Infrastructure ME February 2016 by Infrastructure ME

ISSUE 023 | FEBRUARY 2016

Next generation switching, protection and automation solutions on stand 2D10

SPECIAL SECTION

TECHNOLOGY

The Power Report Electricity sectorâ&#x20AC;&#x2122;s growth potential

Catching up Do we need BIM for infrastructure?

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Visit Lucy Electric on stand 2D10 at Middle East Electricity 2016 to find out how we are supporting the development of Smart Grids. We are experts in the design and implementation of network automation solutions, with a global product portfolio that includes our next generation Aegis Plus and Gemini 3 RTU as well as our gas enclosed switch Rapier GX, all of which have been developed to meet the evolving technical needs of our customers and the Smart Grids of the future.

For more information on our solutions contact us on:

Aegis Plus

Gemini 3 RTU

Rapier GX

+971 4 8129999 salesme@lucyelectric.com

engineering intelligent solutions

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SETTING STANDARDS Sustainability is a serious endeavour for Neil Hawkins, Corporate Vice President, EH&S, and Chief Sustainability Officer, Dow Chemical

PLUS TOP 10 OMAN INFR A S T RUC T URE PROJEC T S

Infrastructure ME.pdf 1 7/21/2015 4:37:26 PM

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INTRODUCTION

The oil stimulus CPI MEDIA GROUP FOUNDER DOMINIC DE SOUSA (1959-2015) GROUP CEO NADEEM HOOD EDITORIAL EDITOR Anoop K Menon anoop.menon@cpimediagroup.com +971 4 440 9100 ADVERTISING & MARKETING COMMERCIAL DIRECTOR Jude Slann jude.slann@cpimediagroup.com +971 4 440 9147 DIRECTOR OF ADvERTIsING & sALEs James Thorburn +971 4 440 9111 james.thorburn@cpimediagroup.com COMMERCIAL MANAGER Tom Dennison tom.dennison@cpimediagroup.com +971 4 440 9104 DESIGN DEsIGNER ULYSSES GALGO CIRCULATION AND PRODUCTION DATABAsE AND CIRCULATION MANAGER RAJEESH NAIR rajeesh.nair@cpimediagroup.com +971 4 375 5682 PRODUCTION MANAGER JAMES THARIAN james.tharian@cpimediagroup.com +971 4 375 5673

f low oil prices were expected to upset the forward momentum for renewables; the indications are to the contrary. The Middle East Solar Industry Association (MESIA) has predicted that the Middle East and North Africa (MENA) region will tender as much as 4,000 MW of solar energy projects in 2016. While the GCC region may have been found wanting when it comes to the number of projects in the pipeline compared to a Jordan or a Morocco or an Egypt, the sizes of the announced projects – Oman’s 1,000 MW solar Enhanced Oil Recovery (EOR) facility, or Abu Dhabi’s 350 MW solar photovoltaic (PV) project or Dubai’s 200MW solar PV project to name a few – have compensated for the same. In fact, thanks to low oil prices, the drivers needed to give renewable energy sector the boost it deserves is now coming into play. In order to tackle their fiscal deficits, countries in the region have started to adjust their hydrocarbon subsidies while oil exporters are taking steps to manage the growing domestic consumption of oil and gas. Removal of energy subsidies improves the business case for renewable energy. But this scenario can be better. Rationalising the electricity prices while working to a long-term plan is an important driver. In this regard, Abu Dhabi’s experience where the Regulation & Supervision Bureau (RSB) worked together with the utilities to educate the consumers on the actual cost of water and electricity through utility bills before nudging up the tariffs is a great example of a long-term approach. Consumers across sectors need to be educated about the need to pay fair market value for water and electricity. A question brought up by Gus Schellekens, Partner, Clean Energy and Sustainability Services, Ernst & Young during a Gulf Intelligence-organised panel discussion at the World Future Energy Summit (WFES) was: who should be the first movers - business or government? In his opinion, it shouldn’t be one or the other but actually both. Schellekens also stressed on moving the sustainability discussion up one level to the implementation of a circular economy, which, by necessity, forces everyone - from policy makers to consumers - to look at electricity and water in an entirely different way. Renewable energy sector cannot but thrive in a circular economy.

Published by

Anoop K Menon Editor Infrastructure Middle East anoop.menon@cpimediagroup.com

While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

February 2016

INFRASTRUCTURE MIDDLE EAST

CONTENTS

023 February 2016 30 26

COvER STORy

REGULARS

Setting standards

16 Regional update

Sustainability is a serious endeavour for Neil Hawkins, Corporate Vice President, EH&S, and Chief Sustainability Officer, Dow Chemical

19 Sector update 21 Global update 23 Infrastructure tenders 34 Project Management trends

TOP 10 FEATURE

36 Commentary: Reactive

Oman Infrastructure Projects

37 Event Reports: ADSW

energy markets 2016 and MEE 2016

Faced with a slump in oil revenues and growing fiscal deficit, Oman is prioritising key hydrocarbon and social infrastructure projects

53 Executive Insight: Estimating Loss impact

54 Infra People 55 Events 56 Infrastructure Milestones

This month: Middle East’s largest hybrid desalination plant

INDUSTRy SECTORS

THE POWER REPORT

06 Smart distribution

12 A new phase in renewables

Lucy Electric’s CEO John Griffiths on providing added value to customers and helping to future-proof their assets

08 Consolidation cuts costs for EPCs Middle Eastern EPCs are starting to get wise to the benefits of consolidating their supply chain but there remains much ground to cover

10 Updates from Barakah ENEC completes major work and testing at the Barakah nuclear energy plant

INFRASTRUCTURE MIDDLE EAST

Renewable energy and energy efficiency offer a realistic path to keep global temperature rise below 2°C

OIL & GAS

42 Deep innovations 3M’s Debarati Sen on solving oil and gas industry’s toughest challenges TECHNOLOGy

14 Tracking the transformation Jeff Larkin, Director - Power & Water, MENA, WSP I Parsons Brinckerhoff on the key trends driving the region’s power sector

44 Playing catch up Experts from Egis and Autodesk discuss BIM for infrastructure

46 The core of the railway system

OIL & GAS

CONSTRUCTION

40 Strong synergies

48 Express upgrade

Schneider Electric’s Franco Restelli shares his perspectives on the process automation market February 2016

Insight into the project management strategy delivering Kuwait’s RA/167 programme

Presents

THE ANNUAL

MIDDLE EAST PPP CONFERENCE Spotlighting vital aspects of public-private partnerships

22 MARCH 2016 | DUBAI, UAE

MEDIA PARTNERS

For Sponsorship Opportunities Contact: Jude Slann Commercial Director +971 50 456 3924 jude.slann@cpimediagroup.com

For Speaking Opportunities Contact: Anoop Menon Editor +971 50 281 6075 anoop.menon@cpimediagroup.com

THE POWER REPORT L A U N C H PA R T N E R

CONSTRUCTION MACHINERY ME’s home on the web MOST POPULAR

EDITOR'S CHOICE

READERS' COMMENTS

Dubai fire investigation “nears completion”

Probe finds an electrical short caused the blaze PHOTO GALLERIES

Dubai’s Emaar appoints DUTCO to restore fire-

damaged Address Hotel Restoration to be carried out “in record time” after New Year’s Eve blaze

In pIctures: central Bank of kuwaIt headquarters China State Construction and Engineering Corporation (Middle East) won the 2015 Big Project Middle East Project of the Year Award for this building. See photo galleries at: meconstructionnews.com/photos

Arabtec, TAV clinch Bahrain airport contract

Construction deal part of

“Reducing cladding is a good option to prevent the spread of fire (“UAE to curb cladding use after Dubai fire – official”). I can also suggest one more option: external sprinklers every 3-4 metres in height would be an additional option to stop fire spreading. They could be easily controlled by the local building guard and helpful for fire and safety people as well. It can be monitored and controlled from ground floor for high-rise buildings” Syed Ibrahim, via the website

$1.1bn airport upgrade

READER POLL

Dubai fire: Emaar sees

What is your outlook for the construction industry in 2016?

“no material impact” on

company, hotel insured

16% 19%

Shares in the company fall on first day of trading after incident VIDEO

Saudi Aramco inks second deal to build

smart constructIon helmet wIth thermal vIsIon, ar

State-owned oil company signs

Intel and Daqri show off the smart helmet at CES 2016 in Las Vegas.

a contract to build 791 homes

See videos at: meconstructionnews.com/videos

homes for employees

Positive: Lots more projects on the table

Good: A few more deals

16%

49%

No change: About the same as 2015

Bleak: Business will be down on last year

Log on for the latest from across the Middle East construction sector. Write to the editor at contact@meconstructionnews.com 4

INFRASTRUCTURE MIDDLE EAST

February 2016

T H E

POWER REPORT ISSUE 01 | FEBRUARY 2016

INSIDE CONSOLIDATION CUTS COSTS FOR EPCS p8 BARAKAH UPDATE

p10

A NEW PHASE IN RENEWABLES p12 TRACKING THE TRANSFORMATION p14

SMART DISTRIBUTION LUCY ELECTRIC’S CEO JOHN GRIFFITHS ON PROVIDING ADDED VALUE TO CUSTOMERS

THE POWER REPORT

VITAL NETWORKS

Smart distribution Despite the economic uncertainties caused by fluctuating oil prices, John Griffiths, Chief Executive Officer, Lucy Electric expects the region to continue to invest in infrastructure development including distribution grids. He spoke to Infrastructure Middle East on the areas where Lucy Electric can add value for utility customers and help future-proof their assets. Excerpts from the interviewâ&#x20AC;Ś hat are the major trends driving the grid sector today? Across the region, we are seeing rising demand for electricity for both business and domestic use as a result of population growth, urbanisation and sustained economic development. This, alongside the growth in connectivity of renewable sources, is presenting distribution network operators with a number of challenges. Establishing a stable, reliable and high performance electrical distribution network is vital if utilities are to meet growing residential and business needs, while powering new industrial development. As a result, we are seeing an increasing number of companies investing in automation and smart grid projects to help realise efficiencies across the network, improve network capacity and quality of supply and help futureproof the infrastructure.

What is your business strategy to deal with the economic cycles which seems to be happening with greater frequency than ever? Are you feeling the impact of declining oil prices in this part of the world? Do you have greater diversity in your customer portfolio than before to reduce dependency on any particular sector or region?Â Our business in the region is almost exclusively long term supply contracts, rather than project based and we expect to see this continuing in the foreseeable future. However, external factors, such as political instability and fluctuating oil prices, have had an impact on the market and while we expect to see continued investment in infrastructure

INFRASTRUCTURE MIDDLE EAST

February 2016

JOHN GRIFFITHS

THE POWER REPORT

What are your thoughts about the impact of the following on the electrical industry? a) Digitisation b) COP 21 The development and implementation of new network automation techniques and smart grid projects is resulting in more efficient and effective distribution networks. In mature markets this is driving energy efficiencies and in emerging markets new techniques, such as microgrids, are opening up access to electricity for hard to reach geographies. The COP 21 resolutions have reinforced the push for renewable sources, especially solar power and this brings with it the need for greater network management to balance the energy mix to ensure supply can meet demand around the clock. As such we expect to see the growth in network automation projects continue, driven by the need to manage the complexities that embedded generation sources brings to electrical distribution. GEMINI 3

development, we do expect to see a slow down or delays in implementation of new projects. In these uncertain times, what are the areas where Lucy, as a supplier of electrical equipment and solutions, can add value? Lucy Electric’s expert Energy Services team helps customers make the most of their existing network assets across the whole product life cycle and at a time when there may be hesitancies in investing in new equipment or projects, this provides utilities with real added value. From a simple service up to a fully outsourced turnkey solution, our complete life cycle management approach ensures customers can maximise the value of their assets and make the most of their internal resources. Whatever the market or commercial challenges, our expert Energy Services team will also work closely with customers to find the right solution for the job, to help customers plan for future challenges and opportunities. What are your thoughts about growth prospects for the mid-term? The rising demand for electricity for both business and domestic use, alongside the increase in renewable connections will continue to drive the industry in the mid-

term. This presents many opportunities for Lucy Electric to supply robust and reliable secondary distribution products and to continue developing and implementing automation solutions to help our customers’ address the changing needs of the market. However, political and economic instability remain a concern and will continue to have an effect on the region overall. Is there an opportunity for acquisitions or will you be looking purely at organic growth? Lucy Electric continues to experience organic growth across the Middle East and North Africa, and we will carry on looking for opportunities where we can add value to our customers, both existing and new. We have a clear plan for growth globally, as evidenced by the recent opening or our new ring main manufacturing facility in Thailand to service the growth in the South East Asian market and our acquisition of interests in our Indian joint venture to ensure we have a wholly owned business to meet demand for electrical infrastructure equipment and the development of Smart Grid projects in India. We continue to see opportunities for growth across the MENA region and will support this growth with the appropriate commercial framework as the business develops.

As a solution provider for grids, what are the challenges and opportunities you are tracking? One of the main challenges we face is that every utility we work with is facing their own set of issues. However, they are all moving towards investment in renewable energy sources and automation of their network. The key here is that companies have a clear understanding of their challenges going forward and are able to plan the most cost effective investment strategies to meet both today’s and tomorrow’s needs. This is where partnering with an organisation such as Lucy Electric can help. Our experts work at the cutting edge of distribution projects and can help organisations scope and specify future-proofed solutions which are specifically tailored to their needs. What are your future plans? What are the technologies you will be looking to invest in? Will you be looking at new geographies? Our experienced engineers are experts in secondary distribution networks and we see lots of promising opportunities for future development in these products and services. We have strong growth ambitions for our business across the Middle East, Sub-Saharan Africa, South East Asia and India. We are also looking at expanding our international footprint to cover more geographies. February 2016

INFRASTRUCTURE MIDDLE EAST 7

FEATURE

Bottomline Matters

Helping you make the smartest decisions

CONSOLIDATION CUTS COSTS FOR EPCS Middle Eastern EPCs are starting to get wise to the benefits of consolidating their supply chain but there remains much ground to cover exel International Projects Group, commonly known as Rexel IPG, has been working with industrial companies and Global EPCs in the US and Europe for over 10 years on a range of projects in the oil and gas, mining, power and infrastructure sectors, consolidating the supply chain for cables, electrical bulk and engineering equipment. In 2013, the IPG team entered the Middle East by setting up an office in Dubai to support a major industrial project in the Kingdom of Saudi Arabia.

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INFRASTRUCTURE MIDDLE EAST

February 2016

EPCs in the Middle East have traditionally worked directly with a range of local and international suppliers to deliver the full spectrum of their supply chain needs, including electrical material. This practice has been replaced in the US and to a large extent in Europe by the Rexel IPG model, which reduces unnecessary complexity in terms of optimising time and cost for both the EPC and the end customer. John Kaznowski, Regional Director for Rexel IPG in the Middle East, explains that for EPCs dealing with multiple suppliers on any given project, this means that many more expediters and procurement staff, not only to manage the day-to-day

communication with their supplier contacts, but also to negotiate, evaluate, analyse and process the many different contractual Terms & Conditions. These also need to be managed to ensure each and every supplier is able to meet the demands of the project. The Performance Bond Guarantee (PGB), for example, is an important element of the Terms & Conditions. It is issued by a bank to guarantee satisfactory completion of a project by a contractor or third party supplier. If, for example, a supplier has been hired to deliver stock of a certain quantity and quality and either fails to do so or does not meet the specifications laid out by the contract, the customer is able to claim the PBG. When dealing with numerous different suppliers, the time it takes to review and monitor this critical element is multiplied many fold. Liquidated damages are another legal provision allowing for the payment of a

FEATURE

specified sum should one of the parties be in breach of contract. Kaznowski says: “EPCs and industrials across the Middle East have worked for many years with a variety of different suppliers and are reticent to change a model that has worked well for them, sticking resolutely to the popular saying ‘if it ain’t broke don’t try to fix it’. “However, we are beginning to see a tidal change in attitudes as a growing number of players in the region are starting to understand the cost and time savings they can make by working with specialised suppliers like Rexel IPG, who provide a simplified supply chain solution with a single set of Terms & Conditions. This offers them, among other benefits, a blanket agreement across multiple products and manufacturers for all their electrical supply needs, freeing up time and resources to work on other critical areas of their projects. “Rexel IPG has advised, consolidated and managed the electrical supply chain for over 300 projects across 20 different countries in the last five years alone, simplifying the human interaction for EPCs to a small, dedicated team of people.”

HAND-IN-HAND

Kaznowski also highlights the importance of working hand-in-hand with EPCs to review the full electrical material take off lists in order to be able to offer options to reduce both time and cost. He says his team see themselves as an extension of the EPC’s team and include specialists from the cable industry, cable tray and support industry, electrical equipment builders and transport logistics industries.

“With this expertise we are able to advise and in many cases re-engineer designs to significantly reduce costs on a project and provide long term MRO solutions to the end -customer,” he adds. Rexel IPG which is part of the Rexel Group, a €13bn global business in the professional distribution of products and services for the energy world, works in partnership with local Rexel subsidiaries. The global team consists of Global Account Managers (GAMs), Strategic Account Managers (SAMs), and Bid Execution teams. Generally, a GAM is located close to the headquarters of the EPC they look after, and SAMs act as a regional workforce to manage the local offices of EPCs in key regions. The commercial Bid and Execution centres’ role is to prepare the quotes and manage day-to day-operations in partnership with the Rexel representatives working on the project. There is also a strategy team, who support the IPG business by constantly working to improve team efficiency and customer solutions. In the Middle East, Rexel IPG works in concert with three local subsidiaries; Redco in Jebel Ali, Rexel Emirates in Dubai and Abu Dhabi, and Rexel Arabia headquartered in Riyadh in Saudi Arabia. The Middle East region team consists of nine specialists on the ground, including commercial experts as well as GAMs and SAMs. Rexel IPG is currently working on the completion of one of the world’s largest integrated chemical facilities based in Saudi Arabia. Beyond optimising the cost of material, Rexel IPG’s industry know-how has helped to deliver project construction efficiency, quality and performance, and reduced total cost of ownership. The team has already generated more than 20% savings on electrical material for the customer. They are

currently using the same methodology for a major mining project in the Kingdom. Kaznowski said: “Rexel IPG support their customers throughout their project lifecycle, from electrical design to material delivery. Working with the customers’ engineering teams, we help to build their required electrical solution, before sourcing products from a complete range of global, local and niche electrical vendors* to minimise the cost of material. By defining and closely monitoring the project specific execution plan, we are able to simplify the project management and ensure the project is on schedule. We can also deploy tailored material management either on the jobsite or using a dedicated warehouse nearby to optimise material availability.” Rexel IPG has also developed a proprietary project management tool called ‘MAPS’, which has been designed to manage day-today supply transactions, providing invoicing history, copies of delivery notes, data sheets for all products, pricing and product location information and reports which can be tailored to customer requirements. MAPS is deployed on each project and provides the EPC and other authorised users full access. *Supplying Rexel IPG customers, the Rexel Group has stocking locations across the globe, that are able to collectively deliver more than 100,000 SKUs from thousands of suppliers directly to project sites, with more than 50,000 product references that can be made available for next-day delivery.

Contact: info@rexelipg.com www.rexelipg.com John Kaznowski,

Regional Director for Rexel IPG in the Middle East

February 2016

INFRASTRUCTURE MIDDLE EAST

THE POWER REPORT

MILESTONES CROSSED

Updates from Barakah ENEC completes major work and testing at the Barakah nuclear energy plant old Hydrostatic Testing (CHT), a crucial step in preparing a nuclear power plant for commercial operations, has been successfully completed by the Emirates Nuclear Energy Corporation (ENEC) at the Barakah nuclear power project. CHT was successfully accomplished at Unit 1, which is now 85% complete.A milestone in the continued progress from construction to commissioning of the plant, the CHT verified that welds, joints, pipes and components of the reactor coolant system and associated high-pressure systems meet quality standards, as per the regulations of the Federal Authority for Nuclear Regulation (FANR). During the testing, previously processed water filled the primary circuit and was circulated by the reactor coolant pumps. These pumps will help to maintain a safe temperature inside the reactor during operations. The testing follows the completion of a number of significant milestones in the safety-led and quality-driven environment focused on the development of the UAEâ&#x20AC;&#x2122;s first nuclear energy plant. This includes the energisation of the switchyard for Units 1 and 2, which connected the plant to the transmission grid and allowed for the completion of CHT at Unit 1 and the substantial completion of the auxiliary building at Unit 1. The switchyard connects the generation capabilities of the plant with the transmission network of the Abu Dhabi Transmission and Despatch Company (TRANSCO) and the Gulf Cooperation Council Interconnection Authority (GCCIA), allowing electricity that will be generated at the plant to be carried to UAE homes and businesses. This also enables the plant to draw power from the transmission grid to support commissioning and operational testing. The energisation is the culmination of two and a half years of work involving more than 1,000 highly skilled ENEC and TRANSCO experts.

