Infrastructure November 2015 by Infrastructure ME

ISSUE 020 | NOVEMBER 2015

EXPO 2020

ANALYSIS

Welcome mat Preparing for the tourist influx

Market share Iranâ&#x20AC;&#x2122;s re-entry into the oil market

p40

p46

Harnessing Clean Coal Dubai commits to a diversified energy sector with Hassyan 1 IPP

PLUS TOP 10 GCC downstream PROJECTS

INTRODUCTION

COP 21 and beyond GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA

EDITORIAL EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 375 6830

ADVERTISING & MARKETING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 375 6842

DESIGN DESIGNER ULYSSES GALGO

CIRCULATION AND PRODUCTION DATABASE AND CIRCULATION MANAGER RAJEESH NAIR rajeesh.nair@cpimediagroup.com +971 4 375 5682 Production Manager JAMES THARIAN james.tharian@cpimediagroup.com +971 4 375 5673

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nd of this month, COP21 or the 2015 Paris Climate Conference, will, for the first time in over 20 years of UN negotiations, aim to achieve a legally binding and universal agreement on climate, with the aim of keeping global warming below 2°C. But let’s not forget that climate change isn’t going away overnight. Our generation and the next will have to deal with climate change in their lifetimes, and sooner we start preparing for it, the better. The solution lies as much in adaptation as in mitigation. While the focus is on the carbon side of things, the impact of climate change will be equally hard on the water side of things. However, climate change is not only an energy problem; it is a water problem too. According to the Intergovernmental Panel on Climate Change (IPCC), the five key impacts of climate change are on water, eco systems, food, coastal areas and health - all of which are linked to water. Climate change is expected to impact the earth’s hydrological cycle, re-distribute water, and increase the intensity and frequency of extreme climatic occurrences. It is expected to raise sea level by at least one metre before this century runs its course, putting at risk nearly 30% of the world’s population who live less than 100 km from the coast. With climate change making its presence felt, 50% of the world’s population is expected to come under water stress by 2030. Urbanisation and the thirst it portends – 75% of the world’s population is expected to be living in cities in the near future – will make adaptation more difficult. Even food production is a looming problem - it takes only 50 litres per capita to secure basic water needs like drinking, sanitation, bathing, and cooking, but 2,500 litres to produce enough food for one person per day. Adaptation should necessarily be a combination of hard solutions like dams to retain the water before it runs into the sea, finding cheaper and better ways of desalination, re-designing sewer and drainage networks to accommodate higher intensity flows, as well as soft solutions like demand management, recycling and re-use, and efficient use of water in agriculture. Both these approaches need to be integrated across different sectors. There is also a strong link between energy and water. Supplying water can account for as much as 10% of a country’s total electricity usage. A lot of energy is expended in treating and pumping water (including wastewater). More efficient water treatment and pumping technologies can save energy and reduce carbon emissions. Better water management holds the key to adaptation to climate change, and will play a significant role in its mitigation too.

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November 2015

INFRASTRUCTURE MIDDLE EAST 01

CONTENTS

020 November 2015 cover story

REGULARS

Harnessing Clean Coal

06 Regional update

Dubai commits to a diversified energy sector with the Hassyan 1 IPP

10 Sector update 15 Global update

28 24

16 In Focus 18 Policy Insight top 10 feature

GCC DOWNSTREAM PROJECTS The downstream sector is expected to feel the impact of low oil prices only next year, even as existing projects continue apace

Qatar’s former minister of energy and industry HE Abdullah Bin Hamad Al-Attiyah launches the Middle East’s first energy think tank

21 Infrastructure tenders 51 Infra People

52 The Big 5 Preview 55 Events 56 Infrastructure Milestones

This month: Ajman Sewerage - the region’s first waste water PPP

INdustry sectors

CONSTRUCTION

OIL AND GAS

ANALYSIS

30 Maintaining margins

38 Water expert

46 Regaining market share

CONSTRUCTION

EXPO 2020

solutions hub

32 Delivering sustainability

40 Welcome mat

Karim Helal, CEO & CoFounder, ProTenders analyses the tools and strategies that construction sector SMEs can use to maintain growth

The region’s facility management industry should embed compliance and resilience into their culture and values By Alan Millin

TRANSPORT

36 Pre-empting threats Booz Allen Hamilton’s Nick Bahr & Ece Kaner on securing the GCC’s defining decade

INFRASTRUCTURE MIDDLE EAST

AES’ Asad Iqbal Khan on delivering water treatment projects for the MENA region’s oil and gas industry

Is the hospitality sector ready for the influx of tourists and vistors? SMART CITIES

44 The data leverage

Julia Boullemier, Regional Director MENA of Profusion, discusses the changes to infrastructure that will underpin a smart city

November 2015

Iran’s re-entry in to the global oil market is being closely watched for its impact on oil prices, says APICORP report

48 ABB’s new broadband wireless

mesh router for utilities

49 WEG showcases energy

efficiency solutions

executive insight

50 A challenging market Kamal Pharran, CEO of Saudi Tabreed speaks to Rajiv Pillai on the future of District Cooling in Saudi Arabia

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EDITOR'S CHOICE

READERS' COMMENTS

Qatar Rail floats tenders for 12 Doha Metro stations

Company was to accept tender forms between October 11 and 25, officials said

SKAI looks to export patented Dubai building concept

Design of Viceroy Dubai Jumeirah Village property could be replicated in cities like Shanghai, Singapore or New York

PHOTO GALLERIES

Mall of the Emirates extension, Dubai Majid Al Futtaim has opened its $272m extension of the Mall of the Emirates in Dubai. See photo galleries at: meconstructionnews.com/photos

Dubai apartment prices down 11%, set to fall further – JLL

Tighter regulations, higher inflation and a stronger dollar

Name supplied, comment to story ‘Hacking scam alert after fraudsters target Dubai construction firm’

expected to push prices down further

READER POLL

Top 10 Oman infrastructure projects

Are low oil prices having an impact on the Gulf construction sector?

Despite the decline in global oil

67% 13%

prices, Oman is pressing ahead with several large projects

Dubai’s Nakheel awards construction

contracts worth $626m Three major retail projects expected to be completed in 2018

“We also had a similar situation [as described in MEConstructionNews.com article about online fraudsters targeting regional construction firms]. But thankfully, our accounts realised that there was fraud interception of our emails and our emails were compromised. Hence we took immediate action by informing the client through phone and personal emails to avert a disaster of money being transferred to the fraudsters’ accounts. The matter was reported to the police.”

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Strongman ‘Thor’ plays tug of war… with a Cat Dozer Hafthor ‘Thor’ Bjornsson, winner of Europe’s 2015 Strongest Man competition, engaged in an epic tug-of-war against a Cat D10T Dozer. See videos at: meconstructionnews.com/videos

Yes: There’s been a big drop in business

Yes: But only in the government sector

13% 5% Yes: Only a limited reduction in activity

No: I’ve not seen any impact

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

regional UPDATE

UAE The UAE has formally submitted it’s Intended Nationally-Determined Contribution (INDC), an outline of what actions the UAE aims to take to combat climate change, to the United Nations Framework Convention on Climate Change (UNFCCC). “The UAE has set an ambitious course to accelerate the creation of knowledge-based sectors to underpin our nation’s ability to thrive in a 21st century economy,” said Dr Sultan Ahmed Al Jaber, UAE Minister of State and Special Envoy for Energy and Climate Change. Aming its contributions to climate action is the national goal to generate 24% of electricity from clean energy sources by 2021.

Up the ranks The UAE ranks first in the Arab world for ease of doing business

The World Bank report on the ‘Ease of Doing Business for the year 2016’, ranks the UAE first among Arab countries for the third year in a row. The World Bank report, which measures the performance of 189 states in facilitating doing business for investors, says the UAE has advanced one step in the ranking from last year to occupy

31st rank globally this year. The UAE was ranked first regionally in both dealing with the construction permits, the delivery of electricity, the protection of small investors and registering property and the non-payment of taxes, which does not affect business, processing construction permits and the enforcement of contracts.

Oman Taking a cue from the UAE and its GCC peers, Oman is planning to gradually cut fuel subsidies from 2016, Gulf News reported. Subsidies on petroleum products, including petrol and diesel, are estimated to have cost Oman an estimated $2.33 bn in 2015, compared to $2.18 bn in 2014. Darwish Al Beloushi, Minister responsible for Financial Affairs described the existing system of subsidies was ineffective as it did not focus on the poor. An Oman Chamber of Commerce study showed that 68.7% of those surveyed in business and government sectors opposed the cut. The study included transport services, construction, and education sectors.

INFRASTRUCTURE MIDDLE EAST

Strategic plan Oman will continue to invest in diversifying its economy

Oman will continue to invest in diversifying its economy despite the tight financial situation, Reuters reported quoting the head of Central Bank of Oman Hamoud Bin Sangour Al Zadjali. “On the revenues side, the government is considering taking some of the load off by cutting subsidies, and increasing some of the fees,” said Al Zadjali. “They November 2015

have directed the ministries to cap their expenditure at a certain level, or to cut the expenditures by a certain percentage.” Oman is on track for a massive deficit of over 15% of gross domestic product this year. “The resilience and inner strength of the Omani economy will tide over lower oil prices and sustain its growth process,” said Al Zadjali.

The UAE cabinet has approved approved a federal budget of $13.2bn for 2016, reported WAM Nearly 49% of the budget will go towards health, education and social services, as well as developing government services for UAE citizens. Sultan bin Saeed Al Mansouri, Minister of Economy said the cabinet’s approval the federal budget shows it is determined to continue to carry out ambitious projects in vital social infrastructure sectors. He added that the 2016 budget shows that low global oil prices has only had a limited impact on the UAE federal government’s future plans, confirming the International Monetary Fund’s report that the UAE was least affected as its non-oil sectors contribute around 69% of the GDP.

On October 27, the Government of Oman priced its first-time sovereign sukuk, a five-year domestic issuance of $649.27m with a rate of 3.5% per annum, payable semi-annually. The sukuk issuance was oversubscribed close to 1.7 times. The first ever sukuk issue marks a step towards developing Oman’s Islamic finance industry and also gives the government a fresh channel to raise money. The collapse in oil prices has crimped government and private sector incomes. According to Moody’s, which assigned A1 rating to the issue, factoring in the reduced government revenues and resulting higher government debt over the next one to three years, Oman’s debt metrics will still compare favourably with the A-rated median.

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regional UPDATE

Kuwait Kuwait is the least popular destination for expats to live and work in the world, according to a new global survey compiled by InterNations. The Expat Insider 2015 poll of more than 14,300 expatriates representing 170 nationalities and living in 195 countries ranked Kuwait 64th out of 64 destinations covered. Kuwait ranked bottom for leisure options, personal happiness, ease of settling in, friendliness and finding friends. The country has been cracking down on its expat population, deporting 20,000 in the first nine months of the year for their non-compliance with the residence and labour laws.

Thumbs down Kuwait is the least popular destination for expats to work

Kuwait’s sovereign wealth fund, one of the world’s largest, is considering selling assets to cover a state budget deficit caused by low oil prices, Reuters reported quoting local newspaper al-Anba. The Kuwait Investment Authority (KIA), which is estimated to have more than $500bn of assets, is studying

whether to liquidate assets that generate annual returns of below 9%, the newspaper said. KIA’s money is invested across the world in various asset classes including bonds, equities and real estate. Saudi Arabia has already set a precedent by drawing on its sovereign wealth fund to finance its fiscal deficit.

Saudi Arabia Saudi Arabia General Investment Authority (SAGIA) Chairman Abdullatif AlOthman said his country is determined to boost its competitiveness and investment potential. Speaking a global summit on innovation in Rabigh, Othman said much has been done in the past five years to improve, in particular to increase the ease of doing business, but important decisions and announcements – many in developing infrastructure – will be made soon to further signal to the global business community that Saudi Arabia is open for business. “Since our accession to the WTO in 2005, increasing our competitiveness ....to diversify the economy has truly become a national effort,” he added.

INFRASTRUCTURE MIDDLE EAST

Digging in Saudi Arabia aims to triple the contribution of mining sector to GDP

Saudi government departments have slowed payments to contractors working on projects as a result of the oil price slump, reported Bloomberg. According to the report, some contractors have been waiting for up to six months for payment for work carried out. The finance ministry has also ordered departments not to November 2015

award new contracts during the fourth quarter of the year. The construction industry in Saudi Arabia is forecasted to grow 7.8% between 2015 and 2019. According to Deloitte’s 2015 Powers of Construction report, Saudi Arabia remains the GCC’s biggest construction market, with more than $1.2tn worth of projects either planned or under way.

Kuwait’s economy contracted last year for the first time since 2010 as the Gulf state suffered the consequences of the global drop in oil prices, said an AFP report. The country’s total Gross Domestic Product (GDP) shrank 1.6% in 2014 because oil-generated GDP contracted 1.7%, said the report, quoting the Annual Economic Report of Kuwait’s central bank. The central bank said nonoil GDP grew 2.1% in 2014. The fourth largest economy in the GCC has managed to weather past economic falls, having built up fiscal reserves of some $600bn. To maintain growth momentum, Kuwait is planning to offer nine infrastructure projects worth $36bn to private investors.

Saudi Arabia is well positioned to become a leading commodities supplier in the region, and a major player in the mining and minerals sector globally. “Saudi Arabia holds rich mineral resources such as Tantalum, Niobium, REE, Quartz, Iron ore among others that provide manufacturing opportunities to develop high value products for the growing demand of several advanced industries such as automotive, aerospace, solar and oil and gas,” said Khaild Al-Salem, President, National Industrial Cluster Development Programme (NICDP). The Kingdom aims to triple the contribution to the Saudi economy made by mining and minerals. The direct and indirect contribution to GDP has reached $21.33bn. The plan is to raise the sector’s share of GDP mining to $69.33bn by 2030 and support 100,000 jobs.

Regional UPDATE

Qatar The RasGas chief has stressed on the need for far-sighted collaboration to maintain liquefied natural gas (LNG) market balance. Speaking at Gastech in Singapore, RasGas Company CEO, Hamad Mubarak Al Mohannadi said the recent decline in LNG prices and the introduction of new players to the ‘LNG club’ means LNG suppliers and buyers should adopt a long-term view for maintaining a sustainable market. He added that both parties will need to work together to jointly influence and enhance the role of gas by providing appropriate support for initiatives promoted by governments and regulatory agencies.

Bahrain Bahrain will make investments of more than $20bn in large scale industrial and infrastructure projects, the GCC development fund, as well as government and private sectors. Speaking at a panel discussion last month, Economic Development Board (EDB) chief economist Dr Jarmo Kotilaine said the outlay is aimed at spurring public and private sector participation across the manufacturing, energy, healthcare and education sectors. This includes a commitment to build 25,000 housing units over the coming four-year period. “Even as the hydrocarbons sector experiences a decline, headline real gross domestic product expanded by 2.9% last

Kafala curbs Qatar has pushed the reform button on its sponsorship laws

Qatar’s ruler HH the Emir Sheikh Tamim bin Hamad Al-Thani has approved reform of the country’s much-criticised Kafala (sponsorship) labour laws. The new law regulating entry, exit and residency of expatriates in Qatar has transformed the Kafala system into one controlled

year and we continue to project robust growth throughout this year and the next,” he said. For example, in mid-August the government announced an $815m upgrade of Bahrain International Airport (BIA) aimed at raising handling capacity from 4m passengers per year to at least 17m by early 2019. Divided into seven parts, the upgrades at BIA call for the addition of a new passenger terminal - complete with 24 air bridges to facilitate passenger movement to and from aircraft, new arrival and department lounges, and expanded aprons. The plan also calls for the construction of related infrastructure, such as utilities and road links. Work on BIA’s new facilities will begin next year with development contracts to be assigned by December. Financing is set to come from both national and regional sources, including the GCC Support Programme for Bahrain.

by employment contract. The reforms will make it easier for expats to leave the country and change jobs. An employee can return to the country two or three days after his departure to take up a new job if he gets a new contract and fulfils entry visa requirements and if there is no court verdict against him.

Qatar has officially opened what it claims to be the largest labour city in country and the Gulf region. Built at a cost of $825m over an area of 1.1m sqm, the new labour city can accommodate 100,000 workers. It was launched by Qatar’s Prime Minister Abdullah bin Nasser Al-Thani and Labour Minister Abdullah Al-Khulaifi. The labour city is divided into two parts: the entertainment and business district includes a commercial centre and a market with 200 shops, Qatar’s largest cricket ground, a public theatre with capacity to seat 17,000 people and four cinema halls. The residential district contains 55 residential buildings, places of worship and a 2,000 sqm medical clinic. There are a number of public telephone booths as well as Wi-Fi-equipped centres.

