Construction Week - Issue 328 by ITP Business Publishing

ANALYSIS WILL THE QATAR-BAHRAIN CAUSEWAY EVER GET BUILT? N E W S • A N A LY S I S • I N T E L L I G E N C E • P R OJ E CT S • C O N T R ACT S • T E N D E R S

AN ITP BUSINESS PUBLICATION LICENSED BY DUBAI MEDIA CITY

Land of opportunity? The pros and cons of latching on to Libya Page 36

JULY 3–9, 2010 • ISSUE 328

CONSTRUCTIONWEEKONLINE.COM

Stock stars 2010’s best performing construction shares Page 42

SHARP FOCUS Wael Allan on how Hyder has changed its business for the better

COMMENT

CONTENTS JULY 3-9, 2010 • ISSUE 328

GOLDMINE OF NEW MARKETS CW looks at the risks and opportunities of Libya’s fastgrowing construciton market.

REGULARS

10 16 18 56

ONLINE EDITOR’S LETTER GUEST COLUMN FOREMAN

INTELLIGENCE

SUBCONTRACTORS SOON TO BID FOR LAGOON CONTRACTS Subcontractors will be able to bid for MEP and ﬁnishing works contracts on Dubai Lagoon in 3-4 months. FINANCE

TAIBA CHARTS DIFFICULT Q2 Taiba Holdings saw its steepest oneday drop on 27th June towards the close of a difﬁcult quarter.

ANALYSIS

LOST CAUSEWAY The Qatar-Bahrain Causeway is a long-running story, but will it have an end?

STOCK STARS

THE GCC STOCK STARS CW proﬁles the biggest construction industry stock market winners of the year.

ON SITE

STEADY PROGRESS Ruﬁ Twin Towers in Dubai Sports City is toughing out market conditions to maintain steady progress.

COUNTRY PROFILE

GOLDMINE OF NEW MARKETS The risks and opportunities of Libya’s fast-growing construction market.

FACE TO FACE

SECTOR FOCUS

ROUND UP

26 12

QATARI DIAR IN UK LAW SUIT Qatari Diar has lost its case against UK property company CPC Group in a British court.

ENGINEERING DISCIPLINE Hyder Consulting’s Wael Allan tells Stuart Matthews about the changes made to focus the company on the business that matters.

GROUNDFORCE As money trickles back into the construction industry, piling and foundation companies are still feeling the pressure. JULY 3-9, 2010 CONSTRUCTION WEEK 1

The most important project, contract and tender information, updated every week

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2 CONSTRUCTION WEEK JULY 3-9, 2010

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INTELLIGENCE

Zone 2 of the Dubai Lagoon project covers 1.1m ft2 and is due to be completed before the end of 2012.

Tenders of note Subcontractors to bid for Dubai Lagoon contracts in 3-4 months

ubcontractors will be able to bid for the MEP and other finishing works contracts on the ‘Dubai Lagoon’ project within the next three to four months. The residential project, being developed by Schön Properties, will require one or two additional contractors for each set of works, depending on the size of the subcontractor. For Zones 2 and 4, there are seven subcontracts outstanding, including the MEP and elevator contracts, and those for finishing works such as joinery, paint work, marbling and kitchen fit-outs. Meanwhile, Zone 3, scheduled for completion at the end of 2011, will also require subcontractors to carry out the MEP works. Salah Yatim, the Project Director for Commodore Contracting Company, the main contractor for Zones 2 and 4, said: “We will be finalising the other packages for Zones 2 and 4 4 CONSTRUCTION WEEK JULY 3-9, 2010

with Schön in the near future. Each package will be awarded according to the plan for the program of works. One or two subcontractors will be required depending on the size of the company and whether or not they can cope with the work across the two Zones.” Vice President for Schön Properties Danial Schön said: “We will hopefully be inviting companies to bid for the additional subcontracts for Zones 2, 3 and 4 in the next three to four months, depending on the market conditions.” The development, which currently covers 1.9 million ft2 and consists of four separate residential Zones, will be handed over to end users in stages, with different contractors working on different Zones at different times. The MEP works for Zone 1 have already begun with a view to handing over the ﬁrst eight residential towers before the end of 2010. – By Elizabeth Broomhall

INTELLIGENCE For upto the minute tenders log in to constructionweekonline.com

Firms have sights set Millions put aside to on new Saudi Mall fund Oman projects Construction companies with experience working on shopping malls have their sights set on a new SR75m shopping centre in Taif, Saudi Arabia. Rosa Mall, being developed by real estate ﬁrm Aqari Investment Holding, is set to be the biggest of its kind in the region. Since the mall is scheduled for completion in just two years, it is expected that subcontracts will be awarded quickly. Some of the construction work has already begun, the mall being a high priority for the developer and a key part of KSA’s tourism development programme. It will be located on the most commercially viable part of Jeddah, Taif-Riyadh Road, covering a total area of almost 120,000m2 and providing as many as 276 shops for tourists and travelers.

Oman’s Ministry of Finance has approved eight new construction projects totaling OMR50.5m (AED481m). One of the projects – expansion of a gas production facility in Salalah – has a budget of OMR19m, whilst a new court complex in Rustaq is estimated to cost OMR10m. Other projects include a technical support unit for staff at Muscat’s College of Technology, costing OMR6.4m, and a building for the college of sciences at Sultan Qaboos University, for which OMR3.5m has been put away. Additionally, OMR 858,000 has been set aside for constructing the Hubra and Al Lagal school in the wilayat of Wadi Al Maawel, whilst further funds have been allocated for a school in Al Qoof and tourist sites in Al Jabal Al Akhdar .

The Lusail Expressway project is part of Qatar’s efforts to remodel infrastructure.

Lusail Expressway contract open to bidders before August Qatar’s Public Works Authority (Ashghal) will be inviting contractors to bid for the construction of the new Lusail Expressway project by the end of August 2010. Executives conﬁrmed to reporters at MEED’s Qatar Transport Projects 2010 conference that the client

is keen to have a contractor on board before the end of the year. The 12km expressway, with seven lanes in both directions, will run from Doha to Lusail, stopping at all new areas of development including the Pearl Qatar, the Ritz-Carlton Hotel, the Towers Zone, the

New Diplomatic Area and Cultural Village. As one of the biggest developments of its kind in the region, it is being treated as a priority project by the Qatari Public Works Authority, which is keen to get the project started as quickly as possible. Currently, it is anticipating that construction will take as long as 36 months, though a formal, scheduled completion date has not been ofﬁcially conﬁrmed. The project is one of several developments for which tender offers will be announced this year, in accordance with the authority’s ongoing efforts to remodel the infrastructure of the state on par with international standards.

TOP TENDERS Construction of Yanbu Power and Desalination Plant Country: Saudi Arabia Closes: Sep 22, 2010 Category: Power & Water Issuer: Saline Water Conversion Corporation Rehabilitation of All Fire Fighting System at Shuqaiq Plant Country: Saudi Arabia Closes: Aug 22, 2010 Category: Infrastructure Issuer: Saline Water Conversion Corporation Construction of 380-kV Ras AlZour Substation Country: Saudi Arabia Closes: Aug 21, 2010 Category: Power & Water Issuer: Saline Water Conversion Corporation Annual Maintenance of Track Roads in Al Dakhliyah Region Country: Oman Closes: Aug 2, 2010 Category: Infrastructure Issuer: Ministry of Transport and Communication Jaber Ahmed Al-Jaber Al-Sabah Bridge (Al Subiya Connection) Country: Kuwait Closes: Aug 8, 2010 Category: Infrastructure Issuer: Central Tenders Committee Construction of 380-kV Ras AlZour Substation Country: Saudi Arabia Closes: Aug 21, 2010 Category: Power and water Issuer: Saline Water Conversion Corporation Housing complex, Phase 2 Buildings Country: Saudi Arabia Closes: Jul 31, 2010 Category: Residential Building Issuer: Saline Water Conversion Corporation Housing Complex in Different Areas of Saudi Arabia - Phase 2 Country: Saudi Arabia Closes: Jul 31, 2010 Category: Buildings Issuer: Saline Water Conversion Corporation Construction of New Ahmadi Hospital & Residential Building Country: Kuwait Closes: Jul 27, 2010 Category: Industry Issuer: Kuwait Oil Company JULY 3-9, 2010 CONSTRUCTION WEEK 5

INTELLIGENCE For upto the minute tenders log in to constructionweekonline.com

TOP TENDERS Refurbishment of Several Pumping Stations - Phase 8 Country: Qatar Closes: Jul 27, 2010 Category: Power & Water Issuer: Public Works Authority Construction of Royal Commission Public Housing Country: Saudi Arabia Closes: Jul 25, 2010 Category: Residential development Issuer: Royal Commission for Jubail & Yanbu Supervision Consultancy Services for an IWPP in Salalah Country: Oman Closes: Jul 19, 2010 Category: Power & Water Issuer: SAOC

Dubai was the ﬁrst city in the Gulf to introduce rail with a view to reducing car usage and easing congestion.

Iraq monorail contract for Canada Consortium

Arabtec wins Qatar World Trade Centre contract

Canadian consortium Transglobim International has been awarded a $600m contract to build Iraq’s ﬁrst monorail system in Najaf city. The second of its kind in the Gulf after Dubai, the monorail is among a number of planned large scale projects in Iraq, including a multi-billion dollar metro system in Baghdad. The aim is to ease the transport crisis, congestion and clogged streets in Najaf, particularly during holy days and on occasions when thousands of pilgrims jam the city’s medieval streets to receive rites. 37km long, the monorail system will link three major mosques in the city: Inam Ali, Kufa and Sahla, with two large bus depots. The second phase of the project will connect the new Najaf airport to the rest of the monorail. The entire project is scheduled to complete in 30-36 months.

Arabtec has inked a deal with the Qatar General Insurance and Reinsurance Company to build the QAR520m (AED524m) Qatar World Trade Centre tower in Doha. The 50-storey tower will include a spherical auditorium with a capacity of 523 fixed-seats, a 1775m2 multi-purpose hall for conferences and exhibitions, and five floors of executive offices. The top floor will feature a circular Business Club with high levels of service and breathe-taking views of the city of Doha. The tower offers four-storeys of car parking space for up to 1169 cars. Preparation work started on the site in April, Arabtec’s Riad Kamal saying that the project should take 26 months to complete. Piling works have been completed and the construction work has commenced. The scheduled completion date is the end of summer of 2012.

Upgrading of Khuwair South Substation Country: Oman Closes: Jul 19, 2010 Category: Power & Water Issuer: SAOC EPC for Upgrading Water Supply System at Kumzar Plant Country: Oman Closes: Jul 19, 2010 Category: Power & Water Issuer: SAOC Bridge and Intersections in Yanbu Industrial City Country: Saudi Arabia Closes: Jul 13, 2010 Category: Infrastructure Issuer: RCJY Installation of Package Sewage Treatment Plant at Daqum Country: Oman Closes: Jul 12, 2010 Category: Infrastructure Issuer: Ministry of Regional Municipalities & Water Resource Construction of 24 Classrooms Al Ahnaf Bin Qais Country: Oman Closes: Jul 12, 2010 Category: Educational facilities Issuer: Ministry of Education

MATERIALS PRICE CHECK

$3.27

$748.67

$3.81

$32.67

$4.36

$72.15

$98

$721.45

$14.97

$640

$10.88

Alum. profiles

Beech wood

Cement

FF plywood

Glass Per m 2

MDF

Ready mix

Red meranti

Scfldi planks

Steel

Steel props

Per tonne

Per piece

Per tonne

Per piece

Per KG

Per m

Per bag

6 CONSTRUCTION WEEK JULY 3-9, 2010

Per sheet

Per m

FINANCE STOCK MARKETS

Taiba charts difficult quarter Taiba Holdings saw its steepest one-day drop on 27th June towards the close of a difﬁcult quarter for the Saudi developer. A fall of 1.2% had continued a slide from SR16.6 to 16.15, down 2.7%, between 20th June and beginning of last week. It reverses a brief resurgence in stock price that fell to as little as SR16.05 on 25th May, having begun April at SR17.5 – a fall of 7.7% for the quarter. In the last couple of weeks it had announced that it was not going to pay a dividend due to a payment delay from the Ministry of Finance. The stock performance of the Madinah-based ﬁrm is similar to many developers still feeling the pressure of a slowdown in some projects and construction. The company has underperformed the Tadawul All Share Real Estate Development Industries Index throughout this year.

Taiba, based in Madinah, has seen a share slump despite major projects across all sectors in the Kingdom.

One year price analysis A slide last July turned to high growth six months later. Share price in USD 2009

Share price in USD 2010

18.00

17.50

17.00

16.60 16.20

16.50

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Expert Views Aldar Properties PJSC A fall in sales has hit the property giant’s results hard – but what of its share performance?

8 CONSTRUCTION WEEK JULY 3-9, 2010

Aldar Properties saw its revenue slashed by more than half in its ﬁrst quarter results for 2010 compared to that of the previous year, concluding in a net loss of AED314.2 million. Nevertheless it has also been in the headlines for the right reasons, including progress at key sites and new business awarded to contractors. Among its major developments are Al Raha Beach and Al Falah, the latter a government project – a competitive portfolio at any point of the economic cycle. Dubai-based stock analysts have looked past the shrunken proﬁts to maintain a broadly bull-

ish view of the company. Majed Azzam at Al Futtaim HC Securities recently recommended a ‘buy’ for the equity, just as for rival Emaar Properties PJSC. Credit Suisse believed, on 3rd June, that the company would outperform by 0.86%, a conclusion reached too by Amberjeen Jimani of Securities & Investment Company, who expected an outperformance of 1.32% in May, and Justin Tartalo at Calyon Credit Agricole Chevreux. Sana Kapadia at EFG Hermes, however, remained neutral on the company, predicting a return of 13.30% and outperformance of 29.01% at the end of May.

