ME Consultant April 2016

DeSimone Consulting Engineers walks us through life at a structural engineering firm

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CONTENTS

April 2016

04 04

On topic

07

news And VIews frOm AcrOss the mIddLe eAst OnLIne news

CPI’s digital platform for construction news

07

12

On tOpIc

Defining the value-add of chartered quantity surveyors

12 12

In practice AnALysIs, InsIghts And InterVIews

20 28

cOmpAny VIsIt

DeSimone Consulting Engineers talks about what goes on behind the scenes at a structural engineering firm

20

InsIght

Assessing where intra-city rail design is heading in the years ahead

26

OpInIOn

Brendan Young of WSP | Parsons Brinckerhoff talks about the opportunities for property development around rail infrastructure

28 28

26

32

On site cAse studIes, OpInIOns And snApshOts

Q&A

Tom Sangster of Downley Consultants speaks to Middle East Consultant about the firm's launch in the region and the road ahead

32

OpInIOn

Saif Al Shamsi of The Legal Group talks about new UAE labour laws and their implications

34

fOcus

Sika establishes its 94th worldwide subsidiary in Kuwait

40

fInAL wOrd

Simon Moon of Atkins talks about the opportunity that construction consultants have to make a positive impact on the built environment

34 April 2016 Middle East Consultant 1

WELCOME

Editor’s note Group FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD

Accommodating The Future

I

PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713

t’s been an intense month at Middle East Consultant with the spotlight on the rail industry and the Middle East Rail Conference 2016.

It’s incredible how the rail industry has evolved in leaps and bounds. Dubai has been at the forefront of this in the region, with its efficient intra-city rail network performing with great consistency, but even experts have said that with needs constantly changing, predicting the future is difficult.

As a result, the industry needs to be prepared to accommodate any changes that occur, and this is not limited to any particular segment of the construction sector.

Airport development takes place keeping the prospective needs of passengers in mind; mall expansions are a result of the same; roads, bridges and even the buildings around us are all evolving based on studies and research of what citizens may need in the years ahead.

In terms of the future of building design, I think it’s especially interesting to hear what Ahmed Osman at DeSimone Consulting Engineers has to say about skyscrapers going forward. He believes that they will not only get taller but that the designs themselves will get far more complex, which will naturally require structural engineers to think out of the box to keep them standing and stable. In fact, DeSimone is working on a lot of interesting projects that you can read about in the feature.

Lastly, let’s not forget that with projects turning more complex, the importance of having chartered quantity surveyors on board to properly evaluate the job at hand grows. As explained by experts, unlike regular quantity surveyors, they possess a diverse scope of competencies like commercial management, design economics and cost planning, contracts, contract pricing, and construction technology, skills which will be invaluable on projects going forward.

Editorial CONSULTING EDITOR GAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 375 5480 DEPUTY EDITOR DAVINA MUNRO davina.munro@cpimediagroup.com +971 4 375 5475 SUB EDITOR AELRED DOYLE aelred.doyle@cpimediagroup.com

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07

QUANTITY SURVEYORS The value-add of chartered quantity surveyors.

On topic W

QUANTITY SURVEYORS

SUMMING IT UP

ME Consultant examines the benefits of having a chartered quantity surveyor by your side on a project

hat is the difference between a quantity surveyor and a chartered quantity surveyor? It’s easy to think that since they both fulfil the same tasks, having the ‘chartered’ in front of the job description is simply an unnecessary vanity.

However, when you delve deeper into the role, it becomes abundantly clear that this is far from the case. A chartered quantity surveyor brings to the table far more training and knowledge, allowing him or her to make more informed decisions than your average quantity surveyor.

Therefore, perhaps it’s time to look at why the construction industry, and consultants in particular, should be pushing their clients towards using charted quantity surveyors, while also examining the various benefits they bring to projects they work on.

“A chartered quantity surveyor delivers the same basic roles as a quantity surveyor, but also at a higher level,” says Clive De Villiers, senior vice president at C-Quest. “A chartered quantity surveyor, having more experience and knowledge, will manage quantity surveyors who are handling quantity calculations and pricing.

The education and experience of a chartered quantity surveyor also includes the fields of procurement and construction contracts.”

Questions must then be asked – does the region have enough chartered QS’s in operation?

How does the industry go about bridging the gap between more junior or inexperienced quantity surveyors and chartered quantity surveyors?

“The perception of a quantity surveyor in this region is that a QS is someone who undertakes basic quantity take-offs and measurement, whereas a chartered quantity surveyor has a very diverse skill set and is an extensively trained construction professional who has a depth of commercial knowledge that enables April 2016 Middle East Consultant 7

on topic QUANTITY SURVEYORS

Keith Bennett, contracts director at Saudi Binladin (Public Buildings and Airports Division).

him to give economic and contractual advice, together with more professional input than that of a more inexperienced quantity surveyor. That’s the difference,” says Keith Bennett, contracts director at Saudi Binladin (Public Buildings and Airports Division).

Robert Jackson, regional director of the Royal Institution of Chartered Surveyors (MENA), points out that contractors in the region tend to stipulate that quantity surveyors employed on a project have a certain number of years of experience.

“This is very inappropriate because you may end up with somebody who has sat in an office drawing take-offs and measurements, and doing

Craig Finlayson, head of Contract Advisory Services at Currie & Brown.

nothing else,” he admonishes. “That particular person, while they may be doing their job very correctly, will add no real value to their client in terms of advice and value creation.”

“What RICS does when we look at a chartered quantity surveyor is that we map out what we believe are appropriate competencies to suit today’s industry. So that means that your age and years of experience as a surveyor don’t matter.

We actually request that they demonstrate to us a set of competencies that cover a much more diverse scope.”

This diverse scope of competencies includes things like commercial management, design

A chartered quantity surveyor has a diverse scope of competencies that add great value to the project, such as design economics, cost planning, contracts and commercial management.

8 Middle East Consultant April 2016

Clive De Villiers, senior vice president, C-Quest.

economics, cost planning, contracts, contract pricing, negotiation and construction technology.

RICS ensures that professionals can then apply this diverse experience to different scenarios and also provide advice and value creation for their client. As the industry is going through a global evolution when it comes to adopting and incorporating construction technology on projects, Jackson asserts that quantity surveyors must also be familiar with the likes of BIM and other construction technology.

“We’re constantly looking at technology being used and making sure that our chartered surveyors are being kept abreast with these technologies,

on topic QUANTITY SURVEYORS

Robert Jackson, regional director, Royal Institute of Chartered Surveyors, MENA.

procurement and tendering, project financial control and reporting, qualification and costing of construction works,” he adds.

Craig Finlayson, head of Contract Advisory Services at Currie & Brown, backs up Jackson’s assertions, explaining that the role of a chartered quantity surveyor includes, but is not limited to, advising clients on the most appropriate procurement routes, something often overlooked by clients in the Middle East.

“A chartered surveyor is also able to advise on the most appropriate form of contract and can recommend which one is most appropriate for the client and the project. The role of a chartered surveyor also extends to providing lifecycle cost advice, undertaking value engineering tasks to ensure the client receives the most suitable end product at the best value and, finally, providing expert advice in disputes,” Finlayson reiterates.

Having a quantity surveyor with these particular skill sets becomes vital on projects where the client may not necessarily have the requisite experience or knowledge to combat bad practices or shoddy work. A chartered surveyor can then step in and explain the processes to the client, while also giving reasoned advice throughout the project lifecycle.

“On a recent project that Currie & Brown worked on, there were a number of issues which had to be accounted for, such as incomplete design for a portion of the work phasing requirements, logistics, coordination between infrastructure and main works, tight time frames for certain components and so on,” Finlayson recollects, highlighting just how important a role a chartered surveyor can play.

Meydan Hotel and Racecourse in Dubai.

“We considered all the issues, facilitated workshops, laid out the main options available, obtained the team’s buy-in and then executed the desired route. The client acknowledged that the early procurement advice that we provided contributed hugely to the success of the project.”

Bennett relates his own tale working on a project in the Middle East five or six years ago, when he encountered a project that posed a particular challenge.

“A tendering process was adopted to obtain subcontractor prices. There are set rules of professional tendering and normally tenders are submitted in a sealed envelope. When the tenders come in, they are opened in front of a committee and it is expected that the lowest price gets the job, providing there are no additional conditions and that the tender complies with the contract.

“On this occasion, I faced an issue because, for the company I was representing, the ‘preferred’ tenderer was subsequently invited to have his tender negotiated down, thus becoming the lowest bidder. Now that was totally against the normal rules of professional tendering and I had

to advise against this.

“As a professional, we would be expected to choose to resign a commission or position, rather than allow that to happen. Nor would we do things like change a figure under pressure to do so, which would ruin our reputation. This is how a chartered surveyor should act. It’s this sort of ethical standard that we stand by and practise,” Bennett insists.

While these tales are heartening and extremely positive for the industry, the concerning fact is that in the GCC region, only a low percentage of quantity surveyors are actually chartered. The majority of quantity surveyors are employed by contractors, so there is less of an incentive for them to be chartered. Furthermore, on the consultant side of the industry, junior to intermediate members of staff tend not to be chartered, while senior, client-facing quantity surveyors have MRICS status.

