Infrastructure Middle East September 2014

ISSUE 007 | SEPTEMBER 2014

IN FoCUS

hEALthCARE

Smart measures Metering giant Landis+Gyr breaks new ground

taking care to adapt Getting to grips with healthcare PPPs

p10

p34

ANALYSIS

tRANSPoRt

Chemical outliers US shale alters petrochem market dynamics

Shipping at risk The economic costs of maritime piracy

p16

p42

EXCLUSIVE INtERVIEW

DEEP WAtER StRAtEGY Sohar Port’s gateway ambitions take shape under CEo Andre toet

PLUS toP 10 SAUDI ARABIA INFRAStRUCtURE PRojECtS

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INTRODUCTION

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

or long, London has occupied the top position among the world’s financial and commercial centres.

However, according to the city’s mayor Boris Johnson, the UK capital is at risk of losing its position among the world’s elite cities as competitors start to invest substantially in their infrastructure.

The 2050 London Infrastructure Plan attempts to prevent that by projecting the full range of infrastructure requirements for the city over the next half century, during which time its population is forecast to increase by 37% to more than 11m people. If this forecast materialises, the demand for public transport is expected to rise by 50%, housing stock will need to increase by 50,000 every year and the city would require a new four-runway hub airport.

Johnson hits the proverbial nail on the head when he asserts that increased productivity relies on good infrastructure but the same can only be delivered, improved and maintained through planned, sustained and targeted investment. What should enthuse us is his approach to making the 2050 plan deliver.

The mayor is setting up a London Infrastructure Delivery Board that will include senior representatives from all of the main infrastructure providers in London. Moreover, a draft plan has already identified the key challenges to the city’s infrastructure.

One of the highlights of the plan, beyond the traditional focus points of transportation, electricity and water, is its outlook for broadband, which the document describes as the ‘fourth utility.’

The goal is to upgrade London’s connectivity to world-class levels by deploying cutting edge technologies such as 5G broadband.

Long-term initiatives like the 2050 London Infrastructure Plan help link up city-wide infrastructure systems and make it possible to take short-term decisions for long-term benefits. More importantly, longterm planning enables early stage collaboration – the number one item on project planning wish lists – between the different stakeholders while providing crucial visibility of workload to ensure better delivery. To make future cities better places to live in and work, future planning is essential.

F

DIGITAL DIGITAL SERVICE MANAGER TRISTAN TROY MAAGMA Published by

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

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

© Copyright 2014 CPI. All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

September 2014

INFRASTRUCTURE MIDDLE EAST

1

At the 2014 Construction Machinery Show we sold 70 units and 100 more units are under discussion. We have delivered a positive message to our existing clients, our competitors, and grabbed new clients.

I think gaining such an appreciation from all members in the construction equipment sector is a great honour and will encourage us to work very hard to keep the same level of style, image, and standards.”

This year the CM Show team delivered an exhibition Saudi deserves. For years, we have seen a vision in this Show and this year the vision was achieved. We wanted quality traffic and we saw equipment and company owners; and we were able to offer some promotions to entice sales.

I saw an increase in our sales immediately.

Our principles, Doosan and Everdigm, really enjoyed themselves. We anticipate the upcoming years to be even better.”

The Construction Machinery Show was perfect from an awareness point of view.

We explained Roots Group Arabia’s capability of covering the construction industry with all of its needs and requirements. The attendance was good especially during weekdays and towards the end of the exhibition. See you next year.”

Al-Qahtani & Sons Khaled El Shatoury, Managing Director

Saudi Diesel Equipment Ahmed Alkooheji, Marketing Manager

Roots Group Arabia Abdulaziz Felemban, Brand Manager

Co-located with

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

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

CONTENTS

007 September 2014 30

CoVER SToRY

REGULARS

Deep water strategy

06 Regional update

Sohar Port’s gateway ambitions are taking shape under its CEO Andre Toet Report by Shruthi Saraf

DEWA invites bids for solar project; Oman extends rail PMC bids

09 Global update

BRICS sets up new development bank; Infrastructure-public investment link probed

10 In focus

Smart measures; Petrixo selects UOP technology; Advancing the grid; Fast-charging partnership

26

Top 10 FEATURE

KSA infrastructure projects The Kingdom of Saudi Arabia is the undisputed capital of infrastructure projects in the GCC. Infrastructure ME presents the country’s most valuable projects

23 Infrastructure tenders 40 The case for interim power Role of fast track plants in bridging power deficits

54 Executive insight Wireless in trains

55 Events 56 Infrastructure milestones This month: Hejaz Railway

INDUSTRY SECToRS ANALYSIS

UTILITIES

20 Chemical outliers

42 Shipping at risk

US shale gas has altered the market dynamics for the global petrochemicals industry Report by Anoop K Menon

A new UNCTAD report examines the economic costs and traderelated implications of maritime piracy across the world

hEALThCARE

CoNSTRUCTIoN

34 Taking care to adapt

46 Keeping out the salt

SpECIAL REpoRT

CoNSTRUCTIoN

36 Smart construction

50 Strong foundations

Public Private Partnerships (PPP) in healthcare, by their very nature, require greater diligence and scrutiny than in traditional infrastructure PPPs

Atkins Middle East CEO Simon Moon explains why it pays to streamline a business and play to its strengths

04

Wacker Chemie’s masonry protection expert Anoop D’souza talks to Infrastructure ME about reinforced concrete’s vulnerablility to sea salt

BASF’s Matteo Gioia on the chemical major’s product portfolio for the airports sector

Report by Oliver Ephgrave

ALSO: ATTACHED TO IRAQ

ALSO: AUTOMATION UNIVERSITY

Report by Neha Bhatia

INFRASTRUCTURE MIDDLE EAST

September 2014

REGIONAL UPDATE

and preparation for the planned commissioning of the country’s first nuclear power plant by 2017.

UAE Dubai Electricity and Water Authority (DEWA) has invited pre-qualified companies to bid for the 100MW Phase 2 of the Mohammed bin Rashid Al Maktoum Solar Park.

DEWA received 49 qualification documents through an open request for the qualification process, which was released last May. The utility then shortlisted 24 developers for the second phase of the tender. Deadline for submitting the bids is October 23, 2014.

The $3.2bn Mohammed bin Rashid Al Maktoum Solar Park is one of the biggest renewable energy projects in the region and will produce 1,000 MW upon completion. Phase 1 of the solar park, implemented by US-based First Solar, has a capacity of 13MW.

Dubai skyline According to EC Harris, Dubai’s real estate market is growing steadily

The Federal Authority for Nuclear Regulation (FANR) has awarded a joint contract to Lloyd’s Register Energy and Lightbridge Corporation to support the authority’s internal inspection team with construction oversight and related technical services for the UAE’s nuclear power plants.

These include design verification, inspection plans, quality assurance, and vendor inspection during site construction, installation and commissioning.

FANR is the independent government body charged with regulating and licensing nuclear activities in the UAE. The deal will help FANR continue its planning

Systems Technology packages.

The first package to be offered to the 23 shortlisted bidders will be the 170km Sohar–Al Ain segment, which will link Oman’s national rail network with the GCC railway system. This segment is targeted for completion by 2018.

Oman Oman government is planning to award three blocks for exploration by the end of this year, the Times of Oman has reported, quoting a senior official at the Ministry of Oil and Gas. The latest oil blocks agreements have been with Total Exploration and Production, Oman Petroleum B V and Petrogas Kahil for developing an offshore oil block in northern coast and an onshore block in Al Wusta region, respectively.

The agreement with Total was for developing Offshore Block 41 spread over a large 23,850 sq km area off the northern coast, while the pact with Petrogas was for Onshore Bock 55, spread over an area of 7,564 sq km.

06

INFRASTRUCTURE MIDDLE EAST

The UAE’s construction market is predicted to return to near full capacity with a number of megaprojects in the pipeline and the ramping up of social infrastructure spend, according to EC Harris’ 2014 International Focus on the UAE report.

EC Harris’ Construction Cost Index indicates that construction prices in the UAE are set to rise by 4-5% over the duration of the year and approximately 6% in 2015.

The volume of announced and planned projects in the UAE in 2014 is expected to be valued at $315bn, and as of May 2014, $212bn worth of construction projects are currently under construction. The report also states that Abu Dhabi may increase construction spend in the latter half of 2014 and early 2015.

Challenging topography Oman’s rail network must contend with a mountainous terrain

Oman’s Tender Board has instructed bidders for Oman National Railway’s Project Management Consultant (PMC) contract to extend their bid bonds by a further two months.

According to Oman Daily Observer, companies in contention for the PMC contract are consortiums headed by September 2014

Korea Rail Network Authority, Técnicas Reunidas and Parsons International. Oman’s 2,244km long national rail network will extend from Buraimi in the north to Salalah in the south.

Oman Rail Company recently completed the process of prequalifying bidders for the Design & Build Infrastructure and

The Oman Power and Water Procurement Company (OPWP) has received 11 statements of qualifications in response to the Request for Qualification (RFQ) for the development of two Independent Power Projects (IPP) .

The IPPs, expected to be located across two sites, will add approximately 2,600MW to the Main Interconnected System (MIS), which covers much of the northern half of the Sultanate.

Part of the capacity will go on stream by 2017, while the full project will be ready by 2018.

REGIONAL UPDATE

Qatar Qatar Rail and Qatar Solar Technologies have signed an MoU to explore opportunities that may lead to the installation of up to 80MW of solar technology within Qatar’s upcoming rail network.

The first stage of the MoU will look at installing ground and rooftop mounted solar PV installations on the proposed 3,000,000 sqm rail depot facility that will be located near the new Sheikh Hamad International Airport.

Qatar is developing a world class 750km rail infrastructure incorporating Doha metro, Lusail light rail transit system, and the Long Distance Passenger and Freight Rail that links Qatar with Saudi Arabia and Bahrain.

Gains galore Planning is crucial to ensure that Qatar benefits from its 2022 spend

The Qatar Public Works Authority ‘Ashghal’ has come under fire for its handling of infrastructure projects in the country.

According to a report in The Peninsula daily, members of the Central Municipal Council (CMC) have criticised Ashgal’s procedures for awarding projects

and delays in implementing projects that were announced.

Councillors also expressed concern over projects in some cities that have been awaiting completion for several years as work has not started yet.

Qatar is likely to be an economic winner from the

World Cup unlike Brazil, where economic activity during the 2014 FIFA World Cup was as dismal as the performance of its national team.

According to a Qatar National Bank (QNB) report, the 2022 FIFA World Cup provides the country a useful focal point to complete the required infrastructure and move to the next growth phase.

Another report by Credit Suisse noted that Brazil’s investments related to the World Cup and upcoming Summer Olympics couldn’t prevent a slowdown in GDP. It pointed out that only a long-term strategy can ensure that the benefits of the spending translate into sustained economic growth, even in a worst-case scenario where Qatar loses the the World Cup. The sectors that stand to benefit most from the spending include petrochemicals, cement, healthcare, education and utilities.

FINISHED PRODUCT SALES HOSE & BELT MANAGEMENT HYDRAULIC TUBING & PIPING HYDRAULIC SYSTEM REFURBISHMENT GATES ENGINEERING & SERVICES

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

REGIONAL UPDATE

is currently involved in Kuwait’s Clean Fuels project, the Karbala refinery project in Iraq, the Kais thermal power plant project in Algeria and the Rumaitha-Shanayel expansion project in the UAE.

Kuwait Kuwait’s Ministry of Communications has finalised the layout of the 61 stations of the metro project that will be distributed along three lines to cover all areas and governorates of Kuwait.

According to a report in Arab Times citing Al-Shahed newspaper, the $20bn project will be implemented as a Public Private Partnership (PPP) with construction work expected to start in 2017.

The first line, covering 23.7km, will have 19 stations, starting at Salwa area and ending at Kuwait University. The 21km second line will start from Hawally area and end at Kuwait City, passing through 27 stations. The third line, covering 24km, will start from the airport

Metro momentum Kuwait intends to start work on its metro in 2017

and end at Abdullah Al-Mubarak area, passing through 15 stations.

Kuwait’s Ministry of Public Works has awarded South Korea’s GS Engineering & Construction a $584.5m order to build a bridge in Kuwait.

The project calls for building the 12.43km Doha Link bridge

connecting Shuwaikh to the port village of Doha in the Jahra region of Kuwait.

Of this, the 7.72km section will be built on sea while the remaining 4.71km will be on land. The project will be completed within 48 months after commencement of construction.

GS Engineering & Construction

Saudi Arabia Saudi Arabia’s oil exports reached 1.6bn barrels in the first seven months of the current year, with proceeds amounting to $175bn, reported Al-Riyadh daily, quoting local economist Fahd bin Juma.

However, local consumption of oil during the same period stood at 475m barrels or 23% of the total production.On global demand, Jumaa said demand for oil is expected to be strong for the remaining period of the current year due to geopolitical turmoil, notably in the MENA region.

Saudi Arabia is accelerating its mineral resources development plan, industry leaders in the Kingdom have told MEED. “The aim is to establish mining

08

INFRASTRUCTURE MIDDLE EAST

Third economic pillar The Kingdom is aiming to become a global powerhouse in mining

and its support services as the third pillar of the Saudi Arabian economy after hydrocarbons and petrochemicals,” said Sultan bin Jamal Shawli, Deputy Minister for Mineral Resources at Saudi Arabia’s Petroleum & Mineral Resources Ministry.

“There is great potential in the Arabian Shield and an enormous September 2014

diversity of minerals across the Kingdom,” added Khalid S Al-Mudaifer, president and CEO of the Saudi Arabian Mining Company (Ma’aden).

“There is strong potential for further discoveries and these will require the application of modern techniques and a wide range of support services.”

Kuwait’s non-oil sector grew a strong 10.6% in 2013, driving the country’s nominal gross domestic product to $175.4bn, a growth of 2.3% over the previous year.

The economic update released by the National Bank of Kuwait (NBK) also noted that oil sector’s share of GDP remained at 66% (including refining), which reflects lack of progress on expanding the non-oil sector in the country.

Gross capital formation posted a solid 12.7% gain. Elias Bikhazi, Group chief economist at NBK said. “We will (still) look for real growth of about 4.5% in the non-oil sector for this year and next.”

The Saudi Arabian General Investment Authority (SAGIA) has approved a series of measures that would enable international companies wishing to expand and develop their investments in the Kingdom to do so in a conducive environment.

According to a report in The Saudi Gazette, the new measures include cancellation and amendments to existing laws that were seen as impediments to investor growth in the Kingdom.

During May, at the first SaudiUK Investment Forum in London, SAGIA Governor Abdullatif A Al Othman highlighted opportunities in healthcare, transport, logistics, building materials, engineering and construction as sectors where the foreign investors can benefit.

In June, SAGIA launched a fast track service to process FDI applications within five days.

GLOBAL UPDATE

Round Up The BRICS group have come together to set up a $100bn development bank as an alternative to Westerndominated development finance institutions.

The bank’s capital – fixed initially at $10bn – will be split equally among the five participating countries, namely, China, Russia, India, Brazil and South Africa.

The new bank will be headquartered in Shanghai with India supplying its first president and Russia serving as the chairman of the representatives. It will finance infrastructure and development projects in the BRICS group.

The bank will also have a Contingency Reserve Arrangement of $100bn to help developing countries avoid short-term liquidity pressures and complement existing international arrangements.

According to UNCTAD’s World Investment Report 2014, Foreign Direct Investment (FDI) flows into West Asia decreased in 2013 by 9% to $44bn, failing to recover for the fifth consecutive year from the fall registered in 2009.

While in countries like Saudi Arabia and Qatar, FDI flows continue to follow a downward trend, in others like Turkey and the UAE, FDI recovery has been weak or bumpy in recent years with flows remaining well below their pre-crisis level.

Only in Iraq and Kuwait have FDI flows been on an upward trend in recent years, reaching record levels in 2013 and 2012.