THE VERDICT BUY: keep the faith and even add to your position. This is the strong message from those keeping an eye on the market.

FINANCE

Al Jouf Cement Company:

TEN BIGGEST RISERS

Oman export statistics:

SR650

26.6%

millions that could be raised:

rise in commodity exports:

5.7%

11.39%

fall in Saudi cement index since 3rd April:

fall in export value of transport equipment:

Al Jouf Cement and KSC launch IPOs

Omani tools don’t cut it as exports decline

Saudi contractor Abdullah A.M Al Khodari Sons Company (KSC) and Al Jouf Cement Company have launched initial public offerings as mega projects in the Kingdom spur construction ﬁrms to restructure their business to capitalise. KSC, which has a focus on the Eastern province, will issue 12.75 million shares, equivalent to 30% of the company. The offer will run between 4th - 10th October later this year. Al Jouf, a joint closed stock company, will issue the equivalent of half its total outstanding shares, the Capital Markets Authority announced last week. The offer price for the 65 million shares will be SR10 per share and will run from 7th July to 13th July. The company’s market capitalization is SR1.02 billion.

Exports of construction-related equipment, tools and machinery in Oman fell more than 45% in a year, according to official statistics. The National Economy Ministry revealed in a bulletin that despite an increase in commodity exports overall for January 2010 by more than 26% compared to the same month last year, building based products saw sharp cut-backs. Imports for tools, equipment and electrical appliances fell 36.4% compared to 35.6% for transportation equipment. Oman’s cement companies has been hit particularly hard in the last two years, based on dwindling demand. Analysts say these firms and UAE rivals are selling into each other’s market to sustain a profit as sale orders fall and the cost of production continues to increase.

National Industrial : +14.29% Zamil Industrial : +9.52% Kuwait Co. for Processing : +9.26% Mushrif Trading : +6.67% Combined Group Company : +6.10% Fujairah Buildings : +5.98% Galfar Engineering : +5.79% Abu Dhabi National Co.: +4.40% Drake & Scull International : +3.59% Saudi Arabian Am : +2.78%

TEN BIGGEST FALLERS Gulf Cement Company : Specialities Gro: National Marine Dredging Co: Salbookh Trading: United Projects Group: National Cement Company: Kuwait Building: Umm Al Qaiwain: Saudi Vitrified Clay Pipes: Gulf Rocks Company:

-9.60% -7.27% -6.67% -5.00% -4.84% -4.82% -2.78% -1.92% -1.89% -1.82%

SECTOR INDICES Banking Insurance Finance & Invest. Real Est & Constr Transportation Utilities Materials Consumer Staples Telecoms

+1.19 -2.72 -6.21 -10.71 -0.53 -1.80 0.00 0.00 0.00

+0.22% -0.09% -0.34% -0.38% -0.11% -0.26% 0.00% 0.00% 0.00%

(Data accurate as of close 26 June 2010)

Update 10 latest Qatar project updates PROJECT TITLE

STATUS

VALUE / VALUE RANGE (US$)

REFURBISHMENT OF 13 SCHOOLS IN DOHA AND VILLAGES

Construction

11,000,000

CONSTRUCTION OF DOHA EXPRESSWAY, PACKAGE 7

CONSTRUCTION

438,000,000

REFURBISHMENT OF BROADCASTING & TELEVISION COMPLEX

Construction

33,000,000

CONSTRUCTION OF MEDICAL TRAINING CENTRE IN AL-KHOR HOSPITAL

Construction

5,000,000

DOHA SOUTH SEWERAGE TREATMENT WORKS - PHASE 2

Construction

190,000,000

CONSTRUCTION OF ROADS IN VARIOUS ZONES IN QATAR

Construction

13,000,000

QATAR NATIONAL MUSEUM

Design

TBC

EDUCATION CITY - ISLAMIC STUDIES CENTRE

Design

TBC

HAMAD MEDICAL CORPORATION STUFF RESIDENCES IN AL KHOR

Construction

81,000,000

MUSHEIREB DEVELOPMENT - PHASE 1-A

Construction

425,000,000

JULY 3-9, 2010 CONSTRUCTION WEEK 9

ONLINE

For breaking news, analysis, interviews, tenders and projects, log on to constructionweekonline.com

MOST POPULAR

1 2 3 4

Kilometre high Kuwaiti tower ‘will get built’

KEO wins contract for new Riyadh monorail

Four men killed after sixstorey plunge in Sharjah All systems go at region’s largest airport

Strabag Oman lands OMR27.6m Sohar airport contract

IN PICTURES

Thousands of men are working over 16 residential towers plus ofﬁce space, villas and townhouses.

Bustling beach project on track Heading toward a handover in the first half of next year, Aldar’s Al Muneera, part of Al Raha Beach, is a busy construction site, on track for its scheduled completion. Dubbed the ‘great Arabian water city of the twenty-first century’, the project is one of 11 precincts within the larger Al Raha beach development, and one of the most high profile projects of the last five years. Creating this novel, mixed-use complex, just next to the 5.2 million m2 natural beach, the developers (Aldar Properties) are looking forward to accommodating as many as 120,000 residents at any one time, with a total built up area of 594,000m2 allowing for 254,500m2 of residential space. When constructed, the complex will include two distinct areas, island and mainland, divided by a canal, and themselves including residential towers, sea-facing villas and canal-facing townhouses. Currently, Drake and Scull’s Abu Dhabi arm are working on the MEP works alongside main contractor Al Futtaim Carillion.

CW takes a look at some of the most novel solarpowered units from Germany to China

LATEST FEATURES

Analysis Shore investment -How the Hamriyah Free Zone is revitalising Sharjah’s economy Sustainability The green revolutionaries CW catches up with those leading the way on sustainability in the GCC

SPOT POLL How safe do you feel while working on site?

43.2%

25%

22.7%

9.1%

Very, management is very strict on PPE use.

There have been lapses in safety, but nothing serious.

Not very. There is a lot of room for improvement.

I dread going to work. I’ve had too many close calls.

10 CONSTRUCTION WEEK JULY 3-9, 2010

The solar challenge

Metal monitor Constructing steel prices – To what extent does the construction industry inﬂuence steel prices?

HOW TO BE GREEN AND PROFITABLE

September 28th 2010 Fairmont Bab Al Bahr Abu Dhabi The Building Sustainability into the Middle East conference is the ideal platform for you to learn, discuss and network with the leading companies and individuals driving the region’s sustainability initiatives. For contractors, developers, sustainability consultants and engineers, this conference is an opportunity to be part of the solution and make a difference – from the construction phase to the behaviour of tenants in buildings. To sponsor the 3rd Building Sustainability into the Middle East Conference contact Andrew Parkes, tel: +971 4 210 8570, email: andrew.parkes@itp.com PLATINUM SPONSOR

ENDORSERS

SILVER SPONSOR

MEDIA PARTNERS

ROUND UP

LEGAL

Qatari Diar gets partial reprieve in UK law suit Qatari Diar has lost its case against UK property company CPC Group Ltd after a British court ruled that the developer had wrongfully withdrawn plans for the development of the luxury Chelsea Barracks development. After a month of court activity, Judge Geoffrey Vos last Friday ruled that the company had breached its contract with CPC Group, controlled by real estate entrepreneur Christian Candy, and must pay damages in an amount to be determined at a later date. The ruling decided that Qatari Diar, the real estate arm of the state’s sovereign wealth fund, had withdrawn its design for the development following pressure from Sheikh Hamad Bin Khalifa Al-Thani, the emir of Qatar following discussions and letter correspondence with HH Prince Charles, who was said to have opposed the prospective design. However, the judge ruled that Qatari Diar was ‘between a rock and a hard place’ and had not acted in bad faith.

“The effects were, I suspect, exacerbated by the inevitable publicity which followed,” he added, referring to the opposition of Prince Charles which was ‘unexpected and unwelcome’. The ruling has brought stern criticism of the prince by Ruth Reed, president of the Royal Institute of British Architects. She said that Charles used inappropriate and 'behind the scenes' tactics to have the plans withdrawn. “The UK has a democratic and properly constituted planning process: any citizen in this country is able to register their objections to proposed buildings with the appropriate local authority,” she said. Candy, one half of the highly successful British luxury apartment developer Candy & Candy with his twin brother Nick, bought the Chelsea Barracks plot in February last year, paying the Ministry of Defence an estimated GBP959 million with help from the Qatari government. – By Ben Roberts

Christian Candy (left) leaves the High Court in central London.

In Quotes “I am sure that with time and proper education, the market will ccome to realise the beneﬁts of sustai sustainability, both for the environm environment and the botto bottom line.” BASIL A ABDULAZIZ, MD of Johnson J Controls Saudi, S on the likely lik spread of sustainable su thinking.

12 CONSTRUCTION WEEK JULY 3-9, 2010

“If Dubai continues to be a future place for people to live in the Middle East region, then it’s going to thrive.” TOM BOWER, MD for WSP, on Dubai’s future prospects.

“The end user has to make up their minds: go with one of the newer regional systems or one of the more mature systems such as LEED.” ISSA AL-MOHANNADI, Qatar Green Building Council, has a pragmatic answer to the problem of picking a ratings system.

ROUND UP

Around the GCC

4 1

Carl Court/AFP/Getty Images

“What we’re seeing is a real awakening for renewable energy.” SAMI KHOREIBI, CEO of Enviromena Power Systems, talking up his industry after the UAE government launched a solar roof program in the capital, a 500 megawatt pilot scheme spearheaded by the company.

1. KSA

4. BAHRAIN

Truckers queue after blaze

Bahrain ban begins

A fire at the border between the UAE and Saudi Arabia last week created chaos for heavy truck drivers wishing to pass. The first started in one truck and quickly spread to a further seven in the queue, completely engulfing them. Nobody was injured in the fire but the tailback, already 25km long, worsened when officials closed the Al Bat’ha checkpoint overnight as a result of the fire. Driver misery was further compounded by the complex Saudi immigration rules, which were introduced last year, and requires every driver to be fingerprinted on every journey – in and out the country, in addition to normal checks.

Bahrain’s midday work ban came into force on July 1, with ofﬁcials warning that any companies caught violated the law will face severe consequences. The ban will last for two months and is in force between the hours of 12-noon and 4pm.

2. QATAR

3. OMAN

5. SHARJAH, UAE

Cup glory ahead for Qatar?

Island link plan for Oman

Four die in fatal fall at mall

Qatar is to build a scaleddown prototype of its air-conditioned stadium concept in a bid to convince FIFA ofﬁcials that it can successfully host the 2022 football World Cup. While action during this year’s event in South Africa is still underway, attention is turning to the feasibility of Qatar’s bid to host the event in 10 years time. The event is hosted during some of the hottest months of the year – and temperatures in Bahrain this year have already topped 45 degrees.

Oman’s Ministry of National Economy is to look in to the viability of a causeway linking Masirah Island with the rest of the sultanate. Economy Minister and deputy chairman of the Financial Affairs and Energy Resources Council, Ahmed bin Abdulnabi Macki said that His Majesty Sultan Qaboos bin Said had given royal orders to his ministry to have the matter investigated. Masirah is an island off Oman’s east coast, with a population of around 12,000 in 12 villages.

Four workers were killed after falling six-storeys when the maintenance cradle they were working in collapsed at Sharjah’s Ansar Mall. Three of the men died at the scene and the fourth later succumbed to his injuries in hospital. The men were erecting an advertising banner for a new restaurant when the incident occurred at around 3.30am. Sharjah police have launched an investigation in to the accident, and have not ruled out the possibility of criminal proceedings.

JULY 3-9, 2010 CONSTRUCTION WEEK 13

ROUND UP

UAE hotel investment tops MENA

FREDERIC J BROWN/ AFP / Getty Images

The UAE is continuing to invest heavily in tourism according to a report which revealed it has the highest number of hotels in the construction pipeline across the MENA region. The May 2010 STR Global Construction Pipeline Report, stated the UAE had 55,629 rooms under development, compared with 15,770 in Saudi Arabia. Dubai alone has 32,516 hotels rooms planned and 16,510 rooms already in the construction phase. There are 468 hotels with around 127,938 rooms planned in the MENA region, the report said. Among the hoteliers planning to build hotels in the region is Spanish hotel group Sol Melia, which plans to open its ﬁrst Middle East hotel - a ﬁve star, 167-room Meliá Dubai - in 2011. Regional tourism remains popular. Saudi's Commission for Tourism and Antiquities is expecting 2010 tourism revenue to increase by 4.8% while the Abu Dhabi Tourism Authority (ADTA) says that the number of hotel guests staying in the emirate rose by 12% year on year.

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WORKERS PREPARE THE CONSTRUCTION SITE for the future eco-friendly assembly line of the Airbus 1350 XWB plane, in the Saint-Martin-du-Touch plant, near Toulouse, southwestern France.

UTILITIES

Power demand expected to grow 9.5% annually Power suppliers are working on projects that will almost double the amount of power supplied to countries in the UAE by 2015 – but it may still not be enough to satisfy demand. The regional electricity network that services four GCC countries including Qatar, Bahrain, Kuwait and Saudi Arabia says that an additional 55,000MW of power will be produced in 2015. The ﬁrst phase of the combined transnational power grid was

completed in the second half of 2009, and the UAE could be added to the grid this year. Regional capacity stands at 75,000MW and it’s anticipated that power demand in the region will grow 9.5% annually, requiring more electricity and more energy projects to be completed to cope. New projects will add 44% more power to the region by 2015, but some experts believe that this may still not be enough. BUSINESS

Arabtec paid by Nakheel The UAE’s biggest construc-

tion contractor Arabtec has received payment from cashstrapped developer Nakheel. Construction Week also understands that some more of Nakheel’s trade creditors, namely KEO International and Van Oord, were also among those to receive funds. The revelations come after months of speculation as to how the developer of the Palm Jumeirah would pay off its AED91 billion-worth of debt. Indications are that trade creditors are in the process of being paid AED 500,000 each. Those owed less are being paid in full.