Sector UPDATE

Utilities Dubai Electricity and Water Authority (DEWA) and Korea Electric Power Corporation (KEPCO) have signed a contract to build a Smart Grid Station (SGS) at DEWA’s green garage in Ruwayyah. Through this pilot project, DEWA is exploring the concept of SGS, which connects smart buildings to each other to share information, to help improve energy and water efficiency and make optimal use of renewable energy within a smart city. The KEPCO-owned Smart Grid Project in Jeju Island is considered to be a model in smart grids and applications and smart homes connected to the grid, as well as electric vehicles, smart stations and power storage.

High demand In the GCC, peak demand growth averaged 8.4% in 2014

Siemens has received a major order from Qatar to supply power plant components for a new combined-cycle power generating facility with integrated seawater desalination facility. Siemens’ customer is Samsung C&T, which is building the entire complex together with its consortium partner Hitachi Zosen.

With a total electrical output of 2.5 GW, and up to 136 MIGD of drinking water per day, the plant will deliver almost one quarter of Qatar’s installed power generating capacity. Besides the major order for power plant components, Siemens has also signed a longterm service contract with the gas company Dolphin Energy.

Oil & Gas Basra Council – the political authority for Iraq’s economic capital – is in the process of establishing a development company in order to attract foreign direct investment in key sectors including oil and gas. Ali Al Faris, Chairman of the Oil and Gas Committee of Basra Council said: “We will be looking to work with international businesses that are capable of developing oil and gas fields which are not covered under current licencing, as well as cooperating with the federal government to improve production, refineries, and transport.” Basra Governorate is home to 70% of Iraq proven gas reserves (almost 112 tn cu.ft) and 59% of its oil reserves.

INFRASTRUCTURE MIDDLE EAST

Capital focus Basra is setting up a company to attract FDI in oil and gas sector

The Kuwait National Petroleum Company (KNPC) denied any radiation leakage from Shuaiba Refinery following the fire accident that broke out inside the refinery in August, reported KUNA. KNPC has coordinated and worked with the authority specialised in radiations in the country on measuring radiation rates in the demulsifiers of heavy November 2015

crude reactors, where the fire broke out, said Khaled Al-Asousi, KNPC’s Deputy CEO for Support Services. The reactors contain a very limited amount of radiation that contributes in measuring level of the catalyst material inside the production unit. Al-Asousi said the company is keen on working with maximum levels of safety, and saving the environment.

Major power contracts worth over $65bn were awarded throughout the MENA region between September 2014 and September 2015. According to MENA Power 2016 - the latest market intelligence report from MEED Insight, more than 22% of these contracts are represented by the Gulf Cooperation Council (GCC) states. Approximately 87% of the total investments have been channeled into generation projects and the remaining% into T&D systems. The report estimates that installed generating capacity across the 14 countries analysed needs to rise by 143,221 MW by 2020, an increase of about 50% on the current level, to meet demand forecasts. In the GCC, peak demand growth averaged 8.4% in 2014.

Over 45% of project and infrastructure work has been completed at Oman’s Khazzan gas field, which is being developed by BP. “There are seven drilling rigs in the field, with 12 wells already having been drilled. We continue to invest significantly in Oman despite low oil prices,” said Yousuf al Ojaili, President of BP Oman. HE Salim Al Aufi, undersecretary of the Ministry of Oil and Gas, visited the Khazzan field last month to review progress of the project as BP prepares to deliver the first gas in 2017. “The Khazzan project is making great progress and the benefit to Oman will be significant once when gas begins to flow by the end of 2017,” said Al Aufi. The project is expected to increase Oman’s supply of natural gas by a third.

Sector UPDATE

Transport General Service Company (Musanada) and the Department of Transport (DoT) Abu Dhabi have announced that 60% of the construction work on the new 62-km Abu DhabiDubai highway is complete. Spanning from Seih Shuaib to Sweihan Interchange, the road is expected to be completed by the end of this year. The $570m project is on schedule with 54% of package A and 66% of package B already completed. The new highway is expected to relieve traffic pressure on the current Abu Dhabi-Dubai E11, cut down on accidents and connect Khalifa Port and Industrial Zone with current and future road network east E11.

Top Terminal KPCT has been rated globally as one of the fastest growing container hubs

Khalifa Port Container Terminal (KPCT), managed and operated by Abu Dhabi Terminals, has been rated as being one of the fastest growing container ports in the world. The Top 120 World Container Ports ranking by by Container Management magazine lists KPCT as the 3rd fastest growing

container port in the world and the fastest growing port in the Middle East based on its 26% volume growth in 2014. Abu Dhabi Terminals attributes its rapid growth to the significant expansion of local industry as well as an increase in the role it plays in regional trans-shipment combined with a steady rise in shipping lines calling at KPCT.

Construction The Kuwait Projects Company (KIPCO) is seeking partners to fund the construction of its planned $5bn real estate project in Kuwait. The 380,000 sqm development on the edge of Kuwait City, in an area where several foreign embassies are located, is said to be among the largest real estate projects planned in the country. “We have no problem with the financing to complete the project but if there is an investor that carries the vision, we will be happy to partner and maybe the seven years in which the project will finish will become five years,” said KIPCO Vice Chairman Faisal Al Ayyar at the Reuters Middle East Investment Summit. He said KIPCO was awaiting the necessary municipality approvals.

INFRASTRUCTURE MIDDLE EAST

Deira Islands Night Souk The souk’s construction is due for completion in 2018

Nakheel has awarded construction contracts worth $630m for major retail projects across Dubai. The company has confirmed the builders of Deira Islands Night Souk, Warsan Souk and The Circle Mall, which, combined, offer nearly 2.3m sq ft of retail space and over 6,700 shopping, dining and entertainment outlets. Nakheel’s retail project November 2015

portfolio is expected to become the biggest in the UAE, with 10 new large-scale developments and a growing collection of community retail centres on the way. The company has more than 10m sq ft of leasable retail space in the pipeline, adding to the 3.4 m sq ft already in operation at its Dragon Mart and Ibn Battuta Mall developments.

Oman has invited a total of nine logistics companies to submit firm bids or a licence to operate and manage the nation’s first dry port in South Al Batinah, reported Oman Observer. The successful bidder will secure a licence for the longterm lease and operation of an inland port facility that will form the centrepiece of the ambitious South Al Batinah Logistics Area (Sabla) development. A contract award is likely before the end of the first quarter of 2016. A number of tenders linked to the development of Block A, a three-sq-km area, as well as other infrastructure facilities, will be floated before the end of this year. Block A will host the headquarters of Oman Logistics Company (OLCo), a wholly government-owned entity which will oversee Sabla.

Sharjah Asset Management, the investment arm of the Sharjah government, has launched Al Saja’a Industrial Oasis, one of the largest industrial projects in the region. The project comprises 353 units of real estate and industrial mixed-use, built on nearly 14m sq ft of land and is strategically located on Emirates Road (E611) in close proximity to Sharjah International Airport and Al Hamriya Port. Through Al Saja’a Industrial Oasis, the Sharjah government hopes to drive the relocation of industrial tenancies from the city’s industrial areas to master planned industrial park communities to relieve congestion in the city’s residential and inner suburbs while creating urban planning opportunities. The electricity will be supplied by the Sharjah Electricity and Water Authority (SEWA).

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Sector UPDATE

Cities The Dubai Data Law was launched last month to allow the sharing of government data with the private sector. “We issued today Dubai Data Law which will allow sharing [of ] Government data with private sector for a better Smart City of Dubai,” HH Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, posted on Twitter. In November 2014, HH Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, issued a decree to establish a committee to draft the law for data in the city, framework, classification and roadmap for its implementation.

Etisalat CEO Ahmad Julfar UAE will be first country in the world to have 5G network

Dubai Silicon Oasis Authority’s pilot green building project ‘Techno-Point’ has received the LEED Existing Buildings: Operations & Maintenance (EBOM) Platinum rating, achieving a total of 85 out of a possible 110 points. Achieving 85 points in the Platinum rating level, Techno-Point is by far the

highest rated LEED Existing Building in the MENA region. It earned points for achieving over 66% reduction in single occupant vehicles through offering shuttle services, encouraging carpooling and the wider use of public transport. Furthermore, the use of low flush and low flow fixtures has helped the facility notch up water savings of up to 82%.

Finance Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE and Metito, a leading provider of intelligent water management solutions in the emerging markets, have signed a 10-year Islamic financing agreement for $65.34m. This is Metito’s first Islamic finance agreement and DIB’s debut partnership with a private company working in the water and wastewater industry. Mutaz Ghandour, Chairman and CEO of Metito, said: “The water sector is very cost intensive, and the term length of the projects generally can be prohibitive for many financers, but, by approaching the deal with an innovative and solutionfocused mindset, DIB turned this challenge into an opportunity.”

INFRASTRUCTURE MIDDLE EAST

Commodity crisis EGA is in talks with banks to refinance its debt at a better cost

National Bank of Fujairah, (NBF) has concluded a facility valued at $56.63m for Gulf Resources Development and Investment (GRDI) towards the construction of IKEA’s largest distribution centre in the Middle East at Dubai South. The IKEA distribution centre is developed through a joint venture between GRDI and Dubai South. It is also the Swedish November 2015

furniture group’s first direct investment in the Middle East. The new IKEA facility has a built-up area of one million sq ft and can handle 50,000 TEUs of containers per year. Utilising its industrial expertise, NBF also brought Amana Contracting into the transaction to complete the principal working team responsible for the IKEA project.

Etisalat is in discussion with the Expo 2020 office to transform the Expo 2020 site as the first and smartest district of the future, said Ahmad Julfar, Chief Executive Officer of Etisalat Group. He said that the proposed smart transformation of the site will build on Etisalat’s plans to introduce the fifth generation (5G) mobile network in the UAE “becoming the first nation in the world to roll out the 5G network” just in time to host the 25m expo visitors. Julfar said this will also help accomplish the goals of the UAE Vision 2021 to rank the nation first globally in the overall ICT infrastructure, Online Services Index and the Network Readiness Index as the UAE celebrates its 50th anniversary in 2021.

Emirates Global Aluminium (EGA) is in talks with banks to raise a $5bn loanto refinance debt taken on for some of its projects, Reuters reported. EGA, created by the merger of state-owned Dubai Aluminium (Dubal) and Abu Dhabi’s Emirates Aluminium (Emal), is jointly owned by Mubadala and the Investment Corporation of Dubai (ICD). The company is talking to local and international banks to consolidate their existing debt into a single loan at improved costs and is seeking a loan with a life span of between 12 and 14 years. In June, EGA cut 250 jobs as part of a strategic restructuring to reduce costs and boost operational efficiency. The company produces 2.4 mtpa of aluminium, making it one of the top five producers in the world.

global UPDATE

Round Up Energy ministers from the G20 countries and heads of international organisations affirmed their commitment to renewable energy at the firstever G20 Energy Ministers Meeting in Istanbul last month. “The G20 countries hold 75% of total global deployment potential and 70% of total global investment potential for renewable energy between now and 2030,” said IRENA Director-General Adnan Z Amin. “Concerted and coordinated action undertaken by G20 countries to advance renewable energy can really move the needle on global deployment as we transition to a clean energy future.” The participants endorsed an 11-point Communiqué, including the adoption of a renewable energy toolkit. Whilst the current environment is creating opportunities for innovation, almost half of oil and gas executives admit they have fallen short of their innovation goals. According to Lloyd’s Register Energy ‘s Technology Radar 2015 report, the number of respondents saying they have fallen short has almost doubled as the oil price has gone down. “The oil and gas industry is undergoing a period of significant uncertainty”, said John Wishart, Group Energy Director, Lloyd’s Register. “The oil price slowdown is clearly impacting investment in innovation initiatives. However, our report finds that contrary to perceived wisdom, innovation has a crucial role to play in the current environment, where it creates operational efficiencies and is cost-effective.”

Mega ethanol plant Dupont’s pioneering cellulosic ethanol plant opened in Nevada

Arcadis has entered into an MoU with the Rockefeller Foundation to improve quality of life in cities. The MoU will see Arcadis and the Rockefeller Foundation’s 100 Resilient Cities Initiative partner to help selected city leaders better understand their short- and long-term resiliency planning challenges. John Batten, global leader of Arcadis’ resiliency initiatives, will work directly with the Rockefeller Foundation to promote a resiliency roadmap, designed to equip cities with the necessary data to reduce risk. Batten said: “Resiliency is becoming an ever-present topic and, by addressing it, cities can give themselves the edge when it comes to attracting investment and securing their natural and built assets.”

DuPont opened the world’s largest cellulosic ethanol plant with the capacity to produce 30m gallons per year of clean fuel in Nevada last month. The raw material used to produce the ethanol is corn stover – the stalks, leaves and cobs left in a field after harvest. Cellulosic ethanol is expected to further diversify the transportation fuel mix just as wind and solar are expanding the renewable options for power generation. The majority of the fuel produced at the Nevada facility will be bound for California where the state has adopted a policy to reduce carbon intensity in transportation fuels. The plant also will serve as a commercial-scale demonstration of the cellulosic technology for investors seeking to replicate this model in their home regions.

Sufficient reserves Technology advances will keep energy supplies plentiful to 2050

November 2015

Alstom has announced the closing of the sale of its energy activities to General Electric (GE) for an amount of approximately $13.56bn. Following the completion of the sale, Alstom will focus entirely on the rail transport sector. The transaction will fund Alstom’s acquistion of GE’s signalling activities for $766m, which will open up the freight signalling market for the company while strengthening its presence in North America and adding 1,200 employees to its roster. Another $2.62bn from the transaction will be invested in three joint ventures with GE in the fields of grid, renewable and steam and nuclear industries. “Alstom today holds leadership positions on a globally growing rail market and will rely on a solid financial base to support its growth strategy,” said Patrick Kron, Chairman and CEO of Alstom. Advances in technology will keep energy supplies plentiful and affordable – enough to meet projected demand many times over - and help pave the way to a lower carbon energy mix, according to data published in the BP Technology Outlook. The report finds that simply applying today’s best technologies to discover oil and gas resources could significantly increase ‘proved reserves’ from 2.9tn barrels of oil equivalent to 4.8tn barrels – nearly double the 2.5tn barrels required to meet projected cumulative global demand through to 2050. The publication suggests that liquid fuels will continue to dominate global transportation through to 2035 and beyond, largely due to their high energy density.

INFRASTRUCTURE MIDDLE EAST 15

IN Focus

GROWTH STRATEGY

Oman turns to private sector Public Private Partnerships (PPP) to be introduced in housing, health, logistics and wastewater man will adjust to lower oil prices by using public private partnerships (PPP) an involving the private sector in a bid to boost economic growth, said HE Dr Ali Massoud Al Sunaidy, Oman’s Minister of Commerce & Industry while addressing MEED’s Oman Projects Conference last month. “In the future, our experience in liberalising power generation, water production and communications will pave the way for the privatisation of other service and utilities,” said Al Sunaidy. “In the discussions of the 9th five-year plan, there is no better time to drive privatisation further, and provide the foundation for a new era of public private partnership.” Frameworks for PPP and private investments are being prepared for the wastewater, health, housing schemes; as well as priority sectors by the Higher Ministerial Committee for PPP. As oil revenues fall, the country is looking to reduce the financial burden of public services and promote the private sector and small and medium enterprises. The Ministry of Commerce and Industry is also preparing a new investment law. “Muscat has been introducing reforms to promote the private sector for some years, and it has had success using the privatefinance model in the electricity and tourism sector. The impact of lower oil prices on government finances is an opportunity to really accelerate these reforms. But it comes with challenges, too. The private sector will want less bureaucratic restrictions such as localisation quotas and the loss of oil revenues will require subsidy cuts and the introduction of new tariffs and taxes,” said MEED Editorial Director Richard Thompson.

INFRASTRUCTURE MIDDLE EAST

HE Dr Ali Massoud Al Sunaidy (far right) listens to the panel discussion underway at the Oman Projects Forum.

