can be

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ASTM E 1710, ASTM E 2540) standards. A standard first of all states how to measure retroreflection from road markings and road signs. The European standards also provide guidance for minimum retroreflection levels for different types of roads, road markings and road signs. Such guidance for the US is located in the National Standards for Traffic Control Devices. It is my impression that many countries in the MENA region have not yet put standards in place for measuring retroreflection or guidance for minimum retroreflection levels, an area that would benefit from improvements, if more safe driving conditions are to be obtained.

Will improved performance of road markings and signs alone provide safer driving conditions in the MENA region?

PS. I have no doubt that high quality road markings and signs will help improve safe driving – but it will not do it alone. Many other factors affect safe driving like speed, quality of the roads, experience and age of the driver (elderly people need more light at night for safe guidance). The challenge in the MENA region is to evaluate each possible factor that may affect unsafe driving conditions and decide which measures to under-

“I have no doubt that high quality road markings and signs will help improve safe driving – but it will not do it alone” Poul Svensgaard done in different ways, but the only objective way is to measure the retroreflection using a retroreflectometer. A retroreflectometer is placed on the road marking or road sign and within seconds it will tell if the marking or sign meet the criteria.

Are there any standards supporting safe driving?

PS. There are written standards available, the main ones normally referred to are the European (EN 1436, EN 12899) and the US (ASTM E 1709,

take to improve the situation. Making sure that road markings and signs perform well is one of the easiest and cheapest ways towards improving safe driving conditions. n

Poul Svensgaard is Executive Vice President of DELTA’s Light & Optics division. Svensgaard has an MSC in Electrical Engineering and has studied at Henley Management College. He has held numerous management roles within marketing and sales during his professional carrier, as well as held executive positions with global business responsibility.

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EXECUTIVE INTERVIEW

The business of aviation Gordon Rosen, President of the ASI Group, explains how cutting-edge technologies are improving aviation solutions.

The business of aviation is constantly – and rapidly – evolving. What are the biggest operational challenges currently being faced by airports and airline operators alike?

Gordon Rosen. The biggest operational challenge is keeping pace with that evolution. The search for efficient, cost-effective answers is the key to success for airports and operators.

Th is means the incorporation of technology to reduce expenses, maximise profits and assist in effective logistical management.

How is the advent of real-time data management solutions enabling both airports and operators to achieve maximum productivity and efficiency in their daily operations?

GR. If you’re aware of operational movements in real-time, then your decisions are based on the most timely and accurate facts. Real-time data management allows you to compare the logistical and fi nancial costs of holding a fl ight versus baggage, mail or cargo mis-connects.

Have you been involved in any particularly interesting projects recently? What challenges did these projects present, and how did you address those problems?

GR. Yes, ASI was contracted by APS to improve interline baggage partnership opportunities for Los Angeles International Airport through the revolutionary integration of GPS, Wi-Fi and aircraft movement integration for a true track and trace solution.

The largest challenges were due to the fact that 43 airlines would be relying on APS for the successful tracking and transport of six million plus bags annually. The airlines didn’t know in real-time where the bags were, so we had to solve this costly problem.

ASI’s premier solution, InterBAG, provides real-time internet-based GPS information, airline movement messages, itinerary and baggage messages for intelligent decision support.

Using real-time data from BSM, SIMM and MOV messages in conjunction with alert messaging, multi-directional communication and immediate data availability, we supplied APS with the tools and support to track every bag travelling to and from LAX. A strong combination of scanned date for GPS monitoring, daily patrol by internal staff, accounting that allows for accurate billing to the appropriate airlines and service level agreements all work in tandem to optimise the customer experience and the overall baggage transport process.

what has worked, and what has not, for the full spectrum of situations and environments the aviation industry faces.

By involving tech providers from the beginning, decision-makers can be assured that they’re looking at the complete picture and make their plans with assurance that they can be adapted as the future requires. In the long run, this could save airports billions of dollars.