In Numbers

600

Value in millions of dollars for contract to build a monorail in Najaf, Iraq.

14 CONSTRUCTION WEEK JULY 3-9, 2010

27.6

Value in millions of Omani riyals of Sohar airport contract won by Strabag Oman.

Storeys in proposed Qatar World Trade Centre building.

ROUND UP

PMV

Caterpillar looks forward to growth The chief executive of Caterpillar is expecting revenue to increase by a quarter this year. James Owens, speaking to reporters after a conference in Lima, added that the world’s largest supplier of construction vehicles would see a 65% rise in exports. Caterpillar saw sales and revenue drop from $51.324 billion to $32.396 billion last year, a 37% decrease. Fourth-quarter sales and revenues were $7.898 billion, down 39% from the fourth quarter of 2008. At the beginning of this year it expected to see an increase in sales of between 10-25%. PROJECT

Dubai Lagoon makes progress The company behind the massive Dubai Lagoon project says it has made “impressive progress” on the development, adding that the ﬁrst phase of the development, Zone 1 will be ﬁnished by the end of the year. The company also revealed that it is in the process of short

listing leading companies to be invited to bid on the infrastructure works, MEP and other finishing works for the project. The US$815 million development totals 130 acres and Zone 1 is the closest to completion, with main contractor Bin Sabt revealing that they are expecting to finish building C+10 first, followed by C9, H11, and C12 by November. The second batch, which will include buildings C7, C8, C13, and C14, is scheduled for delivery by year-end. On Zone 3, main contractor Belhasa is ready to start works on buildings A19 and A23. With a view to complete the full structure within the next 12 months, and the MEP works and finishing six to seven months thereafter, the contractor is confident that the zone will be ready for delivery by the end of 2011.

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JULY 3-9, 2010 CONSTRUCTION WEEK 15

COMMENT

STUART MATTHEWS

Fire starters

N THE NEWS, SOME STORIES are seasonal.

In the Gulf there are three distinct stories that roll round every year. In winter it’s the annual downpour, which brings flooded streets, traffic chaos and site shut downs. Calls for better drainage and infrastructure improvements follow shortly afterward. Come summer and the headlines turn to the midday work ban and the less predictable, but far more dangerous, spate of fires. In the last few weeks we’ve had a run of them and while the region has a patchy history on fire safety, it is always visibly worse around this time of year. So what’s happened so far? An oil and chemical storage unit at a factory in Dubai’s Al Quoz was razed by fire. In Ajman a rubber factory caught alight. A blaze in a cargo vehicle at the Saudi/ UAE border added to the usual crossing chaos as the tailback, already 25km long, was made even worse when a checkpoint was closed for a day. In Abu Dhabi a fire broke out at an apartment building, Alrayyana, being constructed adjacent to the Abu Dhabi Golf Course. There, workers were uninjured thanks to observance of the midday break, but reports suggest that the dry and windy conditions exacerbated the issue, causing the fire to spread to the top floors of three more buildings, before it was contained. Elsewhere in Abu Dhabi two apartments were destroyed in a fire that broke out at in an 11-storey building in the Tourist Club Area (TCA). This is just a smattering of the latest fire stories from a few main centres. The question is what can be done to ease the burden being placed on each municipality’s civil defence force? 16 CONSTRUCTION WEEK JULY 3-9, 2010

While there have been improvements in fire protection systems and their regulation over the years, the authorities need to continue to provide guidelines and recommendations to enhance the quality of fire protection and fire safety on a regular basis. Authorities have, for the most part, shown their willingness to clamp down on fire safety regulation. Abu Dhabi, for example, is implementing an International Fire Code, based on the International Code Council standards in the US, requiring all new buildings and extensions to have emergency exits, working alarms, smoke detectors, and sprinklers systems. It also helps if fire protection needs are considered right at the start of the design process and include suitable measures for safety during construction. However, this is frequently far from the case, especially in that most flammable of industrial structures, the warehouse. All too often fire safety is not considered until the build is well under way, instead of putting the systems in place at the beginning, when better account can be taken of issues, such as weight loading and water demand. Effective compartmentation can stop any potential fire spreading, a key issue in densely packed industrial areas. There have been instances where fires have spread through such areas, hitting surrounding buildings fast and hard, because the fire could not be contained to a portion of one site. Until such issues are addressed and backed up with regulation and enforcement, we can continue to expect an annual fire season.

HAIDER SHAH/AFP/Getty Images

The seasonal conﬂagrations have begun, can anything be done to stop them?

Fires are all too common in the region, especially during the hotter months.

What can be done to ease the burden being placed on each municipality’s civil defence force?

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COMMENT

SARAH BLACKMAN

It’s not my problem Should you deal with facilities management early on or just pass the buck and pay the real price later?

arlier this month I spoke to a developer in Saudi Arabia to enquire about writing a case study covering his up-coming business hotel. The article would focus on how his company has planned for the maintenance of the building and which facilities managers and consultants have been involved in the project so far, to ensure sustainable systems and solutions are implemented effectively. His response? “This hotel is currently a shell of a building. We are therefore not thinking about facilities management at the moment. How can we if the hotel hasn’t even been built yet?” Another developer I spoke to a couple of weeks later hadn’t even heard of facilities management, before I mentioned it to him. Unfortunately, these two are not alone with their approach to construction. With tight budgets, many developers are thinking about what they are spending their money on right now, not what they might be spending their money on in the future, if they don’t take the advice of facilities managers and consultants. Many developers think solely about the beautiful master plan and selling their properties to investors. What they don’t think about is how a square metre of grass needs 54 litres of water per day to keep it hydrated, how motion sensors can control 18 CONSTRUCTION WEEK JULY 3-9, 2010

lights and therefore help reduce electricity bills, or indeed how walls inside a hospital need to be anti-allergenic to stop the spread of infections. Simply inserting a window into an office unit will have a knock on effect on overall operational costs. Air conditioning can be turned down or even switched off during the winter months if a window is there to open. This can be planned for at the design stage of a project. As for the summer, service providers know the difference between high-cost, carbon-unfriendly air conditioning systems and the air conditioning systems which run on low levels of energy. Before a project is complete, facilities management contractors often advise developers to implement sub-metering systems in a building, which provide accurate billing to individual users. In addition to ensuring that tenants are only charged for their actual consumption, rather than a percentage of the overall consumption of the building, this solution has been proven to provide both financial and operational cost savings to the building owners, due to a drop in energy use. Even a poor choice of floor material can result in unnecessary expenses. Any contractor worth his salt will know that a hard-wearing floor would be put to best use in a high-trafficked area because it

requires little maintenance, but a wooden ﬂoor placed in a hotel lobby couldn’t take the pressure of stiletto heels and suitcases for very long and would require frequent restoration and even replacement. Large areas of a building would then have to be cornered off while refurbishment takes place and revenue would ultimately be lost. Using light-emitting diodes (LEDs) recommended by service providers will result in less heat generated and less money spent on cooling a building. Implementing water pressure reducing valves will help conserve the region’s most scarce resource and fewer blackouts will occur if energy efﬁcient lifts are put in place. The list is endless. The truth is, the decision as to whether or not to bring in a facility manager at the design stage of a project could determine the life-cycle of a building and how long residents will be willing to stay. Just because a building is designed to be a high-performance structure does not make it sustainable. You have to think about longterm maintenance. And, if developers think facilities management is not their problem at the start of construction, they certainly will ten years down the line. Sarah Blackman is deputy editor of Facilities Management Middle East.

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COMMENT

EUGENE SITERMAN

Point scoring Eugene Siterman, asks how value engineers can make a LEED project a proﬁtable one

ncreasingly, developers are seeing the advantages of being green. And LEED has been a ready partner in achieving goals that are both good for the environment and for the bottom line. Certification has become a desirable attribute for many prospective tenants, and developers have caught on that this is just one more way to make their projects stand out. Increasingly, it denotes a premium product. Thus, many developers are seeking more-efficient designs that still produce profitable projects. For many builders and investors, the new reality provokes questions of costs and benefits. After all, green is a nice colour - but only when married to black, especially when it hits the bottom line. As a budget item, LEED certification costs can be reduced, especially if value engineers review strategies. Value engineers can identify lessexpensive ways to obtain LEED points, while optimising energy and water consumption. Worth noting is that value engineers were effectively green before it was called green. Value engineers have long been concerned with optimising MEP and streamlining construction methods. They have always optimised system designs to reduce energy consumption and waste. Optimising building systems is the basis of value engineering. The first step 20 CONSTRUCTION WEEK JULY 3-9, 2010

in doing that is clearly understanding the building needs, and using the latest codes, rules, standards and regulations to achieve them. Value engineers keep abreast of the latest methodologies, using them to fine tune MEP building systems. Developing a strategy for obtaining points in the LEED certification process is a necessary step. A keen review of the strategy should result in either gaining additional points (that is, a higher level) for the same budget, or meeting the point goal in the least expensive way. One example of how to get more out of your LEED budget involves the increased ventilation point. To attain this point, breathing-zone outdoor air ventilation rates for all occupied spaces must increase by at least 30% above the minimum rates required by ASHRAE Standard 62.1. Accomplishing higher levels of ventilation also increases energy consumption. As well, increased ventilation leads to higher construction costs, due to bigger ductwork and larger equipment, which also reduces usable floor area. To counter the increased energy used, the LEED documents state, for mechanically-ventilated spaces: “Use heat recovery, where appropriate, to minimise the additional energy.” Energy recovery systems that satisfy ASHRAE Standard 90.1 are a good-sized investment. The value engineering solution

potentially garners multiple points for similar efforts by substituting the ‘increased ventilation’ point with ‘optimised energy performance’ points (up to 10 may be gained). An energy recovery system will decrease energy consumption and improve the overall energy model of the building. Depending on the percentage decreased, more than one point may be achieved for reduction of energy consumption. This does not mean ignoring ventilation rates is okay. Keeping the rates at the minimum comfortable level maintains the LEED intent of “occupant comfort, well-being, and productivity” will be achieved. It is very important to note that this example is specific to a particular project, and not a rule of thumb for cost-saving solutions. Each project must be analysed as a whole. The earlier that value engineers are brought into the process, the more substantially they can improve the results. Whether driven by market or government forces, green building standards are here to stay. It is likely that the future will see a larger array of technologies, equipment and strategies for gaining LEED certification. Partnering with value engineers can help developers obtain that certification in the most efficient manner possible. Eugene Siterman, is a principal at VE Solutions.

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LETTERS assembled with at least six different pieces. The cradle was supported by two wire ropes of 10mm on either side and my assumption is that the bolts either broke, or came out and caused this catastrophic accident. Having seen the cradle I am sure it was neither tested nor certiﬁed. Mall management will have to ensure all HSE systems are in place for their contractors and ensure risk assessment and other HSE requirements are sorted, before starting maintenance works. V PRABAKARAN

RE: KEO wins contract for new Riyadh monorail

RE: Sharjah environmental expert blasts LEED standards Organisations such as the USGBC have proﬁted out of the LEED rating system, to the extent that the word ‘green’ is now abused and misunderstood by most of the engineering empire. Architects are too dependent on intelligent service systems to make up for their folly and neglect in basic building design. Inappropriate implementation of add-on techniques has lead to cumbersome compensation and disorder. Trying to invest in a rain-water harvesting system for example may fetch extra points in the LEED rating, but the whole initiative, if analysed, is a wasteful one. ROMI SEBASTIAN RE: Environmental expert blasts LEED standards

RE: Four men killed after six-storey plunge in Sharjah

It is unfortunate that these rating systems have converted architecture into an accounting exercise. This has completely digressed from what could have been a healthy way of producing truly good architecture. It is unfortunate, that once again, as during the industrial revolution, we have allowed a machine to dominate our thinking. We are missing an opportunity to produce good architecture by allowing these accounting procedures to dominate. ARVIND KRISHAN

This accident is as a result of total failure by the company’s management team to provide and ensure proper health and safety. There should have been third party certiﬁcation and safety harnesses for all those in the suspended platform. And how could the company have allowed four people to get inside the cradle at once? The agency dealing with this case should investigate all the details and punish those concerned to prevent a re-occurrence. PK SIVADAS

22 CONSTRUCTION WEEK JULY 3-9, 2010

This is very unfortunate. I recommend a thorough investigation by all HSE organisations in the UAE to detect the root cause of this accident and publish the results with corrective measures. That way, small contractors operating suspended cradles can eliminate such accidents and ensure the safety of their personnel in the future. AJU SHARFUDDIN I visited the accident scene at the weekend and I believe the investigation is still on going. The length of the cradle is 16m and it was make shift,

God help us if this is anything like the embarrassment of the pilgrim train ﬁasco. They promised us a state-of-the-art railroad and they gave us trams that look like something out of a Dr Zhivago movie. A new series of disasters await us in KSA, thanks to our complete lack of standards and procedures. Train derailment is the new way to go. HUSSAIN

RE: All systems go at region's largest airport Well done to the aviation industry for showing the world that Dubai is capable of achieving anything – and in a recession too. This is a great achievement. I hope more projects like this come up to show the world what Dubai really stands for. NITIN

RE: Kuwait blackout crisis Maintaining power lines will be good if it reduces consumption. MAHMOUD

To submit a letter, write to editor@ constructionweekonline.com or by post: Construction Week, PO Box 500024, Dubai, UAE. Please provide your full name and address. Letters may be edited for space and style. Submission constitutes permission to use. You can also log in to www. ConstructionWeekOnline.com to join the conversation.