A new five-year plan, currently being prepared, will cover 2016 to 2020 and will focus on the following key sectors: logistics and transportation, manufacturing, minerals, tourism, and agriculture and fisheries. It will significantly involve the private sector on all major projects before treasury funding is considered. If there is no private sector interest, the government may step in to fund important strategic projects. Al Sunaidy also raised some questions during his address in the direction of future PPP collaborations that need to addressed, whether or not the government will continue to involve itself further in Medina Irfaan, and choose to fund existing roads, hotels and conference centre or

November 2015

whether the state should just invest in the infrastructure in the South Batinah Logistics Area, leaving the construction of warehouses, networks and provision of services to the private sector. Medina Irfaan is a 7-km sq development near Muscat Airport, for which masterplanning is underway, while the South Batinah Logistics Centre is a 96,000 sqm hub, for which earthworks are almost completed. According to MEED Projects, Oman’s projects market is set for another recordbreaking year. After eight months of the year, the sultanate has already awarded more than $11bn-worth of contracts, and is on track to beat the $14.8bn signed awards on 2014, which itself was a record performance.

POLICY INSIGHT

THINK TANK

“I don’t see the oil price rising to $100 a barrel again anytime soon” Qatar’s former minister of energy and industry HE Abdullah Bin Hamad Al-Attiyah launches the Middle East’s first energy think tank he Abdullah Bin Hamad Al-Attiyah Foundation for Energy and Sustainable Development has been established with the aim to preserve the legacy of its founder, the former Minister of Energy & Industry (and currently, President of the Administrative Control and Transparency Authority) HE Abdullah Bin Hamad AlAttiyah who served Qatar’s oil and gas industry for over 40 years and at the same time, promote his ongoing work. “I would like to see the foundation become the leading think-tank in the region and one of the leading institutions in the world in the areas of energy and sustainable development,” said Al-Attiyah during an interview with Gulf Intelligence on the occasion of the launch of his foundation. Excerpts:

Why did you create the foundation and what is your vision for the same? I am a man who smells energy, lives energy. I cannot change! I am not a businessman and never worked in business. I decided, after more than 40 years in the energy industry, to create The Abdullah Bin Hamad al-Attiyah Foundation for Energy and Sustainable Development as Not-for-Profit organisation. I would like to see this foundation become the leading think-tank in the region and one of the leading institutions in the world in the areas of energy and sustainable development. The foundation will aim to give advice and share knowledge, while specialising in research

INFRASTRUCTURE MIDDLE EAST

HE Abdullah Bin Hamad Al Attiyah at the Doha Energy Forum

and analysis. We will create workshops, white papers, seminars and studies about energy like, how do we deal with the market, with oversupply, demand and prices? What will be important areas of focus for the foundation? We will advise governments and companies on how to build their own projects, how to cut the fat in their expenses, how to avoid market shocks, how to be prepared, how to make the right calculations and how to plan ahead both in the short term and the long term. We want people to knock on our door with questions which we will aim to answer based on our vast experience. The foundation will have leading experts from around the world, thinking clearly without the burdens and pressures of bureaucracy, budgets or politics.

November 2015

I strongly believe in empowering our citizens. Educating our citizens is vital for the future of the Gulf region, which faces many challenges, including that of heavy energy consumption. The region has witnessed major developments and now faces big power shortages. It needs more gas and more oil. The local market has huge consumption, which mostly comes at the expense of exporting crude oil. The Gulf countries have to rethink the generous subsidies they have, they cannot afford them anymore and will have to look at alternatives. They have to reduce subsidies and prepare people to accept that change. The people will protest because they are used to cheap or free electricity and power. I believe this will eventually change culturally because people will realise that they cannot keep

POLICY INSIGHT

depending forever on a depleting product. Young, educated people will be instrumental to that change. How would you characterise your approach to relations with the International Oil Companies? I am a big believer in not just signing contracts, but in making sure that we maintain a good relationship, friendship, understanding and trust directly with our partners and customers. That is why I introduced to QP the transparent policy, including the ethics law and the conflict of interest law. I asked all our employees, including myself to sign them. We told all our partners and customers that they have to sign a legal document stating that no middlemen or intermediaries will be involved in our relationship, that they work directly with QP with no agents or promoters. We created a direct business relationship with them without agents or middlemen, the people who corrupt the energy sectors in many parts of the world. When I became minister I told the International Oil Companies (IOCs) that we should stop being at war. “If you don’t beat me and I cannot beat you, join me”, I told them. In the 1970s and 1980s there was always conflict between the IOCs and the National Oil Companies (NOCs). We had the reserves and the opportunities, while the IOCs had the finance and the technology. I am very proud we came together. We gave them production-sharing agreements. In the old days they were called concessions, but we refused to call them concessions, we changed the model to production sharing agreements. We said we would not go back to imperialist days. Many countries came to see us for our production sharing agreements and they started using this model. What is your outlook for oil prices? I always believed, based on my knowledge of the market that prices in the hydrocarbon industry go in a cycle; they never stay high or low for a long time. In my years in the industry, I saw cycles lasting an average of 15 years. I saw how the oil price works, up in the first shock of 1973, then down in 1985. Then it also took 15 years to recover in 2000. For the last 10 years, the oil price was high because India and China entered the market as big industrial nations with very high demand. And they bought huge

volumes. But because prices go in a cycle, I don’t see the oil price rising to $100 a barrel again anytime soon. We should forget that level of prices for the time being. Higher oil prices are not always good for producers or consumers. Producers in my experience need a reasonable price for their product and a healthy customer. The debate on price indexation will continue because consumers never had a clear stand on it. When the price is low they want oil indexation, but when the price goes up they change their minds. Current market conditions have highlighted the importance of dialogue even further. That is why there should always be dialogue and we must learn from past experiences.

“In the 1970s and 1980s there was always conflict between the IOCs and the National Oil Companies (NOCs). We had the reserves and the opportunities, while the IOCs had the finance and the technology” HE ABDULLAH BIN HAMAD AL-ATTIYAH How important is producer-consumer dialogue at a time when the energy sector is facing so many challenges? Dialogue is very important, producers need to know what the demand forecasts are going to be so they can make the right investments and consumers need to know if there is adequate supply. This balance is hard to achieve without dialogue. It is always a challenge to work out how producers and consumers can create a formula for stabilisation and avoiding shocks in the oil and gas markets. How can they work together, how can they both benefit? We, in Qatar, always support greater cooperation between producing and consuming countries and I believe that the traditional confrontation between them should be left in the past. We should not waste time blaming each other and should seek solutions to ensure security of supply, stability of prices and the curtailment of greenhouse gas emissions.

OPEC’s obituary was written many times when facing difficult times over its 50 years. Is this current period any different? I went to my first OPEC meeting in 1972, shortly after joining the oil ministry. It was an interesting experience sitting in the back seat learning from the people who were creating oil policies. Since then I attended OPEC conferences regularly for 40 years. The challenge for OPEC then was how to confront the IOCs that controlled the industry and benefited from keeping prices low because it owned the concessions and the refineries. The main focus was how to create a lobby to put pressure on the IOCs to increase prices and how to set up NOCs. In 1973, an oil shock followed the embargo by OPEC and Arab producers in response to US support for Israel in the Yom Kippur war. Prices began rising from $2-$3 a barrel to over $36 a barrel in 1981. That was a turning point for producers who started to control their own assets and the IOCs started to lose control. By 1975, producers started setting up their NOCs, but could not get rid of the IOC totally because they needed their technical help. It was a marriage of convenience. Producers thought the high oil prices would go on forever, so they were shocked when by 1985 the prices started to crash and never exceeded $17 a barrel until 2000. OPEC started to talk for the first time about cutting supply and I found that there was no trust amongst the members. They would commit to cutting supply, but some never did. We met many times and meetings started getting longer, from three days to more than three weeks. One OPEC conference in Geneva lasted one month! We had one meeting and the rest was all bilateral talks on how to convince members to respect production quotas and how much to cut from each country. That made the market nervous and prices went down more. We had to break meeting for one week over Christmas because Swiss security told us they would be too busy to provide us with full security. In the 1990s, non-OPEC producers were beginning to have a bigger market share, so we started talking to them to persuade them to cooperate. I was elected OPEC president several times, and visited some of those countries. I said “you have to support OPEC,” but they never did. In fact, when we cut production to try and control prices, they increased production. OPEC was always open to them, always wanted to work with them.

November 2015

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

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

OMAN NATIONAL Railway Project

LNG Import & Regasification Terminal Project - Al ZouR

Makkah Mass Rail Transit System Development ProjecT

PTA & PET Complex Project Sohar Port

Budget: $15,000,000,000

Budget: $3,300,000,000

Budget: $16,000,000,000

Budget: $600,000,000

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

Territory: Kuwait Client Name: KNPC Description: EPC contract to build a an onshore Liquefied Natural Gas (LNG) import and re-gasification terminal. Period: 2020 Status: New Tender

Territory: KSA Client Name: Makkah Mass Rail Transit Company Description: Development of a 188km metro system with four lines and 88 stations. Period: 2020 Status: New Tender

Territory: Oman Client Name: Oman Oil Company Description: EPC contract to build a 1.1 MTPA Purified Terephthalic Acid plant and 250,000 TPA Polyethylene Terephthalate plant. Period: 2016 Status: New Tender

November 2015

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE Al Sharia Park Development Project Project Number: (IO) 95/2015 Client Name: Abu Dhabi Municipality Address: Salam Street, Abu Dhabi Phone: (+971-2) 678 8888 Fax: (+971-2) 677 4919 Website: www.adm.gov.ae Description: The Al Sharia Park is located along E11 highway between Abu Dhabi and Dubai at an interchange near Al Rahba in Plot P2, Ajban Sector. Developers will fund, build and operate the project under a Musataha contract, which entitles them to benefit from the land and facilities for 32 years following which the ownership reverts back to the Municipality at nil premium. Tender closing date is September 29, 2015. Status: New Tender Tender Categories: Construction & Contracting Leisure & Entertainment

Tender Categories: Power & Alternative Energy

West Yas Villa Complex Project Yas Island Zone Kt Project Number: WPR758-U Client Name: ALDAR Properties Address: 13th Floor, Abu Dhabi Chamber of Commerce Tower Phone: (+971-2) 810 5555 Fax: (+971-2) 810 5550 Website: www.aldar.com Description: Development of 1,017 four and five-bedroom villas, each comprising a ground floor and an additional floor, including all community facilities. The villas, located along the islandâ&#x20AC;&#x2122;s mangroves, are expected to be handed over to buyers by the end of 2017. Bids have been submitted for the main contract and are currently under evaluation. An award is expected in October 2015. Status: New Tender Tender Categories: Leisure & Entertainment; Construction & Contracting; Hotels

OMAN New Sultan Qaboos Hospital Construction ProjecT Project Number: 17/2015-O/11 Client Name: Ministry of Health Address: Opp. Khoula Hospital, Bldg. No. 105, Muscat PC 103 Phone: (+968-24) 602 177 Fax: (+968-24) 602 647 Website: www.moh.gov.om Description: Construction of a new hospital in Salalah comprising 5 storeys offering 700 beds and specialist units. The project will cover an area of 200,000 sqm and offer adult and pediatric emergency services, physiotherapy, nuclear medicine, dietary services, warehouses, a pharmacy and a laboratory. Sixteen construction firms have been prequalified for the project. Client has again extended the closing date to submit bids for the main contract from the previous deadline of August 31, 2015 Status: New Tender Period: 2018 Tender Categories: Construction & Contracting; Medical & Healthcare

Daris Copper Gold Processing Plant Project Project Number: ZPR648-O Client Name: Daris Resources Address: Al Tammam Trading Establishment Building, Muscat Phone: (+968-24) 794 331 Fax: (+968-24) 780 180 Website: www.althammam.com Description: The project involves the development of a Copper Gold processing plant with production capacity of 800,000 TPA. The plant will process mineral ores extracted from deposits discovered in the Washihi and Daris areas of Dakhiliyah and Batinah North governorates. Australia-based minerals exploration and mining development company Alara Resources has announced the formal launch of a study into the feasibility of establishing this plant, which will be completed in four months. Period: 2016 Status: New Tender Tender Categories: Industrial & Special Projects

KUWAIT

Consultancy Services

Kabd Waste-toEnergy Plant Project

Project Number: 2131500047 Client Name: Dubai Electricity & Water Authority (DEWA) Address: Head Office, Near Wafi Shopping Mall, Zabeel East, Dubai Phone: (+971-4) 601 9999 Fax: (+971-4) 601 9995 Website: www.dewa.gov.ae Description: Provision of consultancy services for utilisation of coal combustion byproducts from the Hassyan clean coal power complex. The closing date for the tender is October 25, 2015. Status: New Tender

Project Number: MPP2620-K Client Name: Kuwait Authority for Partnership Projects (KAPP) Address: Touristic Enterprises Co. Bldg., Shuwaikh Phone: (+965) 2496 5900 E-mail: (+965) 2496 5901 Website: www.ptb.gov.kw Description: Build-Operate-Transfer (BOT) contract for the development of a waste-to-energy plant with initial capacity of 3,275 tonnes/day. Client will enter into a 30-year contract with the winning investor. This will include 2 years for construction

INFRASTRUCTURE MIDDLE EAST

November 2015

MIDDLE EAST INFRASTRUCTURE TENDERS

Jeddah Public Transport Development Project

and equipment installation. The client has prequalified five groups to participate in the BOT contract from France, Spain and Austria. Period: 2015 Status: New Tender Tender Categories: Power & Alternative Energy; Sewerage & Drainage

Status: New Tender Tender categories: Power & Alternative Energy; Water Works

Al Khiran Independent Water & Power Project - Phase 1

Project Number: WPR749-SA Client Name: Saudi Aramco Address: Dhahran 31311 Phone:(+966-13) 872 0115 Fax: (+966-13) 873 8190 Website: www.aramco.com Description: This project involves expansion of the offshore Hasbah sour gas field, which will feed the planned Fadhili gas plant with 2bn standard cubic feet per day (scfd) of gas, while the remaining 500m scfd will come from Khursaniyah. The project is an important component of Fadhili project. The client has extended the deadline to submit bids for the EPC contract by almost a month from the previous deadline of September 20, 2015, as firms needed more time to prepare the offers. Period: 2018 Status: New Tender Tender Categories: Gas Processing & Distribution

Project Number: ZPR250-K Client Name: Kuwait Authority for Partnership Projects (KAPP) Address: Touristic Enterprises Co. Bldg., Shuwaikh Phone: (+965) 2496 5900 E-mail: (+965) 2496 5901 Website: www.ptb.gov.kw Description: The project involves a Build-Operate-Transfer (BOT) contract to build an independent water and power plant (IWPP) with capacity of 1,800 MW of power and 125 MIGD of water. Client has prequalified seven consortiums to participate in the bidding process for the main contract. They are the same seven lead developers for the AlZour North 2 IWPP. Client is also expected to stagger the submission date by six months due to the size of this project. Period: 2015

KSA Hasbah Sour Gas Field Expansion Project

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

November 2015

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

Produced in association with Middle East Tenders

INFRASTRUCTURE MIDDLE EAST

TEN GCC DOWNSTREAM PROJECTS

GCC DOWNSTREAM PROJECTS The downstream sector is expected to feel the impact of low oil prices only next year, even as existing projects continue apace

INFRASTRUCTURE MIDDLE EAST

November 2015

Sadara Chemical Complex

Owner: Sadara Chemical Company Budget: $20bn Progress: On track The Sadara Chemical Complex, being built in Jubail Industrial City II, is the worldâ&#x20AC;&#x2122;s largest to be built in a single phase. Comprising of 26 world-scale manufacturing units, the complex is one of the largest integrated chemical facilities in the world and includes a world-scale cracker that will be able to crack a wide range of feed stocks. The complex will eventually produce more than 3m MT of value-add performance plastics and specialty chemical products targeted at the rapidly growing sectors of energy, transportation and infrastructure. Sadara is on track to deliver its first products in the second half of 2015, with the complex in full operation in 2016. Many of Sadaraâ&#x20AC;&#x2122;s products will be produced for the very first time in the Kingdom.

TEN GCC DOWNSTREAM PROJECTS

Al-Zour New Refinery Project

Owner: Kuwait National Petroleum Company (KNPC) Budget: $16bn Progress: EPC contracts awarded Al Zour refinery, with a capacity of 615,000bpd, will be an eco-friendly refinery producing diesel, kerosene and naphtha for export and low-sulphur fuel oil for domestic power stations. Saipem was awarded contracts worth $3bn for Package 4 and Package 5. A $4.25bn contract for the main manufacturing units was awarded to Tecnicas Reunidas, Sinopec Engineering, and Hanwa Engineering & Construction Corporation. The second and third contracts for infrastructure worth $5.75bn was awarded to a consortium of Fluor, Hyundai Heavy Industries and Daewoo Engineering & Construction. A fourth contract worth $1.5bn has been awarded to Hyundai Engineering, SK Engineering and Saipem to build the Marine Export Terminal.