Finally, what are your plans in the MENA region? How do you hope to capitalise on the phenomenal growth in passenger throughput numbers – and of course, the attendant rise in baggage and freight?

GR. The rise in passenger and baggage throughput – and the increasing amount The MENA region is curof freight – means it’s more rently undergoing rapid important than ever to rely development, particuon technology for costlarly with regards to its effective solutions. As with transportation systems; any logistical needs, the inmore than US$50 billion corporation of hard and soft is currently being spent technologies can drastically on expanding the aviation reduce expenses and maxiinfrastructure in the GCC mise profits. alone. Why is it important ASI’s soft ware is already Gordon Rosen founded Aviation that technology providers being used on every conSoftware, Inc. (ASI) in 1981, functioning as its chief software such as ASI are involved in tinent and, to date, we’ve architect until 2003. He has served on the boards of domestic and the development process installed over 1500 modules international airlines and FAA to ensure airports continue around the globe. What’s Committees and was invited to testify before the Office to meet the needs of both more, our philosophy of onof Technology Assessment congressional subcommittee as a today and tomorrow? going product development certified aviation technology expert.

GR. Technology providers, and improvement has always by necessity, have to develop been based on industry answers that will work now and be adapttrends and customer feedback, so we’re able to able for the future. In 30 years of operation adapt quickly and supply airports and operaand over 250 installations, we’ve experienced tors alike with the best product possible for the hundreds of ‘important points’. We’ve seen present and the future.

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FIRE SAFETY

LEADING THE WAY New safety standards are improving the fire safety industry in the Middle East, says Ateïs Middle East’s Hussam Al Haddad.

A

TEÏS Middle East was one of the sponsors of a two-day conference and masterclass in London recently to discuss the ramifications of BS 9999:2008, a new Code of Practice for fi re safety in the design, management and use of buildings. The seminar set out to demonstrate that good fi re safety, design and management is critical to protecting life and property. It was agreed that ensuring fi re safety and business continuity while cutting costs becomes increasingly important in this challenging economic climate.

Among the delegates attending was Ateïs Middle East FZCO General Manager Hussam Al Haddad, who arrived accompanied by senior fi re officers and safety professionals from the UAE. These included Mir K. Hussain, Senior Electrical Engineer, GA Architects, Abu Dhabi; Jamal El-Chaar, Head of Electrical Dept, ACG Architectural Consulting Group, Abu Dhabi; and Mohamed Ashraf Radwan, Senior Electrical Engineer, ADG Architecture & Planning Group, Abu Dhabi.

All agreed that it had been vital to have first-hand experience of the new regulation from the outset, as the region is increasingly seeing the British Standards as representing the most important kitemark when setting safety standards. BS 9999 has now superseded

DD 9999 and the entire BS 5588 series (with the exception of BS 5588-1), which were withdrawn earlier in the year.

El-Chaar believes that the new BS 9999 will be useful for everyone in the industry as it brings earlier guidance up to date and provides greater scope for designers, using fi re

the GCC countries is fast becoming as important as the UL American National Standards.

Hitherto it has been difficult to convert BS fi re standards to National Fire Protection Association regulations – however, the two men predict that this is now set to change. “Until now the GCC has been BS-compliant in all areas except fi re,” believes El-Chaar. “Yet we feel BS 9999 is much clearer and contains more details, and is easier to implement. New regulations take time to become established, and it’s the local authorities who have the power – but this is extremely comprehensive.”

As soon as BS 9999 is launched in the emirates, ACG Architectural Consulting Group, who conduct all their own risk assessments in terms of fire, security and mechanical safety, will undertake their own local training.

El-Chaar praised Ateïs Middle East for their initiative in sponsoring the conference, and for leading a team from the region over to the UK. “I have been in the business for 21 years and I don’t think I have known anyone as helpful,” he says. “They take a very responsible attitude towards safety and security.”