ANALYSIS

Lost causeway The Qatar-Bahrain Causeway is for some an illustration of the market’s upheaval, with pricing issues and delays still apparent. Ben Roberts reports

HAT HAD A POLITICAL

can’t seem to reach an economic end. The Qatar-Bahrain Causeway, the US $3 billion ‘friendship bridge’ that was intended to bring the two countries closer and smooth the last decade’s various diplomatic tensions, has experienced one of the longest delays of all the major projects fighting for progress in the market downturn. But unlike the many elaborate residential and retail projects that quietly folded in the last few years, the causeway refuses to admit defeat. For the last three years in particular, announcements amounted to little more than delays and optimistic new dates for commencement, but somehow its existence has continued. The project is a two-lane 40 km road bridge, which will include 18 km of artificial dykes and 22 km of viaducts, as well as two cable-stayed spans at a height of 400 metres, in order to allow maritime vessels to pass underneath. It will later incorporate a 13 metre wide railroad bridge. The concept began during the height of a diplomatic spat between the two countries concerning the ownership of the Hawar Islands off the coast of Qatar. Qatar’s claim derived from the proximity of the islands, whereas Bahrain testified that it had been granted ownership by Britain in 1939, the then protectorate. BEGINNING

24 CONSTRUCTION WEEK JULY 3–9, 2010

Appeals by both countries to the British saw a decision in favour of Bahrain, a decision reinforced by the International Court of Justice in 2001. The furore died down, and the gap between the two countries, metaphorically and literally, seemed like it could be bridged. Documenting the events and changes of the causeway is a project in itself. In June 2006 an agreement was reached between the two nations to create a single entity to spearhead the project. In 2007 the Qatar-Bahrain Causeway Foundation was established, and by September of that year it had signed a memorandum of understanding with a consortium of contractors led by Parisbased Vinci Construction. A statement at the end of 2008 slated construction to begin in January 2009, despite the fact that in August companies such as Mott Macdonald were reportedly asked to resubmit their bids for the consultancy contract. January 2009 came around, only for the secretary-general of the Qatar-Bahrain Causeway Foundation, Nayef Al Emadi to reveal to CW that pricing issues, as well as details around the train and other elements, had pushed back the deadline by 12 months. Seven months into 2010, the project is trapped between authorities and the major companies. Objectively, the amount of communication between the two groups could be a cause for concern. Christopher Welton, part of investor

relations at Vinci Construction, said the company is close to finalising studies for the project ‘in line with the schedule of the Qatari and Bahraini officials’. He added that these studies encompass the whole aspect of the project: ‘how long the bridge is going to be, what materials, what man power is needed’. A source at MEDCO, the dredging giant faced with tackling the ocean floor to facilitate the foundations, admitted to CW that they were still at the planning stage. But on the websites of Hochtief Construction, the German contractor whose name has been connected with the project for a while, and that of KBR, which won a contract last year, there is no mention of the proposed causeway as a forthcoming project.

ANALYSIS For upto the minute analysis log in to constructionweekonline.com

Big names linked to the project Partly as a reﬂection of the size and the international recognition of the prospective project, the causeway has brought together a number of some of the biggest companies from a wide variety of countries. France, Denmark, Germany and the US have been in the mix for a while now, though not all have actually signed a contract.

Main contractors: • Vinci Construction • Middle East Dredging Company • Hochtief Construction • Consolidated Contractors Company • QDVC

Main consultants: • COWI Consult A/S • KBR Troubled bridge over waters: pricing and redesign issues have affected the progress of the causeway.

Hochtief may be resigned to a waiting game. Dr Bernd Putter, spokesperson, said: “We did some planning for the project and we’re still interested since we submitted our bid. We have not signed a contract yet.” The Qatar branch of Consolidated Contractors Company went further, telling this magazine it considered the project entirely on hold. The grey area between ‘planning stage’ and ‘on hold’ has been the curse of some of the biggest projects in the region in the last year. Finance is typically at the root of the issue. Marina West, the multi-billion dirham complex on Bahrain’s West Coast, originally stopped construction at the end of March, and investors were told individually that there would be no

further progress. Later, it was conﬁrmed that developer Marina West Real Estate Co met with Bin Mhana Holdings, a subsidiary of Qatar Investment Company, over possible funding. Oman’s Blue City, an OR7.7 billion real estate project, was the talk of bond markets in the Middle East as it neared liquidation. The project was to house 200,000 people with more than 200 villas, 5,000 apartments, and a number of hotels. Despite much fanfare from the government and a clear initial appetite from markets to fund the project, it had reportedly missed its sales targets. As with Marina West, Bin Mhana Holdings had been drafted in to provide possible support, though on 9th June

Essdar Investments, a fund backed by Abu Dhabi’s ruling family, agreed to buy US $655.5 million of the project’s bonds, telling Bloomberg it planned to take ‘significant control’ over the development. Jaber Ali Al Mohannadi, general manager of the Qatar-Bahrain Causeway Foundation, confirmed that negotiations with contractors over price was the key cause of the delay. Meanwhile, others have hinted that wider political tensions – including rumours of a recent standoff and gunfire from the Qatar coastline to a wayward Bahraini fisherman – may have temporarily hindered the drive towards a ‘friendship’ causeway. It could be a bridge too far. JULY 3–9, 2010 CONSTRUCTION WEEK 25

FACE TO FACE

26 CONSTRUCTION WEEK JUNE 5–11, 2010

FACE TO FACE

ENGINEERING DISCIPLINE Hyder Consulting’s Wael Allan tells Stuart Matthews about the changes made to focus the company on the business that matters Photographs by Isidora Bojovic

IGHT AT THE START OF 2010, with much fanfare and fireworks, the world’s tallest manmade structure was officially opened. The Burj Khalifa was one of the most anticipated, watched and reported on construction projects of all time and its opening is also ranked as the best moment so far, in the tenure of Hyder Consulting’s regional managing director Wael Allan. “The inauguration of the Burj Khalifa was the culmination of a long and concentrated effort, full of innovation and lots of challenges for the company,” said Allan. “We were very proud to be part of that historic moment.” While it would be easy to think that the day after such a momentous project is brought to a public finish, the work would be finished too, but that’s not the case. The Burj Khalifa is still an ongoing job for the company. “Although the building itself is the icon and the ultimate achievement, when it was opened there was still a lot of work to be done and we continue to support Emaar,” said Allan. An engineer with a background in chemical engineering and biotechnology, Allan has spent 20 years engineering everything from pharmaceutical factories and petroleum plants in different coun-

tries around the world, while also developing what he describes as a ‘strong multi-national business background’. The role with Hyder came along around 18 months ago, at a time when the construction industry in the region was facing up to significant challenges. Allan’s remit covers the entire Middle East region, which means the three offices in the UAE, plus the Doha and Bahrain operations. Recent additions include new offices in Riyadh and Jeddah, but the Middle East region also has countries such as India and Turkey under its umbrella. The office also draws on resources from the group’s two global design centres in Bangalore and Manila. The Manila office serves as Hyder’s global ‘centre of excellence’ for its MEP design work. “Since I arrived in the region it has been extremely tough; one of the most challenging times,” said Allan. “When I started, the recession translated into cost reductions and really changing the way we do business. We’ve had hard and difficult moments, and I think this year continues to be a challenge still; perhaps 2010 will be harder than 2009.” With challenging times come tough decisions. Having enjoyed a long regional boom, the sudden slow down meant there was a need for restructuring and staff cuts. JULY 3–9, 2010 CONSTRUCTION WEEK 27

FACE TO FACE

“That is not pleasant at any time and some of the people with whom we had to part company had to leave the country and go home,” said Allan. “You do not take that [decision] lightly, but we had to look at what business was coming in and ask what we needed to do to be viable and sustainable going forward. Some of those decisions are very difﬁcult, but obviously had to be made for the sake of the employees, the overall business and our shareholders.” Focus was the company’s response to the situation. Allan pushed to renew the focus on clients and structured the business to suit their needs. He explained Hyder also shifted from being an inward looking organization to one that is outward looking. “In times of recession people run in all directions looking at diversifying and go-

Building icons gets the glory, but engineering them makes sure they work too and that has been a key part of Hyder’s role.

HYDER CONSULTING MIDDLE EAST HAD 1599 EMPLOYEES IN 2009 • £167 MILLION 28 CONSTRUCTION WEEK JULY 3–9, 2010

FACE TO FACE

From well known projects, such as the Ski Dubai, to essential infrastructure like the Sheikh Khalifa bin Salman Causeway bridge in Bahrain, Hyder has a strong portfolio of completed work.

ing into new geographies,” he said. “That’s not a recipe for success in our view. Focus on your core clients and very much on core competencies; these are absolutely key.” Hyder’s declared core competency is acting as a design and advisory engineering consultancy. It has a focus on transport and infrastructure, property, utilities and the environment, all of which Allan says will continue to be at the company’s heart in this region. Allan is conscious that the times of companies being ‘too big to fail’ are long gone. His belief is that an agile and rapid response to a client’s needs, essentially great adaptability, is the only protection. “I get asked when we are going to stop the change,” he said. “The answer is we're not, because the dynamics of business are changing daily, our clients are changing daily and an ability to respond to change quickly is the key. Like Darwin’s theory, it’s not the strongest or the biggest that survive, it’s the people who are most adaptable to change that will survive in this business.” Allan isn’t expecting an easy ride ahead, but is conﬁdent that the changes made in the structure of the business will pay off. The strategy is one of growth. Shareholders, clients and employees alike will wait to see if the strategy pays off.

“Like Darwin’s theory, it’s not the strongest or the biggest that survive, it’s the people who are most adaptable to change that will survive in this business.” Last year the company enjoyed a backlog from previous years, posting £106.9 million (US $161 million) in revenues for the Middle East region and an adjusted operating proﬁt of £8.3 million (US $12.5 million). That backlog has gone now and the challenge is for the company to keep securing new work, work that both matches its aspirations and provides good value to clients and shareholders. At the time of the interview Allan was waiting for word on two major public sector bids, including one in the UAE, the winning of which he saw as absolutely essential.

“If they come in I think we have an excellent opportunity to make out numbers and our stretch target for 2010. I believe the team has done all they can to secure that win. It remains to be seen if the clients think so as well.” Allan is of the opinion the company has not spent enough time understanding the needs of public sector companies. Work has been done gathering information on how those organizations work and to align Hyder’s objectives with their objectives as a client. The groundwork for this was started in 2009 and Allan hopes to see it come to fruition this year. Cash collection has also been an issue in the past and was noted in the 2009 group results, with Allan pointing out that while the Middle East offers good proﬁtability, working capital is ‘an issue’. “Part of it is cultural and part is our people not having good discipline,” he said “It isn’t really just an issue with clients, it’s also an issue with us. We have introduced a culture of accountability and responsibility, making sure our project managers run their projects as a business, giving value to the client, but also getting paid on time. “We have improved our cash ﬂow tremendously and we continue to emphasise

WORTH OF BUSINESS WAS ON ITS REGIONAL ORDER BOOK FOR 2009 (£384m GLOBALLY) JULY 3–9, 2010 CONSTRUCTION WEEK 29

FACE TO FACE

the importance of cash and the discipline of collecting it.” The results are showing through already, with Allan happy to say that all new projects are paid up on time and that legacy issues are being dealt with. Globally the company has been doing well with the UKlisted share price rising from 74 pence in March of 2009 to 294 pence on June 28, 2010. Having global interests helps, with the Middle East region contributing about 33% of the company’s order book. While work from Dubai has slowed, Hyder is still engaged on projects that Allan says will demand plenty of resources for the next year or two. He cites the Pentominium Tower – slated to be the world’s tallest residential building – which is in the process of moving to the site supervision stage, along with ongoing work on the Burj Khalifa, as two key endeavours. Elsewhere Abu Dhabi remains a strong source of work with Hyder recently winning work on the New York University project with Mubadala. Qatar too is seen as a growing market, despite being ‘slow to take off’. But, like most others, Hyder recognises Saudi Arabia as a place where a great deal of investment will happen. “We are already working in Saudi Arabia, it’s just that before it was part of the business that we do from the UAE,” said Allan. “Now we are looking at Saudi Arabia in its own right. We’ve set reasonable targets for growth this year, and we are hopeful Abu Dhabi will sustain its level of business, though it will probably be a bit slower and more calculated about the sequence of projects being released on the market.” The profile of Hyder’s work in the region has changed a little from the boom days, with the weighting toward property shifting to a more equal split between property and transport and infrastructure. That said, according to Allan, its property sector remains profitable and growing. “We see property holding and continuing to be solid in terms of volume and profitability,” he said. “Utilities and environment is probably our smallest sector, but has potential to grow.”

“In times of recession people run in all directions looking at diversifying and going into new geographies. That’s not a recipe for success in our view. Focus on your core clients and very much on core competencies; these are absolutely key.”

Wael Allan has been the regional managing director for Hyder Consulting Middle East since early 2009.

Market watch Hyder Consulting share price performance 350 250 150 50

4/09

7/09

10/09

1/10

4/10

6/10

Hyder Consulting PLC is listed on the UK stock exchange and closed at 294 pence on June 28. Analyst Edmond Jackson of Interactive Investor says the company stock ‘merits attention’ because of the level of revenue derived from outside the UK. Described as a 'modest multinational' with a market capitalisation of just under £113 million, analysts acknowledge that the group restructuring in 2009 has more closely attuned it to client needs in four key sectors: transport, utilities, property and the environment.