“One of the challenges of bridging the gap in this region is the extensive training which is required to meet the standards to pass the final assessment of the RICS. We continuously strive to increase the number of chartered

“When RICS looks at a chartered QS, we map out what we believe are appropriate competencies to suit today's industry. So that means that your age and years of experience as a surveyor don't matter” April 2016 Middle East Consultant 9

on topic QUANTITY SURVEYORS

staff through our structured recruitment and training programmes, but many firms do not provide a structured training programme for the APC,” says Finlayson. “We believe that more organisations need to introduce similar programmes in order to raise the profile of the quantity surveying profession and improve the services and advice provided to clients.”

De Villiers agrees that education is probably the biggest obstacle facing the industry when it comes to putting out more chartered quantity surveyors, adding that there are discrepancies in what is being offered to those looking to boost their credentials.

“While it’s difficult to comment on actual numbers, the points raised about the education routes go some way to explaining why there are a number of individuals with the title of quantity surveyor and not chartered quantity surveyor.

The challenge is in providing the education routes. Colleges in the region are going some way towards addressing this, but equally, some of the courses are offering qualifications that give a false impression to people outside the industry,” he warns.

“There is also a need to ensure that the individuals taking these courses have the basic knowledge to underpin the status conferred by the qualification. The education route qualification then gives individuals the opportunity to follow one of the RICS routes towards attaining the chartered designation.”

Despite these challenges and concerns, Jackson remains very positive over the future of chartered quantity surveyors in the region, due to shifting trends in the market.

“At the moment, I think we’re certainly seeing more focus on ethical practices in the Middle East. Clients are wanting to create more of an ethical, transparent environment and I think that this is really important as we’re now trying to attract FDI investments from overseas.

Clients and employers want to see real value being created on their projects and chartered professionals are trained to deliver that.

“Governments are also starting to seek more external project funding / FDI and you’re only going to secure such funding if the investors feel confident that the market is transparent and professional. Having chartered surveyors can definitely add to that level of confidence,” he explains.

10 Middle East Consultant April 2016

Cayan Tower in Dubai.

Finlayson adds that as tighter liquidity is predicted in the year ahead, clients will inevitably be looking to benefit from front-end advice, particularly in procurement, which will ultimately be a boon for the chartered quantity surveying industry.

“Clients often perceive the quantity surveyor as someone who provides some initial cost planning

advice, prepares bills of quantities and then undertakes a post-contact role. Chartered quantity surveyors are capable of doing much more than this, and clients who seek out and embrace advice from the consultants are going to be better positioned to make more considered approaches, which ultimately leads to commercially beneficial projects,” he concludes.

Dubai | 8 November 2016 Following its hugely successful debut last year, the Middle East Consultant Awards returns in November 2016 to celebrate the GCC’s leading construction specialists in its distinctive and engaging style. Reflecting the diversity of the consulting industry in the GCC, the awards recognise the region’s best multi-discipline construction consultants, architects and the multitude of specialists in structural engineering, MEP, urban design, sustainability, quantity surveyors and cost consultants and all the many other fields that make up all the facets of this wonderful industry. In addition we will be celebrating projects and individuals from junior to senior level, as well as introducing Workplace of the Year.

NOMINATION ENQUIRIES Davina Munro Deputy Editor +971 4 375 5475 davina.munro@ cpimediagroup.com SPONSORSHIP OPPORTUNITIES Michael Stansfield Commercial Director +971 4 375 5497 michael.stansfield@ cpimediagroup.com

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IN PRACTICE dEsiMonE desimone consulting Consulting engineers EnginEErs

Company visit

STRUCTURE THE FUTURE

Davina Munro spends the day at DeSimone Consulting Engineers to understand the mechanics behind the drawing board of structural engineers.

12 Middle East Consultant April 2016

IN PRACTICE dEsiMonE Consulting EnginEErs

I

N A REgIoN wHERE ARCHITECTS ARE FoCUSEd

on pushing the complexities of design, the call for engineers who can create effective support and load resistance systems for these structures has never been greater. Demand for structural engineering proficiency has grown exponentially, and consultancies are taking steps to ensure they have the best talent on board to meet the need of the hour.

Enter DeSimone Consulting Engineers, a New York-based firm recognised for its structural engineering expertise on significant projects like 400 Park Avenue South, HL 23, Art Gallery of Alberta and the Atlantis Bahamas in North America. Since its first foray into the Middle East in 2008, the company’s focus has been on establishing its name in the market, by no means a simple task.

Having launched at the peak of the global financial crisis, the biggest challenge for the company came at the start, says Ahmed Osman, managing principle for DeSimone’s Middle East division, but it has since proved to be a fruitful venture.

“I think the main challenge for us when we came here was knowing the local practice and understanding the rules and regulation. It was a different market for us, and although we are one of the biggest structural engineering firms in the US, we didn't have that kind of international exposure.

“Also, when we entered the region, it was the peak of the recession so we knew we shouldn’t focus on one particular segment or sector. We worked with every contractor, architect, developer and quite a few local entities, and didn't limit ourselves. It worked very well for us during that period.”

Nearly 10 years later, the company is well adjusted in the region and one thing that has worked in its favour is its focus on strictly providing structural related services and not diversifying into other engineering arenas. By doing this, Osman says they have carved a niche in the market which has given them the opportunity to work on some very interesting projects, such as Yas Mall in Abu Dhabi, Sheikh Khalifa Mosque in Al Ain and King Abdullah Financial District in Riyadh.

A current project that has put their skills to the test is The Emirates Pearl Hotel in Abu Dhabi, a 55-storey twisted building which includes 60 luxury apartments and a 437-key five-star hotel. Facilities include an expansive podium, five levels of underground parking plus five levels of restaurants, retail areas, spas, swimming pools and a gymnasium.

Osman himself worked on the building’s elliptical framework and explains that the twist starts at Tower Level 1 to the roof and sees a total rotation of 25 degrees.

Each floor plan had to accommodate partial ellipses of 0.56 April 2016 Middle East Consultant 13

IN PRACTICE desimone consulting engineers

AHMEd oSMAN Managing Principal

The 55-storey Emirates Pearl Hotel in Abu Dhabi sees a total rotation of 25 degrees. It consists of a 437-key five-star hotel and 60 luxury apartments.

degrees relative to the floor below it, all of which coil around a central core. The perimeter columns incline 15 degrees from the vertical and shift 480mm in the circumferential direction at each level.

“I think The Emirates Pearl Hotel in Abu Dhabi is one project that is close to my heart, because it took tremendous effort to design it as efficient as it came out in the end.

Working out the twist in the building took hours of brainstorming, and bouncing ideas around, but what’s even more amazing about this project than the design itself is that we really maximised its efficiency and saved a lot of construction time and material.

“The most challenging part of this project was the twisting nature of the building. Every floor twists about half a metre from the floor below it, so the dynamic of the structure was very challenging. We came up with a structural scheme which seems fairly simple but is actually very intricate in terms of engineering, and that’s the beauty of this project.”

Another project that DeSimone recently completed is the Maryah Tower, formerly known as Al Hilal Bank Tower.

Spanning a little over 90,000sqm, the structure has six levels of underground basement parking. The efficiency of the building is maximised to 85% along with the floor plate, to create as much leasable space as possible. DeSimone was able to achieve this by making the columns very small and limiting them only to the perimeter of the building, with no interior columns.

In fact, DeSimone Consulting Engineers prides itself on creating structures that are column-free and have longspan framing. Osman believes that having big and too many columns in large open spaces not only spoils their appeal, but also poses an obstacle for leasing space and

“Value engineering plays a big role in every project, and DeSimone has successfully completed many value engineering exercises for various projects where clients were able to save millions of dirhams by changing the designs to more efficient and lean ones.

“A real project case is Saadiyat Resort on Saadiyat Island, where the company value engineered the ground-floor transfer slab with a large footprint equal to 40,000sqm supporting four seven-storey towers and a big programme of landscape areas.

“The result of this exercise, after receiving construction permits and approvals, was saving 65% of the reinforcement from that transfer slab. This was achieved using sophisticated modelling techniques, more accurate loading criteria and the review of seasoned top managers who directed the design from the beginning in the right direction. The savings produced by this exercise also made the project more sustainable because of the reduced quantities of building materials and less CO emissions.”

manoeuvering cars in a parking lot.

“Architects and owners don't like to see columns in big open spaces, and neither do we. It’s really important that you think about having as few columns or keeping the buildings as column free as possible, and this needs to be done right from the planning, concept and schematic stages.

“Everyone actually loves column-less structures, but sometimes people tend to avoid it because they think it will add to material costs as a result of spans getting longer.

However, this is not the case, and sometimes you can actually save a lot of money if you remove some columns.”

In terms of applying this to high-rise structures, Osman says it all depends on the type of building. Each has 14 Middle East Consultant April 2016

IN PRACTICE desimone consulting engineers

(Left to right) Jumana Madi, engineer.

Purushotam Tapariya, project engineer.

advantages and disadvantages. For example, with residential buildings, you can accommodate many hidden columns because there aren’t formal grid lines. In commercial towers, the large and many elevators are an advantage, increasing the size of the core or lateral resisting elements for drifts, which allows engineers to do a lot more.

However, he says the most difficult type of building to work with is mixed-use, because of the combination of office, residential, hospitality, retail and parking. This means there are tower columns coming down and the engineers have to transfer them multiple times to accommodate each building function.