INFRASTRUCTURE MIDDLE EAST

ENEC and KEPCO successfully complete Cold Hydrostatic Testing at Barakah Unit 1

ENEC completes installation of Unit 2 steam generators

ENEC continues to progress safely and to the highest standards of quality in the delivery of the four nuclear energy units in Barakah. Unit 2 is 64% complete while Unit 3 is 41% and Unit 4 25%. All four units and the associated subsidiary buildings are now over 58% complete and, pending regulatory approval, the four nuclear energy units are scheduled to be operative in 2020. The four units will inject 5,600MW of electricity into the UAE grid.

February 2016

ENEC installs second simulator for training

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THE POWER REPORT

COST COMPETITIVE

A new phase in renewables

The Middle East has received some of the lowest renewable-energy prices awarded globally for both photovoltaic (PV) and wind power

he Middle East Solar Industry Association (MESIA) has predicted that the region will tender as much as 4,000 MW of solar energy projects in 2016. The upbeat forecast in the Association’s annual Middle East Solar Outlook, concludes that 2016 will be characterised by increasingly lower levelised costs of solar electricity, as the region’s solar energy market will be spurred on, rather than slowed down, by low oil and gas prices. Noting that solar is cost competitive on an unsubsidised basis, the report points to the economic impact of low hydrocarbon prices

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INFRASTRUCTURE MIDDLE EAST

on net energy exporting nations, energy market reforms and subsidy adjustments, rising electricity prices, and growing demand for desalination and cooling, as key drivers of the region’s energy transition. “Claims that the growth of solar energy will slow down in 2016 because of low oil prices, appear to be unfounded. It is incorrect to assume that solar growth will need to be subsidised by petro-dollars, when all the evidence points to solar being cost competitive with every conventional energy generation resource, on an unsubsidised basis,” said Dr Raed Bkayrat, Director of Research at MESIA. “On the contrary, as countries in the region start to adjust their hydrocarbon subsidies, correct their

February 2016

electricity pricing strategies and seek to reduce domestic consumption of oil and gas, we expect solar to stand out as the single most attractive option for power generation.” The report also underlines the role that solar energy can play in addressing the challenge of Peak Load demand, particularly in summer. Noting that seasonal increases in electricity consumption - primarily as a result of increased air conditioning usage - are a significant challenge in the region, MESIA suggests that solar PV can provide a competitive alternative to conventional peak load generation assets. “Looking at the forecast for 2016 and the very tangible developments we’ve already seen in 2015, it’s hard not to be optimistic for

THE POWER REPORT

solar energy’s potential in the region. We’ve gone from a couple of hundred megawatts in 2013 to almost 3,000MW being tendered and developed in 2015, while an additional 4,000MW are expected to be tendered this year,” said Imitiaz Mahtab, MESIA President. “The numbers speak for themselves and point to the fact that we’re in the midst of a tipping point for solar in the region and that we can only expect the market to grow from here.” According to APICORP Research’s Renewables in the Arab world: A New Phase, reliance on fuel imports to meet domestic demand and a rising import bill have pushed Morocco and Jordan to diversify their energy sources. In Morocco, the government’s target of 2GW of solar and 2GW of wind power by 2020 is on track. Current wind capacity is over 750MW. The large increase in wind capacity over the past two years is attributed to the startup of the 300 MW Tarfaya wind project in 2014. The project is a joint venture between GDF Suez and Nareva Holding and was financed by local banks. As for solar, the 160MW NOOR1 concentrated solar power (CSP) is anticipated to be commissioned early this year while NOOR-2 and NOOR-3 are expected to add a combined 350MW in 2017. Upon completion, NOOR will become the largest CSP project in the world. The multi-billion dollar project is financed by international development agencies including the European Investment Bank (EIB) and the African Development Bank. Jordan’s commissioning of the 117MW Tafila wind project in the second half of 2015 was a milestone for the kingdom. The project had an estimated cost of $287m and was financed by the International Finance Corporation (IFC), EIB, and other international institutions. As for PV, the country is expected to exceed its target of 600MW by 2020. Capacity of 200MW is expected to come on line by the end of 2016 and an additional 300MW by the end of 2017. These projects were also financed by various international institutions and banks. More recently, Masdar, in the UAE, announced that it will build a 200MW PV plant for the Ministry of Energy and Mineral Resources but no details have been provided. The UAE has shown a serious commitment to developing solar energy. The 100MW Shams CSP plant has been operational since 2014 in Abu Dhabi. The cost of the project was

$600m and was financed by international banks including BNP Paribas, National Bank of Abu Dhabi and Mizuho. On the other hand, Masdar?s ambitious Nour project, which aims to develop 300MW of PV, continues to face delays. In Dubai, the 13MW Phase I of Dubai?s solar park was completed in 2013. The 200MW Phase II has been awarded and will come on line in 2017 while Phase III is in the tendering process, with plans to bring 800MW on line by 2020. The Dubai Electricity and Water Authority is in charge of developing renewables in the emirate and aims to have 7% of Dubai’s generation from renewables by 2020. Additionally, Dubai introduced net-metering in 2014 to promote small-scale solar in the residential sector. By 2030, Dubai will require all rooftops to have solar panels as part of a strategy to generate 75% of electricity from solar by 2050.

250MW of wind, 200MW of PV and 50MW of CSP. Developers will design, finance, and build the plants and sign PPAs. The contracts for these projects are expected to be awarded by the end of 2016. In Morocco, a FiT policy does not exist but a similar scheme called the EnergiPro was launched in 2006. Under this programme, industrial consumers can invest in renewables and the governmentowned utility guarantees to buy the surplus electricity at favorable rates. Currently, 850MW of wind was tendered for five projects across the country. These projects are expected to come on line between 2017 and 2020. In January 2016, the Moroccan Energy Minister announced at a summit that the country had received average bids of $30/ MWh for the tenders, possibly the lowest wind price globally.

SUPPORTING POLICIES PAVING THE WAY Regulatory support is improving as several countries accelerate the expansion of renewables. Jordan was the first Arab country to introduce FiTs in 2012. The first round of tenders in 2013 led to the procurement of 200MW of PV over 12 projects, of which 11 received a FiT of $0.160/kWh and the 53MW Shams Ma’an project, expected on line by the end of 2016, received $0.149/kWh. Additionally, the FiT for the recently inaugurated 117MW Tafila farm was $120/MWh. The second round of tenders- concluded in 2015 through competitive bidding - led to the procurement of an additional 200MW of PV divided in four 50MW projects. The offers for the four 50MW plants were $61.30/ MWh, $64.90/MWh, $69.10/MWh and $76.70/MWh around 50% less than the FiTs offered in the previous tender round. The government offered FiTs in the first round to attract foreign investment. But there has been a change in strategy and the government recently offered tenders under competitive bidding which attracted very low prices and as a result is unlikely to revert back to FiTs for future projects. Egypt also introduced FiTs for 2GW of wind ($0.09-0.11/kWh), 2GW of solar PV ($0.1300.143/kWh) and 300MW of rooftop solar PVbut it remains unclear when these projects will be connected to the grid. In October 2015, the country received prequalification submissions under competitive bidding for

COSTS ARE FALLING Renewable-energy success will rely on its cost competitiveness. According to the International Energy Agency, global investments in renewables totalled $270bn in 2014. The agency estimates that global average onshore wind costs decreased by 30% while those for solar PV dropped by 70% between 2010 and 2015. These cost savings are mainly attributed to technological advancements and the increase of manufacturing activities in Asia. Continuing investments and additional capacities will result in further cost reductions. 2015 saw some of the lowest renewableenergy prices in history. The UAE received a solar-PV tender from ACWA of $58.4/MWh for the 200MW phase II Dubai Solar Park while Egypt was able to achieve $50/MWh for onshore wind (which has been beaten by Morocco in January 2016). The price in the ACWA bid is equivalent to that for a combined cycle gas turbine (CCGn at around $2.70-5.00/MMBtu or $10-16/barrel. This is promising for the region given that Qatar is the only Arab country with abundant cheap natural gas. Gas supplies in Abu Dhabi and Egypt are estimated to cost in the range of $5-6/MMBtu and can be more expensive in other countries. Based on these estimates, solar PV and onshore wind are capable of undercutting conventional sources in some countries, despite the widespread perception that renewables are not cost competitive.

February 2016

INFRASTRUCTURE MIDDLE EAST 13

THE POWER REPORT

FUEL MIX

Tracking the transformation

WSP I Parsons Brinckerhoff’s power and water division a full range of project development services, from project planning and financial feasibility, to comprehensive engineering and architectural services, to programme and construction management services. The company’s Director - Power & Water for Middle East and North Africa (MENA), Jeff Larkin spoke to Infrastructure Middle East on the key trends driving the region’s power sector, the focus on diversifying the fuel mix and the rise of solar. Excerpts from the interview…

ill the downturn in the oil and gas sector make its way into the power sector? We won’t see the same sort of decline in the power sector. In the long term, I see low oil prices generating more stimulus in the economies globally. With fuel costing less, people should have more money in their pockets. In the power sector, we have witnessed load growth across the region. We have seen 14% growth rate within the TRANSCO-operating region, while Kuwait, Qatar and Oman are all projecting load growths of 10-12%. Even Bahrain has bounced back to 6.1% growth. With the increase in demand, you have to keep building power plants and expanding the transmission and distribution networks. Where you will see a downturn is in the rate of growth. Economic and population growth primarily drive demand, so we have continuously seen growth across the GCC. Our sense is that electricity demand is going to slow down with oil prices. As other infrastructure developments slow down, demand will be impacted. Utilities will be revising their demand forecasts, and will be looking at slightly lower growth figures this year, which will delay the decision on when to start construction of the next power plant. Power projects will still go ahead but not to the same time scale, and maybe not with government funding. We will see greater reliance on the private sector through the Independent Water and Power (IWPP) route. There might also be a move towards privatisation. I don’t think there is going to be

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a big downturn in the power sector similar to what we see in real estate or hospitality and certainly not to the same extent as in the oil and gas sector. What are the trends concerning the fuel mix? We see countries in the Middle East diversifying their fuel mix. If we take Saudi Arabia as an example, the kingdom is switching from burning oil to burning gas to generate power. They are investing substantially in developing gas fields. Saudi Electricity Company (SEC) is moving from oil-fired gas and steam turbines, and simple cycle gas turbines to combined cycle gas turbines (CCGT).

Jeff Larkin

February 2016

Saudi Arabia is also integrating solar within their power projects. A recent project involves a solar thermal plant to generate steam to inject into the steam cycle. They are also putting PV solar on power plants to improve the plant’s efficiency by 2-3% which is a huge cost saving over the lifetime of the power plant. Will be seeing less and less of integrated water and power plants? More than power, the big question in the future is water production. Abu Dhabi, for example, is bringing in nuclear energy. Dubai is bringing in clean coal, solar and also nuclear, which will account for 7% of the fuel mix by 2030. Saudi Arabia too is looking at nuclear and more of solar. But the countries will have to think about how they will desalinate water when they have got standalone power plants. Oman is addressing the challenge by building Independent Water Projects (IWP). It’s a question that’s the UAE hasn’t answered yet. However, almost every IWPP that has come up in the past few years is using RO technology for desalination, often in combination with traditional thermal desalination technology. They are trying to develop the RO technology now so that when the nuclear power plant comes online, and there is more solar, they can use the excess power to desalinate water that is needed to meet growing demand. What are your thoughts on clean coal technology for the region? Our study of the costs of different forms of power generation for the UK government shows that coal-fired power plants are

THE POWER REPORT

not the cheapest. With clean coal, when you start adding flue gas desulphurisation (FGD) and carbon capture, costs will go up. In Dubai’s case, ACWA Power put in a very competitive tariff, which makes clean coal very competitive in comparison with gas turbines, and could open up the market in other countries as well. But I don’t see coal as risky from a supply chain standpoint. You don’t have long-term fuel supply agreements for coal whereas banks insist on one with gas-powered plants. The infrastructure around bringing gas to a facility is much more fixed than coal. You can buy coal that meets your specifications on thermal calorific values from the international spot market and ship that in. It doesn’t matter from where you bring it in, and you don’t need a fixed infrastructure around it. How competitive is nuclear energy in this part of the world? Nuclear energy should be a part of the region’s fuel diversification strategy. The growth in electricity demand in the next 10-20 years is going to be too high to be sustained through oil and gas alone. The GCC states don’t want to burn all their oil and gas in power plants. They prefer to export them for revenues. With GCC countries planning to get away from oil and gas as a primary fuel source, we are going to see more solar, nuclear and other forms of fuel. Our studies for the UK government have shown nuclear to be the most efficient compared to combined cycle power plants. When you take into account solar and wind, you need to build a gas power plant somewhere in the system to compensate when it is dark, or the wind doesn’t blow. When you add that to the cost of power, it actually makes nuclear more competitive. Most developed economies have made a decision that they need an element of nuclear as part of their generation mix. I think the Middle East and the GCC will go in the same way. Fuel diversification is a great strategy from a power generation standpoint. Are transmission and distribution grids being given the attention they deserve? I think the big impact will come when you have more of smaller solar power plants on top of houses and buildings. Utilities in Europe are dealing with the impact of distributed generation on their networks.

I don’t think we are at that level in the Middle East. We haven’t seen here the levels of embedded distributed generation that we have in Europe. There are safety issues when you have power coming into the system from an entirely opposite end than one where you expect it to come from. Governments in the UK, Germany and Spain have been offering subsidies to people to put panels on their roofs. We haven’t seen that in this part of the world. The grid here can accommodate future generation growth that we can foresee. But it is not ready for distributed generation. I think the Middle East will be looking at a different route with larger solar power plants. We have done some work recently that demonstrated that PV solar is now almost as competitive as a gas turbine on simple cycle, which is a step change for the technology. Once you get to those levels, it really brings solar PV to a space where it can be adopted on a utility basis, and the grid can accommodate that. What will be the role of gas-based power generation in the future? Gas has traditionally been the cheapest form of power, and the region has got considerable resources of gas that can last years. The problem with gas is that you have to create a market for it. In Europe, we have a developed natural gas market, in that gas is used for domestic heating purposes – water and space heating - which generates demand. We don’t have the same sort of market in this region. If we could work out how to run the air-conditioning units on gas, perhaps; but is that going to happen? So the obvious market for all the gas we have in this region is power generation. With more nuclear and solar in the picture what happens to gas-based plants at the end of their lifecycle? I don’t think existing gas plants will be turned off. But as electricity demand continues to grow, we will see more solar coming into the mix to fill the gap. We are getting to a stage where many of the IWPPs in Abu Dhabi are nearing the end of their 20-year Power Purchase Agreements (PPA). Decisions will have to be taken on do they extend the PPA or the life of the plant? Abu Dhabi’s nuclear power plant, which will come online in phases by 2020, could displace some IWPPs. But these IWPPs generate water as well and if

they stop producing power, where will the water come from? I believe that IWPPs will be required and PPAs will be renegotiated. You also have to keep a constant eye on the cost of the fuel and the new technologies coming on the market. I think one of game changers is PV solar due to falling costs. That will have a big impact on the generation plans that are being prepared now in terms of what technologies will be used three to four years from now. Could you tell us about the electricity master plan you developed for Iraq? The Iraq electricity master plan was a small project with a big impact. We did a lot of work in Iraq six years before launching the master plan. It had very clear objectives in terms of training and development and also influencing the decision makers of the future. We had a situation in Iraq where the ministry was burning HFO in gas turbines – which is the most uneconomic way of generating power. We were entrusted with carrying out an economic analysis for power generation which would be the least cost for Iraq. We were not surprised by the figures that came out, but I was surprised how it drove every other form of generation out of the mix. Clearly, gas turbines were the best option. What the master plan achieved was influencing how the ministry of electricity and the government viewed what they should be doing in the future. It fundamentally changed the way Iraq was thinking about power generation. They had the mega deals with GE and Siemens following the master plan, and we are now seeing CCGT plants being built. They haven’t yet delivered the gas to most of these power plants, but the infrastructure is there. Did this project serve as a precedent for similar master plans elsewhere? We have been doing electricity master plans for quite some time. Some years ago we did a distribution master plan for Abu Dhabi. Master planning is something that most welldeveloped utilities do. They have a process in place to renew their master plan at least every two years. Since they have to take a long-term view, the planning horizons are usually five to six years. Demand forecasting is usually done on an annual basis which helps them to adjust their generation for the next two to three years.

February 2016

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SECToR UPDATE

UAE The UAE plans to raise between $22bn to $27bn via a bond issue to fund the fiscal deficit, reported The National, citing an interview on the Al Arabiya channel. Younis Al Khouri, the undersecretary at the Ministry of Finance, told Al Arabiya that the bond issue will take place after the passage of national debt law within “six to nine months.” The UAE has not yet raised federal debt. According to The National, the Abu Dhabi government, which is the largest contributor to the federal budget, has a long-standing liquidity facility with its largest sovereign wealth fund, the Abu Dhabi Investment Authority, which allows it to fund fiscal deficits.

Delinking from oil The UAE cabinet met to discuss the post-oil future economy

Dubai Electricity and Water Authority has issued a request for proposals (RFP) for consultants to develop the strategy, structure and execution plan and the governance framework for the $27.23bn Dubai Green Fund. The deadline for submission of RFP is end-February 2016. The scope of the RFP includes

developing the fund concept, governance structure and underlying regulations and framework according to international best practices, and Dubai’s specific needs. The fund was launched in November last year by Vice President and Prime Minister and Ruler of Dubai HH Sheikh Mohammed bin Rashid Al Maktoum.

Saudi Arabia The finance ministry’s Public Investment Fund (PIF) and Jeddah-based Islamic Corporate for the Development of the Private Sector (ICD), a unit of the Islamic Development Bank, have set up a home finance joint venture to raise the low levels of home ownership across Saudi Arabia. Bidaya Home Finance will begin operations with a capital of $240m. The company was granted mortgage finance license by the Saudi Arabian Monetary Agency (SAMA) in December 2015. Bidaya’s business model is based on forging strong alliances with real estate developers and professional service providers. The company will cater to customers wishing to obtain real estate finance compliant with Sharia.

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Borrowing from overseas Riyadh is planning its first sale of international bonds

The International Monetary Fund (IMF) has forecasted Saud Arabia’s economic growth rate to decline to 1.2% and 1.9% in 2016 and 2017 respectively. The kingdom’s growth in 2015 was estimated at 2.5%. According to KAMCO Research, optimisation of reserves and government expenditure, along with divestment options in state-owned enterprises, subsidy February 2016

cuts on utilities, and additional revenues through taxes, be it Value Added Tax (VAT) or on specific goods, or real estate fees, remain options that are keenly looked into to plug the gap in oil revenue. Initiatives that have been implemented include a hike in prices of petroleum products of up to 50%, five percent annual tax for urban undeveloped land and increase in prices of utilities.

The UAE government has embarked on developing a post-oil roadmap for the country. At the end of a Cabinet retreat last month, HH Sheikh Mohammed bin Rashid, Vice President and Prime Minister and Ruler of Dubai said: “The development of human capital is the global currency of the 21st century economies, and the only way to achieve sustainable development and promote the UAE’s journey towards further progress and prosperity.” HH Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, added: “We want a scientifically advanced UAE, we aim to have an Emirati robust economy depending on advanced industries and scientific research....”

Saudi Arabia is planning its first sale of international bonds to cover the huge $87bn budget deficit expected this year as a result of falling crude prices, reported the Financial Times. According to the FT, international banks have already sent proposals for participation, trying to convince Riyadh they could secure the best borrowing rate which is expected to become a new benchmark in Middle Eastern debt. The first dollar-denominated bond could be about $5bn and possibly split into tranches. FT added that the first issuance is unlikely to have a long maturity. The government has also announced a possible public offering of shares in Saudi Aramco. Last year, Saudi Arabia issued its first domestic bonds since 2007.

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Kuwait 2015 was a milestone year for Kuwait’s projects market, with $32.2bn worth of contracts awarded during the year, reported KUNA, quoting an NBK report. The report said that over half the projects were awarded in the oil and gas sector as Kuwait attempts to reach its oil production target of four million barrels per day by 2020. In July 2015, Kuwait awarded the long-delayed New Refinery contract at Al-Zour for $13.8bn and the contract for the development of the Lower Fars Heavy Oil production facility in the north of the country for $4.02bn. Kuwait is poised to sign projects worth $55bn before year-end.

Exit mode Kuwait Petroleum Corporation is planning to sell its loss-making assets

Kuwait is planning to set up a $100bn sovereign wealth fund (SWF) to manage local assets, including those currently managed by existing SWF Kuwait Investment Authority (KIA), reported Bloomberg, quoting local newspaper Al-Anba. The objective is to privatise these assets in five to seven years

the report. According to the Sovereign Wealth Fund (SWF) Institute, the KIA manages around $592bn in assets. Kuwait’s plan to privatise utilities while removing domestic energy subsidies is intended to make its power and water assets more profitable for the fund and attractive to potential investors, according to Al-Anba.

