Infrastructure Middle East July, August 2014 by Infrastructure ME

ISSUE 006 | JULY–AUGUST 2014

IN FOCUS

Sohar eyes agri-bulk Food commodities to drive port traffic p16 ANALYSIS

Half the story Capacity crunch clouds infra outlook p20 AVIATION

Ready for takeoff Oman gets ambitious about airports p42 RAILWAYS

EXCLUSIVE INTERVIEW

THE RIGHT STUFF

Building a consensus An insider perspective on the GCC Railway p44

Dow’s senior executive Howard Ungerleider outlines the chemical giant’s growth formula

PLUS TOP 10 OMAN INFRASTRUCTURE PROJECTS

INTRODUCTION

Safety first GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713 EDITORIAL EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 375 5473 ASSISTANT EDITOR SHRUTHI SARAF shruthi.saraf@cpimediagroup.com +971 4 375 5715 CONTRIBUTING EDITOR ASHISH SARAF ashish.saraf@cpimediagroup.com +971 4 375 5495 ADVERTISING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 433 2857 SENIOR SALES MANAGER JUNAID RAFIQUE junaid.rafique@cpimediagroup.com +971 4 375 5716 SENIOR SALES MANAGER NITESH PATEL nitesh.patel@cpimediagroup.com +971 4 375 5483 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 MARKETING ASSISTANT BARBARA PANKASZ barbara.pankasz@cpimediagroup.com +971 4 375 5499 DESIGN ART DIRECTOR SIMON COBON DESIGNER LUCY MCMURRAY CIRCULATION AND PRODUCTION CIRCULATION AND DISTRIBUTION MANAGER ROCHELLE ALMEIDA rochelle.almeida@cpimediagroup.com +971 4 368 1670 DATABASE AND CIRCULATION MANAGER RAJEESH M rajeesh.nair@cpimediagroup.com +971 4 440 9147 PRODUCTION MANAGER JAMES P THARIAN james.tharian@cpimediagroup.com +971 4 440 9146

his year, the red flag is up with regard to aircraft safety. The loss of MH370 is unprecedented because never before in the history of modern aviation has such a large commercial aircraft remained missing without a trace for so long. With the MH17 tragedy now making headlines, safety in the skies has again come under the scanner. How does all this affect the Gulf region? Countries here are building big airports and bigger fleets to leverage the region’s location and cost-advantages. With almost 2bn people within 2.5 hours reach by air, governments have realised that the aviation sector can fuel the local economies. In fact, the sector may already be on its way to becoming a significant economic actor in the region; in the UAE alone, aviation is expected to account for 15% of the country’s Gross Domestic Product (GDP) by 2016. But all this build-up in infrastructure and fleet is predicated on international laws, standards and conventions assuring the stability required for long-term planning. Incidents like MH370 and MH17 have flagged a debate on whether more needs to be done. To ensure that something like MH370 doesn’t happen again, the International Air Transport Association (IATA), the International Civil Aviation Organisation (ICAO) and experts from around the world are collaborating to identify the best recommendations for improved global tracking. The Aircraft Tracking Task Force (ATTF) expects to be in a position to deliver draft options for enhanced global aircraft tracking to the ICAO in September, leading to presentation to the industry before year-end. With regard to MH17 tragedy, IATA’s director general and CEO Tony Tyler has called upon governments to take the lead in reviewing how airspace risk assessments are made and redouble efforts to make flying safer. As the region’s aviation sector establishes itself globally, countries here should work together for a greater say in such debates because they, more than anyone, have much at stake from an economic standpoint.

DIGITAL DIGITAL SERVICE MANAGER TRISTAN TROY MAAGMA Published by

REGISTERED AT IMPZ PO BOX 13700, DUBAI, UAE TEL: +971 4 440 9100 FAX: +971 4 447 2409 WWW.CPIMEDIAGROUP.COM Printed by Printwell Printing press LLC

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

© Copyright 2014 CPI. All rights reserved 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.

July–August 2014

INFRASTRUCTURE MIDDLE EAST

At the 2014 Construction Machinery Show we sold 70 units and 100 more units are under discussion. We have delivered a positive message to our existing clients, our competitors, and grabbed new clients. I think gaining such an appreciation from all members in the construction equipment sector is a great honour and will encourage us to work very hard to keep the same level of style, image, and standards.”

This year the CM Show team delivered an exhibition Saudi deserves. For years, we have seen a vision in this Show and this year the vision was achieved. We wanted quality traffic and we saw equipment and company owners; and we were able to offer some promotions to entice sales. I saw an increase in our sales immediately. Our principles, Doosan and Everdigm, really enjoyed themselves. We anticipate the upcoming years to be even better.”

The Construction Machinery Show was perfect from an awareness point of view. We explained Roots Group Arabia’s capability of covering the construction industry with all of its needs and requirements. The attendance was good especially during weekdays and towards the end of the exhibition. See you next year.”

Al-Qahtani & Sons Khaled El Shatoury, Managing Director

Saudi Diesel Equipment Ahmed Alkooheji, Marketing Manager

Roots Group Arabia Abdulaziz Felemban, Brand Manager

Co-located with

Raz Islam Publishing Director raz.islam@cpimediagroup.com Mobile: +971 50 451 8213

Michael Stansfield Commercial Director michael.stansfield@cpimediagroup.com Mobile: +971 55 150 3849

CONTENTS

006 July–August 2014 30

COVER STORY

The Right Stuff Dow’s senior executive Howard Ungerleider outlines the chemical giant’s growth formula Report by Anoop K Menon

REGULARS

06 Regional update

Phase 3 of Dubai Water Canal; ORPIC to upgrade Sohar refinery; Qatar awards Lusail tramway contract; SABIC signs $2.2bn deal with Mistubishi Rayon

09 Global update

China torpedoes P3 pact; GE cleared for Alstom acquisition; IDB launches $2bn infrastructure fund

10 In focus

TOP 10 FEATURE

Oman infrastructure projects Infrastructure spending is projected to spur Oman towards an economic growth of 5% this year. IME presents the pick of top projects in the Sultanate

The human city; Building regional expertise; What BIM is not; Sohar Port targets food sector; Adapting to grow

23 Infrastructure tenders 50 Infra Insight

Advantage petrochemicals

51 Events 52 Infrastructure milestones This month: Bait-Al Falaj Airport

INDUSTRY SECTORS ANALYSIS

TRANSPORT

20 Half the story

41 Navigating the skies

SPECIAL REPORT

TRANSPORT

34 Protection perspectives

42 Ready for takeoff

Renewed optimism about infrastructure and capital projects could be derailed by the capacity crunch looming ahead, says PwC survey

Even as the Middle East spends billions of dollars on infrastructure, it needs to safeguard these assets from multiple threats

Oman’s ambitious airport expansion programme is central to the country’s tourism development and economic diversification strategy Report by Anoop K Menon

TECHNOLOGY

TRANSPORT

38 Smart construction

44 Building a consensus

Wi-Fi connectivity can be a key enabler for procurement, logistics, workforce planning and BIM during construction, argues Aruba Network’s Wesam Al-Assaf

Innovative solutions are helping airlines deal with the challenges stemming from outdated Air Traffic Management (ATM) systems, says Boeing’s Neil Planzer

INFRASTRUCTURE MIDDLE EAST

July–August 2014

Though a complex and stakeholder-heavy project, the GCC Railway has made genuine progress in terms of common standards and guidelines

seabury report

THE NEW GATEWAY TO THE GULF

REGIONAL UPDATE

$4.30bn in 2013. According to the UAE’s Federal Customs Authority (FCA), gold was the top commodity in terms of imports, followed by phone sets, cars, diamonds and articles of jewellery. China and India accounted for 43% of all non-oil related trade, followed by Europe at 25% and Middle East & North Africa (MENA) at 17%. The value of re-exports grew 10.9% to $121bn from $109bn in 2012.

UAE The Roads and Transport Authority (RTA) has awarded Phase III of Dubai Water Canal to local company Belhasa Six Construct. The $218m package comprises construction of a water canal linking the Dubai Creek with the Arabian Gulf from the Sheikh Zayed Road, passing across Al Safa Park and Jumeirah 2, and terminating at the Arabian Gulf near the southern end of the Jumeirah Beach Park. Phase III, which started in June, is set for completion by the end of September 2016, and is synchronised with the completion of Phase I (started in September 2013) and Phase II (started in May 2014).

Dubai Canal The total cost of all three phases of the canal project stands at $480.46m

Dubai Electricity and Water Authority (DEWA) has completed a $71m project to modify its transmission grid to redistribute loads across power stations. DEWA implemented changes to its 132kV transmission grid during the first half of 2014 covering 7 stations with 45km

of new cables. The utility is currently upgrading 49 additional stations. These projects are part of DEWA’s programme to upgrade its transmission infrastructure. The total amount of non-oil related goods traded through the country grew 5% to

Other key contracts that were awarded include improvement work in Khasab road to STFA for $109m, building tunnels in Al Batinah road (second stage, first part) given to Galfar Engineering & Contracting for $58.8m and building tunnels in Al Batinah road (third stage, second part) to Nagarjuna Construction for $45.51m.

Oman Oman Oil Refineries and Petroleum Industries (ORPIC) carried out the ground breaking ceremony of its Sohar Refinery Improvement Project (SRIP) last month. SRIP will add 82,000 barrels per day (bpd) to the refiner’s existing capacity of 116,000bpd, taking the total capacity to 198,000bpd. The project will help Sohar Refinery overcome constraints resulting from changes in the quality of Oman Export Blend (OEB) crude oil and extract more value from deeper conversion of the Omani crude barrel. By increasing fuel production by 70%, SRIP will also ensure that the Sultanate’s increasing demand for fuel is met. The Engineering, Procurement and Construction (EPC) contracts

INFRASTRUCTURE MIDDLE EAST

Dubai Fund for Financial Support (DFFS) has signed a strategic deal with the Dubai Real Estate Corporation (DREC) to develop the fund’s plots ahead of Expo 2020. The focus will be on real estate, hospitality and tourism sectors. The first project, which will be set up along Sheikh Zayed Road, includes a shopping mall and residential complexes.

Conversion value The Sohar Refinery Improvement Project will be completed by 2016

were awarded to South Korea’s Daelim and UK’s Petrofac. Oman has awarded 31 contracts worth $852.6m for building roads and related bridges, tunnels and roundabouts across the country. A significant portion of the contracts are for converting existing July–August 2014

roads into dual carriageways. These include the 76km BidbidSur road (second stage, first part) to Larsen & Toubro Oman for $256m, the 56km Bidbid-Sur road (second stage, second part) to Khalid bin Ahmed & Sons for $237.45m and the 11km long Rustaq road in South Batinah to United Engineering Company for $72m.

Electricity Holding Company (EHC), the holding firm of all electricity firms in Oman, is planning to raise $2.1bn by way of a syndicated loan or bond issue from within the country and outside, the company’s chief executive officer Omar bin Khalfan Al Wahaibi told the Times of Oman. The fund will be used for meeting the capital expenditure for developing the transmission & distribution (T&D) systems of its subsidiary companies.

REGIONAL UPDATE

networks to achieve higher returns on national investment.

Qatar A consortium of France’s Alstom and Qatar’s QDVC has been awarded a $2.7bn contract by Qatar Railways Company (QRAIL) to supply a turnkey tramway system for a 4-line tram network in Lusail, Qatar. The network will cross the Lusail city covering a distance of 33km, including 7km underground and will have 37 stations. The system is expected to enter commercial service from 2018. Lusail will be the second tramway system deployed in the Gulf countries by Alstom with APS (ground-level power supply system) technology. For its $1.02bn part of the deal, Alstom will deliver 35 trains along

Qatar’s first tramway system The Citadis tram for Lusail will be 32 metres long

with power supply equipment, signalling and trackworks. The Qatar Public Works Authority ‘Ashghal’ has chosen IBM to provide a smarter road and drainage infrastructure in Qatar. Ashghal and IBM will deploy an Enterprise Asset Management

Solution (EAMS) to effectively manage the operation and maintenance of the country’s roads and drainage networks and multiple effluent and water treatment plants. The EAMS will enable Ashghal to gain real time visibility into the country’s asset usage and, better govern and manage the lifecycle of road and drainage

Lusail Real Estate Development Co (LREDC) has awarded a contract to Al Jaber Engineering to build the infrastructure of the Seef Lusail North and Waterfront Commercial districts of Lusail City. The package includes the development of the entire infrastructure for that area, which includes streets, pavements, lighting systems, sewage and storm networks, and potable water and irrigation systems. The agreement will also see Al Jaber Engineering develop and connect all power grids and telecommunications networks as well as the central water, gas, district cooling, and waste management networks. Construction is expected to finish in October 2015.

REGIONAL UPDATE

the south west of Kuwait. The project will be set up as a joint stock Kuwaiti company which will build, operate, and transfer the power generation facility for a period of 25 years in accordance with the PPP Law.

Kuwait Kuwait is still considering the prices of the gas it wants to import from Iran, the country’s oil minister Dr Ali Al-Omair said at the sidelines of an OPEC meeting in Vienna. Kuwait is currently studying Iranian proposals in this regard, he added. In March, Iran, which has the second largest gas reserves in the world, sealed a preliminary agreement to export gas to Oman during a visit of Iranian President Hassan Rouhani to the Sultanate. Kuwait and Iran started talking about gas supplies after the visit by Kuwait’s Emir to Iran. Kuwait’s Partnerships Technical Bureau (PTB) in collaboration with the Ministry of Electricity

Tough terms Kuwait’s airport expansion has failed to attract bidders

and Water (MEW) have issued requests for Expression of Interest (EOI) for the Al Abdaliyah Integrated Solar Combined Cycle (ISCC) Project. The project involves developing an ISCC plant to generate power with a capacity of 280MW on a build, own, operate and transfer basis

(BOOT). The solar contribution will be equivalent to 60MW. The original proposer of the project, Toyota Tsusho Corporation, has been granted up to 5% commercial advantage over other bidders in terms of its bid evaluation scores. The project will be built on a plot area of 2 sq km in

Saudi Arabia Vela International Marine, a subsidiary of Saudi Aramco and the National Shipping Company of Saudi Arabia (Bahri) have sealed the merger of their fleet and operations, following the approval of latter’s Extra Ordinary General Assembly (EGM). The $3.2bn merger will integrate Vela’s 14 Very Large Crude Carriers (VLCC) with Bahri’s fleet of 17 to create the world’s fourth largest VLCC fleet. The merged entity will meet Saudi Aramco’s future needs, estimated at 50 VLCCs, through the optimum deployment of the fleet and leasing other carriers when needed. The merger is expected to mitigate the impact of fluctuations in shipping

INFRASTRUCTURE MIDDLE EAST

Mega VLCC fleet Vela and Bahri had signed the merger agreement in 2012

rates of crude oil and improve returns for shareholders. Saudi Basic Industries (SABIC) and Mitsubishi Rayon have signed a $2.1bn contract to construct two plants in the east of the Kingdom. The plants at Jubail Industrial City will be built by Taiwan’s July–August 2014

CTCI Corporation, with one producing annually 250,000 metric tonnes of Methyl Methacrylate Monomer (MMA) and the other 40,000 metric tonnes of Poly Methyl Methacrylate (PMMA) a year. Both plants are expected to start commercial operations in 2017.

Tough contractual conditions have seen firms quitting the bidding process for Kuwait’s $4.2bn new airport project. A Zawya report quoting Arabic daily Al Rai said that offset programme and other fees and guarantee requirements proved to be the dampener for the project, which saw only six of the 19 prequalified companies buying the tender documents. Key components include expansion project of Terminal 2, the construction of a third runway (5.4km), extension of existing east and west runways, and second phase of the air cargo city.