While most consultants with such expertise and projects have large teams to back them up, DeSimone in Abu Dhabi functions with a compact squad of 12 highly talented individuals. Every aspect of design work for the Middle East happens from this office, unlike many other firms, who tend to have small business development centres here while the design-related activities are outsourced to offices overseas.

But this by no means indicates a lack of resources, says Osman. At peak times, they have full access to DeSimone’s assets in the US, and project managers often come for extended stays from there to lend a helping hand on projects in the Middle East for as long as needed.

Working with a smaller team also has its advantages. For one, it makes the firm easier to manage, creating a familylike atmosphere and an open office environment, and allows employees to learn from projects being worked on outside their team.

Osman elaborates: “The size of the team on a project depends on how big and complicated it can get. When you have a team of four to five engineers working on one job but collaborating with other teams, it actually highlights the value of having multiple offices but at the same time working as small groups focusing on the same project."

“One of the other advantages is being able to do an internal peer review. It basically works as an internal quality

control where, before releasing a project for construction, it is shared with other groups where it is reviewed for completeness and evaluated for value engineering.”

Another way this knowledge transfer happens is through monthly lunch and learn sessions, where an employee is chosen to make a short presentation on a project that he or she is working on. Engineer Jumana Madi recalls how this open office environment and lunch and learn session have helped her navigate new territory.

“Having graduated in Canada and worked in Jordan, the codes in the UAE were completely different so it was a little tricky getting used to it. But my colleagues and boss were very helpful and guided me through it. As for the lunch and learn sessions, we learn a lot of new things in terms of avoiding potential obstacles, overcoming challenges and making future projects more efficient and sustainable. It’s all been very enriching so far.”

The benefits of this Americanised work culture are valued by project engineer Purushotam Tapariya as well. He says that having easy access to the department head and his colleagues in the US has taught him new methods to approach a job and let him learn and apply new technologies.

“I love this environment and I’ve had great support from Ahmed and everyone here. Though we are based in Abu Dhabi, we are regularly in touch with our colleagues in other offices in the US. This global exposure has helped us bring a lot to the table in terms of ideas, expertise and being able to access new technology. For example, designing more efficient structures with less volume of concrete and reinforcement, which helps reduce carbon emissions, makes projects more sustainable and is cost-effective.”

While technology plays a huge role in the larger scheme of things, and hardware and software has evolved over the last three decades with the emergence of BIM, relying solely on computer results is a common error that engineers fall into, says Osman.

April 2016 Middle East Consultant 15

IN PRACTICE desimone consulting engineers

STEPHEN dESIMoNE President and Chief Executive He explains that large models have thousands of members and tens of thousands of nodes; thus it takes only one small error in one of the node releases to produce different results or behaviours than the structure would experience. But by mixing technology with seasoned experience, errors can be eliminated. Therefore, DeSimone ensures senior engineers teach talented young engineers how to manually double-check results.

With the company meeting its targets, DeSimone Consulting Engineers is expanding its Middle East operations. Osman says that they have recently opened an office in Dubai which will add 30 employees to their talent pool in the region. This will also help them deal with the large influx of projects, which include the Sheikh Zayed Mosque expansion in Abu Dhabi, the Hermes Towers in Qatar and four new towers in Kuwait.

Also on the radar are project opportunities in Saudi Arabia, Turkey and Egypt, and in terms of new markets, Osman says they are working on a big tower in Serbia.

These growth plans naturally give rise to the question of how they plan to navigate a new branch through the current sluggish economic climate, but Osman is far from worried, saying that 2016 has been strong for the company so far, and with the number of proposals and RPFs coming in from clients, especially in Dubai, he is very optimistic about the months ahead.

“We’ve received a lot of job offers, especially in Dubai, and we’re quite confident of our position. Nonetheless, our strategy through this slowdown is going to be us working harder in terms of business development.

“We're just going to continue to do what we do best, learn from our mistakes and not leave any stone unturned. We will engage as many repeat clients as possible and basically just go out and grab every opportunity.”

In terms of his outlook on building design and skyscrapers in the region going forward, Osman believes

“Everyone actually loves columnless structures, but sometimes people tend to avoid it because they think it will add to material costs as a result of spans getting longer. However, this is not the case, and sometimes you can actually save a lot of money if you remove some columns” 16 Middle East Consultant April 2016

"DeSimone Consulting Engineers expanded to the Middle East in 2008 where we started operations in Abu Dhabi, and in 2015 we decided to open an office in Dubai as well.

"When we initially thought about expanding to the Middle East, the construction industry in the region was booming and we wanted to be part of it. The Abu Dhabi office performed higher than expected, designing many high profile projects and winning multiple awards in a relatively short period of time.

"Last year, we received many inquiries for new projects in Dubai and thus believe that the construction industry in on the rise again, therefore our presence is extremely important.

"We plan to continue our efforts to grow our business in spite of the current low oil prices and we think this economic downturn is only temporary. The Middle East region needs top notch design and construction firms to transform the ambitious vision of its leaders into reality and build technologically advanced, sustainable cities and that is where we fit in."

that they will get taller and more complex, something they are quite excited about.

“With better performing materials and tremendous progress of both computer hardware and engineering software, the design of skyscrapers will only advance in the years ahead. In fact, I see them getting taller and having far more complexities than just twisting in terms of design.

“At DeSimone Consulting Engineers, we look forward to this and feel that the more challenging the projects are the better. It gives us a great opportunity to prove ourselves, outdo rivals and constantly stay ahead of the game.”

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On site Infrastructure

Opinion

Tony Di Rosa, head of Rail for the Middle East at AECOM.

PPP reignites the infrastructure industry

Tony Di Rosa, head of Rail for the Middle East at AECOM, explains why PPPs could fuel the growth of the infrastructure industry In recent months, planned investments in the region have been going through a noticeable downturn due to the drop in oil prices. Funds are either no longer available or are being re-allocated to other priority sectors, such as welfare and health. Despite this, the Middle East remains one of the strongest regions for long-term growth and development.

The region has seen a surge of investments in much-needed major infrastructure programmes over the past few years. There has been a positive reaction to these investments, with the industry mobilising a large number of experts and resources in the region and across the world to support them. The Middle East is currently leading the way and quickly becoming the global benchmark for these infrastructure programmes.

Due to the changes currently faced by the industry, both public sector and private sector companies will need to find new ways to finance and contribute to the growth of the region through alternative financing methods for projects.

One method quickly becoming a focus of 18 Middle East Consultant April 2016

attention in the Middle East is the PublicPrivate Partnership (PPP). The PPP financing model provides a different, effective approach to funding and procurement for projects and programmes. PPPs can be used to engage and help maintain the momentum of these projects and ensure their future growth.

PPP projects feature the integration of two or more project phases, output-based contract specifications and private sector project stewardship. The PPP model tends to achieve efficiency gains with lower costs and faster delivery. Through embracing innovation, private companies can potentially reduce costs.

PPP procurement provides private sector contractors with strong incentives to deliver the infrastructure outcomes valued by the public sector owner. While there are criticisms of the model based on some past failures, the industry has learned from some of its less successful schemes, eliminating the need to reinvent the model. In addition, there are proven successful examples to follow.

Infrastructure projects should be viewed as a source of economic stimulus. By adopting a different way of funding projects, we can maintain the momentum and social commitments that have been made and avoid losing the experience that has been gained to date. Through offering bankable projects, the region is attracting international financing for crucial infrastructure that will further economic development in the region.

One of the keys to success in using a PPP model is ensuring that it has a robust legal framework to support it.

Some governments across the region are currently working to put legislative and institutional structures in place that will

On site Infrastructure

Public Private Partnership (PPP) projects like a rail network have more efficiency gains with lower costs and faster delivery.

enable PPP delivery. Dubai has recently passed a PPP law, following other Middle Eastern countries such as Kuwait, Jordan and Egypt.

In addition, it is extremely important that the procurement process downstream of the legal framework is also addressed, so that it is attractive to the private sector. The timeframes and costs associated with the tender process are higher than the conventional procurement processes, i.e. design, procure and build, or procure and design and build. Timeframes are lengthier due to the preparation time needed for the private sector to cost the 25- to 30-year concessions.

Furthermore, the tender evaluation process by the clients also tends to require more time, and generally involves a series of presentations

by the shortlisted bidders.

To make the procurement process more attractive to the private sector, I have experienced markets where the client has limited the number of participants to three parties, after a rigorous prequalification phase, and a pre-determined portion of the PPP bid costs sustained by the bidders was reimbursed to the parties not awarded the contract.

It is also important to ensure that confidence is given to the investors and private sector that the procurement process will proceed through to award and that the government will remain committed to the project throughout.

The PPP model will allow private sector industries to undertake larger scale projects and complete them faster and more efficiently.

“The PPP financing model provides a different and effective approach to funding and procurement for projects and programmes�

One of the most important requirements of a successful PPP is to have sensible risk sharing among all parties.

To summarise, PPPs are a possible solution to funding projects in the Middle East following the drop in oil prices in recent months. Through collaboration between key members in the industry, we can use PPP models to open more opportunities for growth and expansion in the region.

In order for the industry to move in the right direction, we need to have public and private sector champions to promote a change in the procurement system. The statutory environment and structure needs to be revised to accommodate the changes necessary. Everyone still has a role to play in making PPPs more feasible and accessible in the Middle East.

Finally, the key to the success of a PPP depends on having a strong pipeline of projects and sufficient involvement from both governmental and private sector bodies, to see the project from concept through to construction.