Oman Oman plans to raise between $5bn-$10bn from the international markets to help finance the budget deficit, reported Reuters. Central bank executive president Hamood Sangour Al Zadjali told Al Arabiya television said the government might issue eurobonds by the middle of this year. Oman is planning to issue $1.56bn of domestic bonds in 2016. The government has decided to borrow abroad to reduce pressure on the local banking system, where money market rates have been rising as inflows of new oil revenues decrease. Al Arabiya quoted Al Zadjali as saying that the central bank’s foreign reserves were sufficient to cover about four months of imports.

Central Bank of Oman building Oman is planning to tap the eurobond market

Oman is set to launch a budget airline in the fourth quarter as the country looks to diversify its economy away from oil, reported The National. The country’s aviation regulator has awarded a licence to Muscat National Development and Investment Company (MNDIC), a semi-government entity partially owned by Muscat Municipality, State General

Reserve Fund, the country’s top sovereign wealth fund, and other Omani pension funds. Despite coming late to the game, Oman still anticipates potential for growth, as it anticipates air traffic demand to grow by 40% by 2019. MNDIC is also seeking to develop projects over the coming five to 10 years across industries such as real estate and tourism. February 2016

The Kuwait Petroleum Corporation (KPC) Board of Directors, chaired by Deputy Prime Minister, Minister of Finance and Acting Minister of Oil Anas Al-Saleh, conducted a reshuffle of major posts in the affiliate companies, the state news agency KUNA reported. Under the reshuffle, Hashim Sayed Hashim was appointed a managing director of the KPC; Jamal Abdulaziz Jaafar as CEO of the Kuwait Oil Company (KOC); Mohammad Abdulatif Al-Farhoud as CEO of Petrochemical Industries Company (PIC) and Abdulnasser Yusuf Al-Fluij as CEO of Kuwait Gulf Oil Company (KGOC). KPC is planning to sell lossmaking assets to cut costs. The company had started efforts to sell its refinery in the Netherlands and shut a fertiliser plant of Petrochemical Industries Co.

Oman Rail has invited consultancy firms to bid for the contract to study the acquisition of land for Segment 2 of the national rail transportation system, reported Oman Daily Observer. Segment 2 of the 2,135km national rail network covers a roughly 240-km stretch that starts from Buraimi and connects with a proposed Special Economic Zone (SEZ) in Dhahirah Governorate. ”The objective of this exercise is to have a comprehensive database of all components of the properties/lands inventory of real estates in conflict with the new railway alignment including the restricted protected area along the railway line,” said Oman Rail. The implementation is envisioned in two sections: Section 2a from Hafeet to Ibri (114 km), and Section 2b, extending from Ibri to the Dhahirah Special Economic Zone (116 km).

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SECToR UPDATE

Bahrain Bahrain has awarded contracts worth $1.1bn for the construction of a brand new terminal at the kingdom’s airport, reported Bahrain News Agency. The contract for the construction of the new passenger terminal building, the main services building and aircraft bay was awarded to a JV between Arabtec and TAV Construction. To be completed by 2019, the new terminal will increase the airport’s capacity to 14m passengers annually. The contract is one of the five agreements signed as part of the Airport Modernisation Programme (AMP), Bahrain International Airport’s (BIA) largest infrastructure project in 30 years.

Future plan The new terminal will increase BIA’s passenger handling capacity

The latest International Monetary Fund (IMF) country recommendations “echo Bahrain’s current fiscal action plan,” said Finance Minister Shaikh Ahmad Bin Mohammad Al Khalifa, in a report carried in Gulf News. In a statement issued through Bahrain News Agency (BNA), Shaikh Ahmad said Bahrain’s

Government Action Plan aims to create a balance between the kingdom’s revenues and expenditures, continue the long-standing diversification of Bahrain’s economy by increasing non-oil revenues, redirect subsidies to Bahraini citizens, and reduce recurrent expenditure by restructuring government departments.

Qatar Qatar is set to award more than $22bn worth of new contracts in 2016 as it maintains its spending spree in advance of the FIFA 2022 World Cup, said MEED Projects. However, compared to the $29.3bn worth of deals awarded last year, the forecast for 2016 represents a 24% decline. According to MEED Projects, the drop is primarily due to lower oil prices and a renewed focus on existing project delivery instead of new launches. At the same time, the spend this year is almost exactly to the average spend experienced over the past five years. The projects market is expected to continue apace as the authorities press ahead with their capital investment plans ahead of the 2022 World Cup.

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Happening market Qatar is expected to award deals worth $22bn in 2016

Qatar’s Energy and Industry Minister HE Dr Mohammad Bin Saleh Al-Sada said the current price of oil is not sustainable as it is far below the production cost of even conventional oil. In a statement issued by the Ministry of Energy and Industry and carried by Qatar News Agency (QNA), Al-Sada said from mid-2014, when the run on oil February 2016

prices started to date, $380bn of investments have been deferred in the oil and gas sector running till 2020. In 2015, there was a 20% drop in investments to the tune of $130bn and 2016 is expected to witness a decline of 16%. Al Sada noted that it is the first time in two decades that the industry is witnessing two consecutive years of investment cuts.

The first phase of East Hidd housing project’s construction and infrastructure is 85% complete, said Housing Ministry’s Assistant Undersecretary for Housing Projects Sami Buhazza. The construction of 487 housing units in the two villages B2 and B3 in the first phase will be completed this month. The tender for building 398 housing units in village B1 has been awarded; the tender for 740 housing units in Village C included is currently in the technical evaluation phase. The East Hidd Housing Project includes 4,548 housing units, 2,827 villas and 1,212 apartments. The project in line with Government Action Plan objective of building 25,000 housing units in four years.

Around 50 employees at Qatar Rail have been let go as part of a “business efficiency review,” reported Doha News. The move comes amid reports that more than 1,000 expat staff in Qatar’s health sector are set to be laid off. Under the restructuring – responsibility for quality as well as health and safety will be moved into the company’s programme and service delivery teams. The company said it will also “divide roles and responsibilities more clearly between Qatar Rail and its programme management companies. Plummeting global oil prices have already taken its toll on Qatar’s energy sector, with Qatar Petroleum (QP) laying off an estimated 3,000 people in 2015, and its subsidiary RasGas as well as Danish oil company Maersk cutting hundreds more.

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Utilities The Abu Dhabi Water and Electricity Authority (ADWEA) has received 90 expressions of interest for its 350MW solar PV project. The solar power project will be built under an independent power producer (IPP) model in the Sweihan area of the emirate. A press release issued through the state news agency WAM said the tender will be issued during the first half of 2016. ADWEA and Abu Dhabi Water and Electricity Company (ADWEC) plan to select the winning bidder in the second half of 2016. The financial close is expected to take place in the first half of 2017 with the project commencing commercial operations and generating electricity in 2019.

Solar in MBR City Photolight’s solar-powered LED lights have embedded solar panels

Xylem has pledged its commitment to an ambitious expansion plan and investment of $35m in the Middle East and North Africa (MENA) region. The announcement was made during the International Water Summit (IWS) taking place in Abu Dhabi, January 19-22, 2016. The expansion will see increased localisation

of products and building local capabilities, including manufacturing. “The water-energy nexus is especially relevant throughout the MENA region,” said Vincent Chirouze, regional director, Xylem MENA. “We view the low oil price environment as an opportunity to invest and expand in this market.”

Oil and Gas YASREF refinery, a joint venture between Saudi Aramco and Sinopec, was jointly inaugurated by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, the King of Saudi Arabia and the visiting President of China HE Xi Jinping. On January 15, 2015, YASREF completed its first shipment, sending 300,000 barrels of clean diesel fuel from the YASREF Marine Terminal. Located in Yanbu’ Industrial City, the YASREF refinery has the capacity to refine 400,000 barrels per day (bpd) of Arabian heavy crude and produces over 13.5m gallons per day of ultra-clean transportation fuels and other high-value refined products.

First shipment YASREF completed its first shipment of diesel on January 15, 2015

Bahrain has awarded the engineering, procurement and construction (EPC) contract for the $355m Banagas Expansion project to Japan’s JGC Group. Three international companies had participated in the tendering process of the gas plant, which will process 350 mcf of associated gas resulting from increased

crude production by Tatweer Petroleum to produce liquefied petroleum gas and naphtha. The project is expected to be ready in 32 months and commence operations in September 2018. The Banagas Expansion was an extension of the National Oil and Gas Authority’s (Noga) strategic initiatives in 2015 that added up to projects worth more than $1.05bn.

February 2016

French company Photolight supplied around 340 solar powered LED lights to MBR City and Meydan Race track in December last year. The contract also covers a 9km cycling and jogging track. “When we started discussing this project with the consultant, they were looking for a 15m spacing light with 4.5m height poles. Then we proposed our 6m pole straight lights reducing drastically the investment, which enabled us to create 25m spacing lights fully respecting the lighting level requirements of an average of 10lux,” said Guillaume Dumont, Photolight MEA Sales Manager. Equipped with 74w LEDs in accordance to RTA lux level standards and vertically mounted PV panels specially conceived for dusty climate, these lights don’t require any cleaning maintenance.

GE Oil & Gas has signed a long-term, multi-million dollar contract with Petroleum Development Oman (PDO) for the provision of integrated Reciprocating Rod Pump equipment (RRP) and related services. In alignment with PDO’s ‘In Country Value’ initiative, GE Oil & Gas will sub-contract the manufacturing and fabrication of specific pumping unit’s structural components in Oman and also assemble selected Lufkin Automation products using local companies. A PDO spokesperson said: “Historically, we have sourced individual RRP components from individual manufacturers and had to rely on various contractors for its installation and maintenance. This contract marks the firstever integrated approach in installation and service.”

INFRASTRUCTURE MIDDLE EAST

SECToR UPDATE

Transport Public transport modes in Dubai (metro, tram, buses and marine transit modes, Dubai Taxi and affiliate companies) carried 539m riders in 2015 compared to 531m riders in 2014, announced the emirate’s Road and Transport Authority (RTA). The average daily ridership rose to 1.5m riders in 2015 compared to 1.475m in 2014 and 1.3m in 2013. Dubai Metro remained the most popular mode of public transport, carrying 178.647m riders in 2015 compared to 164.307m riders the previous year and a137.759m riders in 2013. Last year, the Red Line carried 112.7m riders while Green Line lifted 65.942m riders while Dubai tram lifted 4.07m riders.

Abu Dhabi Airport Last year, the airport crossed the 2m-passengers-a-year mark

Etihad Rail has suspended the tendering process for Stage Two of the project with all bidders informed in writing. The company has suspended the Stage Two tender process whilst it reviews the most appropriate options for the timing and delivery of this phase of the project, said the official press release.

Etihad Rail commenced commercial operations on Stage One of the rail network, which links Shah and Habshan to the port of Ruwais, after official safety authorisations were granted by the Federal Transport Authority in December 2015. Stage 1 involves the transport of Sulphur from Shah and Habshan to the port of Ruwais.

Construction Dubai Municipality (DM) has officially launched the ‘Automating Procedures of Engineering Contract Department’ project in collaboration with Tejari, a leading provider of electronic contract systems in the UAE. The project will lay the groundwork for automating DM’s contract tendering and awarding process for engineering contracts. It involves the activation of a contract and purchasing system in eSupply, the official central procurement portal of Dubai Smart Government to integrate purchasing and contracts procedures into a unified system. The project aims to reduce the time needed to assess tenders to seven working days from the previous 27 working days.

INFRASTRUCTURE MIDDLE EAST

DM-Tejari deal The project will help automate DM’s tendering and award processes

Aldar Properties has awarded a $544.5m contract to Arabtec Construction to build 1,017 villas at its West Yas project. In a statement to the Abu Dhabi Stock Exchange, Aldar said this is the final contract for the West Yas project, where packages for supporting infrastructure, a school, a mosque, and retail units have already been awarded. The West Yas project is February 2016

located along Yas Island’s natural mangroves and will feature 1,017 four and fivebedroom luxury villas. The development is a nongated community with no service charges, and will include a range of community facilities, including a mosque built for 2,000 worshippers, two schools – one of which will be operated by Aldar Academies – and a retail centre.

Abu Dhabi International Airport (AUH) achieved record traffic figures in 2015, with more than 23m passengers passing through its terminals. For the first time in its history the airport crossed the two million passengers a month mark, with its four busiest periods ever in July, August, September and December. “Etihad Airways contributed significantly to these traffic figures as more than 74% of the total passengers to and from Abu Dhabi International Airport in 2015 were carried by our national airline,” said Eng. Ahmad Al Haddabi, COO, Abu Dhabi Airports. The strongest destinations in 2015 were India, the UK, Germany, Saudi Arabia and the US that together recorded more than 9m passengers.

Ssangyong Engineering & Construction (E&C), which was acquired by the Investment Corporation of Dubai (ICD) early this year, has won three contracts in Dubai valued at a total of $1.6bn, reported Korea Times. Ssangyong secured the three projects by forming a three-way joint venture with Europe’s BESIX and Chinese builder CSCEC. Of the $1.6bn, the Korean builder will take $730m. The consortium will first build the Royal Atlantis Hotel worth $840m, and then the Palm Gateway worth $386m and an unnamed office building complex worth $370m. The Royal Atlantis Hotel will be a 47-story hotel with 795 rooms and a 37-story apartment building with 231 units. The Palm Gateway is an upscale apartment complex with three buildings and 1,265 units.

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Round Up The groundbreaking for the world headquarters of International Solar Alliance (ISA), a coalition of more than 120 countries that aims to accelerate large-scale expansion of solar energy, was held in New Delhi last month. The ISA was launched during the Paris climate summit [where the UAE was among one of its founding partners], and will serve as a platform for cooperation among ‘solar rich’ countries. Key ISA initiatives include reducing financial risk of solar investments, enhancing technology transfer and knowledge sharing, especially in developing countries, building capacity, and increasing worldwide energy access. The ISA is spearheaded by India, which is investing an initial $30m to set up the ISA headquarters, expected to be operational by mid-2016. DP World has announced that it is launching a new joint venture (JV) with state-owned Russian Direct Investment Fund to upgrade ports and logistics infrastructure in Russia. The new company is expected to invest over time a total of $2bn in upgrading Russian ports as well as introduce international best practices in operations to improve trade connectivity. DP World will own an 80% share with the remaining 20% held by RDIF. Sultan Ahmed bin Sulayem, DP World Chairman said: “Russia has always been an attractive origin and destination market for us with huge long term growth prospects. This joint venture allows DP World and RDIF to build on each other’s strengths in bringing economic prosperity to Russia.”

Silk Road China’s first cargo train to Iran left the country on January 28

At a meeting at the World Economic Forum in Davos, the United Nation’s Broadband Commission for Sustainable Development has pledged to connect 1.5bn people to the Internet by 2020. The joint statement from the leaders pledges a concerted global effort to connect 60% of the world’s people to the Internet by 2020, in line with ITU’s Connect 2020 Agenda agreed by the organisation’s 193 Member States in 2014. The joint statement notes that only 3.2bn people currently have online access, while 4.2bn people remain offline. A discussion paper from the ITU, presented at the session, estimated that it will take $450bn of investments in network infrastructure to connect the next 1.5bn unconnected people.

The first train to connect China and Iran arrived in Tehran loaded with Chinese goods, reported AFP. The train, carrying 32 containers of commercial products from eastern Zhejiang province, took 14 days to make the 9,500-km journey through Kazakstan and Turkmenistan. The journey was 30 days shorter than the sea voyage from Shanghai to the Iranian port of Bandar Abbas. The head of the Iranian railway company, Mohsen Pourseyed Aqayi said the railway will not stop in Tehran “as we are planning to extend the railway to Europe in future..” The monthly train is run by private companies using existing routes. More than a third of Iran’s foreign trade is with China, which is Tehran’s top customer for oil exports.

Capex cut Global oil and gas expenditure is projected to drop by10% this year

February 2016

Global oil and gas capital expenditures dropped by 26% in 2015, and is expected reduce by 10% globally this year, said Bank of America Merril Lynch in its global energy report. According to the report, non-Opec non-shale output should start to feel the pain in 2017, as the full investment cycle is around three to five years. Net total non-Opec supply is set to decrease to 56.4m b/d in 2017 before rebounding to 57.5m b/d in 2020, close to 2015 production levels. Moreover, current production from mature fields is set to decline at higher rates as maintenance capex has been cut too. The report noted that the structural shift towards a lower price environment will have profound and longlasting consequences for non-cartelised production. UAE’s national oil company ADNOC is partnering with the Indian Strategic Petroleum Reserve Ltd (ISPRL) to store crude at India’s soon to be completed strategic oil reserve project in Mangalore, reported Gulf News The development comes as HH Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, visited India to strengthen relations between the two countries. Dharmendra Pradhan, Indian Minister of State for Petroleum and Natural Gas also announced that India is planning to increase its imports from the UAE by 15% this year. India imports 79%of its crude oil. The UAE accounts for 8% of India’s oil imports and is the sixth largest supplier of crude oil to India in 2014-15.

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NoRTh ALwAThBA hoUSINg CoMPLEx DEvELoPMENT PRojECT

BUDgET: $15,000,000,000

BUDgET: $3,000,000,000

BUDgET: $2,000,000,000

Territory: Oman Client Name: Ministry of Transport Description: Engineering, Procurement & Construction (EPC) contract for 2,135km-long national railway network. Period: 2018 Status: New Tender

Territory: KSA Client Name: Saudi Electricity Company (SEC) Description: EPC contract to build a 3,600MW ISCC power plant including a 180MW solar component. Period: 2016 Status: New Tender

Territory: Kuwait Client Name: KAPP Description: Build-operate-transfer (BOT) contract for the construction of a 280MW thermal solar power and natural gas hybrid plant. Period: 2017 Status: New Tender

Territory: Abu Dhabi Client Name: Musanada Description: The project will be located at North of Baniyas and South of Shamkha and house 130,000 people. Period: 2017 Status: New Tender

February 2016

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE SoLAR ENERgy IPP - SwEIhAN Project Number: MPP2999-U Client Name: Abu Dhabi Water & Electricity Authority (ADWEA) Address: ADWEA Building, Al-Falah Street, Abu Dhabi Phone: (+971-2) 694 3333 Fax: (+971-2) 626 7725 Website: www.adwea.gov.ae Description: ADWEA has invited Expression of Interest (EoI) for a 350MW Solar Photovoltaic Independent Power Project (IPP) located at Sweihan, Abu Dhabi. The developer or developer consortium will own up to 40% of the special purpose vehicle which will implement the project including development, financing, construction, operation, maintenance and ownership. The remaining equity will be held, directly or indirectly, by ADWEA. Status: New Tender Tender Categories: Power and Alternative Energy

MohAMMED BIN RAShID AL MAKToUM SoLAR PARK - PhASE 3 Project Number: MPP2963-U Client Name: Dubai Electricity & Water Authority (DEWA) Address: Head Office, Near Wafi Shopping Mall, Zabeel East, Dubai Phone: (+971-2) 601 9999 Fax: (+971-2) 601 9995 Website: www.dewa.gov.ae Description: The project involves an Engineering, Procurement and Construction (EPC) contract to build a Solar PV IPP with capacity of 800MW at the Mohammed bin Rashid Al Maktoum Solar Park, which is the largest single-site solar project in the world. The park will produce 1,000MW by 2020 and 5,000MW by 2030. DEWA has received 21 Requests for Qualification (RFQs) for the project. The project tender is expected to be awarded in June 2016. KPMG has been awarded the lead advisory services contract for the project. Status: New Tender Tender Categories: Power and Alternative Energy

ASTER hoSPITAL PRojECT - MohAMMED BIN ZAyED CITy Project Number: WPR561-U Client Name: Aster Hospital Address: Dubai, UAE Phone: (+971-4) 398 8799 Website: www.asterhospital.com Description: Construction of a new Hospital comprising a basement, ground floor and five floors consisting of 61 beds. The project is currently in the detailed design stage. Status: New Tender Tender Categories: Construction & Contracting; Medical & Healthcare

INFRASTRUCTURE MIDDLE EAST

February 2016

OMAN SALALAh INDEPENDENT wATER PRojECT (IwP) Project Number: 17/2015-O/11 Client Name: Oman Power & Water Procurement Company Address: Floor 5, Bldg. 5, Muscat Grand Mall, Tilal Complex, Al Khuwair Al Janubiyyah, Ruwi PC 112 Phone: (+968) 2450 8400 Website: www.omanpwp.co.om Description: The project involves the construction of an IWP with capacity of 18-22 MIGD. The client has issued a Request for Qualifications (RFQ) from experienced international utilities. PricewaterhouseCoopers (PWC) will provide financial advisory services, while Spanish engineering consultant Ayesa will provide technical advisory services. US law firm Curtis, MalletPrevost, Colt & Mosle will provide legal services. The last date for submission of qualifications is January 17, 2016. The commercial operation date for this plant is early 2019 Status: New Tender Tender Categories: Water Works

