Infrastructure Middle East March 2015 by Infrastructure ME

INTRODUCTION

The tariff story GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA

PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5472 EDITORIAL EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 440 9152 ADVERTISING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 440 9114 SALES EXECUTIVE LARA GAMBARDELLA lara.gambardella@cpimediagroup.com +971 4 440 9127 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 DESIGN HEAD OF DESIGN GLENN ROXAS SENIOR DESIGNER FROILAN COSGAFA IV CIRCULATION AND PRODUCTION DATABASE AND CIRCULATION MANAGER RAJEESH NAIR rajeesh.nair@cpimediagroup.com +971 4 4409142 PRODUCTION MANAGER JAMES THARIAN james.tharian@cpimediagroup.com +971 4 440 9136 DIGITAL DIGITAL SERVICE DIRECTOR TRISTAN TROY MAAGMA

CWA Power has scooped up 610MW in two weeks: How did they do it?’ was the clear and self-explanatory albeit lengthy title of the breakfast briefing that the Middle East Solar Industry Association (MESIA) organised in Dubai last month, a day before this issue was despatched to the printers. In a most engaging manner and sans any jargon, the CEO of ACWA Power, Paddy Padmanathan explained how his company managed to achieve tariff of 5.845 US cents/kWh for the Dubai Electricity & Water Authority’s 200MW Solar PV Independent Power Project (IPP). ACWA Power achieved this benchmark tariff by applying the same approach and rigour that has made the company, within a span of 10 years, one of the leading operators of power and desalination plants in the region, with contracted capacities of 18,000 MW in power generation and 2.45m m3/day in desalination. He pointed out that ACWA has consistently delivered the lowest tariff for all its projects, regardless of fuel, tariff and country, and the same methodology was applied to the DEWA bid. A key component of this approach is taking advantage of each and every opportunity to drive down costs, without compromising on quality, health and safety and environmental responsibility. This applies to capex, opex, financing and in the case of conventional power plants, fuel efficiency. With DEWA’s 200MW project, a key element in keeping capex costs low was the highly competitive construction capabilities available in Dubai. DEWA’s credit worthiness and ACWA Power’s track record meant that 86% of the project was funded by 27-year debt at a highly competitive interest rate. Padmanathan also noted that a “given tariff is only relevant to that specific project at that specific time.” With the US Fed signalling higher interest rates, and with Gulf currencies pegged to the dollar, financing could get more expensive which will surely impact the tariff structure. As to low oil prices playing spoilsport, he claimed that the tariff levels achieved in solar PV projects cannot be matched by oil-fired power generation, even at $40 a barrel. Moreover, the only certainty around oil prices is that no one can forecast the price with any level of accuracy even one year ahead whereas the fuel price for renewables (zero) is guaranteed for decades. ACWA Power’s success shows that solar PV value tariffs need not be in double digits anymore, especially in our region. In other words, US Cents/ kWh terms for well-structured power purchase agreements where solar insolation is reasonable should be in single digits. Is this a harbinger of solar power boom in the region?

‘A

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March 2015

INFRASTRUCTURE MIDDLE EAST

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CONTENTS

013 March 2015 32

COVER STORY

REGULARS

Rail expectations

06 Regional update

Public sector spending has breathed new life into the MENA region’s dormant rail sector but challenges remain

Oman ﬂoats RFQ for its biggest desalination project; Kuwait to boost its drilling rigs by 50%; Saudi central bank chief calls for subsidy reforms ALSO: BizBriefs

12 Global update Oil market to rebalance; China to invest in new rail projects

14 In focus TOP 10 FEATURE

Kuwait infrastructure projects The fall in oil prices hasn’t seriously impacted Kuwait’s infrastructure investment plans, especially for its oil and gas and utility sectors

Strength in diversity; A promising future; Core strategy

21 Infrastructure tenders 30 Bottomline Matters 54 Executive Insight Taking the pain out of parking

55 Events 56 Infrastructure milestones This month: Floating Bridge

INDUSTRY SECTORS

ANALYSIS

CONSTRUCTION

28 Big spenders

44 Reengineering for BIM

Spending outlook for the next 12 months in the region’s energy sector is higher than in any other sector, says PwC

Callan Carpenter, VP Global Services, Autodesk on the impact of BIM on the infrastructure industry and its stakeholders

TRANSPORT

CONSTRUCTION

38 Global leadership

48 Steel support

With a 50% worldwide market share, Kapsch sees itself at the heart of the future evolution of GSM-R

SAS International’s Andrew Jackson on the beneﬁts of steel as a ﬁt out material for transportation infrastructure in the region

TRANSPORT

SPECIAL REPORT

40 The Rail Specialist

50 Still going strong at 40

Atkins’ Julian Hill on the opportunities and challenges involved in developing a rail sector from scratch in the Gulf region

Middle East Electricity, billed as the world’s largest power exhibition, celebrates its 40th anniversary this year

INFRASTRUCTURE MIDDLE EAST

March 2015

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REGIONAL UPDATE

UAE Weak oil price should help to contain inﬂationary pressure in the UAE this year, The National reported, quoting the UAE minister of economy. Speaking on the sidelines of a conference in Sharjah on foreign direct investment, Sultan Al Mansouri said that inﬂation will hover at about 2.5% this year as the slump in the oil price helps to lower the price of imports. The UAE economy, he noted, will post growth in the 4-4.5% range, depending on the level of oil prices. The minister cautioned that while the drop in oil price could energise the economies of China, Europe, America and raise international oil prices, they will not be at the level they used to be in the recent past.

RTA-Etihad Rail pact The agreement also addresses the issue of road work NOCs

Dubai Electricity and Water Authority (DEWA) has awarded a contract to CESI Middle East to ensure the readiness of Dubai’s grid for renewable energy integration. The contract supports DEWA’s latest initiative to install photovoltaic (PV) panels in houses and buildings to generate electricity and connect them to

the utility’s T&D network. Last month, HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, issued Council Resolution No. 46 of 2014, allowing customers to install PV panels to generate electricity in buildings and connect these to DEWA’s grid.

Oman Dr Ahmed bin Mohammed Al Futaisi, Minister of Transport and Communications said his ministry will work to ensure that ongoing airport projects are completed. Dr Ahmed said his ministry will try to ensure that 90% of the work at Muscat International Airport is completed by the end of the year, including the new Passenger Terminal. The year will also see the opening of Salalah Airport, the launch of the third phases of Sohar and Duqm airports (terminals, air cargo buildings and utilities), the completion of the second phase of the Ras Al-Hadd airport, which includes runway and other civil works and completion of integrated IT network connecting Muscat and Salalah airports.

INFRASTRUCTURE MIDDLE EAST

High deficit Moody’s expects government debt to rise to over 20% of GDP by 2016

Oman Power and Water Procurement Company (OPWP) ﬂoated a request for qualiﬁcation tender to build the country’s biggest independent water desalination project. The desalination project, with a total capacity of 531,000 m3/day, will be located across two sites. It aims to enhance the availability of potable water in the country’s northern region.

March 2015

In January this year, OPWP ﬂoated another tender inviting bids from consultancy ﬁrms for conducting a study to identify the best sea-water intake and outfall location for the project. Currently, three major water projects – expansion of desalination projects of ACWA Power and Sur project and a new IWP in Qurayyat – are in different stages of development.

Etihad Rail, the developer and operator of the UAE’s national railway network, has signed a strategic agreement with Dubai’s Roads and Transport Authority (RTA). The agreement focuses on cooperation in securing railway alignments, station locations and defining the contractual and operational responsibilities for both parties. It was signed between HE Nasser Ahmed Alsuwaidi, Chairman of Etihad Rail and HE Mattar Al Tayer, Chairman of the Board and Executive Director of RTA. RTA will assign representatives to coordinate issuing Non-Objection Certificates (NOCs) of any road works required by Etihad Rail while the latter will conduct technical studies and present the findings to the governmental authorities in Dubai.

Moody’s has affirmed Oman’s A1 sovereign rating with a negative outlook. The driver for the change in outlook to negative from stable centres around uncertainty over the effectiveness of the government’s policy response to challenges posed by lower oil prices in 2015 as well as over the next three years. Oil and gas revenues accounted for 85% of total government revenues on average between 2009 and 2013. Under Moody’s base case oil price scenario, the government’s ﬁscal balance would deteriorate to a deﬁcit of around 11% of GDP in 2015 and to around 8% in 2016. As a result, Moody’s expects government debt to rise to more than 20% of GDP by year-end 2016, from an estimated 8% in 2013.

REGIONAL UPDATE

Kuwait Despite the drop in oil prices, Kuwait’s parliament has approved a ﬁve-year development plan that envisages spending of $116bn on projects. Projects envisaged include the construction of 45,000 housing units, a metro system, a railway network and a number of mega oil projects, including a new reﬁnery. The plan will also aim to bolster Kuwait’s GDP, increasing the private sector’s share in the economy from 26.4% at present to 41.9% while stepping up the number of nationals working in the private sector from 92,000 to 137,000. Oil accounted for 94% of Kuwait’s revenues during the past 16 years.

In the dark Kuwait was plunged into darkness by a rare blackout event last month

An electricity blackout which affected most parts of Kuwait last month was caused by cable failure, Kuwait Times reports. The technical glitch knocked out a 2000MW unit at 5,700MW Subbiya power plant leading to a sweeping blackout in the evening hours. However, oil installations across the country were

unaffected by the blackout, which shut down road lighting, leading to traffic jams. Doha-based Arabic daily Al Arab said the GCC grid immediately supplied 1,100 MW to Kuwait, which was half of its requirement. Power supply was completely restored four hours after the blackout event, a rare occurence in winter.

Saudi Arabia Saudi Arabia’s new King, Salman bin Abdulaziz alSaud, has decided to cease the Supreme Council of the King Abdullah City for Atomic and Renewable Energy (KA-Care) as part of a government reshuffle. The shuffle throws into doubt KA-Care’s future role in the development of renewable and nuclear energy in the Kingdom. The original plan set targets for implementing 54GW of renewable energy and 17GW of nuclear power by 2032. Last year, Khalid al-Sulaiman, a vice president of KA-Care, and the brain behind Saudi Arabia’s strategy to attract $109bn in investment for solar energy left because the government didn’t renew his contract, putting a question mark on its progress.

INFRASTRUCTURE MIDDLE EAST

Tackling waste Water tariffs in Saudi Arabia are the lowest in the GCC region

Saudi Arabia’s central bank governor called for reforms to the country’s system of energy and water subsidies. In the speech, published on the central bank’s website, Fahad Al-Mubarak gave no indication that the government actually planned concrete action. “One of the existing challenges is enhancing the efficiency of the local consumption of energy

March 2015

and water, which resulted in distortion and a large waste of those important resources in addition to increasing the ﬁnancial burdens on the government,” said Mubarak at an economic workshop organised by the Saudi government and the IMF. The government has projected a record $38.7bn budget deﬁcit for 2015 because of the plunge in oil prices.

Kuwait plans to boost its oil and gas drilling rigs by 50% by early 2016 as it seeks to boost crude and gas production despite low oil prices, Reuters reports. Kuwait Oil Company’s (KOC) Chief Executive Hashem Hashem said the country plans to deploy 120 oil and gas rigs by the start of next year, up from 80 rigs now. “We are continuing our programme, building capacity, especially in the oil and gas program. We are not stopping ... We are growing our activities on the drilling side,” he said. KOC is aiming to add 150,000 barrels of per day (bpd) to the current production potential of around 3m bpd by early 2016. It also intends to commission the ﬁrst phase of a water injection project to maintain reservoir pressure and boost production from Burgan by the end of March.

The fall in oil prices has forced Saudi Aramco to put on hold a reﬁnery project and exploration activities in the Red Sea, even as it pushes ahead with plans for unconventional gas. The energy major pushed back by a year plans to build a $2bn clean-fuels plant; it also put on hold deep-water oil and gas exploration and drilling activities in the Red Sea because their proﬁtability is now in question. However, Aramco is sticking to its plans to develop shale gas resources in the kingdom, and recently extended the deadline for companies to bid for work on an unconventional gas project in Turaif. Aramco’s chief executive Khalid al-Falih told a conference in Riyadh in January that his company had invested $3bn in developing unconventional gas resources and had earmarked an additional $7bn for it.

REGIONAL UPDATE

Qatar Qatar plans to spend $12.5b on housing to cater to the growing population ahead of 2022 World Cup, Saudi Gazette reports, quoting Minister of Economy and Commerce Sheikh Ahmed bin Jassim bin Mohamed Al Thani. The minister was part of a Qatari delegation that accompanied the Emir, Sheikh Tamim bin Hamad Al Thani, on his official visit to Japan last month. Addressing a meeting in Tokyo, Sheikh Ahmed said the sum, to be spent over the next seven years, will also cover the basic infrastructure needed to create and support the massive housing stocks. The total value of the projects related to the World Cup is $200bn,

World Cup boom Lusail City accounts for a quarter of Qatar’s $200bn spend

Qatar has signed a $21bn long-term contract to supply liqueﬁed natural gas (LNG) to Pakistan, which is grappling with chronic gas shortages, reports Express Tribune. Under the terms of the agreement, Qatar will supply Pakistan with 500 million cubic feet per day (mmcfd) of LNG under a pricing formula

that translates to a current price of LNG of $7 per million British thermal units (mmbtu); Indian importers, in contrast, are currently paying close to $9-$10 per mmbtu. LNG contracts are typically priced at a 10-15% discount to Brent but the price does not include the cost of shipping the LNG to Karachi.

The Minister of Environment Ahmed Amer Mohamed Al Humaidi has issued the fifth version of Qatar Construction Specifications (QCS) 2014, The Peninsula reports The new set of specifications will take effect three months after its publication in the official gazette. The new stipulations also require that all buildings being constructed must be seismic and wind-proof; have entry and exit points for people with special needs; and must provide adequate insulation against sound and heat for walls and ceilings. These specifications also address the safety of workers engaged on construction sites. The decree also states that construction debris be recycled, dysfunctional street lights be replaced; and energyefficient bulbs be used.

FINISHED PRODUCT SALES HOSE & BELT MANAGEMENT HYDRAULIC TUBING & PIPING GATES ENGINEERING & SERVICES MENA Headquarters, Jebel Ali Free Zone Dubai, United Arab Emirates Telephone +971 4 886 1414 Fax +971 4 886 1413

HYDRAULIC SYSTEM REFURBISHMENT FLUID POWER EQUIPMENT DESIGN & BUILD mena@gates.com <> Gates.com

REGIONAL UPDATE

102km of sub-sea pipelines, firbre optic communication cable and associated brownfield modifications on interconnected platforms.