His views are echoed by Mir K. Hussain, who says he had been looking for specifics, “such as the distances between one detector and another, and between sprinklers” in BS 9999. “Th is new standard is easier compared

“Until now the GCC has been BS-compliant in all areas except fire” engineering principles to expand the framework and provide extra freedom by taking into account the type of occupancy (and the nature of the occupants’ business). Th is will have a bearing on factors such as escape route lengths. “Th is will be helpful for everyone and we want to see it published in our region as soon as possible,” he says.

Ateïs’ catalogue of public address and voice evacuation products are strong adherents to British Standards – notably BS5839 part eight (Voice Alarms) – and Al Haddad says that the British Standard compliance in

with NFPA from a practical point of view – in fact it’s far better, and needs to be made concrete as soon as possible.”

GA Architects specialise in hospitality – notably the hotel industry – and Hussain says the requirement varies from application to application: “But this new standard will become adopted more quickly if we have someone locally to support us.”

Hussam Al Haddad is the General Manager-ATEIS Middle East and Member of the International Standards committee and Business Development Solutions at the ATEIS Group. ATEIS is a leading voice evacuation, public address and professional audio manufacturer, with more than 35 years experience of worldwide innovation.

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ASK THE EXPERT

Life safety

systems

Barry Bell, Senior Engineering Consultant and Managing Director for Wagner Fire Management, explains the importance of fire detection and protection systems.

T

he UAE recently celebrated its 38th anniversary and those that were present during the celebrations will have surely felt the enormous national pride that was emanated across the country. Quite rightly so, because the achievements over the last, almost four decades, in cross sectional development, whether industrial, commercial or residential, have been a parallel to the redevelopment of European countries that took place over the same period of time following the second world war. The only real difference is that the UAE was developing from scratch, and not re-building.

velopment were not at all cohesive with modern day fire and safety issues – although regulations taken from abroad were theoretically in place, they were to a large extent, inadequately enforced. I have witnessed the continuous improvement and strength of enforcement of regulations in this field.

This goes for the entire region, but particularly for the UAE. Drawing upon the experience of the rest of the modern world, the GCC countries have skipped many steps along a 100 year (or more) long learning curve, in the field of fire and safety development.

The fact is that much of the state-of-the-art fire and safety technology has been introduced into the endless stream of megaprojects that

“Accurate testing and commissioning of fire and life safety systems in new buildings is vital for the safety of the intended occupants”

The result at the end of the 38 years development process is a harmonious, multi-cultural, modern metropolis. Many of the neighbouring countries are following suit, perhaps slower, but certainly with growing impetus. There was a time, 15 years back, when the elements of de-

showcase the regions development, by foreign consultants through specification. Product and system supply into these projects has been served by foreign manufacturers through local agents, and the installation of the same carried out by regional contractors. The testing and

commissioning process of complex fire and safety systems in equally complex buildings should be a long and comprehensive process, including recoverable and retraceable testing and commissioning documentation. In most cases, the manufacturer has to provide technical assistance during this process because neither the design consultant nor the installation contractor has the necessary knowledge or tools required to complete the process alone.

The importance of complete and accurate testing and commissioning of fire and life safety systems in new buildings is vital for the safety of the intended occupants and protection of the investment. In my capacity as a building auditor in the UAE, for both new and existing buildings, I have reason to raise this issue to the regions developers, investors and design and management consultants that share responsibility for ensuring that this process is conducted to the highest possible standards.

We should be aware that when buildings are handed over and the occupied life cycle begins, the first year of the building’s life is critical in terms of risk. It is not until a building has survived a reasonable period without an event that we can be reasonably satisfied that there are no latent hazards related to poor installation, faulty wiring, defective plant equipment or other similar construction and installation defects. When all the consultants, contractors and sub-contractors have left, facility management takes over. Third party maintenance companies are often engaged to handle fire and life safety systems. We know that if a building has not been completely tested and commissioned, the maintenance companies are unlikely to become aware of deficiencies until it’s too late.