DUqM oIL REFINERy DEvELoPMENT PRojECT - PhASE 1 Project Number: MPP1632-O Client Name: Oman Oil Company Address: Al-Harthy Complex, Muscat PC 118 Phone: (+968-2457 3100 Fax: (+968) 2457 3101 Website: www.oman-oil.com Description: The project involves EPC contract for the development of a 230,000 bpd. grass-roots refinery in Duqm. The contracts linked to the establishment of this refinery will be awarded towards the end of 2016. The client is planning to ask for EPC bids by June 2016. Period: 2019 Status: New Tender Tender Categories: Industrial & Special Projects

KUWAIT KABD wASTE-ToENERgy PLANT PRojECT Project Number: MPP2620-K Client Name: Kuwait Authority for Partnership Projects (KAPP) Address: Touristic Enterprises Co. Bldg., Shuwaikh Phone: (+965) 2496 5900 E-mail: (+965) 2496 5901 Website: www.ptb.gov.kw Description: Build-Operate-Transfer (BOT) contract for the development of a waste-to-energy plant with initial capacity of 3,275 tonnes/day. Client will enter into a 30-year contract with the winning investor. The client has invited five prequalified companies to participate in the Request for Proposal tender round. Period: 2015 Status: New Tender Tender Categories: Power & Alternative Energy; Sewerage & Drainage

MIDDLE EAST INFRASTRUCTURE TENDERS

jEDDAh PUBLIC TRANSPoRT DEvELoPMENT PRojECT

KUwAIT SChooLS DEvELoPMENT PRogRAMME PUBLIC-PRIvATE PARTNERShIP PRojECT

MECCA METRo PRojECT - PhASE 1

Project Number: MPP2895-K Client Name: Kuwait Authority for Partnership Projects (KAPP) Address: Touristic Enterprises Co. Bldg., Shuwaikh Phone: (+965) 2496 5900 E-mail: (+965) 2496 5901 Website: www.ptb.gov.kw Description: The project involves the development of nine schools, including five kindergartens, three elementary and one middle school, a residential building for female teachers and an Olympicsize swimming pool. It is being developed by KAPP in association with the Ministry of Education. KAPP has prequalified four consortiums to purchase the request for proposals for the tender. The project is being procured as design, build, finance operate and maintain structure. The term of the contract is expected to be 25 years in addition to three years for the design and build of the infrastructure assets. The new schools will have a combined capacity of 4,350 students. Status: New Tender Tender categories: Construction & contracting; Education & Training

Project Number: MPP2444-SA Client Name: Makkah Mass Rail Transit Company Address: Makkah 50449 Phone: (+966-12) 567 3987 Website: www.makkahtransit.org Description: Known as the Makkah Mass Rail Transit (MMRT) system, it will run around Makkah city centre. The network will be able to transport about 100,000 passengers an hour. Client has announced that it expects to award five contracts worth $8.8bn for Phase 1 of this scheme in the first quarter of 2016. Four of the packages will be for lines B and C and include 44km of track and 22 stations. The contracts will be civil 1 (tunnels), civil 2 (viaducts), systems and finishing, and rolling stock. The fifth contract is for a bus system. Once contracts have been awarded, the first phase will take four years to complete. Period: 2020 Status: New Tender Tender Categories: Public Transportation Projects

KSA

Project Number: ZPR088-SA Client Name: Jeddah Municipality Address: Jeddah 21146 Phone:(+966-12) 614 9999 Fax: (+966-12) 614 9292 Website: www.jeddah.gov.sa Description: The project involves the develoment of a public transport programme comprising a Metro network, Tramway and Light Rail Transit. Arab Center for Engineering Studies (ACES) has been awarded the geotechnical investigation contract for the preliminary engineering design phase. Metro Jeddah Company (MJC) has invited initial expressions of interest (EOI) for the civil works contract of the metro network. It has also invited EoI and prequalification to design, build, procure, supply, operate and maintain a light rail transit (LRT) and corniche tramway civil works and rolling stock. Period: 2022 Status: New Tender Tender Categories: Public Transportation Projects

February 2016

QATAR qATAR LoNg DISTANCE RAILwAy NETwoRK PRojECT Project Number: MPP1592-Q Client Name: Qatar Railways Company (QRC) Address: Doha Fax: (+974) 4497 4333 Description: The project involves construction of a 400-km-long railway network. The client has prequalified 15 consortiums for the Phase 1. Period: 2018 Status: New Tender Tender Categories: Public Transportation Projects

PROdUCEd IN ASSOCIATION WITh MIddlE EAST TENdERS

INFRASTRUCTURE MIDDLE EAST

TEN oMAN INFRASTRUCTURE PRojECTS

OMAN INFRASTRUCTURE PROJECTS Faced with a slump in oil revenues and growing fiscal deficit, Oman is prioritising key hydrocarbon and social infrastructure projects

INFRASTRUCTURE MIDDLE EAST

February 2016

KhAZZAN & MAKAREM gAS FIELDS DEvELoPMENT

Owner: Ministry of Oil & Gas Budget: $16bn Progress: EPC contracts BP is developing tight gas reservoirs in Block 61 and the Khazzan and Makarem gas fields that cover an area of some 2,800 sq. km. BP plans to drill around 300 wells over 15 years to deliver plateau production of 28.3 Mcm/d of gas and 25,000 bpd of gas condensate. The company has awarded several contracts, including a $1.2bn engineering, procurement and construction (EPC) contract for building the central processing facility (CPF), two long-term drilling contracts totalling $730m and a contract worth $110m to build and install a gas gathering system. Recently BP confirmed that it has signed an agreement with the Oman to develop the second phase of the Khazzan gas field.

TEN oMAN INFRASTRUCTURE PRojECTS

oMAN NATIoNAL RAILwAy PRojECT

Owner: Oman Railway Company (ORC) Budget: $15.5bn Progress: EPC stage Oman’s national railway network comprises 2,244km of track with 35km of tunnels, 40km of bridges, 50 terminals and eight marshalling yards. The network, which will connect the ports of Sohar, Duqm and Salalah, will comprise a double non-electrified track carrying both freight (120km/h max speed) and passenger (220km/h max speed) traffic. A consortium headed by Técnicas Reunidas was awarded the $149m project management consultancy (PMC) contract. ORC has requested bidders to extend the validity of their offers for Segment 1 - a 127-km link connecting Sohar to Buraimi - by six months. The client has invited consultancy firms to bid for a contract to study land acquisition for Segment 2.

DUqM oIL REFINERy DEvELoPMENT PRojECT - PhASE 1

Owner: Oman Oil Company Budget: $6bn Progress: Expression of Interest (EoI) stage The project is being developed by Duqm Refinery and Petrochemical Industries Company (DRPIC), a 50:50 JV of Oman Oil Company and Abu Dhabi’s International Petroleum Investment Company (IPIC). The first phase will see the development of a 230,000bpd grassroots merchant export refinery within the Duqm Special Economic Zone (SEZ). Designed as a full conversion refinery, the plant will use delayed coking technology for bottomof-the-barrel processing. The client is planning to ask companies by June 2016 to submit bids for the EPC contract. Winning bidders are expected to be announced by the end of 2016.

LIwA PLASTICS CoMPLEx

Owner: Oman Oil Refineries and Petroleum Industries Company (ORPIC) Budget: $5.2bn Progress: Financial closure The four EPC packages worth $4.5bn linked to this scheme have been awarded to following companies: EPC 1 (Steam Cracker & Utilities): CB&I and CTCI JV; EPC 2 (Plastics Units): Maire Tecnimont; EPC 3 (NGL Extraction): GS Engineering & Construction and Mitsui & Company JV; EPC 4 (NGL Pipeline): Punj Lloyd. ORPIC is targeting to sign financing agreements concurrently with the award of the EPC contracts. For the $895m package awarded to Tecnimont, an $890m credit line is being finalised, guaranteed by Italian ECA SACE. Korea Eximbank has announced that it will provide $370m to finance this project.

February 2016

INFRASTRUCTURE MIDDLE EAST

TEN oMAN INFRASTRUCTURE PRojECTS

BATINAh ExPRESSwAy CoNSTRUCTIoN PRojECT

SULTAN qABooS MEDICAL CITy CoMPLEx PRojECT

BIDBID - SUR DUAL CARRIAgEwAy PRojECT

Owner: Ministry of Transport & Communications Budget: $3.9bn Progress: Work underway

Owner: Ministry of Health Budget: $2.5bn Progress: Feasibility studies underway

Owner: Ministry of Transport & Communications Budget: $1.1bn Progress: Under construction

One of the biggest road projects in Oman, the Batinah Expressway will act as an extension of the Muscat Expressway and run for 265km to the Oman-UAE border. To be complete by 2018, the expressway will have four lanes on each side, with 75 interchanges and tunnels. The first 11 packages, including six main packages, have already been floated and are under various stages of planning and construction. Work has started on Packages 2, 3 and 4 while contracts are being finalised for Packages 6, 7,8,9,10 and 11. Parsons International and Turkey’s Bosphorous Technical Consulting Corporation (BOTEK) rendered consultancy services for the project.

INFRASTRUCTURE MIDDLE EAST

This project will be developed on a five million sqm site near Barka on the outskirts of Muscat. The 1,200-bed hospital will be equipped with latest medical facilities and has the potential to become a hub for patients from Oman, other Gulf countries and beyond. The master plan of this project is ready and the client is seeking specialised private sector partners to execute this project. The hospitals in this complex are a $515m General hospital (255 beds); a $154m Children’s hospital (180 beds); Rehabilitation Centre (100 beds); Organ transplant centre (100 beds) Trauma and neuroscience centre (165 beds); OPD and renal dialysis centre (185 beds). Each hospital building will be tendered as a separate package.

February 2016

The project connects the cities of Bidbid and Sur by a 247km long, six-lane highway, and also includes the building of nine interchanges, two underpasses, two overpasses, associated retaining wall structures and about 171 reinforced concrete culverts. In February 2011, a joint venture of Italy’s Astaldi and Turkey’s Ozkar Insaat was awarded $325.2m Phase 1A while a JV of UAE’s Habtoor Leighton and Turkey’s STFA was awarded $300m Phase 1B. Phase 2 was awarded in February 2014, with $251 Phase 2A going to L&T Oman and local KAS Construction bagging the $233m Phase 2B. In August 2014, Hill International was awarded the Project Management Services contract.

TEN oMAN INFRASTRUCTURE PRojECTS

INDEPENDENT wATER PRojECTS (IwP)

Owner: Oman Power and Water Procurement Company (OPWP) Budget: $1bn (cumulative) Progress: RFQ phase The Barka and Sohar water desalination projects on Oman’s Batinah coast, at $500m each, constitute the single biggest procurement of new water desalination capacity in Oman’s history. Barka IWP will have a contracted capacity of 281,000 m3/ day while Sohar IWP will have a capacity of 250,000 m3/day. Consortiums led by Spanish water services giant Valoriza Agua and Japanese conglomerate Itochu Corporation have been selected as the preferred bidders. Valoriza Agua teamed up with Oman Brunei Investment Company and Sogex Oman, while Itochu joined forces with Degremont, International Power (Dubai Branch) and WJ Towell & Company. Formal project agreements are being negotiated.

yIBAL KhUFF SoUR gAS DEvELoPMENT

RAS AL hADD ToURISM PRojECT DEvELoPMENT

Owner: Petroleum Development Oman Budget: $900m Progress: EPC awarded

Owner: Omran Budget: $650m Progress: Phase 1 to be awarded soon

Petrofac has been awarded the EPC contract by PDO for Yibal Khuff sour gas project, located approximately 350 km southwest of Muscat. The development of the field will add to PDO’s future oil production whilst the associated gas will be utilised for power generation and enhanced oil recovery developments. Under the terms of the four and a half year contract Petrofac will be providing reimbursable detailed engineering, and construction and commissioning management support services and procurement on an incentivised pass-through basis. This will extend throughout construction and during start-up of the integrated oil and sour gas facility. The commissioning of the project is expected in 2019.

The project involves development of Ras Al Hadd tourism scheme at Sur city in Oman. Client has signed a partnership agreement with Qatari Diar Real Estate Investment Company to form Qatari Diar Ras Al Hadd Development Company SAOC. The first phase includes establishment of a 100-room, ecotheme resort, 50 hotel villas, 150 residential villas and a 7,000 sqm market. The expected completion of this phase is end of 2018. The second phase entails addition of 100 new 5-star hotel rooms to the resort, 196 residential villas, a dedicated centre for wildlife preservation and an observation park set over a 10,000 sqm. Two more 5-star hotels will be constructed during the third, fourth and fifth phases .

February 2016

INFRASTRUCTURE MIDDLE EAST

COVER STORY

Neil Hawkins

INFRASTRUCTURE MIDDLE EAST

February 2016

COVER STORY

A LONG-TERM STRATEGY

Setting Standards

Sustainability is a serious endeavour for Neil Hawkins, Corporate Vice President, EH&S, and Chief Sustainability Officer, Dow Chemical ast year, Dow Chemical announced its 2025 Sustainability Goals. Through harnessing Dow’s innovation strengths, global reach, and dedicated employee population, the company has set bold and aggressive sustainability targets designed to develop breakthrough product innovations, positively impact the lives of one billion people, and deliver $1 bn in cost savings or new cash flow for the company by valuing nature in business decisions. “Whether a company is interested in sustainability or saving money, they go hand in hand,” says Neil Hawkins, Corporate Vice President, EH&S, and Chief Sustainability Officer, Dow Chemical. He should know because the 2025 Goals is the company’s third set of sustainabilityrelated goals since 1995. In an interview with Infrastructure Middle East, Hawkins elaborated on why Dow is serious about sustainability. Excerpts.......

Could you explain the drivers leading to sustainability getting its due in the C-suite? In the broader industry, the reason you see more of us is the need to manage risk and save money as the link to sustainability drivers become clearer. If you want to save money, you have to conserve energy and water, reduce waste. Whether a company is interested in sustainability or saving money, they go hand in hand. Once you are at a point where you understand the benefits of cost savings, the next evolution is how do you make more money? How do you achieve more sales and more profits while doing more good with the sustainability drivers? I believe Dow has done that in our 20-year journey; we recently announced our 2025 goals, and now this becomes a 30-year journey,

but everything we are doing is dedicated to taking Dow’s science and technology, assuring that it is as sustainable as it can be in research, manufacturing and supply chain, and maximising the sustainability good we are doing through our sales. And that’s really been a key role for me in my 10 years. Before I had the title of Chief Sustainability Officer (CSO), I was vice president of sustainability and had been at the top of this area for eight years. It is about reading what is going on externally and bringing it inside the company with our business units to create a strategy that advantages Dow to sell more products at higher margins, and at the same time, help feed the world’s hungry, give water to the thirsty and put sustainable housing for the people. I think that every company has to go through the journey, starting with risk management, improving the footprint, saving money and then growing. When you started 20 years ago, was the focus more internal or external? We began 20 years with the desire to get better and it was much more internally focussed. With each set of 10-year goals, the outside end- focus grew. I believe that every company needs to go through the three steps I mentioned earlier. If you didn’t optimise internally, your employees would see big disconnects. You have to build a culture that creates an alignment. Is it perfect? No. Is it difficult? Absolutely. If we didn’t have this three-fold strategy, we would not do as well. It gives us a rallying point so that employees understand where we are trying to go. They may not understand every piece but they know the CEO, the CFO and the COO are totally devoted to doing good while also doing well as a company. Our goals are designed to make sure we measure and do the right things in both areas – doing good and doing well.

As a multinational with a global footprint, how did Dow address the challenge of implementing sustainability goals across all your businesses in the different corners of the world? We have global standards not just in EH&S but also in ethics and compliance, accounting – almost everything. We expect every country and every employee to meet those standards regardless of where they are. This culture of sameness on the minimum requirements is very strong. If you went into a Dow plant in China or Saudi Arabia or the US, you wouldn’t come across anything vastly different. Even for acquisitions, the fact that we have common standards helps to bring the acquisition into the company quickly. There are minimum requirements, and the goals run above those. They are not deployed in a ‘legalistic’ way. Rather, they help everybody understand and align to where we are trying to go. Not every person is working on every piece at the same time. For example, the people from our water business understand they are helping provide clean drinking water. They are going to help us maximise the number of people we are doing to provide clean drinking water to, make money and also do research and innovation. The goals help them centre themselves. Another of our 2025 goals is one where Dow will work with other industry leaders, non-profit organisations and governments to deliver six major projects that facilitate the world’s transition to a circular economy, where waste is designed into new products and services. Our circular economy goal isn’t a standard but it helps align the businesses. Thus, it helps people in Dow Plastics understand that we are trying to close the resource loop in plastics; it helps Dow Water & Process people understand that we are trying to close the resource loop in water, and scientists in Dow AgroSciences understand we are trying to close the resource loop in food.

February 2016

INFRASTRUCTURE MIDDLE EAST

COVER STORY

These are concepts that help people understand and put a context on strategy. Thus, every business unit has looked at the 2025 goals to work on messaging and alignment. We spend a lot of time early in explaining the new goals and talking to the leadership as the leaders have to understand it first. People from my team worked with every business unit. Each business unit had teams to create narrative documents that explained how their activities aligned to these goals. These are 10-year goals which mean we don’t have to come out of the gate immediately doing things. We have to lay the ground work but I am optimistic that these goals, irrespective of whether we achieve or don’t achieve them, will actually change the way we work. How do you ensure that 2025 Goals are unaffected by the economic cycles that seem to be happening more frequently? It is only through the commitment of our board of directors and senior management that we can carry these goals through the cycles. And we don’t change the goals. Rather, what we do is set them and work as hard as we can to get there. We make long term goals and report against those goals, irrespective of whether we achieve those goals or not. But we don’t reset the goal lower so that we make it. In fact, we do make most of them. For example, in the last set of goals, we had an energy efficiency target which we set too high. We achieved so much in the first 10-year goals that we couldn’t up the level the second time. It was tough because our investments in technology last a long time. A big cracker may run 30 years, for example, so we don’t replace many. But in the new plants that we have put up in the last few years, the machines are much more efficient. From 1995 to 2005, you see again improvements in energy efficiency as we took old plants offline. While we weren’t able to set the goal in a way that was realistic, we continued to report. In your 2025 Sustainability Goals, you are aiming to obtain 400 MW of your power demand from renewable sources. How do you propose to achieve this goal, which is equivalent to setting up a well-sized power plant? Is it an aspirational goal? When we set it, it was aspirational but last year, we brought online 200 MW of new wind

INFRASTRUCTURE MIDDLE EAST

energy. With that, I think we are now at 360 MW, and we almost have met the goal. Now I have to sit with the senior management and decide do we reset the target or do we report 400 MW. I think by 2025, we will be at 1000 MW because we did this very large wind deal, and then we had some other ones that are equally large. We prefer to do big deals because our energy consumption is quite high. But we only do such deals when it makes business sense. When we developed the 400 MW goal, we didn’t have the 200 MW deal. It was a stretch but we didn’t know. There are lots of win-win deals on energy out there, and companies only need to search for them and patiently evaluate them. After COP 21, you will see a lot of incentives for alternative energy in most of the countries. Having partners that understand those incentives and put together arrangements with large consumers is a significant opportunity, even in this region. Employees seem to be one of the central elements of Dow’s sustainability strategy. How do you motivate them to be a part of these goals? There is the initial explaining, and deployment, which is going on. One fundamental principle that Dow follows is that we don’t ask every employee to be responsible for every goal. If there are individual employees who are responsible for making that happen, it is part of their goals; but it is not part of the personal goals of 53,000 people. We try to have the people most accountable for it have it in their goals. But we want everybody to understand these goals. For example, we want our sales teams to understand that we are making our renewable energy goals which make their products more sustainable on a lifecycle basis compared to other people’s products. So there is a balance of awareness and appreciation of the value created versus accountability to deliver. There are actually 40 metrics, and people who have control over those 40 have them in their goals. There is one goal in our 2025 Goals which we call the billion person goal. We are trying to create a situation where the volunteerism and extra effort of Dow employees can be leveraged to support a billion people over 10 years and improve the sustainability of their lives. We already have tens of thousands of Dow employees who have been volunteering

February 2016

for quite some time. We are trying to create situations where Dow is even more supportive of what they want to do in their local community or broader. For example, the chief architect of our IT systems spends one day a week helping a group called The Nature Conservancy devise an IT system to keep track of opportunities for conserving land. He is not building their IT system; rather, he is helping them write the specifications so that they can get the government to fund building it. If he is successful, we will estimate how many people were helped by that. The key thing is we want Dow employees to feel more supported in their volunteering. Where do you see the biggest business opportunities for Dow Chemical in the post COP-21 environment? COP 21 brings some clarity that the countries of the planet are moving towards actually controlling greenhouse gas emissions, and they will move at different speeds. But when you put into place a cap and trade programme in China, for example, that has a global impact. I think low carbon future and low carbon technologies will be highly advantaged. What constitutes low carbon is yet to be defined but I believe that chemistry has a huge role to play in providing low carbon solutions. To me, low carbon doesn’t mean going to solar immediately. We are at the tail-end of the coal era; then we are in oil-era, then a gas-era, and then in a renewables-era. I think we are looking at a transition. We have a philosophy called COAT which is Conserve energy efficiency, Optimise energy, Accelerate and then Transition to the future. We don’t want to lose how important it is to do energy efficiency because the megawatt you don’t have to produce is the lowest cost carbon reduction. Dow is an expert in low energy buildings; we are expert in desalination of water at low energy. These are low carbon technologies but people’s mind go to solar panels or wind turbines first. Insulating buildings better or desalinating water at low energy or even helping manufacture light weight vehicles, all of these represent huge business opportunities for Dow. I can confidently say that in my lifetime and yours, we are looking at real transition of science and technology. And that’s what Dow is great at.