April 2016 Middle East Consultant 19

IN PRACTICE RAIL CONSULTANTS

Insight

ThE RACE foR RAIl

Experts discuss what goes into building a successful rail project, and how railway design and construction are becoming more efficient

20 Middle East Consultant April 2016

IN PRACTICE RAIL CONSULTANTS

I

n the GCC, the scepticism a decade ago about the feasibility of rail transport should be long gone, given the success of the Dubai Metro in the UAE. As other Gulf nations invest in their own rail and metro systems, there is no doubt that much is to be learned from the emirate, with the Red Line alone attracting 112.7 million riders last year.

“ThE UNITEd ARAb EmIRATEs hAs bEComE A

leader in railway design, having implemented a driverless fully automated metro system, a light rail transit [LRT] using ground-level power supply as well as advanced safety and operations features,” says Joerg Tonndorf, associate director – Middle East Transport Modelling Leader at Arup, which has worked on high-speed and rapid rail projects in the UK, Europe, US, China, Hong Kong and South Africa.

The UAE is certainly a force to contend with when it comes to railway networks in the Middle East. But despite the staggering success of the Dubai Metro project, there is room for improvement, and much can be learned by other countries in the region when implementing their own projects.

“There are lessons to be learned in relation to integration – both among transport modes as well as land use. Had the developers correctly predicted the success of Dubai Metro, the alignment would have been most likely different, with the metro potentially connecting through large-scale developments instead of running along the boundary only.”

When it comes to designing a local or intra-city railway network, certain steps should be undertaken

regardless of location and planning context, experts say.

The first is to “learn from the best, but adopt with caution”, Tonndorf says.

Needless to say, public transport in any part of the world has to be developed to suit local needs. While incorporating international best practice is important, it is crucial for the Middle East to also take into account local factors, such as climate or culture. Government entities and the industry should avoid directly adopting a design that has been successful elsewhere in the world without carrying out detailed analysis and assessment of the local context and impact, he elaborates.

Andrew Hammond, director at Arabian Railway Company, also echoes the need to take local conditions into account.

“Railway systems rely on a lot of technology, but the region itself has introduced new challenges like sand [and] extreme heat. We need to make sure that all the products and services provided to the industry meet those requirements.”

Moreover, the GCC needs to start looking at developing standards for railways in the region, he notes. “At the moment, the railways are looking at European standards and North American standards, but we need to work together to produce GCC standards which will meet the requirements of the region.”

April 2016 Middle East Consultant 21

IN PRACTICE RAIL CONSULTANTS

(Left to Right) Brendan Young, technical director – head of Rail at WSP | Parsons Brinckerhoff.

Andrew Hammond, director, Arabian Railway Company.

The most important part of designing an efficient railway system is to ensure the successful integration of the wider urban development that links to it..

When asked what such standards should entail, Hammond says they will evolve over time. For instance, spare parts and consumables often wear out at a higher rate than in their home countries, and hence will need to be developed and manufactured to cope with the conditions in the Gulf. “This in turn creates business opportunities for local companies and local diversification of the economy.”

The next step towards building a successful rail network is designing with flexibility in mind, Tonndorf says. “The willingness to take risks should be combined with designing a system that is as flexible as possible.

This could be expressed through phasing, exploring new technologies, and easy expansion.”

22 Middle East Consultant April 2016

A shortcoming associated with the existing network is that the station design does not allow the operation of longer trains, although additional trains and higher frequency operation can accommodate further passenger growth, Tonndorf says.

In addition, perhaps the most important part of designing an efficient railway system is successfully integrating it within the wider urban development, in terms of infrastructure or links with other modes of transport.

“The need for further integrated planning goes a long way towards efficiency,” Tonndorf says. “Taking the connection between the Palm Jumeirah Monorail and the Dubai Tram as an example, [it] is certainly not efficient considering the

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IN PRACTICE RAIL CONSULTANTS

(Left to right) Joerg Tonndorf, associate director – ME Transport Modelling Leader at Arup.

Julian Hill, managing director – Rail at Atkins.

location of the stations and walking distances, and major infrastructure acting as a barrier between modes. Smart city planning should address similar issues in the future.”

Hammond emphasises that a rail network is only one part of a city’s public transport infrastructure. After all, citizens, residents and tourists need to be able to get to stations in the first place. To improve accessibility to stations, Hammond recommends solutions like park-and-ride schemes which can ensure easier connectivity.

“Had the developers correctly predicted the success of Dubai Metro, the alignment would have been most likely different” While railway systems have little flexibility once they are built, they can go above and beyond serving as a mode of transport, Tonndorf says. Rail infrastructure can attract development in surrounding areas, increase land value around stations and serve as a social hub. This is evident in Dubai, where proximity to a metro station is often a key selling point for properties. “The concept of having railway stations as central elements of developments and urban living is being implemented all around the world,” Tonndorf says.

When it comes to actually building and operating rail networks, progress is being made in leaps and bounds towards making rail infrastructure more efficient.

For example, signalling has seen significant development says Brendan Young, technical director – head of Rail at WSP | Parsons Brinckerhoff Middle East. The firm is heavily involved in helping clients in Europe and North America upgrade signalling systems and make them computerbased. “It’s effectively the train talking to the track at that particular point in time along the line, so it’s using real-time information to dictate how fast the train is going and so on.”

24 Middle East Consultant April 2016

Also gaining traction is communications-based train control (CBTC), which detects and prevents collisions better than traditional signalling systems. “It allows trains to travel closer together so they can get more capacity out of the railway. In the future, in terms of rail investment, that's what [clients] will be looking for.”

Clients are also increasingly demanding efficiency, with nearly all of them looking for improved sustainability from an operational point of view, Young says. This can pose a challenge to contractors, as they have to source and use the right materials, but ultimately the owner of the asset stands to benefit from reduced energy use.

Ways to improve the sustainability of railways, particularly in stations, include improvements to HVAC systems and harnessing renewable energy like solar. WSP | Parsons Brinckerhoff carries out sustainable building modelling to see where inefficiencies in design can be tackled to reduce energy demand, for instance in air conditioning.

Interestingly, design can also play a crucial role in contributing to greater security of rail and metro stations, through a “security by design" approach, Young points out. This means that rather than solely relying on active surveillance such as CCTV systems or guards, a station can be designed to enable passive surveillance, so that passengers can observe their surroundings for suspicious activity. One way to do this is by ensuring there are fewer hidden nooks and crannies in the building, he says.

Bearing in mind that rail infrastructure entails large investment and is an integral part of a city’s landscape, it is important that rail systems be made as future-proof as possible. After all, public transport infrastructure shouldn’t be rendered obsolete or unable to cope when cities expand and populations grow.

Future-proofing is a key issue to be considered during planning and Julian Hill, managing director – Rail at Atkins says that this can be done efficiently if a system is developed with sufficient area and flexibility to expand for future needs.

IN PRACTICE RAIL CONSULTANTS

Q&A: Muna Al Osaimi, director of Rail Planning and Projects Development, RTA how wIll yoU ACCommodATE fUTURE ExPANsIoN of ThE NETwoRk, ChANgEs IN dEmANd, ANd INCREAsEd PAssENgER TRAffIC ANd TERmINAl sIzE? Our plans for future demand are based on thorough studies of current development trends and future expectations. Based on these studies, our plans for the future will follow two tracks: phased implementation of the Rail Master Plan which was developed to cover the future expansion of Dubai’s urban area, and increasing the efficiency and level of service within the existing network to accommodate more users. mAINTENANCE Is AN ImPoRTANT AsPECT whEN PlANNINg ThE ImPRovEmENT ANd RENEwAl of ThE AssET. how do yoU PlAN foR IT RIghT fRom ThE dEsIgN PhAsE? We believe that the maintenance aspect is a crucial factor for extended life cycle of assets and improved performance, to ensure safety of passengers and reliability of services. Based on that, the Dubai rail maintenance facilities include two types of workshops. The first is designed to address light and simple breakdowns and simple as well as routine and regular maintenance, while the second is designed to cater to long-term repairs. The equipment used in the maintenance workshops is designed to improve performance in a cost-effective manner and ensure sustainability of railway services.

CAN yoU gIvE Us AN UPdATE oN RoUTE 2020?

We are currently finalising the tender award process for Route 2020, and the plan for construction of the project will be announced in due course. Other priority projects in this course – such as the extension of the Dubai Metro Green Line from Creek Station up to Academic City, Red Line extension from Rashidiya Station to Mirdiff City Centre, and Phase Two of Dubai Tram from the tram depot up to Burj Al Arab and Mall of the Emirates – are expected to be implemented as per the approved programme.

ThE dEvEloPmENT of ThE RAIl sECToR lARgEly dEPENds oN govERNmENT sPENdINg. how wIll ThE CURRENT UNCERTAINTy ANd CAUTIoUs ClImATE AffECT ThE dEvEloPmENT of RAIl NETwoRks IN ThE mIddlE EAsT? While Dubai’s rail industry will continue to depend mainly on government spending for the coming years, other funding options will be investigated to fund future rail projects.

This, he says, will also save an enormous amount of time and cost on redevelopment.

“Middle East developers who enable sufficient design flexibility to permit change will be able to maximise their longterm returns far more effectively, while also offering universal benefits to communities, businesses and rail operators.