Biz Briefs Dubai Electricity and Water Authority (DEWA) has awarded M Station power and desalination plant expansion contract, valued at $400m, to Siemens. Mott MacDonald was earlier appointed consultant for the project, which will be completed and delivered by April 30, 2018. The expansion project will add 700 MW to the existing power generation capacity of the station (which stands at 2,060 MW), to eventually produce 2,700 MW by 2018. The additional capacity will be deployed combined cycle technology. Hyundai Engineering and Construction Company (HDEC) has awarded the engineering design services contract for the $1.5bn Mirfa Independent Water and Power Project (IWPP) to Atkins An HDEC led consortium is executing the engineering, procurement and construction (EPC) contract for the 1,600 MW project in Abu Dhabi. Atkins’ power and renewables business will provide the consortium civil design review and assistance with building permits from the Western Region Municipality of Abu Dhabi. It will also assist with the project’s conformity to the Estidama framework, which mandates incorporation of sustainability into the construction and operation of all buildings in Abu Dhabi. Yousuf Al-Ojaili has been appointed BP Oman’s head of country and president. Ojaili was previously chief executive of the Oman Gas Company, a subsidiary of the Oman Oil Company. Previous positions in his 27 years working in the industry include roles at

010

INFRASTRUCTURE MIDDLE EAST

M Station UAE’s largest power and desalination plant is set for further expansion

Petroleum Development Oman and Brunei Shell Petroleum. A key responsibility for Ojaili will be managing BP’s contract with Oman’s government for the appraisal and development of the Khazzan and Makarem gas fields in Block 61, which was signed in January 2007. Equate Petrochemical Company, Kuwait’s first international petrochemical joint venture, posted a decline in net profit to $1.04bn for the fiscal 2014, compared to $1.25bn in 2013. “Taking into consideration that 2014 was filled with challenges and developments, these results are extremely positive,” said Equate president and CEO Mohammad Husain The year recorded major highlights in Equate’s history, including its one-month turnaround for ethylene, polyethylene, ethylene

glycol and utilities units. In addition, it finished the first phase of the polyethylene debottlenecking project to increase the production capacity from 825,000 tonnes annually to almost 1m tonnes. L&T’s hydrocarbon business has progressively commissioned the $400m plus Umm Lulu Phase-I and Nasr Phase-I Field Development Projects of Abu Dhabi Marine Operating Company (ADMA-OPCO). Once fully developed the subject two projects will progressively contribute additional 105,000 barrels per day from the Umm Lulu field and 65,000 barrels per day from Nasr field L&T undertook the full EPCIC scope of four Well Head towers (two each in Umm Lulu and Nasr) with another bridge-linked Manifold tower in Nasr field,

Membrane-based wastewater treatment Kuwait’s Sulaibiya is aiming for a new record

March 2015

New expansion by Kuwait’s Sulaibiya Wastewater Treatment and Reclamation Plant will make it the world’s largest membrane-based wastewater treatment facility. Under an agreement, GE will provide ZeeWeed 1000 submerged hollow-fibre membranes and AG LF low-fouling reverse osmosis (RO) membranes for the plant that will enhance its production capacity from 375,000m3/ day to 600,000m3/day. Dr Ibrahim Al-Ghusain, Corporate Director, Kharafi National said: “In 2004, when the project was commissioned, it was the world’s largest to use RO and UF membrane-based water purification, also provided by GE. Through this expansion, we are taking our facility to the next level.” Abu Dhabi Gas Industries Company (Gasco) and Abu Dhabi Gas Liquefaction Company (Adgas) has awarded about $1.6bn worth of contracts to expand the country’s natural gas processing facilities. The contracts for engineering, procurement construction (EPC) work were awarded to a consortium involving Italy’s Maire Tecnimont, Greece’s Archirodon, Spain’s Tecnicas Reunidas, and the UAE’s National Petroleum Construction Company. The project will develop and expand facilities to boost gas transfer from offshore to onshore as part of the UAE’s plans to meet increasing local demand for gas. Adgas, majority-owned by Abu Dhabi National Oil Company (ADNOC), said last year that it planned to increase gas production to as much as 2.4bn standard cu ft (scf ) per day by 2017.

GLOBAL UPDATE

Sharp were the only two to go down in the 2014 rankings. Sameer Joshi, Director of Research and Analysis for Power and Alternative Energy at GlobalData, said: “Trina Solar was able to surpass Yingli’s module production by around 150 MW in 2014, despite the latter’s increase in production.”

Round Up The recent crash in oil prices will cause the oil market to rebalance in ways that challenge traditional thinking about the responsiveness of supply and demand, the International Energy Agency (IEA) said. In its annual Medium-Term Oil Market Report (MTOMR) report, IEA said that the US light, tight oil (LTO) revolution has made non-OPEC production more responsive to price swings than during previous market selloffs. “This unusual response to lower prices is just one more example of how shale oil has changed the market,” said IEA Executive Director Maria van der Hoeven. “OPEC’s move to let the market rebalance itself is a reflection of that fact. It may have effectively turned LTO into the new swing producer, but it will not drive it out of the market. LTO might in fact come out stronger.” While Egypt will largely benefit from low oil prices on the fiscal front thanks to lower oil subsidy bills, the downside could be be lower receipts from the Suez Canal, which accounted for 30.5% of Egypt’s total services and income receipts in fiscal 2014, up from 22% in fiscal 2005. According to Steffen Dyck, Moody’s VP-Senior Analyst Sovereign Risk Group, lower oil price environment could actually prove positive for Suez Canal receipts, if and when demand for oil rises again and tanker tonnage increases. Unfortunately, the current fall in oil prices is not only a function of oversupply but also reflects global demand. He continued: “Given that more than half of South-North

012

INFRASTRUCTURE MIDDLE EAST

Decisive times for shale US light, tight oil is the new global swing producer, says IEA

traffic in the Canal is destined for the Northern Mediterranean and Western Europe, and with global trade growth signiﬁcantly lower than its pre-global ﬁnancial crisis average of 6.7% between 1995 and 2008, the increase in Suez Canal receipts will slow.” China will increase the scale and intensity of major transportation infrastructure construction this year to act as stimulus to spur growth of the economy, which continued to decelerate. Xinhua reports that China’s National Development and Reform Commission (NDRC) plans to put more railway lines, particularly in the central and western regions, into operation this year, which will in turn stabilise economic growth and improve people’s livelihoods. In 2014, the NDRC approved

$56bn for transportation infrastructure, which included railways, roads, airports and waterways. China had more than 110,000km of railways by the end of 2014 of which 15,800km were high speed rail (HSR). Trina Solar became the world’s foremost producer of crystalline modules in 2014, responsible for 7.9% of global production and displacing Yingli Green Energy (Yingli) as the market leader, according to GlobalData. The company’s latest ﬁndings show that global crystalline module production grew from 33 GW in 2013 to 44GW in 2014 at an annual growth rate of 33.3%, with Trina Solar producing an estimated 3,500 MW last year. Among the top ﬁve companies in 2013, Yingli and

Fast track China is planning to beat the slowdown with new railway investments

March 2015

The African Development Bank Group (AfDB) has approved an African Development Fund (ADF) loan of $144.9m to the Kenya–Tanzania Power Interconnection Project. The project involves the construction of approximately 508km of transmission line between Kenya and Tanzania and associated substations. The line will have a transfer capacity of up to 2,000 MW in either direction. The Ethiopia– Kenya interconnection line will allow for the interconnection of the Eastern Africa Power Pool to the Southern African Power Pool and further in the future to Northern Africa through the East Africa Electricity highway. The board of Moroccan National Railways (ONCF) approved a capital budget of $790m for 2014, the International Railway Journal reports. More than half of the budget or $420m is allocated to the 200km Tangiers – Kenitra high-speed line, which is currently under construction, while the remaining will be used for enhancements on the conventional network. These include construction of a third track on the Kenitra – Casablanca line, track doubling on the Settat – Marrakech line, station modernisation and refurbishment of existing rolling stock..

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IN FOCUS

ENERGY FOCUS

Strength in diversity Gates Engineering & Services is relying on its diversified range of products and services to ride out the uncertainty in the global oil industry onsidering that oil and gas has always been a key market for Gates Engineering & Services, has the decline in oil prices affected the company? Whilst we have deﬁnitely seen a decrease in exploration within the region, we haven’t seen an overall drop in our activity levels. Instead, what we are experiencing is a shift in focus from our customers; we are receiving fewer enquiries related to new build rigs, but maintenance-related orders are up. Our diverse range of products and services, including our Sentry Hose ID system, Safe Hydraulics training and 16C roughneck hose, are well-positioned in the market to support our customers’ appetite for increased maintenance and refurbishment activities. This diversity has also allowed us to supply into alternative markets; whilst oil prices are low, we have shifted some of our focus into more stable and growing markets, such as downstream and midstream. Of course, oil prices are a concern for all of us, but we are conﬁdent that as our customers look for greater efficiencies and saving money, we will continue to excel in delivering the best products with the lowest life-cycle costs.

to new markets, such as construction, downstream/midstream and marine.

Do you deal directly with the oil majors?

We deal directly with national oil companies, international oil companies, drilling contractors and major service companies, locally and globally. In the MENA region, we are a preferred supplier in upstream (applications using Gates products include drilling, exploration, utility hose and services); downstream/ midstream (our range of belts is a standard feature in many reﬁneries, and we also supply hydraulic hose and other hydraulic components); energy (our design & build range, including the integration of metering systems and the design, manufacture and supply of transformer skids, is very projectdriven in this segment, and our products are

INFRASTRUCTURE MIDDLE EAST

March 2015

How is the services side of the business doing?

“Whilst oil prices are low, we have shifted some of our focus into more stable and growing markets, such as downstream and midstream” JOHN WESTON, SENIOR VICE PRESIDENT – EMEART, GATES CORPORATION

Our strength remains in our expansive range of hose, industrial belts, hydraulic, and design and build products. At the same time, pullthrough service work is a rapidly growing part of our business. We have recently secured a major hose management contract for a fleet of jack up rigs in the region. Services, such as hose management, flushing, pickling and passivation and safe hydraulic training ultimately stem from our products. Offering these services allows us to offer a more cradle-to-grave approach to our customers. We know that downtime is costly, and our ability to offer onsite services ensures that equipment isn’t taken out of operation for any longer than is absolutely necessary. While capex spends have reduced as a result of falling oil prices, we expect this will lead to an increase in our rental business. We have an extensive fleet of containerised workshops and hydrostatic pressure testing units that will support our customers’ focus on opex spend to maintain their equipment and operations. There is an expectation in the region that more rigs will be cold-stacked whilst oil prices are low; this gives us an opportunity to provide more services, including rig refurbishment activities, during this period. From a local presence standpoint, how does Gates compare with its competitors?

supplied throughout the region, including to end-users in Iraq); and service companies (our offerings include the integration of wireline units and manufacture coil tubing units). What is your new product pipeline looking like?

Development of new products is an ongoing process for Gates globally, and we will continue to invest heavily in research and development. We also continue to look

We are the only original equipment manufacturer of drilling hose represented locally. Furthermore, Gates has the only API 7K-certiﬁed manufacturing facility in the region. Manufacturing and selling our own product allows us to keep safety and reliability at the forefront. Ultimately, the biggest difference between Gates and our competitors is the quality product we offer. We may not be the cheapest, but we’re the most cost-effective.

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IN FOCUS

ACTION PLAN

A promising future New white paper examines reuse policy options to the tackle growing demand for water in Saudi Arabia detailed study of water reuse in Saudi Arabia has recommended four major policy options including education and outreach; removing barriers; incentives; and mandates and regulation to expand water recycling and reuse in the Kingdom. Coauthored by GE Power & Water executives – Colin Enssle, Senior Manager – Water and Process Technologies and Jon Freedman, Global Government Affairs Leader – Water and Process Technologies, the white paper on ‘Addressing Water Scarcity in Saudi Arabia: Policy Options for Continued Success’ presents the water reuse landscape in the Kingdom, existing water reuse policy and regulations, a range of technology options to address reuse challenges and success case studies from markets including Bahrain. The Paper was presented at the Water Arabia 2015 Conference & Exhibition in Al Khobar last month. According to research reports, Saudi Arabia aims to increase water reuse to more than 65% by 2020 and over 90% by 2040 by transforming its existing and planned wastewater treatment assets into source water suppliers across all sectors. Valued at over $4.3bn by Global Water Intelligence (GWI), the Kingdom’s water reuse market is the third largest in the world. Over $66bn in long-term capital investments have been committed for water and sanitation projects in the Kingdom in the next 10 years, while the government aims to achieve 100% reuse of wastewater from cities with 5,000 inhabitants or more by 2025. “Our recommendations complement the recently launched National Water Strategy to address Saudi Arabia’s water challenges. With overall water reuse from treated wastewater at an impressive 30-40%, the Kingdom has tremendous potential to enhance water reuse by over seven times

INFRASTRUCTURE MIDDLE EAST

March 2015

to 241m m3/year,” says Freedman. This leadership by Saudi Arabia comes in the face of signiﬁcant water supply and demand challenges which include water scarcity; dwindling surface water and groundwater supplies; infrastructure buildout; and tariff and demand management. Agriculture is the biggest consumer of treated wastewater followed by landscaping, industries and recreational purposes. GWI reports water reuse will increase at a CAGR of 4% from 2,367m m3/day to 5,834m m3/ day in 2035. Water reuse is promoted in the Kingdom through governmental decrees as well as the active participation of the private sector. Primary responsibility for regulating wastewater – and thereby water reuse – is split among the Ministry of Water & Electricity (MOWE), the Presidency of Meteorology & Environment (PME), and the Ministry of Agriculture (MOA). The National Water Company (NWC) is responsible for implementing projects. The 9th Development Plan aims to increase treated wastewater reuse to 50% as one of its key goals. A new water law, establishing a Supreme Council for Water Affairs and an independent regulator for water resources and water services, and creating a water

Saudi Arabia water reuse by sector, 2012–35 Sector (1,000 m³/d)

management department at the Ministry of Water & Electricity, are among the projected policy goals in the sector for this year. “GE’s white paper highlights the ambitious initiatives ... and discusses four policy options that could serve as a valuable starting point to evaluate the appropriate mix of policies that best fit the Kingdom’s needs, going forward,” says Freedman. The first recommendation on promoting education and outreach focuses on recognition awards and certification programs as well as information dissemination and educational outreach. Removing barriers highlights how financial, regulatory, and technical barriers can be addressed to strengthen water reuse. Incentives as a policy option evaluates the scope of direct subsidies, pricing mechanisms and structuring water rights, while mandates and regulation restrict potable water to human and food-related uses, as well as encouraging utility companies to develop plans for recycled water. Technology options highlighted in the white paper including membrane-based systems and advanced chemistries for 70-85% recovery, thermal evaporation, crystallisation and biological systems for 98% recovery and stateof-the-art wastewater recovery systems.

27,28

2012

2035

% of total (‘35)

CAGR* ‘12–’35

Industry

233

767

13.1%

5.3%

Landscaping

650

1,533

26.3%

3.8%

Recreation

167

2.9%

38.1%29

Agriculture

1,467

3,350

57.4%

3.7%

0.3%

0.0%

2,367

5,834

100.0%

4.0%

Aquifer recharge TOTAL 1,000 m 3/d = thousands of cubic meters per day Source: Global Water Intelligence (GWI), GE analysis.