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PRojECT MANAgEMENT

PM TRENDS

Front and centre

Strategic perspective and ability to balance discipline with agility holds the key to success

he evolution of the project management discipline has created high demands for new skills to master the challenges of our ever-changing work environment. Smart organisations are equipping project managers with the necessary skill sets to think more strategically and innovatively, manage change and complexity with an agile, yet disciplined approach all while carefully monitoring the big picture. “The project management profession has evolved from a niche, technical-based discipline to a fully embedded approach to the way work gets done,” said Tim Wasserman, CLO, TwentyEighty Strategy Execution and Programme Director, Stanford Advanced Project Management Programme. “As a result, the skills required to fill project-based positions have also changed. Smart organisations are embracing these trends to stay ahead of the competition and continue to innovate.” Recently, TwentyEighty Strategy

INFRASTRUCTURE MIDDLE EAST

Execution released their Top Ten Project Management Trends for 2016. 1. The permanency of Agile Project Management: Agile approaches impact the way we do project-based work and have even started infiltrating more rigid methodologies such as Waterfall. Although people are still struggling with embracing the principles of Agile, smart organisations are helping their employees grasp agile ways of thinking to move their mind-set away from how things used to be done to how they need to be done. Forward-thinking organisations will strike the balance between disciplined and Agile methodologies. They recognise the need for Agile and will assist their employees with building their skills, knowledge and capabilities. Smart organisations are the ones that have already prepared a significant portion of their workforce to balance disciplined approaches with more agile ones to get work done. 2. Broadening strategic role of the project manager: Project managers (PMs) are

February 2016

being asked to think more strategically, in large part because, as organisations flatten, there is a rising need for more people to do this on behalf of the entire enterprise. Project management is no longer just about managing the triple constraints, but rather about reaching solutions faster and demonstrating strong, direct business impact. As a result, project managers (PM) are now more engaged in solution recommendations from the beginning. They are evolving from project managers to profit managers, accountable for the project’s financial performance, benefits realisation and its impact on the organisation’s bottom line. As the PM’s role within a project, programme or portfolio morphs into a role requiring a more strategic perspective, PMs are moving away from their historical position as a technical cost centre and toward a more pivotal role charged with ensuring that project-based work aligns to, and helps achieve, the organisation’s strategic intent. Smart organisations are hiring, retaining and training their PMs for the skills necessary to manage this evolving role.

PRojECT MANAgEMENT

3. Turn, Turn, Turn – The Fundamentals of Change Management: Change is embedded in everything we do. Because every project is a cause for change, change management is a required skill in any PM’s toolbox. Change management places the emphasis on relational and strategic skills because organisations have learned technical skills alone are not enough to effectively execute change. Without effective change, projects fail to achieve their full organisational impact. Forward-thinking organisations do not assume people have learned these skills somewhere else; instead they are providing PM leaders with the resources to learn how best to manage change quickly and with impact. 4. Mastering modern-day complexity: The world has become increasingly complex with many interdependencies and technical interfaces required to master the multivariate of information and relationships. Although many have mastered keeping track of all the data, it is not enough. Understanding and interpreting the information about projects, people and relationships are essential skills for breaking down complexity into pieces easily understood by others. PMs who can explain complexity simply will be the first to experience career advancement. While project management used to be focused on technical execution, today’s world requires strategic viewpoints and the understanding of project-based work’s impact, a fact being slowly embraced as organisations begin to see the value of PM leaders who possess a solid balance of technical and relational skills. 5. Up-skilling talent: Thinking like an entrepreneur is imperative for PMs today. It goes beyond a business mind-set to an overall C-suite level way of approaching project-based work and the decisions required for top job performance. PMs can no longer function without the ability to execute strategy. It requires up skilling to meet the demands of today’s marketplace. Solid PMs must have a multidisciplinary skill set that includes effective communications skills, analytical thinking, strategic initiative, a business mind-set and technical finesse. The Project Management Institute’s (PMI) new Talent Triangle reinforces the need for this balance of skills in leadership, strategic management as well as traditional technical expertise. Forward-looking organisations are aggressively up skilling their PMs to ensure

leadership roles are undertaken by women. Smart organisations will tip the balance in favour of diversity to leverage the power of this growing workforce demographic.

they can master these skills; a much more cost effective approach to trying to hire senior PM talent from the ever-shrinking talent pool. 6. The need for design thinkers: Design thinking has emerged as a major trend for how innovative organisations approach problem solving. The potential impact for the project management profession is significant. Design thinking encourages innovative solutions by drawing on approaches from engineering and design and combining them with ideas from the arts, social sciences, and the business world. For PMs, it’s particularly significant for exploring and then narrowing the scope of requirements for a project in a way that generates non-typical solutions to meet a challenge. Leading organisations are helping their PMs build a strong knowledge and skill base around design thinking approaches and balancing that with agility and discipline, encouraging PMs to step up to a more strategic perspective that accelerates innovation. 7. The significance of portfolio and programme management: Portfolio and programme management (PPM) has grown to be a part of the overall business management and leadership landscape. In fact, PPM is a key element in successful strategic execution, because every effort of the organisation to move forward requires project-based work. Therefore, seeing how projects, programmes and portfolios align to the organisational strategy is essential for PMs and non-PMs alike. Understanding how various projects affect others while maintaining a strategic perspective requires PMs to be able to focus on the details as well as step back to a more strategic, multiproject viewpoint. Savvy organisations recognise the importance of a strong PPM perspective and work to empower their PMs to step back and question when misalignment between strategy and project execution occurs. 8. Diversity matters: A diverse workforce enhances client engagement and brings new perspectives to the workplace. In fact, according to a recent Economist Intelligence Unit study, 83% of respondents claimed a more diverse workforce actually improves an organisation’s ability to engage a diverse client base, which then leads to expanded access to a number of markets. While more than 50% of all professional jobs are held by women, according to a recent Wall Street Journal report on major tech companies worldwide, only around 1 in 4 technology and

9. Colocation, global teams and distributed work: The majority of work is now getting done in a distributed manner. Few project teams are solely co-located any more even though colocation is a desired state for Agile project management. This tension between Agile work methods and distributed teams will continue to grow. A distributed workforce creates challenges around managing at a distance, communication, cultural differences, as well as balancing and coordinating internal versus external resources. And as work is increasingly handed off from time zone to time zone in a 24/7 operating model, managing interfaces and interdependencies becomes a critical competency. Those who know how to coordinate distributed teams will increase the likelihood for achieving success as well as career advancement as they demonstrate this most essential skill. 10. The spread of project management into non-PM arenas: Given that project-based work is responsible for all organisational transformation, whether incremental or comprehensive, project management is no longer just for project management professionals. Rather project management is for anyone – which is everyone – who does project-based work. Project management best practices and concepts are being adopted by many non-PM roles such as marketing, sales and logistics. The benefits of this can be seen in increased efficiencies, stronger strategic alignment and improved customer satisfaction – to name a few – all of which leads to improved organisational performance. Organisations that embrace PMs key principles will ensure that their talent pool - regardless of title, position or location - is equipped with the skills and tools to not just get a job done, but deliver the full potential impact of a project. “Project management is no longer boxed away in a corner of the room,” said Wasserman. “It stands front and centre and is being adopted by every area of smart organisations. These organisations understand its significance and are investing heavily to ensure that individuals, teams and departments have what it takes to deliver maximum impact.”

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CoMMENT

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Reactive energy markets The relationship between energy markets and geopolitics has entered a rocky phase in 2016 By B M Bansal nergy markets and geopolitics are permanent bedfellows, but the relationship is set to get particularly tricky in 2016. Gulf governments’ budgets are under rising pressure as oil prices sink to below $30 a barrel for the first time in 12 years and relationships darken within OPEC and with non-OPEC producers. Nigeria’s oil minister and 2015 OPEC President Emmanuel Ibe Kachikwu recently hinted at an emergency meeting by April; a statement welcomed by OPEC’s less wealthy members that have called on OPEC linchpin Saudi Arabia to change the group’s policy to maintain market share since November 2014. Nigeria, Algeria and Venezuela are just a few that are particularly feeling the pinch. But the stalemate is likely to continue. The UAE Energy Minister Suhail Mohamed Al Mazrouei has questioned how an OPEC meeting would address the whole problem while non-OPEC members’ oil production must also be curbed. Oman, the largest non-OPEC oil producer in the Gulf, said the Sultanate would slash 10% off its total production of just under 1m bpd if other oil producers in both camps followed suit. Yet, different philosophies persist and the oversupply will probably get just worse as Iran hopes to bring up to an additional 1m bpd to the market in 2016 following the lifting of sanctions in January. Saudi Arabia, OPEC’s linchpin, has increased petrol prices by up to a 50% and the Kingdom’s budget deficit of $87bn is roughly equivalent to 16% of GDP. Most surprising, however, is state-owned Saudi Aramco’s possible plans to issue an initial public offering (IPO). The world’s largest oil company is notoriously secretive about its oil and gas reserves, with current data estimating 260bn barrels of proved oil reserves and the equivalent of 50bn barrels of natural gas reserves. The IPO could be a call for cash, which

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“Many shale oil producers are now declaring bankruptcy, or planning to kick start production when oil prices climb above $50/barrel – whenever that may be” would back the International Monetary Fund’s (IMFs) forecast that Riyadh will deplete its financial assets by 2020 if oil prices remain low. More likely, however, is that Riyadh wants to either diversify its refining assets, or diversify its shareholder portfolio by ramping up its number of foreign investors. Saudi Aramco’s plans have not been backed up by a date, so the market should hold off getting too excited for now. Still, a successful IPO of a private company with such global influence could redefine the landscape for state-owned majors in the Gulf – perhaps the UAE’s Adnoc, or Kuwait Petroleum Company (KPC) will follow in Saudi Aramco’s footsteps? Riyadh’s escalating political disputes with Iran have failed to curb Tehran’s bold

February 2016

ambitions to ramp up gas and oil supplies to clients in Europe, Asia and the Gulf. Iran, home to the world’s second largest gas reserves, is expected to firm up gas memorandums of understanding with neighbours Oman and Turkey in the first half of 2016. The need for significant investments in infrastructure means Iran is unlikely to bring the planned 1m bpd to market this year, but the country’s re-emergence onto the global energy stage will undoubtedly be a wake-up call to its energy competitors in the Gulf. Nearly 20 months after the Saudi-led OPEC policy to ring fence market share started, the US shale oil producers are finally beginning to kneel under the weight of burgeoning debt packages. Small and medium producers have cut costs and held off drilling new wells since June 2014, demonstrating an unexpected resilience to the bearish price outlook. But $30/barrel is proving just too much. Many shale oil producers are now declaring bankruptcy, or planning to kick start production when oil prices climb above $50/barrel – whenever that may be. Some US producers are retreating to conventional oil drilling as it is sustainable even at $20/barrel. But there are 5,000 wells in the US that have already been drilled and tested and not yet fracked, which could produce 4m bpd in total if all came online at 100-200 bpd – derailing Saudi’s competitive edge against non-OPEC producers and likely creating another glut that dampens prices. Also worth considering is the US’ revived appetite for supply contracts following the lifting of a four-decade ban in December on crude exports, bar the 500,000 bpd that the US mostly sends to Canada. Shaky economics and challenging politics do not promise a stable outlook, but there will be more clarity as the dust from today’s macroeconomic uncertainty clears by year-end and the crash of oil prices slowly starts to reverse. (The author is Strategic Director, Gulf Petrochem Group)

EvENT REPoRT

PRACTICAL DIALogUE

Committed to sustainability As the world’s first major sustainability event after COP 21, Abu Dhabi Sustainability Week (ADSW) 2016 focused on critical issues defining the climate change agenda trategic business deals and partnerships were struck across clean energy, water, and waste at the recently concluded Abu Dhabi Sustainability Week (ADSW) 2016. Major partnerships announced included collaboration between Masdar and the Sharjahbased environmental company Bee’ah to develop the UAE’s waste to energy sector [the partnership has formed a consortium to participate in the tender process for the announced Integrated Waste Management: Northern Emirates project managed by the Ministry of Environment and Water, which, if successful, will see two additional waste to energy plants constructed in the UAE by about 2021] and an agreement between ABB and Marifer on solar power plants in Jordan [ABB has secured a contract with Martifer Solar to supply 50MW solar capacity in Jordan. The deal covers four solar plants, located near the cities of Ma’an and Mafraq]. Japanese firm Hioki launched the world’s

first non-metallic voltage meter, which will be used in large-scale utility projects such as a 200MW solar photovoltaic power plant to be built by Masdar in Jordan. The Global Clean Water Desalination Alliance also hosted its first meeting since launching at COP 21 Paris in 2015. Driving business deals, the tailored networking platform Sustainability Business Connect hosted a record of more than 6,000 business meetings. “In addition to realising major business transactions, ADSW also achieved significant progress in raising community awareness of the importance of sustainability, energy efficiency, and of embracing more environmentally responsible behaviour in our everyday lives,” said Dr Nawal Al Hosany, Director of Sustainability, Masdar. The World Future Energy Summit (WFES), International Water Summit (IWS), in partnership with ADWEA, and EcoWaste, in partnership with Tadweer, the Centre for Waste Management in Abu Dhabi welcomed a record 33,000 attendees, including over 80 government

ministers, and 650 exhibiting companies from over 40 countries, including from Egypt, India, the Kingdom of Saudi Arabia, and Morocco. Naji El Haddad, Group Event Director, WFES, IWS, and EcoWaste said: “As the world’s first major sustainability event since COP 21, Abu Dhabi Sustainability Week’s record deals and partnerships reflects the strong optimism among governments, businesses, and financiers in the region’s Smart Cities, solar rooftops, and desalination plants. We’re set to take sustainability to the next level at Abu Dhabi Sustainability Week 2017, which will be the largest and most expansive ever.” Leading public and private sector exhibitors included Abdul Latif Jameel, Abu Dhabi Chamber of Commerce and Industry (ADCCI), Abu Dhabi Department of Transport (DOT), ADNOC, Atkins, Averda, BP, Canadian Solar, CH2M Hill, Dubai Electricity and Water Authority (DEWA), Dolphin Energy, Dulsco, Emirates Nuclear Energy Corporation (ENEC), ExxonMobil, GE, Hitachi, Huawei, Lavajet, Lockheed Martin, February 2016

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THE POWER REPORT

Occidental Petroleum Corporation, Saline Water Conversion Corporation, Schneider Electric, Shell, Siemens, SkyPower Global, Suez Environment, Toshiba, Total, Trina Solar, Veolia, Xylem, and Yingli Green Energy. There was strong attendance at new show features such as the Egypt Energy Forum, Future Cities Forum, Sustainable Transport, Solar Expo, Energy Efficiency TechTalk, Innovate@IWS, EcoWaste’s MENA Municipalities Roundtable. In fact, both Future Cities Forum and Sustainable Transport made their debut this year. The sustainability week also saw an unprecedented level of youth engagement, with an estimated 9,000 students taking part. The Student Exclusive conference, the event’s flagship youth activity, hosted a half-day programme starring global music celebrity AKON. Female empowerment was also a key topic at ADSW 2016, which staged its first full-day conference dedicated to the Women in Sustainability, Environment & Renewable Energy (WiSER) initiative founded by Masdar and the Zayed Future Energy Prize. Energy Efficiency Expo The organisers announced the launch of the Energy Efficiency Expo for the 2017 edition, as an annual exhibition, conference, and business matchmaking programme in the energy efficiency sector. “Sustainable development requires efficient management of energy demand as well as supply, and the Middle East and North Africa is no exception,” said Dr Ahmad Belhoul, Chief Executive Officer of Masdar. “At the WFES Energy Efficiency Expo 2017, we will share our public-private partnerships in energy conservation, including the role of Masdar City, Abu Dhabi’s ‘greenprint’ for sustainable urban design which consumes 40% less water and energy than city developments of a comparable size.” Deep insights WFES 2016 also witnessed the launch of joint studies focusing on the energy sector. This included a joint study by Brookings-Masdar Institute titled ‘Reforming Energy Subsidies – Initial Lessons from the United Arab Emirates.’ Quoting ‘The Economist,’ which called 31 July 2015 a ‘day of reckoning for fuel prices in the Gulf,’ the Brookings-Masdar Institute study says reforms were incentivised by the significant burden that subsidies put

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on state coffers, estimated at $7bn in 2013 alone for petrol and diesel subsidies. In August 2015, the UAE became the first country in the Arabian Gulf region to remove transport fuel subsidies. the UAE Ministry of Energy, ADNOC, and ENOC have coordinated on revising transport fuel subsidies, by aligning petrol and diesel prices monthly to global price indices and operating costs, according to Fitch Ratings, which predicts that fellow GCC countries could join the UAE in reforming energy subsidies. The prices are announced by the government on the 28th day of each month. While highlighting the fact that the UAE’s subsidy reforms in the power and water sector provide an important market signal, the Brookings-Masdar Institute study emphasises that prices remain low by international standards and, therefore, must be complemented by broader demand-side management strategies to significantly curtail consumption, particularly during times of peak demand. Nonetheless, the study welcomes the current “visible” initiatives undertaken in the UAE as an effort to move toward cost reflective pricing for power, water and fuel in the GCC. Another joint study by Masdar Institute and Finnish Think Tank Sitra highlighted 17 solutions to cut global emissions by onequarter. The report shows that the aggregate annual cost of deploying all the 17 solutions globally would be, at maximum, in the range of $94bn a year in 2030, yet could even provide net savings of up to $171bn per year. The grid-connected photovoltaics-grid

“We are the first generation with an opportunity to end poverty, but we are the last generation with a chance to combat climate change. Clean energy is the key to both of these tests. Sustainable energy is the thread that connects economic growth, social equity and our efforts to combat climate change” hE BAN KI-MooN, SECRETARy- gENERAL, UNITED NATIoNS

February 2016

(PV) case study within the report reaffirmed previous studies, such as the International Renewable Energy Agency’s (IRENA) REMap 2030 work, showing the potential for solar energy to be a game changer in saving domestic gas and oil use for potentially more lucrative uses in the Middle East and globally. Water-Food-Energy Nexus Joint studies apart, the exhibition also featured seminars and sessions organised by key exhibitors. At a panel session titled ‘WaterFood-Energy Nexus: Key Lessons for the UAE?,’ hosted by Embassy of the Netherlands and moderated by Dyala Sabbagh, Partner & COO, Gulf Intelligence, regional experts shared their perspectives and opinions on the implications of acute water-energy-food nexus in the region and the UAE in particular. Henk Ovink - Special Envoy for International Water Affairs, Kingdom of The Netherlands pointed out the water that is wasted in energy production globally is around 40%. “The connection between a scarce resource and too much waste is a clear business case to move ahead,” he noted. Responding to Sabbagh’s question on whether water tariffs in Abu Dhabi have made a dent in the consumption patterns, Mohammad Al-Hajjiri - Head of Water Section, Planning and Studies Directorate, ADWEC said the tariff has influenced the growth rate of consumption. “Between 2014 and 2015, this was just 1%, whereas between 2001 and through to 2014, we had 22% consumption growth. So now we’re moving, there is a growth reduction and maybe we’ll reach zero growth next year and maybe it will start decreasing after that,” he said. Hosted by Masdar, ADSW 2016 was structured around four key pillars: policy, leadership, business and awareness and academic research. It brought together thought leaders, policy makers and investors to address the challenges and opportunities of renewable energy and sustainable development through policy dialogue and action. “With the demand for energy expected to increase by more than one-third over the next two decades, it is becoming essential that we diversify our resource pool to create a more sustainable model for energy security,” said Maria-Jose Nadeau, Chair of the World Energy Council. “Ensuring access to affordable, reliable, sustainable, and modern energy for all is among the 17 Sustainable Development Goals for 2030 put forward by the UN, and renewables will play an integral role in making this happen.”