It is unfortunate that many active maintenance companies in the region do not have the knowledge or the tools to service, maintain, test or repair complex fire and safety systems. It is important to ascertain the qualification and experience of maintenance companies in direct relation to the systems and equipment they assume responsibility for.

If fire detection and protection systems fail to operate as intended because they were not tested and commissioned properly – this is obviously the time when defects are identified and rectified – the investors and stakeholders may experience an unfortunately early disaster involving large scale fi nancial loss.

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INDUSTRY INSIGHT

PRACTICAL PREPAREDNESS Dennis Smagac, President of Intelagard, argues that multihazard response systems and equipment should be a part of every emergency response plan.

decontamination operations, Intelagard systems are capable of applying compressed air foam, air aspirated foam and liquid with simple control adjustments, in order to quickly and effectively switch operational modes to match specific needs.

Intelagard’s portable CAF systems include the man-portable Macaw backpack, Merlin handcart, and SwiftCAF All Terrain Vehicle ATV systems. The Macaw is powered by an on-board air cylinder, or by a direct hose feed from an air compressor. The system is capable of applying virtually any liquid-based material through an array of accessory nozzles, and can expand foaming solutions up to 70 times. Macaw units are fully portable, comfortable to carry and are currently deployed by the US military.

“Compressed air foam, especially in fire situations, has been found to be more effective than water in knocking down fire”

T

hreats to society have been in existence for as long as civilisation itself. So has the need to effectively respond and remediate them. As threats became more varied and complex, attempting to keep pace with effective response and remediation equipment has become a serious budget issue. Single hazard response systems no longer make sense and multihazard equipment is becoming the new norm.

Multi-hazard equipment provides responders with tools to address a wide range of incidents. The ability to use a single unit to respond to a CBRN incident as well as suppress fire reduces the need to buy multiple pieces of equipment and enhances the responder’s ability to provide an effective response in a situation where multiple hazards may concurrently exist.

Consider an intentionally set fire intended to cover up an anthrax attack. While responders fight the fire, they may be exposed and spread the contaminant. If responders had multiple hazard equipment, they would have the flexibility to respond to the multiple hazards at the scene. Using the same scenario, a responder could use a single piece of equipment to contain the contaminant and begin the decontamination process, rinse the unit’s tank,

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refill it with a different formulation and use that same unit to suppress the fire. Consider the lives and money that could be saved. Such equipment and formulations are currently available.

Intelagard offers advanced Compressed Air Foam (CAF) systems. These systems are an excellent choice for initial response applications for a number of important reasons: their ability to expand on-board resources in the form of expanded foam allows for maximum effectiveness per size and weight, with a corresponding significant reduction in logistical support requirements, whether used for fire, decontamination or other emergency response. The unique foam bubble structure generated through Intelagard systems allows the foam to adhere to vertical and inverted surfaces, and the durable foam blanket maintains required wet contact time between the chemical, biological agent or virus and the decontaminant.

Depending on the situation encountered, the systems will deploy fire suppression foams, chemical/biological decontamination foams, and hazmat remediation foams. Compressed air foam, especially in fire situations, has been found to be more effective than water in knocking down fire. Less time and less resources are required. When performing

The Merlin is a twin-tank, cart-mounted unit that can expand solutions up to 70 times. The equipment case quickly detaches from the cart to be used as a hand-carried drafting system for limited access sites. Federally funded US Urban Search and Rescue teams use the Merlin for a umber of applications.

Turn your all-terrain vehicles into response units using the SwiftCAF ATV system. Do not let damaged infrastructure or abandoned cars prevent your ability to respond. As with all Intelagard systems, the units may be used for decontamination, fire suppression and hazmat remediation.

Large-scale systems are also available, including the Falcon Fixed Site Decontamination System (FSDS). Deployed worldwide by the military, the Falcon FSDS is a large-scale truck and trailer system capable of transporting and dispersing decontamination formulas as well as standard fire suppression foams.