The contracting sector in Saudi Arabia is expected to register losses this year due to rising costs of projects and labour, Arab News has reported. The report quotes the head of Contractor Committee at Riyadh Chamber of Commerce and Industry (RCCI) Fahad Al-Hammadi as saying that the cost spiral has resulted in a high percentage of stalled projects at nearly 40% and rise in the rate of contractors quitting the market. Experts have blamed the rising cost of projects on the decisions of the Ministry of Labour in terms of raising the Saudisation rate in the sector from 5% to 8%, high pay scale for Saudis and $640 levy imposed on work permits for expatriate workers. Banks are also reducing their exposure to the sector, which has adversely affected project completion rate.

GLOBAL UPDATE

Round Up The proposed P3 Network between the world’s top three container carriers – Denmark’s Maersk, Switzerland’s MSC Mediterranean Shipping Company and France’s CMA CGM – has been scrapped following its rejection by China’s Ministry of Commerce. The objective of P3 was to establish a long-term operational vessel sharing agreement on the East–West trades. According to China’s Global Times, the decision came after a review under the country’s anti-monopoly rules, which found that the alliance will likely result in a restriction or exclusion of competition. Shipping experts believe that China was apprehensive of foreign dominance of a vital Asia-Europe route. Another contributing factor was over capacity and huge losses incurred by Chinese container companies in the past few years. France has okayed General Electric’s (GE) bid to buy Alstom’s energy business. Alstom’s gas turbine business will bring more scale to GE’s leadership in this market, while its steam turbine business will give GE a valuable foothold in coal-based power plants market, where it had been lacking in both technology and presence. As part of the deal, Alstom’s wind and hydro businesses, its nuclear energy business and grid business will be reconstituted into three 50:50 joint ventures (JV) between GE and Alstom. GE will be putting its grid business into the JV while selling its rail signalling business to Alstom for $825m, which will strengthen the latter’s transport business.

Maersk’s Triple E Ship P3 was scheduled to start operations in the autumn of 2014

The French government will purchase as much as 20% of Alstom shares from its main shareholder Bouygues at a future date, which will make the government the largest shareholder in Alstom. The total value of the deal has been pegged at $17bn. The International Monetary Fund (IMF) has launched Global Housing Watch, a webpage (www.imf.org/ housing) dedicated to featuring its analysis on housing markets across the world. The page will provide a onestop shop for the Fund’s Global House Price Index and other data on housing indicators. Housing is an essential sector of every country’s

economy, but has also been a source of financial crises for institutions and countries. “Understanding the drivers of house price cycles, and how to moderate these cycles, is important for economic stability. It is only by maintaining an open dialogue on these issues that we will gain a solid understanding of how policies can contain housing booms,” said IMF Deputy Managing Director Min Zhu in a blog post. China has proposed a new infrastructure bank as an alternative funding system for developing countries in the Asia-Pacific (APAC) region. The idea was first mooted in October 2013 during a visit to Indonesia by Chinese President

Ho Chi Minh City AIIB will fund infrastructure in the region’s developing countries

July–August 2014

Xi Jinping, who proposed an Asian Infrastructure Investment Bank (AIIB) to promote regional integration. The AIIB, with a registered capital of $100bn, is being promoted as an alternative to the World Bank and Asian Development Bank (ADB), that are seen as being dominated by Western countries and Japan. According to The Financial Times, 22 countries, including some of the wealthy monarchies of West Asia, have shown interest in China’s bold push to establish the AIIB. The Islamic Development Bank (IDB) Group has announced the launch of the $2bn Islamic Development Bank Infrastructure Fund II (the IDB Fund II), on the occasion of its 40th anniversary. The IDB Fund II is the largest private equity infrastructure fund dedicated to the 57 member countries of the IDB. Its founding investors are Saudi Arabia’s Public Pension Agency and Public Investment Fund and the finance ministries of Bahrain and Brunei, with aggregate commitments totaling $750m for the first closing. The fund will eventually mobilise up to $24bn of aggregate financing. Apart from the core infrastructure sectors of power, telecom, transportation, IDB Fund II will have a broad sectorial focus that includes oil and gas, refinery and petrochemicals, steel and aluminium, mining, logistics, healthcare, education, and financial services. The IDB Fund achieved an IRR of 18% and an investment multiple of 1.7 times across projects such as AirAsia in Malaysia, SIPCHEM in Saudi Arabia and AES Oasis with power assets in Pakistan, Oman and Jordan.

INFRASTRUCTURE MIDDLE EAST 09

IN FOCUS

URBAN PLANNING

The human city Abu Dhabi is charting its own, unique course to developing a sustainable community infrastructure for its cities. By Anoop K Menon rbanisation has been a persistent theme in the development story of countries that constitute the Gulf Cooperation Council (GCC). According to a United Nations (UN) study, by 2020, the level of urbanisation in the UAE is expected to touch 86.7% while Qatar will achieve the highest level of urbanisation (99.5%) in the whole of the Middle East. But unbridled urbanisation has costs attached to it, whether it is deterioration of the environment or pressure on scarce resources like water. However, Abu Dhabi has decided to take a measured approach towards urbanisation. The Capital 2030 Plan, which provides an overall framework for the development of Abu Dhabi city, stresses on optimising existing infrastructure before growing into newer districts. “Our idea is that instead of looking at new growth plans or encroaching on new territories and grounds, you have to first utilise your existing assets to the maximum,” said Yasmeen Al Rashedi, Planning Manager, Programme Implementation & Execution, Estidama. “Stricter and more defined growth boundaries for the city ensures that we remain sensitive towards our existing desert ecologies, natural resources such as the waterfront and eco-preservation areas so that development doesn’t impact these sensitivities.” Within the city, the emphasis is on self-sustaining communities, addressed by Abu Dhabi’s Estidama sustainability initiative through its Pearl community rating system, a component of the Pearl rating system for the built environment. Al Rashedi said: “The community rating system promotes communities that are walkable, sustainable and healthier for people to live in and caters to their needs within healthy walking distances

INFRASTRUCTURE MIDDLE EAST

Yasmeen Al Rashedi, Planning Manager, Programme Implementation & Execution, Estidama

from where they work and live. It delves deeper into the urban planning of communities, and ensures that the right level of services, in terms of primary facilities like schools and mosques, are provided for a certain number of population to ensure they are self-sustained.” To encourage people to be more active, the Abu Dhabi Urban Planning Council (UPC) is looking at public areas to ensure that the planned environment is improved. Urban planning can also play an important in pushing public transportation, given that private cars continue to be the most popular or preferred mode of transport. Al Rashedi said: “Creating stronger urban growth boundaries and defining where that growth is happening within the city helps us plan better for movement and transportation that supports the land use pattern.” In fact, the Pearl community rating system looks at districts and movement of people to make them as efficient as possible. She continued: “The patterns of growth and community development is expected to

July–August 2014

be as tightly knit as possible to allow travel distances to be minimised and promote public movement, starting with a person being able to get herself or himself to the desired destination by walking. The secondary option would be to provide public transport to move people to the core destinations they need to be in the city by working together with the Department of Public Transport (DoT).” Narrowing further down to houses, and especially Emirati houses, UPC is focussing on things that nationals can introduce into their homes to improve the quality of their lives and become more sustainable, especially from an economical aspect, in addition to becoming more efficient in terms of water and energy usage. “Our biggest stakeholders are the Emirati people, and the Abu Dhabi Housing Authority, which will be managing all Emirati housing developments houses and plots,” explained Al Rashedi. “We are also working with Regulation & Supervision Bureau (RSB) to promote efficiencies in power and water consumption within homes.”

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IN FOCUS

RAILWAYS

Building regional expertise Atkins is establishing a Middle East rail systems centre of excellence in Dubai to meet the growing demand for its services in the region o capitalise on its involvement with some of the defining projects in this region, Atkins is aiming to further develop its Middle East rail sector services with the appointment of Dr Abdeljabbar Ben Salem as Head of Rail Systems. While Atkins already has established rail systems expertise in the Middle East, the company’s investment in this new role marks its determination to respond to market need by creating a specialist centre of excellence. Abdeljabbar, who has a PhD in robotics and automation from Nancy University in France and an MBA from Manchester Business School in the UK, has joined Atkins after eight years with Bombardier, for whom he worked in France, the UK and Dubai, UAE. Julian Hill, managing director for the Middle East Rail sector for Atkins, said: “Rail systems

skills are deeply technical and much sought after in the marketplace – not just in this region but across the world. “By investing strongly in our rail systems team we’re ensuring that we’re in the best possible position to meet future demand as the region’s major rail projects and programmes gain momentum.” Abdeljabbar believes the rail market in the Middle East has reached a crucial phase which will spur even greater demand for rail systems engineers. “The most advanced cities in the region have reached their respective stages of development thanks to the strength of their vision and their passion,” he said. “What we’re seeing now, though, is a demand for the scientific planning and understanding which is needed for smart city urbanisation, and rail systems skills are an integral part of that vision.” Investment in public transportation in the

Middle East over the next 10-15 years is expected to be in the hundreds of billions of dollars. New metro and LRT systems are either planned or underway in major gulf cities including Doha, Riyadh, Makkah, Jeddah, Dammam and Abu Dhabi, while Dubai is to extend its metro systems and is launching a new tram network. Atkins is among the leading rail sector consultancies in the Middle East after first developing its team to provide full multidisciplinary design and management of the civil works on Dubai Metro, the first phase of which was completed in September 2009. The Dubai Metro, the first state-of-the-art mass transit system in the Middle East and the longest automated, driverless system in the world, drew upon the expertise of around 1,000 staff spread across the Middle East, Europe and Asia. The company is currently working on major rail and metro projects in the UAE, Saudi Arabia and Qatar.

RECENT PROJECTS • Crossrail: Designing the Central London twin tunnels and station architecture for Europe’s biggest civil engineering scheme which will see tunnels passing beneath 470 listed buildings and critical infrastructure • Etihad Railway: Providing multidisciplinary design expertise on the 1,200km Etihad Rail network which will revolutionise passenger and freight transport in the UAE • Denmark ERTMS: Providing multidisciplinary signalling expertise on the first countrywide installation of an ERTMS train control and management system in Denmark • Hong Kong-Zhuhai-Macao Bridge: Lead consultant on this integral part of the new Hong Kong link road scheme which will significantly boost land connectivity in the region Dr Abdeljabbar Ben Salem Head of Rail Systems, Atkins

INFRASTRUCTURE MIDDLE EAST

July–August 2014

Dubai Metro Atkins was responsible for the design and management of the civil works for the entire network

IN FOCUS

RAIL INFRASTRUCTURE

What BIM is not... A clear understanding of Building Information Management (BIM) and its objectives in relation to a project is crucial to tapping its full potential. By Anoop K Menon hile BIM or Building Information Management is winning new advocates in the infrastructure sector, there still remains a fair bit of confusion on what it actually stands for — a technology or a product or a concept? There is a general agreement that BIM is an evolving technology, which deals with new and innovative ways of approaching design and documentation information during the different stages of building. “When we say building, we refer to it as a continuous verb rather than a physical asset,” explained Nader Reslan, Manager for the Rail Sector, Bentley Systems. “BIM embraces the entire lifecycle of the building process beyond the initial design phase to include build, operations and maintenance phases.” Reslan pointed out that BIM is not a product, data format or vendor-specific initiative. Nor should it be confused with a massive 3D CAD model, GIS model or a hybrid of both. He said: “It is a process which must be understood by the people involved and supported by IT systems and solutions in that process.” Reslan cited the example of Crossrail, a Bentley client in the UK, which was clear about adopting BIM as a process right from the beginning. Crossrail wanted to ensure better project performance during initial and detailed design, construction, and post-completion, have a complete BIM model in hand for Operations & Maintenance (O&M). “At Crossrail, they put in the right procedures and processes and the desired standards,” said Reslan. “Of course, you do put in new processes in any new project but with BIM, you can put them into a type of framework together with the technology to control them.” In a rail project, BIM can capture all the

INFRASTRUCTURE MIDDLE EAST

Nader Reslan, Manager for the Rail Sector, Bentley Systems

design parameters during construction, and ensure that all the changes to the lines, alignments and stations are captured so that when the O&M stage arrives, the client has a fully enriched and informed model. In Crossrail’s case, they not only persuaded their entire supply chain to adopt BIM, but also took steps to make the adoption as easy and affordable as possible, which helped overcome the anticipated resistance from different stakeholders and teams. According to Reslan, by insisting on the use of BIM right from the planning stage, the project owner can ensure that the information is mobile as the project moves from one phase to another — from design to construction to O&M — and is available to different stakeholders within that phase. The model can also be kept up-to-date with all the information, standards and specifications and more important, the ocassional changes to the original design that happen during the construction, or to the equipment during the O&M stages. Reslan said: “This saves them the

July–August 2014

trouble of doing re-engineering or resurveying when moving between the phases or when a new stakeholder comes into the picture or even when the infrastructure ownership changes hands. You not only end up with the physical infrastructure but also its equivalent digital infrastructure. With BIM, you can integrate all the information in one model in one place, which is the ultimate goal for the project-owner.” In the real world, a contractor or consultant or supplier may look at BIM as a ‘client solution.’ According to Reslan, while BIM should be applied by these stakeholders during the project, the projectowner will always remain the ultimate stakeholder of this integrated model. From a top management standpoint, some of the key benefits of implementing BIM are avoiding major design conflicts, smoother management of documents, designs and models between the stakeholders, and efficient and quicker contract administration. The integrated and well-coordinated environment made possible through BIM can be used to create executive dashboards that display the process and the progress of this information. For Reslan, the advantages of making BIM mandatory for projects are several. For example, at the conclusion of any infrastructure project, an electronic handover of drawings — 2D and 3D CAD, Shop drawings — is part of the delivery. If BIM is already in place, all these drawings can be easily extracted from the BIM model. But it is equally important that the client has the necessary set-up, to not only receive the BIM model but also utilise it to its full potential. Reslan said: “You can specify a BIM model to be as enriched as possible on delivery, but you need to strike a balance because a fully detailed BIM model that you will never use is as much a waste as a fancy 3D model to impress your superiors.”