EvENT REPoRT

MIDDLE EAST ELECTRICITy 2016

Exceeding expectations

In an interview with Infrastructure Middle East, Anita Mathews, Director of Informa Energy Group explains how the largest power exhibition in the world continues to set new benchmarks year after year What can we expect from 41st edition of Middle East Electricity (MEE)? In terms of innovation, Middle East Electricity 2016 will see a number of new launches and record-breaking milestones this year. [The event will be held from March 1-3, 2016 at the Dubai World Trade Centre – editor’s note] For the 41st edition, in the interests of adding more value to the show, we are proud to announce the inaugural ‘Power Congress’, a Ministerial conference including keynote addresses from the UAE Minister of Energy and Egyptian Minister of Electricity and Renewable Energy. Keynote addresses will be delivered by HE Eng. Suhail Mohamed Faraj Al Mazrouei - Minister of Energy, UAE and HE Dr Mohamed Shaker El-Markabi, Minister of Electricity and Renewable Energy, Egypt. The series of presentations will mostly cover energy development and management in the Middle East, and how regional governments are redefining what is possible in urban development and what support is planned for greenfield cities such as the Expo 2020 site and numerous new residential and business communities. MEE 2016 is also hosted by the Ministry of Energy, UAE this year and all of our knowledge platform offerings, be it the conferences, technical seminar or workshops are CPD accredited. Even though the 2016 edition of the event witnessed an incredible 81% of repeat business, we have over 300 new-to-the-show companies this year. The event has also posted a growth of 10% year on year, both in terms of net exhibition area and exhibitor numbers. Could you also share some numbers regarding expected visitors, exhibitors, floor space? We are getting into a practice of consistently breaking our own records from one year to the next. Today, we are very proud to say that MEE is the world’s largest power event, with the potential to become even bigger as we move

allows visitors the chance to learn about the latest British Fire Standards for electrical cables to prevent and contain fires. The sessions will be held in a 40ft container which has been converted into a modern mobile classroom.

Anita Mathews

towards 2020. The 2016 edition of MEE will have over 1,500 exhibitors from 62 countries. We have 24 government supported country pavilions from across the Europe, Asia, Americas and Africa, and are expected close to 22,000 unique visitors to the event and total attendance across the three days is to reach over 60,000. How are you helping your exhibitors and visitors get more value out of MEE? This year, following feedback from all our stakeholders, we have employed a number of new initiatives to improve the visitor experience. We appreciate that professionals within this industry have tight deadlines so to ensure visitors have the most productive and efficient visit to the show we have developed the new ‘Middle East Electricity’ app which is available for download from the App Store and Google Play from 7th February 2016. This will allow visitors to select exhibitors they want to meet based on the products the exhibitor offers, and then navigate to their stand using our interactive map. Also, Dubai Civil Defence and Ducab will re-launch their educational roadshow at MEE 2016 which

How has Solar Middle East shaped up since inception? Solar has been a very popular attraction since its inception and has been steadily growing. In 2016, we have seen a record 45% growth on the solar content. The exhibition, the conference, workshop and technical seminars are all well attended across the three days of the show. One of the key areas that we are developing at our events, especially on Solar Middle East, are the knowledge platforms - we have a series of conferences, workshops and technical seminars that will be running alongside the exhibition that are free to attend. These are all CPD accredited to ensure the attendees are able to get credits that could help them with their professional development. Solar Middle East 2016 will also host the third edition of Future Generation – a competition for undergraduate engineering students. Engineering students from universities across the UAE will exhibit their innovative solutions for alternative energy, energy efficiency and energy conservation. Visitors to Middle East Electricity and Solar Middle East 2016 can speak to the students about their concepts and ultimately vote for their favourite. This year, for the first time, the winning project will announced during the official Middle East Electricity Awards ceremony. What do you see as being the most important or the most relevant trends in the electrical industry? Are these trends represented adequately at MEE? Energy management seems to play a vital role that of course ties in with energy efficiency. We also see an emergence of the renewable sector as a bigger player and many of the industry leaders are now focusing on hybrid solutions. February 2016

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LEADERShIP

Strong synergies Franco Restelli, President, EMEA Region - Process Automation, Schneider Electric speaks to Infrastructure Middle East on the low oil prices, automation trends and integration of Invensys into Schneider Electric What do you make of current low price environment in the oil and gas industry? It is tough to make a forecast. The way I see it, the excess of supply would force the price of oil to stay where it is now. With Iran coming into the market, supply can only increase. There is a lot of focus on cost control on the part of oil and gas companies because they are not as rich as they were planning to be. I feel that we are not going to see a recovery in 2016. Until demand picks up or the Chinese economy picks up, it’s hard to see significant improvements. Some of the National Oil Companies (NOC) are facing tremendous challenges because they are funding the national budgets. The impact is not so much on the sector itself than on the country’s population and the investments directed towards their welfare. The UAE has removed transport fuel subsidies leveraging on the fact that oil price is down. But in Nigeria and Kazakhstan, the drop in oil and gas prices is creating big problems. But they are still investing in optimisation and rationalisation. Oil companies have to keep spending even more now because they don’t want to lose market share. Lower revenues means they need to be a lot more efficient. So from an automation and advanced applications point of view, there should be a market for us - less green field, more efficiency. The effect that I see is more in the service business. While the spotlight was on capital expenditure, customers are under pressure to reduce their operational costs as well. One cannot ignore US shale oil and gas exports either. The oil prices today is making these investments not so attractive at the moment but the size of the investments -$8m-$10m – required for these wells mean as soon as the market recovers a bit, companies would be able to restart drilling quickly. For traditional activity, you have to make big investments. The market situation

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is not quite ideal where automation companies are concerned. However, outside the sector, certain industries like food and beverage are expected to do well. In the Middle East and Africa region, cheap primary energy and a devalued Euro has created a situation for other industries like food processing to grow. I don’t see it at the moment but it should happen.

“Some of the National Oil Companies (NOC) are facing tremendous challenges because they are funding the country. The impact is not so much on the sector itself than on the country’s population and the investments directed towards their welfare” FRANCo RESTELLI, PRESIDENT, EMEA REgIoN - PRoCESS AUToMATIoN, SChNEIDER ELECTRIC

February 2016

What are the key trends in industrial automation and how is Schneider Electric best placed to serve these trends? I believe today the real challenge is not so much about making data available; probably, we have excess availability of data; what we, as a company, is focussed on is simplification; in other words, making it easy for the end user to get the data they really need while providing a smart way to manage what is just a distraction for the operator and the general manager. Apart from solutions that are linked to pure computerised data acquisition, we are also able to collect all other data that are not directly received by the system. We are taking to partners like Cisco to create the overall layer of infrastructure. We have discussions with enterprise software majors like IBM and Accenture because they are looking topdown at the same problem that we are looking down-up. The focus is very much on simplification and making sure people get few but relevant data instead of vast amounts of data. The other big trend is the cloud. Schneider Electric uses the cloud for intelligent weather forecasting, building automation and management of big data centres. Our contribution is bringing data from the plant. We also do engineering in the cloud; for example, we can develop a system completely in the cloud having people from Germany, the Middle East and Singapore working together on the same project.

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Do your industrial automation customers trust the cloud enough to put their data in it? Are they convinced of its benefits? At the moment, use of cloud is a more on the internal side so it doesn’t impact the customer directly. They only experience the benefits. Today, one of the big challenges is that competencies in this environment are not widely available. So you need to have centres of competence around the world and the cloud permits you to use these people without moving them - this is efficiency. As to process industry customers using the cloud, they have reservations when it comes to and gas control systems because there are cyber security issues. The idea that ‘I don’t want my data to be available to others even if it is extremely secure’ is strong, so there is reluctance about moving to the cloud. Of course, we are focussed on cyber security as well. All our PLCs, for example, are certified for cyber security. Our most recent PLC, the M580 is fully cyber secure certified. We also provide services for cyber security. When we speak about integrated production or data, we use the cloud with customers. We have a case where a big mining company is managing the production of 15 different sites and balancing the production globally based on demand on the cloud. Customers see an advantage in the cloud more on the ERP level than on the control side. There are two mentalities – one is about moving more decision capability down to the field to the instrument itself, and close to where the data is. The other one is to store everything on the cloud and manage from there. The tendency of the market is towards the former. We are managing both - for example, if you are talking about SCADA, the possibility of using the cloud is much higher; if you are talking about managing a refinery or an oil platform, which is very local. How far has the integration of Invensys into Schneider Electric progressed? Invensys brought in offerings that Schneider Electric didn’t have in the automation and software spaces. We have been very complementary to their strategy on the energy efficiency side and automation side. From product set up and redesign standpoint too, we are a good fit. There are some areas where we have an excess of offerings like the SCADA space, for example,

“The acquisition and integration of Invensys into Schneider Electric has made us more significant to certain customers and Engineering, Procurement, Construction (EPC) contractors. We have a better relationship because we rank as a top partner” FRANCo RESTELLI, PRESIDENT, EMEA REgIoN - PRoCESS AUToMATIoN, SChNEIDER ELECTRIC but we are rationalising that pretty well. From the point of view of customer leverage, I believe there is a huge value. Invensys brings account management, attention to mega projects and project knowledge to the company. The good thing is that we can play at the same level of the giants. We can leverage on a far wider portfolio, and combine the electrical offering with the automation offering like an ABB or a Siemens. In some ways, we have displaced some of our traditional competitors while gaining some new ones. From the overall strategy, it is no so different from before in the automation space but surely it is permitting us to play a wider game. In one case, we started with the automation piece and ended providing a significant portion of the electric, raising the deal size to $60m from $30m. From the customer point of view, it is one supplier giving them a far bigger package. The acquisition and integration of Invensys into Schneider Electric has made us more significant to certain customers and Engineering, Procurement, Construction (EPC) contractors. We have a better relationship with them because we rank as a top partner. When I sit with them today as Schneider Electric, I represent a far bigger piece of activity for them than what we were before. What about product development and R&D? It is a lot better. One of the challenges we had when we were 10 times smaller – $2-$3bn

instead of $26bn – was the limitation in terms of what we could invest. Even if were already investing between 8-10% of our turnover in R&D, it wasn’t enough to be ahead of the competition. For example, Foxboro and Triconex were the leaders but being small meant it was proving difficult to maintain the position. With Schneider, we have more money to invest. We can share some of the investments with other divisions and rationalise the way we spend money. This is working a lot better and you see the results. For example, we accelerated the launch of Triconex safety system, which has been completely redesigned with a smaller footprint and better performance. The same goes for Foxboro Evo.

To what extent are Schneider Electric and Invensys products integrated with each other? Schneider always had this idea of putting everything on the same platform. Digitisation is one of the five focussed initiatives driving the new company programme [the remaining four being growth, innovation, simplification and employee development]. We want to have a digitised company which is not only connected internally but also connected with our end users and partners. If you take any product in Schneider Electric, it has to be connectable internally and to the end user. This is a mission that preceded the acquisition and also fits in with our idea of being an open platform for the industry. The discussion now is to bring everything to the same platform, and this not so complex. For example, Wonderware was already a super open platform interfacing all the PLCs of the world including the ones from Schneider Electric. The important thing value is to find ways to generate added value from this integration. If I can put together energy management and real-time data coming from the process, I can give my customer a better vision of their overall production, and a better vision of how to manage energy and production in a smarter way. This is an area where we are working now. The strategy on the brands is simple – we maintain the brand names of our main products. So there is a Schneider Electric umbrella with the Life is On message, and one mission – to influence the sustainability and energy management of the world. As process automation, we are part of this strategy.

February 2016

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TEChNoLogy AT woRK

Deep innovations Debarati Sen, Global Business Director, Oil and Gas Solutions, 3M speaks to Infrastructure Middle East on helping the oil and gas industry meet its toughest challenges, and 3M’s investment agenda for the Middle East going forward Could you tell us about 3M’s oil and gas business? 3M has 10,000 different products that touch the oil and gas industry in several different ways. Our key product platforms help extend the life of critical assets, improve productivity and recovery, and protect people and the environment. From solutions set perspective, they connect into one of the three value platforms – upstream, midstream and downstream. Pipe coatings are one of our top product ranges in the region thanks to growing investments in pipelines. Investments in gas are going up as the region tries to secure fuel for their power plants. We also participate in additives that go in for lightweight drilling. 3M’s gas well stimulation product range has immense potential in countries with sandstone reservoirs. Making existing wells more productive is critical for the oil companies in this region too. Our filters are the media of choice for a variety of fluids used in completion and enhanced oil recovery operations. We are a clear leader in health and safety in oil and gas. However, health and safety is not just about protecting the person; it is also about protecting the site for which we have a strong security business. The number one reason for fatalities in our industry is vehicular accidents and fall. While people intuitively think fire, it comes in the fourth or fifth position. We recently acquired a company called Capital Safety, a leading global provider of fall protection equipment. 3M continues to make investments in the right product lines through acquisitions and organic innovation. In this part of the world, we are making significant investments. Early this year, 3M opened two new customer experience centres in the UAE and Saudi Arabia. In many parts of the world, the discussion is about survival; here, it is about efficiency, and whatever shape recovery takes, this part of the world will come out of it more efficient.

INFRASTRUCTURE MIDDLE EAST

The focus on technology and efficiency we see now in this region didn’t exist two years ago. We expect to see very different efficiency numbers coming out of this downturn. Already, the extraction costs are among the lowest in Saudi Arabia and the UAE, and will only get better. We are keen to partner with the companies and operators, and figure out how to provide them better efficiency in their operations.

“3M continues to make investments in the right product lines through acquisitions and organic innovation. In this part of the world, we are making significant investments. Early this year, 3M opened two new customer experience centres in the UAE and Saudi Arabia” DEBARATI SEN, gLoBAL BUSINESS DIRECToR, oIL AND gAS SoLUTIoNS, 3M

February 2016

How does 3M as a company address region-specific challenges? We start developing a region with a sales and marketing presence. Here, we are on the cusp of changing that to application development and after that, Research & Development (R&D). Working with universities is the first step in carrying out application development. Currently, we have sponsored programmes running in KAUST in Saudi Arabia. We are also looking at Dhahran Techno Valley. Our head of technology for this region, to whom the application development team reports to, is based in the UAE. We are interested in making R&D investments in the region. When we come here, we see a region that is evolving and emerging in a different way. It is really transforming and we want our presence to mirror that. The five critical markets for 3M globally are energy and infrastructure, oil & gas, automotive, healthcare and electronics. Depending on which industry is essential to that particular geography, we invest in that. When you talk about specific industry challenges, oil and gas is a diversified ecosystem with a long value chain from geophysics all the way to retail. Different product solutions go into each of these areas. We tell our customers – share with us your toughest problems, the ones that are keeping you up at night and we will see if we can solve them. For example, for sour gas, we are developing coatings that will completely change

oIL & gAS

the temperature resistance and the chemical resistance of pipes. The better we know how to treat and process sour gas, greater is the availability of petrochemicals for humanity. Take our gas well stimulation product range. A lot of gas stays in the reservoirs because of condensate banking or water building up at the well works. Our coatings ensure that the water is held away and the gas flows out. To make sour gas or oil sweet, the sulphur has to be removed through amine sweetening. We make the filters that make the amines work better and stay clean for a long time. What is the role of customer experience centres in driving the business forward? Large companies bring in engineers from different facets of the organisation – drilling, production, filtration and water treatment, a wide breadth of people – to our customer experience centres where we show them what we know. Since they come from the industry, they tend to see other applications that we don’t see, and it ends up being a collaboration. Having an innovation centre where the customer is located helps with our innovation because we can collaborate with them and use our combined knowledge to come up with a better solution. We have experts all over the world, and all our subsidiaries have access to those people. What we also do is invest in local application development talent. Thus, 3M will have an application development engineer focussed on oil and gas here; similarly, we can have application development engineers focussed on healthcare, automotive as the local situation demands. We have a team of application development engineers in the top 10 countries that produce 80% of the world’s oil and gas. How do you work the value chain in oil and gas sector? Since oil and gas is a contracted environment, there are several tier 1, tier 2 and tier 3 service and product providers, and we work through the value chain. Typically, the specifications are led by the operator. We work with them to inform how 3M products are better and give better efficiency or better performance, chemical resistance and temperature resistance. We will work with the pipe coater to make sure they know how to apply the coating. Thus, they get process efficiency as well as product performance. Our Glass Bubbles additives is another example. We work with the operators so that they know what kind of light

Shale gas drilling 3M’s experience in the shale gas industry in North America can be utilised in the region

weight cement they are getting to help design it appropriately into their well. We try to ensure that their cement systems are being designed with 3M products we think are best for their applications. Given the current low price scenario in the oil and gas sector, services providers and operators becoming cost-sensitive. Does that affect 3M? Cost is being discussed much more. The industry went through an almost 150% increase in capital costs over the last 10 years which meant rig rates went up, by and large, 150%. However, oil prices didn’t go up 150%. The industry is now looking at the speed of contraction and the compressible areas of cost. 3M is a hard product producer and a lot of our costs are not compressible. But a service provider’s costs may be compressible, rig rates may be compressible. The industry is looking very specifically at where they can compress. Yes, we are being asked the cost question and yes, we are trying to do our best to meet those cost expectations but cannot be one expectation for everything. Elasticities differ based on the manufacturing process, the cost structure and what can be compressed. Overall, the industry is being very smart right now. It is not unusual as we have been through many cycles. When you are in a down cycle, you should look at your contracts and renegotiate where possible. I heard a local operator (at WFES) explain how he managed to reduce costs by 12-15% by renegotiating contracts. We are not necessarily the most compressible because we don’t have service revenue. But we are doing our best to drive efficiency in our

operations to meet the industry’s needs. Going forward, what kind of investments will 3M be making in the region? Apart from customer experience centres and applications development, we are investing in local manufacturing in Saudi Arabia. This makes a lot of sense, especially in terms of access to raw materials and incentives from the government. We will continue to invest in talent and local capabilities. We want to ensure that we have the same calibre of talent in front of our customers here. In the UAE, we are talking to Petroleum Institute in Abu Dhabi to expand the collaboration. Investment in R&D is definitely on our agenda. We also hope to participate in regulatory development. We can see that in health and safety where regulatory development is aiming for world class standards. We expect that to happen in multiple areas in this part of the world. We aren’t trying to influence regulation; rather, we want to be a conduit of relevant regulatory information. Do you see your experience in unconventional oil and gas in North America being useful to the Middle East? Unconventional is definitely of interest in this area. In some cases, shale is economically recoverable. We will let the region get to it but it is all about what is the break-even, and the best cost they can get on a per barrel basis. Given how cheap the extraction costs are right now for conventional oil and gas, the focus is on increasing efficiency for existing wells.

February 2016

INFRASTRUCTURE MIDDLE EAST

TEChNoLogy

BIM

Playing catch up At the fourth edition of ‘Autodesk University Extension Dubai’, Eric Le Vacon, Technical & Innovation Director, Egis International; Ahmed Benamer, Design Director, Egis International, and Naji Atallah, Head of AEC & Manufacturing - Autodesk ME&T sat down with Infrastructure Middle East to discuss why Building Information Modelling (BIM) for Infrastructure is different from BIM for buildings. Excerpts from the discussion… Could you tell us about EGIS’ BIM strategy? How challenging is it to match client expectations regarding BIM? Eric Le Vacon: In 2012, Egis started ‘BIM by EGIS’ programme to make it our primary approach for the execution of projects. We wanted to use our experience to raise the bar and make some innovations. Internally, we have got great skills, teams and experts but we are involved externally as well, through working groups, research programmes and standardisation initiatives with industry stakeholders including contractors, owners, competitors and of course, Autodesk and others. It is important to work together. If everybody isn’t driving in the same direction, the industry

INFRASTRUCTURE MIDDLE EAST

won’t move forward. It’s the same for the clients. BIM isn’t black or white; it’s not we do BIM/ we don’t do BIM because we all do a part of BIM. The challenge is in defining what we want to achieve through BIM. We can use BIM for lots of things but in real life, we need to have use cases. We have our own use cases because it is our business. However, the client or owners need to have theirs too. Of course, if our use cases prove useful for the client, it’s a win-win relationship. How is BIM for buildings different from BIM for infrastructure? Le Vacon: There are significant differences. In buildings, there are many elements that are manufactured. You have standardised, for

February 2016

example, doors and roofs but in the case of infrastructure, the scale isn’t the same. With infrastructure, there is a geographical approach that you don’t have in a building. Very few elements are manufactured or standardised and while elements are precast, every infrastructure, including its elements, is a prototype. What we need is a (Autodesk) Revit for infrastructure; 3D Civil is an excellent tool for conception but that is not a synthesis tool. You need to have other tools. To make noise analysis, for example, you need some information from infrastructure. You need traffic which you don’t have in 3D Civil. You need all the environmental infrastructure which is not in the numerical topographical

TEChNoLogy

model; you need information on all the utilities underground. All these are GIS information. I think BIM for infrastructure is late compared to buildings.

as a major benefit. It is important to keep in mind that the benefit depends on where you are looking for it and what you are trying to achieve out of the implementation.