Clean Fuels Project

Jubail Export Refinery Project

Owner: KNPC Budget: $14bn Progress: Work underway The project involves the upgrade and capacity expansion of Mina Al-Ahmadi and Mina Abdullah refineries. The first EPC package covers process units at Mina Abdullah refinery. The second package covers revamping of Mina Abdullah plant together with off-sites and utilities, while the final package is for revamping and installation of units and interfaces at Mina Al-Ahmadi refinery. Japan’s JGC Corporation, and South Korea’s SK Engineering and GS Engineering have been awarded Mina Ahmadi package worth $4.8bn. UK’s Petrofac, South Korea’s Samsung Engineering and US’ CB&I Lummus has been awarded the Mina Abdullah 1 package worth $3.74bn. US’ Fluor Corporation and South Korea’s Hyundai Heavy Industries and Daewoo Engineering have been awarded the Mina Abdullah 1 package worth $3.4bn. Client is expected to close a $9.9bn financing package soon.

Owner: Saudi Aramco Total Refining & Petrochemical Company (SATORP) Budget: $14bn Progress: On schedule The project involves an EPC contract to build an export refinery at Jubail with nameplate capacity of 400,000bpd. It will refine heavy crude into a range of fuels, from gasoline to petroleum coke, for domestic consumption and export. The complex is expected to start full operations in 2015 as scheduled while a few units like the crude distillation unit has been operational for some time now. The project is central to Saudi Arabia’s plans to boost refining production to meet the region’s growing demand, and is expected to replace most imports. The plant utilities package, the distillate and hydrotreater package, permanent infrastructure and the multi-feed cracker are being commissioned. The completion of crude storage tanks package 2 this year will mark the completion of the project.

November 2015

INFRASTRUCTURE MIDDLE EAST

TEN GCC DOWNSTREAM PROJECTS

Ruwais Refinery Expansion Project

Owner: Abu Dhabi Oil Refining Company (TAKREER) Budget: $10bn Progress: Commissioning underway Takreer signed contracts in March 2010 with SK Engineering, Samsung and Daewoo to increase the Ruwais facility’s output by about 417,000bpd. The refinery project was developed in eight packages, including crude distillation and sulphur recovery facilities, a residue fluidised catalytic cracker, offsites and utilities, storage tanks, infrastructure work, marine works, and two separate packages for the site preparation works. The expanded plant, which will process Murban crude, will effectively double Takreer’s overall refining capacity to nearly one million bpd. The new unit will enable production of 1.1m tonnes of propylene per annum through integration with nearby petrochemical complexes.

INFRASTRUCTURE MIDDLE EAST

Tacamool Petrochemicals Complex Development Project

Owner: Abu Dhabi National Chemicals Company Budget: $10bn Progress: EPC bids under evaluation The project is being developed in the Al Gharbia in the Western Region of Abu Dhabi, as part of the Chemicals Industrial City, and is the first phase of a much larger planned development. When completed, the development will be world’s largest fully integrated chemicals complex, producing olefin, aromatics and fertilisers. It will produce more than 7m tonnes a year of products, including basic commodity polymers such as polyethylene and polypropylene and advanced plastics such as polycarbonate and acetone. Bids are currently under evaluation for the EPC contract to build the aromatics complex. Bidders include Bechtel, GS Engineering, Hyundai Engineering and Petrofac.

November 2015

Olefins 3 Petrochemicals Plant Project

Owner:Petrochemical Industries Company Budget: $10bn Progress: Feasability study This project involves the development of Olefins 3 petrochemicals plant in Al Zour area of Kuwait. The initial feasibility study looking into the possible integration of a petrochemical facility with AlZour New Refinery Project is due to be completed by end 2015. The timeframe for construction of this plant is yet to be decided, but it is likely to start one or two years after completion of the refinery. If the complex is located adjacent to Al Zour refinery, it is likely to be built to the refinery’s north, due to existing developments in other surrounding areas. Any development to the north of the refinery is expected to involve major rerouting or avoidance of electrical overhead power lines from Al Zour power station.

TEN GCC DOWNSTREAM PROJECTS

Jazan Refinery Project

Owner: Saudi Aramco Budget: $10bn Progress: Mobilisation works The project consists of an EPC contract to build a grass-roots export refinery in Jazan Economic City with capacity of 400,000 tonnes/year and 500,000 tonnes/ year of Benzene and Xylene, in addition to a naphtha cracker, which will produce olefin and polyolefin. In June 2014, it was announced that construction work on the contract packages awarded have started. In February 2015, the client agreed a refinancing deal with SK Engineering & Construction, whose contract for building the crude distillation/vacuum distillation unit had been cancelled. In April 2015, the client awarded the air separation unit (ASU)/ oxygen supply package on this project to a consortium led by US’ Air Products. This award is the last of major packages on the scheme. The project is expected to be fully commissioned in the first half of 2018.

PetroRabigh Complex Expansion Project Phase 2

Duqm Oil Refinery Development Project Phase 1

Owner: Saudi Aramco Budget: $8 bn Progress: Financing finalised

Owner: Oman Oil Company Budget: $6bn Progress: Prequalification stage

The configuration of the project entails the expansion of the existing ethane cracker to process an additional 30 MMSCFD of ethane and the addition of a new naphtha reformer/aromatics complex processing more than 2.7 MTPA of naphtha. The project will bring derivative products that are high value-added and in high demand, including methyl methacrylate monomer and polymethyl methacrylate. In March, it was announced that the joint venture partners developing this project have signed loans worth $5.2bn. The total loan, maturing in June 2031, includes $2bn from the JBIC and $1.3bn from state-owned Public Investment Fund. It is understood that the new phenol/ acetone plant in this development will start operations in the second half of 2016.

The project is being developed by Duqm Refinery and Petrochemical Industries Company (DRPIC), a 50:50 joint venture of Oman Oil Company and Abu Dhabi’s International Petroleum Investment Company (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 Designed as a full conversion refinery, the plant will utilise delayed coking technology for bottom of the barrel processing. The second phase is being planned as an associated petrochemical complex. The client has prequalified companies for the two main EPC packages of the project – Main Process Units and Utilities/Off-site utilities that will be tendered by the end of the year.

November 2015

INFRASTRUCTURE MIDDLE EAST

COVER STORY

ENERGY SECURITY

Harnessing Clean Coal

Dubai commits to a diversified energy sector with Hassyan 1 IPP n 13th October 2015, Dubai Electricity and Water Authority (DEWA), announced ACWA Power and Harbin Electric consortium as the preferred bidder for the first phase of the 1,200MW Hassyan clean coal power project. The consortium bid a Levelised Cost of Electricity (LCOE) of 4.501 cents/KWh based on May 2015 coal prices. The Hassyan 1 power project will be implemented using the Independent Power Producer (IPP) model on a build, own, operate (BOO) basis. The project is supported by a 25-year Power Project Agreement (PPA). DEWA will hold a 51% share in the special purpose vehicle formed to own the project with the developer consortium holding the rest. The Hassyan project is a key step in the implementation of the energy diversification strategy formulated by the Dubai Supreme Council of Energy to introduce clean coal-

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based electricity generation into the emirate’s energy mix. The Dubai Integrated Energy Strategy 2030 aims to diversify Dubai’s energy mix by targeting 71% from gas, 15% from solar power, 7% from clean coal, and 7% from nuclear power. DEWA received expressions of interest from 48 international applicants out of which seven developers were shortlisted. During the Invitation to Bid stage, the utility received four offers that included, apart from the ACWA-Harbin consortium, South Korea’s Kepco, Malaysia’s Tenaga Nasional and Japan’s Marubeni. After an intense bidding and a rigorous evaluation of the bids received, supervised by financial advisor Ernst and Young, technical advisor Pöyry, and legal advisor White & Case, the consortium of ACWA Power and Harbin were selected as the preferred bidder. “This wide international participation reflects the trust and confidence of international investors to invest in Dubai’s major energy projects,” said HE Saeed Mohammed Al Tayer, MD & CEO of DEWA in

November 2015

the press release announcing the winning bid. The first phase of Hassyan coal power plant comprises two units of 600MW each and will be operational by March 2020 and March 2021, respectively. Together, Phase 1 represents a 12.5% boost to Dubai current grid capacity. The DEWA chief said the utility is planning to launch two additional projects in the future to bring the total capacity of the clean coal project to 3,600MW. The fuel risk is to be borne by the winning consortium, which is required to put in place arrangements for the assured delivery of coal to the project over the life of the PPA. The coal-handling and trans-shipment facilities will be managed by Louis Dreyfus, a major European specialist company. France’s EDF Trading, one of the world’s largest coal traders, will manage the coal supply to the plant. While ACWA Power is known mainly for its oil, gas and now solar power projects, the company entered the area of coal power with the Moatize IPP in Mozambique. As the lead developer, investor and operator

COVER STORY

of this green field project, ACWA Power is working with mining giant Vale and Japan’s Mitsui on developing the 300MW first phase on a Build-Own-Operate-Transfer (BOOT) basis. The PPA with the government of Mozambique is for 25 years. Approximately 250MW of the total 300MW capacity will feed the largest coal mine in the world being developed by Vale, with the remaining 50MW supplied to state-owned utility, Electricity de Mozambique (EDM) to feed the national grid. Chinese lenders and export credit agencies are expected to play a key role in financing Hassyan 1 thanks to the presence of Harbin Electric as a co-developer Critical choice DEWA’s choice of clean coal technology for Hassyan raises the efficiency of coal combustion while reducing emissions of pollutants. “DEWA has requested that the project meets flue gas emission limits more stringently than emission limits in the Industrial Emissions Directive (IED) of the European Union and the International Finance Corporation (IFC) Guidelines,” said Al Tayer.

The EU IED introduces stricter limits for power plants as of January 2016. Emission Limit Values (ELVs) have been defined for SO2, NOx and particulate matter for all power plants including coal. The IED limit imposed on NOx and SO2 emissions are a stringent 200mg/Ncm and for particulate matter, it is 20mg/Ncm. However, the emission levels specified for Hassyan are twice below the EU guidelines making Ultra-Supercritical (USC) technology the best option. As a result, Hassyan will also be the first USC technologybased coal power plant in the Middle East. The USC technology (boiler and steam turbine generator) will be supplied by Alstom, which has been appointed the lead Engineering, Procurement, Construction (EPC) contractor for the project in consortium with Harbin Electricity. [Alstom has been acquired by General Electric]. Alstom will equip the plant with dual fuel capability to fire sub-bituminous coal as well as natural gas as back-up fuel. It will also have advanced environmental control systems like electrostatic precipitators (ESP) and seawater flue gas desulphurisation (SWFGD) systems.

Face-off: Coal versus Gas

echnological advances have put coal power plants on par with their combined cycle compatriots when it comes to environmental impact. Alstom’s Sacha Parneix elaborated: “Emissions capture technologies have improved dramatically. Thirty years ago, the dust level coming out of the boiler was 5,000 mg/ Ncm; twenty years ago, it went down to 1000 mg/Ncm; today, the World Bank is imposing numbers below 100 mg/Ncm. In the EU guidelines, it is 20 mg/Ncm while Best Available Techniques (BAT) promise single digits.” There have been significant improvements on the efficiency front too. Parneix explained: “Efficiency of a coal power plant depends on two parameters – the steam temperature and the steam pressure coming into the steam turbine. If you increase the steam, using better materials, of course, you will have a drastic improvement in efficiency. Today, we are at USC level 600 degree C, 270-280 bar, and this has been proven operationally and commercially. Our research programmes go towards 700 degrees C 350 bar, and at the prototype level, in terms of materials, they have proved themselves. I feel that steam plants at 50% efficiency are a possibility in the medium-term. For each MW you produce, less coal is burned, and therefore, you have lower emissions.” However, in terms of construction costs and time, combined cycle plants are better placed as they are smaller and less complex to build. According to the Alstom executive, while it is possible to set up a coal power plant in three years, the equipment that goes into the plant, like steam boilers, are massive and consume tonnes of steel. However, sourcing coal is relatively easier and more flexible than natural gas, which makes the former a cost effective option for countries that have to import coal and natural gas for power generation. “That’s why Turkey, Egypt and Pakistan have embarked on extensive coal power programmes,” said Parneix.

Sacha Parneix, Sales Director, Steam Business MENAT, Alstom explained: “Flue gas is full of nitrates, dust, sulphates that create local pollution problems around the plant. Flue gas cleaning systems capture the pollutants arising from the combustion before releasing the flue gas into the atmosphere. For example, our technology can lower NOx emissions to levels comparable with gas-based combined cycle power plants.” [Important Note: Infrastructure Middle East spoke to Parneix during the 2015 World Future Energy Summit held in January 2015] Concerning the contentious issue of CO2 emissions, Alstom claims that its USC technology will enable the power plant to run at a higher steam temperature and pressure than regular coal-fired plants, improving plant efficiency while decreasing stack-emissions, particularly CO2 per unit of fuel burned. Additionally, the plant will be equipped to be CO2-capture ready. Hassyan 1 will be operated and maintained by ACWA Power and Harbin in partnership with Alstom Power and US-based NRG.

The residue effect

EWA recently issued a tender for consultancy services for the utilisation of coal combustion byproducts from the Hassyan Project. One of the by-products generated by coal combustion is fly ash, which is composed of fine particles that are driven out of the boiler with the flue gases. According to US’ National Precast Concrete Association, fly ash is classified as a pozzolan and with its high silica content is used by concrete producers as a component in the cementitious portion of concrete mixtures. The use of fly ash makes the concrete mix stronger and better resistant to water, salt and sulphates. In November 2014, the buildings department of Dubai Municipality issued a circular to consultants, contracting companies, concrete factories and suppliers in Dubai mandating the use of Ground Granulated Blast Slag (GGBS) and fly ash with Portland cement in concrete mixtures. The rule has come into effect from April this year.

November 2015

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construction

HEADWINDS

Maintaining margins Karim Helal, CEO & Co-Founder, ProTenders analyses the tools and strategies that construction sector SMEs can use to maintain growth ME lending in the UAE is at approximately five per cent of all lending in the market. Consultants report that there are about 300,000 SMEs in the country, but only a third (approximately 100,000) are bankable. This figure is backed up by a recent Souqalmal report that highlighted that only 28% of SMEs have taken financing from a bank to cover working capital and operational expenses. Bucking the trend of the last few years, lending to SMEs will decline as the banking sector enters a period of corporate consolidation and refocus amid slower economic growth. Despite this, a Zurich SME report highlighted that 26% of UAE SMEs had expanded their export operations internationally compared to an average

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of 13% of SMEs from other countries, and almost 30% view overseas markets as their biggest upcoming opportunity. The regional construction sector is currently operating on very tight margins. Nearly 50% of those surveyed in the Zurich report cited competition as the most prominent threat to their business.

‘Reducing the cost of marketing activities to gain share both domestically and abroad, and using technology to make business processes more efficient will be key for construction SMEs to maintain profit margins’ KARIM HELAL, CEO & CO-FOUNDER, PROTENDERS

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The ability for construction SMEs to increase brand awareness and provide all the necessary information to convert a potential client into a paying customer is limited by the amount of budget and in-house skills available. Therefore, any extra time taken during this stage negatively impacts the time that can be spent delivering the service or goods and creating loyal revenue generating prospects. Reducing the cost of marketing activities to gain share both domestically and abroad, and using technology to make business processes more efficient will be key for construction SMEs to maintain profit margins. Technology solutions There are now several technology solutions targeting normal business operations for SMEs such as CRM, Accounting, HR, Customer Support, File Management and Taxes. Depending on the size of the operation, these can be used either for free or for a small monthly fee. Benefits of using these tools can be reduced staff overhead cost and improved visibility into operations as most of them provide easy to view analytics and visuals. Some of these tools include: • Zoho for CRM • Quickbooks for Accounting • Dropbox for File Sharing • Beneple for HR

construction

However, many digital tools that target the construction industry in particular focus on the higher end of the market with software licenses running into the hundreds of thousands of dollars. SMEs would benefit the most from this type of technology, but all too often they are underserved. This results in SMEs having to continue with resource intensive processes when that money and manpower could be freed up for other business critical services. One particular area of concern is bidding and tendering. The paperwork and printing required along with the time taken to go back and forth with queries and clarifications can overwhelm a small business. The more time spend in the bidding process, the less time spent doing the actual work, which delays incoming payments. ProTenders offers an e-tendering product, which removes the need for paperwork and can decrease the time taken from initial tender to close of bid to just a few weeks. It also provides an easy way to communicate between both parties and ensures submissions are completed right the first time, eliminating human error. SMEs benefit from this in large part because it also removes the need to learn multiple different tendering platforms.

businesses has reduced dramatically as offthe-shelf templates now allow users with very little technical knowledge to create a basic website. There remains, however, a general lack of awareness about the latest digital tools and technology to maintain the website’s content and to continue driving traffic. This results in many outdated websites (for example those that use flash technology) and very little incoming traffic since the site usually is not optimised for keyword searches on search engines. Ultimately, SMEs end up with a selection of digital assets that are not working efficiently for them.