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IN FOCUS

PORTS

Sohar Port targets food sector New agro-bulk terminal to enhance the port’s multi-commodity handling capability and secure Oman’s food security. By Shruthi Saraf fter establishing its container and general cargo business, Sohar Port is now looking at the agribulk business as its next big accelerator for growth in the coming years. Speaking exclusively to Infrastructure Middle East, Andre Toet, the CEO of Port of Sohar said a dedicated berth will be created to facilitate imports of agricultural commodities, which will open up new opportunities for the freezone. “I foresee that once the agro business starts moving, we will easily grow at a few million tonnes per year,” said Toet. “Because everything in the Middle East has to be imported, our next strategic target is food and everything around it.” The Sultanate’s first dedicated agribulk terminal will handle wheat and grain shipments on behalf of the government and feedstock for Oman’s first sugar refinery. The terminal and sugar refinery will support the development of the freezone’s food and agro-processing cluster. The agri-bulk terminal, together with the upcoming grain silos in the port, will also play a crucial role in the government’s strategy to build up strategic food reserves. Toet said: “The good news is that the

IN NUMBERS

2,000

Number of vessels handled annually

50m

Tonnes of cargo handled in 2013

$15bn

Worth of investments received by the port and the freezone up to 2013 construction of the sugar refinery will begin in the third quarter of this year. Along with it, we will also get a big chunk of Oman’s strategic food reserve. Together, they will create additional business for the port and drive opportunities for food-based downstream industries.” Sohar Port initially focused on developing metals, logistics and petrochemicals clusters. The addition of a fourth cluster through agro-bulk handling will make it one of the handful of ports in the region with multi-commodity handling capabilities. As of now, Sohar Port will not be looking to diversify into new areas. “We are happy with our four-cluster approach because the spin off

Sohar Port Agri-bulk will become the Port’s fourth cluster after metals, logistics and petrochemicals

INFRASTRUCTURE MIDDLE EAST

July–August 2014

from these will keep our hands full,” explained Toet. “For the freezone, it is a different story because if a customer from a different segment approaches us, we will not say no. We will see how we can fit that customer in because they could trigger a lot of additional business.” Sohar Port welcomed its first ship in 2004; currently, it handles more than 2,000 ships in a year. Companies such as Vale, Air Liquide, Larsen & Toubro, Methanol Holding International and Jindal Power & Steel are well-established in the Sohar Port and Freezone. Its independent terminals are operated by C Steinweg Oman for general cargo, Oiltanking Odfjell Terminals for liquid cargo and Hutchison Whampoa for containers. Sohar Port gained even more prominence when the government announced earlier this year that all commercial shipping from Muscat’s Port Sultan Qaboos will be transferred to Sohar. Approximately, 300,000 TEU in container traffic will transfer from Muscat to Sohar, boosting the latter’s container traffic to around 500,000 TEU. “The strategy behind this move is to get the mainliners into Sohar. Oman was regarded as a feeder destination, fed from either Salalah or Jebel Ali. By combining the volumes you create critical mass and get the big ships to come directly to Sohar, which will eventually reduce the cost of goods,” said Toet.

Serves Iftar

ADVERTORIAL

Construction workers at one of the largest and most prestigious project sites in Dubai, Al Habtoor City, were treated to an iftar meal courtesy of Knauf, a German gypsum board manufacturer and building material company.

ver 3,800 workers, comprising of more than 20 nationalities, received the food packages as part of a special initiative conducted during the holy month of Ramadan. Some 45 team members of Knauf in conjunction with staff from Al Habtoor-Leighton Group and sub-contractor Al Rawda took to the midday summer heat to distribute the iftar packages as the workers left to go home for the day. Amer Bin Ahmed, Managing Director of Knauf G.C.C and India, explained: “From the very beginning, Knauf has been practicing four main values, known as K-Values. These are known as Partnership, Entrepreneurship, Commitment and finally Menshlickeit. The final K-Value, Menshlickeit, translates literally as Humanity and the “human touch”. As a company we endeavour to fulfil this very important value through humanitarian work and giving back to the community. For this reason we are gathered here today as we would like make a meaningful difference and bring a smile to the faces of the Al Habtoor workers by providing them with an Iftar meal. This is not just about providing plasterboard and drywall systems, it’s about getting to know the people we are working with and to share our values with them and show that we care.” The landmark $1.33bn (AED4.875bn) Al Habtoor City development will include 1,600 hotel rooms, spread between three five star hotels (lifestyle, luxury and main); an iconic Las Vegas-style ‘aqua’ theatre; a French provincial-inspired garden; and food and beverage venues. In what will become the largest integrated hotel complex in the Middle East, comprising a five-level podium, one 36-storey tower and one 25-storey tower within a total GFA of 350,000m2 located on the arterial Sheikh Zayed Road. Knauf is providing specific tailor made solutions thanks to a dedicated Technical and Sales Team. Within the project Knauf is delivering full-system interior drywall solutions and Aquapanel solutions in wet areas. Knauf will cover hotel rooms, kitchens and lobbies among many other areas with high acoustic ratings and excellent fire protective systems. As he watched hundreds of workers queue patiently for their free iftar box, often lending a hand alongside his staff members, Ahmed stressed that safety on the site and throughout the entire company is of paramount importance. He said: “We are one of the companies that has really implemented the safety aspect from the very beginning in our company, starting from our workshop, right up to the managing director levels. As you can see the morale today is high with both Habtoor-Leighton workers and our staff. So many faces are passing by and collecting their packs, each one as cheerful and happy as the one before, fully demonstrating the success of the event. Today would not have been possible without the support of Al Habtoor-Leighton Group and Al Rawda Contracting Company who both played a significant part ensuring that the event was able to happen.” “We have 23 nationalities working in our company and we do not all speak the same language; we are not from the same cultures and we do not look the same or dress the same,” said Ahmed. “To bring everyone together is very important. We are like a mini version of the UAE and it allows us to see that we can work together. We can achieve as a team the most difficult task and that is why we knew that today was possible. We are united through our diversity and through our four K-Values.” Knauf, one of the world’s leading manufacturers of building materials, is a multinational company with operations in more than 150 production sites worldwide and present in more than 37 countries. The headquarters for the Gulf Region is in Dubai, United Arab Emirates with a dedicated manufacturing facility in Ras al-Khaimah. Knauf also maintains presence in Qatar, KSA and India and serves many of the neighboring regions.

Knauf Head Office

P.O.Box 112871 Dubai, U.A.E. Tel: +971 4 337 7170 Fax: +971 4 334 9659 info@knauf.ae

Knauf Qatar Branch P.O.Box 27111 Doha, State of Qatar Tel: +974 4452 8191 Fax: +974 4452 8181

Knauf RAK Branch P.O.Box 50006 Ras Al Khaima, UAE Tel: +971 7 221 5300 Fax: +971 7 221 5301

Made in UAE

IN FOCUS

WATER TECHNOLOGY

Adapting to grow Grundfos looks to infrastructure and construction markets to drive its growth in the Middle East. By Shruthi Saraf ith an annual production of more than 16m pumps, Grundfos is a global leader in advanced pump solutions for heating and air-conditioning applications, and centrifugal pumps for industrial applications, fire protection, water supply and waste water treatment. This year, the company celebrated its 25th anniversary in the UAE, where its Dubai office serves as the regional headquarters for the Middle East and Turkey. Grundfos Middle East looks after not only the Gulf Cooperation Council (GCC) countries, but also Iraq, Jordan, Lebanon, Syria, Yemen, Turkey, Egypt, Iran and Pakistan. “As such, we are present throughout the Middle East but continue to expand our presence selectively in different market segments, depending on the opportunity and return on investment,” said Henning Sandager, Area Managing Director for Middle East and Turkey at Grundfos Middle East. “We have been maintaining strong relationships with all our stakeholders and would like to continue doing so in the future as well.” In addition to pumps, Grundfos also produces standard and submersible motors and electronics for monitoring and controlling pumps. The company’s core products include multi-stage and single-stage pumps for air conditioning and chilled water supply, hot water, and fire systems. “We are expecting to see further growth in our product offerings within waste water, flood control, chemical dosing and disinfection for the water treatment markets,” said Sandager. “We have also fulfilled the required standards for ISO 14001 certification and EMAS registration in our production.” As far as growth is concerned, infrastructure and construction are the fastest growing sectors in the Middle East and Grundfos anticipates more business from these sectors.

INFRASTRUCTURE MIDDLE EAST

“Though the Middle East is known for its oil & gas market, we have set our eyes on its construction and infrastructure markets” HENNING SANDAGER, AREA MANAGING DIRECTOR FOR THE MIDDLE EAST AND TURKEY, GRUNDFOS

Henning Sandager, Area Managing Director for Middle East and Turkey, Grundfos

July–August 2014

Sandager said: “Though the Middle East is known for its oil & gas market, we have set our eyes on its construction and infrastructure markets. For example, with Dubai winning Expo 2020, infrastructure and construction development in the UAE is bound to grow. Dubai’s emergence as an important business hub in the Middle East has caught the world’s eye. Furthermore, governments in the region continue to invest in education, health, safety and the overall living comfort of their citizens.” Grundfos invests heavily in research and development (R&D) to drive innovation, spending 4-5% of its global revenue on R&D. Also, the company looks at market-specific needs as a development opportunity. Sandager said: “For example, we customised our booster solutions for water supply applications according to Middle East requirements. We also make sure that our products are fit to operate in the region’s desert and saline environments. Our specialist applications will always have the best fit for the customer’s requirements.” Grundfos has always promoted sustainability and not only provides cutting-edge green solutions to its customers but also runs its business in an environmentally-responsible manner. The company has actually gone ahead and prioritised the reduction of its CO2 emissions by optimising business processes and sourcing renewable energy. According to Sandager, not only is sustainability the right thing to do, it also makes good business sense. He said, “Today, 10% of the world’s electricity consumption is attributed to pumps. This number can be greatly reduced by replacing old pumping systems with new intelligent pumping systems, which in many cases, can reduce electricity consumption by up to 40% or even more. This, in turn, means that investment in a new pumping system is paid back in a very short time. We are proud that we make products and solutions that help our customers save natural resources and reduce climate impact.”

12-14 OCTOBER 2014

ADNEC, ABU DHABI, UAE

ABU DHABI NATIONAL EXHIBITION CENTRE (ADNEC)

REGIONAL

OPPORTUNITIES

STRATEGIC THINKING

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PRELIIMINARY EVENT GUIDE NOW AVAILABLE The Preliminary Event Guide is now available to download. This comprehensive pocket guide will provide everything you need to know about the events including:

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* Schedule of Events - to help plan your visit * Conference Programme - find out the latest power issues from over 150+ eminent regional and international speakers * Exhibitor List / Floor Plan - bookmark the companies you wish to visit and connect with

WaterWorld Middle East Roy Morris T: +44 (0) 1992 656 613 E: rmorris@pennwell.com

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Register for the Early Bird Discount and view the Preliminary Event Guide at www.power-gen-middleeast.com or www.waterworldmiddleeast.com Owned and Produced by:

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速

ANALYSIS

PROJECTS

Half the story Renewed optimism about infrastructure and capital projects could be derailed by the capacity crunch looming ahead, says PwC survey

hile the resurgence in optimism about the region’s overall capital projects and infrastructure sector is set continue into the coming year as well, there are concerns about a looming capacity crunch—in terms of quality staffing and funding and also cost-inflation pressures. According to PwC’s latest Middle East Capital Projects & Infrastructure Survey, titled ‘Building beyond ambition,’ the expectation of an increase in spending in the coming 12 months is largely driven by mega events, including Dubai Expo 2020 and Qatar World Cup 2022, increased spending on social infrastructure including housing, education and healthcare and continued investment in oilfields, petrochemicals and power production facilities. There has also been a significant reduction in the number of projects being scaled back or cancelled due to funding constraints, down 14% from the last survey 18 months ago, with respondents expecting this trend to continue into the next year. However, this is only half the story—the survey results show that there is a ‘capacity

INFRASTRUCTURE MIDDLE EAST

crunch’ looming on the horizon or in other words, market capacity could fail to keep pace with demand. The two fundamental areas that will limit the ability to progress with project plans are people and financial resources. “Whilst our survey shows a good dose of optimism, there is a capacity crunch looming which threatens the delivery of projects. It is already having an impact, we are seeing more delays on projects that are underway,” said Stephen Anderson, PwC’s Leader of Capital Projects and Infrastructure in the Middle East. “Broadly speaking these problems have been apparent in our region’s infrastructure sector for several years, but the increase in activity is making them more acute. They need to be urgently addressed if the region is to deliver on its ambitions.”

Ever-increasing compensation packages are only adding to the cost-inflation MIDDLE EAST CAPITAL PROJECTS & INFRASTRUCTURE SURVEY - PWC

July–August 2014

NOT ENOUGH TO GO AROUND

The ability to find skilled people – both in terms of quality and volume – was identified as a key challenge with 54% of owners, and 43% of contractors reporting the availability of skilled resources as a top challenge in the coming year. With activity levels picking up globally as well, the region faces stiff competition from the likes of Japan, especially for specialists in areas such as nuclear power. In fact, 30% of respondents in the energy, utilities and mining industry said competition from other countries outside of the MENA region was the biggest threat to them attracting and retaining talent. The talent vacuum presents a different set of challenges for project and programme owners, many of whom lack the mature, technically capable and well-staffed delivery functions that are essential prerequisites to successful project delivery of large and complex projects. The primary impact of this from a project perspective is slow decision making: 54% of those surveyed said owner decision making was the biggest delivery challenge they faced. Another indicator that capacity is unable to keep up with planned spending is inflationary pressure. Forty one per cent of the respondents

ANALYSIS

involved in mega events expect construction costs to rise by between 15-50%. Only 6% think there will be no cost escalation. With people shortage being one of the biggest challenges, ever-increasing compensation packages are only adding to cost inflation. There are signs that capacity constraints are already starting to impact project delivery–95% of respondents say their projects are delayed, with a staggering 45% delayed by more than six months while 71% of projects were over budget. Client decision-making is also a big concern, with 35% of contractors citing it as the greatest challenge they face delivering projects. The survey report recommends organisations delivering complex and iconic projects need to rethink how they govern and oversee project delivery, building delivery units that are agile, empowered and able to make decisions effectively. Failure to do so risks these projects being mired in delays and disputes. TOP GCC MARKETS

Respondents identified the UAE as their top target for investing in capital projects and infrastructure, closely followed by Qatar and Saudi Arabia. Strong economic growth and budget surpluses in these countries provide the backbone for ambitious spending plans, as their governments continue to invest in economic diversification while at the same time spending to maintain or expand hydrocarbon and downstream petrochemical production. However, optimism in the rest of the

Partner, Abu Dhabi as saying that while not all commercial lending banks have retreated from long term project financing in the Middle East, there is still a lingering liquidity crunch. This has led to the emergence of alternative financing sources ranging from infrastructure funds, Islamic debt, equity-driven products and, as Dubai is now demonstrating, bond financing with several successful placements in the US and EU markets – in short, ‘The Bond is back.’ Pressure on costs is driving focus away from capex alone and towards the cost of maintaining and operating assets after project completion – the whole life view. There are successful examples within the region of the ‘whole life view’ approach - For example, the Independent Water and Power Plant (IWPP) model in the utilities industry has fostered an approach where the state and private sector are incentivised to work together in a long term offtake arrangement. By tying the construction and operations together in a Public Private Partnerships (PPP) model, and passing the risk of cost overruns, delays or long-term operational costs to the private sector, bidders and developers are incentivised to consider the various costs incurred over the life of the asset. Failure to do so would eat into returns. According to the report, the challenge for countries in the region is to extend this successful PPP model into areas such as transportation, healthcare, education and housing.

region is not as high, as political instability continues to affect confidence. THE FUNDING GAP

There has been a significant reduction in the number of projects being scaled back or cancelled due to funding constraints. Down 14% from the last survey, this is explained by the increasing role of private finance, as 83% stressed the importance of the private sector in financing projects. During 2013, several large projects took advantage of recovery of the banking sector from the financial crisis and lower borrowing costs, a great example being Saudi Aramco and Dow Chemical reaching financial close on a $19.3bn funding package for the development of the Sadara Chemical Company. That deal was one of the largest project finance transactions in 2013 and attracted capital from major Western banks, export credit agencies, and the Islamic bond market. Even though the banking sector and capital markets are in a bullish mood, there are growing concerns that rising demand will soon exceed the supply of capital, with 45% of respondents noting that funding constraints had resulted in projects being postponed or deferred last year. The sheer scale of commitments is making private sector finance a more attractive, and indeed necessary, option for funding infrastructure projects. The report quotes Maarten Wolfs,

EXTERNAL CHALLENGES FACING THE DELIVERY OF MAJOR PROJECTS

0 0% KEY TAKEAWAYS • 75% of respondents expect an increase in spending over the next 12 months • Respondents list the UAE as top