If BIM is an investment, how do you measure the benefits? Le Vacon: Measuring productivity is tough in our business. It is easier to measure how long it takes to build a car than to make a design or deliver a drawing. You can’t say: “I have 1,000 drawings to deliver, and one drawing takes one day, so will take me 1009 days to deliver” because it depends on the type of information you have inside, the uncertainties, the relationship of the difficulties. Therefore, it is very difficult to say that BIM will give 10% or 20% increase in productivity. Having an objective approach on this topic is difficult. Ahmed Benamer: Clients and contractors benefit more from BIM. When you develop a BIM model in infrastructure, you build everything in it, like for example, all the existing underground utilities. This model goes to the contractor and the supervision team. The contractor knows where he is going to dig, and what he will find before and after digging, which is helpful and saves money and time for the client. They will have less interruption during construction because the contractor has all the information in hand before starting work. But this also opens up another question. Sometimes clients say they don’t have to pay for BIM because savings are on the design side. The clients aren’t convinced because they don’t see the benefits they are getting from BIM. They feel they are entitled to a cheaper project.

What would be your BIM wish list? Le Vacon: For us, BIM is a real opportunity to set standardised tools and methods. Like every global group, EGIS has subsidiaries and have acquired companies with their histories and processes. We had to confront the problem of working together because contexts are different, infrastructure projects are different, and often the tools are different. With BIM implementation, we have the opportunity to set the best tools for everybody. We feel InfraWorks 360 could be a very powerful tool for early stage conceptual design. We want to collaborate on this because we think it is the future.

How well equipped is the client to derive benefits from BIM? Naji Atallah: If BIM is done for the sake of doing BIM; it doesn’t really work. There has to be an identified problem that someone is trying to solve. It can be an objective like, I want to reduce wastage on site; minimise the clashes on site or give my construction team early access to data. But there should be a starting point or challenge that the company is trying to solve. If it is the client, it is certainly facility management because operating a built asset over 20 years is three times the cost of building that asset. If it is a consultant, it might be productivity in terms of man hours; if it is the contractor, it is reducing the risk or site rework. The RoI is difficult to quantify because it spreads across the supply chain. Third party literature and studies cite waste reduction

Le Vacon: We can deliver what we are paid for but we don’t want to be responsible for something we haven’t designed. So it would be nice to be able to know who is responsible for which data, who has the right to see this data and collaborate on this data. That’s a huge programme because it changes all the relationships including contractual relationships between the different stakeholders. These challenges have to be solved in order to go fully digital at every level. Naji Atallah: It becomes a matter of whose scope it is? Ultimately, the approach needs to be: it is our scope and this is how we collaborate to get this scope done. This is a big shift that one entity alone cannot achieve.

What about a common language? Le Vacon: The interface can be in any language but the parameters and everything else is in English. We have decided on English as the standard because it improves interoperability between our teams. We need to have local teams and permanently established tool all over the world at the best place with the best skills, capable of adapting to any culture, any requirement, and any specifications. We are a global company, not a French company exporting abroad. Benamer: We have in France and around the world skilled and established teams. When we come into a county and win a project, we set up a project management team to capture the culture so that we can be close to and understand the client, and get all the requirements that are standard. People working in France were brought to work in Qatar frequently to understand the culture here. Has the industry reached a stage where everything is digitalised? Le Vacon: Contractually, there aren’t many clients who require fully digital deliverables. The first step is to deliver the documents or the drawings based on the model. You make the BIM model and extract from the model the drawings, more or less automatically; the next step is to deliver the model with all the information inside. Atallah: Part of it is also the way the contracts are set up these days where if you share the complete model, you are sharing part of your IP. The question then is: where does the liability start and end?

Le Vacon: We have signed an enterprise business agreement with Autodesk, and it not only about providing the tool but also about providing services. When we started by BIM by Egis, we had some experience and skills but we aren’t experts on everything. It was very useful to mobilise some Autodesk resources. While we chose the tools, we wanted to set some parameters and processes to these tools. The best way is to get some help from Autodesk to set the right parameters to see what is possible and eventually, be able to get feedback from the development teams to adapt for the next version. We want to be interactive with Autodesk on the products as well. Atallah: It is not a vendor-user relationship anymore; they know the industry and we want to have that knowledge; they have input to the future of our product because they want a product which responds to their needs. They have access to our product management; they also have access to Autodesk Consulting and Priority support. Egis is one of our top tier clients, and the relationship is definitely beyond the supply of products; it is really strategic. The part where we consult them on BIM processes and standards is software agnostic. The know-how they gather from us applies to our products and other products in the market. We are there to provide information about the process and standards. We break this relationship into three parts – first, there is the software component, which is still our broadest offering to the market. We are very niche with the companies that we deal with in terms of consulting; then there is support, premium support or enterprise priority support for our products. We are always helping them optimise their network resources and optimise the value they get out of their tools.

February 2016

INFRASTRUCTURE MIDDLE EAST

TRANSPoRT

SIgNALLINg

The core of the railway system

In an interview with Infrastructure Middle East, Thierry Bonnefous, Signalling Managing Director for Middle East & Africa region, Alstom Group, explains why signalling deserves the utmost attention while designing railway transportation systems

What has been the pace of technological change when it comes to signalling systems? From basic mechanical systems to electromechanical, electronics and computer-based systems, signalling systems have gone through several technological changes. But these changes have taken several years, or even decades, to become established as state-of-the-art. For example, in train control systems, the main stages of evolution were Train Stop, Speed Code, Distance-To-Go and ultimately Moving Block systems, with the evolutions taking place, on average, every 15 years. It is to be noted that due to the extent and interconnection of rail networks, the technological evolutions have to support an acceptable migration regime during which operations are maintained. In signalling, there isnâ&#x20AC;&#x2122;t a defined standard for all applications. ERTMS is generally regarded as the global standard for mainline application; it is defined and maintained by European Railways Agency (ERA) with the support of major stakeholders (infrastructure managers, operators and industry), and ensures an overall consistency between solutions from different suppliers. This standard is quite stable; for example, the first commercial operation of ERTMS started 10 years ago on the Roma-Napoli high speed line. With metro applications, due to different needs (very short headway, high performance), each industrial supplier has defined its own optimised solution based on CBTC technology, which is described in IEEE 1474.1 standard. For freight, if they are not using ERTMS, it is mostly a proprietary solution fitting specific needs. If there are different standards, is there a need for them to communicate with each other or be interoperable? In some specific cases, mixing different type of applications, you may have a need for interoperability between the different signalling standards. It is the case for some suburban applications where mainlines routes

INFRASTRUCTURE MIDDLE EAST

a CBTC system called URBALIS in order to deliver best performances to passengers, operators and users. As other CBTC systems, it is a proprietary solution. Alstom URBALIS CBTC system is now in service on more than 30 metro lines, with more than 60 metro projects worldwide (Singapore, Panama, Lausanne, Toronto and Mexico to name a few)

are going through metro network (or vice versa). Those applications are not common and most of the time, have specific solutions. There is a trend to extend the features of each standard to limit multiple systems deployed in parallel. For metro lines, other than one or two exceptions, there is no clear demonstration that interoperability is cost-efficient. What is Alstomâ&#x20AC;&#x2122;s approach when it comes to signalling? If a standard is available and brings significant benefits, Alstom will adopt it. This was the case with the ERTMS standard for mainline applications where Alstom was a pioneer and involved in the early stages of its definition. We have developed our ATLAS family of signalling solutions, compliant with ERTMS standard with references that are in operation for more than 10 years all over the world. Adoption of the standard does not preclude us from adopting the latest technologies available to provide stability and compatibility from the standard with performances from the underlying technology, where it brings valuable benefits to our customers. For metro applications, Alstom has developed

How is the signalling system procured? What should railway owners or operators keep in mind when deciding on signalling technology? According to the context of the railway project (metro v/s mainlines, new lines v/s revamping, planning synchronisationâ&#x20AC;Ś), there are a lot of possible configurations. The signalling system can be procured as a standalone up to part of an overall turnkey package (including civil works, track, rolling stock, electrification, power supply and telecom) Several key criteria may have a strong impact on the type of signalling solution to be provided, such as traffic capacity [trains per hour (tph) or people per hour per direction (pphpd)], operational needs (driverless, degraded modes), interoperability constraints, and many others. The main item to keep in mind when deciding on signalling technology is to be able to define its overall needs and performances without imposing an overspecified architecture or solution that may not fit the optimum solution available on the market. For instance, a common mistake that must be avoided is to impose a traditional architecture that appears robust but is actually less reliable than state-of-the-art technology. What is going to be the next big leap for signalling technology? Digitalisation is a major trend with a significant impact on signalling in terms of better access and treatment of information (big data), connectivity, additional services and higher automation. Alstom is already working to stay a step ahead of this trend.

February 2016

(2505)

IN PARTNERSHIP WITH

SUPPORTING GOVERNMENT PARTNERS

10th Annual conference and exhibition

8 – 9 March 2016 Dubai International Convention and Exhibition Centre, UAE

THE LARGEST RAIL EXPO IN THE MIDDLE EAST AND NORTH AFRICA Middle East Rail is the region’s longest running and most successful railways event. For almost a decade we have helped shape the regional rail market through sharing knowledge, educating the market and facilitating influential meetings. As Middle East Rail enters its 10th year, it now welcomes over 9000 attendees and takes up over 18,000 sqm. It has grown to become Middle East and North Africa’s most important and best supported railways conference and exhibition. Don’t miss your chance to access over $352bn of rail projects.

Meet 330 exhibitors including: A RAWIE AATi Ltd ABB AECOM Aferpi AFT Trenchers Ltd Airtec International Ltd Al Mobty AM Signalling Design Ltd Amberg Technologies AG Ansaldo STS Aquafrisch Arabian Railway Company Arcelor Mittal Ares Corporation ASC GmbH Autodesk Bahna Rail Services Bayka BBM Beena Vision Systems Beijing Yanhongda Railway Equipment Co Ltd Bentley Systems International Ltd Bertolotti Spa Bochumer Verein Verkehrstechnik Gmbh Bombardier Boretech Industries/ Chemix Bradken CAF

Captron Electronic Gmbh CDP Bharat Forge GmbH CH2M Hill Chengdu Lead Science & Technology Co., Ltd China Innovation Exhibitions Group CNL Software Ltd Comply Serve CRRC Dahua Technology DITECFER DNV - GL Dolphin Group Easy World Technology Edilon )( Sedra/Panel/ Al Mobty Elektro- Thermit GmbH&Co.KG Eltek Encardio Rite Geosystems L.L.C E-Solutions Maximo Ethiad Rail Eversheds Legal Services Limited Fiberweb Geosynthetics Ltd (TERRAM) FLIR Commerical Systems Getzner Giugiaro Design Goldschmidt Thermit GmbH GR Technologies Greenbrier Greenwood Engineering Grindrod Locomotives Hanover Displays Ltd Harsco Rail Hawker Siddely

Switchgear Ltd Herrenknecht HIK Vision HOK Holophane Europe Ltd Idom IEM Corporation Infrastructure Middle East Intamin Transportation Ltd Intec Export Intelligence Ltd PAVILION Irmie Impianti Italcertifer SpA Jewers Doors Ltd JR Dynamics Ltd Kapsch CarrierCom AG Kardemir A.S. Knorr-Bremse Kraiburg Relastic Laborex Laird Last Mile Consortia Ltd Linsinger Loko Trans sro Longs Steel UK Ltd (Tata Steel) Loram LPA Group Plc Lucchini RS MAFEX MAPNA Group Mechan Ltd MG - Valdunes Micro-Mesh Engineering Ltd Ministry of Public Works/FTA Mors Smitt Multitel NEM Solutions Nencki

Network Rail Consulting Nordco Olab srl Oman Rail OTN Systems NV Oxplus BV Ozkan Demir Celik AS PACADAR Pandrol Track Systems Panel Parsons Brinckerhoff/ WSP PATENTES TALGO S.L Pauley Interactive Ltd Petards Group Plc Phoenix Nailors Abrasives Ltd Phooltas Harsco Rail Solution Plarad Plasseur & Theurer Plastiforms Progress Rail/Elektro Motive Diesel Prysmian Group PSV Wipers Ltd PTV Group Radio Frequency Systems Rail Measurement Ltd Rail Pardaz Systems Co. Rail Personnel Railway Advanced Maintenance Ricardo Rail Ltd Riyadh Cranes Robel Bahnbaumaschinen Germany GmbH Roland Berger Strategy Consultants Salcef Schwihag AG Sener

Serco Siemens Spectrum Strail Suyu Rail Technical Review Tecnatom Teknoware Oy Teleste Teltronic Tensar International Ltd Terrafirma/Oriental Sharra Thales Global Services The Bionic Eye Ltd The Business Year The India Thermit Corporation Topometria Track Tec S.A Trackmobile LLC Trackside Intelligence Pty Ltd Trans Data Management Ltd Transport Systems Solutions TRS Staffing Solutions Ltd TYPSA Unipart Rail Ltd Unistrut Ltd Visul Systems Ltd Voestalpine VAE (GmbH) Vossloh Wabtec Corporation WBN Waggonbau Niesky GmbH Westermo WSP X Rail Solutions York EMC Services Ltd Zephir SpA Zetica Ltd

2/10/16 9:09 AM

CoNSTRUCTIoN

PRojECT MANAgEMENT

Express upgrade

An insight into the project management strategy delivering Kuwait’s RA/167 strategic infrastructure scheme

By Eng. Ahmed Al Hassan, Undersecretary of Roads Sector, Ministry of Public Works & Dr John Andrew Faulkner, Project Director, Jamal Abdul Nasser Street Development Project amal Abdul Nasser Street Development Project (RA/167) is a strategic infrastructure scheme undertaken by the Ministry of Public Works of Kuwait as part of the state’s ongoing plans to further enhance the existing infrastructure and transportation network. The plan is to transform the existing Jamal Abdul Nasser Street into an internationally standardised elevated expressway extending for approximately 10 km from the Jahra Gate (Jahra Gate Roundabout - Sheraton) to Grenada area in the western region of Kuwait. The Ministry has employed the Louis BergerPace joint venture to undertake the design and construction supervision of the project. The total construction cost is $810m and the scope includes an elevated viaduct with multilevelled ramps constructed to highway standard. In addition, there will be the upgrading and reconstruction of existing service roads, which will provide additional traffic lanes together

INFRASTRUCTURE MIDDLE EAST

with enhanced new utilities infrastructure. The completed Jamal Abdul Nasser highway will serve as efficient transport infrastructure for the service roads serving the existing vital establishments such as Kuwait University and University of Applied Sciences, Shuweikh Medical Zone, Ministry of Defence and Kuwait Ports Authority. The project is also interconnected with a network of newly developed highways comprising of Jahra Highway, Jaber Causeway and Doha link. This network will serve Kuwait City and the main internationally standardised routes to reach the newly developed projects of Silk City and Mubarak Al-Kabeer Seaport. RA/167 project management Project management can generally be defined as the discipline of organising and managing resources (for example, staffing, materials and equipment) to achieve project completion and meet its proposed objectives within the constraints of ‘Scope, Time and Cost.’ Each of these constraints are variables that cannot

February 2016

be changed without impacting the others. PM also involves planning, monitoring and control of all aspects of the project and the motivation of all those involved in it to achieve the project objectives to the specified performance. The discipline of project management is about providing the tools and techniques that enable the project team of engineers and technicians (not just the project manager) to organise their work to meet these constraints Among the core outlines that provide a further understanding of Project Management include PM life cycle, PM processes, documentations, general plan and subsidiary plans. The PM life cycle PM life cycle is the sequence of phases that define the overall process from the beginning to the end of a project, with a process group in charge of every phase: 1. Initiation phase, with a process group that collects information,

CoNSTRUCTIoN

PROJECT CHARTER AND INITIATION Final Master plan completed

Initate Project Charter

Business Case Defined

Key stakeholders identified

Project Initiation complete

obtain organisational commitment and develop the team. Planning phase, with a process group that established project objectives of ensuring high quality roads and bridges and traffic solution during and after construction by defining scope of works, determining the timing, establishing resource requirements/ availability and cost budget to evaluate, optimise, and create a baseline plan. Execution phase, with a process group that tracks constructional and managerial works in progress and actual costs then distributes information. Monitoring and controlling phase, with a process group that analyses and evaluates the ongoing project and modifies it with realistic data along with reforecasting the schedule as well as recommending necessary actions to then communicate the performance to the project team. Closing phase, which is the handover of the completed project to client or stakeholders. It also documents lessons learned and backs up or archives all project files.

Project charter finalised

Project context and background defined

Criteria for success established

Project delivery methodology finalised

Risk workshop: Issues and risk identified

Conceptiual Level 1 schedule developed

delineating works, value and distribution. A stakeholder’s management plan is set in order to address, and be granted approvals from all the Right-of-Way (ROW) concerned authorities. The plan also includes the residential area owners impacted by the project. Project stakeholders are classified into two main categories: #1: Key players, represented by the employer/owner which is the Ministry of Public works and by Pace/Louis Berger JV, in addition to the joint venture of contractors - Rizzani De Eccher, Obrascon

Conceptiual Level 1 cost estimate developed

Huarte, TREVI and Boodai Construction. #2: Comprises other stakeholders (ROW authorities and establishments plus residential area owners) that require coordination and focus from key players. Key ROW impacted authorities include the Ministries of Health and Communication, in addition to Kuwait Port Authority, Kuwait Petroleum Company and Kuwait University. A stakeholders plan can ensure that their needs are identified and addressed in timely manner. Notifications with proposed construction schedules via multiple platforms are distributed with enough periods prior to works commencement throughout the entire project duration.

Following the preliminary processes of traffic modelling aiming to develop, adopt and finally select the conceptual design alternative – with solutions that would ultimately meet the project’s primary goals with considerations of key aspects such as safety and traffic flow – a project charter is formulated and project initiation completed, with all data and charts February 2016

INFRASTRUCTURE MIDDLE EAST

CONSTRUCTION THE POWER REPORT

approvalsfor onapprovals shop drawings on shop drawings Residential owners Residential require owners further require responses further responses and departments. and departments. The main authorities The main authorities Meetings forMeetings and/ or various and/ other or various correspondences. other correspondences. to their complaints to theirwith complaints immediate withactions. immediate actions. working closely working with the closely project withare: the project are: StakeholdersStakeholders can be identified can be through identified through ConstructionConstruction activities areactivities organisedare within organised within • Ministry of Interior for • Ministry of Interior for a complete and a complete very systematic and veryanalysis systematic analysis their areas sotheir thatareas it minimises so that itimpact minimises impact traffic management traffic management works works of gathered quantitative of gathered quantitative and qualitative and qualitative on their day to onday their life. day Environmental to day life. Environmental • Ministry of Electricity and • Ministry of Electricity and in order to determine in order tothe determine the control takescontrol all the corrective takes all the measures corrective to measuresWater to for associated Water forutilities associated relocation utilities relocation informationinformation various and different various and interests. different This interests. generally This generally minimise noise minimise and impact noiseon and airimpact qualityon inair qualityand in refurbishment and refurbishment works works follows the steps follows described the steps below:described below:the area. Further the area. coordination Further coordination is, however, is, however, • MPW sanitary dept. for sanitary works • MPW sanitary dept. for sanitary works • Step one: Identify all potential • Step one: Identify all potential prepared through prepared Kuwait through Municipality. Kuwait Municipality. • MPW Roads Admin. for • MPW Roads Admin. for project stakeholders project stakeholders and relevantand relevant Coordinators Coordinators address various address authorities various authoritiesstructural and structural road works and road works informationinformation such as theirsuch roles,as their roles, through MPW through Project MPW representatives. Project representatives. • Ministry of Communication • Ministry of Communication departments,departments, interest, knowledge interest,levels, knowledge levels, This includesThis project-concernedincludes project-concerned• Kuwait Municipality for • Kuwait Municipality for expectationsexpectations and influence and levels. influence levels. authorities (PCA) authorities approvals (PCA) onapprovals project on project Right-of-Way Right-of-Way related matters related matters • Step two: Identify the • Step two: Identify the shop drawings, shop provision drawings, and provision inspection and inspection Documentation Documentation of agreements of is agreements essential is essential potential classify impact, themclassify so as them so as of material and of material numerous andother numerous works other works between stakeholders between stakeholders and key players and key players potential impact, to define an strategy. approach strategy. that fall under that their falldifferent under their sectors different sectors through Memorandums through Memorandums of Minutes and of Minutes and to define an approach

Typical submittal Typical submittal codes codes

DD Design DD Drawing Design Drawing AB As-Built AB As-Built OM Operation OM Operation and Maintenance and Maintenance Manual and Manual Trainings and Trainings SD Shop Drawing SD Shop Drawing SK Sketches SK Sketches SC Sub-Contractor SC Sub-Contractor SubmittalSubmittal MS Method MSStatement Method Statement CR Certificates CR Certificates PS Processes/Procedure/Plans PS Processes/Procedure/Plans CN Calculation CN Calculation Notes Notes GT Guarantees GT Guarantees QU Quality related submittals (Quality Plan, Inspection &Test Plan QU Quality related submittals (Quality Plan, Inspection &Test Plan PQ Pre-qualification PQ Pre-qualification RP Report RP ReportHS HSE and HS HSE logistics andrelated logistics submittals related submittals (HSE plan, (HSE Logistics plan, Logistics Plan) Plan) SH Schedules/Program SH Schedules/Program SM Sample SM Sample MT Material/ MT Material/ Supplier Submittal/ Supplier Submittal/ Manufacturer’s Manufacturer’s data data TR Test Report TR Test Report 50