*CAGR = compound annual growth rate

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IN FOCUS

GRID FOCUS

Core strategy Lucy Electric targets smart grid opportunities for growth in the Middle East By Anoop K Menon hilst Lucy Switchgear has become a recognised name in the Middle East, we felt it no longer reﬂected the scope and future ambition of the business,” says John Griffiths, Chief Executive Officer (CEO), Lucy Electric, explaining the rebranding of the erstwhile Lucy Switchgear, which boasts of a 50-year plus presence in the Middle East, as Lucy Electric. Griffiths who took over as CEO mid-2014, following the retirement of his predecessor Chris Levick points out that the rebranding was also prompted by the fact that company’s identity encompasses much more than just switchgear. For example, smart grid is an area where Lucy Electric enjoys a great deal of expertise, both in terms of project planning and management as well as an extensive product range designed to support customers at every stage of the development of a smart grid. “We need to demonstrate to our customers that we have the engineering capabilities to support automation projects and deliver customised solutions which meet their needs,” he says.

through to end of life removal and disposal.” Griffith sees smart grid playing a key role in Lucy Electric’s future growth. “One of the key challenges facing network operators in the future is the development of fully automated distribution networks,” he explains. “Smart grids provide many beneﬁts for network operators, particularly real-time adjustment to changing loads, generation, and failure conditions of the distribution system, without operator intervention. This is especially valuable in networks where equipment is remote or hard to access, and can effectively minimise power interruptions and ensure a more stable power supply.” In terms of research and development (R&D) focus, the company is looking at integrating smart grid control and monitoring into its switchgear range for underground cable networks and overhead line systems.

“W

NEW LAUNCHES AT MEE

At the Middle East Electricity (MEE) this month, the company will be exhibiting its next generation Aegis Plus range. These smart gridready units incorporate many features designed to meet customers’ changing technical needs. “The core of our business remains Ring Main Units,” says the Lucy Electric CEO. “We also have a number of new developments to our automation range, such as an upgraded RTU Gemini 3, which enables us to deliver a broad spectrum of smart grid needs, SCADA systems for network monitoring and control, and LV automation with Gridkey.” MEE will also see the launch of Lucy Electric’s new energy services group to support

INFRASTRUCTURE MIDDLE EAST

March 2015

“We need to demonstrate to our customers that we have the engineering capabilities to support automation projects and deliver customised solutions which meet their needs” JOHN GRIFFITHS, CEO, LUCY ELECTRIC

customers with a wide variety of service needs. “As a business we have always had a strong focus on ongoing support for our customers throughout the product lifecycle and regularly review our services,” says Griffiths. “This new group offers customers expert support, advice and a range of services from new equipment installation and commissioning, retroﬁt or upgrade packages to add automation functionality, all the way

CORE MARKET

Griffiths sees the Middle East as a “very important core market” for Lucy Electric. “We still see opportunities for growth (in the Middle East), especially as our customers embrace the development of smart grid projects,” he says. “We also work with customers across North Africa from our Dubai office and expect this market to develop strongly in the future as the infrastructure is extended and upgraded to meet growing demand for electricity across the region” And what does he make of the fall in prices and its impact on utility projects in the Middle East, and speciﬁcally, the Gulf region? “We are heavily linked to the utility spend cycle which in turn is a function of construction activity, especially in this region,” admits Griffiths. “As we saw during the 2008-09 recession, these activities are later in the economic cycle, so at this stage it is hard to say if the reduction in oil prices is a short term drop or if it will be sustained and will have longer term economic impacts.”

MIDDLE EAST INFRASTRUCTURE TENDERS

Infrastructure Tenders Our monthly analysis of new tenders and key projects across the region

GCC RAILWAY PROJECT

DESERT ROSE CITY PROJECT

NOOR 1 PHOTOVOLTAIC SOLAR POWER PLANT PROJECT

SOHAR INDEPENDENT WATER PROJECT (IWP)

BUDGET: $15,000,000,000

BUDGET: $8,000,000,000

BUDGET: $600,000,000

Territory: GCC Client Name: GCC Secretariat Description: Construction of 2,170km-long railway transportation system to connect the Gulf Cooperation Council (GCC) countries Period: 2018 Status: New Tender

Territory: UAE Client Name: Dubai Municipality Description: Development of a city covering 4,000 hectares of land between Al Ruwaya and Al Aweer across old Emirates Road in Dubai Period: 2018 Status: New Tender

Territory: UAE Client Name: Masdar Description: Engineering Procurement and Construction (EPC) contract to build 100 MW PV solar power plant in Al Ain Period: 2014 Status: New Tender

Territory: Oman Client Name: OPWP Description: Development, financing, design, engineering, construction and O&M of a 250,000m3/day IWP Period: 2018 Status: New Tender

March 2015

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE SAHIL, QUSAHWIRA, MENDER FIELDS DEVELOPMENT PROJECT - PHASE 2 Project Number: MPP1490-U Client Name: Abu Dhabi Company for Onshore Oil Operations (ADCO) Address: Corniche Road, Abu Dhabi Phone: (+971-2) 604 0000 Fax: (+971-2) 666 5523 Website: www.adco.ae Description: Engineering, procurement and construction (EPC) contract to develop Sahil, Qusahwira and Mender fields to expands onshore crude production by 143,000 barrels a day (b/d). The project will increase Abu Dhabi’s onshore crude capacity by 1.8m b/d. Last year, US’ CH2M Hill was awarded a deal to manage the development of Sahil, Qusahwira and Mender onshore oil fields. Bids are currently under evaluation for the Mender field main contract on this scheme while Qusahwira field is currently in the design stage. Period: 2019 Status: New Tender Tender Categories: Gas Processing & Distribution

field. Surface facilities will be delivered for the Thamama A, Thamama H and Thamama B production zones to achieve a total sustainable oil production rate of 450m b/d. The field is sour with high hydrogen sulphide content and aquifer water is injected into the producing zones to maintain pressure. Client has invited the seven prequalified companies to submit technical bids for the EPC contract by March 2015. Commercial proposals are expected to be submitted in the first week of May 2015 after the assessment of technical bids. Status: New Tender Tender Categories: Gas processing & distribution, oil fields & refineries

CONSULTANCY SERVICES - STRATEGIC TRANSPORT PLANNING Project Number: MPP2693-U Client Name: Department of Transport, Abu Dhabi Address: C2 Towers, 6-11th Floors, Bainunah Street, Al Bateen

Project Number: MPP2693-U Client Name: Abu Dhabi General Services Company Address: 3rd Floor, Bldg. C6, Al Bateen Towers, Bainuna Street Phone: (+971-2) 404 2222 Fax: (+971-2) 404 2221 Website: www.musanada.com Description: The $2bn project, which will house 130,000 people, is still in the design stage. UK’s Atkins has been appointed as design consultant. Enabling works are expected to commence in the second quarter of 2015. Status: New Tender Tender Categories: Construction & contractong

DUQM OIL REFINERY DEVELOPMENT PROJECT - PHASE 1 Project Number: MPP1362-O Client Name: Oman Oil Company Address: AlHarthy Complex, Muscat PC 118 Phone: (+968) 2457 3100 Fax: (+968) 2457 3101 Website: www.omanoil. com Description: EPC contract for the development of a grassroots refinery in Duqm with a capacity of 230,000 b/d. The deadline for prequalification submission has been extended to March 12, 2015. Construction work on the scheme is slated to commence in late 2016. Financial close is targeted by the end of 2015, with the refinery slated for commissioning in fourth quarter of 2018. Status: New Tender Period: 2019 Tender Categories: Gas Processing & Distribution, Industrial & Special Projects Oilfields & Refineries

Project Number: ZPR841-O Client Name: Oman Oil Company Address: AlHarthy Complex, Muscat PC 118 Phone: (+968) 2457 3100 Fax: (+968) 2457 3101 Website: www.omanoil. com Description: Build-Own-Operate (BOO) contract for the construction of a crude oil storage terminal with capacity of up to 200m barrels at Ras Markaz. The terminal will be located in Al Wusta region of Oman, 70km north of Duqm. It will be built in phases and serve the storage requirements of the new refinery in Duqm and provide

Project Number: MPP2693-U Client Name: Abu Dhabi Company for Onshore Oil Operations (ADCO) Address: Corniche Road, Abu Dhabi Phone: (+971-2) 604 0000 Fax: (+971-2) 666 5523 Website: www.adco.ae Description: EPC contract for the development of integrated facilities at the Bab

INFRASTRUCTURE MIDDLE EAST

NORTH AL-WATHBA HOUSING COMPLEX DEVELOPMENT PROJECT

OMAN

RAS MARKAZ CRUDE STORAGE TERMINAL PROJECT

BAB INTEGRATED FACILITIES PROJECT

Phone: (+971-2) 656 6666 Fax: (+971-2) 635 9666 Website: www.dot.abudhabi.ae Description: Provision of consultancy for Strategic Transport Planning (On-Call) to support the Advanced Multi-Modal Transport Planning Section (AMMTPS). Status: New Tender Tender Categories: Roads, bridges & infrastructure; Public transportation projects

March 2015

MIDDLE EAST INFRASTRUCTURE TENDERS

Website: www.ashghal.gov.qa Description: Construction of a new road spanning 5.3km with four lanes in each direction, separated by a central median, and 5.4km of side roads, associated service roads and secondary intersections. Construction work has commenced on the scheme. Period: 2017 Status: New Tender Tender categories: Roads, bridges & infrastructure

DOHA BAY CROSSING (SHARQ CROSSING) PROJECT blending facility for crude. On completion, it will be the largest crude storage terminal in the Middle East. In January this year, UK-based Amec Foster Wheeler was awarded a contract to undertake the front-end engineering design (FEED) for this project. Period: 2018 Status: New Tender Tender Categories: Gas Processing & Distribution; Oilfields & Refineries

SOHAR PETROCHEMICALS COMPLEX PROJECT Project Number: MPP2910-O Client Name: Oman Refineries & Petroleum Industries Company (ORPIC) Address: Sohar Industrial Port Area, Sohar 322 Phone: (+968) 2685 1000 Fax: (+968) 2685 1211 Website: www.orpic.om Description: EPC contract to build a petrochemicals complex with capacity of 1.1mtpa. Client is looking for funding from banks and export credit agencies. Tendering for the EPC contracts is currently underway. Construction is expected to commence in 2016. Period: 2018 Status: New Tender Tender Categories: Industrial & Special Projects

QATAR INDEPENDENT WATER PROJECT - RAS LAFFAN INDUSTRIAL CITY Project Number: MPP1487-Q Client Name: Kahramaa Address: Corniche Street, Number 61, Sheraton Roundabout, Doha Phone: (+974) 4484 5484 Fax: (+974) 4484 5496 Website: www.kahramaa.com.qa Description: Construction of an Independent Water Project (IWP) using reverse osmosis (RO) technology. Client has reduced the capacity to 35MIGD for potable water capacity while removing the industrial capacity from the scope. The previous bid deadline of February 23 has been extended. Period: 2017 Status: New Tender Tender Categories: Water works

Project Number: ZPR096-Q Client Name: Baladiya Address: Al Kornish Street, Doha Phone: (+974) 4426 6666 Fax: (+974) 4426 5689 Website: www.baladiya.gov.qa Description: Construction of a 12km long crossing at Doha Bay. The project has been delayed after being taken off the priority list for 2022. Status: New Tender Tender categories: Roads, bridges & infrastructure

BAHRAIN SITRA REFINERY EXPANSION PROJECT Project Number: MPP2596-B Client Name: BAPCO Address: Industrial Area, Awali Phone: (+973) 1775 2995 Fax: (+973) 1770 4070 Website: www.bapco.net Description: EPC contract for upgrading and expanding production capacity of Sitra refinery from around 262,000b/d to 360,000 b/d. The project is currently in the FEED stage. Status: New Tender Tender Categories: Oilfields & refineries

PRODUCED IN ASSOCIATION WITH MIDDLE EAST TENDERS

AL RAYYAN ROAD UPGRADE PROJECT - PHASE 2 Project Number: WPR096-Q Client Name: Ashgal Address: Al Faisal Tower, Al Corniche Street, Doha Phone: (+974) 4495 007 Fax: (+974) 4495 0777

March 2015

INFRASTRUCTURE MIDDLE EAST

TEN KUWAIT INFRASTRUCTURE PROJECTS

KUWAIT INFRASTRUCTURE PROJECTS The fall in oil prices hasn’t seriously impacted Kuwait’s development plans for its oil and gas and utility sectors that dominate this month’s Top 10

INFRASTRUCTURE MIDDLE EAST

March 2015

AL-ZOUR NEW REFINERY PROJECT

Owner: Kuwait National Petroleum Company (KNPC) Budget: $15bn Progress: Invitation to bid The project involves EPC contract to build a new reﬁnery at Al Zour with a capacity of 615,000 b/d, makig it the biggest in the region. The contract has been split into ﬁve packages with a combined value of over $11bn. Last month, KNPC extended the deadline to bid for packages 1, 2 and 3 by nearly a month from the previous deadline of February 8, 2015 in an attempt to secure lower bids post sharp decline in global oil prices. For Package 5 (marine package), a consortium comprising South Korea’s Hyundai Engineering & Construction, Italy’s Saipem and India’s Essar submitted the lowest bid at $1.55bn. The contract award is scheduled in May 2015, but it is expected that there may be delays due to the lowest bid coming in at nearly double the estimated budget of $850m.

TEN KUWAIT INFRASTRUCTURE PROJECTS

CLEAN FUELS PROJECT

Owner: Kuwait National Petroleum Company (KNPC) Budget: $14bn Progress: EPC awarded The EPC contract for implementation of Clean Fuels scheme involves upgrading and increasing capacity at Mina Al-Ahmadi and Mina Abdullah refineries raising their total refining capacity to 800,000 b/d. Work has been split into three main packages in terms of process units at Mina Abdullah refinery, revamping the plant together with off-sites and utilities and revamping and installation of units and interfaces at Mina Al-Ahmadi refinery. Last year, a consortium led by Japan’s JGC Corporation won a contract worth $4.82bn to work on the Mina Ahmadi refinery; UK’s Petrofac won a contract worth $3.5bn to carry out work at the Mina Abdullah refinery, while US’ Fluor Corporation own another contract for Mina Abdullah valued at $3.4 bn. The three consortiums have agreed on a time table with KNPC to complete the project in 45 months.