FDI outflows from West Asia increased by 65% in 2013, boosted by rising flows from the Gulf Cooperation Council (GCC)

Rising powers The BRICS group represents 20% of the world’s economy based on GDP

countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. Turkey remained West Asia’s main FDI recipient in 2013, with flows maintaining almost the same level as in the previous year – close to $13bn.

However, flows to Saudi Arabia declined for the fifth consecutive year. They dropped by 24% to $9.3bn, moving the country from the second to the third largest host economy in West Asia.

Japan’s Mitsubishi Corporation (MC) and Mitsubishi Heavy Industries (MHI) will acquire 38.4% stake in Dubaiheadquartered Metito Holdings, a leading provider of intelligent water management solutions for emerging markets.

Under a share purchase

agreement, MC and MHI will acquire Metito shares predominantly from its existing shareholder Gulf Capital..

Additionally, Japan Bank for International Cooperation (JBIC) will also subscribe as a preference shareholder, providing Metito with additional funds of up to $92m to fund growth opportunities. The investments aim at supporting overseas business deployment of Japanese companies and a strategic partnership between MC, MHI and Metito.

Gulf Capital and the International Finance Corporation (IFC) will continue to hold 23.8% and 3% of Metito respectively.

A working paper published by the International Monetary Fund (IMF) has questioned

Wake up call London is already mapping its infrastructure priorities up to 2050

September 2014

the narrative of a public investment boom followed by acceleration in GDP growth.

In his paper ‘Public Investment as an Engine of Growth’, economist Andrew M Warner observes that the idea that infrastructure would revive growth was an important plank in the Egyptian government’s economic revival programme in August 2013 and the Indian BJP Party’s election manifesto in the Spring of 2014.

However, econometric data indicates that benefits of such investments have been short term with little evidence of long-term positive impact, which Warner attributed to reliance on borrowings to finance public investment and on poor analytics at the time investment projects were chosen apart from incentive problems and interest-groupinfested investment choices.

He noted that public investment drives will be more likely to succeed if governments take analytical issues seriously and safeguard their decision process against interests that distort public investment.

The Mayor of London, Boris Johnson has launched consultation on the London Infrastructure Plan 2050, which attempts to set out the full range of infrastructure requirements for the UK capital over the next half century. To kick-start the process, the Mayor is establishing London Infrastructure Delivery Board composed of senior representatives from all of the main infrastructure providers in London to utilise their expertise.

Arup estimates that the total investment in London’s infrastructure between 2016 and 2050 could amount to £1.3tn. This includes investment in public transport, which is forecast to increase by 50% and a new four runway hub airport in the Thames estuary.

INFRASTRUCTURE MIDDLE EAST 09

in focus

ENERGy EFFICIENCy

Smart measures

Rajiv Sawhney, the CEO of Landis+Gyr Middle East tells Anoop K Menon how the smart metering giant is breaking new ground

Lyon Confluence district Landis+Gyr is implementing smart metering solutions for the Lyon smart community project in France

rom where Landis+Gyr started out in the smart utilities ecosystem to where it has reached today, how has the company evolved?

Landis+Gyr had over 100 years of metering expertise before our business transformation into smart metering leadership really started. ICT advances have been the main drivers of this ecosystem expansion over the last 10 years or so, as industry-wide investments in technology and products allowed for significant growth in applications and functionality.

Key investment areas for Landis+Gyr, given our strong metrology background, were communications technology and software that helped propel us to global leadership in smart metering when the business was acquired by Toshiba in 2011. Since then, we have further increased our R&D spend to roughly $130m in FY 2013 and expanded our capabilities in areas such as meter data management, grid analytics, advanced

F

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INFRASTRUCTURE MIDDLE EAST

demand response and distribution sensors.

Today, Landis+Gyr is the leading global provider of integrated Energy Management products tailored to energy company needs.

Our capabilities and portfolio includes meters for electricity, heat, and gas, communication devices, communication networks, head end systems and meter data management solutions, software and

â&#x20AC;&#x153;We sense immense opportunities in Bahrain, Qatar and Saudi Arabia for smart cities and the entire GCC for smart grid applications that will offer economic and ecological benefitsâ&#x20AC;?

RAjIv SAwhNEy, CEO, LANDIS+GyR MIDDLE EAST

September 2014

sensors for grid supervision and analytics, solutions for distributed load control, virtual power plant and advanced distribution automation application. We are ready to help our customers building a smarter grid.

With the region planning to develop smart cities and communities, what kind of opportunities does this new trend throw up for Landis+Gyr?

Based on our capabilities and track record, and in combination with our parent company Toshiba, which has identified smart communities as one of their key growth areas, we are already involved in various lighthouse projects in Asia, the US and Europe, proving the economic and ecological benefits of such concepts.

From a conceptual standpoint, the idea of smart cities has been progressing well in the Middle East. Such projects, in fact, are a brilliant way of creating self-sufficient and sustainable communities. Starting off on a smaller scale can be ideal for piloting smart technologies and getting them to work together.

The key to the success of these projects

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in focus

lies in understanding the complexity of their architecture and bringing the ‘sensory nervous system of the city together in a well-coordinated manner to the brain’.

In other words, it is about selecting the right technologies for key applications and integrating these aspects to reap the smart benefits, as a community, in a green manner.

The opportunities for Landis+Gyr are tremendous; to start with, we can offer best practices by referring to years of experience from successful cases and projects in areas driven by regulatory bodies or in other words, the more mature markets.

Landis+Gyr is looking to create lighthouse projects in the Middle East similar to what we have done in other parts of the world. We sense immense opportunities in Bahrain, Qatar and Saudi Arabia for smart cities and the entire GCC for smart grid applications that will offer economic and ecological benefits through the integration of renewables, demand side energy management, linkages to SCADA systems and multi-utility applications. These initiatives are prioritised and acknowledged with positive intent, decree and active investment.

Rajiv Sawhney, CEO, Landis+Gyr Middle East

smarter and support their transformation to become a smart utility. In fact, the latter is pivotal for building smart communities.

LANDIS+GYR FAST FACTS Has this strategy translated into projects or deals on the ground?

• Largest installed meter base in the industry with more than 300m devices installed • More than 49m fixed network

What are the other areas of the smart utilities ecosystem that the company is targeting?

Landis+Gyr today is the market leader in smart metering. Recent acquisitions will also allow us to enter the grid analytics space. Existing smart grid applications for distributed load control, micro energy management and storage will allow for future growth while positioning us as the utility partner of choice for efficient and effective energy management.

advanced meters deployed • Managed services for 14m endpoints • Nearly $130m in annual R&D investments • 18 R&D labs incorporating global centres of competence • 1,135 engineers & scientists globally

SALES WORLDWIDE BY 2013/14 SOURCE: LaNDiS+gyR

What is the underlying strategy behind this extended play? More importantly, what does it mean for customers?

13%

Borrowing Lord Kelvin’s words “You can only manage what you measure,” we believe that metering is and will always remain the core of our activities. Communication technology and networks, in combination with headend systems and meter data management solutions, provide a transparent insight into what’s happening in the distribution grid.

Analytics tools and sensors, in combination with complementary software applications and demand response solutions, will allow for system optimisation. But more importantly, with this strategy, we commit to customers our dedication to help them make the grid

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INFRASTRUCTURE MIDDLE EAST

49%

Landis+Gyr has engaged consultatively in projects that are successfully implementable from a technology and architectural perspective, and also demonstrate economic and ecological benefits. We have won and have been actively involved in numerous projects all over the Middle East on a small to medium scale, which is the extent to which projects of this nature have evolved.

We are currently partnering with all the major utilities in the region on pilots and creating a portfolio which will become the backbone of their smart grid and smart city projects. We are confident of being engaged in projects of significance and importance to the region.

Given the technological maturity, how should utilities squeeze the maximum value from their smart grid investments?

38% (iN $m)

2013/14

aMERiCaS

761

EMEa

575

aSia PaCiFiC

203

TOTAL

September 2014

1,539

They can achieve that by picking a reliable, competent and committed partner who can deliver a reliable and future-proof backbone solution. From this backbone, like a smart metering system for example, a customer can evolve, when ready, to meter data management and analytics functionality, securing full interoperability with installed IT systems and future solutions.

IN FOCUS

DOWNSTREAM

Petrixo selects UOP technology The company’s Fujairah refinery will be the first commercial-scale renewable jet fuel production facility outside of North America oneywell’s UOP green fuels process technology has been selected by Petrixo Oil & Gas to produce renewable jet and diesel at a new refinery to be built in Fujairah in the UAE. Petrixo will use UOP Renewable Jet Fuel process technology to process approximately 500,000 MT/year of renewable feedstocks into renewable jet fuel and renewable diesel, also known as Honeywell Green Jet Fuel and Honeywell Green Diesel. The process technology is capable of processing a variety of renewable feedstocks.

Petrixo announced earlier this year that it will invest $800m to build the new refinery, which will have a design capacity of 1m tonnes/year of biofuel products, and will be the first commercial-scale renewable jet fuel production facility outside of North America.

“Petrixo believes that new energy solutions are immensely important for scalable, environmental and renewable solutions,” said Dr Eid Al Olayyan, chief executive officer of Petrixo Oil & Gas. “UOP’s green fuels technologies are proven refining solutions that produce high-quality products compatible with petroleum-based fuels.”

The UOP technology is designed to provide flexibility to adjust the feedstock mix depending on parameters such as cost and availability, as well as to enable adoption of newer-generation feedstocks such as oils derived from algae and halophytes as scalable supply chains for these lipids develop.

“UOP’s renewable process technologies produce real fuels, rather than fuel additives like biodiesel, that fit seamlessly into existing fuel supply chains,” said Veronica May, Vice President and General Manager of UOP’s Renewable Energy and Chemicals business unit. “The renewable fuels produced by our technology also offer lower greenhouse gas emissions relative

H

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INFRASTRUCTURE MIDDLE EAST

Louisiana-based Diamond Green Diesel is using Honeywell technology to produce green diesel

In numbers

$800m

Petrixo’s investment in the Fujairah refinery

500,000 mT

Projected yearly output of the refinery

65-85%

Reduction in GHG emissions from using renewable jet fuel to traditional petroleum-based fuels.”

Blended up to 50% with petroleumbased jet fuel, Honeywell Green Jet Fuel, the company claims, requires no changes to aircraft technology, meets all critical specifications for flight, and can reduce greenhouse gas emissions by 65-85% compared to petroleum-based fuels.

Honeywell’s UOP Renewable Jet Fuel

September 2014

Process technology was developed in 2007 under a contract from the US Defence Advanced Research Projects Agency (DARPA) to produce renewable military jet fuel for the US military. The process technology is fully compatible with existing hydroprocessing technology commonly used in today’s refineries to produce transportation fuels.

The process technology also produces Honeywell Green Diesel, a drop-in replacement for traditional diesel.

Honeywell claims that the fuel offers improved performance over biodiesel and petroleum-based diesel, including a higher cetane value compared with the cetane range of 40 to 60 found in diesel at the pump today. Cetane value is the measure of the combustion quality of diesel.

Higher cetane values help diesel engines operate more effectively. Diesel with high cetane can be blended with lowcetane diesel to help meet transportation requirements. Honeywell also claims that its green diesel offers high energy density at both cold and warm temperatures.

Honeywell’s UOP also serves as a founding member of the Sustainable Bioenergy Research Consortium (SBRC), together with Boeing, Etihad Airways, and the Masdar Institute of Science and Technology in Abu Dhabi. SBRC focuses on testing the use of desert plants grown with seawater to support biofuel crop production in arid countries, such as the UAE. UOP process technology is currently being used by Diamond Green Diesel to produce green diesel at a commercialscale facility in Norco, Louisiana, US. Dubai-based Petrixo is part of the Petrixo Group, which is active in trading crude oil, oil products and petrochemicals, with an interest in downstream energy projects and logistics operations in the Baltic States, the Russian Federation, CIS and the Middle East. The new Fujairah refinery will occupy 460,000 sqm in the Fujairah Freezone and the Port of Fujairah.

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IN FOCUS

NEXT GENERATION

Advancing the grid Alstom Grid launched a slew of new products, including the ultra-fast DC circuit breaker, at the biennial CIGRE 2014 event in Paris last month lstom Grid unveiled its latest innovations at CIGRE 2014, the biennial worldwide forum of the electrical power industry, held in Paris, France last month. These were the new Asset Management Solution; Digital Substation 2.0; g3, a clean alternative to SF6 gas and the ultra-fast DC Circuit Breaker.

Announcing the launch of an environmentfriendly alternative to SF6, a gas commonly used in high-voltage equipment, Michel Augonnet, Senior Vice President Commercial Solutions, Alstom Grid, said: “g3 or green gas for grid is the world’s first environmentally friendly alternative to SF6. It has 98% less impact on global warming than SF6. With performances comparable to SF6, it is a suitable technology for the development of today’s new generation of clean highand ultra-high voltage equipment.”

Explaining the rationale behind the new asset management solution, Patrick Plas, Senior Vice President Grid Power Electronics & Automation, Alstom Grid said: “Electricity utilities face budget constraints in the context of aging infrastructure.

They have to minimise maintenance cost and maximise life of their assets avoiding costs, inconveniences and customer dissatisfaction associated with equipment failure and service outages. Our new asset management solution maximises the value and reliability of utilities’ electrical assets.”

The solution optimises maintenance and asset replacement decisions by integrating advanced analytics with the criticality of each piece of equipment. Data is collected from all types of electrical assets, including third-party equipment.

“The solution also integrates real-time condition monitoring of equipment to anticipate failures, thus reducing failure rates by up to 70% and maintenance costs by up to 30%,” claimed Plas.

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Ultra-fast DC circuit breaker The product represents a major step towards creating the Supergrid

He also announced the launch of Digital Substation 2.0, the first version of which was unveiled during CIGRE 2012. Plas continued: “A digital substation provides a flexible communication infrastructure that reduces the limitation of point-to-point wiring and allows two-way information and device data to be shared in real time. The visibility and control provided by digital substations are helping utilities become more reactive and flexible, enabling them to meet demands of grid operators.”

Digital Substation 2.0 enhances smart grid management and operation using intuitive dashboards for enhanced situational awareness. It ensures optimum real-time performance of the grid by monitoring availability, health, and dynamic loading capability of the substation assets and connected circuits. Alstom Grid has delivered more than 10 digital substation projects worldwide including one in the Middle East for Petroleum Development Oman (PDO).

Another innovation announced at CIGRE was the ultra-fast Direct Current (DC)

September 2014

circuit breaker, which Plas described as a major step towards creating the Supergrid.

“A Supergrid is a combination of AC and HVDC transmission lines that transport, interconnect and balance electricity across countries, regions and continents and integrate renewables,” he explained.

“We have over 50 years of experience and innovation in Supergrid technology.”

The ultra-fast DC circuit breaker was developed by Alstom Grid within the framework of the Twenties European programme. On a high-voltage DC grid, these circuit breakers ensure protection and help avoid failures and blackouts by cutting off the current in a malfunctioning equipment, thereby isolating the fault from the rest of the grid.

While such breakers are used in the AC grid, with DC case grids, radically new technology is required because the circuit breaker is required to perform 10 to 20 times faster than in AC grids. Moreover, utilities are increasingly using DC to guarantee efficient transmission of power over long distances and to stabilise the grid, which must accommodate increasing supplies of renewable energy.

“Alstom’s prototype successfully interrupted a 5,200-ampere current at 160kV with full extinction of DC in less than 5.5 milliseconds under the real operational constraints of a high-voltage DC transmission grid,” said Plas.

Augonnet attributed these successes to Alstom Grid’s relentless focus on innovation, with the company investing nearly 4% of its sales in Research & Development (R&D) annually.

“Our product launches across the years are the outcome of our innovations,” he said. “Our experts collaborate closely with international standardisation organisations and with leading universities. Innovation teams, based across more than 25 global technology and R&D excellence centres around the world, are preparing the future of electrical networks.”