“This is about being able to adapt as a city and ensuring you always have the essential ingredients for people-friendly, commercially viable and environmentally sustainable communities. If you look at Dubai Metro, the daily ridership today has quadrupled and the RTA and operator are doing a good job to maintain a consistent level of performance.

“Going forward, the transportation sector will continue to see massive change, which makes predicting the future even more difficult. Today’s cars typically spend 97% of their time unused and our city infrastructure is built around that expectation. But types of ownership, needs and associated behaviours will change too and all this will have an impact on today’s rail and metro networks.”

Rail infrastructure attracts development in the surrounding areas, increases land value and serves as a social hub..

“At the moment, the railways are looking at European standards and North American standards, but we need to work together to produce GCC standards which will meet the requirements of the region” April 2016 Middle East Consultant 25

in practice Rail TRanspoRT

Opinion

Brendan Young, technical director and head of RailWSP | Parsons Brinckerhoff.

A whole-life approach to rail WSP | Parsons Brinckerhoff’s Brendan Young outlines the opportunities available to Middle East rail authorities as look to optimise property development alongside rail infrastructure WSP | Parsons Brinckerhoff recently launched an industry white paper titled “Smarter Rail – A Whole-life Approach”.

The paper brought attention to the shift in focus government rail authorities have to make from the project delivery phase to the operations and maintenance phase, essentially reminding us that once a rail system is in operation, the hard work has only just begun.

There is no getting away from the fact that the whole-life cost of a railway is significant.

Once construction is completed, rail owners still have around 95% of the whole-life cost ahead of them. However, cost does not come without benefit and opportunities still abound to drive the investment dollar further.

In these tighter times, it’s important to remember that there is still a strong long-term business case for rail infrastructure investment, particularly passenger rail. A well-planned and well-designed rail system is a proven catalyst for economic development and prosperity.

As vital public infrastructure and an alternative to road-based travel, railways and other public transport systems connect people 26 Middle East Consultant April 2016

to places and products to buyers, forming a permanent backbone to local, regional and national economic growth. According to the US Department of Commerce, every $1 invested in rail systems returns $3 to the American economy – a 200% return on investment.

Urban rail systems are great for our cities as well. Almost every ‘global’ city has a comprehensive rail transit network. They increase the mobility of the population, free up space on roads and enable a more dense development pattern, bringing social, economic and environmental benefits to society.

However, rail owners operate on an annual budget and must continue to find ways to lower up-front costs for new projects and offset downstream operational costs for their existing assets. One way is to derive revenues from property development and retail leasing.

In more established rail markets, like the US, UK and Europe, station renewal programmes are bringing ageing 19th-century assets into the 21st century and creating opportunities for redevelopment with future revenues in mind.

In the UK, at London Bridge Station, our client, Transport for London, tasked us with redesigning the station to provide additional capacity and a seamless connection between Thameslink, other over ground train services, the Underground and London Bus services.

But it didn’t stop there.

The client ultimately wanted to create a thriving station environment to make the station and its environs a hub of activity for this part of South London. By introducing new access halls and using pedestrian modelling, we were able to predict how passengers and non-passengers would use the station space.

We were then able to target specific areas in the station for additional retail and food and

in practice Rail TRanspoRT

Station upgrades like that of King's Cross railway station in London has a regenerative effect on the surrounding area.

beverage outlets, which gave the station a critical mass as a community focal point, not just as a transit facility, giving the owners access to improved nonfare revenues.

Station upgrades also have a regenerative effect on the surrounding area and the local economy. Since the 2007 reopening of St Pancras International, King's Cross, London, following £800 million of refurbishment works, the local community has benefited from a marked improvement to the station precinct, with upmarket shopping facilities, regular music and drama events and even the longest champagne bar in Europe. It has attracted a whole new demographic to the station development, with around 25% of its visitors never even going near a train.

In 2013, the Hong Kong MTR posted profits of $2m, around one third of which was generated from property development and retail leasing in stations alone. They have done this through strategic land purchases, developing property schemes for sale and leasing space in close proximity to stations.

Granted, what they have achieved isn’t easily replicated (Hong Kong has some unique factors that make this possible, like scarcity and high value of land, a high-density living culture and high car ownership tariffs). However, other cities can take Hong Kong’s lead and start to create opportunities of their own.

In China and Taiwan, it is now the norm for rail authorities to use the space above stabling facilities and depots for vertical property development and sell property off the plan to partially fund construction.

In developing rail markets like the Middle East, there is an opportunity to ensure that optimum revenues are generated through property development, by planning in options during master planning.

First and foremost, station planning should take into consideration how well the station and its entrances are integrated with the surrounding land uses and buildings; and secondly, the opportunities to incorporate retail space within and immediately surrounding the station envelope.

Transit-oriented development (TOD) focuses some of this effort on making the station and the immediate surroundings conducive to both transit ridership and commercial activity. A good example of the importance of proximity and connectivity between rail stations and commercial property is Burj Khalifa/Dubai Mall station on the Dubai Metro. The station is within the right of way of Sheikh Zayed Road, around a kilometre from Dubai Mall.

Recognising the benefit of connecting to the station, the Mall’s owner, Emaar, built an air-conditioned footbridge to link the two destinations. Both footfall into Dubai Mall and Metro ridership have significantly increased

as a result. We understand that Meraas, the developer of City Walk on the opposite side of Burj Khalifa/Dubai Mall station, is looking to do the same thing.

Within a station, design should incorporate some form of internal retail space. Not everything will work though. In a high-speed, time-scarce environment, it is the low order goods that sell well, like newspapers, top-up cards and coffee.

In some cases, like Dubai Metro, there are restrictions on food being taken on trains. However, many other food and beverage outlets are busy by virtue of the people waiting for bus transfers at ground level.

It is important that owners do the market research, just like any other new retail business, to ensure they have the right space with the right facilities. So get this right and add solid footfall, and retailers will be queueing to sign a lease.

Middle East rail authorities now have the opportunity to optimise opportunities for property development and leasing alongside rail infrastructure. As they look to strengthen the overall business case, it is vital that downstream revenue opportunities be given equal billing to getting TBMs in the ground.

“It is important that owners do the market research just like any other new retail business to ensure they have the right space with the right facilities” April 2016 Middle East Consultant 27

ON SITE DOWNLEY CONsuLtaNts cONsuLtaNts

28 Middle East Consultant April 2016

ON SITE DOWNLEY cONsuLtaNts

Q&A

Laying It Straight Middle East Consultant speaks to Tom Sangster, managing director of Downley Consultants, about his strategy for the company in the region and the road ahead

T

ell us about Downley Consultants and why you have chosen to enter the Middle East.

Downley Consultants was founded in 1992 and is one of the leading engineering consultancies in trenchless technology works worldwide. We have grown with the market and have gained a reputation for solving challenging problems in installation and renovation of underground pipe networks, without digging up streets and disrupting communities.

While our main markets have been North America, Europe and Australia, the Middle East has always been a leader in the use of trenchless technologies and we have undertaken several projects in the region in the past. Now we consider that the timing is right for a stronger presence and that our capabilities can really add value to utilities in the region.

You’ve entered the region through a joint venture with Faiz Alelweet Engineering Consulting Office (FAE) of Riyadh. Tell us about the terms of the agreement.

Success in the Middle East for an overseas company depends on having the right local partner, and Faiz Alelweet Engineering Consulting Office is a perfect fit for us. We have worked with FAE and its sister company, International Aramoon Company (IAC), in several projects in the GCC region and there is a real compatibility between us.

Both companies are focused on service, on understanding and meeting customers’ needs and on solving problems costeffectively. Under the agreement, we have established an office in Dubai and will also establish a base at IAC’s office in Abu Dhabi.

Each company will provide specific capabilities to the JV as our projects require it. I will be general manager of the business and will divide my time between the UAE and other international business.

What will be your philosophy for the Middle East, and how will it be different from other regions?

Our philosophy will be the same as elsewhere: to listen to our clients and then use our strengths and unique capabilities to ensure that we achieve what they need. Focusing on what we know best is important, and in the Middle East we will concentrate on specific segments of the market where we know we can provide superior value. FAE’s reputation and client base will be important in helping us to introduce the concept of focused problem-solving to the region.

Tell us about your experience with trenchless technology and geosynthetics. How do you plan to apply this to the region?

In the Middle East, we will focus on the trenchless technology sector and more specifically on renovation of existing underground infrastructure networks – mainly water supply and wastewater collection pipe systems. The combined company has extensive expertise in inspection, condition assessment and renovation of underground pipe networks.

FAE is especially strong in inspection and rehabilitation, and Downley Consultants has great expertise in condition assessment, taking the inspection data and evaluating it to April 2016 Middle East Consultant 29

ON SITE DOWNLEY cONsuLtaNts

Tom Sangster, managing director, Downley Consultants.

teams efficiently anywhere in the world.

Together with FAE’s locally-based team, we have enough capacity to support our plans for the initial period. We will add to that capacity and build a greater capability in this region as our workload in the region grows.

Market research and intelligence is one of your core services. What is your opinion on the Middle East market at the moment?

Undoubtedly the market is quite challenging at the moment, but this is all relative. Growth rates are not as high as they have been, but they are still better than in many other regions.

Also, the upside potential of trenchless technology throughout this region is considerable.