Marketing agenda The ProTenders Global Construction Survey 2015 showed that over 50% of customers are always looking for new partners. Buyers demand that companies present information online. Also, 80% of B2B purchase decisions are currently made using web search because it’s the quickest way to get answers to questions. For SMEs, particularly those wishing to expand overseas without opening up a brick and mortar presence, having an always-on digital presence allows a steady stream of potential leads and market awareness coming in from search queries and social networks. Whilst 76% of survey respondents cited their website as the main channel to drive construction leads, almost 50% said their major marketing pain point was generating awareness about their products and services. The cost of developing digital assets for

‘The cost of developing digital assets for businesses has reduced dramatically as off-the-shelf templates now allow users with very little technical knowledge to create a basic website’

ProTenders is an example of construction specific software as a service platform that specifically targets construction marketing pain points. Company profiles can be easily created which are accessible on both desktop and mobile and are optimised for search queries. In addition, the profile structure has been refined to focus on the right information that construction clients find useful, including past projects, team members, qualifications and areas of expertise. ProTenders offers an online platform for construction SMEs to efficiently scale their marketing activities with minimal impact on budget and resources. Simple enough for anyone in the organisation to use and with the option of updating content in real time, businesses can focus on serving more incoming leads and start the bidding process earlier. It also reduces the time taken to search for potential construction clients by allowing firms to easily pinpoint those that have similar areas of expertise. A business can simply forward their ProTenders company profile to them and increase their bid to win ratio. As construction SMEs focus on expanding their geographic reach, their reliance on technology to take over certain areas of business operations will determine their competitive edge. Being able to minimise expenditures on marketing and administration will allow for savings to be reinvested into growing supply chains and manufacturing, ultimately having a direct impact on profitability.

KARIM HELAL, CEO & CO-FOUNDER, PROTENDERS

ABOUT PROTENDERS

Outsourcing marketing and technology processes can also be too costly for a construction SME which is relying on selffinancing rather than institutional lending. One way to find a better middle ground is to consider the use of ‘software-as-a-service’ platforms. These are usually built to help SMEs do better business by giving them powerful technology that is not packed with unnecessary features, and by allowing monthly or bi-yearly payments that fits in well with the cash flow. November 2015

ProTenders.com is a secure, paper-free bidding platform for the construction industry. As a cloud-based SaaS platform, members can access from anywhere to search and engage with potential partners and bid on projects. The company has processed over $12.4bn of bids since 2009 and is the winner of the best e-commerce solution by the WSA Awards, MENA ICT and Internet Awards in 2011.

INFRASTRUCTURE MIDDLE EAST

construction

KEY ASPECTS

Delivering sustainability The region’s facility management industry should embed compliance and resilience into their culture and values By Alan Millin ustainability has become a word that is thrown into most facilities management (FM) dialogues, particularly at the point of trying to win work. But what exactly is it and how can we achieve it? We have definitions for sustainable development, such as the oft-quoted line from Our Common Future, commonly referred to as the Brundtland Report, published by the United Nations in 1987: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Within FM there is, understandably, a drive to demonstrate how “sustainability” is delivered to clients. We give this aspect of sustainability much thought when considering smart cities, master developments, communities, individual facilities and end users. We propose that our green building initiatives will contribute to the sustainability of the client, along with our resource conservation strategies and local purchasing programs. These initiatives are all well and good, but we also need to consider how to stay in business and prosper. If we don’t, it really doesn’t matter what we try to deliver to clients. Sustainability of the FM provider is essential in supporting the sustainability of the wider community; yet, this aspect is often not sufficiently prioritised.

“One critical contribution that clients can make to sustainability is to settle invoices promptly within the terms of a negotiated agreement. Late payment puts the service provider under stress, resulting in the client who pays late quickly getting an undesirable reputation for doing so” 32

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Compliance

Elements of concern include compliance management. Of course, FM providers are extremely competent and may even boast of their consistent outstanding performance. If this was in fact the situation with all service

providers, we would not have the need to hold regular post-mortems to unearth the causes of contract penalties. Penalty avoidance may well fall under the banner of meeting the needs of the present, but then so does delivering what the client is paying for. While many contracts require the client to pay 100% of the contract value in return for a percentage, perhaps 95%, of the programmed work, an FM provider’s performance target may fall very quickly to the lower threshold rather than the client-desired 100%. Why? The answer is simple: the provider wants to get full payment and they can do this as soon as they cross the lower percentage threshold. While reduced output may still deliver contractual compliance it does little to foster the long-term sustainability of the FM provider. Providers that strive to deliver 100% output, even though they are aware they can get paid in full for less, are contributing to their own sustainability and that of their client. Service providers who work to deliver the spirit of an agreement, rather than simply abiding by or targeting the letter of it, may thereby gain competitive advantage. Resilience

Another area that FM providers should consider when creating their sustainability plans is resilience. Organisations need to be prepared to adapt to changing circumstances. To do this they should be prepared for, and able to anticipate, events that may range from routine challenges to major business disruption. All supply chain actors and interested parties should be considered when developing organisational resilience. FM providers are excellent at establishing contingency plans for service delivery but the upstream aspects that may affect resilience should not be overlooked

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Brought to you by KONE MIDDLE EAST LLC Tel: +971 4 279 4500 www.kone.ae

construction

or treated with any less importance. Both compliance and resilience are important sustainability aspects which should be embedded into the culture and values of FM providers. Values and culture form part of the DNA of organisations, requiring total leadership commitment. Striving to achieve reduced targets or failing to consider resilience as a critical sustainability factor can have disastrous consequences. Compliance and resilience are just not items to be ticked off from a manager’s checklist. They demand active management if companies are to survive and prosper. Standards

Fortunately help is at hand for those organisations that recognise the importance of organisational sustainability. Established standards provide guidance on both compliance and resilience. ISO 19600:2014 deals with compliance management systems while BS 65000:2014 addresses resilience. Those who do use standards to support their sustainability initiatives should also keep in mind that standards represent foundations on which to build; they should not be regarded as targets to work toward. ISO 19600 informs us that compliance is “…an outcome of an organisation meeting its obligations”. Clients therefore also have an obligation in supporting the sustainability of both their own organisations and those of their FM providers. One critical contribution that clients can make to sustainability is to settle invoices promptly within the terms of a negotiated agreement. Late payment puts the service provider under stress, resulting in the client who pays late quickly getting an undesirable reputation for doing so; word travels fast in business. Will service providers still bid for work with clients who are known to pay late? Of course they will, and regularly do. The downside is that they cover the potential financial burden and risk of late payment by increasing their prices, resulting in the client paying more than is really necessary. Late payment can therefore hardly be considered as a contributing factor to the improved sustainability of either client or service provider. Nor does it contribute to compliance or resilience. Represent only two aspects of sustainability. The sustainable organisation will be continually working to identify and address as many other aspects as possible, while actively searching for opportunities for improvement. November 2015

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CITIES

RISK ANALYSIS

Pre-empting threats Booz Allen Hamilton’s Nick Bahr & Ece Kaner on securing the GCC’s defining decade atar’s FIFA Football World Cup and Dubai’s Expo 2020 may prove to be defining moments in the social and economic development of both Qatar and the United Arab Emirates. The events will take place within two years of each other and the momentum from one will surely have a positive effect on the other. To think of these mega events in isolation would be a missed opportunity for those seeking to build long term reputation in the GCC. For 24 months the eyes of the world will be focused intensely on GCC nations at the turn of the decade, and while that attention will bring opportunity both nations and the wider GCC would do well to consider the threats such a spotlight represents. Both the UAE and Qatar’s governments will spend billions of dollars on metro and train infrastructure, required to carry visitors quickly and safely between destinations. Being aware – and a step ahead – of those who threaten such infrastructure will be crucial. To put a number to it, Qatar has embarked on a $200bn dollar infrastructure programme including a metro project that will be a main source of public transport for visitors traveling between stadiums, to and from hotels, city attractions and general places of interest. The UAE too is well advanced in its domestic transport plans. Dubai recently announced that it will extend its current metro line to connect the site of Expo 2020 with the emirate’s most populated and accessible locations. To supplement these domestic programmes, a transnational mega-project is in the making. GCC Rail is a 2,117km network that will for the first time connect the Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the UAE to one another. The network will be transformational, positively boosting panregional trade, travel and economic activity. It supports a positive global image of modern, progressive, business-friendly nations and

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improves the visitor experience for media, tourists and fans. But the success and popularity of wellconnected train and metro systems that are set to attract dense crowds, will also be its most potent threat. The time for mitigation strategies is now. We do not have to look too far back for painful examples of what happens in the absence of pre-emptive steps. The coordinated Madrid bombings in March 2004 took place on a commuter train system, just three days before Spain’s general elections, killing 191 people and wounding 800. In July 2005, bombings on London’s underground occurred just a day after London won its bid to host the 2012 Olympic Games. The recent bombings in Turkey, which occurred on two exits of the main train station in Ankara, also claimed 99 lives in what should have been a calm peace rally, in country’s pre-election period. The message is that the spotlight brings with it great challenges. And only with adequate risk assessments and broad recognition of the new threat paradigm faced can such threats be equalised. The analysis must be thorough and complete. Authorities must embark on a threat vulnerability risk analysis that identifies the threats specific to individual assets and analyses the risks, so tailored countermeasures can be drawn up. Costbenefit analysis need to follow to make sound risk management decisions. In addition, emergency management and crisis preparedness need to be woven in to event preparation. Simulating a situation on a form of transport that as yet does not exist is not a simple task, but the drills must happen. Crisis management exercises, testing chain of stakeholder command and layering in a culture of emergency preparedness are all critical. A business continuity plan needs to be in place to ensure minimal disruption of critical functions. Other crucial factors such as enlisting competent train operators, outlining appropriate evacuation

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procedures and installing asset management, infrastructure and system integrity functions must be looked at. True resilience stems from anticipating and managing negative events and predicting future threats. This is of course relative, but we know that the impact of these threats can be grave – and at times fatal. And in less severe cases the negative public perception created by a poorly managed travel experience or inadequate safety measures may impact a national for a lifetime. Let’s consider the worst case scenarios as we prepare for the best case ones, to ensure that the legacy of the 2020s is one of a true coming of age for Gulf nations.

Nicholas Bahr is a Principal at Booz Allen Hamilton, who leads the firm’s resilience business in the MENA region. One of his books on risk management is used by the US FAA to ensure safe commercial air traffic.

Ece Kaner is an Associate at Booz Allen Hamilton, in firm’s resilience practice in the MENA region.

OIL AND GAS

HIGH PROFILE

Water expert

Asad Iqbal Khan, Manager – Business Development, AES speaks to Infrastructure Middle East about his company’s experience and expertise in delivering water treatment projects for the MENA region’s oil and gas industry

ES has carved a strong niche for itself as a water and waste treatment turnkey solution provider for the oil and gas industry in the Middle East and North Africa. The company’s client list boasts of the who’s who of the energy industry like Saudi Aramco, Petroleum Development Oman (PDO), SABIC, Abu Dhabi National Oil Company (ADNOC), Sonatrach, TOTAL, Shell who have selected and contracted AES for several of their projects to supply water and waste water treatment plants, chemical injection and Oil and Gas modular skids. AES designs, engineers, manufactures, installs and commissions water and waste

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treatment plants as well as oil and gas process modular skids on a turnkey basis. The company works with Engineering, Procurement and Construction (EPC) contractors and end users in its projects. Asad Iqbal Khan, Manager – Business Development, AES says: “A significant percentage of our business comes from the region’s energy sector. There are different solutions for enabling efficient water use and savings in the oil and gas and petrochemical industries, ranging from wastewater treatment to RO polishing to Zero Liquid Discharge (ZLD).” Recently, Spain’s Tecnicas Reunidas selected AES to provide sea water desalination and wastewater treatment plants for Jazan Refinery Project in Saudi Arabia.

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AES is to design, engineer, manufacture and supply cutting edge technology plants for process water and to feed the utilities of an integrated gasification and power plant with ultra-pure water. “We were selected by Tecnicas Reunidas to provide Ion Exchange Mixed Bed Demin Plant for the refinery project they are executing for Saudi Aramco,” says Khan. “Under the contract, we will design, engineer, manufacture and supply plants that will provide 7,608,155 GPD of deionised process water and to feed the utilities of the integrated gasification and power plant.” AES will also supply the condensate polishing plant for the same upstream. “AES was awarded the contract for design, engineering, manufacturing and supply of the condensate polishing plant for this project by Hitachi Infrastructure,” says Khan. “The condensate polishing plant is designed to polish 30,000 CMD of steam generated during the process and the treated condensate will be pumped to the refinery process.” By winning the two contracts, AES will be contributing to one of Saudi Arabia’s and the region’s most significant energy projects. The 400,000 bpd Jazan refinery is part of a $20bn plan to develop an industrial city in Jazan, located in the South West region of the kingdom. The project also includes a 4,000 MW power plant, a port, and a refinery terminal. Khan says: “We are proud of contributing to Saudi Arabia’s development agenda. We have a long and successful track record of delivering projects in the region.” AES also supplies cutting edge solutions for treating the energy industry’s waste streams. The company successfully designed, supplied, commissioned and handed over a state-of-the-art 715,907 GPD industrial waste water treatment plant to Petrokemya, an affiliate of SABIC. Under the contract, awarded by the project’s EPC contractor

from Europe, AES supplied the waste water treatment plant and mixed bed demin plant for the project. Khan says: “In a hot and dry region like the Middle East with scarce water resources, there is huge dependence on desalination to meet the potable water needs of industries and households. However, desalination is energy-intensive and has a high carbon footprint; it also leads to pollution of marine environment from the discharge of brine. We help companies in the energy sector optimise production costs and reduce environmental impact of the waste streams.” He notes that energy companies are in the forefront when it comes to adhering to the region’s increasingly tough environmental regulations. “There is a lot of awareness about the environmental impacts than in the past thanks to tougher regulations,” says Khan. “In the oil and gas sector, for example, the UAE and Saudi Arabia have very strict regulations on treatment and disposal of waste streams.” AES also manufactures equipment like API Oil-Water Separators and Corrugated Plate Interceptors (CPI) and supplies integrated solutions for the oil and gas industry. For example, based on its previous track record, AES was selected by Saudi Aramco to design, fabricate, test, supply and commission oil modular packaged units. These units are designed for oil wellheads in order to regulate the oil stream coming from oil well. It primarily consists up of Choke Valve, MPFM, Sampling system, RTU Panel & Scrapper launcher Valve. The complete integrated unit is designed and tested according to API 6A code. Khan says: “We are getting plenty of opportunities to work on Saudi Aramco projects thanks to our previous work experience and capabilities to do medium to large size projects. Our commitment towards our work, technical capabilities, design competency, engineering and execution have been enough to win our customer’s trust.” AES has a production facility in the Saudi capital of Riyadh, which puts it at a significant competitive advantage. “An enviable track record of successfully completing projects on schedule has

established our reputation in Saudi Arabia and the region in general,” explains the AES executive. “Previous work experience also counts a lot in this region and this is another advantage that many of our competitors don’t possess.” With a strong presence in the MENA region, and a client roster of biggest names in the oil and gas industry, AES is uniquely positioned to meet the growing water treatment needs of the oil and gas industry. Khan says: “As a water treatment partner to the region’s oil and gas industry, AES brings strong engineering expertise and experience to help meet their evolving and growing water needs. We use the most current technologies for water and waste water treatment which help us increase efficiency.”

Early days

ES has grown to become one of the one of the leading specialised water treatment companies in the Middle East and North Africa. The company has a strong track record in the desalination and waste management sector that goes back to 1997. In 1999, it built the Haql and Duba seawater reverse osmosis (SWRO) desalination plants for Saline Water Conversion Corporation. The same year, AES was picked among several major water treatment firms to carry out the 13,000m3/day BWRO water treatment plant at King Khalid International Airport by the Ministry of Defence and Aviation (MODA). In late 2000, AES was awarded the construction and upgrade of 38,000 m³/day Brackish Water Reverse Osmosis (SWRO) water treatment facility for the Royal Commission of Jubail and 28,000 m³/day SWRO plant (Manifa) for Saudi Aramco.