10 10%

20 20%

30 30%

by Qatar and Saudi Arabia • 54% of owners, and 43% of contractors, consider the availability of skilled people as a

33%

Availibility of skilled resources

30%

Availibility of funding

28%

Supply chain capacity and performance

26%

Political instability

people to deliver big, complex projects

23%

Market volatility

retaining enough skilled and experienced Attracting the right suppliers Material fluctuations

60 60%

37%

Contractual disputes

top challenge in the coming year – they are facing difficulty in finding, attracting and

50 50%

54%

Client decision making

target for investing in capital projects and infrastructure, followed

40 40%

11% 7% July–August 2014

INFRASTRUCTURE MIDDLE EAST

3 N OV E M B E R 2 014 | J U M E I R A H B E AC H H OT E L | D U BA I

CO M M EN D I N G E XCELLEN CE I N S U STAI NAB I LIT Y NOMINATIONS CLOSE: 22 SEPTEMBER 2014

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For sponsorship

GREEN BUILDING PROJECT

JUNAID RAFIQUE JUNAID.RAFIQUE@CPIMEDIAGROUP.COM +971 4 375 5716

SUSTAINABLE CONSULTANT GCC BUSINESS BEST CSR INITIATIVE SUSTAINABLE PETROCHEMICAL COMPANY

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MIDDLE EAST INFRASTRUCTURE TENDERS

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

MAKKAH MASS RAIL TRANSIT SYSTEM

SITRA REFINERY UPGRADE & EXPANSION PROJECT

INNER DOHA RE-SEWERAGE IMPLEMENTATION

AL-DABBIYA OIL FIELD DEVELOPMENT PROJECT – PHASE 3

BUDGET: $16,000,000,000

BUDGET: $6,000,000,000

BUDGET: $2,700,000,000

BUDGET: $1,000,000,000

Territory: Saudi Arabia Client Name: Makkah Mass Rail Transit Company Description: Development of a Metro system comprising four lines with total length of 188km and 88 stations. Period: 2020 Status: New Tender

Territory: Bahrain Client Name: BAPCO Description: EPC contract for upgrading and expanding production capacity of Sitra refinery to 360,000 barrels a day (b/d). Period: 2018 Status: New Tender

Territory: Qatar Client Name: ASHGHAL Description: Building a series of deep tunnels for wastewater that will serve the Doha South catchment area over the next 50 years. Period: 2018 Status: New Tender

Territory: Abu Dhabi Client Name: Abu Dhabi National Oil Company (ADNOC) Description: EPC contract for the development of an onshore oil field in the North East Bab asset. Period: TBA Status: New Tender

July–August 2014

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE LIQUEFIED NATURAL GAS EMISSION REDUCTION PROJECT–DAS ISLAND Project Number: MPP2639-U Client Name: Abu Dhabi Gas Liquefaction Company (ADGAS) Address: Corniche Street, Abu Dhabi Phone: (+971-2) 606 1111 Fax: (+971-2) 606 5500 Website: www.adgas.com Description: EPC contract for the development of new flaring and LNG emission reduction system in Das Island. FEED is expected to be completed in August 2014. Invitation to Bid for the EPC contract is expected to be issued in the third quarter of 2014. Period: 2016 Status: New Tender Tender Categories: Gas Processing & Distribution

DUBAI EXPO 2020 METRO LINE PROJECT Project Number: MPP2913-U Client Name: Roads & Transport Authority (RTA) Address: Marrakech Road, Dubai Phone: (+971-4) 284 4444 Fax: (+971-4) 290 3380 Website: www.rta.ae Description: Construction of a new metro line serve the Dubai Expo 2020 site, next to Al-Maktoum International Airport. The link could be a standalone, from the existing Green and Red Lines of the Dubai Metro, to create options for stations at existing residential and industrial areas that are not currently on the Metro network. A joint venture of US’ Parsons International and France’s Systra has emerged as the frontrunner for the contract to complete preliminary engineering works on this scheme. Status: New Tender Tender Categories: Public Transportation, Metro

OIL STORAGE TERMINAL PROJECT – HAMRIYAH FREE ZONE

DUBAI SMILE PROJECT

Project Number: MPP2813-U Client Name: Sharafco Group (Sharjah) Address: Behind Sharjah Cement Factory, Al-Sajaa Industrial Area Phone: (+971-6) 531 0786 Fax: (+971-6) 531 0787 Email: info@sharafcogroup.com Website: www.sharafcogroup.com Description: EPC contract to build a new oil storage terminal with capacity of 179,000m3 scheme in Hamriyah Free Zone, Sharjah. Evaluation of bids is currently underway. Period: 2015 Status: New Tender Tender Categories: Gas Processing & Distribution

Project Number: BIP047-U Client Name: Roads & Transport Authority (RTA) Address: Marrakech Road, Dubai Phone: (+971-4) 284 4444 Fax: (+971-4) 290 3380 Website: www.rta.ae Description: This project is also known as Al Ittihad Bridge/Dubai Creek Seventh Crossing as it involves construction of a seventh crossing across Dubai Creek. The crossing, which will replace the floating bridge, consists of 12 lanes (six lanes in each direction) and a footpath in each direction. 1t will rise 5 metres above the water level of the Creek. Bids are currently under evaluation for the main construction contract. An award

INFRASTRUCTURE MIDDLE EAST

is expected by the end of 2014. Period: 2016 Status: New Tender Tender Categories: Roads, Bridges & Infrastructure

July–August 2014

BAHRAIN WASTE WATER TREATMENT PLANT Project Number: WPR404-B Client Name: Ministry of Works Rolling Company Address: Ministry of Works Bldg., Diplomatic Area Phone: (+973) 1754 5555 Fax: (+973) 1754 5608 Email: info@works.gov.bh Website: www.works.gov.bh Description: Construction of a Waste Water Treatment Plant with capacity of 40MLD in the North Town development, off the coast of Budaiya in Bahrain. The project is currently in the design stage and and client is planning to float a tender for the main construction contract this year. Status: New Tender Tender Categories: Sewerage & Drainage

ALUMINIUM PLANT EXPANSION PROJECT–1 Project Number: MPP771-B Client Name: ALBA Address: Aluminium Bahrain Bldg., King Hamad Highway, Askar Industrial Area Phone: (+973) 1783 0000 Fax: (+973) 1783 0083 Email: alba@alba.com.bh Website: www.albasmelter.com Description: EPC contract to build an additional pot-line to increase production from the current level of about 881,000 tonnes a year (t/y) to 1.2m t/y. Work on this project is likely to commence by the end of this year. The project is expected to take 36 months for completion. Period: 2015 Status: New Tender Tender Categories: Oilfields & Refineries

QATAR UMM AL HAUL POWER & DESALINATION PLANT PROJECT Project Number: WPR379-Q Client Name: Qatar Electricity

MIDDLE EAST INFRASTRUCTURE TENDERS

Tender Products: Construction & Contracting, Medical & Healthcare

WATER & WASTE WATER TREATMENT PLANT

& Water Company (QEWC) Address: QIMCO Bldg., 2nd Floor, West Bay Phone: (+974) 4485 8568 Fax: (+974) 4483 1116 Website: www.qewc.com Description: Construction of a power and desalination plant with capacity of 2,400MW and 130MIGD respectively. Four companies have expressed interest in the bidding process for the main contract. Status: New Tender Tender Categories: Power & Alternative Energy, Water Works

DISTRICT COOLING PLANT PROJECT – PLANT 3 Project Number: WPR375-Q Client Name: Qatar District Cooling Company (Qatar Cool) Phone: (+974) 437 2099 Fax: (+974) 436 1548 Email: cgoulding@qatarcool.com Website: www.qatarcool.com Description: EPC contract to build a District Cooling Plant with a capacity of 35,000 refrigeration tonnes (RT) including a thermal energy storage tank, offering an additional 5,000 RT. The plant will cater to residential and commercial buildings in the West Bay area. Status: New Tender Tender Categories: Construction & Contracting

SAUDI ARABIA KING KHALID MEDICAL CITY PROJECT Project Number: MPP2588-SA Territory: Saudi Arabia Client Name: Ministry of Health Phone: (+966-1) 401 2220 Fax: (+966-1) 402 6944 Website: www.moh.gov.sa Description: Construction of a Medical City comprising a 1,500bed hospital, a research centre, staff accommodation, a conference centre and an administration office building. The project is in Dammam and will cover a total area of 700,000 sqm on land allotted by Saudi Aramco, 20km southwest of Dhahran. It will be implemented in a joint venture with King Khalid Mega Project Management Office. The client has launched a tender for the main construction contract with work expected to commence by the end of 2014. AECOM is providing a complete single point solution from concept development through to tender documentation with services, including master planning; architecture; landscape; interior design; MEP; civil and structural engineering; cost consultancy; medical equipment planning and traffic engineering. Status: New Tender

Project Number: WPR394-SA Client Name: Ma’aden Phone: (+966-1) 874 8000 Fax: (+966-1) 874 8300 Website: www.maaden.com.sa Description: Construction of a water and waste water treatment plant at Waad Al Shamal Mining City in Al Hail to serve the 440 sq km industrial city. Negotiations and signing of the final contract are likely to be completed by October 2014. Construction work is expected to be completed by the second quarter of 2016. Status: New Tender Tender Categories: Sewerage & Drainage, Water Works

RAS TANURA REFINERY CLEAN FUELS & AROMATICS PROJECT

Fax: (+966-3) 873 8190 Website: www.saudiaramco.com Description: EPC contract for the implementation of major modifications to the existing refinery at Ras Tanura to comply with the new environmental regulations and produce higher-grade clean fuels. Jacobs Engineering is the FEED consultant. The site preparation package is expected to be awarded in the third quarter of 2014. Invitation to Bids (ITB) for the off-sites and utilities as well as the naphtha and aromatics processing packages are expected to be reissued in the third quarter of 2014, with contract awards anticipated by fourth quarter of 2014. Period: 2017 Status: New Tender Tender Categories: Gas Processing & Distribution Industrial & Special Projects Oilfields & Refineries

PRODUCED IN ASSOCIATION WITH MIDDLE EAST TENDERS

Project Number: ZPR413-SA Client Name: Saudi Aramco Address: Dhahran 31311 Phone: (+966-3) 872 0115

July–August 2014

INFRASTRUCTURE MIDDLE EAST

TEN OMAN INFRASTRUCTURE PROJECTS

OMAN PROJECTS Infrastructure spending is projected to spur Oman towards an economic growth of 5% this year. IME presents the pick of top projects in the Sultanate

INFRASTRUCTURE MIDDLE EAST

July–August 2014

OMAN NATIONAL RAILWAY PROJECT

Owner: Oman Railway Company (ORC) Budget: $15.5bn Progress: PMC stage Oman’s national railway network comprises of 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. Three consortiums, namely Korea Rail Network Authority (KRNA), Técnicas Reunidas and Parsons International, have been shortlisted for the Project Management Consultancy (PMC) contract. In June, they were instructed to extend their bid bonds by a further two months. ORC is currently prequalifying bidders for the Design & Build package for the 170km Sohar–Al Ain segment.

TEN OMAN INFRASTRUCTURE PROJECTS

DUQM OIL REFINERY PROJECT - PHASE 1

DUQM GAS PIPELINE PROJECT

INDEPENDENT POWER PLANTS PROJECT - 2

Owner: Duqm Refinery and Petrochemical Industries Company Budget: $6bn Progress: RFQ stage

Owner: Oman Gas Company (OGC) Budget: $250m Progress: Bids invited for the EPC contract

Owner: OPWP Budget: $1.5bn Progress: RFQ stage

Duqm Refinery is a 50:50 joint venture between Oman Oil Company and Abu Dhabi’s IPIC. The first phase will see the development of a 230,000 barrels per day (bpd) grassroots merchant export refinery within the Duqm Special Economic Zone (SEZ). Foster Wheeler has been awarded the Front-End Engineering Design (FEED) contract for the project. The pre-qualification of international companies for the Engineering, Procurement and Construction (EPC) package is expected to start in the third quarter of this year. A contract for readying the site will be awarded in the first quarter of 2015. The invitation to bid for the key EPC package is expected to be floated in the second quarter of 2015 with the final award in 2016.

The 36-inch-diameter, 230km Duqm gas pipeline will link the Saih Nihayda gas field in central Oman to the Duqm Special Economic Zone (SEZ). With a capacity of 25 MMcm of natural gas per day, the pipeline will initially meet Duqm’s energy and feedstock needs. In June, OGC awarded the gas pipeline supply tender for the project valued at $93.5m. OGC is also carrying out the internal and external coating for the pipes locally, in order to stimulate local enterprise. The tender for the construction works is expected be awarded soon. The entire project has been planned for completion by 2018 with Duqm Refinery and Petrochemical Industries Company expected to be its first major customer.

Through this project, Oman Power and Water Procurement Company (OPWP) plans to add new power generation capacity of approximately 2,600 MW to the Main Interconnected System (MIS) of Oman. The project, which will be developed as an Independent Power Project (IPP) by qualified developers, is likely to be located across two sites. OPWP has launched the qualification process through the launch of Request for Qualification (RFQ), ahead of the launch of a competitive tender for one or more licenses. Part of the capacity will go on-stream by 2017, while the full project will be ready by 2018. Fichtner Consulting has been appointed as the technical consultant, with DLA Piper as the legal consultant and Project Financing Solutions (UK) as the financing consultant.

July–August 2014

INFRASTRUCTURE MIDDLE EAST

TEN OMAN INFRASTRUCTURE PROJECTS

GCT EXPANSION PROJECT – SALALAH PORT

Owner: Salalah Port Services Company Budget: $145m Progress: On schedule The General Container Terminal (GCT) expansion project aims to increase Salalah Port’s dry bulk cargo handling capacity to 20m tonnes and liquid cargo to over 6m tonnes annually. At the time of the contract, awarded in 2012 to Netherland’s Archirodon Construction, the port’s general cargo handling capacity was 5.5m tonnes annually. The new liquids terminal will significantly expand the port’s role in handling key industrial commodities such as fuel, methanol, monoethylene glycol, and caustic soda. Last year, there were reports of delay in completing the project due to electrical and corridor works. However, recent announcements indicate that the GCT expansion and liquid jetty will be completed by November 2014.

INFRASTRUCTURE MIDDLE EAST

AMMONIA PLANT PROJECT – SALALAH FREE ZONE

MUSANDAM INDEPENDENT POWER PROJECT (IPP)

Owner: Takamul Investment Company Budget: TBA Progress: RFQ

Owner: Oman Oil Company Budget: $1.5bn Progress: EPC bids submitted

The 1,000 metric tonnes per day (mtpd) capacity ammonia plant in Salalah Free Zone is being set up by Takamul Investment Company, the downstream investment arm of Oman Oil Company. The project is intended to catalyse investments in a wider, value-added chemicals cluster at the free zone. The plant will be constructed adjacent to the methanol scheme of Salalah Methanol Company to ensure feedstock. Germany’s Linde has been awarded the FEED contract. In May this year, Takamul invited international firms to prequalify for the Engineering, Procurement, Construction and Commissioning (EPCC) contract, which is expected to be awarded by end-2014.

July–August 2014

The Musandam Independent Power Project (IPP) is owned by a consortium of Oman Oil Company and South Korea’s LG, but it will be procured by OPWP. The project, which will utilise dual-fuel gas turbines, will be built close to Oman Oil Company Exploration and Production’s (OOCEP) Musandam Gas Plant, which will process well fluids from offshore platforms in the West Bukha field. OOCEP is Oman Oil’s upstream subsidiary. A pipeline will supply natural gas as feedstock for the IPP while the power produced will be sold to Rural Areas Electricity Company (RAECO). Bids have been submitted for the EPC contract, and the final award is expected soon. The IPP will usher in a new era of gas-based power generation in Musandam, replacing the existing network of diesel-based systems.