IN FOCUS

E-MOBILITY

Fast-charging partnership Global agreement combines Volvo electric and electric-hybrid buses with ABB fast-charging solutions BB has announced a partnership with Volvo Buses, one of the world’s leading bus manufacturers, to co-develop and commercialise electric and hybrid buses with open standards-based direct current (DC) fast charging systems.

The cooperation creates a city-wide standardised charging system for electric and electric hybrid buses that can charge buses quickly through an automatic roof-top connection system at bus stops or through cabled charging systems overnight.

This approach, based on internationally accepted standards, enables maximum re-use of existing e-mobility technologies, thereby ensuring a rapid deployment of urban e-mobility. The first joint project for Luxembourg’s public transportation system is planned for 2015.

Volvo’s new Electric Hybrid bus, which reduces fuel consumption by 75% compared to conventional diesel buses, will debut at the IAA exhibition in Hannover, Germany, this month.

ABB and Volvo will contribute with their respective expertise in power grids and e-buses to further develop e-bus fast-charging standards, such as communications protocols for infrastructure, electrical grids and e-buses.

An electric-bus charging standard will be largely based on the recently adopted global DC fast charging standards for passenger cars, guaranteeing safety and helping stimulate investment, long term commitment and increased adoption of clean mobility.

“We are very pleased to partner with a global transportation industry leader that shares our vision of e-mobility in line with ABB’s commitment of power and productivity for a better world,” said Pekka Tiitinen, head of ABB’s Discrete Automation and Motion division. “Urbanisation is at a historic high and is stretching transport infrastructure of cities around the world. Our

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Clean transport Hybrid electric buses charge quickly via overhead cables and are charged at destinations

Hybrid electric buses provide: • 75% fuel savings and CO2 reduction • 60% energy reduction

collaboration will help support sustainable and cost-efficient transportation solutions to meet rising commuter demand.”

The partnership is focused squarely on standardisation of automatic e-bus fast charging, including the communications protocol between the infrastructure charging solution and e-bus, the electrical interface and specifications for the rooftop automatic connection system (ACS).

“We are delighted to enter into partnership with ABB. Together, we have a complete and competitive offer to cities around the world that want to switch to a sustainable public transport system,” said Håkan Agnevall, President Volvo Buses. “Electric hybrid

September 2014

buses and full-electric buses are tomorrow’s solution for urban public transport.”

Volvo Buses launched its first hybrid bus in 2009 and has delivered nearly 1,600 hybrids to 21 countries. Its first fully electric bus will be launched in June 2015 as part of the Electricity project in Gothenburg, Sweden.

ABB has delivered over 1,500 DC fast charging systems for passenger vehicles worldwide since 2010, rolling out charging networks for automotive, utility, government and retail customers including nationwide networks in the Netherlands, Estonia and Denmark.

The first joint project will be the implementation of Volvo Electric Hybrids and ABB’s automatic e-bus chargers in the Luxembourg public transport system, where as many as 12 Volvo Electric Hybrid buses operated by Sales-Lentz will be running on existing lines by 2015.

The project is integrated into Luxembourg’s Mobility Network linking different mobility projects to exploit synergies and develop common visions for the mobility of the future.

ANALYSIS

FEEDSTOCK WARS

Chemical outliers US shale gas has altered the market dynamics for the global petrochemicals industry

By Anoop K Menon

our to five years ago, China’s GDP growth rate was cruising at 10%, its exports only matched by an insatiable appetite for raw material imports from across the globe, the Middle East included. For the region’s rapidly growing petrochemicals industry, all roads led to Asia, and particularly China. Being located in a non-consuming region meant the industry perforce had to be export-oriented.

While China was aiming for a self-sufficient petrochemicals sector, it was a goal 20-25 years into the future, the pace dictated by investments set aside for chemicals and the type of products the country wanted to produce. It was assumed that even as China became more self-sufficient, Middle East petrochemical exports would be absorbed by markets disadvantaged by high feedstock costs, in this case the US (which had the highest feedstock cost thanks to gas prices

F

in the $15-16 MMbtu range) and North Asia, mainly Japan and South Korea, with some exports making its way to Europe.

It was under this scenario that the petrochemicals industry in the region leveraged growing exports and feedstock advantage to build up its capacity and broaden the feedstock from gas to liquid cracking.

But the aforementioned scenario no longer holds true today thanks to the emergence of the US as a low-cost feedstock source; another factor has been China’s slowing economic growth rate from 10% to 7%, which means the dragon could become self-sufficient earlier than anticipated. In the interim, Europe’s moribund petrochemicals sector has been thrown a lifeline by the availability of lowcost feedstock – ethane – from the US. There are also wild cards like South America, South East Asia, Iraq and Iran. Canada, which used to export its high-priced gas to the US, will in all probability, start exporting to North Asia.

The variables could become more complex

thanks to R&D in new process technologies like coal to chemicals and methanol to olefins.

All these changes begs the question – what new scenario awaits the Middle East’s exportdependent petrochemicals industry?

Is It for real?

When shale gas started making waves in the US energy sector, the questions on everybody’s lips were – can the costs be kept down, can these be sustained?

According to Thomas Rings, Partner, AT Kearney, low gas prices in the US, now at $4MMbtu after going down to $2MMbtu, will be sustainable. He said: “The shale industry started with dry gas or methane but when the prices went down and they couldn’t break even at the well-head, they shifted to wet gas or shale oil with all the natural gas liquids (NGL) components.

When gas decoupled from oil due to shale, the NGLs – mainly propane and butane – kept a closer link to oil but ethane didn’t.”

“they (the Us) are going to increase ethylene capacity by over 50% by 2020 and there is no way they can consume all of that domestically” THOMAS RINGS, PARTNER, AT KEARNEY 20

INFRASTRUCTURE MIDDLE EAST

September 2014

ANALYSIS

The availability of low-cost ethane as a chemical feedstock has flipped the picture bigtime in the US. Wherever they could, the domestic petrochemicals industry switched to ethane to restart their crackers.

“There have been restarts on the C1 value chain – methane, methanol, fertilisers,” said Rings. “There have been announcements about new propylene PDH units. A big part of these investments have come on stream because in C1 and C2 value chains, the US’ cost structure is closer to the Middle East vis-à-vis other regions.”

Rings also noted that the US doesn’t have the demand to absorb all of the products it makes. He said: “They are going to increase ethylene capacity by over 50% by 2020 and there is no way they can consume all of that domestically.”

According to the AT Kearney analyst, there could be significant exportable surpluses in ethylene and polypropylene compared to the C3 chain. In fact, the US is expected to become an even bigger exporter in sharp contrast to the pre-shale scenario where the country was portrayed as a major importer saddled with a non-competitive domestic chemicals industry.

AT Kearney’s models indicate that by 2025, gas prices in the US will range from $6-$7mmBTU. But even at that range, US exports will still be competitive, claimed Rings.

started with propane as a co-feed.”

The different variables at play means the petrochemicals industry in the Middle East has to adapt quickly and become more global than before.

“I expect the markets to become highly volatile and even less predictable as we go forward, which is not a pleasant scenario for companies with huge assets,” said Rings.

He continued: “The Middle East is very cost competitive, particularly in the commodity upstream products.

However, they cannot continue to rely on China for 80% of their exports.

For long, they were used to having that one highway to Asia but now they will need to switch markets and flows more often, which means more market intelligence and sales force. They will also need to develop the trader/distributor capability of moving volumes where the markets are. Equally important, they have to globalise their logistics and supply chain capabilities even more.”

Regional industry heavyweights are also making strategic R&D investments in their key markets like China and India, which, according to Rings, facilitates “market access to be able to distribute upstream commodities.” The other factor is the need for more innovation capabilities in these markets as the regional players broaden their portfolio and move downstream into speciality type products.

Where do We go noW?

If the US and Middle East go for exports big time, where will all the volumes go?

Rings observed that North Asia is a key market because of its high feedstock costs.

Additionally, the US will also seek to export to South America, where Brazil’s naphtha-based crackers put the country at a disadvantage because deep sea oil isn’t cheap.

The African continent too is a prospective market though it cannot be another China.

While the Europeans escaped the onslaught of Middle East exports thanks to China, the same doesn’t hold true anymore. But Europe capitalising on excess ethane in the US is a new scenario that is now playing out.

Rings said: “Some coastal European crackers equipped with existing infrastructure for gas storage are trying to bring ethane from the US to benefit from a lower feedstock cost. A few have already

thomas rings, Partner, at Kearney

BetWeen the hammer and the anvIl

The impact of huge volumes from the US and the Middle East could be painful for smaller producers from Asia and Europe.

According to Rings, some capacity will go out of the market but the industry per se in these countries will not be wiped out. In some cases, national interests could be expected to override economic logic while in others, it could be technological advantages.

“In the case of Europe, specialty chemicals is an area where the region is still very strong,” said Rings. “You will find companies moving into higher value, lower volume production.

It is far more difficult to sell a food ingredient than a base polymer. For the former, you need to be very close to the industry and the only way to build up market access quickly is to buy it.”

The cost position of the US has also eroded the cost competitiveness of renewable feedstock based chemicals industry.

All said, the global petrochemicals sector is headed for volatile yet interesting times. The new crackers in the US are expected to come online over a five-year time period. While there are legitimate fears about price pressures, which is good for the consumers but no so much for the producers, Rings opined that the growing number of variables notwithstanding, supply and demand will continue to play an important role in price determination.

He continued: “If there is oversupply, prices will certainly come under pressure but even today, the Middle East is better positioned than the US on the feedstock cost front.

Moreover, in Europe and Asia, most of the crackers are naphtha-based which gives more C3 and C4 products. If most of this is switched to gas, where will the C3 and C4 come from?

Therefore, you are now seeing announcements about C3 PDH units and on new technologies for butane and dehydrogenation. While supply imbalances will get adjusted in the long run big ups and downs will continue to remain a part of the industry landscape.”

Rings cited the example of butadiene, where prices dropped by 225% of the prior levels after Chinese investments poured in.

“With this kind of volatility, companies would find it difficult to plan their investments,” he noted. “For the Middle East though, the feed stock cost advantage should hold the industry in good stead. But that doesn’t mean they shouldn’t invest in preparing to deal with this volatility.”

September 2014

INFRASTRUCTURE MIDDLE EAST

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MIDDLE EAST INFRASTRUCTURE TENDERS

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

qATAR - BAhRAIN CAUSEwAy PRojECT

INTEgRATED gAS DEvELoPMENT ExPANSIoN PRojECT

PoRT oF DUqM LIqUID TERMINAL PRojECT

ELECTRIC TRANSMISSIoN DEvELoPMENT PRojECT

BUDgET: $4,000,000,000

BUDgET: $1000,000,000

BUDgET: $260,000,000

BUDgET: $750,000,000

Territory: Qatar Client Name: Qatar Bahrain Causeway Foundation Description: Construction of 40kmlong, double-lane causeway between Qatar and Bahrain Period: 2015 Status: New Tender

Territory: Abu Dhabi Client Name: GASCO Description: Carrying out expansion of Integrated Gas Development (IGD) to add an additional capacity of 200400m cubic feet a day of gas Period: 2015 Status: New Tender

Territory: Oman Client Name: Port of Duqm Description: Design-Build contract for a terminal capable of handling requirements of a proposed 230,000 bpd capacity refinery Period: 2017 Status: New Tender

Territory: Bahrain Client Name: EWA Description: Design-Build contract for a terminal capable of handling requirements of a proposed 230,000 bpd capacity refinery Period: 2016 Status: New Tender

September 2014

INFRASTRUCTURE MIDDLE EAST

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MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE jEBEL ALI REFINERy UPgRADE PRojECT Project Number: MPP2908-U Client Name: Emirates National Oil Company (ENOC) Address: Dubai, PO BOX 6442 Phone: (+971-4) 337 4400 Fax: (+971-4) 313 4402 Website: www.enoc.com Description: Engineering, Procurement and Construction (EPC) contract for upgrading the existing refinery at Jebel Ali to meet domestic fuel demand. The refinery currently has two trains of condensate. The client is planning to add two new processing trains – jet and diesel hydro-treaters and an isomerisation unit – that will lead to the production of Euro 5 grade products like high-octane gasoline, low-sulphur jet fuel and ultra-low sulphur diesel. Invitation to bid for the EPC contract is expected in the third quarter of 2014. Construction of the refinery is expected to commence in the first quarter of 2015.

Status: New Tender Tender Categories: OGas Processing & Distribution

SAhIL, qUSAhwIRA, MENDER FIELDS DEvELoPMENT PRojECT – PhASE 2 Project Number: MPP1490-U Client Name: Abu Dhabi Company for Onshore Oil Operations Address: Corniche Road, Abu Dhabi Phone: (+971-2) 604 0000 Fax: (+971-2) 666 5523 Website: www.adco.ae Description: EPC contract to develop Sahil, Qusahwira and Mender fields to expand onshore crude production by 143,000 barrels per day (bpd).

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INFRASTRUCTURE MIDDLE EAST

The project will increase Abu Dhabi’s onshore crude capacity by about 8% from the 1.8m bpd being commissioned in the current round of developments. Invitation to bid for the EPC contract is expected to be issued in October 2014.

Period: 2019 Status: New Tender Tender Categories: Gas Processing & Distribution Oilfields & Refineries

KUWAIT AL ZoUR NoRTh IwPP – PhASE 2 Project Number: ZPR445-K Client Name: Partnerships Technical Bureau (PTB) Address: Touristic Enterprises Co. Bldg., 2nd Floor, Al-Jahra Street Phone: (+965) 2496 5900 Fax: (+965) 2496 5901 Email: infor@ptb.gov.kw Website: www.ptb.gov.kw Description: Build-Operate-Transfer (BOT) contract for the construction of Al Zour North independent water and power project (IWPP) with capacity of 1,500MW of power and 100MIGD of desalination – Phase 2. The desalination plant will use either Reverse Osmosis (RO) or thermal technology, or both.

Status: New Tender Tender Categories: Water Works Power & Alternative Energy

FACILITIES CoNSTRUCTIoN PRojECT, ShAqAyA RENEwABLE ENERgy PLANT Project Number: 18/2013/2014-K/3 Client Name: Kuwait Institute

September 2014

for Scientific Research (KISR) Address: Safat 13109 Phone: (+965) 4836100 Fax: (+965) 4830643 Website: www.kisr.edu.kw Description: Construction, completion and maintenance of facilities for the renewable energy plant in Shaqaya. This tender is open to contractors classified at the CTC as Class 1 contractors for civil and construction works.

Period: 2014 Status: New Tender Tender Categories: Construction & Contracting Power & Alternative Energy

AL ZoUR NoRTh IwPP – PhASE 1 Project Number: ZPR250-K Client Name: Partnerships Technical Bureau (PTB) Address: Touristic Enterprises Co. Bldg., 2nd Floor, Al-Jahra Street Phone: (+965) 2496 5900 Fax: (+965) 2496 5901 Email: infor@ptb.gov.kw Website: www.ptb.gov.kw Description: Build-OperateTransfer (BOT) contract to build an independent water and power plant (IWPP) with capacity of 1,500 MW of power and 125MIGD of

water. The project will be located to the south of existing Al-Zour South power and water project in Kuwait and include a 400kV substation. Request for qualification (RFQ) for the BOT contract is expected to be issued soon.

Period: 2016 Status: New Tender Tender Categories: Water Works

DohA Ro DESALINATIoN PLANT PRojECT – PhASE 1 Project Number: ZPR250-K Client Name: Ministry of Electricity & Water Address: Ministry of Electricity & Water Bldg., South Al Surra Street, Ministries Area, Safat Phone: (+965) 2537 1000 Fax: (+965) 2537 1420 Email: webadmin@energy.gov.kw Website: www.energy.gov.kw Description: EPC contract to build a reverse osmosis (RO) desalination plant with capacity of 50MIGD in Doha. Client has invited 9 groups to participate in the bidding process.