November 2015

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EXPO 2020

(From Left to Right) Mark Shea, Director - Head of Hospitality Middle East, Faithful+Gould; John Podaras, partner at Hotel Development Resources; Filippo Sona, Director, Head of Hotels, MENA Region, Colliers International; Bassem Salah, General Manager for Hotels and Hospitality, ISG Construction HOSPITALITY FOCUS

Welcome mat

Is the UAE ready for the influx of expo visitors? Excerpts from a round table on the emerging trends and opportunities in the country’s hospitality sector oderator: What are the drivers behind the region’s hospitality sector? How real are the opportunities for growth? Mark Shea: There is a lot of growth being talked about in the Middle East region, certainly from a hospitality perspective. One of the key drivers, if we take the UAE as a starting point, is the tremendous work that Emirates is doing as an airline in bringing in tourists and opening up new locations. Coupled with that, the impact of mega events that we are going to see in the next five to seven years with Expo 2020 in the UAE and 2022 World Cup in Qatar, there are positive reasons for the industry’s growth across the region. If you look at the number of hotels coming to market, and the amount of growth in the pipeline across all segments and particularly the mid-market segment, I think there is good reason for optimism.

John Podaras: The only other thing I would really add in terms of major drivers

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is the willingness of governments to spend on infrastructure and job creation. This is particularly true in Saudi Arabia where we have seen tremendous growth as a result of government spending, which fortunately, seems to be continuing into the future. Saudi Arabia, together with the UAE, are market leaders in the development of hospitality projects pipeline. Filippo Sona: It is important to bear in mind that we are sitting in a region where we have more tourists than inhabitants. If we consider the UAE, the total population of the country is eight million but it receives around 11m tourists annually. This is a phenomenon that has no parallel in any other part of the world except perhaps Singapore. Even at the city level, it doesn’t happen anywhere else. And yes, the infrastructure development has huge support. I will say that the ongoing opportunity will always be the UAE – mainly Dubai and Abu Dhabi, where I believe it is time to build upon the foundation being laid. The second highest opportunity after the UAE is Egypt.

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Bassem Salah: I agree with my fellow speakers. The fundamentals in the UAE lend themselves to the hotel industry. Moderator: Bassam, what are the emerging trends across the region informing hotel design? Bassam: Coming from a contracting background, what we are seeing is a lot more boutique and branded hotels, and this is fundamentally influencing the design environment. We are also seeing design take on modular concepts as opposed to the traditional build. By modular, I mean prefabricated concepts. For example, we can build 300 rooms off site and bring elements of pod bathrooms or prefabricated joinery elements into the projects. Because of economies of scale of buying, the cost savings potential is huge. On two star and three star hotels, there is a lot of saving to be had by going down the modular route. Filippo: For me a big trend and what I would call the validation of Dubai among global destinations is that the size and specification of the asset is becoming a bit more aligned with the global sizes. For example, if the norm

EXPO 2020

for five star hotels is 50 sqm bedrooms, we start going down to 45 sqm. And in that space, you see 50 sqm in the top luxury hotels. What it means is that the volume, the maturity and the dynamics of the market doesn’t require 100% alignment with local culture. The domestic market accounts for very little for the segmentation, or in other words, the domestic market accounts for only a smaller proportion of the source market while the international markets steal a very big chunk of the business. This is the case in Dubai. But other countries in the region are still misaligned with global development standards. In the next five years, we will see potentially four star hotels at 26-28 sqm bedrooms instead of 32-34 sqm because with land becoming expensive, the tendency will be towards mixed use schemes. With space limited, urban planning will become tougher. So we will have to scale down hotels to commercially viable solutions from a specification point of view without undermining the financial aspect. We will also see the scaling down or reengineering of food and beverage (F&B) outlets. There will be more of outsourcing and employment of third party F&B consultants due to the growing sophistication and fast-paced development of that part of the business. To sum up, we will see less outlets, more outsourcing and more focus on having a balance between traditional outlets like allday dining and what drives the footfall next. John: We are seeing a lot of the ideas and concepts that originated in the West five to 10 years ago starting to appear in this part of the world. As Filippo said, we are having to become a lot more commercial here as margins are being slimmed down. The other aspect is that there has been considerable amount of research into guest preferences. Guests have moved away from boxstyle hotels or the big chains; they want little bit more individuality. We will start seeing brands like Indigo, Canopy and Radisson Red. Flexibility is the key. Personally speaking, I like to go to my room and work at a work station, so I want a well-equipped work station. But apparently, the millennials like to sit on their bed and work. The solution is to put a desk on castors that can be moved around. You are looking at a bathroom that can look into the room and therefore, borrow a little from that space.

I recently visited an old hotel in London with cordoned off areas and people snaking their way to the reception area that looked like an airline receiving desk. But we are already moving away from that design with reception areas that serve as staging areas where guests feel comfortable. They are sitting in settees until they can be accommodated instead of standing in lines. Focussing on your target markets and creating spaces that can cater to those markets is important. If you are going to handle large numbers of groups, then create separate spaces where you can put people temporarily until you can process them instead of having them jam your reception area. A great example would be JW Marriott Marquis in Dubai. Flexibility and focus on the target market is a trend that is definitely happening at the moment. Mark: There is definitely the emergence of life style product in Dubai’s hospitality market. We will see more of the trendy boutique hotels, like YOTEL, which has announced it will be coming to Dubai earlier this year. These concepts are quite different from what we are used to in the local market. Also, the impact of technology will be quite interesting. Picking up the earlier point by John about guest experience on entry, some of the brands are starting to look at people walking around doing and checking in guests through tablets, which is a much more informal and relaxed approach compared to the traditional check-in desks. Moderator: What key factors need to be considered from a construction perspective that will improve the success of a hospitality development project? Filippo: I think we may see many hospitality development projects slowing down because they haven’t thought about their staff accommodation. Even at a feasibility level, lot of people don’t factor in that you need to find the place to accommodate your staff. And this is going to be single biggest problem that will slow down hotel projects in the next 5-10 years. For every 11,000 rooms that we are going to build, we will need 41 buildings of 200 apartments each at two member staff per key on average, five star or bigger. So for every 11,000 keys, you have 22,000 population that you have to accommodate somewhere.

How does this affect construction? Preopening happens nine months before practical completion so we are talking second or third year of construction. Suddenly you realise that you don’t have accommodation ready and that will probably knock you down another two years because either a) you have to build it or b) you have to lease it, and both involve complications. In order to have a successful construction programme in terms of time, you have to think of where your staff of going to be. It is going to bite you at the back-end of the construction, at a time when you are going to spend a huge amount of money on the preopening, which is additional cash flow. Staff accommodation is an indirect issue from a construction point of view. The other prickly issue is project management, and I am sorry to say that we still see people who don’t understand the business. For example, we have project managers who ask us what is a typical list of OS&E (Operating Supplies and Equipment). As project managers, they are expected to know what OS&E is. If you don’t employ people who know the hotel business, you are going to have a serious problem. Let’s not forget that another 50,000 hotel rooms need to be built by 2020. Bassem: I have a different outlook on this. As a developer, you are buying teams of people. It is really important that when you are buying the team to deliver your project as a contracting project, all the stakeholders - architect, contractor, cost consultant, O&M services and development management team – should be on board. This is about breaking down the barriers between them and collectively collaborating to achieve an outcome or set of objectives that the developer sets out. The first thing in terms of building success into a project is disseminating your strategy and objective as a developer, bringing cohesiveness to the team; only then you are able to deliver the project. From a hotel perspective, it is understanding the sector and the specialities within the sector. It is understanding what your brand standard is, what your demographic is and what they require from a hotel. There is also a technical aspect which is understanding the little nuances which come with hotel fit out, like RMS Systems, Access

November 2015

INFRASTRUCTURE MIDDLE EAST

EXPO 2020

Systems, OS&E, FF&E (Furniture, Fixtures and Equipment). All of that combined is what delivers a successful hospitality project. Mark: Touching upon what Filippo and Bassam said, the key is in making sure the project is set right from the outset for delivery. It is about making sure that the expectations are managed from the ownership to make sure there is a real stake and a robust project in place. That’s sometimes a very difficult conversation to have very early in the project life because you can end up killing the project. But it is better to have a project which is realistic. Similarly, with the programme, there is massive expectation for delivery. As Filippo mentioned, a lot of rooms need to be delivered for 2020, and that’s going to need some careful programme management. Moderator: John, do you think the capability exists to deliver on those numbers? John: Opportunity brings resource to come and meet it. Where we have to manage the process more carefully and that actually builds on what Mark said is that in a project, there are different visions and objectives; the secret is to be able to manage all of them in a cohesive way so all are pulling in the same direction. It is important that you get an operator on board at the right time. Get them too early, and they will become a millstone around your neck. The right operator will act as a safety net and guide you with his experience and bring in the expertise to drive things forward. You need a cogent project manager who ensures that there are no changes as you go down the line. I think that’s the biggest problem in this area. I have seen projects go past concept development to detailed design and then the concept changes. You lose three months of work. Sometimes, you have the detailed design, you get approval and then someone decides to change the use; that’s six months down the line. Even worse, you have built the floor plate and now you have to punch new holes to put new vertical transportation in there. All these things drive up the cost tremendously, and these are all actual examples. Now, in fairness, we have been through turbulent times, and market changes, but we have also gained experience in that. As planners and consultants, we need to recognise that and allow for these

INFRASTRUCTURE MIDDLE EAST

eventualities. For me, the biggest problem is being unprepared to deal with change. Filippo: In my opinion, we are facing the most difficult five years for Dubai. You need to repeat exactly the success you have had to go to the next platform. Why do I say this about project management? For example, if Dubai Parks doesn’t come up on time, you will put at risk years 2021-2022 because this is stabilisation time. From a projected 20m visitors, you will potentially scale it down to 15m-17m. The presence or absence of the three million can make a huge difference to local economic development – hotels, retail, F&B, transportation. If the parks don’t get built on time, investors will become nervous and start slowing down things. If you don’t open your hotel by 2018, it allows you a couple of years to be at the back end of your stabilisation period. From 2020 onwards, it will be stabilisation period for the market. There will be good growth but in single digits. That’s going to be critical - if you don’t have project managers who can deliver the projects on time, you potentially knock down millions from your bottom line. From a technical point of view, we are facing a second set of issues in tower development, particularly in vertical transportation. People don’t want to wait as they are living in a fast moving environment. How do you get people from one floor to another or from parking to their rooms is a very big issue and impacts the experience of the guests and eventually, your profitability. During construction, you need to have a good plan for vertical transportation. Moderator: Given that operational costs rising, what does this mean for hospitality business if rates are reducing? Will there be more focus on development costs and finding more efficient ways of building? Mark: The operation costs are rising, whether it is staff accommodation, the cost of residency visas for the staff or the cost of utilities. Securing utilities for projects is also a big issue. All the operational lifecycle costs are increasing. The owners have still got the same expectations in terms of gross operating profits and the margins they want to see. The only way to maintain that is to squeeze the development costs which has to be adjusted against the growth, and the two could be pushing against each other. We need to look at some clever ways

November 2015

like prefabrication to take some of the stress out and bring projects to market faster, in order to bring in revenue quickly and save on finance costs as well. John: The truth is that in life, when costs are rising, efficiency also rises. We have already started to see things which we wouldn’t have believed possible 20 years ago; we are starting to see very credible outsourcing companies moving into things like housekeeping and laundry. When you don’t have to build a laundry into your room, your capex goes down. Operational efficiency starts to rise as time goes on because of necessity. We do have some challenges in the region because internationally, the hospitality industry relies on casual labour to take care of the demand peaks. We can’t do that here. The natural development of that is an outsourcing company that can feed in that additional resource at the right time and of the right quality. We also have to think about the way we build, the materials that we use to minimise the weight to improve the strength. I saw one building waste a complete floor to transfer the weight from the columns at one end to the columns at the other end to allow for public spaces. The whole floor took up some very precious Gross Floor Area (GFA). You need to get your structural engineers to work quite well to avoid such issues. Bassam: What we see is that 80% of the construction cost is influenced in the first 20% of the design. Parking space is considered in the design phase. It is very hard for a contractor to come on board towards the end when the concept is being finalised and everything is being completed, and then come up with a solution which provides efficiency. Nonetheless, contractors are always required to provide efficiency because it is the biggest outlay in terms of capex. If you are going to maximise your return on investment, it is inevitably construction that you will be looking at to manage the costs. Where the market should potentially head, in my opinion, is to bring the contractors in early. You should consult with them and get the feedback very early on to get it into the design to ensure you actually get a cost saving and an outcome of efficiency down the track. The contractor cannot do much when the design is done and the objectives have already been set out. The biggest thing we can do is consult more collaboratively. (Rest of the article is available online at www.infrastructureme.com)

CITIES

INTELLIGENCE HUB

The data leverage

Julia Boullemier, Regional Director MENA of Profusion, discusses the changes to infrastructure that will underpin a smart city

othing fits the saying, ‘can’t live with it, can’t live without it’ like city infrastructure. Few of us would claim to love the railways, subways, roads, sewers, electricity pylons and internet cables that crisscross our urban environment, however, we all miss them when they cease to function even for a moment. I would guess that the reason most of us don’t have any affinity for city infrastructure is because there’s a belief that it could be better. Trains could run on time and be less crowded, roads could be better laid out and have less roadworks. Meanwhile, internet connections could be faster and more reliable and electricity should be cheaper. Sewers wouldn’t be overwhelmed in storms or cause nasty smells on the streets above in hot weather. Put simply, the quality of life of city dwellers would be much higher if everything ‘just worked’. In a smart city ‘perfection’ is a very real possibility. A smart city is underpinned by the

INFRASTRUCTURE MIDDLE EAST

collection and analysis of data on its citizens. This information informs every part of the city, ideally, in real time. For infrastructure, it impacts the planning, operation and maintenance of every function. From a planning perspective, if you know how existing infrastructure is being used at a granular level and then overlay this information with demographic data, planned

The benefits of ‘smart’ infrastructure is not limited to simply making life more comfortable for people. It can also make a city more environmentally friendly and safer. JULIA BOULLEMIER, REGIONAL DIRECTOR MENA, PROFUSION

November 2015

developments, government policy and wider economic trends, you can create an ultraaccurate picture of what will be required in the future. It can influence every aspect of a development plan, from the layout of power grids to how many ticket gates are needed in a subway station. Simply having exactly the right facilities in the right places that are built to anticipate future requirements is a big step in the right direction. Any commuter on the subway in London will attest that much of it was not built to support the volume of passengers it takes every day. Nor, are the stations laid out or even situated in the best way – even on the more modern lines. Critics will be quick to point out that insufficient data is not the only thing that holds back good infrastructure. Cost and local interests or concerns play a big part. However, the argument to set aside a substantial amount of money for a new road or railway line is much easier if it can be empirically proven that it is the most efficient, cost-effective and future-proofed plan possible. Existing assets Existing infrastructure will also benefit from the smart city effect. Anticipating power surges, managing traffic flows, the ideal number of buses or trains to provide at any given time are just a few of the possible applications of data science on the data collected in a smart city. If you know where, when, who and what people do around a city, including where they shop, work, socialise and live it becomes much easier to anticipate what they will need. By adding in external factors such as the weather, events, time and date, a real-time picture of how citizens will interact with their city emerges. Through machine learning, algorithms can be created that react to events and respond accordingly. The ultimate goal is ultra-efficient infrastructure that instantly adapts to the changing needs of the city. The benefits of ‘smart’ infrastructure is not limited to simply making life more comfortable for people. It can also make a city more environmentally friendly and safer. If an emergency or disaster occurs, the fabric of a city can respond immediately. For example, if sensors capture a surge in movement or behaviour that indicates a fire or explosion has occurred in a specific location, transportation, water services and power can be deployed

CITIES

or changed immediately in mathematically the best way to help citizens. Roads can be quickly cleared to aid emergency services – particularly if the widespread adoption of selfdriving cars becomes a reality. Similarly, if a city is constantly monitoring how its systems are being used it can become ultra-green. Energy production can be tweaked in real time to minimise wastage, street lights can be switched off when not in use and the flow of traffic can be improved. Experimenting with data Of course, creating a smart city is not exactly straightforward. A lot of money is required to develop the network of devices needed as a framework for the city. For a truly smart

city, where homes and businesses are also connected, there needs to be significant buy-in from people and technological improvements. The much talked about Internet of Things currently lacks the ‘killer’ device that will spark wide spread adoption. Although data scientists have the expertise to crunch the numbers and create the algorithms that will provide the intelligence for a smart city, there will still need to be a lot of experimentation to determine the best approach. As with any science, testing and refinement is a crucial aspect. Such hurdles mean that municipal authorities and businesses need to have patience and determination. There are also real questions around data ethics and security to address. Naturally

with such a large amount of information collected on individuals the risk of misuse or abuse is very real. Maintaining trust with the populace of a smart city is fundamental. That is why data security, transparency and anonymization should be the bedrock on which a smart city is founded. Smart cities are gradually becoming a reality. Governments across the world are devoting billions of dollars to get projects off the ground. The rationale is fairly clear, the above is just a snapshot of the benefits a smart city can create. Undoubtedly, as technology advances and becomes cheaper, data science techniques are refined and people see their lives improve, even ‘smarter’ cities will emerge with even better benefits for us all.