TEN OMAN INFRASTRUCTURE PROJECTS

SALALAH 2 IPP

Owner: OPWP Budget: $1.5bn Progress: RFP stage OPWP has sent Request for Proposals (RFP) to shortlisted companies to develop the Salalah 2 Independent Power Project (IPP) on Build-Own-Operate (BOO) basis. The RFP has gone out to four groups comprising Saudi Arabia’s ACWA Power and Japan’s Mitsui; France’s EDF; Japan’s Sojitz and South Korea’s KEPCO and Japan’s Marubeni. The project will have an installed capacity of 300–400MW and will be based on combined cycle gas turbine (CCGT) technology. It will be located near the site of an existing power plant in Raysut, owned and operated by Dhofar Generating Company (DGC). The successful bidder will have to acquire the assets of DGC, comprising a 273MW capacity gas-fired plant, which was commissioned in 2003. OPWP hopes to conclude the tender by the end of the year and start the project in 2015 so that it can be completed by early 2018.

DIBA-LIMA-KHASAB ROAD AND TUNNEL

SALALAH INTERNATIONAL MEDICAL CITY - PHASE 1

Owner: Ministry of Transport and Communications Budget: $1bn Progress: Tendering stage The Diba-Lima-Khasab road and tunnel project has been planned as a Design, Build, Operate and Maintain (DBOM) project to improve connectivity between the Wilayats in the governorate of Musandam and revitalise tourism in the area. The project is a 65km-long coastal road, starting from Al Khalidiya in the Wilayat of Khasab to Diba, passing through the village of Lima and will have seven tunnels and 18 bridges. The feasibility study for project, to be developed as a 20-year concession, has been completed. This year, two tenders have been floated – one, to select a consultant for preparing tender documents and the other, to select a project management consultant. The tender for pre-qualification of contractors for the construction work, which was floated last year, attracted 33 companies.

Owner: Apex Medical Group, Saudi Arabia Budget: $1bn Progress: Infrastructure work to start The Salalah International Medical City Project will have three major clusters — a healthcare complex, a health resort and a healthcare education complex — that will be developed in three phases on a 866,000 sqm site. The centrepiece will be a 530-bed multi-tertiary hospital catering to 21 different specialties including an organ transplant centre, a diagnostic centre and a rehabilitation centre. The second phase of the project will witness the extension of the multispecialty tertiary care hospital to 430 beds, and will encompass a healthcare resort which will offer complementary and alternative Medicine. The third phase will have a medical college and a research & development centre.

July–August 2014

INFRASTRUCTURE MIDDLE EAST

COVER STORY

EXCLUSIVE INTERVIEW

The Right Stuff

Dow’s senior executive Howard Ungerleider outlines the chemical giant’s growth formula 30

INFRASTRUCTURE MIDDLE EAST

July–August 2014

COVER STORY

f you want to know how The Dow Chemical Company regards the Middle East, all you need to do is pick up (or in this digital era, download) a copy of the company’s 2013 annual report. The region comes across as central to Dow’s cost advantaged strategy, best defined as taking advantage of low-cost feedstock as building blocks to add value downstream, with bestin-class R&D and application of technology. Throughout the 117 years of its existence, Dow has displayed a remarkable ability to adapt itself to changing business environments. Since 2009, the company has moved out of what it calls ‘commoditising assets and businesses at risk from highly competitive state-owned enterprises in the emerging world’ into ‘higher margin, faster-growing businesses.’ This includes infrastructure, transportation, electronics, agricultural sciences, and packaging, where it can leverage its strong technology and highly competitive cost position. In fact, infrastructure is a huge focus for Dow, with its products and services sold into this industry sector accounting for 18-20% of the company’s total turnover at the enterprise level. The cost position, defined as integrated value chains, from feedstock to end-use products is aligned directly to high margin, high-growth end-markets and underlines Dow’s investment strategy today – from the Middle East to the US Gulf Coast. “We are looking at the Middle East from two big and equally important perspectives,” explains Howard Ungerleider, Executive Vice President, Advanced Materials and a member of Dow’s most senior executive committee in an exclusive interview with Infrastructure ME during a recent visit to Dubai. “First, is our investments in the region, especially from a manufacturing/capex standpoint and the second, is the market, in terms of oil & gas, energy, energy efficiency, water treatment and even construction. The region’s economy is developing at a fast pace and we are excited about the fact that we can lend our expertise and knowledge to help accelerate this pace.” Compared to its Fortune 500 peers, Dow has been a serious, long-time investor in the region, starting 40 years ago with the setting up of manufacturing and commercial facilities in the UAE. The company then

went on to establish a solid presence in the region’s petrochemicals industry, partnering with leading regional companies to set up state-of-the-art petrochemical complexes across the region. For almost 20 years, Dow and Petrochemical Industries Company (PIC) of Kuwait have partnered together in six industry-leading joint ventures. Where the GCC’s largest economy is concerned, Dow first entered the Saudi market in 1976, partnering with EA Juffali & Brothers to create Arabian Chemical Company (ACCL), producing latex in Dammam and STYROFOAM in Jeddah and in Dubai. In 2013, Dow and its joint venture partner TASNEE and the Sahara Olefins Company started the region’s first acrylic monomer production facility in Jubail in the eastern province of Saudi Arabia. The plant will produce acrylic emulsion polymers for coatings and adhesives applications targeted at emerging geographies.

“The further upstream we go, the more we prefer to forge partnerships as this involves more capex and hydrocarbons” HOWARD UNGERLEIDER, EXECUTIVE VP, ADVANCED MATERIALS, DOW THE BIGGEST DEAL

The crowning glory of Dow’s Middle East journey is, without doubt, the Sadara Chemical Company, a $20bn joint venture with Saudi Aramco, now under construction in Jubail Industrial City. Recognised as the largest chemical complex ever built in a single phase, Sadara is on track for start-up in the second half of 2015. The complex, which includes a worldscale cracker that will be able to crack a wide range of feed stocks, will eventually produce more than 3m MT of value-add performance plastics and specialty chemical products. These are targeted at the rapidly growing sectors of energy, transportation and infrastructure, and consumer products, especially in the emerging markets of Asia Pacific, the Middle East, Eastern Europe and Africa. But if one gets the impression that joint ventures are integral to Dow’s go-to-market strategy for the region, Ungerleider dispels

that by pointing to the 100% Dow-owned coatings plant in Jebel Ali and the under construction manufacturing facility for DOW FILMTEC RO (Reverse Osmosis) elements coming up in Saudi Arabia as examples of going solo when the situation favours it. Commenting on the new RO facility, Howard says: “We are excited about this project because it is not just about producing monomers or building blocks but really being able to go downstream to add value. We have a 35-40% global market share in RO membranes, and the only place we make them today is the US.” Dow’s philosophy about partnering versus going alone is quite straight forward. Ungerleider explains: “In general, the further upstream we go, the more we prefer to forge partnerships as this involves more capex and hydrocarbons. That’s one of the reasons we partnered with Aramco for Sadara. They have the upstream expertise and hydrocarbons while we bring the downstream experience, R&D, marketing and commercial engine.” The Dow executive hastens to add that Sadara is much more than “the largest integrated petrochemical complex ever built at one time.” Sadara will also enable significant advanced manufacturing investments further downstream. In fact, Dow itself will be an investor in the downstream businesses in Jubail with the manufacturing facility for RO elements. More important, Sadara is laying the groundwork for the regional debut of a unique industrial park concept developed by Dow. Unlike a conventional industrial park with its loose syndicate of companies, all the companies operating in the Value Park will be integrated into Sadara’s material flow system, supply and production chains as well as joint service and safety management system. For businesses that use the Sadara complex’s intermediates or derivatives in their production process, being located in the Value Park can help them maximise proximity benefits, whether it is easy access to feed stock, logistics or even R&D. “We first applied the Value Park concept in the early days of German unification to the former BSL (Buna Sow Leuna Olefinverbund) complex in the East Germany, regarded as the birthplace of chemistry in Europe,” explains Ungerleider. “As we grew the BSL complex, we brought in other partners further upstream than us, as well as customers. The same concept is now being implemented in Saudi Arabia.”

July–August 2014

INFRASTRUCTURE MIDDLE EAST

COVER STORY

The Sadara complex in Saudi Arabia The largest chemical complex ever built in a single phase, Sadara is on track for start-up in the second half of 2015

Sadara is expected to play a pivotal role in Saudi Arabia’s strategy to create a hub for future downstream industrialisation of chemicals and plastics in the Kingdom while supporting the government’s goal of enhancing job opportunities for the fast growing young population in Saudi Arabia. “Sadara is going to have 26 manufacturing units excluding the Value Park,” says Ungerleider. “As we build up the Value Park, we will be creating quite a number of jobs. Moreover, we are already training 1,100 Saudi engineers in our facilities around the world to take up responsibilities in Sadara. This is something we have been an active proponent of and you will continue to see more of that.” SHALE GAS ADVANTAGE

Even as Dow is solidifying its global footprint through mega projects like Sadara, it has been equally aggressive in applying its costadvantaged strategy in its home country, the US, where the shale gas boom has radically altered the country’s energy outlook. According to a Financial Times report, the cost advantage created by shale gas boom has made the US the second cheapest location to manufacture chemicals, after the Middle East. “The shale opportunity has been a key catalyst for Dow to re-invest in the US, allowing us to reinvigorate our assets in North America,” says Ungerleider. “In

INFRASTRUCTURE MIDDLE EAST

“We are already training 1,100 Saudi engineers in our facilities around the world to take up responsibilities in Sadara” HOWARD UNGERLEIDER, EXECUTIVE VP, ADVANCED MATERIALS, DOW fact, our other mega project, apart from Sadara, is our US Gulf Coast investments which will serve the US, Canada and Latin America. We see these two investments in terms of two large manufacturing bases serving different parts of the world.” Leveraging the benefit of positive shale gas dynamics, Dow restarted its St Charles ethylene production facility in Louisiana in December 2012. A second project in Louisiana, an ethane flexibility investment, is expected to become fully operational in 2015 as also a new world–scale, on-purpose propylene production facility in Freeport, Texas, which is the company’s largest integrated manufacturing site worldwide and the largest single-company chemical complex in North America. In June this year, Dow announced that it has started construction on a worldscale ethylene facility, also in Freeport. “Over time, I am a big believer that the

July–August 2014

world will minimise molecular tourism,” says Ungerleider. “It wasn’t that long ago people were talking about hydrocarbons in the Middle East being turned into plastic pellets and shipped to China to be turned into fabricated products that would be then shipped to the US. That’s a lot of movement and waste, both from a sustainability standpoint and a lifecycle standpoint. As economies grow, you are going to produce and consume long-term as close to the end-market as possible.” The Dow executive believes that companies with global scale and capability are going to pivot to markets where the consumer is because it is always in their interest to be upstream of their customers. Not surprisingly, Dow has a strong view on US gas exports and does not want to see the country’s energy cost-advantage eroded. “We don’t believe that exports should be restricted,” explains Ungerleider. “We just want to ensure there is a balanced and measured approach on natural gas exports as there is a great opportunity for the US to build a market upstream and minimise molecular tourism. Moreover, there is an 8:1 multiplier for an economy if you are doing advanced manufacturing versus just exporting hydrocarbons. If you can produce products and create manufacturing jobs, you get greater employment, tax base and other advantages.”

COVER STORY

that goes into STEM (science, technology, engineering, and mathematics),” admits Ungerleider. “But making sure that we keep young people excited about going into science and engineering is critical, and that is a challenge today.”

INNOVATION VALUE

Dow’s global manufacturing capabilities are backed by solid technology leadership and science-driven innovation. The company’s 2013 Annual Report describes Dow as an organisation that is innovating and delivering unique customer products and solutions at the intersections of chemistry, biology and physics. According to the company’s 2012 Data Book, programmes in the implementation stage of its R&D pipeline represented a net present value of $7bn in 2012. “We are not focussed on innovation for the sake of innovation,” says Ungerleider. “Ultimately, it doesn’t really count unless there is a customer willing to pay for the science and technology that you have invented.” Dow’s work in spearheading the development of sustainable technologies that integrate water and energy requirements is of great relevance to the Middle East. Earlier last year, the company launched the FILMTEC ECO Line RO Elements for desalination, which uses much less energy than standard RO elements. Dow claims that these elements can deliver 40% lower salt passage at 30% less energy, when compared to standard RO elements, an ecologic as well an economic win. Ungerleider points out that a large chunk of the Middle East uses thermal desalination, which is wasteful from a sustainability standpoint. With hydrocarbons becoming more and more valuable, it makes a lot more sense to put that money into a technology like RO. According to Dow, RO desalination can reduce the oil requirement to distil water in the region by approximately $1bn per year. “At Dow, innovation is all about bringing chemistry in a sustainable way to solve our customer’s problems,” says Ungerleider. “We prefer that customers tell us about their problems. But we understand the value chain well enough to actually solve problems that customers don’t know they may have. Innovation is a balance of application back but science forward, and at Dow, we try hard to do both.” In Saudi Arabia, for example, Dow is a founding member of the King Abdullah University of Science and Technology’s (KAUST) Industrial Collaboration Program, which serves to commercialise research into practical applications. As a part of this agreement, Dow announced this year the setting up of a large-scale pilot plant, which will serve as a water technology research centre to test real-world scenarios at industry scale.

UNUSUAL PARTNERSHIP

Dow’s Freeport,Texas Operations is the company’s largest integrated manufacturing site worldwide and the largest chemical complex in North America

TALENT MAGNET

Attracting the talent that drives cutting-edge R&D and innovation has never been an issue at Dow, claims Ungerleider. “We have had tremendous success in recruiting scientists, whether it is India, China, Europe, the US or this region,” he says. “There aren’t many companies in the world where you can be an expert in your field and also apply that expertise across markets around the world.” For example, every year, Dow organises the Building Engineering & Science Talent Symposium (BEST) to introduce doctoral and postdoctoral scientists to the wide range of rewarding careers in industrial research. “We recruit from the best universities around the world,” says Ungerleider. “Our reputation as a blue chip company helps attract the best talent.” But going forward, attracting talent is expected to be a problem for the chemical industry. “We get our fair share of talent

IN NUMBERS

$20bn

Total investment by Dow and Saudi Aramco in the Sadara JV

COMMITTED TO INVEST

Number of world-scale manufacturing units in the Sadara complex

$7bn

Keeping the excitement quotient high are associations with mega events; for example, Dow is an official Worldwide Partner and the Official Chemistry Company of the Olympic Games through 2020. As a B2B company, Dow doesn’t necessarily have a consumer angle which would typically be the case of an Olympic sponsor. But from artificial turf in stadiums to insulation for buildings, the company produces the raw materials, chemistries, systems and technologies for many of the products used to enable the Games. Thanks to Dow, the Sochi 2014 Olympic Winter Games was the first Olympics in history to mitigate the entire direct carbon footprint of the Organising Committee (for the Olympic and Paralympic Winter Games) even prior to the opening ceremony. This was achieved by implementing offset projects in the areas of infrastructure, industry and agriculture throughout the Russian Federation. These projects were largely focussed on energy efficiency in buildings and industrial processes, low-weight and high-strength materials for structural integrity and durability of civil infrastructure, and farming enhancements. Commenting on Dow’s carbon mitigation programme, Ungerleider says: “Offsetting carbon associated with the games was something that we set up as a model for Sochi and you will see us continuing to drive that around the world with the Olympic movement. This is also transferable to the Middle East, which has started attracting mega events like the World Expo and the FIFA World Cup.”