OLEFINS 3 PETROCHEMICALS PLANT PROJECT

Owner: Petrochemical Industries Company (PIC) Budget: $10bn Progress: Planning stage The project involves the development of world-scale Olefins complex in Kuwait with a mixed-feed cracker in Al Zour area to produce 1mtpa of polyethylene and up to 600,000tpa of polypropylene. The economic pre-feasibility study for Olefins III was completed in 2009 while UK- based consultancy KBC Advanced Technologies completed a detailed feasibility study in 2011. PIC is in the early planning stages of developing the cracker and is yet to decide whether or not to go ahead with the integration of this project with the planned $14bn AlZour New Refinery Project (NRP). Start-up is estimated to be in 2017 or 2018, based on current status. Feedstock options being considered include ethane, off gases, propane, and other combinations with LPG, naphtha and condensate.

KUWAIT AIRPORT EXPANSION PROJECT

Owner: Directorate General of Civil Aviation Budget: $4.8bn Progress: Delayed The project involves expansion of Kuwait’s international airport to increase capacity to handle 13m passengers annually by 2016; this will be increased to 25m passengers in the second phase and 50m in the third phase. The expansion includes construction of a new terminal building and extension of the existing runways, construction of a hotel, car parks and associated aprons and remote stands. In November last year, the CTC announced that a consortium of Kharaﬁ National and Turkey’s Limak Holding was awarded the contract. Last month, KUNA reported that a tender committee of public works ministry has recommended that all bids to construct the new terminal be rejected. According to media reports, the lowest bid exceeded the estimated cost of the project by 39% and did not meet technical speciﬁcations.

March 2015

INFRASTRUCTURE MIDDLE EAST

TEN KUWAIT INFRASTRUCTURE PROJECTS

LOWER FARS HEAVY OIL DEVELOPMENT PROJECT - PHASE 1

Owner: Kuwait Oil Company (KOC) Budget: $4.2bn Progress: EPC awarded The Lower Fars ﬁeld is located about 80 km northwest of Kuwait City. The EPC contract covers drilling of hundreds of wells and data collection, as well pilot schemes using various extraction methods. The consortium of Petrofac and Consolidated Contractors Company (CCC) overcame competition from 19 international contractors to bag the EPC contract in January 2015. When fully operational, the initial phase of the Lower Fars heavy oil project is expected to produce around 60,000 b/d. The scope of the contract covers main central processing facility (CPF), associated infrastructure, production support complex and a 162km pipeline which will transport the heavy crude from the CPF to South Tank Farm located in Ahmadi.

INFRASTRUCTURE MIDDLE EAST

March 2015

HEAVY OIL PRODUCTION FACILITIES PROJECT

GAS TRAIN PROJECT MINA AL AHMADI REFINERY

Owner: Kuwait Oil Company (KOC) Budget: $4.2bn Progress: Invitation to bid

Owner: KNPC Budget: $1.5bn Progress: Invitation to bid

This oilfield cum refinery project, initiated by the Kuwait Oil Company (KOC), is located in the north of Kuwait and includes transportation, storage and distribution of crude as part of exploration and development of oilfields. The heavy oil production facilities will have a capacity of 60,000 b/d and will play a very important role in helping Kuwait meet its oil production target of 4m b/d by 2020. Scope of work covers steam injection and production for heavy oil along with a support complex tank farms and a 270,000 b/d pipeline. Petrofac has emerged as the lowest bidder for the EPC contract followed by SK Group of South Korea. KOC has also invited international companies to bid for an enhanced technical service agreement to develop the field.

The project involves an EPC contract for the construction of a fifth gas train with the capacity to process 805m cubic feet of gas per day and 106,000b/d of condensates. The gas train, which will separate associated gas produced in the north and southeast of the country into its basic components, will accomodate upstream capacity increase at Kuwait Gulf Oil Company (KGOC) and Kuwait Oil Company (KOC). UK’s Amec was awarded the FEED and project management consultancy contracts for the project. FEED has already been evaluated and KNPC is appraising the project’s economics in light of the changes in the amount of gases from KOC fields. Last year, nine contractors were prequalified to bid for the EPC contract. Kuwait’s Central Tenders Committee (CTC) has extended the deadline to submit bids from the previous deadline of March 3, 2015.

TEN KUWAIT INFRASTRUCTURE PROJECTS

BUBIYAN PORT DEVELOPMENT PROJECT

Owner: Ministry of Public Works Budget: $1.2bn Progress: Construction of Phase 1 underway Bubiyan is Kuwait’s largest island separated from the mainland by the Subbiya Channel. Long undeveloped due to its poor soil conditions, the government approved a plan to develop Bubiyan in 2004 and turn it into commercial seaport with a total handling capacity of 2.5m containers a year. A local/ Chinese joint venture of Gulf Dredging & Contracting, Shaheen Alghanim Roads & Bridges and China Harbour Engineering Company were awarded the $409m Phase 1 contract for the construction of a 34km road, a 1.4 km road bridge, landﬁll, soil improvement works and a railway embankment. Phase 1 is expected to be completed by 2018. In August last year, the ministry prequaliﬁed consultants for designing stages 3B and 3C of the project.

AL KHIRAN INDEPENDENT WATER & POWER PROJECT PHASE 1

Owner: Kuwait Authority for Partnership Projects (KAPP) Budget: TBA Progress: Request for qualification The Al Khiran IWPP will include a greenfield power and seawater desalination plant with a capacity of 1,500 MW and 125 MIGD respectively with the Ministry of Electricity & Water as the off-taker. The project will be located to the south of existing Al Zour South power and water project in Kuwait and include a 400kV substation. Low sulphur fuel oil, gasoline, crude oil and/or natural gas will be used for fire the plant. The desalination component will use multistage flash (MSF), multiple-effect distillation (MED) and/or RO technology. KAPP has invited interested groups to submit prequalification bids for the Build-OperateTransfer (BOT) contract by April 2, 2015.

KABD WASTE-TOENERGY PLANT

Owner: KAPP Budget: TBA Progress: Request for qualification The plant will be located in Kabd, about 25 km from Kuwait City and will treat up to half of Kuwait’s municipal waste. The waste-to-energy plant will have an initial capacity of 3,275 tonnes a day. To be developed on BOT basis, the contract term will be for 30 years in addition to a two-year period for construction and equipment installation. The electricity generated by the plant will be purchased by the Ministry of Electricity & Water. Last year, KAPP’s predecessor PTB invited companies to pre-qualify for the BOT contract, and received expressions of interest from 13 firms. It also appointed a consortium led by PwC to provide transaction advisory services. KAPP is expected to reveal the project’s status by March 2015.

March 2015

INFRASTRUCTURE MIDDLE EAST

ANALYSIS

SNAPSHOT

Big spenders Spending outlook for the next 12 months in the region’s energy sector is higher than in any other sector, says PwC report egional commitment to spending on oil and gas projects is unlikely to change, even in light of the significant drop in oil prices over the last few months, according to PwC’s industry snapshot ‘Black gold: The road ahead.’ The snapshot analyses the views expressed by respondents involved in the oil and gas industry in PwC’s 2014 report ‘Building beyond ambition,’ a capital projects and infrastructure survey of project owners, developers, contractors, advisors and financiers on their view of the market. According to the new report, 60% of oil and gas industry respondents said that their organisations spent more than $1bn last year, with more than a fifth saying that spending overtook $5bn. The report also suggests that this could increase, with over three quarters of respondents expecting spending to rise over the next 12 months and 40% expecting spending to increase by more than 25%. Since this survey was conducted, oil price has dropped significantly, but PwC does not believe this will dent the spending plans of projects planned or underway in the region. This is because of the fundamental importance of the sector to the region’s governments in helping to deliver revenue and employment. “Irrespective of the recent decline in oil prices, there is cause for optimism in the regional oil and gas industry,” says Paul Navratil, PwC’s Leader of Energy, Utilities and Mining in the Middle East. “However, it also brings to sharp focus some issues that need to be addressed as a matter of urgency if the

INFRASTRUCTURE MIDDLE EAST

March 2015

sector wants to deliver on its ambitions.” The report, quoting data from MEED Projects, notes that there are currently 456 active projects in the oil and gas sector in the Middle East, with a total value of around $540bn. The overwhelming majority of the region’s hydrocarbon sector mega projects are still ﬁnancially viable in the $60-$70 oil price range; however, the importance of efficiency in the capital allocated and spending incurred will be ampliﬁed. “If oil prices remain as they are, or drop further, then the need for efficiency of capital will be even more important,” says Navratil. INEFFECTIVE DEPLOYMENT OF CAPITAL

Although the sector continues to invest, challenges remain. Oil and gas projects suffer from the same concerns that plague other sectors - mainly project delays and cost over runs. In the survey, 92% of oil and gas respondents said their projects are not delivered on time, with almost two ﬁfths of these delayed by more than six months. Cost is also an issue - 70% of respondents said their projects are also delivered over budget, with 9% of people saying projects eventually cost more than 50% of their original estimates. “A lack of planning, coordination and integration across the entire project leads to delays, claims and an inability to deploy capital effectively,” says Stephen Anderson, PwC’s Leader of Capital Projects and Infrastructure in the Middle East “It’s not necessarily about what you do, it’s the way that you do it. Addressing delays and budgets will require systematic shifts in the way the industry operates; in many cases budgets are set in a vacuum away from the operational side which eventually

impacts the ability of implementation.” PEOPLE AND TALENT

A shortage of skilled workers is also becoming a challenge, with almost half of the respondents (46%) listing it as their top external challenge. A staggering 70% of respondents view competition with other countries as the largest threat to attracting and retaining talent. Despite the oil price falling, which may mean more people on the market (due to a number of firms and contractors reducing their staff ), PwC believes that the volume (and core capabilities) of people on the market will still not be on the scale required or what is needed by the GCC market. In order to overcome this issue, more attention will need to be placed on a broader suite of benefits to attract and retain talented people, according to PwC. Over half of respondents said compensation and benefits were the most important things to attract talent; however, 30% said career progression was important. “This to us marks a shift, where compensation alone is not enough to attract the right people,” says Anderson. “As the region develops and becomes a more attractive place for expatriate workers to live and raise their families, efforts have to be made to create opportunities that offer career progression and longer-term prospects.” Ultimately, regional oil and gas projects are unlikely to face funding issues as they are critical to national ambitions and domestic growth agendas. Perhaps for these very same reasons, 42% of respondents do not expect funding issues to constrain spending plans - a stark contrast to other sectors, with only a 31% confidence rate.

9th Annual

IN PARTNERSHIP WITH

Under the honorary patronage of His Highness Sheikh Mansour Bin Zayed Al Nahyan Deputy Prime Minister, Minister of Presidential Affairs

17 – 18 MARCH 2015 Dubai International Convention and Exhibition Centre Dubai, UAE

H.E. Dr. Abdulla Belhaif Al Nuaimi Chairman of the Federal Authority for Land and Maritime Transport is delighted to invite you to attend Middle East Rail 2015

6000 ATTENDEES 600 DELEGATES 220 EXHIBITORS 200 VIPS BUILDING ICONIC RAILWAY NETWORKS ACROSS THE ARAB WORLD WHO ATTENDS… • Regional and international rail operators • Regional transport authorities and ministries • Major contractors

TO PURCHASE… • Service Integrators

• Rolling Stock

• Tunneling

• Service providers

• Maintenance

• Rail Technology & ICT

• Consultants

• Revenue Management

• Agents and distributors

• E2E & International Operators

• Fixed Stock

Gold Sponsors

Platinum Sponsors

Supporting Partners

• Engineering & Construction

• Security & Safety • Interiors

CASE STUDY

Bottom Line Matters Helping you make the smartest decisions

Using Technology to Prevent Flooding Effective stormwater technologies are an essential part of infrastructure development in the Middle East to deal with the risks of flooding and take account of climate change. Clive Evans of Hydro International explains. tormwater networks in the Middle East have been at the receiving end of the region’s infrastructure boom and population expansion, sometimes resulting in severe flooding in the region’s cities. Take Jeddah’s devastating flash floods in 2009, when twice the average rainfall for an entire year fell in 24 hours. At least 120 people are thought to have died. The sheer intensity of the rainfall in an otherwise arid climate was a clear outcome – many believe – of climate change. Rapid economic growth, ambitious infrastructure investment and huge population expansion have combined to overwhelm the existing stormwater network in Saudi Arabia, in

INFRASTRUCTURE MIDDLE EAST

March 2015

common with many Middle East countries. Infrastructure investment continues apace across the Middle East and that development is now being matched by multi-million dollar investments to build storm drains and improve the stormwater and foul water networks. Combining local knowledge with the best in civil engineering and planning expertise from across the globe, far-reaching drainage measures are now being undertaken to prevent a repeat of disasters. PROTECTING LIVES AND PROPERTY

Such measures are essential, not just to protect lives and livelihoods, but also the valuable new developments themselves, as many flagship and iconic buildings are linked with major new world-class road and rail projects.

To address storm drainage infrastructure, governments can turn to international disciplines such as Sustainable Urban Drainage Systems (SuDS), Low Impact Development (LID) and Water Sensitive Urban Design (WSUD) to ﬁnd the best the world has to offer. But with so many technologies originally designed for more temperate regions, it is important to track down the best solutions to deal with large quantities of fast-ﬂowing water, and high concentrations of suspended grits and sand. Take for example, the construction of the 449.2km high-speed Al Haramain railway linking the Muslim holy cities of Medina and Mecca via King Abdullah Economic City, Jeddah and King Abdulaziz International Airport. Each of its four main stations are architecturally stunning with a striking

CASE STUDY

modern design that still resonates with Islamic architectural traditions. Each station will have shops, restaurants, mosques, car parking, a helipad and VIP lounges. In one of Saudi Arabia’s most prestigious and far-reaching infrastructure projects, engineers have taken the best of stormwater drainage principles and planned at-source stormwater attenuation using large underground stormwater storage tanks to protect the stations from flooding in peak storms. For Jeddah, Makkah and King Abdullah Economic City stations, Hydro International’s modular geosynthetic solution offered significant advantages over other storage options because of the perforated distribution pipes that run underneath the storage volume. Hydro’s geocellular storage technology is designed to prevent sediments suspended in the stormwater from entering the storage tank and instead wash them through the pipe network. More than 18,000 cubic metres of storage has been created in seven underground tanks across the Jeddah and King Abdullah stations, with each discharge to the sewer network controlled at 270l/s by a Hydro-Brake Optimum® vortex flow control. Considering the heavy silt and sand loadings, the design enabled the storage tanks to be self cleansing and to require only minimal maintenance. A third stormwater storage project is now underway at the Makkah Station, located at the main entrance to Makkah City, where a further two tanks with a total volume of 2,650 cubic metres are being constructed using the same modular geocellular storage technology, controlled by a Hydro-Brake Optimum vortex flow control. The Hydro-Brake Optimum is the only vortex flow control that can be perfectly sized to balance flow rates and surface water

Hydro's Vortex Drop Shaft technology is helping control peak stormwater flows in Qatar

attenuation to optimise storage volumes – saving up to 15% more storage than comparable ﬂow controls, and helping to keep construction costs to a minimum. With contracts totalling $5m, the solution is a major success for Hydro International, following the signing of an official agency agreement with Jeddah-based Centex Arabia, part of the Alkhorayef Group of Companies. VORTEX DROP SHAFT

Another cutting-edge technology developed by Hydro in the UK is now providing the ideal solution to cope with the strain on stormwater networks caused by high peak flows of large stormwater volumes. Stormwater drained from an overhead highway could need to fall many metres at peak flows to the receiving storm drains at ground level. With this drop and the expected peak volumes of water, rapid erosion and significant vibration damage from vertically falling water could occur. Hydro’s Vortex Drop™ Shaft technology can dissipate the energy of tonnes of water safely.