The use of global design centres in Manila and Bangalore has added a ‘productivity factor’ to the company’s operation, helping it to produce things faster, where standardised designs are required. According to Allan the company’s systems are geared toward completing projects, no matter where they are. “We truly operate as a multi-national, barriers and borders mean nothing,” he said. “It’s about bringing the best to the project and we can do that from wherever the best resources are available. “While we work globally, it’s absolutely key to deliver locally.” Allan talks a lot about alignment and emphasises the importance of lining up

£8.3 MILLION 2009’S REGIONAL ADJUSTED OPERATING PROFIT (£17.3m GLOBALLY) 30 CONSTRUCTION WEEK JULY 3–9, 2010

FACE TO FACE For upto the minute analysis log in to constructionweekonline.com

APPLYING PRINCIPLES

Hyder’s capabilities and offerings with the needs of its clients, in the hope of winning a fair share of business with them. He also believes it is no longer enough to compete on price or quality, a company, he says, now needs to be able to deliver both. “If we do not understand the objectives of our clients, then the project will go wrong,” he said. “If we don't have the right model to serve them, the best thing is to say, ‘on this occasion, I don't have the right formula to make your project a success’.” Allan pitches himself as ‘a realist, but an optimist’ and has a positive outlook on likely results this year, expecting the company to meet its performance targets for 2010 and possibly even its stretch goals.

“The outlook for the Middle East will be improved,” he said. “Things are stabilising and we’re hoping that by the end of the calendar year, we will have absolute clarity on where projects are going. “I’ve worked all over, and I am really pleased to be in the Middle East while there is a recession. I do believe there will be more growth in the Middle East, and it is probably the best place to be at the moment. “So, although expectations are a lot higher – I believe the market has matured – while people adjust to this new reality, there will be some growing pains, but eventually the Middle East will offer a great opportunity to companies like Hyder.”

Wael Allan is a chartered engineer and scientist with more than 20 years of experience. He started out working as a process engineer in 1980s Glasgow and then worked with companies around the world. This was the start of him gathering extensive international business management experience with various multi-national companies, including Raytheon Engineering and Constructors and Washington Group International. While working with Raytheon he was posted in Saudi Arabia, where he had also spent several years while growing up, between the ages of four to 15. His work in Saudi Arabia included some oil and gas projects, involving design and process work for Saudi Basic Industries (SABIC), plus the upgrade of a pharmaceutical facility in Tabouk, in the north of the country, to federal drug administration (FDA) standards. “It was a generic facility which wanted FDA approval,” said Allan. “I was instrumental in making sure it adhered to the standards and had the right license.” He also spent time working in the US with Skanska, prior to joining Hyder, as the regional managing director for the Middle East, a year and ﬁve months ago. “I’m an Arabic speaker and I’ve worked all over the world, but one of my ambitions was to come back to the Middle East to use my cultural knowledge and language skills doing business in the region.” Allan believes the principles of engineering apply equally to all kinds of speciﬁc disciplines. “To me engineering is engineering, whether process, chemical or mechanical. Whether dealing with pharmaceuticals and biotechnology, or high-rises and infrastructure projects, the principles are the same, although the applications may vary.”

• 7.8% WAS 2009’S ADJUSTED OPERATING MARGIN JULY 3–9, 2010 CONSTRUCTION WEEK 31

ON SITE

ONWARDS AND UPWARDS The Doka -formwork is in place and rebar is ready for the next pour on one tower.

32 CONSTRUCTION WEEK JULY 3–9, 20 2010

ON SITE

Steady progress Ruﬁ Twin Towers in Dubai Sports City is a project toughing out market conditions to maintain steady progress. By Stuart Matthews; photos Efraim Evidor

TWIN TOWERS IS RISING out of Dubai’s Sport City. With views of picturesque golf courses and the impressive cricket stadium, the finished product can look forward to an enviable sporting outlook. Many nearby structures are at a similar stage in development, with varied levels of progress in evidence, while the newness of some parts of the city give a clue to their very recent completion dates. As the name suggests the Rufi Twin Towers project involves construction of two towers comprising two basement car parking levels, a ground floor, 18 additional floors and a common roof top. When finished, it will offer apartments and amenities for around 1,200 residents. Although the project is not moving at the hectic pace at which it started, careful management by Emirates Belbadi Contracting Company, the main contractor, is making sure the project is one of those still making steady progress. The company, which counts a new hotel project in Al Ain and an emerging development on Reem Island among its latest awards, has finished the initial conUFI

tract period for the towers, but has agreed an extension with its client, to accommodate a slow down on the job. “We were given another year to finish this project,” said Elie Zgheib, Emirates Belbadi Contracting’s Dubai projects manager. “The client is emphasising the concrete and the block works, then we’ll start with the fitout and the MEP. We have finalised most of the lifts, swimming pools, garbage shoots and lights, but it is up to the market how much we can accelerate the work.” At the project’s start the two towers were progressing at the rate of eight slabs per month, but of late this has been pulled back to just one per month now. That said, the towers are just a little short of completion: Doka formwork is in place and rebar ready for the next pour on one tower, while the other has halted, waiting for final design work on the sky bridge that will link the two towers at their top. The slow down was by mutual agreement between client and contractor, the two working to help each other out, but there’s more to it than simply reducing the amount of work done each day. JULY 3–9, 2010 CONSTRUCTION WEEK 33

ON SITE

“You have to reorganise all of your team,” said Zgheib. “Before, I had MEP coordinators, construction managers, engineers and around 400 labourers in two teams on each tower – now I have reduced everything by half.” The amount of equipment on site was cut down too, with two tower cranes and a number of generators being removed, to help reduce site costs. Overtime for the labour force is also a thing of the past. “This procedure is very difﬁcult,” said Zgheib. “But as professionals, we reduce our costs to match our income and keep the client happy, plus [future] tenants still see their building is coming on. “On the other hand, there is a positive side. We have had time to review our drawings, we have had time to check our value engineering and the quality of the build. Now we have time to check everything, study the de34 CONSTRUCTION WEEK JULY 3–9, 2010

1,200 G+18 20,000 15.24m

The number of residents who will live in Ruﬁ Twin Towers.

Number of ﬂoors for each tower, along with two basement levels.

Approximate daily cost, in dirhams, of maintaining the site operation.

Size of Dubai Sports City, in millions of square metres.

tails with our sub-contractors and avoid any variations in the future, which saves money for our client.” Prolonging a project isn’t without its own costs. The core equipment needed to run the site has to stay whether progress is at the rate of one slab per month, or eight, with an estimated AED 20,000 per day required to cover everything, from cranes to the site ofﬁces. With some costs ﬁxed, no matter how fast the project goes, a slow down also raises the cost of progress. “I prefer to keep it running this way, it’s better than not working or having to release labour,” said Zgheib. “Before, I had a project manager for each job; now we are more spread. Our management was very smart in this regard, giving more work to everyone means more pressure, but we’re all still in a job, so it was a good strategy for our management.”

ON SITE

TAKING SHAPE More time on the project has given the contractors involved the opportunity to review the drawings and check quality.

Other projects on nearby sites allow the ibilit with ith resourcing. i company some flexibility The company is able to move its specialised labour from site to site as required, and keep the teams busy. “Some of my labourers are bored, they want more action,” said Zgheib. “This is a challenge some of the time. Let’s say I have 50 steel fixers and sometimes they have nothing to do, when the shuttering is done, the carpenters have nothing to do, so I move them around to do something else. “We are settled in Dubai. We have other projects in Al Ain or Abu Dhabi, but we have been in the market in Dubai for more than 15 years. Now it’s time to hurt a little, to keep our business running here.” Cost savings are being found in the design to help the project further. The sky bridge, set to link the two towers at the top and be a defining feature of the structure, is being

redes redesigned to employ less steel internally. O Once designs are complete and the details of the engineering specifications finalised, then the method of construction for the bridge will be decided and progress at the top of the towers can be resumed. “When the engineer gives us the details, then we will be able to go to a specialist to get their opinion,” said Zgheib. “They may say cranes, or scaffolding. How they are going to handle the bridge depends on their method statement. “I want to finish my towers so I can start with the finishing works all around the towers and the substation, which is also part of our package.” There is still plenty to do on the towers to complete the structure, but steady progress, through careful and considered management, is the aim, until market conditions improve enough to allow for acceleration.

Ruﬁ Twin Towers, Dubai Sports City Owner: Ruﬁ Real Estate & Construction Consultants: Dimensions Engineering Consultants (DEC) Contractor: Emirates Belbadi Contracting Contractor: Al Sabah International Cement and concrete products: National Ready Mix Concrete, Al Ain Cement & Marble Formwork: Doka Metals: Cicon Building Materials Electricals: Zucchini (Gulf) Pipes: Hepco 3B Cables: Oman Cables industry

*Source: BNC Network

JULY 3–9, 2010 CONSTRUCTION WEEK 35

COUNTRY PROFILE

The goldmine A of new markets Huge infrastructure development plans, a young, growing population and innovative ideas for tourism make Libya one of the world’s fastest-growing new markets. Elizabeth Broomhall looks at the risks and opportunities in the country 36 CONSTRUCTION WEEK JULY 3–9, 2010

S FOOTBALL FANS DIRECT their attention to the south of the African continent, shrewd investors and business people around the globe are, this year, focusing on its north. One country in particular, for all its previous issues of sanctions and conﬂict, is now emerging as one of the most competitive markets in the world for construction contract wins. Libya, with its colossal infrastructure requirements, house-building plans and generous tourism investment programme, is one emerging market that no GCC contractor can afford to ignore. Only recently, the government outlined its proposals to plough US $100 billion into infrastructure and housing in the next four years, with a view to revamping what it now calls ‘the gateway to

COUNTRY PROFILE

A large number of new projects are planned for the capital Tripoli, including high-rise towers and hotels.

Africa’. Shortly afterwards, a UK Trade and Investment study ranked the North African oil exporter as the fourth most attractive country in the world for companies to do business, between 2012 and 2014. Evidently, this is what years of under-investment will do to a country, Libya having only properly restored its diplomatic ties with the West and opened up its market to international investors in the last ﬁve years. Subject to a number of economic sanctions by the US since as far back as the 1980s, not to mention UN sanctions from 1992, following the Lockerbie bombing, the country has been effectively cast-out of the development rat-race and allowed to slip into a period of stasis for more than three decades. It wasn’t until 2003 that Libya accepted responsibility for the Scotland bombing and

agreed to compensate the victim’s families, and only in 2004 that Libya mended its friendship with the US after Colonel Qadhafi decided to relinquish Libya’s weapons development programme. By 2005, Libya was finally ready to do business again. Today, back on the business map, Libya is offering huge opportunities for contractors, developers, consultants and suppliers from all around the world. Possessing the second highest gas and the third highest oil reserves in the whole of Africa, the country has a huge amount of foreign currency stores and plenty of available funds. “The country is in a state of transition,” says Tawfiq Abu Soud, executive director of Drake and Scull Water and Power division, which is currently trying break into the Libyan market. “This creates significant op-

portunities across most sectors, the priority ones being building and construction, transport and communications, water and environment and power and electricity.” Likewise, WSP’s general manager for the Libya region, Markus Eek, says: “Libya is presently undergoing a comprehensive upgrading of general infrastructure including roads, rail, airports, harbours and housing, hence, there are a lot of opportunities in the civil engineering sector.” Interestingly, the sheer size and number of projects lined up for Libya are not the only factors that make it attractive. Again stemming from its lengthy lack of investment, an additional appeal is the high demand for specialist skills in sustainability – an area which international developers and contractors are well-versed in – as well as a strong deJULY 3–9, 2010 CONSTRUCTION WEEK 37

COUNTRY PROFILE

sire to boost economic cooperation. Having withstood the economic downturn where many other countries did not, Libya’s market is particularly tempting to construction contractors who have experienced cashflow and payment problems, providing a safe haven for those looking to escape less secure economies. And where companies are looking to expand beyond the GCC region, Libya may also act as a springboard into other African markets. But perhaps the best thing about Libya is the opportunities for GCC companies specifically. Possessing a strong portfolio of projects in the aviation, transport and energy sectors, Middle East contractors and developers are in a good position to bid for these priority government contracts. With substantial experience in high-rise buildings, property and the general ‘sprucing up’ of cities, they are equally well placed to contribute to the architectural overhaul required by Libya’s increasingly young and student population – 50% of which are under the age of 20. “At the moment there is a lot of infrastructure going on, but there are more and more towers being built in the centre of Tripoli, and tourism is one of the areas that Libya will be putting effort into soon,” says Herve Hamelin, General Manager of Aconex Europe and Africa, which provides project collaboration software. “People are starting to realise that Libya has massive potential.” Executives from UK firm SECBE, who advise companies on how to break into Libya, second this argument, citing ‘multiple hotels and resorts’ currently being planned for the country’s Mediterranean coastline. These things, alongside positive LibyanGCC relations, language and cultural similarities, as well as the fact that the UAE alone has already invested AED3.67 billion into

Top tips for Libya: • Research your new market • Hire a good solicitor • Spend time there • Network with the locals • Read contracts thoroughly

38 CONSTRUCTION WEEK JULY 3–9, 2010

“The entire pre-tender process is very involved and time consuming, with much re-registration required for all the main government work providers.” - Tawﬁq Abu Soud, executive director Drake and Scull Water and Power division.