SP Specifications SP Specifications OT Others OT Others

INFRASTRUCTURE 50 INFRASTRUCTURE MIDDLE EASTMIDDLE February EAST2016 February 2016

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Reference 2. document Reference– document A document – A document and finish while and inversely finish while determining inversely determining 2. that can beby referenced a project by a project their deadline their dates deadline for start dates andfor finish. start and finish. that can be referenced participant for participant the purpose for the of providing purpose of providing The end result The ofend thisresult process of this is toprocess determine is to determine guidelinesorfor guidelines performing forwork. performing work. the Longest Path the Longest or Critical Path Path. or Critical RA/167Path. RA/167standards orstandards Planning engineers Planning use engineers the schedule use the to schedule to Request for Information (RFI) is a document (RFI) is a document forecast costforecast and schedule cost and information, schedule information, Request for Information • Step three: Assess how key • Step three: Assess how key information asks for information or clarification or clarification account for potential account for risks potential and they risks areand they are that asks forthat stakeholdersstakeholders are likely to react are likely or to react or on technicalon technical aspects of the project. RFI’s aspects of the project. RFI’s able to identify ableopportunity to identify opportunity and mitigation and mitigation respond in various respond situations. in various situations. can be issuedcan by be all issued stakeholders by all stakeholders in a form in a form measures. They measures. also plan They variables also plan variables questions includes byquestions the initiator by the initiator across a network across ofarelated network activities of related that activities thatthat includesthat Upon creating Upon a stakeholder creating a stakeholder register register by the responder. If an RFI would otherwise would beotherwise impossible bewithout impossible without and responseand response by the responder. If an RFI containing all containing details related all details to therelated identified to the identified has a Cost, Schedule has a Cost, or Scope Schedule impact, or Scope the impact, the the use of based a network schedule. based schedule. stakeholders,stakeholders, the management the management strategy strategy the use of a network must be approved must be byapproved the by the A critical is the sequence path is the of activities sequence of activitiesimplicationsimplications will define the will approaches define the to approaches increase the to increase theA critical path Engineer prior Engineer to proceeding prior towith proceeding any with any that coulda determine project’s minimum a project’s minimum support, andsupport, minimise and negative minimise impact negative impact that could determine work. Contractual work. Contractual issues however issues must however must total duration and completion date. It is and completion date. It is of stakeholders of stakeholders throughout the throughout entire the entire total duration be formally communicated as letters. as letters. generally thegenerally longest continuous the longestpath continuous path be formally communicated project life cycle. project The life engagement cycle. The engagement process process A asubmittal document is issued a document issued of activities where of activities the duration where the of those duration of those A submittal is will entail multiple will entail communications multiple communications by thethat contractor requiresthat peerrequires peer the critical onpath the critical controlpath the control the by the contractor methods formethods each stakeholder, for each stakeholder, along with along withactivities onactivities review and before approved they before they duration entireof project. the entire A delay project. A delay review and approved interpersonal interpersonal skills appliedskills by the applied project by the projectduration of the can be incorporated in a project. in a project. to any activity toon anythe activity critical onpath the critical will path will can be incorporated to manage stakeholder to manage stakeholder expectations.expectations. When submitting Whennew submitting Review new Cycles, Review the Cycles, the delay the Finish delay date theof Finish the project. date of the project. Why to communicate: Why to communicate: To make To make contractor must contractor cloud any must change cloudmade any change made people understand, people understand, involved andinvolved and against the previous against the Review previous Cycle. Review The Cycle. The MANAGING Managing DOCUMENTS documents to foster improvement to foster improvement Required and Required Start and Finish Required must Finish must Pre-construction Pre-construction documents and documents records and recordsRequired Start What to communicate: What to communicate: Quality requirements, Quality requirements, remain as the the1st same Review as theCycle. 1st Review Cycle. include site hand include over site tohand the contractor over to the contractor remain the same quality objectives quality and objectives results and results Response can Response be with one canof bethe with following: one of the following: and kick off Method meetings, Statements, Method Statements, How to communicate: How to communicate: Team briefings, Team briefings, and kick off meetings, - A: Accepted: - A: when Accepted: a submittal whenisa complete submittal is complete Inspection and testing Plans, meetings, notice meetings, boards, notice newsletters, boards, newsletters, Quality Plan,Quality Plan, Inspection and testing Plans, and approved and byapproved the Responder by the Responder Request for Information, Submittals, Submittals, audio-visualaudio-visual and electronic and media electronic and media and Request for Information, - B: Accepted- As B: Accepted Noted: when As Noted: a submittal whenisa submittal is Subcontractors log, Shop Drawings, log, Shop Drawings, optically effective optically management effective management activities activitiesSubcontractors approved to qualifications/comments subject to qualifications/comments Material andMaterial procurement and procurement Submittals Submittals approved subject that the Initiator must address on site must address on site and Authorities and Approval Authorities documents Approval documents that the Initiator PLANNING Planning - C: Revise And - C:Resubmit Revise And (RAR): Resubmit when(RAR): a when a Project 1. Documents Project can Documents be can be Critical PathCritical Methodology Path Methodology (CPM) was (CPM) was 1. submittal requires submittal significant requiresrevision significant andrevision and classified a work as either product a work product crucial within crucial the project withinundertaking the project undertaking in inclassified as either another review another cyclereview for thecycle Responder for the Responder ordocument: a reference document: order to allow order for schedulers to allow fortoschedulers pinpoint to pinpointor a reference to ensure design to ensure intentdesign is being intent met is being met areas withinareas a schedule withinthat a schedule will directly that will directly - D: Rejected-(REJ): D: Rejected when(REJ): a submittal when a submittal Work product Work – A document product – Athat document is a project that is a project affect the most affect critical the most workcritical being performed work being performed isand/or incomplete irrelevant and/or and irrelevant the and the or activityand deliverable will be turned and will be turned is incomplete through determining through determining both the scheduled both the scheduledor activity deliverable Initiator needs to issue a new submittal to issue a new submittal over to the project’s over to the endproject’s user or customer. end user or customer.Initiator needs times that tasks times (activities) that tasksare (activities) set to start are set to start February 2016 February INFRASTRUCTURE 2016 INFRASTRUCTURE MIDDLE EASTMIDDLE 51 EAST 51

CONSTRUCTION

Document and Information Management technology The project management has employed the latest in document management technology - global servers, web-based, unlimited open storage tool to file and support all project related documents from the smallest PDF files to the largest CAD, 3D and audio visual presentations. This eco-friendly tool not only reduces paper use, but is also cost and time effective as documents can be electronically managed, reviewed and approved within the organisation. In terms of privacy and hierarchy, the tool supports multiple organisation document management function, with different user permissions, for instance, the 3 main parties undertaking the project (Owner, consultant and contractor) are restricted to the files and documents shared within each organisation. However, to link documents, a document record (repository) is created and then linked to the document source instead of storing it in the professional database.

Authority approvals Approval documents from the Ministry of Interior (represented by the General Traffic Authority) are to be acquired in order to process the openings of detours or partial project openings for the public traffic Risk # 1: Based on the contract documents, number of lanes are to be equal the existing road, while MOI is requesting more lanes for some detours. Risk # 2: During the MOI inspection, they

INFRASTRUCTURE MIDDLE EAST

February 2016

may request additional requirements if minor are not affecting the work, while major changes may result in claims (e.g. traffic signals) Risk # 3: Required openings in weekends which may delay the works for one week. Approval documents from the Ministry of Electricity and Water, on the other hand, are to be acquired in order to process the relocation and refurbishment of water and electricity lines throughout the entire project route. Construction Management documents and records entail Inspection and testing (work and material), Daily Reports, Progress Meetings, Non-conformance, Handing over of works and Close out of project Testing and record keeping entail Method Testing for Earthworks, Concrete, Asphalt, Piling, Bearings, Failure test and recording results. Auditing activities throughout the project’s life cycle is crucial to ensure quality delivery. An audit team is assigned with specific roles and responsibilities. A Quality Management and Control System within the project comprises a set of interrelated or interacting elements to establish policy and objectives and to achieve those objectives, and to direct and control the organisation with regard to quality focused on fulfilling requirements. Quality management principles are fundamental rules for leading and operating an organisation through customer focus, leadership, involvement of people, process approach, system approach, continual improvement, factual approach to decision making and mutually

beneficial supplier relationships. The project adheres to: • ISO 9001:2008 – for Quality • ISO 14001:2004 – for Environment • ISO 19011:2002 – for QMS/EMS Auditing • ISO 10015:1999 – for QM Training • ISO 10013:2001 – for QMS Documentation ISO Management System requires meticulous documentation (manuals, procedures and work-instructions), understanding by all the people through training, implementation everywhere within the scope and finally maintenance and updates through continual improvement. Training programmes The project executives are constantly developing internationally standardised training programmes for national cadres of new engineers and university students. This entails several lectures at the offices of the project on structural works, utility development works and project management, in addition to practical application through field work at the construction sites and the pre-cast yard for bridge segments.

Corporate Social Responsibility As part of its social responsibility agenda, the project team launched Jamal Abdul Nasser Development Project’s first CSR programme under the title ‘Helmets for a Cause,’ where art met engineering in a world class collaboration between the project and the Kuwait Autism Centre (in collaboration with Kuwaiti Youth Volunteers Group). The project’s safety department provided the Autism Centre pupils with a total of 20 safety helmets to showcase their talents in arts and crafts by producing Kuwaiti symbols and landmark designs on the helmets reflecting their love for the country. Other successful programmes that the project has recently undertaken include the seven-day lectures and site visits presented to Kuwait University Civil Engineering students and conducted by the project’s director Dr John Andrew Faulkner with the aid of his team of specialists. The students received exceedingly valuable engineering knowledge on advanced roads and bridge projects in addition to a practical application that was executed safely on project sites.

EXECUTIVE INSIGHT

Ian Henderson

“Certain energy industry sectors, most notably oil refining, remain challenging from a loss perspective”

Estimating loss impact Ian Henderson, Global Energy & Power Engineering Leader, Marsh on his company’s new explosion model for the energy sector as the potential for losses from explosions increased dramatically over the years? In many sectors of the energy industry, reliability and loss records have improved substantially over the years. This follows the significant improvements that most operators have made both through the enhancement of their hardware and also through the maturing of their management systems. Both of these advances help to control the hazards involved in oil and gas operations. However, certain energy industry sectors, most notably oil refining, remain challenging from a loss perspective as many operators continue to push the boundaries on crude selection and plant operation.

What kind of an advancement from traditional approaches does the new MARSH BLAST POWERED BY MAXLOSS represent? Could you give instances of the simulations available through this tool? Many firms in the energy insurance market still use TNT equivalence models for

estimating potential loss impact. These explosion models do not take into account the build-up of flammable gases within the plant’s structures following a release – the ignition of which is one of the most common causes of loss in the industry. Marsh BLAST powered by MaxLoss employs the advanced BST (Baker-StrehlowTang) explosion model, a first in the insurance industry. BST is a congestion-based explosion model that takes into account the key factors (congestion, confinement and fuel reactivity) that affect the severity of Vapour Cloud Explosions (VCEs). Marsh BLAST will be used predominantly to calculate Estimated Maximum Loss (EML) values for onshore energy installations such as refineries, petrochemical plants and gas plants. These assessments will be undertaken as part of insurance risk assessment surveys, which are used by clients and insurers to guide insurance placement strategy. The output from Marsh BLAST simulations will be available to our customers and their insurers after its release and implementation, which will follow the launch event at Marsh’s NOC (National Oil Companies) conference in Dubai from March 22-24, 2016.

Marsh BLAST builds upon Marsh’s pioneering use of congestion-based explosion modelling in its SLAM tool, which was developed in the early 1990s. How does the product work? Marsh BLAST has been developed with leading engineering consultants Baker Engineering and Risk Consultants (BakerRisk). In practice, a user loads an image of a facility’s layout into the software and assigns a replacement cost value to each area of the facility. The user then specifies the location and physical properties of structures that may accumulate vapour and contribute to an explosion in the event of a hydrocarbon release. Finally, the properties of hydrocarbon sources that may result in a release are specified along with any potential sources of ignition. The software then models the vapour cloud dispersion, explosion and damage resulting from the release of each hydrocarbon source. The greatest extent of damage possible, from the available combinations of hydrocarbon source and explosion location, is used to calculate an EML value for insurance purposes. The EML value is used by the client and their insurers to guide the insurance placement strategy. February 2016

INFRASTRUCTURE MIDDLE EAST

INFRA PEoPLE

AlMansoori appoints new GM

Speaker’s Corner

Oilfield services leader AlMansoori Specialised Engineering has appointed Ahmed Aboulfotouh as a General Manager for AlMansoori Production Services. Prior to AlMansoori, he worked as the Testing & Production Services Regional Manager, Middle East and North Africa at Weatherford. Aboulfotouh brings more than 29 years of rich experience in the oil and gas industry in senior management and leadership roles across Egypt, Pakistan, UAE and Libya.

Imdaad appoints new Executive Director GCC-focussed provider of integrated facilities and waste management solutions, Imdaad has appointed Marc Esteve as the Executive Director for its Environment department with the aim to reorganise the division according to the company’s green policies. Esteve brings with him over 24 years of professional experience in developing, implementing and monitoring environmental strategies, policies and programmes. Prior to joining Imdaad, Esteve was the Senior General Manager – Emerging Business for ETA FM.

Arcadis appoints Middle East CEO Global Design & Consultancy firm for natural and built assets Arcadis has announced that Graham Reid, currently the company’s Global Design Director, has been appointed as the new Middle East Chief Executive Officer. Graham will assume the role effective February 1, 2016 and will succeed Wael Allan, who has stepped down to pursue new opportunities outside of Arcadis. Reporting to Executive Board Member Stephan Ritter, Graham will be responsible for leading a 2,200 person business. In the past year, Graham has led the expansion of the global design excellence centres, making them a key differentiator for the business. He previously served as the Hyder UK Managing Director and a member of the Executive Board, where he completed three acquisitions and enabled the firm to

INFRASTRUCTURE MIDDLE EAST

February 2016

achieve quality and sustainable solutions through focused client partnerships. He was also involved in winning some of the region’s best known projects, including parts of the Doha Metro program, road and drainage works in Doha and the gas turbine power plant in Dammam, Saudi Arabia.

HE Abdullatif Al-Othman, Governor & Chairman, Saudi Arabia General Investment Authority (SAGIA)

Although the region has experienced turmoil in recent times, the Kingdom continues to be an oasis of stability while continuing to accelerate developmental progress. A wide range of decisions have been made to adopt progressive policies and implement procedures aimed at achieving wide structural economic reform. These include the establishment of the Council of Economic and Development Affairs, which is tasked with overseeing all economic issues; the reorganisation of the housing sector; the introduction of fees on undeveloped lands; and strengthening of the role of the private sector. Further initiatives being implemented in early 2016 include partial privatisation of some state assets, removing bureaucratic obstacles to foreign direct investment (FDI), and improving accountability and transparency in the public sector. At $653bn, the Saudi GDP is the largest in the Middle East; it is the fourth fastestgrowing in the G20, and a public debt of just 5.8% of GDP compares favourably with the three fastest growing G20 economies (China, India and Indonesia) that average 34% of GDP. Furthermore, the Kingdom’s income from non-oil revenues has increased 29% over the course of 2015. (Excerpted from the media release of his inaugural speech at the 9th Global Competitiveness Forum (GCF) in Riyadh last month)

EvENTS

ThIS MoNTh

MIDDLE EAST ELECTRICITy 1-3 MARCh 2016, dubai iddle East Electricity (MEE), the world’s largest power exhibition, will celebrate its 41st edition in 2016 at theDubai International Exhibition Centre. Running alongside the MEE is the Solar Middle East exhibition, which will bring together a notable line-up of exhibitors from all over the world to showcase their products to an audience of key decision makers from across the region. After a successful debut in 2015, MEE 2016 will once again feature a dedicated area for the lighting industry. Other highlights include The Solar Agenda 2016 conference and the MEE 2016 Awards. The MEE awards celebrate the outstanding achievements of individuals, departments, teams and organisations that contribute to the growth and development of the energy industry with a focus on the power, lighting, new & renewable energy, nuclear and water sectors. This year

Mark your diary... LUxLIvE

also marks the debut iof ‘Power Congress’, a Ministerial conference including keynote addresses from the UAE Minister of Energy & Egyptian Minister of Electricity and Renewable Energy. Keynote addresses will be delivered by HE Eng. Suhail Mohamed Faraj Al Mazrouei - Minister of Energy, UAE and HE Dr Mohamed Shaker El-Markabi, Minister of Electricity and Renewable Energy, Egypt.

13-14 APRIL, 2016 ABU DHABI With more than 4,000m2 of exhibition space, and over 70 of the world’s leading lighting brands, LuxLive is set to repeat its success in the UK. Contact: Peter Rowledge Tel: +44 7740 110 261 www.luxlive.ae

AIRPORT SHOW 09-11 MAY, 2016 DUBAI

Contact: Feroz Parkar Tel: +971 4 407 2406 Email: feroz.parkar@informa.com www.middleeastelectricity.com

The massive airport development projects and infrastructure investments in the region will come under spotlight at the

MIDDLE EAST RAIL 8-9 MARCh 2016, dubai n its 10th year, Middle East Rail is an annual regional event for railway operators, government departments and world-class solution providers from across the globe. Middle East Rail will be held under the patronage of HH Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister, Minister of Presidential Affairs, UAE and in partnership with the Ministry of Public Works UAE and the Federal Transport Authority - Land & Maritime. Alongside two days of keynotes, panel discussions and research sharing, the show will spotlight projects updates, with key

16th edition of Airport Show. Contact: Raed El Forkh Tel: +971 2 409 0484 www.theairportshow.com

government departments, railway operators and construction companies giving a first look at 2016 tenders and an understanding of the techniques and technologies being implemented to build these futuristic networks. The exhibition will feature a lineup of over 300 exhibitors, covering all aspects of rail infrastructure.

FM ExPO 23-25 MAY, 2016 DUBAI FM EXPO is the Middle East’s premier event for the facilities management industry, and serves as a meeting platform for industry professionals. Contact: DMG Events

Contact: Jamie Hosie Tel: +971 4440 2501 Email: jamie.hosie@terrapinn.com www.terrapinn.com

Tel: +971 4 4380355 www.fm-expo.com

February 2016

INFRASTRUCTURE MIDDLE EAST

INFRASTRUCTURE MILESToNES

#023 hybrid desal revisited Fujairah 2 in the UAE, which was officially inaugurated in May 2011, is the largest hybrid desalination plant in the world

CMY

Fujairah 2 is the largest hybrid desalination plant in the world, with a capacity equivalent to 595,000 m3/day of potable water. The high drinking water demand in the UAE does not vary substantially with the seasons whereas the power demand does: during summer, the power demand is high due to the use of air-conditioning while it is lower during the winter months. Therefore, a hybrid solution which combines two technologies Multiple Effect Distillation (MED) and Reverse Osmosis (RO) - was selected to best match the demands from a cost as well as a performance perspective. The desalination plant is linked to a 2,000 MW power plant. The MED system comprises

INFRASTRUCTURE MIDDLE EAST

the first section of the desalination plant and is the largest system of the two. It includes 12 MED units that are driven using steam extracted from the two condensing steam turbines and from the exhaust of the back pressure steam turbine. This provides maximum output from the MED units during the summer. The second part of the desalination plant (136,500 m3/ day) is based on RO and is driven by power rather than steam hence it can be operated independently of steam output and be used during winter to maintain water output when power demand is low. Red-tide events or Harmful Algal Blooms (HAB) are often a problem in the region and Veolia, which operates the RO plant, put in place an innovative Dissolved

February 2016

Fast facts Cost of F2 IWPP: $2.8bn Area occupied by the plant: 74,0000 sqm Commissioned: May 2011 Power generation capacity: 2,000 MW Desalination capacity: 595,000 m3/day

Air Flotation (DAF) pretreatment solution upstream of the RO system. Taking advantage of the innovative aspects of the RO desalination plant and the challenging location, Veolia Research and Innovation (VERI) has also established a state-of-theart research facility on the site. With a footprint of 3,000 m2 the objective of the facility is to optimise the de sign of future seawater reverse osmosis desalination plants, optimise the operation of the F2 RO plant and to develop innovative solutions to mitigate the impacts of Harmful Algal Blooms (HAB). According to Veolia, in its five years of operation, the plant achieved an energy consumption of less than 3.7 kWh/m3 (excluding intake and post-treatment) thanks to energy recovery turbines, which makes the plant highly energy-efficient as well.

Infrastructure ME.pdf 1 7/21/2015 4:37:26 PM

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