Period: 2016 Status: New Tender Tender Categories: Power & Alternative Energy Water Works

MIDDLE EAST INFRASTRUCTURE TENDERS

Phone: (+973) 1754 6666 Fax: (+973) 1753 3035 Website: www.mew.gov.bh Description: EPC contract to build a solar and wind power plant with capacity of 5MW, which will help in reducing the environmental damage.Bids are currently under evaluation and an award is expected in the fourth quarter of 2014.

Period: 2015 Status: New Tender Tender Categories: Power & Alternative Energy

QATAR RAS LAFFAN SEAwATER REvERSE oSMoSIS PLANT PRojECT Project Number: MPP2730-Q Client Name: Qatar General Electricity & Water Corporation (Kahramaa) Address: Corniche Street, Number 61, Sheraton Roundabout, Dafna Area Phone: (+974) 4484 5484 Fax: (+974) 4484 5496 Email: contactus@km.com.qa Website: www.kahramaa.com.qa Description: Construction of a seawater reverse osmosis (SWRO) plant with initial capacity of 159,100m3/day of desalinated water.

Capacity is expected to be increased to 272,770m3/day of desalinated water at a later date. Client has set November 6, 2014 as the deadline to submit bids for the BOOT contract.

Initial production is expected to commence on April 30, 2017.

Status: New Tender Tender Categories: Water Works

BAHRAIN SITRA REFINERy UPgRADE & ExPANSIoN PRojECT Project Number: MPP2588-SA Client Name: Bahrain Petroleum Company (BAPCO)

Address: Industrial Area, Awali Phone: (+973) 1775 2995 Fax: (+973) 1770 4070 Email: info@bapco.net Website: www.bapco.net Description: EPC contract for upgrading and expanding production capacity of the existing refinery at Sitra from around 262,000 bpd to 360,000 bpd.

It is understood that the full rehabilitation will add about 100,000 bpd of refined products and complex will also produce petrochemicals, probably olefins after work is completed. The scheme has been split into four packages.

These include: Offsite & Utilities, Crude Unit & Associated Facilities, Hydrocracker & Associated Units and Residue Conversion project.

Bids have been submitted for the FEED contract. US’ Bechtel is the lowest bidder. Other bidders are US’ CB&I Lummus and France’s Technip. Bids are currently under evaluation. An award is expected in the third quarter of this year.

Status: New Tender Tender categories: Oilfields & Refineries

oMAN DUqM INDUSTRIAL ZoNE SEAwATER SUPPLy FACILITIES PRojECT Project Number: ZPR1354-O Client Name: Duqm - SEZAD Address: Al Mashriq 113 Bldg, Block 248, 70 Street, Muscat PC 103 Phone: (+968) 2450 7500 Fax: (+968) 2458 7400 Email: info@duqm.com

Website: www.duqm.com Description: EPC contract to build a seawater supply and disposal system. Scope of work will consist of construction of seawater supply and disposal system including: – Water Transmission Pipeline – Pumping Station Plants US’ Parsons International has been appointed as the front-end engineering and design (FEED) and construction supervision consultancy contract on this scheme. FEED study is expected to be completed in the first quarter of 2015. Invitation to bid is expected to be made in the second quarter of 2015.

Period: 2017 Status: New Tender Tender Categories: Water Works

PRodUcEd IN AssocIATIoN WITH MIddlE EAsT TENdERs

SoLAR & wIND PowER PLANT PRojECT Project Number: ZPR020-B Client Name: Ministry of Electricity & Water Address: King Faisal Street, Diplomatic Area, Manama

September 2014

INFRASTRUCTURE MIDDLE EAST

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ten KSA InFRAStRUCtURe PROJeCtS

KSA PROJECTS The Kingdom of Saudi Arabia is the undisputed capital of infrastructure projects in the GCC. Infrastructure Middle East sifts through the Kingdom’s ever expanding roster of existing and new projects to craft this month’s top 10

26

InFRAStRUCtURe MIDDLe eASt

September 2014

the SADARA CheMICAL COMPAny

Owner: Saudi Aramco-Dow Budget: $20bn Progress: Under construction The Sadara chemical complex, now being built in the Jubail Industrial City II, is the world’s largest to be built in a single phase. Comprising of 26 world-scale manufacturing units, the complex is one of the world’s largest integrated chemical facilities and includes a world-scale cracker, which will be able to crack a wide range of feed stocks. It 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 Sadara’s products will be produced for the very first time in the Kingdom.

ten KSA InFRAStRUCtURe PROJeCtS

Jeddah Metro_ Muntalaq Approach.JPG

RAS tAnURA CLeAn FUeLS AnD AROMAtICS PROJeCt

JeDDAh MetRO

MAKKAh MASS RAIL tRAnSIt SySteM

Owner: Jeddah Metro Company Budget: $12bn Progress: Design stage

Owner: Saudi Aramco Budget: $4bn approx Progress: RFQ stage

Owner: Makkah Mass Rail Transit Company Budget: $16bn Progress: Invitation to Bid

The project aims to upgrade Saudi Aramco’s oldest refinery to the most advanced environmental and high efficiency standards for clean fuels and operating performances.

In Februrary 2014, Saudi Aramco decided to re-tender the scheme towards the middle of the year with the final award scheduled for December 2014. Accordingly, in June 2014, the scheme was re-tendered with revised scope of work and packages. Of the original scheme, the paraxylene production facilities package was cancelled, while the naptha and aromatics processing facilities package as well as the off-site and utilities package were retained. Saudi Aramco has started the pre-qualification process for the tender of this scheme. EPC packages are expected to be announced by end-2014.

The Makkah Mass Rail Transit Project (MMRT) constitutes the centre-piece of the Makkah Public Transport Project, which also includes bus rapid transit, express bus, feeder bus and associated infrastructure.

The metro consists of four lines with a total length of 188km, served by 88 stations to be built in three phases. Ten short-listed consortiums have been invited to bid for Phase 1, which has been split into two civil construction packages. The cost of Phase 1– comprising two lines totalling 44km – has been pegged at $6.8bn. The Phase 1 contracts are expected to be awarded in October this year. In June, it was announced that bids will be invited for supplying locomotives and coaches from qualified international companies for the Makkah Metro.

Jeddah’s seven-year transport plan includes commuter trains, trams, metro lines spanning 152 km with 72 stations, marine networks, ferries as well as commuter, rapid and feeder buses. The plan’s ambitious goal is to convert 30% of the city’s traffic to public transport over the next 20 years. Jeddah Metro will extend for 111km along three lines.

The Orange Line will be 67km long and have 22 stations; the Blue line will be 27km long with 17 stations, while the Green Line will be 17km long with seven stations. In May 2014, AECOM Arabia was awarded a contract worth $28m to provide pre-programme management consultancy services for the Jeddah Metro project. This was followed by the award of a $73.59m contract to Systra in July for preliminary engineering designs. The metro is expected to start operations in 2022.

September 2014

InFRAStRUCtURe MIDDLe eASt

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ten KSA InFRAStRUCtURe PROJeCtS

King Khaled.JPG

KIng KhALID InteRnAtIOnAL AIRPORt exPAnSIOn

JIZAn ReFIneRy PROJeCt

Owner: General Authority of Civil Aviation (GACA) Budget: $8bn Progress: Construction contracts awarded The main construction contract for the expansion of Terminal 3 and 4 of King Khalid International Airport in Riyadh was awarded to a consortium led by the German contractor Hochtief, which also includes India’s Shapoorji Pallonji and local firm Al Nahda. The value of the contract is $2.9bn. The expansion will increase the airport’s capacity to 25m passengers per annum from the existing15m.

Construction of the $420m Terminal 5 project, awarded to a joint venture of Turkey’s TAV and local Al Arrab Contracting Company last year is already underway. Work on the new scheme is expect to begin in September, and is to be completed in the last quarter of 2017.

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InFRAStRUCtURe MIDDLe eASt

Owner: Saudi Aramco Budget: $7bn Progress: Construction underway The Jizan Refinery and Terminal Project is a grassroots exports refinery coming up in Jizan Economic City (JEC). The refinery will have the capacity to process 400,000 barrels per day (bpd) of crude oil to produce 75,000 bpd of gasoline, 250,000 bpd of low-sulphur diesel and 80,000 bpd of vacuum distillation material to be used as fuel for power plants. In 2012, Aramco awarded Engineering, Procurement & Construction (EPC) contracts worth $1.4bn for different units of the refinery, but associated infrastructure bottlenecks delayed the project. In June this year, it was announced that construction work on the contract packages awarded have started. Additionally, local company Mohammed Al-Mojil Group (MMG) signed a JV deal with EPC giant Essar Projects to provide construction services for JEC. More recently, Korea’s Hanwha was awarded the Paramax complex contract.

September 2014

KIng AbDULAZIZ InteRnAtIOnAL AIRPORt exPAnSIOn

Owner: General Authority of Civil Aviation (GACA) Budget: $7.2bn Progress: Under construction Expansion work on Jeddah’s King Abdulaziz International Airport (KAIA) is more than 69% complete. Phase 1 of the project, with an annual passenger handling capacity of 30m, is expected to start operations by mid2015. The upgraded airport will have twin crescent-shaped 670,000 sqm passenger terminal complex, 46 contact gates, 94 boarding bridges, including double deck A380 access, lounges, an airside hotel and catering and retail facilities. The project’s masterplan includes capacity expansion in three phases up to 2035 (with 45m passengers in the second phase and 80m in the final phase) and an Airport City with retail shops, hotels and restaurants.

ten KSA InFRAStRUCtURe PROJeCtS

yAnbU3.JPg

ShOAIbA bULK StORAge FACILIty PROJeCt

Owner: Saudi Aramco Budget: $6bn Progress: Invitation to bid Four companies have submitted bids for the main contract of this project, which involves the construction of a bulk storage facility comprising a marine terminal and a tank farm that will be able to store about 400,000 barrels of gasoline, benzene and diesel. The products will be shipped from Saudi Aramco’s refineries at Yanbu and Petro Rabigh before being distributed along the southwest coast. The Front End Engineering and Design (FEED) contract was carried out by US’ Mustang Engineering. According to MEED, Aramco’s plan is to bypass the busy Jeddah Port while making its operations in the southwest more efficient and streamlined. Shoaiba is about 220km south of Jeddah, so it is a lot closer to the market. The project is part of Aramco’s plan to revamp its distribution network across the Kingdom. This inititaive also covers the Wasea storage hub near the capital Riyadh.

RAbIgh SwRO PLAnt

yAnbU POweR & DeSALInAtIOn PLAnt PROJeCt – PhASe 3

Owner: Saline Water Conversion Corporation (SWCC) Budget: $5bn Progress: RFP for design be launched

Owner: SWCC Budget: $4bn Progress: Under construction

The 600,000 m3/day Rabigh Sea Water Reverse Osmosis (SWRO) Plant, on Saudi Arabia’s Red Sea coast, will be the world’s largest SWRO plant when completed. The new plant, which is expected to start operations in 2018, will supply water to northern Jeddah, Makkah and Taif. Request for Proposal (RFP) for the design contract is expected to be issued before the end-2014. Also, the capacity of the existing desalination plant in Rabigh will be increased to 20,000 m3/day using SWRO technology following a timeline similar to the new plant. SWCC accounts for 20.7% of the total world production of desalinated water.

However, 88.5% of water supplied by SWCC is produced using thermal desalination, which is seen as more expensive than RO.

The project involves the construction of an oil-fired power plant with capacity of 3,100 MW and a desalination plant with capacity of 550,000 m3/day in Yanbu. Doosan was awarded the $1bn desalination package while a consortium of Al-Toukhi Company for Industry, Trading & Contracting, Samsung Engineering and Shanghai Electric was awarded the $3bn power plant package. The project is due to enter commercial operation in 2016. France’s Alstom is supplying the equipment for 5x620 MW including steam turbines and generators, the supercritical boilers, electrostatic precipitators and flue gas desulphurisation system; in April this year, US’ Foster Wheeler was awarded the contract to supply five steam condensers and 30 feed-water heaters for the project.

September 2014

InFRAStRUCtURe MIDDLe eASt

29

COVER STORY

Deep water strategy EXCLUSIVE INTERVIEW

Sohar Port Chief Executive Officer (CEO) Andre Toet speaks to Shruthi Saraf on his plans to raise the portâ&#x20AC;&#x2122;s profile as the gateway of choice for the GCC region 30

INFRASTRUCTURE MIDDLE EAST

September 2014

COVER STORY

ituated at a strategic location on the Arabian Peninsula, just outside the Strait of Hormuz, Sohar has rapidly transformed itself from a quiet fishing village to a potential game changer in the Middle East’s ports sector. Sohar Port currently focuses on three clusters, namely logistics, petrochemicals and metals with agro-bulk slated to become the fourth. Its general cargo terminal is operated by C Steinweg Oman; the liquid cargo terminal is operated by a joint venture between Oiltanking and Odfjell while Hutchinson Whampoa operates the container terminal. A recent development of significance is the transfer of commercial cargo traffic from Muscat’s Port Sultan Qaboos to Sohar, which is expected to have a beneficial impact on the latter, in terms of both traffic growth and competitiveness.

Side by side, the port continues to build up and improve its infrastructure to realise the vision of becoming the gateway of choice into the Gulf Cooperation Council (GCC) market.

Making a case for investing in Sohar Port, its Chief Executive Officer (CEO) Andre Toet says that the city has in abundance the three

S

main ingredients for a successful business: energy, land and manpower. This probably explains why the port has grown at 1000% ever since it welcomed its first cargo in 2007. This year, Sohar is poised to welcome 2,000 ships, a “mind boggling” achievement, given that it had “virtually nothing” to bank on when it started in 2004.

Do you see the relocation of cargo traffic from Muscat to Sohar turning into significant driver of growth?

If you look at the numbers, our own captive container traffic was 200,000 TEUs (Twentyfoot Equivalent Unit); from Muscat we will add approximately another 300,000 TEUs. Even with a total 500,000 TEUs, the volume is still small. I don’t see a massive increase in

“Once the agro-bulk business kicks off, it will be an accelerator for growth increasing at the rate of few million tonnes per year”

the number of ships, but where the container business is concerned, what will happen is an increase in the ship sizes.

Our strategy is to get the mainliners, the big ships, into Sohar. For long, Oman has been regarded as a feeder destination, fed from either Salalah or Jebel Ali, which made everything in Oman more expensive than in Dubai. This is because the freight difference between bringing the mainliners into Jebel Ali versus the feeder ships into Oman is huge. By combining volumes, we are aiming to create the critical mass so that we can get the big ships to come here, thereby reducing freight costs. Also, the Muscat Port cannot grow any further and is therefore, shifting focus to cruise tourism.

The shift from Muscat to Sohar will also advance our goal of becoming a gateway to the huge markets of upper Gulf, Iran, India and Pakistan. Their port infrastructure is not ready to receive huge volumes, so the very big ships can come to Oman while the smaller ones can go to Iran and India. Being just outside the Strait and at the same time, not being very far way, Sohar Port can play a very important role in these markets.

How are you ensuring that the port infrastructure keeps up with the trade dynamics?

September 2014

INFRASTRUCTURE MIDDLE EAST

31

COVER STORY

Strategic expansion Sohar Port recently opened a new container terminal of 1.5m TEU capacity

From a cargo handling infrastructure standpoint, we have a massive deep-water jetty, which extends 1.3km into the open sea. One of the biggest of its kind globally, it is capable of handling some of the biggest bulk carriers that exist today. In the liquid business too, we are looking to expand; we are more or less full at the port from a land perspective but from a marine perspective, we still have scope to expand. We have also opened a new container terminal of 1.5m TEU capacity, and are aiming to expand the port’s container handling capacity to 2m TEU. The land is already there but the key walls are yet to be built, work on which will start in 2017.

By the end of this year, we are also looking to reclaim 180ha of land from the sea, possibly for marine infrastructure, depending on the kind of industry we are able to attract for this plot.