COUNTRY PROFILE For upto the minute tenders log in to constructionweekonline.com

The Libyan government has outlined proposals to plough US $100 billion into infrastructure and housing over the next four years.

the country, will be significant in driving a strong GCC presence across the North African region. “In general the GCC construction sector has a higher awareness of ‘time is money’, and a more modern approach to building execution,” says a support manager for Doka North Africa, which has been present in Libya since 2007. “With sound Middle East knowledge, there are no totally unknown proceedings that cannot be dealt with.” No GCC company can deny however, that an abundance of difficult challenges during the initial phases of moving into a new market, are inevitable. Even international firm Jotun paints, a company used to moving into foreign markets, which has now started building a factory in Libya, found it tough. “It was not easy to penetrate the market in Libya, as it has a different cultural and business environment from the rest of the MENA region,” said Ibrahim Amer, general manager of Jotun Libya. “Libya was not part of the globalisation process that changed and improved business environments everywhere.” Speaking about the market in comparison to other regions, he adds: “Libya is growing faster than the GCC at the moment, and the opportunities are higher, but the business environment is far less developed. There is still a long way to go to reach the level of development in the GCC. It is very similar to Algeria in this sense.” Problems related to the business environment in Libya have been identified by a number of GCC companies. While the country has a limited private sector, most firms in Libya are yet to have their own websites (the internet being a fairly new phenomenon) and there very few publicly announced projects. Credit cards are rarely used or accepted, telephones are unreliable and there are limited street names. There is also no public transport, marketing is done face-to-face rather than through advertising, and quality hotel space, according to Doka’s support manager, is hard to come by. He says: “Compared to the UAE, especially Dubai, there is quite a difference in terms of comfort of living, availability, quality of infrastructure, and accommodation standards.” Probably less surprising is the sheer amount of bureaucracy and administration involved for foreign contractors and inves-

PAYMENTS: According to the UK Trade and Investment (UKTI), which advises ﬁrms on new markets, one of the biggest challenges for companies doing business in Libya is the issue of late payments. A recent report on the region warned not to assume you will be paid on time, and stressed the importance of contracts. Solicitor Peter Morris gives his advice on payments in new markets: “Clearly the ultimate aim of all transactions is to make a proﬁt, but though the price may be attractive, it is worth nothing if you can’t get paid. If there are problems with enforcing payment, then you may be able to avoid these by way of advanced payments and irrevocable letters of credit.”

10 questions to ask: 1 What legal system applies? Is it civil law, common law, pure Sharia law or some other legal system?

2 How easy is it to terminate or suspend for non-payment?

3 What is the legal process for resolving disputes? How long does it take? How much does it cost? Can you recover your legal costs?

4 What is the language of the courts?

5 Can the courts grant summary judgement in respect of debts?

6 Are arbitration agreements recognised, or are you forced to use the local courts?

7 Is the country signatory to the New York convention for the enforcement of arbitral awards?

8 Is there reciprocal agreement between your country and theirs in relation to enforcement of judgements or arbitral awards?

9 Are you required to adopt local law for contracts or can you elect to apply another law?

10 Is there access to injunctive relief to prevent wrongful calls on bonds? How easy are they to obtain? JULY 3–9, 2010 CONSTRUCTION WEEK 39

COUNTRY PROFILE

tors trying to move into Libya. As well as impacting on the developments themselves, causing delays and sometimes project cancellations, the link between politics and business and the complexity of the legal and tax systems, makes it difficult to do such things as register a business branch, import goods and materials, employ staff and manage taxation. “Libya has its own processes and procedures which are different to the West and UAE,” says Hamelin. “It has its own rules which do not match people’s experiences in the UK, France or Dubai.” More specifically, Eek says that getting a visa can be particularly difficult. “Visa is one major issue that all foreign countries have to deal with. It takes a lot of time and the rules tend to change pretty quickly.” Tawfiq Abu Soud from Drake and Scull, which is yet to win a project in Libya, refers to the issues around project tendering and goods importing. “The entire pre-tender process is very involved and time consuming, with much re-registration required for all the main government work providers. Importing of materials can be slow with frequent hold up of customs procedures and difficulties understanding tax laws, foreign trade and currency.” But according to solicitor Peter Morris from Systech Solicitors, one of the biggest barriers to market entry, regardless of the company and even the market itself, is the legal system. “With the current state of the construction industry in Dubai, many contractors are looking to expand their businesses into new international markets. Whilst this is clearly a prudent move, it could turn out to be a nightmare if a company doesn’t do its research first. It pays dividends to spend some time first researching the legal framework of the target country to avoid potential pitfalls and unforeseen costs – which can mean the difference between success and failure.” He adds: “Only too often have ill-informed companies set off down the process of establishment abroad only to find they have been caught up by a legal issue that wraps them up in expensive litigation for years and destroys their profit, and in some instances, their company.” Across the board, experts suggest that one of the best ways to ensure this doesn’t 40 CONSTRUCTION WEEK JULY 3–9, 2010

Local partners are key to business success in Libya, where the laws and regulations are not clear cut.

happen is to partner with a local ﬁrm. “The majority of countries require licensing of businesses that wish to operate in their country and the setting up of either a branch of the foreign company or as a local company,” says Morris. “As with the UAE, there will often be a requirement to enter into a sponsorship agreement with a local partner or to establish a corporate vehicle in which a local partner must own a 51% share or more.”

“Libya is growing faster than the GCC at the moment, and there are more opportunities, but the business environment is far less developed.”

Other firms cite the importance of spending time in Libya, networking with the locals and making contacts in order to facilitate access to its unique market. “Contractors have to be prepared to invest time and money in multiple visits to the country, both to develop relationships and to find the right partners to work with,” says John Ellis, the business development director from SECBE. “Wasted time can be spent not dealing with the right people.” Eek agrees. “Libya is a country where connections are very important indeed. It is slightly complicated for ‘beginners’ knowing who is who in the jungle of clients.” Hamelin is of a similar view. “We [Aconex] have been in Libya for two years now, and have a team of about 15 people there. The first thing we thought important was to get local people to help with Libyan processes. In Libya, networking is very important.” For some companies, staffing in Libya has presented additional problems. Doka is one of them. Whilst well established in Libya today, one of its projects being the Burj Bulayla Tower in the capital Tripoli, the company found initial recruitment to be a challenge. “The process of performance and selection is difficult,” says the Doka representative.

COUNTRY PROFILE

“There are no recruitment agencies, and nearly all the common workforce in construction and service-related sectors comes from outside and neighbouring countries in the Middle and Far East. The sometimes quite fast-changing immigration laws also add an edge to mid-term staff planning.” On the contrary, Jotun says the problems are more related to getting technical, high-quality staff. “At the beginning we counted on Jotun employees from Egypt but now we are hiring local staff, and this is not a big challenge. 90% of the organisation are now Libyans and developing very well. What are not available locally are high-level and technical employees.” Overriding the challenges, the general consensus of advice from established and bidding ﬁrms is not to give up. Indeed, with demand only set to increase in the future, ultimately, the Libyan market can only offer huge opportunities for the GCC construction sector.

Libya, the goldmine of new markets, is currently seeking: Feasibility consultants Geo-technical consultants Project managers Architects Engineering consultants Mechanical and electrical engineers Cost-control consultants Quantity surveyors Contractors Developers Investors Construction software specialists HSE experts Sustainability experts Facilities management ﬁrms

JULY 3–9, 2010 CONSTRUCTION WEEK 41

STOCK STARS

THE GCC STOCK STARS The markets have decided who the top performers are. Ben Roberts proﬁles the biggest construction industry stock market winners of the year so far

42 CONSTRUCTION WEEK JULY 3–9 2010

STOCK STARS

WEEK HAS the share performance of all construction and materials companies across the GCC’s stock markets from the begin beginning of this year to 22nd June. It set a ben benchmark of 5% for both the increase in stock market value and total return for the year to date. Tw Twelve companies beat this benchmark, with results showing that Kuwait and Saudi mate materials manufacturers have provided the best m market value increase and total returns so far this year. Ku Kuwait Portland Cement Company has seen the biggest increase, up 54.49% on the benchmark (59.49% total rise so far this year on the Kuwait Stock Exchange), with a total return of KD70.57. And Kuwait companies have surprisingly dominated the benchmark-beaters, with Combined Group Contracting, Kuwait Company for Process Plant Construction & Contracting Company and United Projects Group outperforming by 39.48%, 33.64% and 13.95% respectively. These companies produced total stock returns for the year of KD49.75, KD40.29 and KD30.52. Saudi Arabia’s Saudi Vitriﬁed Clay Pipes Company has also been a star performer, beating the CW benchmark by 50.95%, with total returns of SR63.01. Other companies from the Kingdom of note for the ﬁrst half of this year include the ready mix giant Saudi Cement Company (10.57% up on the benchmark), Makkah Construction & Development Company (+6.90%) and Zamil Industrial Industries Company (+4.26%). Stock price and total returns for the year do not tell the whole picture if you are an investor of course. Stock pickers will often look at the earnings per share (EPS) of a company and then the price/earnings (p/e) ratio (see box). Based on these variables of dividend rates and outstanding shares, a company’s stock ONSTRUCTION ANALYSED

market value increase and its P/E ratio may be very different to each other when compared to peers. This has played out in CW’s research. Kuwait Portland Cement Company may have outstripped the CW benchmark by almost 55%, but its P/E ratio sits at 6.32, a long way below the 23.3 of Makkah Construction & Development Company and the 22.32 of Saudi Vitrified. Different investors will focus on a company’s dividends, p/e ratio or share value depending on their long-term intentions for the shares – indeed, the different figures may help determine those intentions. A long term investor in a company – along with income funds – may study the dividends they will receive as stock holders, whereas those with a shorter term view may look at the capital gains to be pocketed from an increase in share price. It also must be acknowledged how differently company finances are structured across the construction sector. If a contractor takes on a project that will take many years, it may subsequently take a few quarters for it to appear on its balance sheet – even if their share price may rise on the initial news. Ziad Makhzoumi, CFO of Arabtec, recently highlighted this delay in an interview with CW. “In construction, you’re not taking on a four-week project, you’re taking on a three or four-year project, and there is usually a lag time between signing a contract and seeing the revenue on your balance sheet,” he said. He pointed out that Arabtec’s net profits for the first quarter of 2010 were down 17% compared to the same period in 2009, but that the net margin had increased as a result of operating in new markets. Materials manufacturers can see similar delays if they have expanded their capacity, though also the opening of a new plant or factory can boost share price and be factored into the forecasted revenues. Gulf Cement Company, for example, will in the next three years see its 5,000-ton capacity cement plant

come on line. Nishit Lakhotia, an analyst at Securities & Investment Company in Muscat, also earmarks an expected increase in capacity for Al Madinah, to add further to the competition for this commodity. Of course, many of the companies in the region are private entities. But all things considered, CW has found some fascinating trends in the market. These trends highlight factors that have helped some companies to clear the 5% benchmark easily in the ﬁrst half of the year. it may also point to those that have great expectations for the next six months.

Is the price right? Stock pickers will often look at the earnings per share (EPS) of a company:

Net Income - Dividends on Preferred Stock Average Outstanding Shares The number of outstanding shares can ﬂuctuate, and may disclude convertible shares and other elements. For convenience, analysts may derive the ‘average’ from the number of shares at the end of a period. When they have the EPS, company analysts will then look to the price/ earnings (p/e) ratio, calculated by:

market share price earnings per share The resulting ﬁgure essentially tells an investor how much return they will get for every dirham, riyal or dinar spent on buying the shares.

JULY 3–9, 2010 CONSTRUCTION WEEK 43

STOCK STARS

2010’s 12 outperformers Material suppliers dominate the list of companies that have beaten CW’s 5% benchmark for share performance in the ﬁrst half of 2010 SAUDI VITRIFIED CLAY PIPE COMPANY Core business: The manufacture of

vitriﬁed clay pipes with an eye on being environmental friendly. Since 2001 the company has produced an annual capacity of 100,000 tonnes, and has been an ISO 9001 certiﬁed company since 1998.

CW benchmark outperformance: 50.95% Market capitalisation: SR975 m

KUWAIT PORTLAND CEMENT COMPANY Core business: The import, export, trade and distribution of cement and related products in bulk and in bags, along with the construction, operation, lease and rent of stores and silos needed for cement. Also produces ready mix cement and deformed steel bars.

CW benchmark outperformance: 54.49% Market capitalization: KD105.7 million Kuwait Portland’s success this year has been remarkable given its core business. Most analysts are certain that the cement market in Kuwait is saturated, with very few major projects of note to soak up the supply. Nevertheless, its success has not been through obscure means, but merely being a major supplier for its market – where there is business, it tends to grab it. Its last financial statement showed why shareholders are rubbing their hands. First quarter net profits reached KD6.35 million, up 211%, after a 100% cash dividend at 100 fils per share was announced for 2009. Its profitable streak saw it reverse a KD3.54 million loss incurred during the first nine months of 2008 into a KD14.08 for the first nine months of 2009. Last year also saw a US$3 million profit from selling its 58.33% in United Gulf Cement Company. It has a diverse investment portfolio too.

Few companies in CW’s stock stars list are more straightforward than Saudi Vitrified Clay Pipes Company. The company has claimed significant market share from producing clay pipes and its ancillary products and is an authority on joints and fittings. In March 2009 it opened a second factory, which would have bolstered its earnings potential and then stock price, though its equity only really started to rise at the beginning of 2010. The company is working on big projects in every major city of the Kingdom, which is not common among a lot of materials suppliers. And the company itself is outstanding in its transparency, publishing on its website not only its full methods of production but also all the banks with which it deals financially.

COMBINED GROUP CONTRACTING Core business: A diversiﬁed contractor across both the construction, power and oil sectors across the Middle East and parts of Eastern Europe.

CW benchmark outperformance: 39.48% Market capitalization: KD152.8 million The publicity-shy contractor has seen the majority of its projects are for schools and roads, although its continued diversiﬁcation includes a special projects section - the “proving grounds... where a new, related, business segment is explored and tested,” the company explains. Its overall takings have seen only a small dip compared to peers. First quarter 2010 saw KD2.4 million in net proﬁts, down from KD2.739.671 million in 2009.