Net Present Value of the programmes in Dow’s R&D pipeline in 2012

What is clear is that the Middle East is firmly on Dow’s radar, not only as a market but also as a cost-advantaged investment destination. “There will be many more investments to come,” assures Ungerleider. “You will be hearing more about our new worldscale coating plant here in the coming months. As population grows and industrial production increases, in a region or a country, where we see the opportunity to add value is where we tend to play.”

July–August 2014

INFRASTRUCTURE MIDDLE EAST

SPECIAL REPORT

CRITICAL INFRASTRUCTURE

Protection perspectives Even as the region spends billions of dollars on infrastructure, it needs to safeguard these assets from multiple threats 34

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Julyâ&#x20AC;&#x201C;August 2014

SPECIAL REPORT

n August 2012, oil giant Saudi Aramco, which accounts for 10% of the oil consumed daily in the world, was the victim of a malicious attack intended to halt the company’s crude oil and gas supplies. Although the virus — given the nickname ‘Shamoon’ by investigators — failed in its primary objective, it nevertheless destroyed the hard drives of more than 30,000 desktop computers and 2,000 servers, forcing IT systems to be disconnected from the Internet for two weeks. But the question on everybody’s minds was: what if the attackers had succeeded? According to Standard & Poor’s Ratings Services, on average, hydrocarbon revenues constitute 46% of nominal GDP and threequarters of total exports of the six GCC countries. The region also accounts for nearly one-fifth of global crude supplies. Therefore, any unplanned stoppage of production could become a nightmare, not only for the producers but also for the countries that depend on them. Critical infrastructure, in the Gulf region’s context, comprises of sectors that constitute the backbone of its social and economic security. These include oil & gas, utilities, telecommunications, transportation and industrial manufacturing sectors. Any attack on these sectors could result in equipment impairment and production loss at the most basic to crippling financial losses, environmental damage and loss of human life at the worst. As their operations increasingly move online, critical infrastructure installations are also at risk from cyber attacks. According to the Marsh Risk Management Research paper, Advanced Cyber Attacks on Global Energy Facilities, energy firms are being disproportionately targeted by increasingly sophisticated hacker networks that are motivated by commercial and political gain. Open industrial control systems (ICS) have integrated controls that are linked with other information technology networks, giving hackers the opportunity to gain access through back doors and exploit system weaknesses to their advantage.

CYBER THREATS

Computer controlled systems, such as the Supervisory Control and Data Acquisition (SCADA) and Distributed Control System (DCS), are now mainstays in various sectors,

“In any conflict, you will see that the enemy always targets infrastructure. In the past, you had weapons of destruction; today, you have the Internet”

CREATING A SAFE CITY LANDSCAPE

DON CODLING, FORMER CYBER SECURITY CHIEF, FEDERAL BUREAU OF INVESTIGATION (FBI) monitoring and controlling highly critical infrastructure across oil & gas, power, distribution and aluminium. From checking temperatures and water levels to managing physical infrastructure, these automated systems and communications technologies have helped the industry to run more efficiently. Don Codling, former Cyber Security Chief and 23-year veteran of the Federal Bureau of Investigation (FBI), says: “All the systems we use now were originally developed and designed largely without security in mind. The people who came up with the Internet protocols could never have never anticipated that a tool to connect research laboratories would become so ubiquitous in daily life. They couldn’t have forseen that someone with malicious intent would use that tool to bring down power plants or refineries. If I had to develop and design something today, I will always use encryption instead of open protocol.” Codling was one of the keynote speakers at IQPC’s Cyber Security for Energy and Utilities Summit in Abu Dhabi a few months ago. He continues: “In any conflict, you will see that the enemy always targets infrastructure. In the past, you had weapons of destruction; today, you have the Internet.” Codling believes that officials responsible for critical infrastructure protection in the region understand the nature of the problem because societal and economic progress of a nation is underpinned by solid infrastructure. “It usually takes a disaster to remind us how important infrastructure is to our society and our way of life,” he says. “The most important thing is to have the leadership of the individual sectors understand this is a concern.” For example, in the US, following a presidential directive, critical infrastructure

• A safe city starts with an urban environment that has been designed to minimise risk and recover quickly from any possible consequences. • Critical locations should have solutions in place to provide full situational awareness to the relevant agencies. Such automated, integrated systems can provide a higher level of protection than a regime based on guards alone. They can often collect valuable intelligence that enables security personnel to adopt the most appropriate countermeasures to a given threat. • If a problem occurs, the authorities should be able to respond quickly to correct the situation and recover. They should also be able to keep everyone “in-the-loop”, including responders and the general public, where appropriate. • Safe and efficient communication tools mean that commanders can always ask for more details if necessary, while field personnel can access all the available intelligence. Everyone has the information they need to make the right decisions and work effectively together, even during multi-agency operations. • End-to-end encrypted voice communications make eavesdropping a thing of the past. This can be equally valuable for security personnel and for business professionals. • Digital communications can be vulnerable to cyber-attacks, so a cyber-security solution can protect public safety communications and businesses, as well as vital infrastructure operations, such as utility and transport networks, or industrial production at oil and gas facilities, for example. • Smart decision-making tools can interpret and predict different cyber-security alerts and their likely impact on operations and businesses. This enables security experts to focus on the biggest threats. • Finally, the authorities need to be equipped to disarm and dispose of high-risk threats such as bombs or improvised explosive devices. The right training and information systems can also support them here. Reproduced with permission from the white paper ‘Anticipate, respond, inform – supporting urban security’ by Airbus Defence and Space

July–August 2014

INFRASTRUCTURE MIDDLE EAST

SPECIAL REPORT

ANDREA SORRI, DIRECTOR BUSINESS DEVELOPMENT, GOVERNMENT, CITY SURVEILLANCE AND CRITICAL INFRASTRUCTURE, AXIS COMMUNICATIONS ON USING IP SURVEILLANCE TO PROTECT INFRASTRUCTURE The protection of critical infrastructure from theft, break down and hostile activity is a challenging task. More and more organisations are looking to IP surveillance to protect their installations and guarantee safe, secure and uninterrupted operation. Network video offers excellent possibilities for the operator of a plant to integrate security, safety and production control in one system. A central system combines the supervision of all processes, video surveillance, intrusion protection and access control, allowing security staff to reliably detect, verify and identify alarms â&#x20AC;&#x201C; both from remote sites as well as from a centrally located control room. When planning and designing a system for the surveillance and protection of critical infrastructure, choosing the right network cameras and where they should be placed is a good starting point, regardless of what other technologies are being used. For example, low light sensitive cameras and thermal cameras can be combined for better detection and verification of intruders. Protecting long perimeters, monitoring entrances and exits and safeguarding potentially hazardous areas are some of the main concerns of the security manager. The protective measures need to be defined based on a risk and hazard analysis that also takes into account accuracy, affordability, maintenance, ease of customisation and integration of the security solution with other systems.

BREAKING IT DOWN For perimeter protection there are many different technologies available to detect an intruder like microwave, fibre-fence sensors, seismic sensors and radar alerts. Network cameras can be combined with these technologies to protect infrastructure. In a typical set up, detection would be provided by network thermal cameras equipped with intelligent video analytics. A thermal camera works just as well in complete darkness as in daylight, and environmental disturbances, like rain, fog, sun, foliage or small animals are kept to a minimum thus influencing the intelligent algorithm as little as possible. In the case of an event being detected, the thermal cameras automatically trigger images from a PTZ dome camera that, thanks to HDTV image quality, permit the security manager to capture details of the situation. Was it an animal or leaves or was it a human being trying to sabotage the system? This information is crucial when deciding what action to take and who to send out. To ensure as much functionality as possible, each camera is independent and is able to provide information as long as it is connected to the IP infrastructure. In case of communication failure, the camera can record on an embedded SD-card for future analysis.

PIPELINES AND CRITICAL AREAS Distribution systems are perhaps the most vulnerable parts of the supply chain and the costliest to protect. For example, pipelines transporting gas from remotely located exploration sites over vast unpopulated areas are very difficult to protect. Hence, remote supervision is a must. Information from the thermal camera, enhanced by images from a PTZ dome camera, provides enough detail for the operator to make the appropriate decisions. Along with perimeter access, it is also important to control access and flow within critical areas. Being able to monitor exits during

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Julyâ&#x20AC;&#x201C;August 2014

evacuation is important to ensure that nobody is left inside and potentially in danger. Network video linked to access control systems offers faster and more accurate access management facilitated by instant access to live or recorded video, sound and data. Cameras with image enhancing technology allow security managers to see what is happening even in low light; for example emergency exit lights can be sufficient to provide details of the scene. Advanced capabilities include video and audio information connected to an access control system for an intercom, virtual gates, virtual fences, audio detection and counting people going in and out of the facility. In case of obstruction by environmental factors such as fog or smoke, thermal cameras can be used.

PRODUCTION CONTINUITY Apart from safety and security, integrating the camera system into the production system can help in monitoring production efficiency, visually inspecting and verifying functions and processes, and providing remote assistance with planned maintenance. It also helps ensure safety rules and processes are being followed, and tools and equipment are being managed properly. It is important to work with open standards and protocols in order to facilitate the integration of systems, enabling manufacturers to integrate the various production components into one management system. For example, SCADA systems can integrate network video to provide information on temperature, pressure and speed meters. Or, if you have a control room in a facility where you control the pumping station, live images of sensors can provide visual confirmation in addition to data.

SCALABLE SOLUTIONS A network video system is especially useful to critical infrastructure operators since it allows them to be present virtually anywhere. Whenever there is the need to involve third parties such as the police, fire services or government bodies, a network video system not only helps with the fast detection and evaluation of the situation, it also allows two-way communication for security managers, encouraging cooperation among different entities and agencies.

SPECIAL REPORT

owners and operators established sectorspecific Information Sharing and Analysis Centres (ISACS) that share information about threats and vulnerabilities pertaining to their respective sectors. Most ISACs have 24/7 threat warning and incident reporting capabilities which are critical to the success of protecting critical infrastructure. The US Department of Homeland Security has established the Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) to reduce risks within and across all critical infrastructure sectors. “ISACS and ICS-CERT have been successful because they are backed by legislation, presidential directives and a national consensus,” says Codling. “They provide a platform for subject matter experts from the public and private sectors to come together and talk to each other. ” Such best practices are making their way into the region as well. For example, the UAE is working on legislation that will require operators of critical infrastructure to implement security systems. In June, Kuwait Petroleum Corporation (KPC) organised Kuwait’s first ever industrial automation and control systems cyber security conference, focussing on cyber security threats to ICS in oil & gas, petrochemical and power plants. Senior IT Engineer at Kuwait Gulf Oil Company Abdullah Al-Akhawand cautions that cyber risks cannot be mitigated through technology alone. He elaborates: “It is not only the technology; it is also about behaviour, processes, practices, right certifications and putting in place governance and security policies that not only look at the enterprise side but also the control side.” He also adds that cyber risk is a key topic at board level discussions and is considered as part of the IT risk landscape. INSURANCE PLAN

From a risk mitigation standpoint, insurance companies like Marsh are coming out with specialised cyber insurance products to help energy companies develop and implement more comprehensive risk mitigation and risk planning strategies. Exclusion clauses in standard commercial insurance policies stipulate that cover will not be provided for bodily injury, property damage and business interruption arising from a hacking event. Marsh’s Cyber Gap Insurance closes this gap by indemnifying the insured

SHADI BAKHOUR, GENERAL MANAGER, CANON EMIRATES ON SECURING CRITICAL INFRASTRUCTURE THROUGH DOCUMENT SECURITY overall information security approach. Solutions like Canon’s Managed Print Solutions (MPS) would drive the adoption of print security and ensure seamless interactions between machines without compromising on quality or efficiency.

THE RIGHT QUESTIONS

Increased threats and security breach incidents are fuelling investments in IT security solutions, with organisations now adopting predictive rather than reactive strategies when it comes to protecting business infrastructure. Printers have become very advanced due to their operating systems, internal hard disks, CPUs and network capabilities, yet many companies still do not consider them as a main security threat. Common security threats for printers include document theft, unauthorised access, saved copies on internal storage, hacking and network sniffing. Then there are the risks associated with unsecured printers and multi-functional printers (MFP). In addition, a complexity of mixed printer fleets can introduce a greater risk and companies should conduct a security assessment of the print environment to uncover any weaknesses. Ideally, a print security strategy should be integrated with an

in the event that indemnification under the normal property, business interruption or package policies is denied, solely due to the existence of any of these cyber risk exclusions. Andrew Herring, Leader of Marsh’s Energy Practice in Europe, the Middle East and Africa (EMEA), says: “The disproportionate rate at which the (energy) sector is targeted means it may only be a matter of time before we experience catastrophic physical damage to facilities or disruption to supply as a result of a cyber-related event. Marsh’s Cyber Gap Insurance closes the gaps in existing coverage

In order to understand how best to go about adopting an MPS and how to maximise its effectiveness, buyers should ask the following: • Who do I need to speak to from the senior management to implement MPS and how do I communicate the benefits to my colleagues? • What are my ‘day one’ costs and how do I ensure MPS providers use my cost model? • How do I create an output strategy that meets my organisation’s needs? • What deliverables should I include in my service level agreement with my MPS provider? • How do I incorporate security and compliance in a workplace where people share devices and occasionally travel with them for business purposes? Today, with the increase of personal devices inside the enterprise, it has become impossible to continue with only device specific security functions. It is now possible for data to be shared beyond an organisation’s secure cloud or company network. Organisations need to consider integrated hardware and software solutions that create an information centric approach to ensuring document security. Document control and rights management is crucial when dealing with sensitive content. I am sure that it will be on par with cybersecurity soon as the solutions for the two issues often complement each other.

that have existed for over a decade.” The nature of the threats and significance of critical infrastructure to economic and social well-being means governments, more than anybody else, will have to take the lead, preferably through legislation, to persuade infrastructure operators to adopt rigorous risk management practices commensurate to the threat at hand. Equally important, critical infrastructure security solutions that are adopted by these operators should integrate both modern cyber security and traditional physical security to present a combined front.

July–August 2014

INFRASTRUCTURE MIDDLE EAST

TECHNOLOGY

WIRELESS

Smart construction Wi-Fi connectivity can be a key enabler for procurement, logistics, workforce planning and BIM during construction, argues Wesam Al-Assaf he Middle East is all abuzz with excitement about ‘Smart Cities’ and rightfully so! Economic, social and technological factors have converged to make the region ready for wide-spread Smart City developments. Masdar City in Abu Dhabi and the recent announcement of strategic plans to transform Dubai into a ‘Smart City’ by His Highness Sheikh Mohammed bin Rashid Al Maktoum; the six greenfield economic cities in Saudi Arabia; Lusail’s Smart and Sustainable City, Pearl-Qatar Island, and Energy City in Qatar are examples of the

numerous initiatives that have already gained solid backing from respective local governments. As the Middle East ushers in this new era of advancement, much has been predicted and promised about the integration of ICT into every aspect of the completed city developments. There is however no reason why the benefits of technology cannot be leveraged much sooner than that, at the construction phase itself. In the GCC, there are around $3.45tn worth of projects that are in the design, bid or construction stage until 2025 (Source: Zawya), so clearly, employing technology to increase efficiency during construction could go a long way in

Technology at work Rugged Wi-Fi solutions can help streamline operations at construction sites

INFRASTRUCTURE MIDDLE EAST

July–August 2014

streamlining operations and cutting costs. The computing capabilities of mobile devices have advanced to a level that has made them capable of aiding the planning, designing, and building phases. But turning mobility into an effective tool requires not only computing power but also connectivity. And at jobsites, wired connections are not feasible and cellular networks are not always available. A strong case can, therefore, be made for developers to utilise Wi-Fi solutions. These are not only easy to install and manage, but are now affordable and rugged enough to see deployment in harsh construction environments.