Oman probably has the deepest water ports in the region easily accessible from the sea. Sohar Port, for instance, has a draft of 25m that can accommodate Vale ships.

There were recent reports in the press about Sohar Port’s diversification into agro-bulk.

Could you elaborate on that?

Because everything in the Middle East has to be imported, we see an advantage in creating a dedicated agro berth. By doing this, we

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INFRASTRUCTURE MIDDLE EAST

“By the end of this year or early next year, we will have new roads to Riyadh, which is the biggest consumer market in the Middle East” are creating massive opportunities to drive business for the freezone to go downstream. The Sultanate’s first dedicated agri-bulk terminal will handle wheat and grain shipments on behalf of the government and feedstock for Oman’s first sugar refinery. The construction of the refinery will begin in the third quarter of this year. We are happy with our four cluster approach because the spin offs from these will keep our hands full.

You become a jack of all trades if you have too broad a focus and it also becomes difficult to manage and grow the business. However, this approach is only for the port. For the freezone, we have a different approach altogether.

What is the growth strategy for the freezone?

We are developing a massive piece of land 4,500ha in area - for the freezone and plan to develop it in blocks of 500 ha each. In fact, we

September 2014

filled the first block much ahead of the deadline we had set for ourselves. We have expanded the second phase to include 600ha. If a customer from a different segment approaches us to set up the business in the freezone, we will not say no. We would rather see how to fit that customer in because they, in turn, could trigger a lot of additional business for the freezone.

With well-defined clusters already in place, we commissioned a study to fashion specific marketing campaigns for our focus markets, mainly India, parts of China, Korea, Saudi Arabia, the UAE and Brazil. We spend our marketing money in these markets but don’t forget that Oman itself is a source of investment for the freezone.

How about recent media reports about strengthening Sohar Port’s linkages with Singapore and the US?

Singapore has become the marine centre of the world. A lot of companies, from a marine perspective, are moving if not moved their head offices to Singapore. As an important transit point between East and West, a lot of decisionmaking power in the industry is concentrated there. We want Sohar to be closely linked to Singapore.

With US, Oman already has a free trade

COVER STORY

- like Vale, Jindal and Sohar Aluminium - if they increase their business. But I foresee that the biggest growth will occur in the container business. Aided by the freezone, our captive and general cargo will grow at 5-6% per year.

Once the agro-business kicks off, it will be an accelerator for growth, increasing at the rate of few million tonnes per year. All in all, the port will enjoy a steady growth in business, whether it is project cargo to build the industries or manufacturing output through the container terminal.

agreement. We believe Sohar Port should take advantage of this and attract more investors who may want to set up manufacturing facilities in the freezone to export to the US. We already have an industry that has completely moved out of Dubai to our freezone because their biggest export market is the US and in Dubai, they didn’t have the benefit of a free trade agreement.

Why did Sohar choose the landlord model for its operations?

While most ports juggle landlord and operator roles, we consciously chose to stay away from operations. When we try to attract private entities and internationally-reputed companies to Sohar, we automatically bring in their efficiency, productivity and global access.

When players like Odfjell and Steinweg come here, they not only invest heavily in Sohar but also popularise it within their global network, which attracts more customers. Moreover, in a landlord model, companies are responsible for their investments. We ensure that the basic infrastructure is in place but everything else is private investment. This also saves the government a lot of money.

How are you building up your connectivity into the hinterland?

You can have beautiful terminals but without good hinterland connections, you are a dead port. Sohar is unique because we enjoy good hinterland connections into the UAE and Oman by road. By the end of this year or early next year, we will also have new roads to Riyadh, which is the biggest consumer market in the Middle East. This will also raise Sohar’s profile as a competitive gateway into the GCC. We expect the GCC Railway to boost our hinterland connectivity. Oman will first link Sohar to Al Ain and Abu Dhabi, followed by Salalah, Duqm, and Muscat. We are planning to set up on-dock rail facilities to provide direct access to the railway for bigger companies like Vale and Steinweg. We will also open a massive rail service centre between the port and the freezone.

The Sohar airport will be primarily utilised for cargo movement. Time sensitive products come by air and therefore, the airport could play an important role in developing this segment.

We are looking to attract the big companies that do airplane maintenance to set up their base in Sohar. They will be able to put their spare parts in the freezone sans taxes, which is an interesting proposition for most people.

This was one of the reasons why we changed

Moving boxes Toet is confident that the container business will drive future growth

How prepared is Sohar to accommodate future trends in the shipping sector?

our branding to include the freezone. The more we started selling, the more we understood that the two are interlinked. The port cannot do without the freezone and vice-versa because both guarantee each other’s growth.

What kind of growth do you foresee for Sohar Port in the near future?

To have 1,000% growth in such a short period of time is an achievement. A lot of people look up to Jebel Ali and rightfully so. Jebel Ali is topnotch in the container business and bigger than Rotterdam. But they started in 1983 whereas we started in 2004. Therefore, the numbers we have achieved in such a short period of time is quite commendable.

We obviously foresee continued growth. But, how much? That is always difficult to predict.

We are doing close to 50m tonnes/year and the aim is achieve 90m tonnes/year by 2022. We will see increased growth in the captive market In nUMBERS

1,000%

Growth in cargo in the past five years

1.5m

TEUs/year of container handling capacity

80,000

Job opportunities created so far

6,500ha

Area earmarked to develop the freezone

We are currently handling 12,000 TEU ships but now I hear that 24,000 TEU is on the drawing table and is expected to be built in the next five years. The scale of ships is getting larger but this trend is no longer exclusive to the container business. You can see it in the liquid and the general cargo business as well.

In fact, without our present draft, we wouldn’t be able to get a Vale or a Maersk.

Similarly we have to further enhance our marine layout, increase water depth and enable easy approach into the port to deal with the increase in scale. Port infrastructure should be able to keep up with trends and at Sohar, we are in a unique position to do that. Now we are using super-post Panamax cranes but if you want to handle the 18,000 TEU, you need to have the bigger super-post Panamax cranes; if we ever reach 24,000 TEU, you can only imagine how those cranes will look.

Does Sohar have a sustainability agenda? If so, what steps have you taken to implement that?

We follow very high environmental standards.

Those who want to invest here have to comply with the Intergovernmental Panel on Climate Change (IPCC) standards and best available techniques. The port is in the IPPC green zone and has the most advanced air quality systems.

We know exactly how much and what kind of emissions go into the air and we measure that all the time. We have invested in one of the most advanced e-nose systems in the world, which can immediately analyse a smell and identify the source in order to try to rectify it. We have had companies unable to join us due to the cost of compliance with IPPC rules.

We are also the first port in the Middle East to become a member of the environment shipping index. Ships that comply with the index get a rebate on their port use.

September 2014

INFRASTRUCTURE MIDDLE EAST

33

HEALTHCARE

pARTNERShIpS

Taking care to adapt Public Private Partnerships (PPP) in healthcare, by their very nature, require greater diligence and scrutiny than in traditional infrastructure PPPs. Norton Rose Fulbright’s Joanne Emerson Taqi and James Kay explain why

Rising trend Healthcare spending in the GCC is expected to reach $133bn by 2018

n line with its growing population, the GCC region’s healthcare demand continues to increase. The cost of healthcare delivery is expected to nearly triple over the next five years, leading many analysts to question where and how funding for such an increase will be met. Healthcare spending is expected to reach $133bn by 2018.

The region’s demographics have altered as the population has increased. There is a burgeoning urban middle class with an increasing appetite for Western-style food and sedentary living. These changes have brought about a large increase in obesity and

I 34

INFRASTRUCTURE MIDDLE EAST

diabetes (of the world’s 10 worst countries for diabetes, five are GCC member states).

Due to the current lack of first rate healthcare facilities available to many GCC residents, the Dubai Health Care City estimates that citizens spend an estimated $25bn a year receiving treatment elsewhere.

Faced by increasing regional demands, governments within the GCC have called on the private sector to play a role in tackling the issue.

Public private partnerships (PPPs) have proved (when properly designed and implemented) to bring long term cost savings and prevent an immediate hit to a government’s balance sheet from costly large building projects.

Capital investment in new facilities, provision of new medical technologies

September 2014

and expertise in service delivery are examples of the benefits that private sector healthcare providers can bring to the Middle Eastern market. There is a range of economic, social and political motivations for developing PPPs, including the sharing or apportionment of risk, the integration of specialist skill sets, and improved efficiency.

The GCC region is not new to PPP projects and their potential benefits. Over the past 10 years, large scale infrastructure projects in Bahrain, UAE and Qatar have shown the potential successes that carefully advised and implemented projects can bring. Private sector provision of healthcare is already on the ground in certain member states.

UAE and Saudi Arabia are seen as the front

HEALTHCARE

runners with the presence of the American Hospital in Dubai and a number of German Hospitals in Saudi Arabia. Abu Dhabi is a driving force in the development of healthcare PPPs based on management partnerships with some major international hospitals participating in its regional schemes. Despite the presence of these private sector schemes, spending on improvements to healthcare remains well below equivalent spending on upgrading infrastructure projects and oil and gas development. Whilst this is perhaps not overly surprising, the required spending to accommodate healthcare improvements is becoming increasingly apparent and will need to be tackled by government members and the GCC region as a whole.

of private sector competitive advantage, governments still retain the bulk of the cost of healthcare provision across the GCC. Government spending accounts for three quarters of all spending on the region’s healthcare needs. Kuwait and Oman have made the least progress in developing a private healthcare sector.

CaReful planninG

Cost analysis

A PPP structure allows some component of responsibility and resultant risk to shift from the private sector to the public sector. In conventional PPP structures, payment is based on service performance, for example, repayment by the government organisation is only made after the project becomes operational. The private sector debt burden at the beginning of the project is hoped to incentivise it into ensuring completion and commencement of service in order for it to receive repayment.

However, with obvious initial benefits such as the private sector shouldering the brunt of the upfront construction costs, PPP investment in healthcare requires careful planning. Issues including payments for services by uninsured patients and high overall project costs have resulted in the PPP structure being criticised in certain markets. Initial project benefits may be overcome by longer term excessive repayment structures. A government body considering PPP as a financing method should ensure that it has consulted and been adequately advised on the underlying costs of the repayment structure.

Further, governments may lack the capacity to monitor, regulate and enforce contracts with the private sector. Moreover, governments may lack the funds for transaction advisors.

The work needed to implement a PPP model can be split into two phases; 1) the due diligence and transaction structuring phase, and 2) the transaction implementation phase.

Both phases require various advisors which can result in significant underlying costs.

Despite the high initial cost level and lack

Reports on the current healthcare requirements of the Middle East state that medical tourism may offer an attractive incentive to GCC states upgrading their facilities. The GCC member states have traditionally lagged behind other Middle Eastern countries such as Jordan and Lebanon, which boast a thriving medical tourism industry reported to have generated revenues in excess of $1bn. With increased offerings and relative stability compared to the rest of the Middle East region, GCC members may be able to attract a new revenue stream from private paying foreign consumers.

Healthcare projects (especially new build hospitals) require very large capital investment.

Building specifications, intellectual property rights and specialist contractors require a greater level of scrutiny (and resulting cost) than similar residential and commercial construction. It is essential that all elements of cost are thoroughly evaluated and that the project is effectively managed both

Government spending accounts for three quarters of all spending on the region’s healthcare needs

in numbeRs

$25bn

The annual spend of GCC citizens on healthcare outside the region

25%

Savings achieved in healthcare projects in the UAE through PPP funding

during and after completion. PPP funding has shown to have saved an estimated 25% of cost on healthcare projects in the UAE; however, tight financial management is required to prevent costs spiralling.

With high project costs, alternative forms of investment for the project company other than simple debt may be required.

Export credit agency facilities and project bonds may also be used in larger scale hospital and healthcare PPPs. Governments entering into such agreements should be aware of the additional complexities of these alternative investment sources.

PPP project structuring is inherently more complex than a simple government run healthcare project. The inclusion of the private sector through a special purpose project company requires additional considerations as to shareholders, repayment length and amounts, lender considerations, assurances for performance and subcontractors running the project on its completion.

However, PPP cost-benefits and improved private sector performance make them tempting alternatives to public sector organisations attempting to embark on large scale projects without incurring a large initial debt burden. A PPP structure can allow an improved whole life cost risk allocation and management, with a view taken at the outset of the life of the project, and enables a greater focus to be given on due diligence, owing largely to the presence of significant amounts of debt.

In the Middle East, demand for PPP style projects is increasing. Egypt and Turkey have formed central units to drive the concept of PPP models and to expand its reach from the traditional infrastructure sector. Morocco and Tunisia are also looking to PPP-type structures to encourage more efficient investment in areas previously run by the public sector.

The use of PPP looks likely to increase and – coupled with increasing demand for costly healthcare requirements – may be the preferred route for many future projects. Project management (whether on the ground, legal advice, or financial) is essential to ensure that the potential benefits are captured and the pitfalls avoided.

(Joanne Emerson Taqi is partner and head of Norton Rose Fulbright’s Bahrain office; James Kay is trainee)

September 2014

INFRASTRUCTURE MIDDLE EAST

35

SPECIAL REPORT

STRATEGY

Sharp focus With financial results showing an improved performance in the region, Atkins Middle East CEO Simon Moon explains why it pays to streamline a business and play to its strengths.

By Oliver Ephgrave aving recorded a 3.8% increase in revenue and a 22.2% rise in operating profit in the Middle East, regional CEO Simon Moon has reason to be pleased about Atkins’ results for financial year.

“It’s been a good year, certainly the second half,” he tells Infrastructure ME. “Our big projects started to make it through and our strategy started to hit. Our real laser focus is on three key sectors: rail – which is probably the biggest growth sector – as well as infrastructure and property, across three core markets of Qatar, Saudi and the UAE.” The results were similarly positive for the global business as a whole – with

H

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INFRASTRUCTURE MIDDLE EAST

underlying profit before tax up 7.3% and revenue increasing by 2.6%. Yet the highest growth rates in operating profits were seen in the Middle East and US – the two markets where the firm rolled out its ‘operational excellence’ programme.

A report accompanying the results stated that the Middle East offers “multiple opportunities” while the firm’s strategy is aimed at “carefully selecting and securing major projects and programmes with established key clients”.

The focus on key markets has resulted in a shift away from Kuwait and Bahrain.

Moon continues: “It’s really about what we do with our resources. We have a bunch of talented people and [we need them] where they are best placed.

“The Kuwait and Bahrain markets

September 2014

over the last few years have not presented any significant opportunity. There are great plans in both of those locations, but they aren’t really growing.

“We’ve moved a lot of those resources out of Kuwait and Bahrain into Qatar, Saudi Arabia and the UAE.” Staff numbers across the Middle East remained fairly similar to the previous year, at around the 2,000 mark. Moon states that the headcount is not expected to change much in the foreseeable future, due to the support of an offshore design centre in India and key partnerships.

“I’d expect our revenues to continue to grow pretty healthily, but I wouldn’t necessarily map staff onto that,” he says.

“We have 2,000 mobile people in the region, who deliver the front-end of the

SPECIAL REPORT

projects. Any growth comes through our global design centre in India.

“On top of that we’re starting to do a lot more partnering – in the case of Riyadh metro we’ve partnered with Spanish consultancy TYPSA. I think that’s an important way to move forward. In the future, I wouldn’t use headcount growth as a measure of real success for us.”

While revenue and profit have both grown substantially from the previous year, the amount of ‘work in hand’ – the level of contractual work for the next year – has decreased from 80% to 63%. Moon insists that one shouldn’t “read too much into that”.

He continues: “That’s really about our move into big projects – of course there are a number of projects that we’re currently negotiating that we can’t value as contracted work for next year, but we’re very confident we’ve got them.

When you’re in a bigger project environment it’s more difficult to value those contracts until you’ve won them.

When you’re in a standard consultancy, where you’re winning lots and lots of smaller projects, then your order book can be a lot stronger at any one point in time.