Installing geocellular storage from Hydro International as part of the Al Haramain railway project

For example, in Qatar, the technology is being used on the four-lane, 81km Salwa International Highway, as part of multimillion dollar infrastructure developments in advance of the 2022 Soccer World Cup. Despite the dry climate, winter rain storms can be intense and could quickly cause localised and dangerous surface water flooding on the elevated expressway. So, at the interchange, large volumes of water falling from height must be controlled and drained away rapidly to avoid structural damage. A Hydro Vortex Drop Shaft has been installed to control stormwater runoff over a drop of more than six metres from the raised expressway at Doha’s Industrial Park Interchange, helping achieve significant savings in construction costs and time over conventional methods. Alternative solutions such as cascades, or shallow gradient drops are expensive to build and take up more space With the Hydro design, the pipe diameter is significantly smaller than a concrete drop shaft for the same flow. In addition, as a selfcontained unit, the Hydro Vortex Drop Shaft is installed within a micro-tunnel of concrete ring sections. Workers are insulated from the danger of unexpected falling water and allowed safe escape via ladders. As the Middle East continues to implement world-class infrastructure, engineers and designers can now select techniques and technologies from across the world best suited to the challenging weather conditions and environment. For more information about Hydro’s Stormwater management products contact Ezzat Natsheh. Tel +971 557644961 or e-mail enatsheh@hydro-int.com. (The author is International Business Director, Hydro International - www.hydro-int.com)

March 2015

INFRASTRUCTURE MIDDLE EAST

COVER STORY

strategic mode

Rail expectations Public sector spending has breathed new life into the MENA regionâ&#x20AC;&#x2122;s dormant rail sector but challenges remain By Anoop K Menon

INFRASTRUCTURE MIDDLE EAST

March 2015

COVER STORY

last but not the least the Dubai effect. “It is important not to underestimate the Dubai effect,” says James. “By pioneering the GCC’s first metro system, Dubai has proved that metro projects can be successful in the Gulf.” Scale of ambition

According to MEED Insight, the region currently has 28,882km of rail networks with Egypt topping the chart at 9,633km. But there are also countries like Libya, Lebanon and most of the GCC states that have next to non-existent rail networks. “Some countries have a lot of rail while

Value of MENA rail projects planned or under construction 120,000

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captured in most, if not all, of the major regional cities’ vision statements.” Demographic growth, which is putting strain on existing transport infrastructure, was another factor. The GCC has added over 8m people over the last 10 years while the Middle East, as a whole, is expected to add 100-115m people by end2015. This acts as an impetus to invest in transport infrastructure to ensure that business and life can continue normally. Other factors include political desire to improve access to more remote areas and stimulate economic development, more visible in Saudi Arabia and Oman, and

ailways aren’t a new phenomenon in the Arab world. The 19th century railway boom in Europe and North America impressed the Middle East and North Africa (MENA) region as well. The year 1852 saw the opening of the first railway line in MENA between Cairo and Alexandria, while the 1,300-km Hejaz railway between Damascus and Medina, opened in 1908 (and made famous by Lawrence of Arabia), marked the sector’s highpoint in the region. Thereafter, the intervening world wars, the discovery of oil in the Arabian Peninsula and the region’s intermittent political and economic instability turned railways into fond memories for much of the 20th century. “In the Gulf region, local population took to roads encouraged by new road networks and cheap fuel,” says Ed James, Director of Analysis, MEED Projects. “At the same time, existing networks in some of the pioneers of rail travel in the region suffered from underinvestment.” The last 10 years has seen a revival of railways in the region and especially in the Gulf Cooperation Council (GCC) countries. According to MEED Projects, a total of $300bn worth of rail and metro projects are planned or under execution in the Middle East & North Africa (MENA) region. The largest market, by some distance, is Saudi Arabia with over $100bn worth of projects planned or under construction. Qatar has a rail and metro project pipeline valued at $40bn. The UAE, Egypt, Iran, Kuwait and Oman have $10-30bn worth of stated investments in their railway projects. “Even if only half of these projects actually materialise, you are still looking at $150bn worth of investments in the region in the next 5-10 years,” says James. A key factor behind the upsurge in rail projects is high oil revenues. Within the GCC, infrastructure sectors like ports and railways were the main beneficiaries of government spending aimed at economic diversification. Tim Risbridger, partner and head of infrastructure at EC Harris says: “The regional governments recognised that public transport is required if they are to continue to support successful growing and diversifying economies. Rail is a key component of this and this is

Source: MEED Projects

March 2015

INFRASTRUCTURE MIDDLE EAST

COVER STORY

TOP 5 LARGEST RAIL PROJECTS IN THE MIDDLE EAST

Riyadh Metro Lines 1 & 2 Bechtel/Siemens/Almabani/CCC $9.5bn Haramain High Speed Rail Phase 2 2011 OHL/Adif/Renfe/Talgo/Indra/ Dimetronic/Cobra/Inabensa/ Copasa/Imathia/Consultrans/ Ineco/Shoula/Rosan 2011 $8.4bn Riyadh Metro Lines 4, 5 & 6 FCC/Freyssinet/Alstom/ Samsung/Strukton/Setelc/Typsa 2013 $7.8bn Riyadh Metro Line 3 Ansaldo STS/Impreglio/L&T/ Nesma & Partners/Bombaridier 2013 $5.9bn Dubai Metro Green Line Kajima/Mitsubishi/ Obayashi/Yapi Merkezi 2005 $3.8bn Dubai Metro Red Line Kajima/Mitsubishi/ Obayashi/Yapi Merkezi 2005 $3.8bn Courtesy: MEED Projects

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March 2015

some have little or not at all but all this is changing rapidly,” says James. “Currently, there are more than 41,000 km of new rail projects planned in the region. While not all these projects may go ahead – for example, Iraq, Libya, Yemen are facing political instability – nonetheless, it is indicative of the scale of the ambition. Even if only half of those projects ago ahead, we are still looking at 20,000km of new rail networks.” Also, the Dubai effect is in full swing as metro and high speed rail projects get off to a flying start, especially in the GCC, compared to long distance rail networks. “It is true that urban rail systems like Metro projects and LRT are being given priority over long distance projects in almost all the GCC states,” says Srinath Manda, Programme manager, Transportation & Logistics practice, Frost & Sullivan. “One major reason for this is lack of integrated urban local transport system in most cities within the region (except for Dubai), and relative ease in realising the urban projects. Further, the governments are focused on enhancing living conditions and transportation facilities within their prominent cities.” In 2013, Qatar awarded contracts worth $7.3bn for Doha Metro Phase 1 while Saudi Arabia awarded more than $22bn in contracts to three foreign-led consortia for the design and construction of the Riyadh Metro. In Qatar, work on Phase 1 is being carried out under five separate contracts the Gold Line, Green Line, Red Line North, Red Line South and the Major Stations packages. Four of these were awarded in 2013 while the Gold Line package, at $3.3bn the single largest contract of Phase 1, was awarded in April 2014. Late last year, Qatar Rail invited architects and building contractors to prequalify for the construction of architectural elements of the metro project before moving on to the QIRP’s freight and passenger lines. Rail projects that merit tracking in 2015 include tenders for Oman National Railway Phase 1 and Mecca Metro, prequalification for Jeddah Metro, prequalification for Project Management Consultancy (PMC) services and Preliminary Design Consultancy services for the Kuwait Metro, which has been revived as a government-funded project.

Future projects

The top future rail projects in Gulf region are expected to be Riyadh Dammam High-Speed Rail, Dammam Metro, Oman National Railway, Mecca Metro Lines B&C, Jeddah Metro – Orange and Blue lines, Saudi Land-bridge, Abu Dhabi Metro and Qatar Integrated Railway Project (QIRP). In Saudi Arabia, tendering for Jeddah Metro is not expected to start before the end of this year or later while for Mecca Metro, bids have been invited from the prequalified consortia for Phase 1. The cabinet has already approved Mecca Metro project at a total cost of $16.5bn. In November 2014, Prasarana Malaysia Berhad won the bid to be the ‘Shadow Operator’ for Phase 1 of the Mecca Metro, providing operations and maintenance consultancy services to the Makkah Mass Rail Transit Company during the construction of Phase 1, which comprises two lines with 22 stations and spans 45.1 km, including 24.9km of underground rail network and is expected to cost $6.8bn. Last year, SRO has awarded a $1.6m contract to a consortium led by Spain’s Consultrans to study options for the highspeed line linking Riyadh and Dammam. SRO has also awarded a $104.4m contract to local contractor Al Mobty for the Phase 1 doubling of tracks on the Riyadh - Harad - Dammam freight- line. The contract involves doubling a 214km section of the line from Hofuf to Harad over a period of two years. The design speed of the doubled line will be 150 km/h in order to enable SRO to run passenger trains between Hofuf and Harad and then to Al Kharj at a later stage. In parallel, China Railway Construction Corporation has been awarded a contract worth $32.5m to renew 78.4km first phase of the main freight route two between Dammam and Riyadh. Challenges ahead

Globally, railway projects are always been complex affairs, needing higher investments and longer time for development than other infrastructure. In almost all the GCC states, the railway projects being developed, especially long distance (national, regional) are the first set of projects in this sector. A cross-border network like the GCC Rail, for example, will confront challenges in terms of border control, integration and

COVER STORY

interoperability of systems and rolling stock which can make the ride bumpy. EC Harris’ Risbridger points out that the GCC Rail project will provide a secondary freight route bypassing the Straits of Hormuz, which will enhance inter-GCC trade and development, and in time, should provide cheaper inter-GCC travel. “However, as the network expands, security and cross border cooperation is a challenge which will require focused dialogue between the countries if the benefits are to be maximised,” he cautions. Climatic and topographic conditions can also pose major challenges. “The challenging desert terrain that the railways have to pass through in case of intercity or long distance routes within the GCC states, requires advanced engineering and construction practices than those adopted in countries like India, China or the US,” says Manda. “The engineering and construction companies have to develop and build infrastructure that withstands challenges such as desert storms and scorching temperatures.” Sand can substantially increase costs by 10-20% or more due to higher O&M burden and to ensure that the system’s design can cope with it. “Track maintenance and operating in relatively low visibility conditions (due to sand storms, or air filled with sand dust), which could be a regular case, would definitely prove to be a severe challenge for the railway service operators and infrastructure maintenance companies,” notes Manda. On the topography front, some countries also present mountainous terrain that need to be tunnelled through and wadis that need culverts and viaducts. Outside the GCC, in places like Algeria, Egypt, Iran and Iraq with long established railway networks, substantial investments are required in electrification, expansion and doubling of tracks and station improvements to improve the systems and increase usage. In terms of specific challenges, the metro projects in Saudi Arabia, Qatar and Kuwait and the main line projects in the UAE, Oman and Saudi Arabia are all going to be built in a small area in the next five years, which is going to put enormous constraints on

“Most international major rail investments have struggled to be directly self-financing; however, it is the wider indirect economic benefits that justify these investments” Tim Risbridger, partner and head of infrastructure at EC Harris labour, materials and expertise, resulting in delays or escalation of costs or both. “Globally there are in a wave of significant rail investment resulting in high demand for rail expertise worldwide; therefore, attracting rail experts to this region is becoming increasingly difficult,” says Risbridger. Another challenge is the lack of local experience in building, operating and maintaining rail systems. However, Oman and Saudi Arabia are looking at developing in-country talent and in-country value (ICV) addition stipulations to address this challenge. On a macro level, risk perceptions have changed for the better. “With a number of new heavy rail and metros having been completed and operating in the region for a few years, the risk profile has changed significantly for investors,” notes Risbridger. “Before these rail lines become operational there was little or no data to base financing and investment models;

therefore, the investment community perceived this as being higher risk.” Likewise, the engineering and construction community now has a much better understanding of the regional and local technical challenges associated with rail sector projects and has access to locally experienced and trained staff and is able to build on practical experience. “However, the delays in arriving at a consensus regarding common/shared aspects such as uniform infrastructure across the GCC states, is severely affecting the pace of development,” says Manda. Questions have been raised on whether the region’s rail networks can be selfsustaining without government support. Risbridger says: “Most international major rail investments have struggled to be directly self-financing; however, it is the wider indirect economic benefits that justify these investments. This is particularly relevant in the Middle East as populations are increasing at a high rate and the economies are rapidly diversifying. It is therefore my opinion, governments should invest in establishing rail networks at the outset and thereafter, without the burden of capital funding, the rail networks should be self-financing.” Where there are sufficient population densities, there is a very strong demand for local passenger rail networks in the region, something amply demonstrated by Dubai Metro. “In respect to longer distance passenger rail (medium - high speed trains) some research has indicated that there could be a viable demand provided the fares compete favourably with air travel,” says Risbridger. “Freight rail is more challenging as the economic advantages typically only work for large scale bulk products over long distances.” An unforeseen externality has been the decline in oil prices, which is expected to put brakes on public funding in the Gulf. Governments have committed to investing in their respective railway projects irrespective of the direction of oil prices and transport ministers have gone in record reiterating their resolve to move forward with ‘strategic projects.’ But if the past is any indication, a prolonged fall in oil prices could force a more phased out project implementation scenario and highly competitive bidding. March 2015

INFRASTRUCTURE MIDDLE EAST

COVER STORY

Oman: ‘Tenders for two more segments planned’

ast month, Oman’s Ministry of Transport and Communications awarded a $149m project management consultancy (PMC) contract for Oman’s 2,135-km long national railway project to a consortium headed by Spanish contractor Técnicas Reunidas. As per the contract, the Técnicas Reunidas will undertake a complete review of the preliminary design work of the rail network already prepared by Italferr, the preliminary design consultant for the Oman rail project. Seventeen consortiums/joint ventures have ben prequalified for the main design and build packages of the 207-km Phase 1 stretch between Sohar and Buraimi. The rail systems prequalification attracted five submissions. Technical bids were submitted by January 18 while deadline for financial offers is March 1. The construction contract is expected to be awarded by mid-2015. Eng. Abdulrahman Al Hatmi, chief executive officer of Oman Railway Company told Times of Oman that there are plans to float tenders for building two more segments of the railway network this year. The design of the remaining eight segments is going on and will be completed by the year-end. Italferr is designing routes for the entire network.