Governments understand that the high standards of living and of public health that now prevail here rely on high-quality public services, and increasing the use of trenchless technology is part of improving service and quality of life for citizens in advanced societies. That includes maintaining the serviceability of the existing infrastructure networks, which in all countries deteriorate over time, so we consider that opportunities will still be there. develop asset management plans including rehabilitation, replacement and repair. The core expertise of the two companies complement each other perfectly.

What services and projects will you focus on, and in which Middle East markets?

The focus will be on inspection, condition assessment and renovation of underground water supply and wastewater networks. We will target utilities, industrial customers and other consulting engineers for whom our capabilities complement theirs. Initially we will concentrate on the UAE, and then develop into Qatar and Saudi Arabia, both countries in which FAE and IAC already have a presence.

How do you plan to differentiate yourselves from your competitors here?

No doubt all our competitors would be very pleased were I to answer that directly, but they are going to be disappointed.

We know from our experience in other regions how we are differentiated from competitors and how this provides value for our clients. FAE’s knowledge of the Middle East region will help us in identifying whether and how we might need to position ourselves differently to meet local needs.

Tell us about your operational and recruitment plans.

We have a small and very talented, experienced team of specialist engineers already, and will deploy these as necessary for projects in the Middle East. A benefit of being a relatively small company is the flexibility of our personnel to create project 30 Middle East Consultant April 2016

How do you see the cautious economic climate affecting business opportunities here, and what will be your strategy to overcome it?

Our target markets will benefit from the economic climate.

When public sector budgets come under pressure but the need to provide high-quality public services remains, the gap is bridged by being smarter and more cost-effective. This is what engineers are good at.

Our experience of applying our engineering knowledge and expertise to solve pipe network problems cost-effectively, and of delivering solutions within time and budget, fits very well with this new economic climate and will enable our clients to provide the same high levels of service to their own customers, even with tighter budgets.

Give us your outlook on 2016 and future plans for the company.

2016 is shaping up to be a challenging year in most of our markets, but that is not really a change from any recent year.

We have grown in this climate through delivering value for our clients in our established markets, and will continue to pursue this strategy.

We expect to maintain our position in our core markets and to focus on a successful market entry in the Middle East in 2016. As a small company, we will consolidate our position in the Middle East before developing other growth opportunities elsewhere.

For 2016 and probably 2017 as well, we will concentrate on achieving a successful market entry together with our partners FAE in this region.

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in practice Saif al ShamSi

Opinion

Saif Al Shamsi, founder of The Legal Group.

UAE labour law – 2016

Saif Al Shamsi, founder of The Legal Group, speaks to ME Consultant about the implications of the new decrees and their effect on contracts.

The Ministry of Labour produced three landmark decrees in 2015, effective from the turn of the year, in what seems like an initiative to propagate a healthier relationship between employer and employee and play an enhanced role in safeguarding employee interests and job security.

These new rules highlight the benefits for thousands of expatriates in the UAE. The three decrees laid down rules as follows – Standard Work Contracts (Decree 764), Terminating of a Contract (Decree 765) and Granting a new Work Permit (Decree 766).

Decree 764: StanDarD Work contractS

This decree mandates the use of Ministry of Labour-adopted Standard Contracts and Offer Letters. The rule states that an employee must be presented with an Employment Offer Letter that conforms to the Standard Contract and must then be signed and accepted by the employee. All renewals of existing Employment Contracts must be done using the new Standard Contract in addition to the Employment Offer, the terms of which cannot be altered or substituted unless approved by the Ministry. It thus restricts the amendment 32 Middle East Consultant April 2016

of the Employment Contract signed by the employee and the addition of new terms without the employee’s approval.

In light of the labour population demographics of UAE, which has a large number of blue-collar jobs in infrastructure, construction and civil employment, the involvement of the Ministry of Labour in verifying the authenticity, and more importantly the fairness, of an Employment Contract will go a long way in shielding employer as well as employee interests and rights.

However, this might mean a more rigid process for employers to go through, in terms of liaising with the Ministry of Labour and getting pre-approval for insertion of even a minor clause in a contract. Once the diligence process is established, it is sure to provide peace of mind for drafting contracts in the long haul.

Decree 765: termination of LimiteD anD UnLimiteD term contractS

This decree outlines situations whereby it may be possible to grant a new work permit to an employee after terminating the employment relationship, and also scenarios when a contract can be terminated (limited or unlimited).

Under this new rule, termination is as follows: Limited term contracts (less than two years): • The term of the contract expires, • The employer and employee mutually agree to end the contract, • Either party acts unilaterally to terminate the contract or renewal, but complies with legal consequences of early termination.

Unlimited term contracts: • Both parties consent to termination;

in practice Saif al ShamSi

The new decrees issued by the Ministry of Labour prohibit any manipulations or injustice that an employee might face.

• One party gives notice of termination well in advance, that is, at least one month prior, but such period shall not exceed three months • One party acts unilaterally to terminate the contract or renewal, but complies with legal consequences of early termination.

This rule essentially means that within the boundaries stipulated by the Ministry (serving the notice period or complying with legal consequences), an employee is free to shift jobs without the previous mandatory consent of the employer; a paradigm shift in the liberty bestowed upon the employee in lieu of terminating a contract. It elicits a strong commitment of the Ministry to empower employees and allow them to exercise free will in the labour market.

Additionally, it encourages an influx of talented and skilled labour into the country.

Decree 766: GrantinG of neW Work Permit

This decree provides relief to the common struggle of many employees in the UAE to obtain a new Work Permit. Hereby, a new permit may be granted upon termination of employment when the term of the contract has expired. The rule also allows employers and employees to take recourse to the courts to seek

compensation and enforcement of any other rights provided for under the UAE Labour Law, and for implementing the regulations provided by the Law. A new Work Permit can be granted when: a) Both the employer and employee mutually consent to terminating the contract during the term, provided that the employee has completed at least six months employment or the employee qualifies for a skill set, as classified by the Ministry of Labour; b) The employee’s contract has been terminated prematurely without any reason, provided that the employee has completed six months or belongs to the waiver class of skill sets.

The Ministry also insures a Work Permit in situations where the employer defers wages for more than two months or fails to meet contractual obligations; if the company remains dormant; or in the event of a company shutdown.

Work permits will also be issued to safeguard the interests of the employee in the case of a complaint referred by the Ministry and approved by the Labour Court – provided a final ruling in favour of the employee is issued that confirms that the employee is owed wages for no less than two months of work; or indemnity for arbitrary or early termination; or any other rights that the employer has abstained from granting; or end-of-service dues.

This rule endeavours to serve manifold roles in the labour economy. While it does not place any restrictions on the right of the employer to terminate a contract in order to maintain turnover rate or to preserve the efficiency of the organisation, it ensures that employees do not face professional turmoil because of a premature contract termination owing to the absence of a Work Permit.

These new rules enumerated through Decrees 764, 765 and 766 of 2015 prohibit any manipulations or injustice that an employee might face due to the myopia of the employer. The employers may need to modify the employment contracting methods that they currently follow to ensure compliance with these new decrees, avoiding the breach of rights of respective parties.

Hence, there is a clear shift of decision-making from employers to the Ministry of Labour, which ensures transparency and fairness, traps the nexus of illegal immigrants and standardises contractual obligations prohibiting any malpractices, without any loss in efficiency of the labour market.

In light of the proposed tax regime from 2018, which may deter an influx of immigrants owing to the loss of a tax utopia, these promising job market changes will hopefully go a long way to mitigating this deterrent.

April 2016 Middle East Consultant 33

on site FOCUS

Supplier Kingspan’s Kooltherm and KoolDuct products achieve DCL certification Kingspan Insulation, an Irish manufacturer of insulation panels, has announced that its Kingspan Kooltherm and Kingspan KoolDuct products have achieved Product Conformity certification from Dubai Central Laboratory (DCL).

Developed at Kingspan Insulation’s Pembridge, UK manufacturing facility, the DCL certification enables the manufacturer to prove that its products have been manufactured to a high standard and meet the requirements specified by Dubai Municipality.

The standard describes the quality assurances, factory assessment and independent testing that must be addressed in order to ensure the conformity of products.

In order to obtain a DCL certificate, Kingspan Insulation supplied a range of samples and performance data for Kingspan Kooltherm

and Kingspan KoolDuct products, all of which were approved by Dubai Municipality.

In addition, Kingspan Insulation passed the factory assessment for its Pembridge, UK manufacturing facility.

“We are clearly delighted, although not surprised, about this excellent result. Having

DCL Product Conformity means that the Kooltherm range and KoolDuct products, alongside the PalDuct portfolio, carry the maximum potential for specification within projects across Dubai,” said Sarmad Fakhri, managing director at Kingspan Insulation.

Kingspan Kooltherm is a range of premium performance rigid thermoset phenolic insulation which can be incorporated into the construction of floors, soffits and external walls. The product can also be used for insulating HVAC ductwork and pipework.

Kingspan KoolDuct panels, used for the fabrication of the Kingspan KoolDuct System, comprises a premium performance, kooltherm technology insulation core.

Kooltherm technology insulation has an aged lambda value of as low as 0.020W/m.K and its phenolic insulation core is closed cell and fibre-free.

Sika establishes national subsidiary in Kuwait

Sika has expanded its position in the Middle East by establishing a new national subsidiary in Kuwait. The creation of this 94th subsidiary worldwide marks a further step forward in the implementation of Sika's growth strategy, which aims to expand the group's international presence to 100 national subsidiaries by 2018.