Need for Holistic Smart Government Strategies

overnments in the Middle East and North Africa (MENA) are being urged to evolve smart service strategies and adopt a more holistic view of smart government to successfully deliver on becoming truly smart, according to a report released by Booz Allen Hamilton. The report - ‘Smart Governments in the MENA region: Progress, Perception and the Path Forward’ - highlights that while several regional governments have taken positive steps, to become truly smart they must transform in response to ‘a number of new and rising challenges’. According to Booz Allen Hamilton, regional governments must seek to increase smart government engagement by going beyond a linear concept of smart services and adopt a ‘multidimensional framework’. Fady Kassatly, Vice President at Booz Allen Hamilton MENA, and co-author of the report, says the ideal smart government framework is one that is predictive, citizendriven and shaped by user data. “The UAE and other regional governments are making tremendous strides in the pursuit of smarter government services and the creation of a better constituent experience, but there is need for a more responsive smart eco-system organised around users and user habits. “The success of smart services is based not on the perceived value of the offering, but on the tangible benefits smart services bring to citizens,” continued Kassatly. “The

greatest measure of success is in the engagement levels. Smart government goals cannot be achieved by simply extending access to existing e-services and adding new services through mobile technology; it is about transforming services to become responsive, adaptable, predictive and selfsustaining – encouraging more citizen participation.” The report suggests governments will need to continue evolving beyond just services, by tackling seven key areas of a holistic ‘Smart Government Framework’. Those areas include: • Smart Policies, the setting of policies that utiliSe economic modelling and big data analysis • Smart Strategies, defined as being responsive, adaptive and flexible strategies • Smart Human Capital, the cultivation of a robust but flexible organisation that relies on smart sourcing to provide expertise • Smart Technology, adopting cloud and subscription-based ICT and advancing analytics • Smart Funding, which taps various funding streams to drive and maintain sustainable growth • Smart Services, the provision of highly personalised and predictive services through a customised service delivery

• Smart Strategic Impact, allowing for evaluation of the socioeconomic impact of policies, strategies and services using robust data analytics The United Kingdom’s ‘gov.uk’ is cited as a truly adaptive smart government platform, and the South Korean government’s use of the Internet of Things and smart grids, to capture insights and predict future trends is also highlighted as a benchmark. “To be truly smart, we must develop smart communications strategies that drive engagement and introduce smart policies that support integration of data and service access. Proper planning and adequate funding will ensure that the smart government framework covers a larger footprint of the citizenry“, continued Kassatly. “Big data analytics can provide us with real time insights about user habits and allow the service to become truly smart – personalising itself to suit a user’s habits.” A ‘culture of innovation’ will also play a critical role in the success of smart government, says the report – allowing for a ‘freeform thinking process to occur within broadly defined rules’ to unlock the next level of digital government maturity. By 2025, the global smart cities market will reach $3.3tn – according to Frost and Sullivan research, with nearly half of the world’s 26 smart cities arising in emerging markets such as the Middle East. November 2015

INFRASTRUCTURE MIDDLE EAST

ANALYSIS

ACTION PLAN

Regaining market share

Iran’s re-entry into the global oil market is being closely watched for its impact on oil prices, says a new report by APICORP

ran has put regaining its oil export market share at the heart of economic planning as the country emerges from years of international sanctions. The government has declared bold targets for the restart of shutin production, a boost to oil investment and development, and a sharp increase in gas development, implying a new wave of condensate production and exports. Although some of these targets look overtly political and will be difficult to deliver, the trajectory of Iran’s full re-entry to the global oil market will be closely watched for its impact on oil prices and neighbouring MENA oil producers. Iran’s July 2015 agreement with international powers to curtail its nuclear activities in return for sanctions relief has

INFRASTRUCTURE MIDDLE EAST

raised the prospect of a recovery in its oil production from the present 2.8m barrels per day (bpd) to pre-sanctions levels of 3.7m bpd. The deal should also herald new IOC investment in the country’s oil sector, yielding longer-term output gains for crude oil, condensates and natural gas. Once sanctions have been lifted, Iran is also likely to wind down its large inventory of stored liquids afloat and onshore, to allow greater operational and shipping flexibility as it seeks to rebuild its European customer. Bullish on restart Projecting an accurate trajectory for the Iranian oil restart is critical to understanding the potential price impact. Tehran has unsurprisingly been on the bullish side of projections, claiming it will deliver an additional 500k bpd of exports within six months and 1m bpd of within a year of

November 2015

sanctions relief, taking total production to 3.8m bpd as the country’s prolific but ageing major oil fields ramp up. Under the nuclear deal framework, implementation of relief is set to occur in December or early 2016. The Iranian government projection assumes that the sanctions-related shut downs have not damaged production capacity at major fields and also assumes that development work, potentially with new IOC partners, could be fast-tracked on the major new oil fields close to the Iraqi border in the southwest. The major new oil fields under development, including Azadegan and Yadavaran, would allow production to rise well above 4m bpd within three years, according to petroleum ministry plans. There are reasons to lend Iran’s plans some credibility. The ministry has been preparing for a post-sanctions recovery since

‘In order to start pumping higher volumes at the well-head and into the export system, Iran will first need to empty a large proportion of its onshore and floating storage’

ANALYSIS

mid-2013. That programme has involved the optimisation of onshore oil field surface facilities and well workovers and some new production drilling. The lifting of restrictions on the import of drilling equipment banned under the sanctions regime may also allow optimisation of existing production in a way that is difficult to foresee. The National Iranian Oil Company (NIOC) carried out a major refurbishment and de-bottlenecking programme on its surface facilities in 201214. This may have improved capacity at key pinch points, but is also unlikely to have been comprehensive given the sanctions restrictions. Hurdles to growth Factors that could potentially slow the impact of an upstream recovery include the condition of surface infrastructure, field production units and flowlines as well as the main export system itself with its terminal infrastructure in the Gulf. Sanctions have hindered access to spare parts for pumps, compressors and valves. Iran’s attempt to retrofit domestically manufactured spares has not always delivered the performance of the originally installed equipment. The state of the well stock will also affect efforts to raise production volumes: if new parts can be imported and installed quickly, some supply gains could be seen swiftly. But hold-ups here could be costly in supply terms. Iran is also betting on the swift re-entry of IOCs to manage new EOR projects across the mature oil fields a top priority for the government. While preparation for this has been considerable, technical and commercial holdups are likely to mean the fruits of IOC involvement will not be significant until the end of the decade. The history of downstream investment is instructive: while Iran has boosted gasoline capacity in recent years, new downstream investments have also been delayed, mainly due to financing problems. In order to start pumping higher volumes at the well-head and into the export system, Iran will first need to empty a large proportion of its onshore and floating storage. With limited onshore storage, Iran has used part of its VLCC fleet to store oil but these state-owned tankers will be needed for the marketing effort once exports restart at higher levels. Total floating storage hit a peak above 40m barrels in mid-2015, equivalent toto 220k bpd

if released over six months. However, this assumes that all of the liquid on storage is crude and could be easily marketed in Asia. Anecdotal reports however suggest that the bulk of floating storage is less-easily marketed condensate. Hence the immediate impact on the market of the storage release is likely to be less than anticipated. As storage is emptied, NIOC can be expected to ramp up its prolific, mature onshore oil fields operated by National Iran South Oil Company (NISOC), which account for 75% of Iran’s pre-sanctions capacity. The natural decline rate for these onshore fields is estimated variously at 6-12% and whether the fields can be restored to pre-crisis levels is debatable. The major planks of the restart will focus on Ahwaz, Iran’s largest producing field and traditionally a swing field that has been ratcheted up and down to give Iran production flexibility. The field produces from the Asmari, Bangestan and Mansouri layers, and is expected to be able to recover to presanctions output of 800k bpd 18 months after restrictions are lifted. Long-term plans for the field include EOR and secondary lift using higher levels of gas injection. Like Ahwaz, the mature Agha Jari field has been in decline for decades but it is expected that increased levels of gas injection using South Pars gas will extend recovery factors and bring a slight increase in production over two years from pre-sanctions levels. But other mature fields in the onshore are unlikely to see a recovery in output until EOR can be applied, most likely through the involvement of IOCs. Overall, we expect new up-stream projects to bring some additions in 2016-18 but given that many of the projects have been facing delays and some contracts cancelled, the additions are likely to be only in the 200k-250k bpd range. This underpins our low case scenario. Counterbalancing the onshore potential, Iran’s offshore oil fields have struggled with high natural decline rates and stabilization will be the main objective. The increase in output from South Pars will partially compensate for decline rates in offshore fields, but this increase is mainly concentrated in condensates, in turn increasing the proportion of condensates to total output. The big push in Iranian productive capacity will only come following the return of IOCs. This could prove to be a lengthy process and

significant challenges face the IOCs. The shape of the new upstream contract, now expected to be presented in early 2016, will be critical. It will replace the unpopular buy-back contracts and is expected to be more competitive than those offered to IOCs in Iraq in the past decade. The contract is likely to extend for longer than the previous model, with fewer restrictions on cost recovery. It may also allow booking of reserves. But upstream investment will be challenged by Iran’s general weak business environment. New entrants will have to tolerate headwinds around regulation and dispute arbitration, both of which suffer from a lack of transparency, if they want to succeed. Fresh uncertainty Iran’s plans to regain its place as OPEC’s second-largest producer to Saudi Arabia will, in APICORP’s view, take years not months. While Iran has a significant subsurface resource and a new, more pragmatic leadership in the petroleum ministry, risks remain. Iran will need to maintain its commitments to the letter under the nuclear agreement to avoid the snap-back of sanctions. Iran’s internal political rivalries will need to be kept in check if the oil sector is to flourish. In the short term, the timing of the return of Iranian barrels will be critical: a swift resumption will keep downwards pressure on prices as producers jostle for position in a well-supplied market. If supply pressures result in sustained stock-building above present historic high-levels, OPEC may be forced to consider reintroducing some supply management. This may not be straightforward, as Iran has repeatedly signalled its desire to recapture market share and that other OPEC players should create the necessary space. The perception of a price war between OPEC’s key producers can be bearish on the market. However, in APICORP’s view, such a scenario may not playout. Due to multiple hurdles, a slower trajectory and Iran’s full re-entry to the oil market should help smooth the loss of new oil supply from nonOPEC producers after 2017. A rebalancing away from non-OPEC oil to MENA’s lowcost reserve base, combined with resurgent price-driven demand growth, will, APICORP believes, help make room for at least some of Iran’s additional barrels. (The complete report is available on APICORP’s website: www.apicorp-arabia.com/ research)

November 2015

INFRASTRUCTURE MIDDLE EAST

SOLUTIONS HUB

“The TropOS 6420 brings to Middle East utilities the benefits of a modern wireless communications system.” MARTIN ZUERCHER, HEAD OF NETWORK MANAGEMENT BUSINESS UNIT MIDDLE EAST, ABB POWER SYSTEMS

SMART NETWORKS

ABB’s new broadband wireless mesh router for utilities TropOS 6420 mesh router enables reliable, costeffective private wireless communication networks for smart metering backhaul and distribution automation

A 48

BB showcased its latest outdoor broadband mesh router, designed to meet the communication networking requirements of utilities

INFRASTRUCTURE MIDDLE EAST

in the Middle East, during a seminar for utilities in Dubai last month. The new TropOS 6420 offers utilities in the Middle East a reliable, cost-effective alternative to service provider networks to deliver wireless communications for smart grid applications such as Advanced

November 2015

Metering Infrastructure (AMI) backhaul and Distribution Automation (DA). The new router’s state-of-the-art radio design, coupled with the advanced mesh routing and radio resource management capabilities of the embedded TropOS Mesh OS, enables the TropOS 6420 to offer higher availability than service provider networks. “The TropOS 6420 brings to Middle East utilities the benefits of a modern wireless communications system” said Martin Zuercher, Head of the business unit Network Management in the Middle East, within ABB’s Power Systems division. “It enables deployment of private wireless networks that are both highly available and cost-effective.” The most commonly used communication technologies for smart grid applications are power line carrier (PLC), a private, wired communication technology, and public wireless data services provided by cellular network operators. The TropOS 6420 provides utilities in the Middle East with a new option. Able to access up to 653 MHz of RF spectrum, the TropOS 6420’s radio resource management embedded in the TropOS Mesh OS uses more available channels, automatically selecting the best frequency to avoid interference and maximise network availability. These capabilities, combined with its mesh routing capabilities and environmentally hardened packaging, enable TropOS 6420-based networks to be designed to highest level of system availability. The TropOS 6420 is available now and comes with a five-year warranty. An optional GPS and a variety of input power choices are offered for the TropOS 6420. As with all ABB Wireless products, the TropOS 6420 can be managed using SuprOS (formerly Tropos Control), a robust network management system. For additional information, go to www.abb.com/tropos

Solutions Hub

MOTORS

WEG to showcase energy efficiency solutions at ADIPEC

The star attraction is WEG’s Super Premium W22Xd motors, the most energy-efficient explosion-proof motors currently available on the market, as claimed by the company

EG, a leading global manufacturer of motor and drive technology, will demonstrate its energy-efficient solutions at this year’s ADIPEC show. WEG’s Super Premium W22Xd motors – the most energy-efficient explosion-proof motors currently available on the market - as well as some of WEG’s most ambitious oil and gas projects, including the supply of motors to enhance gas recovery in Oman’s $550m Saih Rawl Field Depletion Project will be highlighted during the event. “Today’s oil and gas industry is faced with new challenges including the current low oil prices and the need to reduce energy consumption and keep costs down. With some of the most easily accessed oil fields becoming exhausted, the industry is also finding

itself operating under harsher environmental conditions – often in deeper waters and under higher temperatures and pressures,” said Colin Cox, Managing Director, WEG Middle East. “With this mind, this year we will show visitors at ADIPEC our state-of-the-art motor technology which combines best-in-class energy-efficiency with strength, reliability and safety to endure the most aggressive environments while complying with global hazardous area safety certification requirements.” Now available in rated power from 0.12 kW to 5.6 MW and frame sizes from IEC 71 to 800 (NEMA equivalent available), the W22Xd is one of the broadest ranges of energy-efficient explosion-proof motors on the market. It features an advanced cooling system with cooling fins that reduce noise levels while significantly increasing heat dissipation, thus contributing to higher efficiency up to IE4 levels.

The standard W22Xd series is ATEX certified and designed for use in IEC Zone 1 and 2 hazardous areas and with group IIA, IIB and IIC gases. The W22XdBD and W22XdCD versions provide additional protection against explosive dusts for use in aggressive atmospheres classified as Zone 21 or 22, group IIIA, IIIB or IIIC, and EPL Db. The W22XdM version is suitable for use in coal pits with classification Group I, Category M2 and EPL Mb. To demonstrate its expertise as a fullspectrum manufacturer of automation solutions for the oil and gas sector, WEG will also be showcasing a range of motor control equipment, including the CFW500 range of variable speed drives for applications including centrifugal and process pumps, fans and compressors, and the SSW06 and SSW07 soft starters.