44 CONSTRUCTION WEEK JULY 3–9 2010

JUNE 19-25, 2010 CONSTRUCTION WEEK 44

STOCK STARS

UNITED PROJECTS GROUP Core business: Aeroplane ground and cleaning services and catering, leasing out aeroplanes, tourism, travel, and cargo services as well as managing projects and investing surplus funds in portfolios managed by specialised companies.

CW benchmark outperformance: 13.95% Market capitalization: KD24.3 million United Projects Group has one of the more unusual suite of services, providing airport ground and cleaning along with leasing out planes and cargo services. It also manages projects and has an investment portfolio on the side, and counts Kuwait United Construction Management and Sporting Real Estate among its past business partners. Last year, as many services companies looked to break even, UPG posted a net profit of KD4.02 million, up 130% on the previous year, producing a 35% cash dividend (35 fils per share) for its investors. First quarter results this year show more than a quarter of the 2009 net profits, at KD1.35 million, implying a continued ascent in its returns. Further, it has completely outstripped a services index in Kuwait that has headed south for the last two months - all this from a company that will only be 10 years old in December and has 67 employees.

KUWAIT COMPANY FOR PROCESS PLANT CONSTRUCTION & CONTRACTING COMPANY Core business: KCPC has a focus on civil engineering, building and infrastructure development with subsidiaries across the Gulf except Saudi Arabia with subsidiaries and strength in MEP.

CW benchmark outperformance: 33.64% Market capitalization: KD16.36 million KCPC has been an unshowy construction company that has experienced few hinderances in the global slowdown. The company is diverse across the public and private sectors and the projects it has worked on. It caught the eye in the last week following its announced details of a KD200 million tender related to houses and buildings in the Jaber Al Ahmad Residential City and is looking for a replacement partner, following a breakdown with a UAE company based on a bank guarantee. It is now in talks with firms around the world and the project is one of a flow of tenders for the firm, which also includes electrical and flooring mandates, hotels and shopping centres.

SAUDI CEMENT COMPANY Core business: A 55-year-old producer of cement, cement-based products and investment in related ﬁelds.

TOP TEN FALLERS

CW benchmark outperformance: 10.57% Market capitalization: SR6.7 billion

(below the 5% CW benchmark) Arkan Building Materials:

-46.88%

The combination of Saudi Arabia and cement rarely produces anything but big numbers. The Kingdom’s growth and prospective projects ensure its major contractors will need every bag of the grey stuff it can get. Saudi Cement Company is one such manufacturer to profit, selling into all the major cities helped by exclusive access to the railways – some analysts estimating the transport cost saving at 40%. It has two big plants in the Eastern Province, both between 120-130 km from Dammam port, where it has its own export terminal. The first quarter saw a profit of SR174 million, up 16% on the 2009’s first quarter and an increase on the 10% rise in profits from the final quarter last year due to increased sales. Investor faith is strong, and in May the company confirmed a 50% capital increase approved from SR1,020 million to SR1,530 million, through issue of 3-for-2 bonus shares.

National Ranges:

-40.90%

Construction Materials:

-40.45%

Salbookh Trading:

-40.23%

Ras Al Khaimah Cement Company:

-34.41%

Arabtec Holdings:

-33.36%

Mushrif Trading:

-31.74%

Mohammed Al Mojil Group:

-25.83%

Galfar Engineering:

-25.69%

Union Cement Company:

-25.24%

JULY 3–9, 2010 CONSTRUCTION WEEK 45

STOCK STARS

YASSER AL-ZAYYATAF /Getty Images

AL BABTAIN POWER & TELECOMMUNICATIONS Core business: Manufacturer of transmission and distribution towers along with other industrial steel products.

CW benchmark outperformance: 7.46% Market capitalization: SR1.5 billion Al Babtain Power & Telecommunication is embedded within the power market, particularly as a leading force in the production of transmission towers - which can deliver power up to 500 KV – along with distribution towers. The majority of its business is in Saudi Arabia, and contractors such as National Contracting Company and Al Sharif have regularly returned to the company for further work. But it has also strong lines of steel production for the oil and gas, petrochemicals and cement industries, particularly for plant upgrade work. 2009 saw sales of SR1.12 billion, up more than SR100 million on the previous year’s total despite a 14% increase in sales costs during that time. First quarter net proﬁts fell marginally, to SR24.2 million from SR25.3 for Q4 2009 after Zakat. Its stock price really started to climb after the ﬁrst week of February. On 9th of that month it was trading at SR34.6 – by 1st May it had reached a peak of SR42.9 and by 22nd June was coasting at SR38.8.

MAKKAH CONSTRUCTION & DEVELOPMENT COMPANY Core business: Construction projects for all new developments and upgrade work in the vicinity of the Grand Mosque in Makkah.

CW benchmark outperformance: 6.9% Market capitalisation: SR43 billion MC&DC has delighted shareholders in the last two weeks by maintaining its cash dividend at SR247 million for its June-to-June cycle. Other figures from the statement look strong too, with net income beating that of 2008 by 17% despite a slip from the AED213 million posted between July 2008 and June 2009. First quarter profits this year were SR52 million, up from SR43 million of last year’s first quarter. The company is well-placed as a developer for the area around the Grand Mosque based on a recent incline in pilgrim numbers, with the Hilton Makkah a stand-out project for the company project. Its share price has been substantial, from SR27 at the start of the year to SR30.1 on the 22nd June, though not without its volatility.

46 CONSTRUCTION WEEK JULY 3–9 2010

SAUDI CERAMIC COMPANY Core business: The manufacture and selling of ceramic

products for both wholesale and retail markets. Bathroom ﬁxtures, wall and ﬂoor tiles, electric water heaters, and ceramic road markers are among its key enterprises.

CW benchmark outperformance: 4.58% Market capitalization: SR3.075 billion The third entry from Saudi Arabia’s extraordinary materials market, Saudi Ceramic Company typifies the opinion that the global financial crisis never made it to the Kingdom. The company’s sales and net income have both grown year-onyear, with last year’s annual sales up by SR100 million and after-tax earnings up 9.7% to SR197 million. Its exporting network sells into 45 countries, and it has 26 showrooms around the Kingdom. Cash dividends have been maintained in the last two years, and the company has been proven credit worthy: in May it borrowed SR71 million from the Saudi Industrial Development Fund to help finance a plant expansion. Once the increased production emerges, sales should follow, and with it further gains on the stock market. Raj Sinha at HSBC Saudi Arabia advised to be ‘overweight’.

STOCK STARS

ZAMIL INDUSTRIAL INVESTMENT COMPANY Core business: A manufacturing giant of glass, steel, mirrors and air conditioners. Subsidiaries include Zamil Steel.

AL ANWAR CERAMIC TILES COMPANY Core business: An Omani manufacturer of kitchen, ﬂoor and bathroom tiles that distributes around the region.

CW benchmark outperformance: 0.3% Market capitalization: OR49.16 million A significantly smaller company than its Saudi peers, Al Anwar Ceramic Tiles Company’s moniker as the ‘first and only tile manufacturer in the Sultanate of Oman’ goes some way to explain its ability to sell well in the last two years. The combination of local raw materials and finishing materials and designs from Europe give it a degree of uniqueness, but it is the recent balance sheet that has been most pleasing to the eye. Net profits for the first quarter rose 11% from OR1.26 million to OR1.43 million compared to the first three months of 2009, with sales rising from OR4.096 million to OR4.575 million during that period due to a 7% increase in production. “Based on our cost position and the very satisfactory acceptance of 'Al Shams' across the GCC markets, we remain optimistic about our prospects for the year 2010,” said chairman Hussain Ali Habib Sajwani in April.

YAMAMA CEMENT COMPANY Core business: A producer of cement, clinker and paper bags for packing cement, at a capacity of 30 million bags.

CW benchmark outperformance: 0.27% Market capitalization: SR6.73 billion Yamama has in the last year rode the crest of Saudi’s construction wave, and is one of the major producers, with an annual capacity of 6 million tonnes in clinker and 6.3 million tonnes in cement. It has seen a remarkable rebound in quarterly results, the ﬁrst three months of this year producing SR165 million, a rise of 31%, on top of Q4 2009 results that were up 70% on 2008’s last quarter. Investors saw a cash dividend for the second half of last year at SR2 per share; they can expect that and more for the ﬁrst six months of 2010, despite a worrying crash in share price from SR50.5 to SR45.1 in seven days during May. But with nine subsidiaries and joint ventures, it has a substantial operation.

CW benchmark outperformance: 4.26% Market capitalization: SR2.736 billion The only materials supplier with big-scale multiple specialisms, Zamil has been competitive on all fronts in the last year: steel, glass, mirrors, transmission towers and air conditioners. Its rise on the stock market had an outstanding start to the year with Q4 2009 results that more than tripled after reducing costs and securing investments in India and Egypt. In an interview with a newswire, Abdulla Al-Zamil, chief executive officer, emphasized the reduction in inventories and receivables to reduce its debts to banks. It has meant that it could cut steel costs in its home markets where some rivals could not. New ventures with Indian firm Heurtey Petrochem’s PetroChem Development and New Delhi TeleTowers last year and a steel factory in India at the end of 2008 look to be adding to its firepower. But despite its gain against the CW benchmark, it fell below the SR41.73 in which it started the year and has lost around SR9 since its peak in 14th April.

CONCLUSION: As four of the top five, Kuwait companies have been surprisingly successful. Cement is still vital, and Kuwait Portland Cement Company has enjoyed the market juggle of supply and demand. Two contractors – Combined Group Contracting and KCPC – have produced a big outperformance with effective diversification. However, some have flourished with a single product area, such as Saudi Vitrified Clay Pipes Company. There is a link between strong first quarter results and a good rise for the half-year.

JULY 3–9, 2010 CONSTRUCTION WEEK 47

ares

SECTOR FOCUS

Ground force While money trickles back in to the construction industry after a tough couple of years, piling and foundation companies are still feeling the pressure . Carlin Gerbich reports

ITHOUT DATIONS,

SOLID

the

FOUN-

construction industry sits on pretty shaky ground and a lack of funding for new projects means contractors charged with providing piling and foundation work themselves are on fairly unstable territory. Since the construction industry slowdown during the latter half of 2008, piling and foundation work has all but ground to a halt in the UAE. Work is still available, but the frantic level of activity prior to the slowdown has had an impact on the business, and caused many of the industry’s main players to tighten their belts in order to weather the current economic storm. At the height of the construction boom in Dubai, more than 70 piling and foundations companies were operating in the emirate – but a drought in work has seen this number decline. “Things are very quiet,” Mervin Fernandes, marketing manager for equip-

48 CONSTRUCTION WEEK JUNE JULY 326-JULY - 9, 20102, 2010

ment specialists Hytec International, specialists in hydraulic construction equipment. He says sales of construction machinery has remained constant, but the demand for piling rigs has dropped. “Nothing is moving and nothing has really changed since October 2008 when the industry went quiet.” Hytec supplies both new and used piling rigs to contractors, but Fernandes said: “Both new and used markets are slow – there’s no movement of machinery and many contractors have stopped. Things have to change, but at this moment, we don’t know when that will happen.” While funding is slowly trickling back into the construction industry, developers are reluctant to start new projects. Most money is being used to complete existing projects, not start new ones and, until that happens, piling and foundation contractors will continue to ﬁnd it tough. “The volume of work for the ﬁrst two quarters of 2010 has certainly dropped,” said Shad Asif Khan, general manager

SECTOR FOCUS

of UAE specialists Keller Grundbau Gmbh. “It seems it may pick up slightly in the third and fourth quarters – but still not enough in terms of the volume of contractors out there looking for work.” “The first part of the year was very difficult. We seemed to spend the whole time filling out papers and tenders, with very short closing dates, and not really having many of them convert into contracts. Decisions get delayed, or something else happens,” he said. While the company has enough work to see it through tight times, Khan says some contracts aren't due to start until next year or even 2015. A reduction in the availability of work has also led to other contract related pressures – not the least of which are time constraints and penalties that come from failing to meet deadlines. “I thought that a recession would mean that everything would slow down and people would take time to do things at a reasonable pace – but the opposite is the case. Clients are squeezing contractors to get things done faster. I don’t know whether it’s pressures from the banks, or where it’s coming from. I don’t understand the logic,” Khan said. While other construction jobs can be solved by pouring manpower and machinery in to it, piling and foundation work often has physical constraints that limits the amount of work that can be done. Restricted work sites often means that only one piling rig can be used, so contractors can’t simply throw men and machinery at a job to hit tight deadlines. “Not every job is like the Palm Deira [with wide open spaces and room for several piling rigs]. Most are very restricted on space,” Kahn said. Another area contractors are feeling pressure is in a lack of understanding from some clients over the amount of time it takes regulatory bodies to approve plans. “I can’t blame regulatory bodies for that. They’re looking at something that’s been worked on for several months for the first time, and time needs to be given for this to happen. We have to plan around this, but it’s unfair on contractors to be nailed for any delays that are out of their

hands. Clients need to try and understand what is involved,” Khan said. So far, Keller Grundbau has weathered the downturn without downsizing. Contracts in the petrol chemical industry in Abu Dhabi, and others throughout the UAE have kept the company bouyant and, with the promise of more work in the second half of 2010, Kahn says staff are taking holidays now in anticipation of a better few months ahead. “At the moment, it’s just a matter of working out how to support the company and survive until then,” Khan said.