INFRASTRUCTURE MIDDLE EAST

March 2015

Saudi Arabia: ‘Most ambitious future plans’

audi Railways Organisation (SRO) has awarded the contract to carry out detailed design work for the Kingdom’s 663km-long segment of the GCC rail project. Speaking at the GCC Rail and Metro Conference in Muscat, HE Mohamed Khaled Al Suwaiket, President, SRO, said the design will take around 12 months to complete. Saudi Arabia, he continued, has ambitious plans to build 15,000km of rail and metro networks over the next 15 years in phases. The 5,000 km to be built includes the GCC Rail segment and the Saudi Landbridge project. The existing Riyadh-Dammam passenger line is being upgraded, with the first phase of the project to double the track lines between Hofuf and Harad expected to be completed by the middle of 2015. Speaking at the event, Dr Rumaih M Al Rumaih, CEO of Saudi Arabian Railways (SAR), said, “SAR is building a massive network of 5000Km. Already 1,400km is operational, with the ability to transport phosphate and bauxite from mines to the manufacturing facilities at the port in Ras Al Khair.” SAR is planning to buy 222 locomotives, freight cars and passenger train sets for the Saudi Landbridge alone.

UAE: “We’re almost there”

ddressing the GCC Metro & Rail Conference in Muscat recently, Etihad Rail’s acting CEO Eng. Faris Saif Al Mazrouei said the contract awards for the second - and largest - phase of the project will be announced soon. “It’s right now with the government,” said Al Mazrouei, while responding to a question posed by a delegate. “They’re reviewing all of the documents as we speak. We’re almost there.” The second phase will connect Saudi Arabia on one side and Oman on the other, and is a crucial segment of the GCC Rail network. The line will also connect three major ports of Khalifa, Musaffah and Jebel Ali. Meanwhile, on the metro front, the RTA has revived the $3bn Blue Line, which will form the third line of Dubai Metro. The project is in the concept planning stage with design work expected to start in 2016. The bid documents of the main contract for the Dubai Expo 2020 Metro Line is expected to be released by July 2015. Parsons Systra JV was awarded the contract to complete the preliminary engineering for the project last year. Also, the master plan for the first phase of Abu Dhabi Metro has been completed.

COVER STORY

Bahrain: ‘Causeway link study to be completed in March’

Kuwait: ‘Design consultants prequalified for national railway’

peaking at the recent GCC Rail & Metro Conference in Muscat, HE Eng Maryam Ahmed Jumaan, UnderSecretary for land transportation, Bahrain said that study on Saudi Arabia-Bahrain rail causeway will be completed by the end of March 2015. The Under-Secretary said the alignment of the line has already been finalised, a landing point for the network has been agreed and most of the technical and operational guidelines have been put in place. The study, being carried out by SNC Lavalin, has proposed two alignments for an 87km-link that will join two stations on both sides. These will be built on land reclaimed from the sea. The link, which is crucial to the GCC Railway project, will be built in parallel to the existing King Fahd Causeway. Bahrain and Saudi Arabia are working towards making the new causeway operational by 2018. On Bahrain’s side, the station will further connect to Bahrain’s port and airport, and the proposed causeway to Qatar, which will also be a part of the GCC Railway project. Jumaan said it may still possible to complete the Bahrain-Qatar link in time for the Qatar World Cup in 2022 “if the commitment is there.”

uring the GCC Rail & Metro Conference, it was announced that prequalification of consultants for engineering design of Kuwait’s national railway has been completed. The railway, which will be a part of the GCC Rail network, is 574km long. One line is the Nowaseb-Khafji south line, running from the Saudi border to Mubarak Port and Boubyan Island. The second line will connect Shuwaikh and Al Shoiaba ports with national railways onward to connect with Iraq and Saudi Arabia. Construction is expected to start in 2016 so that the lines become operational in 2018. With regard to $20bn Kuwait Metro project, in October 2014, the Ministry of Communications invited consultants to prequalify for two contracts covering the project management and preliminary design of the scheme. The plan is to tender the project as a series of design and build contracts allowing it to be completed in five years. Work on the metro, which will have three routes, is to start by 2017. Last month, Kuwait’s parliament approved new fiveyear development plan, which has allocated funds for construction of the metro system and the national railway network.

Qatar: ‘Ongoing projects sticking to timeline’

ast month, Qatar Rail announced a series of contracts for the Doha Metro and the Long Distance rail projects. A five-member consortium consisting of Mitsubishi Heavy Industries, Mitsubishi Corporation, Hitachi, Kinki Sharyo and Thales received a Letter of Conditional Acceptance from Qatar Rail for a systems package for the Doha Metro. “The Doha Metro ongoing works are being done according to (the) timeline that we set at the beginning of the project,” said Qatar Rail’s CEO Eng. Saad Ahmed Al Muhannadi. The package calls for turnkey construction of a fully automated driverless metro system. Also, a JV of Louis Berger and Egis Rail was awarded the contract to provide Project Management Consultancy (PMC) services for all elevated and at-grade sections of the Doha Metro project. Qatar Rail has re-launched the prequalification process for Phase 1 of its long distance passenger and freight network. The line will connect the Doha with Bahrain and Saudi Arabia and complete Qatar’s segment of the GCC Rail project. In January, the shadow operator contract for the long distance project was awarded to DB International.

March 2015

INFRASTRUCTURE MIDDLE EAST

TRANSPORTATION

DEDICATED SOLUTION

Global leadership With a 50% worldwide market share, Kapsch sees itself at the heart of the future evolution of Global System for Mobile Communications – Railway (GSM-R) he pre-eminence of Global System for Mobile Communications – Railway (GSM-R) in railway operations comes directly from an official choice made in the 1990s by the European transport authorities, who decided to build a common European Union (EU) standard for railway signalling {European Train Control System or ETCS} and telecommunication (GSM-R). “Today, after more than 15 years, we have reached a point of richness and robustness with this dedicated railway solution that permits mission-critical level of service ….for both high-speed and conventional lines, which was not a given at the beginning of its history,” says Michel Clement, Kapsch CarrierCom’s GSM-R Vice President. He spoke to Infrastructure ME about key milestones in GSM-R deployments, the technology’s future direction.

in the UK, Deutsche Bahn in Germany and RFF/Synerail in France. Two years ago, we were selected by the Chinese authorities to equip 25% of the new lines in the country with our access solutions. The most recent milestone is a massive deployment for MAV in Hungary, where we will provide the totality of our new product portfolio. In the Middle East, we are equipping Algeria’s railway network with GSM-R under a massive investment plan by the authorities. In Saudi Arabia, we are currently deploying GSM-R on the Mecca – Medina line, which will be the most frequented line in the Kingdom.

How would you describe Kapsch’s global leadership in GSM-R?

From a marginal business of Nortel, GSM-R was re-positioned as a core activity of Kapsch after we acquired Nortel’s GSM-R activities in 2010. Our strategy has been to expand the existing footprint in Europe and outside Europe, while extending the scope of GSM-R related activities to end-to-end solution provisioning, transmission and civil works. Within ﬁve years, this effort led to four-fold increase in turnover and a clear number one position in this market, with a market share of 50%, both in terms of contracts won and in terms of track kilometres awarded. What would be your milestone projects?

The ﬁrst milestone was the transfer from Nortel to Kapsch CarrierCom of the Synerail contract for implementing the GSM-R

INFRASTRUCTURE MIDDLE EAST

March 2015

How is Kapsch driving the evolution of GSM-R technology?

“Having introduced our IPbased R4 core technology in 14 countries to date, Kapsch CarrierCom can rightfully claim to be the initiator of the global IP evolution of railway GSM-R networks” MICHEL CLEMENT, VICE PRESIDENT GSM-R, KAPSCH CARRIERCOM

Public Private Partnership (PPP) for the entire French railway network. Its successful execution helped build market conﬁdence in our abilities. Another milestone was the adoption of IP-based Release 4 core network technology by the three major European railway networks - Network Rail

Having introduced our IP-based R4 core technology in 14 countries to date, Kapsch CarrierCom can rightfully claim to be the initiator of the global IP evolution of railway GSM-R networks. What needs to be understood is that the intelligence of GSM-R networks is in the core, and not in the access - 2G today, and maybe 4G or 5G tomorrow. Therefore, the evolution will necessarily be initiated from the core network, including the transmission infrastructure which has to evolve towards IP in order to support next-generation radio access. We are preparing and standardising GPRS and Edge for ETCS communication, which will introduce the packet mode into European Rail Traffic Management System (ERTMS) A major point to consider is the coexistence of current and future networks, as each network will evolve at a different pace, with the obligation to ensure interoperability between networks, a fundamental objective of ERTMS. These are the elements that Kapsch is focusing when preparing the GSM-R evolution that will take some time due to the railway security and safety concerns and obligations.

Kapsch CarrierCom

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always one step ahead

TRANSPORTATION

ADDING VALUE

The Rail Specialist Atkinsâ&#x20AC;&#x2122; Julian Hill on the opportunities and challenges involved in developing a rail sector from scratch in the Gulf region

INFRASTRUCTURE MIDDLE EAST

March 2015

TRANSPORTATION

tkins has around 18,000 people across the world which includes 3,000 rail specialists, making rail a significant part of the company’s business. Revolving around the core markets of the UK, Hong Kong, Scandinavia and the Middle East, Atkins’ activities include all aspects of infrastructure design and engineering, systems engineering, asset management, high speed rail, forecasting and transaction advice. Milestone projects in the region include the Dubai Metro, for which Atkins provided full multidisciplinary design and construction support services for the civil works, and Al Mashaaer Al Mugaddassah Metro in Makkah, where it provided various design services including rail systems, MEP and civils design verification. The latter has a peak capacity of 72,000 passengers per hour per direction, the highest in the world. “We’ve been really encouraged in other parts of the region by the way new projects and programmes are being developed and procured,” says Julian Hill, regional managing director – Rail, Atkins, who led the team working on the underground stations for the Dubai Metro’s Red Line and was the PM for the design of the Green Line. Hill also points out that the railway sector has a role to key play in region’s economic diversification plans. Excerpts from the interview:

What projects are you currently involved in? How are they helping showcase Atkins’rail expertise?

The Middle East is a brilliant showcase for our expertise because we’re working with partners and clients to create new metro systems from scratch. It doesn’t really get any better than that for our engineers and architects because you can quickly see the product of your hard work and you can also appreciate the outcome. For instance, Dubai Metro has had a fundamental impact on the city and it’s now hard to imagine life without it. We’d expect to see a similar transformational impact on other cities in the region – most immediately Doha and Riyadh – and that’s incredibly exciting. The value we’re able to add is getting stronger with every project we work on

“Dubai Metro has had a fundamental impact on the city and it’s now hard to imagine life without it. We’d expect to see a similar transformational impact on other cities in the region – and that’s incredibly exciting” because it’s about learning from experience and making incremental improvements. We know what works and we understand how the decisions we’re making today are going to impact the end user, and that’s critical. Our current major projects in the region are:

Doha Metro Red Line South – client: QDVC

Atkins is lead designer for the QDVC consortium (Qatari Diar/Vinci Construction Grands Projets) for Doha Metro’s Red Line South. This comprises a circa. 12km route with five stations, for which Atkins is providing multidisciplinary services including station planning, architecture, tunnel design and track alignment. Doha Metro Gold Line, Qatar – client: Greece’s Aktor, Yapi Merkezi and STFA of Turkey, India’s Larsen & Toubro and the local Qatari contractor Al Jaber Engineering

The $3.88bn Gold Line is the largest package of works to be awarded on Doha Metro. It crosses the city from east to west and includes 15km of twin tunnels and 13 underground stations.

Riyadh Metro, KSA – client: FAST consortium

In the context of the services that Atkins provides, what is the region doing right?

Atkins was contracted by the FAST consortium (comprising FCC, Samsung, Alstom, Strukton, and Freyssinet Saudi Arabia) to the role of lead designer for three of the six lines (lines 4, 5 and 6). Atkins is in a design joint venture (DJV) with Spanish consultancy Typsa. The package consists of 25 stations, two depots and seven park and ride car parks over a total length of 64km. Atkins’ work draws on a range of specialist skills including architects, civil, structural, bridge, MEP, geotechnical, tunnel and rail alignment engineers, plus project and cost managers.

Ten years ago Dubai Metro was still just an idea and until its completion six years ago there were no operational metro projects in the Arabian Peninsula. People all around the world, including here in the region, were cynical about whether any form of mass transit network could be successful in a city where people were so in love with their cars. With that in mind it’s incredible to think about the region’s rail sector today. Dubai Metro has proven to be successful and new metro systems are being planned in most major cities across the GCC. What we’ve seen is the development of a highly developed rail sector which has attracted some of

March 2015

INFRASTRUCTURE MIDDLE EAST

TRANSPORTATION

“When it (Dubai Metro) was being built it seemed to some like a big leap of faith to commit such a huge investment when the social and cultural context suggested it may not be successful. The results have proven otherwise”

the best talent from across the world so we’ve a lot to celebrate as an industry. Companies like Atkins, which have already been involved in successful projects in the region, have a really valuable role to play in new projects because we can share our experience. This offers a huge head start and a great deal of assurance. However it’s also great being able to work with new partners so you can bring fresh ideas to the table and understand how things might be done differently. Generally, railway projects are complex and involve financial, economic and technical challenges. The fact that the GCC (with the exception of Saudi Arabia) is implementing railway projects for the first time adds an extra dimension to these challenges. What are your observations in this regard?

It’s fair to say that for any city in the region which wants to develop a rail or metro network, it invariably means a huge learning curve for new client organisations. If you think of Transport for London which oversees London Underground, it can trace its roots back more than a 100 years so it has a wealth of experience, with all the structure and systems in place to do its job. A city starting a new rail or metro network doesn’t have any of that. But it’s also an opportunity, because it’s possible to set up a body which is flexible and fit for purpose. And our experience has always been very positive. The RTA in Dubai has developed remarkably quickly into a mature, well managed organisation and we’ve been really encouraged in other parts of the region by the way new projects and programmes are being developed and procured. There’s a partnership mentality and a strong desire to bring experienced teams on board who can provide the right level of support at all stages of planning, design and construction, through to operation and maintenance. What also makes a big difference in the region is the fact that funding is in place and there is strong, visionary leadership. This provides a can-do attitude which is hard to find in many other parts of the world. From a cost perspective, what are the most expensive bits for rail projects in the region? For example, is terrain proving to be the most expensive bit?

INFRASTRUCTURE MIDDLE EAST

March 2015

For metro projects, the capital cost for tunnelling under established cities, including the purchase of tunnel boring machines, is very high. As you’d expect, the most complex aspects also come with a high cost, whether it’s the underground structures, diversions and protection of utilities or the rail systems, so you don’t want to make mistakes. For long distance rail networks, terrain is a certainly a costly factor and in the Middle East there is a surprising amount of variety; you’ve got to contend with sand dunes, Wadis, mountains and low lying Sabkha (salt flats). Will there be sufficient shift of traffic –people and freight –to rail in the region to make it economically selfsustaining? Are there creative ways for the government to ensure they don’t lose money by investing in railway projects?