Kuwait's construction market is 34 Middle East Consultant April 2016

set to grow at a tremendous pace, with investments of just under $30 billion in the focus areas of real estate and infrastructure. Key construction projects at national level include an airport extension and upgrade of the metropolitan transportation network, which alone account for a total investment of $13 billion.

The new national subsidiary positions Sika perfectly to supply high-quality concrete admixtures and refurbishment products directly to customers in Kuwait, and to benefit from the country's booming construction market. Sika products are already being used in the construction of a new university and several road building projects. The Kuwait market has been serviced from neighbouring countries since 2010.

With national subsidiaries in 13 countries, Sika has an extensive local presence in the Middle East. In Qatar, where a subsidiary was established in 2013, Sika recently won a mega project.

In the first phase of work on the world's biggest concrete-reinforced reservoir, more than 350,000sqm of Sika Proof A and Sika Proof P membranes are being laid for waterproofing.

on site FOCUS

Event LuxLive Middle East 2016 lights the way for Middle East lighting industry A spectacular new lighting event is set to bring together leading lighting brands, specifiers and key decision-makers from across the Middle East.

The two-day LuxLive Middle East 2016 exhibition and conference features over 50 big-name brands – including iGuzzini, Erco, Trilux, Schreder, Lumenpulse, Fagerhult, Lutron, Leviton, Regent, Tridonic and Cree – and a comprehensive educational programme with talks, presentations and live debates across two arenas.

The show includes a glittering free-toattend awards event which celebrates and rewards excellence in lighting design.

Some 3,000 specifiers, contractors and clients from across the GCC are expected to descend on the state-of-the-art Abu Dhabi National Exhibition Centre on Wednesday 13 April and Thursday 14 April for LuxLive.

"There’s a revolution happening in lighting right now," says organiser Ray Molony, one of a team of lighting

professionals behind the show.

“LEDs and smart controls are opening up lots of exciting possibilities to do things that we never thought possible.

"Today’s lighting equipment is unrecognisable compared to just a few years ago, so we’re really excited to bring this technology and great designs to the specification community in the region."

Products on show include the famous Coelux artificial skylight. It mimics natural light to make you believe you’re under a bright sunny sky, and with nanotechnology, it even recreates the scattering that turns the

sky blue.

Also on show will be the world’s most efficient light fitting, the Veko industrial fitting, which has 180 luminaire lumens per watt, and the multi award-winning iGuzzini Trick, a fixture that emits a bright blade of light in 360 degrees.

Globally recognised speakers at the event include lighting designers Sally Storey, Michael Grubb and Courtney Mark. Architect Ashutosh Jha of MSCEB will present on how to handle daylight to cut energy, create great space and achieve onerous building codes, and Etihad Energy Services CEO Stephane le Gentil will give a keynote presentation on how his organisation is helping industry and government execute major LED lighting retrofits involving thousands of luminaires.

LuxLive Middle East will be opened by His Excellency Eng Suhail Mohamed Faraj Al Mazrouei, Minister of Energy. Entry is free if you pre-register at www.luxlive.ae

Cityscape Abu Dhabi returns for tenth edition Marking its tenth edition this year, Cityscape Abu Dhabi is the UAE capital’s largest and most influential property event, gathering local, regional and international exhibitors together alongside a range of high-profile speakers.

Over the past decade, the three-day exhibition has showcased hundreds of private and public development projects, which have helped shape the emirate into a regional hub for tourism and commerce.

Cityscape Abu Dhabi will also host major developers such as Aldar Properties, Eagle Hills Properties, Tourism Development & Investment Company (TDIC), Bloom Properties, Masdar, Manazel, Eshraq, Wahat al Zaweya and Mubadala.

New participants this year include

Yas International Development, SAPST (Morocco) and Garanti Koza (Turkey).

The Abu Dhabi Market Overview conference runs on the opening day of the event (12 April), and will feature prominent speakers and regional experts in the real estate development and property investment industry.

Notable participants include David Dudley, international director at JLL MENA; Chris Taylor, CEO of Abu Dhabi Finance; Cyrill Lincoln, head of Real Estate at ADCB; Fergal Harris, global head at Real Estate & Family Conglomerate at NBAD; Dr Martin Berlin, PwC partner – Deals Strategy in the Middle East; and Sameh Muhtadi, CEO at Bloom Properties.

Topics to be discussed include the newly implemented Property Law, regulations in

the real estate industry and the price of oil and its potential freeze deal.

Investors visiting the show floor will have the opportunity to purchase property from a select number of exhibitors who have undergone a rigorous approval process put in place by Abu Dhabi Urban Planning Council (UPC).

Companies including Mubadala Real Estate, Bloom Properties, Kleindienst and United International Group will be taking advantage of the ability to sell their projects directly on the show floor, offering properties from Al Maryah Island, Bloom Gardens, The Heart of Europe and Didube Tower.

The 10th edition of Cityscape Abu Dhabi takes place from 12-14 April at the Abu Dhabi National Exhibition Centre.

April 2016 Middle East Consultant 35

on site roundup

Update Qatar World Cup workers ‘still being abused’, Amnesty International claims

Migrant workers employed on a World Cup stadium refurbishment project in Qatar are still suffering from abuses despite promises to boost welfare standards, according to Amnesty International.

Dozens of migrant construction workers from countries like Nepal and India were charged high recruitment fees by agents in their home countries, housed in “squalid” accommodation and barred from leaving the country by employers who confiscated their passports, Amnesty said in a report.

Authorities in Qatar agreed with some of the issues raised by Amnesty but said many of the concerns have already been addressed.

Amnesty last year identified more than 100 migrant workers employed on the Khalifa Stadium renovation project who were allegedly subjected to human rights abuses by their employers.

The human rights watchdog carried out research on the Khalifa Stadium refurbishment and the Aspire Zone – where the stadium is located – between February 2015 and February 2016. Researchers visited Qatar three times and interviewed 234 men in total working for the companies said to be responsible for the abuse.

Among the most frequently reported issues were employers allegedly deceiving 36 Middle East Consultant April 2016

workers about the nature of the work for which they were being hired, or the salary they would be paid. There were also allegations of poor living conditions, delays in salary payments, and workers being denied the right to leave Qatar due to the country’s sponsorship system.

Migrant workers in Qatar cannot leave the country without an exit permit from the authorities, which can only be obtained with the sponsor’s approval. This system “gives employers an excessive level of control over the lives of foreign workers” and violates the right to freedom of movement, Amnesty said.

“My life here is like a prison,” Deepak from Nepal, who worked as a metal worker on the Khalifa Stadium refurbishment in May 2015, told Amnesty International. “The work is difficult, we worked for many hours in the hot sun.”

Deepak’s efforts to complain about his situation were in vain, he said, as he was told by his manager that if he wanted to stay in Qatar, he should “be quiet and keep working”.

In the wake of international pressure, Qatar’s Supreme Committee for Delivery and Legacy, the body responsible for the construction of stadiums and other projects for the 2022 World Cup, published its Worker Welfare Standards in 2014. These standards are mandatory for

all businesses undertaking work or providing services related to the World Cup. Despite steps taken by Qatar to address grievances, such as the wage protection system introduced last year, gaps remain in their implementation, Amnesty said. It said one such issue is a focus on major contractors, rather than smaller sub-contractors who are more likely to be involved in recruitment malpractices.

Other claimed problems include an over-reliance on self-auditing and a lack of enforcement of ethical recruitment processes. All 234 workers interviewed

by Amnesty said they had paid fees to recruitment agents in their home countries to get a job in Qatar, with the amounts ranging from $500 to $4,300.

Hassan Al Thawadi, Qatar’s 2022 committee chief, said Amnesty had highlighted “malpractices” faced by some of the 5,100 construction workers building stadiums, a figure expected to increase to 36,000 in the next two years.

“We’ve always recognised that we don't have a magic wand that could fix the matter from the very beginning,” Thawadi said, quoted

by Reuters. The World Cup is a “catalyst for change”, the committee chief went on to say.

“We’re resolving gaps day by day.”

on site roundup

Abu Dhabi to review building rules after storms Abu Dhabi to revisit building and infrastructure rules, after storms damaged buildings in the city last month.

SAudi ArAbiA’S 1km JeddAh Tower 20% compleTe

Abu Dhabi is expected to overhaul its building and infrastructure rules after the storms that swept across the UAE last month, causing widespread damage and flooding.

The National Emergency Crisis and Disaster Management Authority said that measures to guard against freak weather were being considered, the National reported, and new building codes will be issued to construction companies as part of the review.

Three days of severe weather last week led to flooded streets, waterlogged buildings and structural damage.

Rhys Steel, a Chartered Building Surveyor on Cavendish Maxwell’s Project and Building Consultancy team, told ME Consultant that many buildings and parts of the country’s

infrastructure are not designed for such weather.

“If we have learnt anything from the last few months, it is that buildings in the UAE have to be built to withstand the elements,” he wrote.

“They need to be constructed with consideration of high temperatures, heavy rainfall, strong winds and the risk of fire, and insurance needs to be adequate to reflect the risk.”

The extent of the damage points to two main issues, Steel added.

“The first is that buildings and infrastructure are not designed to consider the likelihood of this extreme weather, as there is generally the attitude that ‘it never rains in the UAE’; and secondly, the issue of whether you are insured if your properties or possessions are damaged."