Make multi-hazard response systems a part of your response plan – they are practical, economical and efficient.

Dennis Smagac co-founded Intelagard in 1991. His mission both then and now is to save lives and property. Smagac continues to advance and evolve cutting-edge multiple hazard response technology.

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INDUSTRY INSIGHT

Improving data capture The more you understand about your project in the early stages, the better you are able to plan for and manage risk. Aeroquest’s Jonathan Rudd explains how airborne geophysical methods are helping improve information capture.

A

ll projects, from those of a regional nature to those with a small footprint, benefit from an understanding of the geology OF the near surface. Airborne geophysical surveys offer mature, non-invasive technologies that provide systematic, quantitative, rapid, cost-effective information about the near-surface in the project area. Modern airborne geophysical methods offer accurate, high precision, calibrated data sets, which measure the electrical conductivity, magnetisation, natural radioactivity, topography and density. The correct combination of these methods for a given project will provide valuable layers of information for integration and interpretation of the surface and sub-surface characteristics.

With a presence on every continent (barring Antarctica), and as a public company focused exclusively on airborne surveying, Aeroquest International Group of Companies is uniquely positioned to deliver customised turnkey airborne services wherever a project is located. Aeroquest is focused on raising the

bar in the airborne geophysics industry, building on its past successes and leadership in the industry. The UTS arm of the company was the first to offer compensated, stinger-mounted magnetics on a helicopter for high resolution, high accuracy magnetic mapping in any terrain. UTS continued to innovate, and developed Ultra High Resolution Airborne Magnetic and Radiometric (UHRAM) surveys.

These surveys offer the highest resolution data sets available from a fi xed wing platform and are delivered using purpose-built crop-duster aircraft capable of flying safely as low as 15-20 metres above the ground.

Aeroquest was also the first to commercially offer helicopter-borne time-domain electromagnetic (HTEM) surveys. These systems have powerful transmitters that allow for mapping to depths of several hundred metres with great spatial resolution and detail. The AeroTEM system is well-suited to the delineation and interpretation of both discrete targets and stratigraphy in many environments.

Helicopter-based systems provide project managers with many technical and logistical

advantages, and the AeroTEM system can be quickly employed and has been credited with a number of mineral discoveries.

In this example, the AeroTEM survey is interpreted to produce a 3D model of the variation in the electrical conductivity of the ground. These results are used to map the continuity, thickness and depth of the various layers across the survey area. A conductive shale formation in this area is very important in delineating the underlying sandstone (the reservoir rock), and is also an important element in defi ning the mining/extraction process for oil sands. The AeroTEM results also effectively map the distribution of aggregate resources at surface. Paleochannels are mapped as relatively resistive units with a very clear morphology and are important as sources of aggregate and water, and for planning the oil sand extraction process.

The application of this technology is virtually limitless. In western Africa, AeroTEM was effective in locating and characterising conductive ground sinks for electrical transmission lines. In eastern Africa, AeroTEM was combined with the magnetic and radiometric methods for mapping potential gas seeps across a prospective licence area. Combining the appropriate EM technology with magnetics and radiometrics allows for the layering of information for a more effective and robust interpretation of the survey results. AeroTEM is currently being used in Yemen for the characterisation of the low velocity layer to improve the static correction of noisy seismic data.

Aeroquest’s history is proof of capable guidance, growing an innovative, full-service airborne geophysical company that provides service globally to multiple markets. The company as a whole has acquired and delivered more than nine million line kilometres of high-resolution airborne geophysical data.

And Aeroquest’s present is focused on further expanding and developing our technologies and services. From a high-resolution magnetic gradiometer to the helicopter-borne AeroTEM system to our frequency domain EM systems, the strength of Aeroquest’s product offering is in its diversity and the ability to customise the survey systems and parameters to match the project requirements.