TECHNOLOGY

FACILITATING WORKFLOW

ASSESSING WI-FI SOLUTIONS

It isn’t uncommon for construction workers to still rely on paper-based documentation. Besides being cumbersome to transport and maintain, these documents need to be regularly updated, often-times at the site itself. With the introduction of tablet devices, mobile project management has emerged as a worthy replacement to age old methods. Coupled with the broad ecosystem of feature-rich mobile applications and the ability to draw from vast amounts of remotely stored data and ‘cloud’ services, these devices are capable of granting contractors, engineers and supervisors access to blue prints, schematics and other vital documents. Moreover, with the ability to instantly push updates to all members working on the project, mobile computing devices can aid collaboration and revolutionise the Building Information Modeling (BIM) process in real-time. With site-wide high speed wireless connectivity for all the mobile devices, workers gain the ability to transfer high volumes of data back and forth not only with each-other but also with the headquarters. This significantly streamlines communications while cutting costs and improving operational efficiencies. This could also bear attractive ‘green’ side effects as staff no longer have to make regular trips to and from headquarters.

The challenge for the developer is to find a robust enterprise-class WLAN that is affordable in terms of the capital expense and operational overhead. While construction companies may be staffed with savvy IT professionals at their headquarters, they have limited resources and RF expertise at remote locations. Consequently, they must utilise mobility solutions that are simple to set up, highly reliable, and can be managed centrally. While being portable enough to be transported from one site to another, these systems must also offer enterprise-grade WLAN functionality. In line with keeping things simple, developers should also consider investing in controller-less ‘instant’ WLAN solutions. These solutions utilise a virtual controller on access points to deliver controllerlike features including RF management and role-based access control. As construction integrates more deeply with IT, network uptime will become an increasingly important factor. It is, therefore, prudent to invest in network management tools which can prove invaluable in providing maximum network availability. Software that periodically backs up all device configurations on the network is simple but extremely useful. Since most construction sites don’t have copper or fiber cabling installed, and 3G/4G network coverage may not be up to mark on location, developers can consider another alternative for their connectivity needs. They can partner with mobile operators who have a Wi-Fi offload strategy in place. In this case, they must look for a service provider whose solution is based on the new 802.11ac wireless standard as this delivers gigabit Wi-Fi combined with the device density and application intelligence required by today’s Wi-Fi networks. Finally, developers must also invest in training personnel to utilise newly deployed technologies. To ensure there is smooth transition from traditional methods to the modern mobile construction site, it is best to ensure that all team members are well versed and comfortable with all aspects of mobile technology. Once this has been achieved, ‘Smart Construction’ will usher in the era of the ‘Smart City.’ Wesam Al-Assaf is Technical Sales Manager at Aruba Networks

“Mobile computing devices can aid collaboration and revolutionise the Building Information Modeling (BIM) process in real-time” WESAM AL-ASSAF, TECHNICAL SALES MANAGER, ARUBA NETWORKS

ASSET TRACKING

At job sites, company assets are a major investment and the progress of construction is heavily reliant on their functionality. Heavy equipment such as cranes, Bobcats and cement mixers are often required to be left on site overnight. This makes them a prime target for theft. Asset tracking technologies help monitor such equipment at remote locations and automatically detect and report suspicious behaviour. These systems can also determine utilisation of expensive equipment and thereby, help supervisors determine if it is being over or underutilised. Developers can also benefit from automated maintenance schedules, logs and reports. The availability of cheap and easy to use RFID technology has made possible the automation of inventory management. By knowing in advance which materials are

soon to run out, construction companies can anticipate and avoid material shortages and eliminate losses on the productivity front. All these systems can only be deployed upon a robust Wi-Fi platform. Connectivity is thus becoming essential to procurement, logistics and workforce planning. SITE SECURITY

Another vital area of a construction site where mobile technology can be applied is video surveillance. Not only does this enable better collaboration and remote supervision, it is also essential to site security. Highspeed connectivity for robust and costeffective camera equipment can mean ready availability of high definition video, making both identification and collaboration easier. These video systems are also a key part of asset tracking systems.

July–August 2014

INFRASTRUCTURE MIDDLE EAST

Omanâ&#x20AC;&#x2122;s 4th International Exhibition for Infrastructure and Industrial Projects 20 - 22 October 2014

Oman International Exhibition Centre Sultanate of Oman

Power packed Networking Opportunity with Government Offcials and Key Decision Makers

Diamond Sponsors

Gold Sponsors

Platinum Sponsor

Supporters

Media Partners

Construction Intelligence Partners

TRANSPORT

AVIATION

Navigating the skies Innovative solutions are helping airlines deal with the challenges stemming from outdated Air Traffic Management (ATM) systems. By Neil Planzer he Middle East isn’t only home to some of the world’s leading airlines, such as Etihad Airways and Emirates; it is also home to some of the busiest skies. As its fastgrowing airlines nurture global ambitions and invest in expanding their fleets, the region’s airspace has never been more crowded. With the International Civil Aviation Organisation (ICAO) predicting that Middle East traffic will grow at an annual rate of 5.2% through 2030 and Boeing’s Current Market Outlook forecasting demand for an additional 2,610 aircraft in the region over the next 20 years, it will be critically important to address the challenges that will inevitably arise. Air Traffic Management (ATM) systems around the world have struggled to keep pace with the extraordinary growth in air traffic. Consequently, we see airlines struggling to deal with air traffic congestion, which has a direct impact on the industry’s environmental footprint and on profitability. Looking at the numbers, according to the International Air Transport Association (IATA), every minute of wasted flying time accounts for 62l of fuel consumption and 160kg of carbon dioxide (CO2) emissions. IATA estimates that this has led to 73m tonnes of CO2 emissions and nearly $13.5bn in wasted costs. But there are innovative solutions being adopted in a concerted effort to address the challenges that stem from outdated and inefficient ATMs. At a macro level, Collaborative Decision Making (CDM) tools are being advocated as a long-term response to inefficiencies caused by the absence of a cohesive, multi-country approach to ATM. By deploying CDM tools, airports, airlines and other stakeholders will have shared access to data allowing for more informed decision making, leading to improved airspace management.

Neil Planzer

Hidden from public eye ATM plays a crucial role in helping the airline industry take flight

The industry is also taking a fresh look at the current routing system, which, in most instances, allows airlines to fly fixed routes from origin to destination, with little to no flexibility offered to compensate for changing conditions such as winds. These systems date back to the early days of aviation, when airplanes did not possess the navigational capabilities that they do today and Air Traffic

Services (ATS) faced challenges in terms of flight management and communication. Additionally, demarcation of airspace for military and civil use has traditionally been non-negotiable as national security takes obvious precedence over airline operations. While the technologies have evolved and some militaries have become more flexible about sharing air space with civilian aircraft, the route systems have largely remained unchanged, and this is a disadvantage to our industry. For example, an airplane flying from Dubai to New York will, in most instances, have to follow a pre-determined route regardless of wind conditions. If the airplane’s pilots are allowed to make course corrections en route in order to benefit from changing high-altitude jetstream wind conditions, this will have a positive influence on fuel burn, improving operating efficiencies and reducing carbon emissions in the process. Early studies revealed that flexible routing could cut flight times by six minutes, reduce fuel burn by 2% and save 3,000kg of CO2 emissions on a 10-hour intercontinental flight. This system of optimising flight operations using flexible routing is currently offered by Airservices Australia and the Indian Ocean Strategic Partnership to Reduce Emissions (INSPIRE), both of which count Emirates as a partner, and the results have been remarkable. In one year, Emirates analysed data on eastbound, long haul flights and found that the programme saved 628 tonnes of fuel and 57 hours in trip time over the same period. This means that, on average, the airline saved six minutes of trip time for every flight, and one tonne of fuel. The effort of the aviation industry underscores the importance of having effective ATM systems in place. While hidden away from the public eye, ATM plays a critical role in helping the airline industry take flight. Neil Planzer is VP, Airspace Solutions & ATM, Boeing

July–August 2014

INFRASTRUCTURE MIDDLE EAST

TRANSPORT

AVIATION

Ready for takeoff Oman’s ambitious airport expansion programme is central to the country’s tourism development and economic diversification strategy. By Anoop K Menon he base for Oman’s impressive transportation infrastructure development lies in a vision tract launched in 1995. The key objectives laid out in Oman Vision 2020 were economic and financial stability; broadening private sector participation; diversifying the economic base; globalising the Omani economy and upgrading the skills of the Omani workforce and developing human resources. The economic diversification agenda also incorporated the goal of increasing the tourism sector’s share of GDP, from 2.4% to 5%, by 2020. Oman is blessed with a rich heritage and landscape, and a diverse culture, so the government has always viewed tourism as a job creator and multiplier to absorb the rising numbers of young Omanis, who currently make up 70% of the total local population. Globally, growth of tourism has always enjoyed a strong correlation with superior transportation infrastructure. This is acknowledged in Oman’s 8th five-year plan (2011–2015), where a major portion of its $78bn outlay is allocated to transportation

infrastructure including the Oman National Railway ($15.60bn), airports ($6.24bn) and roads ($3.12bn). In fact, Oman’s portfolio of airport projects constitute one of the largest infrastructure programmes underway in the Middle East today. Oman is currently building five new airports — three green-field and two brown-field — to improve international and domestic connectivity and ensure all-round development. “Oman’s aviation sector has experienced massive growth over the past 40 years,” says Eng. Khalfan Said Al Shueili, the Readiness General Manager of Oman Airports Management Company (OMAC). “We have experienced more than 31% growth in the past four years alone. We are targeting 16m visitors by 2020.” MUSCAT INTERNATIONAL AIRPORT

Seeb International Airport, now known as the Muscat International Airport, was officially inaugurated in 1973. However, soon it began to get squeezed on the capacity front, due to economic expansion fuelled by rising oil revenues as well as growing visitor numbers for tourism, business and employment purposes.

New Muscat International Airport Planned air traffic control tower with bridge house

INFRASTRUCTURE MIDDLE EAST

July–August 2014

Five years ago, Oman’s government embarked on an expansion programme for the Muscat International Airport. In fact, passenger numbers over the past four years have averaged 12-13%, with 2013 numbers touching 8.3m. The new Muscat International Airport has been designed as a midfield terminal sitting between two runways. Currently, only the southern runway is operational; the northern runway will be opened towards the end of 2014 as part of Phase 1. OMAC hopes to have the airport in full operation mode by late 2015 or early 2016. “The design capacity of the new terminal is 12m passengers per annum,” says Eng. Al Shueili. “The terminal building has a net floor area of 340,000 sqm while overall project area is 600,000 sqm.” Further expansions can be carried out, depending on growth, in three phases from 24m to 36m to 48m passengers per annum. Apart from passengers, Muscat Airport will also will have a 1km long strip for cargo operations. Construction work on the new cargo terminal started recently. “In terms of connectivity, the airport is connected to three major highways,” said Al Shueili. “For easier access, we have

Current Muscat International Airport Aircraft parking aprons

TRANSPORT

envisioned a major railway station at the southern part of the airport for freight and hopefully, for passengers as well.” SALALAH INTERNATIONAL AIRPORT

Economic activity in Salalah is driven by its strategic position on the Indian Ocean Rim where major east-west shipping lanes converge and its proximity to major markets in Asia and the Middle East. Salalah Port, which is Oman’s largest port, is one of the top 30 container ports worldwide and nurtures a fast developing free zone. Salalah’s distinctive monsoon environment also attracts growing numbers of local, regional and international tourists. These elements have been factored into the expansion of Salalah Airport, which is the second largest airport in Oman. It involves building a new runway, long enough to handle the A380 Airbus, and a new terminal, which will improve the airport’s capacity to 1m passengers per annum. Post-completion, the new airport’s built-up area will be 20 times bigger than the existing area. Al Shueili said: “The existing airport has maintained an annual growth rate of more than 20%, and this trend will continue with the new airport. Last year, we handled 800,000 passengers, and by 2020, we hope to touch 2m passengers. We are working towards opening the airport by the end of this year.” Based on demand, the terminal building capacity can be expanded in three stages to 2m, 3m and 4m passengers per annum. In addition to the international airports under construction in Muscat and Salalah, three regional green field airports are being built in Sohar, Ras Al Hadd and Duqm. The construction work at these airports have been divided into three packages — the first phase comprises of civil works including roads and utilities; the second is for airfield infrastructure like runways and taxiways while the third package includes construction of passenger terminal buildings and cargo buildings. SOHAR AIRPORT

In recent years, Sohar and the wider Batinah region, have attracted significant industrial and commercial infrastructure investments. Sohar Port was established in 2002 with the freezone following in 2010. The government recently set August 31 as the deadline to shift all commercial activities from Port Sultan Qaboos in Muscat to Sohar Port, which is expected to boost the ports’

Aerial view Muscat airport as it looks today

Future view New Muscat International Airport in 2016

container and general cargo traffic significantly. The new Sohar airport, located 10km northwest of Sohar city, is designed to handle 500,000 passengers and 25,000 tonnes of cargo annually. The airport will serve as the gateway for passenger and freight traffic for the north of Oman and as a domestic and emergency alternative to the Muscat International Airport. Together with the Sohar Port and the freezone, it will be part of a multimodal network which includes a major expressway and railway network that will come up in the near future.

attract thousands of visitors every year, hoping to observe rare turtles in their natural habitat. The new airport will cater to this traffic and can accommodate 250,000 passengers per annum. While the first two packages have been completed at Sohar and Ad Duqm airports, in the case of Ras Al Hadd, only the first package has been completed. Ad Duqm Airport has started official operations from 23rd July while no date has been fixed yet for starting operations at Sohar Airport. Oman’s massive investments in its airport sector is expected to yield long-term dividends in line with the objectives outlined in the Vision 2020 document, especially in terms of economic diversification and job creation for nationals. With five major seaports and 30,000km of highways and roads already operational, and five new airports, and a pan- GCC rail network in the works, Oman’s transportation sector is surely heading for a new era of growth.