That’s certainly not an indication that we’re not winning more work in the future, it’s more of an indication that we’ve got big projects that we are just about to sign, particularly in rail.”

In addition to Riyadh Metro, where Atkins is working as lead designer on three of the six lines, the company’s current rail projects include Etihad Rail in the UAE, Dubai Tram, Doha Metro Red Line South and Lusail Light Rail in Qatar.

“the Kuwait and Bahrain markets over the last few years have not presented any significant opportunity. We’ve moved a lot of those resources into Qatar, saudi arabia and the uae” SIMON MOON, CEO, ATKINS MIDDLE EAST

Key targets include further metro packages in Doha which Moon “looks forward to securing” as well as metro projects in Mekkah, Medina, Dammam, Jeddah and ultimately Abu Dhabi.

“Of course we’ve got a continued expansion of Dubai metro with the expo, so we’re tracking that very carefully,” adds Moon.

Infrastructure sector activity, which covers roads, bridges and utilities networks, remains buoyant in Qatar, where headcount has grown to approximately 500 locally-based staff.

Atkins continues to work with the Qatari government, advising on infrastructure planning and design projects to meet its National Vision 2030.

It is working with the Central Planning Office, which is coordinating Qatar’s major transport programmes, and a significant frame-work contract to upgrade Doha’s roads and drainage systems.

atKins middle east results Key performance indicators

2014

2013

change

financial metrics Revenue

$286.6m

$276.0m

+3.8%

Operating profit

$24.5m

$20.1m

+22.0%

Operating margin

8.6%

7.3%

+1.3pp

Work in hand

62.7%

80.2%

-17.5pp

Safety – Accident Incident Rate (AIR)¹

53

43

+10

2,071

1,979

+4.6%

people Staff numbers, 31 March Average staff numbers for the year

1,985

2,006

-1.0%

Staff turnover

16.0%

13.2%

+2.8pp

Notable projects in Abu Dhabi include the design of infrastructure for a $2.2bn, 4,200ha Emirati community in North Wathba.

In KSA, Atkins recently won a strategic programme in partnership with Bechtel to advise the Economic Cities Authority on the development of four new cities.

The third key sector, property, is closely linked to the upturn in Dubai fuelled by the emirate’s successful bid to host Expo 2020.

Key projects include Dubai Opera House and the residential element of Al Habtoor City on Sheikh Zayed Road.

Moon adds: “We’re tracking the Expo very carefully. We’re also looking at how we can contribute directly with our experience on the London Olympics in programme management and engineering delivery of a major event. Then all the property and infrastructure that comes around that. I think it’s exciting for Dubai.

“We’re starting to see really good property sector clients and a growing portfolio in Dubai around Emaar, Meraas and Habtoor. A lot of projects were put on hold during the recession and they’ve started to come back based on our long-term relationships in those areas.”

Atkins’ report underlines the risks of working in the Middle East, both politically and financially, stating: “Certain countries within the Middle East have greater potential for political change.

In addition, it is a region where there is an increased risk of payment delay.

It adds: “We continue to experience protracted negotiations on variations on some of our major contracts in the region.”

However, the report claims that the group’s “focused strategy of carefully selecting both the countries and clients” enables it to mitigate political and commercial risks as much as possible.

Moon concurs: “There’s a general confidence growing, certainly in Atkins in the Middle East. I think those results show that general confidence across the region.

“There may be some big issues and politics playing out, but there are also some very big opportunities and we seem to be in a place where we can win those.

We’re pretty confident in the future,” he reiterates. “The focus in the Middle East is very much about playing to our strengths and targetting those three key sectors – rail, property and infrastructure,” he remarks.

September 2014

INFRASTRUCTURE MIDDLE EAST

37

special report

MANUFACTURINg

Automation University Big names from Saudi Arabia’s manufacturing sector will come together in the first mega event organised by Rockwell Automation in the Kingdom he Kingdom of Saudi Arabia has been at the forefront of economic development in the Middle East thanks to steadily growing hydrocarbon revenues and massive financial reserves of more than $500bn. The Kingdom intends to spend more than $367bn over the next 10 years on a wide range of infrastructure investments with an ambitious plan that includes thousands of kilometres of new roads and railways, airport expansion, investments in water, sewerage, electricity plants, telecom and IT and also social infrastructure projects like homes and hospitals.

In this context, Rockwell Automation, the world’s largest company dedicated to industrial automation, is bringing its signature event Automation University Classic to the region on September 9 and 10 at Sheraton Hotel Dammam in Saudi Arabia.

The two-day event has been tailored to support the Kingdom’s developing industrial landscape. With over 550 attendees, an extensive exhibition floor of 1,000 sqm showcasing Rockwell Automation and Partner products, technologies and solutions, industry round tables (Life Sciences, Food & Beverage, Oil & Gas, Water and Waste Water), demonstrations, presentations and hands-on sessions, Automation University Classic is being billed as one of the largest automation events to take place in the region.

The event will not only present the technologies of integrated information and automation solutions but will also tackle country perspectives and trends concerning the sector.

“Saudi Arabia is one of the world’s fastest growing economies,” says Yahya Darwish, KSA Country Director-Sales, Rockwell Automation.

“The Kingdom’s non-oil industry is made up of factories and industrial facilities including desalination plants, seaports, refineries and

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September 2014

Hand-on Sessions More than 100 demo cases and computers enable participants to experience actual hardware and software products in a class room environment. Hands-on sessions focus on both traditional applications and new innovations

Presentations A variety of seminars by Rockwell Automation and partners will explain how Integrated Architecture leads to modern, efficient, integrated and streamlined manufacturing environments

Demo Sessions Interactive demo sessions mix live demonstrations with customer success stories

Exhibition Floor Demonstrations and displays showcasing products, solutions and expertise from Rockwell Automation and partners

manufacturing companies. Automation University Classic will be a great platform for private companies and the government to discuss topical industry issues and at same time, exchange fresh and stimulating ideas valuable to the development of the country.”

Day 1 will see a conference on the theme ‘Industrial Evolution in Saudi Arabia,’ where key executives from Rockwell Automation and VIP guest speakers from Saudi Arabia will highlight latest trends and innovation in industrial automation and major developments in the Kingdom’s industrial journey.

Day 1 will also see key industry experts conducting a full day seminar about Connected Enterprise. The migration of commercial communication technologies onto plant floors is creating unprecedented opportunities and some potential risks for manufacturers. The Seminar will offer insights and approaches to help manufacturers securely integrate ‘disruptive’ technologies – such as mobile devices, cloud computing and virtualisation – to help build a connected enterprise.

Key benefits of the connected enterprise include better coordination between operations and communications through the integration of information across IT and control systems and making data-driven decision-making possible through the presentation of valuable information for different contexts, ultimately contributing to higher business growth.

“Disruptive technologies can enable collaboration across all levels in manufacturing organisations by connecting the entire enterprise,” explains Sujeet Chand, Senior Vice President and Chief Technology Officer, Rockwell Automation. “Manufacturers can thus fully harness the information they need to optimise their operations.”

Rockwell Automation partners at the event include Prosoft Technology, Molex, Stratus Technologies, Cisco, Endress+Hauser, Ewon, Fluke, Oldi, Panduit, Spectrul Control, Avanceon and ATCO.

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

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

Supported by

Gold sponsor

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For sponsorship

SUSTAINABLE PETROCHEMICAL COMPANY

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

SUSTAINABLE OIL AND GAS COMPANY SUSTAINABLE CONSTRUCTION PROJECT BEST RENEWABLE PROJECT MOST SUSTAINABLE GOVERNMENT DEPARTMENT SUSTAINABLE CONSULTANT

JUDE SL ANN JUDE.SL ANN@CPIMEDIAGROUP.COM +971 4 433 2857

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ASISH SARAF ASISH.SARAF@CPIMEDIAGROUP.COM +971 4 375 5 495

Utilities

MobILE TURbINES

The case for interim power APR’s Ranjit Singh explains how fast track plants help bridge power deficits arising from the re-building or refurbishment of basic infrastructure efore the advent of the Arab Spring, Libya was ahead of its North African neighbours when it came to energy access and consumption.

In 2009, energy consumption per capita was 4,068kWh, and 99.8% of the population had access to electricity, both of which far exceed the North African average. However, Libya’s electricity situation today is a different story.

The need for electricity is compelling for both the people of Libya, who are attempting to re-establish normal life and the industries and businesses underpinning this renewed growth. All require a continuous supply of electricity to develop, innovate, and compete.

There are also many international agencies looking to provide support and expertise to Libya following the Arab spring, and many international businesses are looking to capitalise on the potential of the country.

However, lack of access to basic and reliable energy sources limits their contribution.

Power intensive industries have also been finding themselves competing with communities over the limited electricity supply, and in many cases, cannot operate effectively, if at all they are able to. These industries require their own dedicated source of power. As infrastructure rebuild takes place, for most heavy industrial and extractive industries, power is the single largest cost item impacting their operations.

With Libya’s electrical power generation and transmission systems in a severe state of disrepair, and with expected peak demand far outstripping the available electrical generation, the power deficit has only become more acute. Libya’s utility, the General Electricity Company of Libya (GECOL), has contracted for repairs of its power plants and building of permanent power solutions. Yet, construction and repairs to permanent power structures

include an additional 200MW of fuel-efficient diesel power modules over two sites. This contract, totalling 450MW, became the largest single contract ever signed in the fast-track power industry and the largest fast-track turnkey power project ever with a public utility.

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Mega blocks

Ranjit singh Managing Director eMea, aPR energy

will take several years, leaving Libya with an urgent need for alternative solutions.

In the spring of 2013, with the summer season quickly approaching, Libya’s interim government, the Ministry of Electricity and Renewables and GECOL proactively took the decision to explore immediate power solutions to generate electricity whilst repairs and improvement of its infrastructure continued.

This is where APR Energy stepped in.

Working alongside the Ministry and GECOL, APR Energy was able to install fast-track solutions that met the utility’s key requirement – environmentally sustainable and efficient turbine generation.

We worked to deliver state-of-the-art, fuel-efficient mobile gas turbines on a fasttrack basis, with 250MW distributed over four sites in key areas of the country.

In the following months, when other generation vendors failed to execute their proposed solutions, APR Energy was able to fill this gap by providing the required additional power and GECOL expanded the contract to

September 2014

What makes these systems unique is that large-scale blocks of power – as much as 500MW or more – are made available in just 90-130 days using mobile turbine technology. These turbines require only a third of the space and less than one-third of the number of people to operate than reciprocating engine generator sets.

The power-dense nature of the turbines makes it easy to integrate them seamlessly into a permanent infrastructure and makes them highly effective in adding stability to the grid, which is ideal in a country like Libya where the re-development of basic infrastructure needs to happen fast, while laying strong foundations for the future.

Semi-permanent turbine solutions are an ideal option for countries like Libya because they negate many of the obstacles posed by building permanent power projects. APR Energy was able to provide the expertise to install, operate and maintain the plant, while placing a strong emphasis on training the local workforce so as to provide local people with transferable skills for the future.

These solutions complement the build-out of a permanent plant, working well to provide power during the long construction phase. As a result, companies operating in this space are now filling the void once inhabited by the Independent Power Providers (IPP) of the late 1990s.

To conclude, mobile power plants give people the time to develop permanent power for the long-term, facilitates business and economic development and enables a country’s critical infrastructure to operate effectively.

NOVEMBER 3, 2014 JUMEIRAH BEACH HOTEL, DUBAI Dubai’s strong belief in sustainability is reflected thorough initiatives such as the enforcement of the new Green Building regulation that aims at improving the performance of buildings.

At Bgreen’s Green Building Codes and Beyond seminar a panel of speakers will be discussing; IMPLEMENTING GREEN BUILDING REGULATIONS

Progress since the Green Building regulations came into effect

Positive response from the industry

Opportunities for suppliers, contactors and consultants

Challenges and solutions

Collaborations with global companies

BOOSTING ENERGY EFFICIENCY

Technological innovations

Developments in building automation

Initiatives and campaigns

Existing laws and scope for amendments

Role of renewables and clean energy

Changing public mindset on conservation

WASTE MANAGEMENT

Where are we in comparison to the US and Europe with waste management?

What have we learned that we can use?

What new initiatives does this region offer the world?

Key thoughts on what may be in the future

FOR SPONSORSHIP OPPORTUNITIES, PLEASE CONTACT Jude Slann, Commercial Director // jude.slann@cpimediagroup.com // +971 4 433 2857 Junaid Rafique, Senior Sales Manager // junaid.rafique@cpimediagroup.com // +971 4 375 5716

TRANSPORT

PIRACY

Shipping at risk A new UNCTAD report examines the economic costs and trade-related implications of maritime piracy across the world

Policing the high seas Intensified international counter-piracy efforts have contributed to a reduction in the number of incidents

he importance of oceans and seas for trade-led economic prosperity has increased in tandem with growth in the world economy, global merchandise trade and maritime transport activity. However, increased international trade volumes and value have also heightened the exposure and vulnerability of international shipping as a potential target for piracy, armed robbery and other crimes.

According to a new two-part report published

by UNCTAD titled ‘Maritime Piracy,’ over 20062010, piracy incidents rose by 86.2% worldwide, with the number of actual and attempted attacks moving up from 239 in 2006 to 445 in 2010.

Between 2005 and 2012, 61 seafarers were killed as a result of piracy and 5,420 were held hostage on some 279 ships hijacked worldwide. Piracy off the coast of Somalia accounted for nearly 50% of all the hijackings over this period.

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In fact, pirates off the coast of Somalia have, since 2000, adopted a different approach by widening their geographical presence and moving farther away from the coast and territorial waters into the Indian Ocean, the Red Sea, the Gulf of Oman, the Mozambique Channel, Maldives, and the Indian territorial waters.

According to the report, while intensified international counter-piracy efforts have since contributed to a reduction in the number of incidents in the region, this positive trend remains fragile and could be undermined and reversed unexpectedly. In addition, with a surge in piracy observed in the Gulf of Guinea, West African waters are also emerging as a dangerous hotspot for piracy.

Tankers, containerships and bulk carriers remain among the main targets owing to their high economic value and given their strategic role in global merchandise and energy trade.

In 2013, the World Bank had estimated the global economic cost of piracy off the coast

September 2014

of Somalia at $18bn, with a margin of error of roughly $6bn. The One Earth Future (OEF) Foundation estimated the total cost of piracy off the coast of Somalia at $5.7–$6.1bn in 2012.

While over 80% of these costs were estimated to be borne by the shipping industry, 20% were estimated to be borne by governments. These costs act as a hidden tax on world trade reflected in increased trade costs.

Attacks in the Gulf of Guinea region are also on the increase, in many cases exhibiting greater levels of violence. In contrast to the modus operandi adopted by Somali pirates – holding ships and crews for ransom – pirates in the Gulf of Guinea region appear to be focused on stealing the ship’s cargo, especially crude oil and oil products, for subsequent resale on the black market, with little regard for the life of crew members.

While piracy is not a new insured risk, the increase in pirate attacks has affected premiums and coverage. Since the Gulf of Aden was classified as a war risk area by the Lloyd’s Market

TRANSPORT

that piracy hampers the collection of weather and climate related data which are required for the purposes of safe navigation and for the study of climate variability and change.

MaIn contaIner shIPPIng routes SOURCE: UnitRa nORth atlantiC OCEan

Europe

north america

addressIng the challenge Middle East

PaCifiC OCEan

MIllIon teu In 2010

2 5 10

South america

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africa SOUth atlantiC OCEan

Association (LMA) in May 2008, the cost of war risk premiums has increased significantly, from $500 per ship, per voyage to up to $150,000 per ship, per voyage, in 2010. The additional premiums paid on cargo transiting piracy regions are estimated to have increased by $25 to $100 per container in the past few years. The cost for hull insurance which covers physical damage to the ship has also increased and is estimated to have doubled in 2010.