Rail as a mode of transport is not only cost effect and environmentally sustainable, it also supports diversified economic growth so it’s essential that the Middle East continues to invest. Successful, prosperous, growing countries and cities need high quality modes of mass public transportation so you can’t look at a rail network in isolation – its wider economic and social benefits are immense. Advances in technology and innovation will enable smart, integrated and personal rail travel everywhere. This is a global trend and it applies to the Middle East as much as to China, Europe or the US, where high speed rail is very high on the agenda. We’ve seen the arguments about how successful rail can be in the region before, going back to my example of Dubai Metro. When it was being built it seemed to some like a big leap of faith to commit such a huge investment when the social and cultural context suggested it may not be successful. The results have proven otherwise and the Metro has shown itself to be a catalyst both for economic and sustainable social development. Freight rail is new territory but the arguments in favour are definitely very compelling – it goes hand in hand with the development of healthy, diversified economies. As with Etihad Rail, the burden of cost can be shared with the end users which will benefit from its development and this will result in a project which fully meets the needs of industry.

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CONSTRUCTION

RIGHT METHODOLOGY

Reengineering for BIM Callan Carpenter, VP Global Services, Autodesk speaks to Infrastructure ME about the transformative impact of BIM on the infrastructure industry and its stakeholders

INFRASTRUCTURE MIDDLE EAST

March 2015

CONSTRUCTION

ow has Autodesk positioned its consulting services? In the infrastructure consultancy universe, which is the space that you occupy?

Autodesk has positioned its consulting between the high-end pure management consultants or expert engineering consultants and the low-end service providers, who supply training, software installation and configuration services. We live in that middle space. We try and connect our knowledge of the technology and the detailed work processes needed to implement the technology with the business goals of the customer. Thus, we will work with the Atkins’ and the Accentures’ of the world, with a Project Management Consultant (PMC) or an Engineering, Procurement and Construction (EPC) contractor. We may consult to them or work with them as they consult to an owner. We also do consulting in the owner context, where the owner could be a private developer or a government owner, like a Transportation Ministry, for example. Our consulting services are tied to implementing changes in customer’s work processes that will enable them to take advantage of technology. If customers try and use the new technology in the same way they use the old technology, they may see only a nominal improvement in their performance, productivity and quality. In order to get the maximum benefit of the new technology, they need to change the way they work, which is a hard thing. Knowing what the work flows need to move to and how to get the organisations to move with you is the hard thing to do. Our primary consulting line of business in the infrastructure space is around Building Information Modelling (BIM). And BIM is one of those technologies that is very misunderstood, often thought of as a CAD tool. How would you define BIM? Why is it always being described as an ‘imperative’ that infrastructure stakeholders cannot do without? Do you have a personal perspective that you could share with us?

I view BIM as a change in philosophy, a change in collaboration from the standard way the Architecture, Engineering and Construction (AEC) Industry has built up over the years.

“I view BIM as a change in philosophy, a change in collaboration from the standard way the Architecture, Engineering and Construction (AEC) Industry has built up over the years” For the last 100 years, the AEC industry has built on a certain framework of contracting, liability management, and hiding-versus-information sharing approach, which translates into ‘my power comes from what I know that you don’t know.’ As we build more and more mega projects that involve hundreds of sub-contractors, different disciplines, multiple PMCs, EPCs and Architects, the potential for waste, misunderstood design intent and the potential for the owner to not get what he really intended to get is very high. These are complex programmes, and the information is more than the human brain can manage. Many people deﬁne BIM as Building Information Modelling, and by that they refer to the 3D model itself, which is deﬁnitely an important element of information sharing. As visual creatures, it helps us understand what’s intended to be built and goes a long way towards reducing confusion, RFIs and clashes discovered on the job site. I prefer to think of BIM as Building Information Management, where the scope is all the information relevant to a project and its lifecycle, from early conception to design, pre-construction, construction, commissioning and operations and maintenance, and sharing of that information more effectively among all these trades, and contractors and stakeholders. What has been your experience when it comes to BIM perception among the key stakeholders?

In fact, the mind-set varies quite a bit depending on what part of the world you are in. Here, in the Middle East, owners are only just starting to understand BIM and their requirements from it. Mandating BIM for complex projects, as Dubai Municipality has done, is a welcome step but often, this

may not necessarily translate into a deep understanding of what is required to actually implement BIM effectively. While BIM is being used by contractors in this part of the world, we have seen that it is often internal to their design and construction processes. It is allowing them to improve their margins, on-time delivery performance and quality of what they deliver, and manage their sub-contractors better. But they aren’t necessarily creating BIM deliverables that go to the owners. From the owner’s perspective, the great power of BIM is that it opens up and gives them visibility into all aspects of what is happening in their projects. If you have appropriate dashboards tied to BIM data, you can look at where you are with regard to schedule, which subcontractors are behind or on time and whether your costs are progressing according to plan or are you overspending someplace. You can take this information and fold that forward it into your construction planning, construction sequencing, commissioning and also into your O&M system. From the owner’s perspective, BIM is all about visibility, information and controlling the project while from the contractor’s perspective, it is about managing costs, schedule, subcontractors, and delivering a better product at the end of the day with less risk. So where does the resistance come from?

Resistance comes from two sources – ﬁrst, a lack of understanding of what BIM really is, and second, human nature. For many people, BIM is just the next generation of CAD. Their objections are on the lines of - Do I really need another CAD tool? Let the architect worry about it as I don’t need visibility into this. It is human nature to resist change. BIM requires you to do things differently than you have done before, and even have different skills than the ones you had. People are concerned whether their skills will become obsolete if they move from a drawings-based management system to a model-based system. This is where our consultancy services can make a difference because we try to help customers understand that BIM is 80% about people and business process change, and only 20% about technology. We advise them that to get better business outcomes, they will have to change the way people work, hire new people with new skills or even enter into

March 2015

INFRASTRUCTURE MIDDLE EAST

CONSTRUCTION

‘We don’t specify the tool that you have to use; rather, we specify the information that must come out of that tool. If the information specified correctly and if the formats are correctly implemented, you can build a heterogeneous design flow very effectively’ a different contracting relationships with their supply chain because they have to share information not hide information. And we have to help workers who will use this technology understand how to move their skills from what they are used to doing to the new system and convince them about its beneﬁts. A few of the stakeholders we speak to have expressed worries about being tied to a technology or even a vendor. Has the CAD industry evolved to become more ‘open’ in that regard?

This topic does come up often because Autodesk is a leading supplier of BIM technologies. But an important difference is that Autodesk’s consulting arm is structured independently from the product sales organisation. Consulting’s focus is very much on the data standards and the work ﬂow standards in business process reengineering and change management. Many layers of what we do there are technology independent. You can create the strategy, the data and the work flow standards entirely out of Autodesk products or a mix of Autodesk and third party products or entirely out of third party products. Once the customer understands the benefits of BIM, and the tools and technologies needed to implement it, they can look at Autodesk and compare us to what is out there. We can also offer the service all the way down to the implementation level of setting up an Autodesk-based flow or a heterogeneous-based flow that takes in third party data formats. This is very important for government

INFRASTRUCTURE MIDDLE EAST

March 2015

customers, who for competitive law reasons, cannot mandate a particular vendor or have hired different PMCs who have their own tools and products. We have tools that enable us to take in models and data from multiple vendors and still be able to do coherent, intelligent things such as quantity takeoff, clash detection, sequencing and so on. This is why data standards have become so important – we don’t specify the tool that you have to use; rather, we specify the information that must come out of that tool. If the information speciﬁed correctly and if the formats are correctly implemented, you can build a heterogeneous design ﬂow very effectively. Do you have studies that show that the business process reengineering associated with BIM has delivered on its promise?

Every study that has ever been done, either by universities such as Stanford or Penn State, or by building trades associations has shown time and again that BIM has positive impacts on schedule, overall design coordination and understanding, design quality, cost, reduced wastage and better integration between construction and prefabrication. What is also well-documented is that the abandonment rate of BIM is higher for companies who attempt to do this transition on their own without internal employees who have experience with BIM or without the help of a consultant who can guide them than for companies who have internal expertise and access to knowledgeable consultants. BIM is a completely new way of thinking, and if you don’t know where you are going, it is hard to get there. So you need a guide to get there. How does a typical consulting engagement work?

We begin by sitting down and understanding the current state of needs of the owner or the constructor or the engineering consultant, their current business processes, quality challenges, and their biggest sources of waste, inefficiencies or costs. Then, we build with them a set of BIM uses in terms of how they intend to use the information captured by BIM model. If you don’t know how you want to use it, then you don’t know what goes into the model in the first place. For example, if you want to automate your quantity surveys and cost estimation, an area which is historically full of errors, certain kinds of information

need to be standardised and made available on the model. You also need to have the tools that can query the model and do an automatic quantity take-off or budget estimation or may be reach out automatically and check on supplier availability or even check the ERP system depending on how far you want to go. In fact, one of the things we assess with our customers is – do you want to walk with BIM or do you want to fly with BIM? It can be implemented in stages, starting with quick wins like automation of clash detection, design reviews and quantity takeoff. Once the customer starts getting used to the model-based method, we will layer in 4D BIM (time), 5D BIM (cost), 6D BIM (facility management) at a rate at which they can absorb it. To sum up, we assess where they are today, where they want to get to and what uses they want for the information. We will develop for them a set of documents, in terms of high-level BIM guidelines they can incorporate into their contracts with their contractors, and the contracting language so that they can describe much more precisely than what you see commonly in the region today, what deliverables they expect from their supply chains. We write the data standards, and we can even go to the level of architecting the data management collaboration systems, design workflows, RFI handling and invoicing. But whatever the workflow is, it is going to be different in the BIM world than in the old world. We work with them to capture the new workflows and train their people on it. We will staff pilot projects and do the work with them. This allows us to help train their people by showing by examples in real projects while also helping us to refine the processes, make adjustments and tweak the standards and workflows. Finally, we will help them staff a BIM management office and train their people to take over the work we are doing. It is important to understand that BIM methodology is a ‘living methodology’ which is going to evolve over time; you will add more use models for the data, add more analysis and more simulation. We want to show the customer how to set up a BIM office, and we will staff it for them for a period of time but always with the idea that eventually we are doing knowledge transfer and handing that over to them.

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CONSTRUCTION

STRUCTURAL CHOICE

Steel support for rail projects SAS International’s Andrew Jackson on the benefits of steel as a fit out material for transportation infrastructure in the region ith Qatar preparing for the World Cup 2022 and Dubai hosting the Expo 2020, infrastructure development is at the top of the agenda in the Middle East. Qatar alone will invest tens of billions in preparation for the World Cup; the Qatari Minister of Finance, HE Ali Sharif Al Emadi, said $24.03bn had been allocated for key projects, an increase of 16% from 2013/14. Dubai has set a firm deadline for the expansion of existing infrastructure and renewed the emphasis on projects in the planning stage to be able to accommodate the expected 25 million Expo 2020 visitors. The high level of planning and investment in multi-modal transport infrastructure is enough to bring the Gulf region, especially its Centres, close to the standards of the world’s most advanced cities within 15-20 years. Taking into consideration the growing number of visitors for mega events, it is paramount that transport hubs are prepared to cater to future passenger demand and that the materials chosen for their interior fit-outs are robust enough to handle the increased crowd pressure forecast for the future. As a building material, steel is wellregarded for its durability and ability to withstand the challenging desert environment. While other structural materials might struggle in the harsh desert climate, steel easily copes with the abrasive, ubiquitous sand, and also provides inherent security against fire and depreciation. In transport environments, steel is used for applications such as cladding, wall panels and ceilings. Steel’s ability to cope with sand is particularly advantageous for transport infrastructure projects. Sand not only abrades surfaces but settles in an insidious layer on any surface, dulling all attempts at sheen.

INFRASTRUCTURE MIDDLE EAST

March 2015

Andrew Jackson, Director, SAS International

Metal solutions like steel provide an easy-toclean surface with quick access for essential ongoing maintenance, without damage. They also provide for signiﬁcantly improved impact resistance in external or semiexternal spaces such as public concourses. Cheaper materials struggle under conditions that require high performance characteristics, both in terms of durability and aesthetics. High traffic areas like concourses need to cater for increased capacity while ensuring that the upkeep of the interior is simple to maintain. Options for maintenance and access need to be designed in from the beginning, including considerations for increasing traffic. Solutions that are quick and easy to maintain reduce maintenance costs as well as commuter inconvenience. Architectural metalwork solutions can balance visual appeal with enhanced performance qualities

to provide a highly functional solution. Transport hubs will always have specific design requirements to take into consideration. An internal ceiling will have integrated lights and speakers for public address systems, and signage and CCTV camera poles may need to protrude downwards. Access to these services is therefore a core consideration, especially with high floor to ceiling ratios. Architects, clients and developers should engage with manufacturers at design stage to ensure that these considerations are factored in. Secure, accessible voids can be created, and designs to enable fast smoke extraction specified using tubular or vaulted options. Paints used on products such as binnacles or wall panels are another important aspect to consider because transportation environments have some of the highest demanding foot fall areas for interior finishes. The demand for a durable solution with an anti-graffiti finish is one option proving popular for highly frequented areas. The use of high performance products to help ensure and improve the overall passenger experience does not exclude innovative and interesting interiors when the right balance is struck. Materials can not only help create the final look to enhance architectural vision but also ensure that future generations will benefit from the facility. Balancing aesthetics with the performance qualities of materials should be high on the agenda. In other words, design and integration of the fit out needs to be visually appealing as well as durable, maintainable and flexible. Having won contracts to supply metal solutions to the West Kowloon rail terminus in Hong Kong and to Madinah station, which is part of the Haramain High Speed Rail project, SAS International has gained first-hand experience in supplying bespoke steel solutions to challenging projects.

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SCALING UP

Still going strong at 40 Middle East Electricity, billed as the world’s largest power exhibition, celebrates its 40th anniversary this year

or an event which started life in a tent as a local trade show, Middle East Electricity (MEE) has certainly come a long, long way. “When Middle East Electricity was launched back in 1975, it was held in a tent on the banks of Dubai Creek,” says Anita Mathews, Director, Informa Energy Group. “Today, the show boasts over 54,000 sqm of exhibition space and received a total attendance of 50,629 last year, the highest number of visitors we have ever received in the event’s history.” MEE, which celebrates its 40th anniversary this year, is among a handful of regional events that have evolved over time to attain a global stature, attracting exhibitors and visitors from all over the Arab world, Europe, Africa, South Asia and the Far East.