Jonathan Rudd is Chief Geophysicist at Aeroquest Surveys.

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HOSPITALITY 138

The

luxury

collection

With plans afoot to establish a five-star hotel chain in under 10 years, Emaar Hospitality Group has set itself an ambitious target. But as CEO Marc Dardenne tells MENA Infrastructure, it has every intention of reaching it.

Emaar Hospitality has pledged to build a world-class five-star hotel chain, The Address, in under a decade. How close is it to achieving this aim?

Marc Dardenne. Emaar Hospitality Group launched The Address Hotels and Resorts a little over a year ago. Th is was shortly followed by the opening of its first and flagship hotel, The Address Downtown Burj Dubai to global acclaim. Response to the hotel has been strong and it continues to record robust occupancy levels. It has also become a social hotspot in Dubai with a range of restaurants including Neos, an impressive sky lounge on the 63rd floor. Its close proximity to The Dubai Mall, the world’s largest shopping and entertainment destination and direct views of The Dubai Fountain – the tallest performing fountain in the world – have added to its popularity. Some of the other key achievements for The Address Hotels and Resorts include assuming the management of The

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Palace – The Old Town hotel in Downtown Burj Dubai – and signing international management contracts in Morocco and France to manage luxury resorts.

The Address Hotels and Resorts will operate Domaine de Lavagnac, a luxury resort developed by Residence De Lavagnac SARL in LanguedocRoussillon, South of France. Scheduled to open in 2011, Domaine de Lavagnac is the first five-star tourism development in Languedoc and comprises a 17th century chateau that is being transformed into a 70-suite hotel located in close proximity to the Mediterranean coast. The Jnan Amar Polo Retreat in Morocco is a luxury retreat developed by SIAMA, a subsidiary of Azmi Abdelhadi (AAH) Group in Marrakech. The Address will manage the luxury five-star retreat hotel and includes dining facilities, meeting venues, leisure facilities and business lounge as well as several luxury villas.

15/1/10 16:28:47

HOSPITALITY 139 Other milestones include the opening of our third property, The Address Dubai Mall in September and another property will open soon, The Address Dubai Marina.

Residences. A third and flagship Nuran serviced residence is planned in Downtown Burj Dubai. We are targeting the leisure sector in the GCC, which has earned us good results in the summer months.

What plans does The Address Hotels and Resorts have to expand its hotel portfolio globally and which parts of the world does it plan to target?

MD. The Address Hotels and Resorts is part of Emaar Hospitality Group, the hospitality and leisure subsidiary of Emaar Properties. As one of the world’s largest property developers, Emaar is creating integrated lifestyle communities across key emerging markets as well as developed economies. Emaar Hospitality Group and The Address Hotels and Resorts will support the hospitality and leisure aspects of these communities across the world as well as explore independent hotel development, management and operation contracts. Our development pipeline for The Address Hotels and Resorts includes Egypt, Lombok in Indonesia, Jordan, Saudi Arabia, Syria, Turkey, Budapest, Shanghai, London, Los Angeles and New York. We will continue to focus our development efforts in the Middle East and North Africa region, the Indian Subcontinent and South Marc Dardenne Asia. The Address has won many prestigious international awards this year including: Hotel Business Lounge of the Year – Commercial Interior Design Awards 2008; Best Leisure and Entertainment venue – Commercial Interior Design Awards 2008; Best New Hotel – Arabian Hotel Investment Conference Awards 2009; Dubai’s Leading Lifestyle Hotel and Middle East’s Leading New Hotel – World Travel Awards 2009; Condé Nast Traveler Hot List 2009; The Palace – The Old Town ‘Dubai’s Leading City Resort’ – World Travel Awards 2009.

How has demand for and development of luxury hotel developments been affected by the global economic downturn?

MD. We opened The Address Downtown Burj Dubai in the thick of the global fi nancial downturn. During this time we also won two international management contracts to operate luxury properties in addition to opening another hotel this year. Demand for luxury hotels continues to be strong in Dubai, led by its robust visitor arrivals.