It is estimated that the shipping industry pays around $2.3-$3bn per year to reroute ships to avoid piracy each year. Diverting fleet and trade from the Suez Canal to the Cape of Good Hope on a trip from the Middle East to Europe doubles the typical transport time.

Industry under threat

As many countries in regions affected by piracy are also major hydrocarbon producers and suppliers of global energy markets, maritime piracy affects the oil industry and tanker trade, as well as energy security.

According to the UNCTAD Report, piracy attacks off the coast of Somalia threaten the oil industry in the region, such as in Bahrain, the Islamic Republic of Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and Yemen. With nearly 45% of global crude oil production being carried in tankers, wellfunctioning and secure strategic transit points such as the Gulf of Aden are critical for global energy supply and security.

With oil cargo passing through the Strait of Hormuz estimated to account for some 35% of all seaborne oil traded in 2011, the strategic importance of the maritime route involving the passage through the Strait of Hormuz and the Gulf of Aden/Suez Canal cannot be overstated.

The stakes are further amplified by growing

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PaCifiC OCEan

Gulf of aden

indian OCEan

South asia

Malaca Strait

volumes of Liquefied Natural Gas (LNG) being loaded at ports in Qatar, a country that accounted for nearly one third of global LNG exports in 2012.

Approximately 30% of piracy attacks between 2008 and 2012 have targeted bulk carriers and general cargo ships. As bulkers carry the majority of the worldâ&#x20AC;&#x2122;s food staples such as rice and grain, pirate attacks have direct consequences on the price of food given the delays in delivery and the loss of cargo in the case of perishable goods. Rapid rises in food prices can have dire humanitarian consequences, but may also lead to social unrest, riots and conflict.

Piracy also poses additional risks, for instance in terms of the potential for pollution, which in turn may have severe economic as well as environmental effects and in terms of jeopardising economic and development opportunities arising from the installation of submarine cables. Also worth noting is the fact In nuMbers

$18bn

impact of piracy off the Somali coast on global trade, according to World Bank

$2.3-$3bn

Cost incurred per year by the shipping industry to reroute ships to avoid piracy

30%

Of piracy attacks between 2008 and 2012 have targeted bulk carriers and general cargo ships

September 2014

Maritime piracy has evolved from a localised maritime transport concern into a cross sectoral global challenge, with a range of important repercussions for the development prospects of affected regional economies as well as for global trade. Addressing the challenge in an effective manner requires strong cooperation at the political, economic, legal, diplomatic and military levels, as well as collaboration between diverse public and private sector stakeholders across regions. While progress will ultimately also depend on the economic situation and on political stability in affected regions, the success of policies and strategies to combat and repress piracy rests on strengthened cooperation at all levels. This includes cooperation not only in respect of maritime security measures, but also in terms of information sharing and in terms of the effective prosecution of pirates and of those who benefit from the proceeds of piracy.

Reflecting an increase in cooperation at the international and regional levels, a broad range of multilateral initiatives have been developed over recent years with the objective of countering piracy and armed robbery at sea. Many of these were initiated following the proliferation of acts of piracy off the coast of Somalia, but now serve as a model and/or as a basis for relevant cooperation in other regions, such as in West African waters, where piracy levels are rising at an alarming rate.

Also worth noting are initiatives by the shipping industry, including the development of Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area (BMP) which set out preventive, evasive and defensive measures, as well as the increasing use of armed guards and security personnel on board ships.

While the main focus of the international communityâ&#x20AC;&#x2122;s response has been and continues to be on piracy off the coast of Somalia, it is hoped that the ambit of relevant initiatives and efforts will, in due course, be extended to all areas where maritime piracy is prevalent, so as to minimise the incidence of piracy, as well as its human and economic costs and its wide-ranging implications for international transport, trade and security.

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

Oman International Exhibition Centre Sultanate of Oman

Power packed Networking Opportunity with Government Offcials and Key Decision Makers

Diamond Sponsors

Gold Sponsors

Platinum Sponsor

Supporters

Media Partners

Construction Intelligence Partners

CONSTRUCTION

CONCRETE PROTECTION

Keeping out the salt Wacker Chemie’s masonry protection expert Anoop D’souza talks to Infrastructure ME about reinforced concrete’s vulnerablility to sea salt

“although the application conditions vary greatly with location and climate, hydrophobic impregnation is in demand around the world” ANOOP D’SOUZA, REGIONAL SALES MANAGER, WACKER CHEMICALS MIDDLE EAST

oncrete is a highly versatile building material, but it has two arch enemies: chlorides and carbon dioxide.

For bridges, bridge piers and tunnels on the Arabian Peninsula made of reinforced concrete, these dangers double up, since the materials are at risk from sea salt and high levels of salt in the underground.

All year long, the salty sea air from the Gulf blows inland. Through atmospheric humidity and precipitation, the ocean salts penetrate into the concrete’s porous structure and cause immense damage. In 2011, Saudi Arabia spent more than $14bn for corrosion protection and repair of infrastructure projects, more than any other country in the world. Consequently, bridges and infrastructure projects in the region

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need special protection in order to increase their longevity and decrease the cost of repair.

Salt water can cause considerable damage to reinforced concrete. Once the salt has entered the concrete, the continuing capillary absorption of water slowly transports the chlorides to the steel reinforcing rods which, as a result, start to rust. Since corrosion products require more space than the metal, the reinforcing steel expands causing the concrete to spall.

New moisture draws the salts further into the structure’s core. “Water molecules give the deposited chlorides a change to penetrate deeper into the concrete,” explains Anoop D’souza, Regional Sales Manager at Wacker Chemicals Middle East. “The process is gradual and in some cases only becomes visible after several years.”

Another danger threatens from the air: socalled carbonation. Here, atmospheric humidity and rainwater carry carbon dioxide from the

September 2014

atmosphere into the concrete pores. Carbonic acid forms, which then turns into calcium carbonate. The otherwise alkaline concrete thus becomes increasingly acidic from the outside in. If this process reaches the steel, it loses its corrosion resistance and, in the presence of moisture and oxygen, begins to rust. Although water is important in preparing concrete, it can also be destructive by acting as a carrier medium.

The benefiTs of silane

The most efficient way of protecting concrete is to drastically reduce water uptake.

Without water, steel will no longer corrode even in carbonated concrete. The waterrepellent protective zone created by this process significantly reduces the uptake of harmful substances. Silanes with long alkyl chains, such as isooctylsilanes, have proven to be the ideal product group here.

12-14 OCTOBER 2014

ADNEC, ABU DHABI, UAE

ABU DHABI NATIONAL EXHIBITION CENTRE (ADNEC)

REGIONAL

OPPORTUNITIES

STRATEGIC THINKING

TECHNICAL SOLUTIONS

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

BOOTH AND SPONSORSHIP ENQUIRIES:

* Special Events - take part in the Joint Opening Ceremony, Russia Day and Technical Tours of Ansaldo Thomassen Gulf Repair Facility and Masdar City

POWER-GEN Middle East Kelvin Marlow T +44 (0) 1992 656 610 E kelvinm@pennwell.com

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

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

* Hotel/Travel/Venue Information - tips to fast-track your travel plans

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

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速

CONSTRUCTION

Silanes outperform other substance classes in their resistance to UV radiation, thermal stress, aggressive substances and microbiological influences. While they efficiently penetrate into the concrete, they protect the material against external influences without sealing it.

The building material can continue to release water vapour from the inside and so dry out.

To unfold its effect, the process draws on the concrete’s material properties. “Silanes form extremely stable bonds with the silicate matrix of the pores and capillary walls,” says D’souza. “The protective molecules resemble conventional quartz molecules with an additional organic group. This makes the protection particularly durable and the hydrophobic effect lasts for decades.”

However, to achieve optimum results, users must observe a number of conditions. “Before any restoration work is carried out, we recommend that an accurate analysis of the structure’s condition be conducted by professionals specialised in this area, for example, a civil engineering consultant,” says D’souza.

A detailed examination with magnets and ultrasonic and radar testing is able to determine the temperature and moisture content of the concrete and the ambient air, the depth of carbonation and compressive strength, as well as the depth of the reinforcing steel.

For older concrete structures, the chloride content deep down in the material can also be determined. “In special cases, an extracted drill core can be examined in the lab,” says D’souza.

Once the structure’s condition has been ascertained exactly, a civil engineering consultant plans the appropriate repair measure and, normally, puts out an invitation to tender.

There are liquid as well as cream-like products available for the hydrophobic impregnation of concrete. Creams can be applied with so-called airless spray guns. These instruments have a suction tube that can be immersed directly in the product container and make it possible to meter the active ingredient exactly.

However, the main advantage of spraying cream-like products is that the application can be carried out in a single step. Liquid products, on the other hand, are applied by “flooding.” This means that the product is applied to the wall under very low pressure. It runs down the wall, soaking into it as it goes. For liquid products, several work steps (two to three) are often required in order to apply sufficient material.

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“in the case of calls for bids for expensive infrastructure projects, contracting authorities increasingly demand that the results should be durable” ANOOP D’SOUZA, REGIONAL SALES MANAGER, WACKER CHEMICALS ME PreParing The siTe

Prior to the actual application via the airless technique, WACKER recommends carrying out spray tests to find the right application pressure for the relevant product, environmental and substrate conditions. Too much pressure would cause the product to atomise and lead to wastage, while too little pressure would result in uneven application.

As a result, lumps would form on the surface.

Beside material dosage and active-ingredient concentration in the water repellent, there are a number of other factors that determine the silanes’ penetration depth, including weather conditions and the porosity and moisture content of the concrete to be treated. If the moisture content is greater than four percent, for example, treatment must not proceed, as the silanes cannot penetrate sufficiently.

Further problems can arise, if the buildingcomponent temperature is below five degrees Celsius. At such low temperatures, there is a risk of water condensation on the component, preventing the effective penetration of the water repellent.

For quality control purposes, reference

September 2014

surfaces must be prepared prior to the actual application to test how the hydrophobic impregnation works on the concrete to be treated. Among other things, this test area is used to determine the amount of waterrepellent agent needed. Normally, two or three test surfaces with different dosage are prepared; exactly 28 days later, service engineers determine the quality of the water-repellent treatment. Only then do they decide what dosage to apply to the concrete structure.

Deep impregnation with water-repellent chemicals is able to protect intact concrete against water and salts for many years and is much cheaper than carrying out full repair work at a later stage. Scientific studies show that by using this method, bridge piers need to be repaired far less frequently and in some cases not at all. There are several projects in southern Germany, Japan, China, and in the GCC where the use of water-repellent chemicals have proved their benefits.

“Many projects in the Gulf region are built close to the sea which exposes them to high chloride ingress,” says D’Souza, “Therefore, it is important to protect structures, bridges and tunnels from the penetration of chloride.

Inland structures need an equal level of protection in order to ensure long term durability and construction sustainability.”

To cater to the special protection needs in the region, WACKER tests special silane formulations at its Technical Centre in Dubai. This way it is possible to adapt them to the specific construction materials and needs of the region.

“Although the application conditions vary greatly with location and climate, hydrophobic impregnation is in demand around the world,” says D’Souza. “In the case of calls for bids for expensive infrastructure projects, contracting authorities increasingly demand that the results should be durable. Renovation cycles that are too short could ruin a bidder’s chances and WACKER’s silane treatment protects structures even under extreme loads.”

Thus, reinforced concrete structures in the Arabian Peninsula are often exposed to an aggressive mixture of salt and water and high levels of salt underground. Without protection, these salts can penetrate deep into the concrete and cause damage, to the reinforcement as well as the fabric of bridges, bridge piers and highways. A water-repellent treatment, with special hydrophobic silanes, can offer effective and long-lasting protection for many years.

From Saudi Arabia to Morocco and from East to West Africa, the 7th annual MENA Mining Show brings government ministers, exploring and operating mining companies together with investors and key solution providers to unearth the regions potential.

Offically Supported by

21 – 22 October 2014 Dubai International Convention and Exhibition Centre, UAE

Project Showcase Theatre mining companies from the Middle East and Africa demonstrate their projects

The show offers you the biggest marketplace to source innovative mining and exploration technologies and products to transform your business.

With over 100 companies showcasing their services, the expo offers you the unique chance to source all the products you need in just 2 days and learn how to overcome the challenges facing the mining industry with our FREE education seminars in the following theatres:

Mineral Processing Theatre plant managers find out how to solve their chemical and mechanical processing requirements

Register for free online at www.terrapinn.com/visitmenamining

Exploration Services Theatre suppliers discuss the best new tools and techniques to help exploring mining companies

CONSTRUCTION

AIRPORTS

Strong foundations Matteo Gioia, ORA Regional Marketing Communication Manager, BASF Construction Chemicals UAE talks to Infrastructure ME about the chemical major’s product portfolio for the region’s fast developing airports sector

Dubai International Airport Terminal 3 BASF supplied admixtures for the 2.4m m3 of concrete used in the construction of the terminal

How is BASF geared to respond to the airport sector’s growing demand for new infrastructure in the region?

BASF’s portfolio presents a comprehensive product range for the construction and refurbishment of airports. MasterGlenium, MasterTop, MasterSeal, MasterEmaco,

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MasterTile and Ucrete ranges, by Master Builders Solutions, as well as Wabo products are part of the wide and high quality BASF’s offering to this sector. Master Builders Solutions is our new brand for the construction industry, developed by a crossindustry, global exchange of knowledge and

September 2014

technology. These products are designed keeping climate requirements in mind, and are well-suited for the high quality infrastructure projects in the region.

Could you give us a particular case study of BASF’s engagement with the airport sector?

CONSTRUCTION

BASF has provided comprehensive sustainable solutions for the Dubai International Airport. These include: • Waterproofing systems and sealants: Dubai International Airport required, during the second extension phase, a watertight solution which would reduce, control and cure future possible leakages. MasterSeal re-injectable hoses and membranes were installed to allow increased resistance to damage caused by structure movement; MasterSeal sealants were chosen due to their high weather, jet fuel, oil and chemical resistance. The engineering of these products minimises the risk of leaks and the disruption of retrospective maintenance, thus reducing the life cycle costs of the structures and extending their durability.

• Performance Grouts, Repair and Protection Systems: For the same project, BASF provided MasterEmaco performance grouts, which re-establish the long-term durability and load bearing capacity of concrete. Working quickly to allow a fast return to service, they match the concrete’s strength, improve the aesthetics and prolong the lifecycle of the structure.

• Flooring solutions: MasterTop cementitious floor overlays were applied in an area of 50,000m2 during the same expansion phase of the airport. The chosen product was highly fluid and pumpable for fast installation and self-smoothing.

Its effective compressive strength and rapid cure allowed the applied area to return to service in 24 hours.

• Admixtures: We were proud to be the sole supplier of admixtures for the 2.4m m3 of concrete used in the construction of Dubai International Airport Terminal Three. As part of the construction, MasterGlenium superplasticiser was used in selfcompacting concrete (SCC). They utilise latest-generation polycarboxylic ether polymers manufactured in-house by BASF. The use of SCC was prompted by a need for fast construction and the requirement for high-quality surface finish of the concrete.

Along with Master Builders Solutions that also include Tile Fixing Solutions and thermal insulation Wall Systems, Wabo from BASF comprises a full range of expansion control systems.

Within the Expansion Control Systems led by the Wabo brand, a comprehensive range of expansion joints is available for use in airports. These include architectural joints to fit within the floor finishes that extend the service life of structures by protecting them from weather, moisture and premature deterioration. Wabo expansion control systems incorporate recycled, recyclable and renewable materials whenever possible and use waste reduction practices to lower the impact on natural resources.

How does BASF embed sustainability into its product portfolio?

Matteo Gioia ORA Regional Marketing Communication Manager, BASF Construction Chemicals UAE

How distinctive are BASF’s flooring solutions for the airport sector?

Our portfolio includes a variety of flooring solutions by Master Builders Solutions for airports and other infrastructures.