November 2015

INFRASTRUCTURE MIDDLE EAST

EXECUTIVE INSIGHT

Kamal Pharran

“If you compare District Cooling to conventional air conditioning, we are talking about a 50% savings in electricity”

A challenging market Kamal Pharran, CEO of Saudi Tabreed speaks to Rajiv Pillai of Climate Control Middle East on the future of District Cooling in Saudi Arabia istrict Cooling is an effective and sustainable key solution for energy optimisation for the Kingdom. It’s at the heart of its developments and key competency, when things come to energy savings and proper utilisation of allocated budgets for spending and civil expansion. In fact, a mandate was already streamed via the Riyadh City Development Council to adopt District Cooling solutions to any of the mega projects within the city of Riyadh. We expect the District Cooling industry to evolve under the same mandate to cover all the cities in the Kingdom, where government entities and real estate developers alike, are mandated to introduce District Cooling schemes in their current projects as well as future plans. The collaboration with the Saudi Energy Efficiency Centre (SEEC) is, on the other hand, a key to go forward with District Cooling implementations and regulations across the Kingdom. The government did establish the SEEC by the Council of Ministers in 2010, with a mandate to enhance energy efficiency measures

and implementations in the Kingdom. The Executive Committee of the Energy Efficiency Center is headed by HRH Prince Abdulaziz Bin Salman Al Saud, the Deputy Minister of Petroleum, who is leading the energy efficiency programmes across the different sectors in the Kingdom, with close collaboration with different stakeholders. District Cooling regulations are at the top of the agenda. We hope that the District Cooling regulations would be drafted and implemented within the coming years, to facilitate District Cooling implementations, with main emphasis on mega projects in the Kingdom. SEEC aspires to raise rationalisation awareness and enhance energy consumption efficiency, as well as unify the efforts of governmental and non-governmental agencies to support and preserve the national wealth of energy resources. The District Cooling platform will, indeed, help achieve the lowest levels of energy consumption. Our close collaboration with SEEC is key to further develop the District Cooling industry in the Kingdom. Our growth strategy is strongly aligned with the Kingdom’s needs and requirements, to further optimise energy

consumption for cooling systems. Our main focus is on our outsourcing mechanism via long-term BOO/BOOT (build–own– operate–transfer) frameworks for our District Cooling schemes throughout the Kingdom, namely, for mega projects. Again, if we talk about what the need is in Saudi Arabia, 70% of the consumption of electricity in Saudi Arabia is for cooling. If you compare District Cooling to conventional air conditioning, we are talking about a 50% savings in electricity. Therefore, by comparing this formula, you will see that District Cooling can reduce the electricity consumption of Saudi Arabia by around 30-40%, which is a huge saving. Saudi Arabia is a country where six months of the year the climate is extremely hot. Saudi Arabia is really expanding, and it is a large country, and in line with that, the demand for cooling is really growing. It is one of the countries with a population that is growing. I am sure that the government is facing many hard challenges to provide sufficient electricity to the Kingdom. District Cooling is one of the best solutions for the government, and it is an improved technology that will satisfy almost 50% of the cooling demand. November 2015

INFRASTRUCTURE MIDDLE EAST

INFRA PEOPLE

Perkins appoints new VP

Point of View

Chris Snodgrass has been appointed Vice President of Global Sales, Marketing, Service and Aftermarket Parts at Perkins Engines Company, He will lead all commercial activities for Perkins engines, sold both direct to customers and through the global Perkins distribution network, and will own the service and parts group, where he will continue to ensure customers experience consistently exceptional levels of service and support. He is also the first vice president to have offices in San Antonio, Texas US., Peterborough, UK and Shanghai, China. James Hogan, President & CEO, Etihad Airways

Airedale strengthens GCC operations British cooling expert, Airedale International, has appointed Jamshad Padanchery as Sales application engineer at its Dubai Airport Freezone office opened in early 2014. Jamshad, who is 25, joins Airedale with two years’ experience gained at HVAC and building services specialist, Gulf Engineering System Solutions (GESS). He will provide technical and commercial support to the manufacturer’s business partners and clients in all the GCC alongside sales application engineer Nissar Rahman, and regional manager Andrew Walker.

New Assistant Undersecretary at Ministry of Environment & Water The UAE Cabinet has issued a decree appointing HE Eng. Mariam Mohammed Saeed Hareb as the Assistant Undersecretary at the UAE Ministry of Environment and Water’s ‘Water Resources and Nature

Conservation Affairs Department.’ She was previously the Acting Assistant Undersecretary in the same department. HE Eng. Hareb, a UAE National, began her career soon after graduating from one of Europe’s leading engineering universities, with specialisation in ‘Development and Design Engineering.’ She received her Bachelor’s and Master’s Degrees in Mechanical Engineering from the Rhenish-Westphalian Technical University (RWTH) in Aachen, Germany. She has gained prominence in the field of Environmental Engineering through her professional experience of over 10 years working with wellknown organisations in the UAE and Germany.

Ways of doing business globally have changed over the years and aviation, like many other industries, must adapt and change. In union there is strength and a shared vision. At Etihad Airways we have seen the results of working together which go well beyond commercial benefits. Industry observers originally questioned our equity investment strategy. Three years on, we have proved the sceptics wrong. Our organic growth has been supported by successful codeshare partnerships, minority investments in selected airlines around the world, and deep commercial agreements with competitors and noncompetitors – all to provide an enhanced global offering to the travelling public. Through cooperation we also enjoy significant cost reduction opportunities such as joint procurement of assets, services and supplies. We recently concluded an innovative financing transaction involving some of our equity partners which raised $700m across international markets to fuel growth collectively, a clear endorsement of our business model. The ongoing instability and conflicts in parts of the region continue to affect the performance of the business... collectively, as an industry, not in isolation, we can work towards finding solutions and come up with a framework that is both workable and competitively feasible.” (Excerpted from speech made at IATA Aviation Day in Abu Dhabi last month)

November 2015

INFRASTRUCTURE MIDDLE EAST

EVENTS

HOUSING

In pursuit of affordability As the GCC members contemplate the task of housing a rapidly expanding population, we explore the related challenges and opportunities, courtesy the organisers of Big 5, the region’s largest construction event he year 2015 has been referred to as the ‘year of affordable housing’ in a construction industry report published by Ventures Onsite ahead of The Big 5. In line with the findings of the report, the Dubai Municipality announced in March 2015 that it has allocated over 100 hectares of land for affordable housing in Muhaisnah and Al Quoz, while across the border in Saudi Arabia announced a $66bn outlay for building affordable houses. These new developments follow similar investment in Bahrain in 2014, with the government announcing ambitious plans to build 40,000 social housing units by 2022. Meanwhile, Oman’s Five-Year Development Plan (2011-15) seeks to implement housing

INFRASTRUCTURE MIDDLE EAST

projects with a budget of $1.16bn (8% of total planned spending) and Sultan Qaboos ordered a grant of $520m for a housing assistance programme that includes housing loan projects. Much has been written about the motivations behind this trend, including regional population growth figures that are amongst the fastest in the world. In fact, by 2020 forecasts suggest that there will be an additional 13m people in GCC countries, with combined populations in the UAE, Saudi Arabia, Oman, Bahrain, Qatar, and Kuwait set to rise from 40m to 53m. However, while Qatar’s Ministry of Civil Service Affairs and Housing and the Saudi Arabian government have provided affordable housing to low income nationals since the 1960s and 1970s respectively, the age of the region’s population and booming real

November 2015

estate markets have also played their part in prompting a renewed interest in the provision of affordable housing. More specifically, the proportion of the population under 15 years of age is expected to drop from 29% in 2008 to 24% in 2020, but will remain substantial. And while, top global credit rating agency Moody and estate agents Knight Frank agree property prices in Dubai are likely to correct by 10-15% in 2015, the demand created by Expo 2020 is expected to lead to future upswings – not least because of the 227,000 new jobs the Expo will create. Affordable track Far from putting an end to growth and opportunity, the creation of an affordable housing sector in the GCC represents the maturing of the region’s construction market and is creating business opportunities for

EVENTS

construction companies. So much so, that among the extensive range of 75 certified workshops there will be a dedicated programme concerning affordable housing and sustainable communities providing the latest key insights on this topic to the 85,000 participants that are expected to attend the Big 5 at Dubai World Trade Centre from 23-26 November 2015. Led by industry experts from around the globe, this programme of free education sessions includes a seminar on whether sustainable and affordable housing can become a reality in the Middle East, whether sustainability and affordability are opposing metrics, and what it will take to deliver on regional ambitions for sustainable housing. This will be delivered by Abdallah Bdeir, Chairman of Jordan’s Green Business Council, Eng. Meshal Al Shamari, Director of Qatar’s Green Building Council, Gerry Rogers, Senior Associate, Galadari Advocates & Legal Consultants DIFC Limited. There will also be a case study on Fujairah’s Vision 2040 master plan. This will be presented by Alaa Saber Mahmoud, Project Coordinator at Fujairah Municipality and will provide an overview of the strategic master plan for the emirate and highlight the challenges and opportunities in the construction sector. In other seminars, keynote speakers and industry leaders will offer insights into the role of green building and alternative methods to constructing affordable housing, sustainable design and procurement of affordable housing, and some of the latest technologies and innovations being used to design, and construct affordable housing.

In all visitors will have guaranteed access to at least 75 free CPD-certified education seminars at The Big 5, making it the largest provider of free education of any event in either the Middle East or Asia. Additionally, in order to better align local, regional, and global suppliers with the specific needs of local markets, The Big 5 will feature more live product demonstrations of technologies that are shaping the broader construction industry. In a similar fashion to the workshops and seminars, participating exhibitors will bring experts to showcase products in action, giving all visitors the opportunity to assess the suitability of a product for their projects in real-time. Available floor space is also set for an eight percent increase from 52,265m in 2014 to 56,400 in 2015, following the expansion of Dubai World Trade Centre and strong demand from exhibitors. Together with strong demand, extra floor space will also be used to accommodate a new hall called The Big 5 Focus, which will be making its debut at the 2015 event. As the latest addition, The Big 5 Focus has been created to serve the increasing number of visitors seeking information on the challenges and opportunities for technology in construction and project management. In speaking about The Big 5 Focus, dmg event director Ashley Roberts explained the rationale behind the new hall and that The

Big 5 Focus will offer more stand space for companies wishing to increase their presence at the event. He said: “The 2014 edition of The Big 5 was a record-breaking year, which was attended by 80,178 participants. To continue with the expansion and development of The Big 5 Focus is a hall dedicated to a range of features that have been introduced specifically to meet the needs of our visitors providing additional value.” The free CPD workshops and seminars at The Big 5 focussing on housing include: 1. Can sustainable and affordable housing become a reality in the Middle East? 2. Delivering affordable and sustainable housing 3. Integrating high performance into the next generation of GCC housing and communities 4. Building green: alternative methods to constructing sustainable housing and environments 5. Sustainable design and procurement of affordable housing 6. Affordable housing construction technology solutions For the full agenda and complete information about the free workshops and industry speakers taking part at The Big 5, please visit https://www.thebig5.ae/ freeeducation/certified-workshops/agenda/

November 2015

INFRASTRUCTURE MIDDLE EAST

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events

coming soon

InnoTrans 2016 20-23 SEPTEMBER 2016, Berlin very two years the world’s rail industry meets at InnoTrans in Berlin. For rail industry professionals the leading international trade fair for rail transport technology is a firm fixture on the calendar of events. At InnoTrans 2014, 133,595 trade visitors from 146 countries came to Berlin to find out about the innovative products of the global rail industry which were displayed in 40 halls by 2,761 exhibitors from 55 countries. More than 3,000 students from around the world travelled to the German capital to find out about the growing number of job opportunities in this sector. At the the outdoor display site, 149 innovative rail vehicles were displayed on tracks totalling 3,500 metres in length. In 2014, for the first time, visitors were able to admire rolling stock exhibits on a purpose-built Special Gauge display area. In the Railway Infrastructure hall, which has

Mark your diary... ADIPEC 2015

continued to expand, more than 550 international exhibitors displayed their innovative products on an overall area covering more than 30,000 square metres. In addition to signalling and control systems, rail track technology and equipment for overhead lines were also exhibited in six halls. Extensive services for planning and monitoring construction work rounded off the exhibition. According to the organisers Messe Berlin, current booking levels indicate that the next edition of this leading trade fair will continue its history of success. Around 90% of the overall display area has already been booked.

9 – 12 NOVEMBER, 2015 ABU DHABI Hosted by the Abu Dhabi National Oil Company (ADNOC) and organised by dmg events, ADIPEC 2015 will take place at the Abu Dhabi National Exhibition Centre (ADNEC) and is expected to host more than 85,000 attendees. Contact: Nour Soliman Tel: +971 2 6970 516 Email: NourSoliman@ dmgeventsme.com www.adipec.com GEOSYNTHETICS Middle East 2015 16 – 17 NOVEMBER, 2015 ABU DHABI

Contact: Kerstin Schulz Tel: +49 30 3038 2032 Email: k.schulz@messe-berlin.de www.innotrans.de

Enjoying the patronage of Department of Municipal Affairs, Abu Dhabi Municipality at the Rosewood Hotel, the 7th edition of this flagship event comprises of GeoME conference and

SaMoTer 2017 22-25 FEBRUARY 2017, Verona aMoTer, the International Earth Moving and Building Machinery Exhibition, is the leading event in Italy and the main European event for construction equipment. The 30th edition of this event will be held at the Veronafiere Exhibition Centre in Verona (Italy) in 2017. The exhibition focus will be on environmental emergency and protection solutions, the territory and hydro-geological risks, with special reference to intelligent machines, hybrid low-emission and high efficiency machines, technological platforms for human to machine (H2M) and machine to machine (M2M) interaction. Topics debated

GeoME Technical Exhibition. Contact: Fabian Beermann Tel: +971 4 8845001 Email: fabian@bmc-gulf.com

will highlight EU projects such as Europa 2020 planning for sustainable growth and the Horizon 2020 programme for research and innovation. SaMoTer is co-located with Asphaltica (machinery and systems for the road building and bitumen sector promoted by Siteb) and enjoys the patronage of CECE, the European Committee, which brings together earth moving and building machinery manufacturers associations.

www.geosyntheticsme.com world future energy summit 18 – 21 JANUARY, 2016 ABU DHABI WFES is the world’s most influential event dedicated to advancing future energy, energy efficiency and clean technology. Contact: Naji El Haddad Tel: +971 2 409 0499

Contact: SaMoTer-Veronafiere Tel: +39 045 8298 317 Email: exhibitors@samoter.com www.samoter.it

Email: naji.haddad@ reedexpo.ae

November 2015

INFRASTRUCTURE MIDDLE EAST

Infrastructure Milestones

#020 Waste water concession Ajman Sewerage is the region’s first-ever Public Private Partnership (PPP) for the delivery of a municipal service, and a successful one at that

he Middle East’s first waste water concession, no surprises here, was implemented in the UAE, or more

specifically in Ajman. In December 2001, the Public Private Partnership (PPP) model took a significant step forward in the region, when the Ajman government signed a concession agreement with US-based Black & Veatch International and the UK’s Thames Water for the region’s first integrated wastewater project, backed by private capital. Prior to that, Ajman relied on septic tanks, soakaways and tankers to dispose of its wastewater. After a few hiccups along the way, the project came online in 2009. Currently, the 27-year concession is operated by Ajman Sewerage Private Company Ltd (ASPCL), a partnership

INFRASTRUCTURE MIDDLE EAST

between the Government of Ajman, BESIX and Veolia, two leading international water treatment experts from the private sector. ASPCL collects wastewater, treats it and delivers treated water to the city of Ajman. The sewerage system has about 300 km of sewer lines, 22 pumping stations and a wastewater treatment facility that currently handles more than 80,000 m3/day. On a daily basis, more than 300,000 people living and working in Ajman benefit from the sewerage system. The entire infrastructure is operated and maintained by Moalajah, owned one-third by BESIX and two-third by Veolia Water. The concession contract not only covered construction of the treatment plant and collection system and the service lines to homes but also billing. In fact, in Ajman’s case, the waste water collection and treatment services were the first in the region

November 2015

Fast facts Location: Emirate of Ajman, UAE Existing treatment capacity: 80,000 m3/day PPP partnership: Government of Ajman, Besix, Veolia Capacity expansion: 40,000 m3/day

to be billed directly to customers. In May 2015, ASPCL signed a deal aimed at expanding the treatment plant capacity by 50%. The construction contract has been awarded to Six Construct and the upgrade works are expected to be completed before the end of 2016. Speaking during the signing ceremony, ASPCL General Manager, Christophe Ledur said that the plant upgrade would allow treating an additional 40,000 m3/day of wastewater. ASPCL will also increase the production of treated water for usage in domestic and industrial applications such as greenery, irrigation, landscaping, construction works, cleaning and district cooling. Interestingly, the government of Ajman has set up another PPP with Besix called ‘Safi’ to commercialise the treated effluent produced by ASPCL, marking another first in the region.

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