What will be the unique brand values of The Address and how will it differ from other luxury hotels in the UAE? MD. The three key differentiating factors for The Address Hotels and Resorts are: location, service and benefits. The brand defi nes itself by its ‘one size fits one’ approach whereby benefits to guests and service excellence are priorities. For the convenience of guests, all check-ins are processed in the guestrooms upon arrival. In addition, complimentary wireless internet is available throughout the properties apart from a 24hour fitness centre and a 24-hour business lounge. Guests opting to stay in suites or club rooms can enjoy the innovative and convenient privilege of a complete 24-hour stay.

How high has demand been for Nuran, Emaar Hospitality Group’s serviced residences, and what plans are there to expand the chain?

MD. Currently, we operate two properties under the Nuran brand, namely, Nuran Marina Serviced Residences and Nuran Greens Serviced

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Does Emaar have any plans to enter the mid market hotel sector or will it remain exclusively in the luxury boutique hotel sector?

MD. We are currently concentrating on ensuring the continued success of our five star premium hotel brand The Address Hotels and Resorts as well as the successful launch of the fi rst Armani Hotel.

What are the biggest challenges you face as CEO of Emaar Hotels and Resorts in the year ahead?

MD. One of the biggest challenges faced by the hospitality industry is sourcing and retaining key staff as well as rationalising and maintaining a high degree of resource use efficiency.

Is Emaar Hotels and Resorts planning to form partnerships with any more international design brands?

MD. Currently, Emaar is focused on the roll out of the Armani Hotels and Resorts.

About Emaar Hotels and Resorts Emaar Hotels and Resorts LLC is a subsidiary of Emaar Properties and was initially created as part of a joint venture project with the fashion designer Giorgio Armani.

Its aim is to develop and operate hotel branded products at five-star level that are internationally recognised as “lifestyle” oriented hotels.

The first Armani/Emaar hotel will be in the Burj Khalifa where the company is also looking to develop and operate a collection of branded, mixed-use properties. Through the collaboration with Giorgio Armani SPA, Emaar Hotels and Resorts LLC is responsible for expanding Emaar’s profile on a global basis by the creation of Armani Hotels, Resorts and Residences internationally.

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An aerial view shows a cluster of man-made islands,part of The World on December 21, 2009.

Things looking up for The World German real estate company Kleindienst has announced plans to build luxury villas and hotels on six of the artificial islands on Nakheel’s The World project – despite the financial woes faced by the Gulf emirate.

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ast month the real estate company launched its Heart of Europe development – a six-island, 12-site luxury holiday destination that will begin construction on the island of Germany in the first quarter of 2010, followed by plans for Austria, Switzerland, the Netherlands, Sweden and St Petersburg. When complete, The Heart of Europe will be home to 75 private holiday homes, six apartment buildings, six hotels, six lighthouses and six floating palaces as well as a diverse range of retail, entertainment and restaurant outlets.

While property prices in the emirate fell up to 50 percent last year, Kleindienst Group remains confident in the investment potential

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of The World given that it is one of the only sites dedicated entirely to holiday home ownership.

“We have interests in industrial, commercial, hospitality and residential real estate, but The World is where we now see the strongest market potential,” explained Chief Executive Josef Kleindienst. “Tourist arrivals to Dubai have increased despite the economic slowdown in 2009, and worldwide the market for property ownership abroad has shown resilience, particularly for luxury holiday home destinations.”

According to analyst reports, Germans alone will purchase 60,000 new vacation homes around the world in 2010. “We anticipate The Heart of Europe will attract interest from both offshore Europeans and residents of Dubai.

Investor enquiry levels are looking positive – we have already sold three villas ahead of our official launch to market,” said Kleindienst.