INFRASTRUCTURE MIDDLE EAST

March 2015

BY THE NUMBERS

14% Growth in MEE exhibitors this year

86 Number of exhibitors at Solar Middle East

24 Total number of country pavilions

54,000 sqm Exhibition space occupied by MEE 2015

“In the event industry, 40 years is no mean feat, and we are one of the longest standing exhibitions in the history of the UAE’s event calendar,” says Mathews. “For many of our exhibitors, we have grown right alongside them, building the trust that is required to ensure the longevity of our event. One of the main drivers of the event’s success has been maintaining our focus on the expectations of our stakeholders.” MEE has posted a 14% growth in exhibitor numbers this year, which stands at 1,400, while the number of country pavilions have grown to 24, led by Saudi Arabia and Turkey. The Saudi pavilion has grown from 252 sqm in 2014 to 780 sqm this year, registering a 210% YoY growth thanks to support from the Saudi Export Development Authority (SEDA). The Turkish Pavilion has grown from 987 sqm in 2014 to 1,761 sqm this year, a growth of 78%.

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SPECIAL REPORT

In the French pavilion, spread over an area of 360 sqm, 31 companies will showcase their products, technologies and innovations. Additionally, Egypt, Morocco and the Czech Republic will make their MEE debut this year. Solar Middle East, which is colocated with MEE, too has registered growth in exhibitor numbers, from 59 in 2014 to 86 this year, a 45% YoY increase. The inaugural edition of the show in 2013 received 4,700 visitors over the three days compared to 5,800 in 2014, a 23% increase in visitor attendance in the first year alone. Lighting has been one of Middle East Electricity’s fastest growing sectors for a number of years. To meet demand,

Future Generation The student competition is back again

MEE 2015 AWARDS Awards will be given out in the categories of: 1. Power Project of the Year 2. Lighting Project of the Year 3. Solar Project of the Year 4. Best Innovation or Technology of the Year 5. Power & Water Utility of the Year 6. HSE Project or Initiative of the Year Winners of the above categories, as well as the Young Engineer of the Year will be announced at the awards

‘Day three will feature the first ever conference dedicated to commercial lighting, which will discuss major issues such as transitioning to and supporting the LED market in the Middle East’

ceremony on March 2, 2015.

KEY DATES 2-4, March 2015, Dubai World Trade Centre Day 1: Green Energy Conference Day 2: Solar Middle East Conference Day 3: Commercial lighting conference

INFRASTRUCTURE MIDDLE EAST

March 2015

the 2015 event will feature, for the first time ever, an area solely dedicated to the lighting industry, increasing the total floor space for 2015 by 13%. According to statistics shared by the organisers, the recent revival in the region’s construction sector is expected to increase the lighting fixtures’ market by 10% annually to reach a value of $3.75bn in five years. The UAE and Saudi Arabia collectively accounted for around 70% of the regional market last year.

EDUCATIONAL PROGRAMME

MEE 2015 will offer an extended educational programme with three conferences, once again supported by Dubai Municipality, the event’s strategic government partner. The Green Energy Conference will highlight sustainable energy solutions, with a focus on combining traditional and alternative energy sources to minimise the risks inherent in both. The Solar Middle East Conference, which takes place on day two, will provide a holistic view of the regional solar industry with a country focus on Saudi Arabia, Kuwait and Jordan. Day three will feature the first ever conference dedicated to commercial lighting. The conference will discuss major issues such as transitioning to and supporting the LED market in the Middle East, as well as a session on how new sustainability guidelines will be the driving force behind Abu Dhabi’s and Dubai’s aggressive goals to become smart, sustainable cities. MEE 2015 offers a comprehensive and free Technical Seminar programme, which showcases the products and services of leading names in the industry.

SPECIAL REPORT

ENGAGING THE YOUNG

Future Generation, a student competition designed to encourage young minds, will make its second appearance this year. This year there will be two awards on offer, a People’s Choice award, where visitors vote for the project they think is the most innovative and viable and a new Judge’s Award, decided by a panel of three industry experts who will review all of the entries to ultimately determine their winning project. Last year’s winners were Zulfa A Rasheed, Amna Abdulla and Muna Dahir Ali from Ajman University of Science & Technology/Fujairah for their ‘Wind Powered Water Lifting System’ project, a renewable energy conversion system transforming wind energy to mechanical energy. EXHIBITOR PREVIEW

Cummins will be debuting their recently launched QSK95 Series highhorsepower generator set. Rated at up to 3.5 MW, it is Cummins’ most powerful diesel generator set to date. The Cummins stand will also feature a power systems simulator to demonstrate the complete range of power systems, including transfer switches, PowerCommand paralleling systems, generator sets and remote monitoring solutions. The new Gas Power Module from Cummins Power Generation Energy Solutions Business will on display as a digital interactive model, with stand visitors able to see the product and its key features brought to life through augmented reality (AR). Rolls-Royce Power Systems will present its portfolio of high and medium speed diesel and gas engine systems for power generation. The booth will also display the company’s new MTU Onsite Energy products and the portfolio of Bergen Engines for the first time. MTU Onsite Energy and Bergen Engines are part of RollsRoyce Power Systems within the Land & Sea division of Rolls-Royce. Panasonic will launch its extensive range of professional LED luminaires in the region at MEE 2015. The company will also be displaying first-

Anita Mathews, Director of Informa Energy Group

of-its-kind Direct Control Motor ventilation fan that has a built in sensor to reduce power consumption. SolarWind will launch its innovative solar street lighting solution at the French Pavilion. The company will introduce SUNSET, a solar candelabra with a 30-year lifecycle, which it claims can pay for itself in under two years. The product is being promoted as an alternative to standard grid-powered lighting, or even to regular solar lighting, and as the only system to generate significant revenue throughout its lifecycle. DIETAL will be launching a new range of sealed LED lighting fixtures for explosive environments. Complying with ATEX requirements, it will meet specific needs of customers in difficult environments like refining and petrochemicals. Additionally, the company will announce the opening of its Dubai office, in order to be closer to its local partners and assist them in carrying out their projects.

comprises the following:

SPOTLIGHT Low voltage leadership

Wire & cable management Connectivity & grounding Cable protection systems

Visit us at MEEE-2015 in Hall no:4, Stand -4D21 The acquisition of Thomas & Betts in 2012 advanced ABB’s strategy of expanding the reach of its Low Voltage Products division into key geographies, sectors and products. By combining ABB’s low-voltage protection, control and measurement products with Thomas & Betts’ electrical components, ABB has managed to create a broader low-voltage offering with significant market access. The new Protection, Connection & Wire management business business product portfolio

Explosion proof equipment Emergency lighting & central battery systems Cable accessories and apparatus These products find application in the verticals of Building & Infrastructure, Rail & transportation, Power utilities & Renewable energy, Aerospace, Food, beverage & agriculture, Commercial, Institutional, Residential, Automation, OEM, Panel builders, Chemicals & Pharmaceuticals, mining & minerals and On & Offshore and marine.

March 2015

INFRASTRUCTURE MIDDLE EAST

EXECUTIVE INSIGHT

Richard Harris

“Smart parking enables cities to develop fully integrated and intelligent transportation systems”

Taking the pain out of parking Richard Harris, Solution Director of International Transportation & Government, Xerox explains how smart parking systems can transform cities inding parking spaces in a busy city can be a major challenge. Often, time and fuel are squandered in search of vacant parking spots, and further compounding the problem are slow moving vehicles that circle around looking for parking spaces. In fact, in most metro cities, a third of the congestion is caused by circling traffic seeking parking spaces. This is why a new breed of smart parking solutions that provide information on parking availability, parking reservation and dynamic pricing schemes are becoming a ‘must have’ to keep our cities moving. Smart parking is an advanced technology solution that involves the use of real time data, cell phone-enabled automated payment systems and reliable information to guide people to vacant parking spots and help them pay for the same. Los Angeles in the US was among the ﬁrst cities to implement Xerox’s smart parking solution, Merge, which integrates hardware and software to provide real-time information about coin collection, meter upkeep, implementation and occupancy by

INFRASTRUCTURE MIDDLE EAST

March 2015

applying real-time data to solve parking issues. Apart from giving immediate visibility into what is happening on the streets, Merge encourages municipalities to make datadriven decisions on everything, from meter collection to rate structures, improving performance and creating additional revenues. In Los Angeles, Merge is deployed as part of the City’s LA Express Park programme, where an algorithm-driven pricing model sets parking prices based on supply and demand, helping to improve parking turn over and space availability and provide a better experience for drivers. Smart parking pilot programmes are now being implemented in San Francisco, Stockholm, Beijing, Shanghai, São Paulo, and the Netherlands. Recently, the UAE too joined the smart parking bandwagon. As part of a Smart Parking pilot project launched last year, parking sensors were installed on a stretch of Shaikh Zayed Road in Dubai to enable motorists to locate vacant parking spots through the Roads and Transport Authority’s (RTA) Smart Parking mobile application. Recently, RTA tied up with Emaar to link Dubai Mall to the Smart Parking app. Based on the response to its pilot project, RTA is planning to extend

the system to the congested areas of Bur Dubai, Deira, Dubai Marina and Satwa. A BETTER ENVIRONMENT

It may be tempting to dismiss smart parking as just another trendy solution to stop motorists or drivers from needless circling of city blocks. However, its benefits go well beyond that. Firstly, smart parking enables cities to develop fully integrated and intelligent transportation systems that better influence transport mode choice and reduce reliance on cars. Secondly, when set up as a system, smart parking cuts down automobile emissions in urban centres by reducing the time required to find a parking spot. With the arrival of smart parking and more mobility alternatives, improved use of remaining parking spaces will drive decreased demand for the city’s excess parking space. This will, in turn, create more opportunities to reuse parking garages, surface parking spots and land to create or widen living space and recreational spots. In the end, metropolitan areas can become greener, more compact, more walkable and accessible by a multimodal transportation system.

EVENTS

Mark your diary... WETEX 21 – 23 APRIL, 2015 DUBAI Organised by the Dubai Electricity and Water Authority (DEWA), WETEX 2015 presents the latest technologies in the field of water and electricity conservation. Contact: Organisers Tel: +971 4 515 1460 Email: sales_general@wetex.ae www.wetex.ae AIRPORT SHOW 11 – 12 MAY, 2015 DUBAI Now in its 15th year, the Airport Show is the world’s largest

HAPPENING IN MARCH

annual airport exhibition and a key procurement platform for

MIDDLE EAST RAIL 17-18 March 2015, Dubai

airport developments in the Middle East, Africa and Indian subcontinent region. The event is co-located with the Global Airport Leaders’ Forum (GALF).

iddle East Rail is run in partnership with the Ministry of Public Works UAE and the Federal Transport Authority- Land & Maritime, under the patronage of HH Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister, Minister of Presidential Affairs. Conﬁrmed attendees include Saudi Railways Organisation, Etihad Rail, Saudi Railway Company, Roads and Transport Authority, Metro Jeddah Company and Arriyadh Development Authority (Riyadh Metro) Keynote speakers Talal A Al Raddadi, Secretary General of Al Madinah Al Munawarah Development Authority and Mamdouh M Tarabishi, Public Transport Programme CEO, Al Madinah Al Munawarah Development Authority will speak on the new Madinah Al-Munawarah Public Transport Programme, the ﬁrst ever public presentation about the full multibillion dollar programme which includes the metro, bus and advanced intelligent transport system.

HE Mohammed bin Khalid bin Mohammed al-Suwaiket, General President, Saudi Railways Organisation and Faris Saif Al Mazrouei, CEO, Etihad Rail will also deliver keynotes at the event. Nino Cingolani, Co-Chairman, Egyptian National Railways; Qoutaiba Al-Qaysi, Senior Executive, Metro Jeddah Company & Director, Jeddah Transportation Master Plan, Jeddah Municipality; and Mohammad Montazeri, Deputy Managing Director of Tehran Urban and Suburban Railway Co have conﬁrmed their participation. According to the organisers, over 3,454 rail professionals have already registered to attend the event including 891 project managers, 631 consultants, 747 engineers and 432 Directors/CEOs.

Contact: Raed El Forkh Tel: +971 2 409 0484 Email: raed.elforkh@ reedexpo.ae www.theairportshow.com WORLD STADIUM CONGRESS 18 – 21 MAY, 2015 DOHA World Stadium Congress sets out to promote best practice in design, development, management and usage of sporting infrastructure. Over 350 industry professionals will gather at the St Regis Doha for the region’s largest event for stadia professionals. Contact: IQPC Tel: +971 4 364 2975

Contact: Chloe Higman Tel: +971 4 440 2500 Email: chloe.higman@terrapinn.com www.terrapinn.com

Email: enquiry@iqpc.ae www.worldstadiumcongress.com

March 2015

INFRASTRUCTURE MIDDLE EAST

INFRASTRUCTURE MILESTONES

#013 Floating Bridge Conceived as a temporary solution, Dubai’s Floating Bridge has found a permanent place in the hearts of commuters working on either side of the creek ubai’s Roads and Transport Authority (RTA) is always trying to plan, build and optimise road infrastructure to ease traffic flow. In 2006, to relieve traffic pressure on the existing four creek crossings – Al Garhoud Bridge, Al Maktoum Bridge, Al Shindagha Tunnel and Business Bay Crossing, RTA decided to build a fifth crossing, and a floating one at that, as a temporary solution. The entire construction was completed in a mere 23 days by Vienna-headquartered WaagnerBiro. Altogether, the time for design, foundation works, bank installations, manufacture and installation of the steel structures added up to just 10 months. The six-lane pontoon bridge, which connects Riyadh Road on the Bur Dubai side with Deira City Centre

INFRASTRUCTURE MIDDLE EAST

and the Dubai Creek Golf & Yacht Club on the Deira side, was thrown open to traffic on July 16, 2007. This pioneering bridge has a width of 2 x 22m , a total length of 365m, and can accommodate more than 6,000 vehicles per hour during peak hours. Perhaps due to its limited operational hours (6am to 10pm), Floating Bridge was spared the Salik toll levied initially on the Al Maktoum Bridge, and thereafter, on the Al Garhoud Bridge. According to Waagner-Biro’s website, the challenge lay in balancing the shifts in height caused by waves and differing traffic loads. An independent bridge structure was built for each of the two traffic directions. Between the two 115m long concrete pontoons, is a hydraulically driven swing gate made of steel, which provides an unobstructed shipping lane. Motorists using the ﬂoating bridge can’t help but notice a ‘garden’ or

March 2015

Fast facts Year of opening: 2007 Construction time: 23 days Number of lanes: 6 Length: 365m Operation timing: 6am-10pm

‘grass growing wild’ on the control cabin’s roof. This ‘grass garden,’ on the portacabin’s roof, is actually a reed bed-based wastewater treatment system, which treats toilet sewage into water suitable for irrigation. Early last year, the RTA announced that the Floating Bridge will be replaced with the Al Ittihad Bridge, a 12-lane crossing with an arch that rises 100 metres, enabling nonstop traffic movement all day and passage of bulky ships on Dubai Creek underneath. The 420-meterlong and 61.6-metre-wide bridge will extend beyond Al Riyadh Road on the Bur Dubai side and up to the DubaiSharjah Road on the Deira side. At the same time, it is not the end of the road for the Floating Bridge. The RTA has decided to give it a fresh lease of life by using to link Sheikh Khalifa Bin Zayed Road in Bur Dubai with Omar Bin Al Khattab Road in Deira.