MasterTop DTZ is a hard-wearing, highly decorative, epoxy terrazzo floor covering used in public space areas that are subject to high volumes of rolling wheels and foot traffic. It provides the ultimate in low maintenance and durability, typically lasting the life of the structure. It is composed of zero ZOC naturally occurring aggregates, recycled glass and an epoxy binder, utilising wherever possible locally sourced materials.

Ucrete industrial flooring is long lasting and convenient to install. Meeting the needs of modern processing industry, Ucrete is a unique suite of products based on polyurethane concrete which has enjoyed a reputation for performance built up for over four decades. Considered the world toughest floor, Ucrete is durable, non-tainting, moisture tolerant, hygienic, clean, safe and thermal shock, mechanical and chemical resistant.

We view sustainability as one of our core strategic principles, which led us to become a founding member of the Emirates Green Building Council (EGBC). Our products are developed to improve resource efficiency and increase the durability and strength of structures, reducing the need for maintenance and ensuring safety.

BASF’s Master Builders Solutions products are designed to meet the green building standards and simplify construction without compromising modern and sophisticated aesthetic requirements.

BASF‘s sustainable solutions, such as its weather-proof range of products are affordable and environmentally sound, and provide a quick return on investment.

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CONSTRUCTION

RISky bUSINESS

Attached to Iraq Insurgent forces have taken over key pockets of Iraqi territory, but some construction firms have chosen to stay on as the country finds itself in the face of yet another conflict. By Neha Bhatia n October 2013, optimism appeared to reign in Iraq. A bevy of Iraqi ministers had visited Dubai to promote the nascent economic benefits their country could offer to affluent GCC construction businessmen. Meanwhile, the country’s housing, rail, aviation and public works ministers began conversations meant to lure monetary flow and investor confidence into the country.

A lot has happened since then. Less than a year down the line, bleakness has returned to Iraq’s security situation through insurgency and civil clashes. Sectarian divisions have been attributed to this round of internal conflict, causing bloody combat in Mosul, Iraq’s second largest city, which fell to the extremist group, ISIS – the Islamic State of Iraq and the Levant.

400km north of the capital Baghdad, trouble had officially returned to Iraq.

Rearranging Iraq’s security and infrastructure requires a sound government be established.

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This seems unlikely given the failure to form a working parliament despite the clear need for one. Parliament was adjourned twice before a speaker was finally elected on 15 July, 2014, and the disagreements between various political Iraqi factions have held up the creation of a new government.

The prompt appointment of a prime minister and president for the country is crucial to alleviating extremists’ presence, which has gravely impacted Iraq’s pivotal infrastructure and commercial operations.

Surprisingly, construction professionals in Iraq seem less defeated than one would assume.

Speaking to Infrastructure ME from Baghdad, Sabah Ghaidan, CEO of construction machinery distributor firm Al Ghodwa Group says that the uncertainty in the country (and therefore, its construction market) will only clear once a solid parliament has been established.

“It (the security situation) will be solved, but it needs time,” he asserts over a crackling phone line. “Everything is okay; everyone wants to solve this situation and

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we need a strong government for that.”

The construction industry in the GCC has kept a keen eye on the security situation in Iraq, which in January 2014 was found to be the third-largest projects market in the region with developments worth $519bn either planned or underway in the country.

Only Saudi Arabia ($1.05tn) and the UAE ($713.15bn) had larger projects markets as per MEED’s Gulf Projects Index as of January 2014.

The absence of a cohesive government threatens to detriment Iraq’s infrastructure rebuilding, consequently also discouraging foreign firms from participating in the Iraqi market.

Ammar Al Assam, owner of Dewan Architects & Engineers knows this all too well. 130km north of Baghdad lies Samarra, part of Iraq’s Salah ad-Din governorate where his firm has been commissioned to undertake a university design project.

Listed as a UNESCO World Heritage site, fears of an encore of the 2006 attack on Samarra’s historic Al-Askari mosque have returned to the fore.

CONSTRUCTION

Assam had expressed confidence in the security of the culturally significant Samarra when the project was announced in February 2014. Despite all that has transpired since, he hasn’t been deterred from his stand.

He remains confident that the security situation in Iraq – more specifically, Baghdad – is one his team can still contend with.

“The owners of Dewan are originally from Iraq. We left the country in the 1970s, but were probably one of the first few companies to return.

I think it was in May 2003, a month after the war.

We still have ties with the country and weren’t concerned about going to Iraq per se. The security situation has been bad from 2004 onward and that’s unfortunate, but we know how to work around things.”

Assam insists that maintaining one’s security in Iraq also depends on the vigilance deployed by employees and firms.

“All our employees there are Iraqi and have a sense of where to go or not go. This isn’t to say it’s 100% safe to live there – people get killed every day. You could be waiting at a traffic signal or headed for the ministry for some paperwork and God forbid, anything could happen.

“But we’re Iraqi. We blend in easier and don’t keep excessive security,” he adds. “In Iraq, the more low-key you are, the safer you’ll be.”

Bora Yildiz, executive partner at Turkish contracting firm EID, was at the conference held in Dubai in October 2013. Speaking about his experience of working in Iraq, Yildiz had said at the time: “Challenges exist in terms of security, logistics, international labourers, suppliers and so on. Logistical problems persist when the need for getting machinery, materials and manpower into the country arises.”

Despite having highlighted the glaring flaws in the apparatus of the Iraqi construction market, Yildiz was buoyant about the investor returns the country’s untapped market could offer.

Today however, entering and capturing the temperamental Iraqi market will require strategic managerial forces on the ground, which Yildiz admits are difficult to source.

“The challenge at the moment is to alter expats’ opinions of Iraq,” he tells Infrastructure ME from Turkey. “They’re focusing on only the specific areas of the country where conflict is occurring. There are some territories which are relatively safer, but overlooked when considering the condition Iraq is in right now.

“Around 400 EID employees are currently based in Iraq,” Yildiz reveals. “We have had to increase security on-site like most firms

“We’re Iraqi. We blend in easier and don’t keep excessive security. In Iraq, the more low-key you are, the safer you’ll be” AMMAR AL ASSAM, owNER oF DEwAN ARChITECTS & ENgINEERS have. But the real difficulty for firms, including us, has consistently been to encourage and stimulate people to work in Iraq. They demand higher salaries which places an increased burden on our existing expenses of security, material sourcing and so on.”

Pragmatically viewed, the security of manpower is not the only facet construction companies operating in high-risk zones have to worry about.

Over a poor quality phone line from Baghdad, Rebin Mukerji, sales manager of oil well cement for Lafarge Cement’s Iraqi operations highlights the impact increased product prices have had on business in the country.

“The problem is mostly in and around Baghdad. The south of the country and Kurd region is relatively safe,” says Mukerji.

Even though the main roads in the country are almost clear, transportation costs to move materials from the northern part of the country to the south have increased by almost three-fold. “ “The prices of our products have had

to be lowered, and this is something all companies operating in the market have had to do. Most companies, much like us, have kept their operations on hold until the end of Ramadan,” he adds.

To each person interviewed for this piece, the Holy Month of Ramadan has become one of hopes and expectations.

Amal Al Dabbagh, member of the economic section at the Consul General of Iraq’s office in Dubai is worried about her family in Iraq – which is, at the moment, safe in the South – but she cannot wait for Ramadan to end so that she has a better idea of what the future holds for her country.

“We’re all very confused,” she rues.

“Everything has stopped and I have no information at the moment. Hopefully, after Ramadan, I will have a better idea of what the situation is like in the market.

But right now, we don’t even know who the ministers for each portfolio are, when the government will be formed or what happens next.”

Pegging recovery hopes on Ramadan is a sensible move says Assam, since the government is – technically – meant to be formed during July, which coincides with the holy month in 2014.

“Ramadan is meant to be the month of forgiveness and peace,” he says. “It has unfortunately become about politics in Iraq this year. I don’t think the ‘Ramadan factor’ will necessarily deter any violence, but I’m hopeful.

Maybe it will be a good omen for the country.”

Safe havens The south of Iraq and the Kurdistan region remain relatively safe for firms operating in the country

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executive iNSiGHtS

Vick Mamlouk

“The future of railway wireless networks in the Middle East will depend on 4G technology capabilities”

Wireless in trains Vick Mamlouk, VP of Wireless Sales, CommScope MEA on the how the region’s upcoming railways sector can benefit from the latest wireless communication technologies he Middle East has set aside $250bn for rail projects, with the UAE, Qatar and Saudi Arabia being allocated the largest budgets. According to the National Transport Authority (NTA), the UAE is investing more than $22.41bn railway projects including the Etihad Rail, Abu Dhabi Metro, Abu Dhabi Light Rail, Dubai Metro and Al Sufouh Tramway.

The Dubai Metro, launched in 2009, was the first urban train network in the Arabian Peninsula, while the upcoming Al Sufouh tramway will start operating in November 2014. Dubai Metro’s wireless connectivity has been set for upgrade in order to achieve a major improvement in services and enhance the efficiency of the metro’s wireless network.

The future of railway wireless networks in the Middle East will depend on the deployment of fourth generation or 4G technology capabilities. These advanced systems, based on Long-Term Evolution (LTE) technology, will allow the railway wireless network to be integrated into a

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single communication infrastructure.

Wireless networks based on 4G can enhance passenger experience on highspeed trains by providing both broadband Internet and mobile phone coverage, and enabling video calls to homes and offices through wireless and mobile networks.

When travelling, passengers expect their wireless devices to function reliably and properly, no matter where their journey takes them. At times, it can be hard to get a strong enough signal in your own home — much less on a moving object!

Railway operators must overcome several unique obstacles that threaten reliable wireless service. These include: • Train speed: High-speed trains force rapid signal handovers between cell sites, threatening continuous connectivity from cell to cell • Limited capacity: When entering a macro cell, especially in urban areas, stationary passengers must share capacity with those in transit • Train construction: Thick metal windows prevent signal penetration, increasing the chance of lost or dropped calls

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• Difficult terrain: Track location can add complexity to the RF signal path However, technologies like Distributed Antenna Systems (DAS) can seamlessly coordinate the complexity of these challenges, by fully enabling in-train wireless access. This enables passengers to communicate freely via the devices they prefer. At the same time, safety personnel and fleet staff can become more responsive.

With comprehensive in-train coverage solutions, passengers can have an optimised experience during transit for both cellular and Wi-Fi. Rail operational coverage with public safety/GSM-R solutions can help keep passengers and train personnel safe.

With the Middle East region still in early stages of the railway network development, it is important for railway operators to ensure they implement, from the onset, the necessary wireless infrastructure that will be able to cater for future growing demand.

Moreover, wireless service providers can add more users to their network and generate more revenue, while train operators can gain a competitive advantage over other forms of travel.

EvENTS

Also in October…

POWERGEN MIDDLE EAST 12–14 OCTOBER, 2014, ABu DHABI Attracting delegates and attendees from over 50 countries across the MENA region and around the world, this event is the industry’s leading platform to meet and network with senior executive and industry leaders.

Contact: Sue McDermott Tel: +44 1992 656 632 Email: suemc@pennwell.com www.pennwell.com

HAPPENING IN OCTOBER

SEATRADE MIDDLE EAST MARITIME 28-30 October, Dubai he 7th biennial Seatrade Middle East Maritime (SMEM) exhibition and conference will take place at the Dubai International Convention and Exhibition Centre, as part of Dubai Maritime Week.

Held under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, more than 8,000 participants are expected to attend the 2014 exhibition and conference.

Speakers and delegates representing international and regional shipping operators, ports, financiers and associated maritime professionals will be welcomed by international broadcaster and journalist, Mishal Husain, who is confirmed as this year’s keynote session moderator and master of ceremonies for the 2014 Seatrade Maritime Awards.

Husain will open up keynote proceedings and introduce HE Khamis Juma Buamim, Chairman & Group CEO, Drydocks World and

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Maritime World and Colonel Rashed Al Hebsi, CEO, Tasneef Emirates Classification Society, who will address the prospects for the region’s shipping companies and their international partners as the world economy continues to grow and ease out of global recession The Seatrade Middle East Maritime conference includes an Economic Forum session on day one, moderated by Marcus Machin, CEO, Tufton Oceanic Middle East.

Port Investment and Logistics will be addressed on the morning of day two, with input from experts such as Michael Deleuran – Milaha in Qatar, Dimitris Kostianis, Saudi Ports Authority; Alan Murphy, SeaIntel Maritime Analysis and Dirk Van den Bosch, Chief Commercial Officer, DP World UAE Region.

Bunkering issues in the region are also high on the agenda, with Captain Farhad P Patel, Director, Sharaf Shipping Agency moderating the session.

Contact: Seatrade Middle East Tel: +971 43245344 Email: cmorley@seatrade-global.com www.seatrade-middleeast.com September 2014

FuTuRE DRAINAGE NETWORkS SAuDI ARABIA 20–22 OCTOBER, 2014, DuBAI The event comprises of two one-day workshops in Jeddah and Riyadh respectively, targeted at sewage, drainage and utilities professionals. The format includes presentations, roundtables, panel sessions and networking opportunities.

Contact: Advanced Conferences & Meetings Tel: +961 5 959 111 Email: nour.naffi@ acm-events.com www.acm-events.com MENA RAIL AND METRO SuMMIT 2014 20–22 OCTOBER, 2014, DuBAI Now in its 10th year, MEED’s MENA Rail & Metro Summit incorporates a focussed agenda exploring key themes and issues regarding projected rail plans, with case studies by GCC and MENA stakeholders and operators.

Contact: Chichi Osagawu Tel: +9714 368 1644 Email: sponsorship@meed.com www.meedrailprojects.com

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#007 Hejaz Railway Carefully restored tourist attractions and coffee-table books are all that remains of the Middle East’s first regional railway 014 has been a year of commemoration of 100 years of World War I. Perspectives about conflicts will always differ depending on which side is writing it. While memories of the ‘Great War’ has always evoked mixed emotions in the Middle East, one of its little known tragedies is that the war put paid to the region’s fledgling rail ambitions. In recent years, though, these ambitions have staged a come back, mainly in the Gulf Cooperation Council (GCC) area.

Railways have always played a major role in the economic development of the advanced economies, especially Western Europe and North America.

The Hejaz Railway, which ran between Damascus and Medina, was expected to do something similar for the region while also promoting closer social and

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cultural integration of the Arab world.

Commissioned by the last Sultan of the Ottoman Empire Abdulhamid II in 1900, the 1,302km-long railway started operations in 1908. Built by public subscription and German advice, the Hejaz Railway, which operated for a mere eight years, was celebrated worldwide as an “extraordinary feat of engineering and endurance” when it opened.

The railway achieved its primary objective of cutting down the travel time from Istanbul to Islam’s holy site of Medina to five days from 40 odd days.

However, the Ottomans also viewed the project as a means to tighten control over their Arab provinces and protect the Hejaz region from the imperial adventures of their European rivals.

But the loss of custom caused by the migration of pilgrim traffic to the railways meant that local Bedouin tribes were always resentful of this ‘Iron Camel,’ which had usurped their livelihoods. And when the Ottomans decided to back what September 2014

Fast facts Start of operations: 1908 Length of the railway: 1,302km Number of stations: 80 Project cost: 5m Ottoman gold dinars End of operations: 1920

turned out to be the losing side in the world war, the railway’s fate was sealed.

Labelled as a military threat to allied efforts, the line became the target of a sustained campaign of guerrilla attacks and sabotage by local tribesmen led by the celebrated Captain TE Lawrence of the British Army.

In his book ‘The Hejaz Railway’ James Nicholson notes that “it is also the case that without the Hejaz Railway there may never have been a Lawrence of Arabia” as it is “hard to imagine how his story could have developed in quite the same way had he been ambushing tanks or digging trenches in the sand.”

After the fall of the Ottoman Empire in 1920, this magnificent piece of infrastructure was never re-opened. The Hejaz Railway now exists as a historical heritage of restored or abandoned rolling stocks, stations, intermittent tracks and museums in Saudi Arabia, Turkey and Syria; only Jordan has restored its part of the railway.

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