Commenting on the launch of The Heart of Europe Marwan Al Qamzi, Group Managing Director from master developer Nakheel, said: “The World is one of our most ambitious projects and part of the long-term vision of Dubai. The development is bolstered by the select group of developers on The World who have the skill to create developments consistent with the vision of the project and have the expertise and capital to deliver economically viable projects in a mature real estate market.”

The move is welcome news for Nakheel, one of the key subsidiaries of Dubai World, which is facing staggering debts of $59 billion.

The company narrowly escaped debt default last month after payment was covered thanks to a $10-billion lifeline extended by neighbouring Abu Dhabi, and Kleindienst’s announcement came as Dubai World began talks with its lenders on how to restructure its $22 billion debt. Nakheel has already put several other larger-than-life Dubai projects on hold.

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IN THE BACK 142

On the shelf Taking an in-depth look at sustainability, MENA Infrastructure uncovers the best of this quarter’s book releases.

An Introduction to Sustainable Transportation: Policy, Planning and Implementation

By Preston Schiller, Eric C. Bruun and Jeffrey R. Kenworthy

Transportation is one area that is under scrutiny for its contribution to increasing our carbon footprint. Written by three lecturers and experts in transportation policy and planning, this book explores sustainable transportation and development and suggests some innovative solutions regarding mobility management. It contains sections on policy-making and planning and compares and contrasts various modes of transport, from human-powered modes to motorised modes, including marine and air transport. The book also features many international examples and case studies, textboxes, graphics, recommended reading and end of chapter questions.

MENA Infrastructure says: A great introduction to sustainability in transport – an informative, authoritative and worthwhile read for all those interested in or intrigued by the subject.

Sustainable Construction: Green Building Design and Delivery

By Charles J. Kibert

As industry attempts to review its construction practices and promote more sustainable buildings, this book provides a handy introduction to the design and performance of commercial and institutional green buildings. Author Charles Kibert uses the book as a way of encouraging the reader to realise the ecological and economic benefits of green building. He uses the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) set of standards to help explain these benefits.

MENA Infrastructure says: Ideal for anyone wanting to learn more about the theory, history, best practices and state of the industry with regards to green building.

Strategy for Sustainability: A Business Manifesto

By Adam Werbach

More than ever before, consumers, employees and investors share a passion for companies that do well by doing good. So any strategy without sustainability at its core is just plain irresponsible – bad for business, shareholders and the environment. These challenges represent unprecedented opportunities for big brands – such as Dell, Toyota and Wal-Mart – that are implementing integral, rather than tangential, strategies for sustainability. What these companies are doing illuminates the book’s practical framework for change, which involves engaging employees, using transparency as a business tool, and reaping the rewards of a networked organisational structure.

MENA Infrastructure says: Full of insight and wisdom, this is a valuable and thought-provoking read on implementing sustainability in your business.

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18/1/10 11:58:09

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 Editition ion 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

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AWAY A WAY ON ON BUSINESS BUSINESS

DUBAI FOUNTAIN

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et on the 30-acre Burj Dubai Lake in the shadow of the world’s tallest structure, the $217 million Dubai Fountain promises to rapidly become one of the Gulf’s must-see tourist attractions. The spectacular water feature – in true Dubai-style, the world’s largest – shoots water jets as high as 500ft , equivalent to the height of a 50-storey building, is 900-feetlong and has five circles of varying sizes and two central arcs. The beam of light from the Emaar-developed fountain can be seen from over 20 miles away and will be visible from space, making it the brightest spot in the Middle East – and quite possibly, the entire world.

Designed by California-based WET, creators of the famed fountains at the Bellagio in Las Vegas, the attraction contains over 6600 WET Superlights – the most advanced incandescent large fountain lights available today – and 25 colour projectors to create a visual spectrum of over 1000 abstract light and water combinations, artfully set to music.

Key facts • World’s largest dancing fountain • In sync with classical, Arabic and world music • 1.5 million lumens of projected light • Spray heights of up to 500 feet • 22,000 gallons of airborne water

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