AD DUQM AIRPORT

The Omani government has created a blueprint to develop the coastal city of Ad Duqm, in the south east of Oman, as the country’s next major industrial and shipping hub. With a land area of 1,777 sq km and 80km of coastline along the Arabian Sea, the Duqm Special Economic Zone is the largest in the Middle East and North Africa region. Duqm Port is being developed as a joint venture between the government of Oman and the Consortium Antwerp of Belgium. Ad Duqm Airport is designed to handle 500,000 passengers and 25,000 tonnes of cargo annually. It will cater to business and eventually, tourist traffic. The airport’s airfield infrastructure has been completed and is currently in the handover phase. The third package of Duqm Airport project, which includes a passenger terminal and an Air Traffic Control (ATC) structure was awarded to India’s Larsen & Toubro (L&T). RAS AL HADD AIRPORT

The Ras Al Hadd Airport, which is located near the town of Sur, is being developed primarily to support the development of ecotourism in the Al Sharqiya region. Beaches in the region

IN NUMBERS

Number of airport projects underway in Oman

$6.24bn

Funding for airports under the 8th five-year plan

14.25m

Total passenger handling capacity per annum at the five airports

July–August 2014

INFRASTRUCTURE MIDDLE EAST

TRANSPORT

RAILWAYS

Building a consensus Though a complex and stakeholder-heavy project, the GCC Railway has made genuine progress. By Anoop K Menon

GCC Railway The 2,117km long mega project is the first in the world to be implemented as a regional, integrated, and interoperable railway

here has been a lot of heartburn about the GCC Railway’s moving goalposts and its mixed progress in the member states. But arriving at a consensus for such a complex, stakeholder-heavy, intraregional project is easier said than done. Since 2009, when the project received the go-ahead from the Gulf Cooperation Council (GCC) Summit, only the UAE and Saudi Arabia, together accounting for over 60% of the GCC Railway network, have made progress. Yet, substantial ground has been covered in terms of putting in common standards and systems. The GCC Railway is, perhaps, the world’s first railway network to be implemented as a regional, integrated, and interoperable railway; in this case, linking the six GCC member states and their respective national railways, catering to both freight and passenger traffic. The $15.5bn, 2,117km long mega project will link Kuwait in the north of the Arabian Peninsula to Oman in the south, through Saudi Arabia, Bahrain, Qatar and the UAE. Large complex projects must deal with an equally large number of high-level

INFRASTRUCTURE MIDDLE EAST

PROGRESS REPORT • Saudi Arabia has commenced construction of about 200km and tendered the DED for the rest of its share (450km) • UAE has completed the construction of 150km Ruwais–Habshan link, a part of which will link with the GCC Railway. Etihad Rail is currently evaluating bids for the construction of a 190km double track from Liwa Junction to Al Ain at the Oman border and a 137km line from Ruwais to Ghweifat on the Saudi border • Qatar Rail has invited companies to prequalify for Phase 1, a 146km line from the Saudi border to Mesaieed and the new Doha Port Project on the east coast • Oman Railway Company (ORC) is in the process of prequalifying bidders for

stakeholders. In the case of the GCC Railway, stakeholders include ministries of transport and finance of the member states, railway companies and authorities, customs, security and immigration, consultants and suppliers. Speaking at MEED’s Arabia World Construction Summit in Dubai recently, Dr Ramiz Al Assar, World Bank Resident Adviser, Gulf Cooperation CouncilSecretariat General (GCC-SG) pointed out that major decisions on the project have to pass muster with the ministerial committees (transport and finance) and the foreign affairs ministries, with key decisions going all the way up to the GCC Summit. “This cycle usually takes up to a year but we try to expedite it as much as possible,” he said. “The most difficult thing in such projects is to achieve a consensus among the stakeholders but the GCC-SG has been fairly successful on that front.”

the 170km Sohar–Al Ain segment • Kuwait has commissioned a feasibility study on its segment of the GCC Railway • Feasibility study underway for a new

July–August 2014

Bahrain-Saudi Arabia causeway

ACHIEVEMENTS TO DATE

Al Assar pointed out that common guidelines that govern Detailed Engineering Design (DED), operations, institutional and regulatory requirements are key to ensuring an integrated and interoperable railway network.

TRANSPORT

On the design front, all the member states have adopted the DED guidelines and are on track to complete the DED for their segments by the end of 2014. However, member states with smaller segments of the network have time till 2015 to complete their DEDs. Also, the guidelines for operations, institutional and regulatory requirements are in the final draft stage and will be finalised by the end of this year. All the above guidelines will be endorsed officially by the GCC Summit to ensure that member states stick to them while developing the project. In 2013, the member states completed and endorsed the engineering maps that monitor updated railway alignments based on actual implementation on the ground. “The most critical issue is to monitor border-crossing areas where the alignment flows seamlessly,” explained Al Assar. “It was agreed to update the engineering maps twice a year to ensure that the railway alignment reflects the latest developments in each of the member states.” He held up this achievement as a testament to local capacity building because the initiative was led by Etihad Rail working in tandem with the GCC-SG and the member states to make it happen. Another example on the same lines is an ongoing project, led by Qatar Railway, to create a draft master procurement schedule, which will track the implementation schedules of the member states. “Procurement of the railway is critical to ensuring the integration of the railway,” said Al Assar. “Qatar Railway is coordinating with the member states and the GCCSG to put the schedule together, and we expect it to be endorsed this year. Thanks to the common guidelines, the monitoring of railway alignment and the master schedule for procurement, one can be assured that the GCC Railway, once implemented, will be really integrated.” He noted that the most successful outcome from the common guidelines, especially on the institutional front, is the proposed GCC Railway Authority. The GCC-SG has commissioned a study on the formation of this authority, its mandate and organisational structure, and how it should work with

The GCC-SG also carried out a feasibility study in 2010 on connecting the GCC Railway from Muscat, where it now ends to Al Mazyounah near the Yemen border. In fact, a significant part of Oman’s national railway network is based on that study’s outcome. “We are looking at all the railway developments in the region as one network,” explained Al Assar. “The mandate from the GCC Summit was to promote a regional railway which not only links all the member states but also integrates with their existing and planned railway networks. For example, including its part of the GCC Railway, Saudi Arabia’s master plan envisages 15,000-17,000km of railways.” MEGA PROJECT CHALLENGES

Dr Ramiz Al Assar, World Bank-Resident Adviser, Gulf Cooperation Council-Secretariat General (GCC-SG)

stakeholders and existing authorities in the member states, with the primary objective of ensuring the successful implementation of an integrated and interoperable GCC Railway. Equally important are the agreements reached, in principle, on technical interoperability, the concept of origin/ destination (which could pave the way for eliminating border stations where freight have to be inspected or passengers processed for immigration), a common rule book for safety procedures and regulations, a harmonised timetable and lastly, track access charges. In a key development, the King Fahd Causeway Authority (KFCA) and GCCSG are undertaking a feasibility study for a new causeway, which will link Bahrain to the GCC Railway via Saudi Arabia. “The feasibility study is expected to be completed this year,” said the GCC-SG official. “We are optimistic about securing the approval to move forward.”

Al Assar noted that developing an enabling environment for the project, in terms of delivering adequate institutional capacity, enabling policies, strategies, regulations as well as economic and safety regulations, is a tough challenge as also ensuring an active role for the private sector in investing and developing the infrastructure. Al Assar contended that mega projects like the GCC Railway could benefit from a common procurement strategy. With a number of concurrent projects, member states end up competing for the same resources, leading to project delays, shortage of skilled personnel and material cost-overruns. The master procurement schedule for the GCC Railway, once finalised and endorsed by the end of this year, is expected to facilitate the development of a regional procurement strategy. The GCC-SG official also recommended a balanced approach to dividing the construction packages to avoid management overlays and complexities associated with fragmented works. He cautioned against the region’s propensity to put mega projects on fast track, which he noted, leads to improper planning and sub-standard ventures resulting in significant cost overruns and delays. While concluding his presentation, Al Assar reiterated the importance and significance of setting up a GCC Railway Authority. He said: “With what we have achieved so far, the challenges that we will face in the future are tremendous. If we don’t set up this railway authority, we will have more difficulties in achieving our objectives.”

“If we don’t set up GCC Railway Authority, we will have more difficulties in achieving this (GCC Railway) objective” DR RAMIZ AL ASSAR, WORLD BANK RESIDENT ADVISER, GULF COOPERATION COUNCIL-SECRETARIAT GENERAL (GCC-SG) July–August 2014

INFRASTRUCTURE MIDDLE EAST

INFRA INSIGHTS

Dr Abdulwahab Al-Sadoun

“Development of transportation infrastructure needs to keep pace with expansion in production”

Advantage petrochemicals Dr Abdulwahab Al-Sadoun, Secretary General, Gulf Petrochemicals and Chemicals Association (GPCA) on the competitiveness of the region’s petrochemicals sector hen it comes to petrochemicals, especially of the commodity variety, the Gulf Cooperation Council (GCC) region is now well established as a global production hub. For example, SABIC is ranked number four among the top 10 chemical producers in the world. The region’s global share in the production of petrochemicals range from 7-25%. In ethylene glycol, our share is 25% which makes us number one, while for polyethylene, it is 14%. We are the fourth largest petrochemical hub for polyethylene; in the case of polypropylene, we account for 7% of the global production. What we lack, however, is a robust services sector, in terms of maintenance, manufacturing of spare parts and so forth but there is a drive towards ensuring that this sector develops on a fast track basis. The petrochemicals industry is working in concert to bridge other critical gaps. For example, there is a growing emphasis on developing technological capabilities within

INFRASTRUCTURE MIDDLE EAST

the region, with many of our companies investing in local R&D centres. In the area of human resources too, we are seeing companies with critical mass investing in their own academies in order to equip candidates with the right skills. In fact, both SABIC and Abu Dhabi’s ADNOC have their own academies, and others are moving in the same direction. Even governments are getting involved and investing in vocational institutes to train nationals and provide a skilled workforce to the downstream sector. For example, Saudi Arabia has established a plastics institute to train youngsters in plastics processing, and will be opening a similar institute for rubber later this year. Infrastructure is always an issue because there is continuous expansion of production. Unless the development of transportation infrastructure copes with the fast pace of expansion in production, there might be bottlenecks. The fact that 85% of our output is exported means such bottlenecks only spell trouble. Any delay in shipping products to the final destination is a cost that will have to be borne by the producers. Therefore, any

July–August 2014

savings in lead time will only help enhance the competitiveness of our industry. However, there are also some good developments in the region, like the regional railway network, which will help in enhancing the industry’s competitiveness, In fact, significant investments have been made by the developers of these railways to ensure that the chemicals sector is catered to in their projects. Apart from cutting transportation costs, a robust railway network will help eliminate safety issues associated with road transport and reduce greenhouse gas emissions on the environment front. Apart from railways, the region’s port sector is also undergoing a huge expansion, and when you put all of these together, you can see that the region is on the right path in terms of getting its transportation and logistics infrastructure right. (Editor’s note: The GPCA estimates that petrochemical producers in the Arabian Gulf will increase their capacity by 45% over the next four years, reaching 199.5m tonnes by 2018. Petrochemical exports from the region for 2013 were valued at $55.5bn.)

EVENTS

Also in October… POWERGEN MIDDLE EAST 12–14 OCTOBER, 2014, ABU DHABI Attracting delegates and attendees from over 50 countries across the MENA region and around the world, this event is the industry’s leading platform to meet and network with senior executive and industry leaders. Contact: Sue McDermott Tel: +44 1992 656 632 Email: suemc@pennwell.com www.pennwell.com

HAPPENING IN OCTOBER

STORMWATER SUMMIT 20-21 October, Abu Dhabi tormwater management has become crucial in the Middle East region due to rapidly growing cities, lack of adequate stormwater drainage networks and increase in rainfall over the past few years. This, in turn, has prompted governments to increase the scope of activities and funding for this important area of concern in order to enhance the quality of life for their citizens. IQPC’s Stormwater Management Summit will take place at The Westin Abu Dhabi Golf Resort and Spa. This event will provide an interactive platform for local governments, municipalities and industry leaders to address the urgent challenges relating to planning, construction and maintenance of stormwater drainage networks in the Middle East region. Key speakers include Dr Amr El-Agroudy, Advisor stormwater Drainage-Road Maintenance Section, Abu Dhabi Municipality; Husain Al Saeedi,

Head of SCADA & Asset Management System, Abu Dhabi Municipality; Mohamed Hasan Al Saeedi, Project Manager, Road Design Section, Abu Dhabi Municipality; Ahmed Mohammed AbdulKarim, Head of Drainage and Irrigation Department (DID), Dubai Municipality and Saudah Baker, Senior Urban Planner, Ministry of Municipality and Urban Planning, Qatar. There will be speakers from Parsons, MWH, AECOM and Masdar Institute as well. Apart from a two-day conference, the summit will feature two workshops on Design of storm water drainage systems in a changing environment and Stormwater systems Operation & Maintenance: Best Management Practice (BMP) at Abu Dhabi Municipality. Contact: Tarannum Syeeda Tel: +971 4 446 2745 Email: tarannum.syeeda@iqpc.ae www.stormwatersummitme.com www.iqpc.ae July–August 2014

FUTURE DRAINAGE NETWORKS SAUDI ARABIA 20–22 OCTOBER, 2014, DUBAI The event comprises of two one-day workshops in Jeddah and Riyadh respectively, targeted at sewage, drainage and utilities professionals. The format includes presentations, roundtables, panel sessions and networking opportunities. Contact: Advanced Conferences & Meetings Tel: +961 5 959 111 Email: nour.naffi@ acm-events.com www.acm-events.com MENA RAIL AND METRO SUMMIT 2014 20–22 OCTOBER, 2014, DUBAI Now in its 10th year, MEED’s MENA Rail & Metro Summit incorporates a focussed agenda exploring key themes and issues regarding projected rail plans, with case studies by GCC and MENA stakeholders and operators. Contact: Chichi Osagawu Tel: +9714 368 1644 Email: sponsorship@meed.com www.meedrailprojects.com

INFRASTRUCTURE MIDDLE EAST

INFRASTRUCTURE MILESTONES

#006 Bait-Al Falaj Airport If only for a short ‘hair raising’ period, Oman’s oldest airport ushered the Sultanate into the era of modern civil aviation before disappearing off the map he Sultanate of Oman’s tryst with aviation predates its Gulf Cooperation Council (GCC) peers, except Bahrain to which belongs the honour of being the first airport to open in the region. Oman’s very first airport, dating back to 1929, started off as nothing more than a narrow, dirt-track landing strip. In fact, the Bait-Al Falaj Airport, located in the town of Ruwi, was mainly used for military purposes and by Petroleum Development Oman (PDO), which utilised the airport to fly between Muscat and its oil fields in Fahud, Qarn Al Alam and other locations. The airport was equipped modestly, with a communication centre, a customs office, asphalt parking for aircraft and a maintenance shed. After Bait-Al Falaj assumed

INFRASTRUCTURE MIDDLE EAST

responsibility for civilian flights in the 1960s, Gulf Air began to fly its DC3 aircraft to the airport; with the advent of the 1970s, Pakistan Airlines and British Airways commenced operations with semi-regular passenger flights. Oman International Services (OIS), the predecessor of Oman Air, provided civil aircraft handling services at the airport. Most accounts about Bait-Al Falaj Airport are replete with words like ‘hair raising,’ ‘dangerous,’ ‘risky,’ or the relatively understated ‘sporting’ and ‘interesting,’ for a reason. Takeoffs and landings were fraught with danger as the narrow landing strip was squeezed into a plain flanked by towering mountains and steep hills. As Ian Skeet noted in his book ‘Oman before 1970: The end of an era,’ “most visitors to Muscat arrive there nervously watching hills approach ever closer to the wing tips of their aeroplane as it slews in through a not so obvious gap.” An equivalent modern experience

July–August 2014

Fast facts Start of operations: 1929 Length of the runway: 1,219.2m Cessation of operations 1973 The first jet to fly into the airport: BAC 1-11 Start of operations at Seeb: 1973

would have been Hong Kong’s erstwhile Kai Tak International Airport, rated as the world’s 6th most dangerous airport. Oman had been expanding steadily since 1970, when HM Sultan Qaboos bin Said came to power and introduced economic reforms, boosting spending on health, education and welfare. Recognising the need for a new airport to support the anticipated growth in passenger and cargo movements, the government decided to construct the Seeb Airport, now known as the Muscat International Airport. Today, Bait-Al Falaj Airport is just a memory, with the site of the airfield a centre of modern commercial and residential buildings. The Sultan’s Armed Forces Museum (SAF) in Bait-Al Falaj fort houses some of the military aircraft that used the strip. It seems that a part of the runway still exists – accessible from behind the local Pizza Hut, it is used by kids for roller skating.

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