50m 45m 290,000 Depth of each of the 192 piles supporting the Burj Khalifa

Depth of each of the 250 piles supporting the Burj Al Arab

Weight in tons bearing down on the foundations of the Millau Viaduct, France

Piling profits in a tight industry The profits from piling and foundation work come from selling concrete and steel at small markups, with little room for movement. But, with the pressure mounting on businesses to ensure the company remains busy, some firms are operating on exceptionally thin margins. “You get a sense of how smaller businesses are suffering from the kinds of prices they’re offering,” said Shad Asif Khan, Keller Grundbau Gmbh’s general manager said. “We’re at a slight advantage in that we have a lot of experience, so tend to be shortlisted for contracts, but it’s still tough. Clients are really enjoying this time,” Khan said.

JUNE 26-JULY JULY 3 - 9, 2, 2010 CONSTRUCTION WEEK 49

PROJECT UPDATE ON SITE CW reviews a collection of its most recent site and plant visits to keep you up to date with project progress

WANT TO UPDATE YOUR PROJECT'S PROGRESS, OR HAVE IT INCLUDED HERE? Email: stuart.matthews@itp.com

148 Townhouses in Al Muneera

AL MUNEERA Location Abu Dhabi Visited June 2010

DUBAI PEARL Location Dubai Visited June 2010

KING ABDULLAH FINANCIAL DISTRICT Location Riyadh Visited June 2010

50 CONSTRUCTION WEEK JULY 3-9, 2010

Al Muneera is being developed by Aldar as part of the expansive Al Raha Beach project in Abu Dhabi. The projects is made up of two distinct areas, with an island and mainland divided by a canal. A total of 16 residential towers are under construction, along with an ofďŹ ce tower, 11 villas and 148 townhouses. Al Futtaim Carillion is the main contractor, with Drake & Scull providing MEP works.

With four 73-storey towers planned, the Dubai Pearl project is a massive undertaking that has taken several years and some false starts, to finally get a solid start. Piling was completed in 2009 along with the raft pouring. The towers are just starting to grow, with a 600strong work force moving from building to building, as each one progresses at a similar pace. The project is aiming for LEED Gold certification.

The King Abdullah Financial District is one of the most challenging and intricate projects currently under development in Saudi Arabia. A total of 77 buildings are expected to be built in six zones across the entire site. Saudi Bin Laden Group is building four of the first 10 towers as part of the initial construction packages. The company is targeting Leed ratings for the buildings when complete.

PROJECTS

7000t Daily production capacity

CONSTRUCTION AND DEMOLITION WASTE RECYCLING PLANT IN AL DHAFRA Location Abu Dhabi Visited May 2010

SAUDI BINLADIN GROUP FOR INDUSTRIAL PRECAST Location Jeddah Visited May 2010

36 Townhouses in the first part of the project.

AL WAHDA STREET Location Sharjah Visited May 2010

SANDOVAL GARDENS Location Dubai Visited April 2010

Concrete waste, from construction and demolition projects, now has an alternative place to go, other than straight to landfill. The recently opened recycling facility in Al Dhafra, on the outskirts of Abu Dhabi, is crushing waste concrete into aggregate for use in road building. The plant will be able to produce up to 7000 tonnes a day, using crushers, conveyors, screens and magnets to break the raw material down to size.

The Saudi Binladin Group for Industrial Precast operates out of Jeddah, a city with a whole street full of offices for the company and on the outskirts there are enormous factories and holding yards. The plant is supplying a number of projects across the country, including the Princess Noura Bint AbdulRahman University for Women in Riyadh and the King Abdullah University for Science and Technology.

Central Sharjah is moving closer to a transformed road system to meet today’s traffic volume, following the latest milestone in Package 5 of the redevelopment of King Abdul Aziz Road. The latest completion of note, officially announced on 30th April, is the opening of the viaduct on the west side of Al Wahda Street. The viaduct crosses King Abdul Aziz Road at a 90 degree angle, itself a major project.

Bavaria Gulf’s flagship Sandoval Gardens project has been an interesting mix of German and Arab expertise, and its townhouses are near to completion. The 36 townhouses are the first part of an AED260 million twin-development of the overall Sandoval Gardens. All townhouses conform to TUeV, a standard of quality that is a common benchmark, which means all construction and finishing is assessed by a third-party.

JULY 3–9, 2010 CONSTRUCTION WEEK 51

PROJECTS

MIRDIF CITY CENTRE Location Dubai Visited April 2010

Million m2 of desert is what DIP started with

DUBAI INVESTMENTS PARK Location Dubai Visited March 2010

MEYDAN Location Dubai Visited March 2010

OCEAN HEIGHTS Location Dubai Visited March 2010

52 CONSTRUCTION WEEK JULY 3-9, 2010

UAE-based Alec was awarded the main contract to build the US $816 million Mirdif City Centre in September 2007, with construction getting under way almost immediately. Developed by Majid Al Futtaim Properties, more than 16000 jobs were created at the peak of the design and build stage. The team behind the mall are hoping for a Leed Gold rating, to reflect the work they did to make the building sustainable.

In 1997, way before the construction boom really took off, Dubai Investments’ management took it upon themselves to lay foundations across 24 million m2 of desert and start building a mixed-use city from scratch. In March, the developer announced the launch of the final phase of development, which is set to become a hub for logistics services spread across 500,000m2. Construction was due to start in May.

Dubai was thrown back into the limelight when the US $10 million Dubai World Cup kicked off at the new Meydan Racecourse in Nad El Sheba. The enormous 18.6 million m² project consists of four separate areas including the development’s central feature, the Racecourse with Meydan Hotel. Meydan City Corporation has announced plans to build an equestrian city in China’s Tianjin province.

Construction of Ocean heights tower began in August 2007. The US $175.6 million (AED645 million) main contract was awarded to Arabtec. As it rises, the tower’s floor plates reduce in size, allowing the rotation to become even more pronounced. At the peak of construction, there were 30 contractors and 2000 people on site. On December 23, 2009 – 23 days ahead of schedule – the building was topped off at 310m.

PROJECTS

4 Levels of difference in U-Bora towers

U-BORA TOWERS Location Dubai Visited March 2010

INFINITY TOWER Location Dubai Visited February 2010

6000 Number of men on site at any one time

CENTRAL MARKET Location Abu Dhabi Visited January 2010

BURJ KHALIFA Location Dubai Visited January 2010

Business Bay's U-Bora towers is being built by Korean firm Bando, the project features a podium with a curved residence building, which has a roofline that sweeps from 12 levels at one end, up to 16 at the other. The build was started back in 2007, initially with Simplex acting as subcontractor. The subcontractor left site in September 2008, leaving Bando both as developer and lead contractor.

Infinity Tower, located in the Dubai Marina, is set apart from its neighbours by its rotating structure and is spiraling into the sky at a fast pace. Each slab plate rotates 1.08 degrees around a fixed cylinder core. Once the tower is complete, the 73 floors will add up to a cumulative 90 degree angle. There are no pillars in the building; instead it is supported via a complex concrete column structure.

Central Market was named Abu Dhabi’s safest construction site just prior to Construction Week’s visit. The project combines three super-tall towers with an Arabian Souk and covers 5.2 million m2. With more than 6000 men on site at any time, the contractor, Arabian Construction Company is proud of its safety record and the measures it takes to keep all of its workforce safe on the massive site.

Possibly the most famous building in the world and certainly the tallest, the Burj Khalifa got its official opening in the early days of 2010. Big name contractors such as Arabtec and Besix were involved in the record-breaking build, which also played on the skills of Hyder Consulting and Depa. Developer Emaar made claim to eight world records, all based around the tower’s height and accompanying features.

JULY 3–9, 2010 CONSTRUCTION WEEK 53

APPOINTMENTS TIPS FOR JOB SEEKERS

Scan and talk When searching for a job during or shortly after a recession, it can be difficult to find regular new listings. It is important that job seekers, when looking for a new position, scan lots of different magazines, newspapers, websites and notice boards, and keep their eyes and ears open at all times. More often than not, competitive positions will not be advertised, but you may hear about them through word of mouth. Industry contacts are key. Create a portfolio Regardless of whether you are lucky enough to be invited for interview, a good way to get ready for one is to create and regularly update a portfolio of your best work. This is therefore not a folder of everything you have ever done, but a selection of perhaps, the best projects you have worked on. As well as demonstrating your ability, a portfolio will show your potential employer that you are committed and organised. Be armed with ideas If you are asked to go to an interview, you will need to prepare in advance. One of the best things you can do is come up with an array of ideas (which you can execute in your new position) to help raise the profile of the company. Note: It helps to show modesty when expressing these ideas. 54 CONSTRUCTION WEEK JULY 3-9, 2010

Shuffle Abu Dhabi Ports Company has appointed a new Chief Executive Officer, Tony Douglas, formerly the Chief Operating Officer (COO) and Group Chief Executive designate of Laing O'Rourke, to steer the development of ADPC's portfolio of projects, including the flagship Khalifa Port and Industrial Zone (KPIZ). Mechanical pipe joining systems expert Victaulic meanwhile has elected a new Vice President and General Manager for Europe, the Middle East, Africa and India, Mark Gilbert. Previously regional director for the Middle East, Gilbert has more than 15 years experience working for Victaulic. In the same week, Masdar Institute of Science and Technology, the world's first graduate research institution dedicated to alternative energy, environmental technologies and sustainability, has appointed Dr. Fred Moavenzadeh, formerly a collaborating partner at Massachusetts Institute of Technology (MIT), to be its new President. Likewise, Senergy, an energy services company specialising in the engineering and project management sector, has made Andrew Sutherland, formerly Executive Vice President at Paradigm, the new Vice President of Energy Services Global and Stuart Walley, formerly Area Manager, Southern Gulf and India at Paradigm, as the company’s latest Regional Manager.

3 TOP JOBS For more details visit: www.constructionweekonline.com/jobs Please apply directly to the listed consultants. Role: Contracts ManagerSewage Treatment Plant Agency: Randstad A Qatar-based design, engineering, project and construction management consultancy ﬁrm is currently looking for a Contracts Manager to work on a major sewage-treatment plant, design/build project in Doha. The successful candidate will have a minimum of 18 years’ experience, the last eight years of which should have been spent as a Contracts Manager and claims specialist on similarnatured infrastructure projects. Applicants should also hold a Bachelors Degree in a Quantity Surveying discipline from a recognised University. Prior experience in the Gulf Region would also be advantageous.

Role: Planner- Healthcare Agency: Randstad

Role: Lead Structural Engineer Agency: Randstad

An individual with in-depth knowledge of large scale hospital planning is required by a leading provider of dispute avoidance, dispute resolution and consultancy services to the construction and engineering industries. Having held senior positions within project teams, the right candidate will have substantial experience developing C1 14 programmes with logic, resource and cost loading. They will have the ability to defend logic and demonstrate why they are the best applicant. Additionally, they will need to identify and manage change and delay in the programme, maximising the return for the client where possible.

An Abu Dhabi-based company in the rail industry requires a Lead Structural Engineer with 10 years minimum experience to join its UAE team of highly skilled staff. The role will involve managing the design and construction of the structural works portion of a major railway project. Responsibilities will include planning, design, cost estimation and construction of all structural works associated with the project. This will include, but not be limited to, bridges, tunnels, earth retaining structures, noise walls, culverts, utility protection, stations, terminal facilities, depots, and all other structural scope items related to railroad works.

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JULY 3 – 9, 2010 CONSTRUCTION WEEK 55

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Email: foreman@itp.com

Palatial planning

always see Abu Dhabi in the news these days. Whether they’re building another hotel, proposing plans for a new tower or upgrading infrastructure, guys like us are constantly being called upon to get in and get on. This week, word on site was that the new Presidential Palace there is about to announce the ‘main man’ for the construction works, and I’m pretty sure there are a few big players in the running. Arabtec deﬁnitely came up, and I think ACC , Al Habtoor and Saudi Oger were also mentioned. The guys say the piling and marine packages have already been awarded, so it’s just the last two still to go. Funny though, there must have been quite a lot of messing around over the big contract, because the guys said that the deadline for bidders was pushed back at least twice. Think the whole project is worth about AED 2 billion, so I reckon there’ll be a big pay out. Good luck to them I say. The work itself I think is going to cover around 220,000m2, so it sounds like a good place to host cabinet meetings and government business. 56 CONSTRUCTION WEEK JULY 3–9, 2010

Balanced books I’ve been studying our balance sheet this week, under pressure from the powers that be to try and save a few ﬁls here and there. One spot where I might be able to save our current job a little valuable cash is materials. While our deliveries have all been on time for the last month – no volcanic ash, ﬁngers crossed – my boss reckons I should be able to get a much sharper price on some of the essential stuff we use a lot. Steel is right at the top of my target list. While I have to sympathise a little bit with the local suppliers of steel and other raw materials – I hear they’re getting undercut by the equivalent product from Turkey – I just need to get the best bargain I can. Still, that’s the market for you, and for all the talk we hear about carbon footprint, nothing beats a cheap import.

Real value Do all of you remember ‘value engineering’? I know it never really went away, but recently I’ve been in more talks with consultants who do the numbers for this kind of work

It’s a steal: steel made in Turkey by this chap and his co-workers is coming into the region and undercutting the prices of local suppliers.

and it seems to be the new feng shui of construction. It’s just someone coming in with the great idea at an early stage to look at a project overall, rather than in all its many parts. This seems to imply that the project would either fall apart or be massively over budget if those guys weren’t around to watch what I’m up to, or that we are all wearing blinkers on-site. However, the clients love the idea of saving cash so we’re stuck with it, even though it’s us that have to pay for yet another consultant.

“This week, word on site was that the new Presidential Palace in Abu Dhabi is about to announce the ‘main man’ for the construction works. I’m pretty sure there are a few big players in the running.”

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