Jeddah Tower in Saudi Arabia, set to be the world’s tallest building, is over 20% complete, according to the developers.

The planned 1km tower has already reached the 37th floor and is on track for completion by 2018, according to a press release by Saudi Arabian billionaire Prince Alwaleed bin Talal’s investment firm, Kingdom Holding, which owns a third of developer Jeddah Economic Company (JEC).

Although the number of habitable floors has not yet been revealed by JEC, the Chicagobased Council on Tall Buildings expects it to be around 167 floors tall on completion.

Jeddah Tower, formerly known as Kingdom Tower, is set to overtake 830m Burj Khalifa in Dubai as the world’s tallest tower.

According to architecture firm Adrian Smith + Gordon Gill, Jeddah Tower is expected to cost $1.2 billion. It will contain 59 elevators – 54 single-deck and five double-deck – and 12 escalators. The project is also expected to have the world’s highest observatory on its sky terrace.

The announcement comes on the back of JEC’s launch of the Alinma Jeddah Economic City Fund in December, which will provide sharia-compliant financing of 3.6 billion riyals ($959.9 million) from Alinma Bank for the project.

Mounib Hammoud, CEO of Jeddah Economic Company, commented: “With financing in place, we are now on our way to achieve our set goals and to complete building Jeddah Tower and the infrastructure of Jeddah Economic City as per the five-year plan developed by Jeddah Economic Company.”

April 2016 Middle East Consultant 37

on site roundup

Update Gulf construction pay increase slows to 6.1% Construction salary increases in the GCC region slowed to an average of 6.1% last year, according to a survey by GulfTalent.

The online recruitment firm said pay rises were lower than the 7.8% recorded in 2014, but that construction still saw the second largest increase of all sectors, after retail, which saw a 6.6% rise in 2015.

GulfTalent’s Employment and Salary Trends in the Gulf report did however warn of the impact of spending cutbacks by regional governments.

“Energy companies have borne the brunt of the slowdown and laid off thousands of staff, while construction firms which depend heavily on government-funded projects have also seen a slowdown in new business,” it said.

Despite this, construction saw a “healthy” average salary increase last year, the report found, as regional companies “sought to remain competitive and retain key specialist staff”.

Construction salaries rose a little more

than the average of all sectors, which was 5.7% in 2015.

But the GulfTalent report suggests that the rises across all sectors will be lower this year. “Based on GulfTalent’s survey of employers, salary increases are set to slow down even further in 2016, forecast to average just 5.2%,” it said.

The research report was based on GulfTalent's survey of 700 employers and 25,000 professionals across the six GCC states.

An increasing number of firms have been reducing head count, particularly in energy and construction, the report noted. Overall, 14% of surveyed firms in Saudi Arabia reported plans to reduce head count in 2016, compared with 9% in the UAE.

Dubai Properties starts construction of 1/JBR residential tower in Dubai Dubai Properties (DP), the real estate developer and property manager, has announced the start of construction of its flagship project, 1/JBR, a 46-storey residential tower at the entrance of Jumeriah Beach Residence.

Construction has started on the Dubai project, with site mobilising and enabling works underway at the end of January 2016. Final design has been completed and it is now in the final stage of approval with authorities, the developer said.

“1/JBR is a testament to DP’s distinguished portfolio, as it broadens our residential offerings across Dubai.

This ground-breaking marks an important phase of this highly anticipated development, reinforcing our commitment to delivering key projects at one of the Emirates' most sought-after beachfront destinations, JBR,” said Marwan Al Kindi, executive director, Sales and Sales Operations at Dubai Properties.

38 Middle East Consultant April 2016

An artist's impression of 1/JBR

by Dubai Properties.

The registration of clients and customers with the intent of purchasing was launched in September 2015, with the tower scheduled for completion and handover in early 2019.

1/JBR will offer customers two- to four-

bedroom apartments and five-bedroom penthouses, totalling 153 units. Sections of the tower will be released for sale in different markets, with registration now open exclusively through Dubai Properties' sales partner Gulf Sotheby’s International Realty.

on site roundup

Legendary architect Zaha Hadid passes away Iraqi-born British architect Zaha Hadid has died of a heart attack in Miami, where she was receiving treatment for bronchitis. The 65-year-old was widely regarded as one of the world’s leading architects and was one of the few women to achieve such a position in the profession.

Hadid started her architectural journey in 1972 at the Architectural Association in London, and by 1979 she had established her own practice there, Zaha Hadid Architects.

Hadid’s first major built commission, which won her international recognition, was the Vitra Fire Station in Well Am Rhein, Germany in 1993. Other notable projects include the MAXXI, the Italian National Museum of the 21st-Century Arts in Rome in 2009; the London Aquatics Centre for the 2012 Olympic Games in 2011; and the Heydar Aliyev Centre in Baku in 2013.

In 2004, she became the first woman to be awarded the Pritzker Architecture Prize.

This year she also became the first woman to be awarded the RIBA Royal Gold Medal.

Zaha Hadid was the first woman to be awarded the Pritzker Architecture Prize and the RIBA Royal Gold Medal.

UAE’s Green Valley launches projects worth $169m in Morocco, Bosnia UAE-based developer Green Valley International Real Estate has launched projects worth a combined $168.8 million in Morocco and Bosnia.

Close on the heels of completing projects in the UAE and Turkey, the company has announced the City of Green Valley Marrakesh project, worth $136.1 million.

The 410,000sqm project comprises 350 villas around 11km from the city centre. It offers facilities such as a swimming pool, health centre, spa, sports complex, shopping centre, restaurants and mosques.

Green Valley has also launched the $32.7 million Green Valley City project in Sarajevo, on one of the highest peaks in the city. The 73,000sqm project is Green Valley’s first foray

Ali Saeed Al Salami, owner, Green Valley Real Estate.

into Bosnia, and consists of 106 independent villas and 224 apartments.

The launch of the two projects is part of Green Valley’s plans to offer GCC nationals the opportunity to invest in properties outside the region.

“We are privileged to announce two new iconic projects in Marrakesh and Sarajevo, which offer an excellent growth potential for investors looking for substantial return on investments.

Both are luxury projects that offer amazing investment opportunities,” said Ali Saeed Al Salami, owner of Green Valley Real Estate.

Green Valley’s previous projects include the Bursa Boulevard, Sapanca Villas and Yelwa Villas developments in Turkey.

April 2016 Middle East Consultant 39

On Site SiMon Moon

Final word

Simon Moon, CEO (Middle East) at Atkins

Delivering Happiness As custodians of the built environment, construction consultants have the opportunity to make a positive difference The recent announcement that the UAE’s federal government has created a Minister of State for Happiness has been met with puzzlement by some people. And granted, it’s certainly a departure from traditional politics.

The GCC region, however, has never been afraid of challenging established thinking – least of all the UAE. I see its new ministry as typical of the forward, dynamic thinking that has helped these desert states undergo such incredible development during the past 40 years.

Having been so successful in delivering the physical infrastructure to support its vision for economic and social growth and prosperity, the UAE is operating at a level at which it can now prioritise the wellbeing and satisfaction of its people. HH Sheikh Mohammed’s announcement called for “a government with its purpose to build a virtuous society, a forgiving environment, close families, educated generations and equal economic opportunities for all”.

That's inspirational thinking, as was His Highness's statement about government flexibility: "We don't need more ministries, but more ministers capable of dealing with change." Government bodies are seldom known for being agile and flexible, but these are exactly the attributes needed by modern states as they grapple with the global challenges of today, among the foremost of which are population growth and urbanisation.

This region has already been subjected to these twin issues far more than most parts of the world.

Between 1950 and 2010, the population of the GCC grew more than ten-fold (1053%), compared to global population growth of 174%.

Between now and 2050, the population of the 40 Middle East Consultant April 2016

MENA region is expected to more than double, while by 2015, 88% of the region's population is forecast to be living in cities. It’s absolutely right that this is driving lateral thinking from government, while also demanding creativity and innovation from industry.

The nature of our work means we are among the true custodians of the built environment, and better placed than anyone to support the region's governments in the management and delivery of social, economic and environmental change (the goal being societal "happiness").

In order to do this, it’s essential that we create environments which are fit for the future, and which take into account the scale of change being forecast.

If we fail in this, today’s infrastructure will quickly become redundant.

It was with this in mind that we at Atkins adopted our Future Proofing Cities approach five years ago to help clients to identify the opportunities and risks – and from there the potential solutions – to ensure their projects have fully considered longterm needs.

We're now adapting this thinking in response to the very particular needs of GCC cities. While a common thread in most parts of the world is the need to increase infrastructure funding at the city level, in this region funding itself is less of a problem. That's a great starting position, and it means that the core challenge is focus and prioritisation, in order to ensure that the right portfolio of solutions is assembled to address the individual needs of each city.

Coming back to the UAE, what's so impressive about its new Ministry of Happiness is the fact that it shows how the leaders really get it when it comes to the number one priority. They know that to create a city which really works, and which embraces new ideas and technology in the right way, they need to put people first. And a by-product of that will be happy people – productive, successful residents and an environment which attracts tourists and other visitors time and time again.

LEADERS IN ARCHITECTURE mena

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Jan Mattsson CEO, Sweco Architects

Jeffrey Brand Principal and Board Director, Perkins Eastman

Sameh Muhtadi CEO, Bloom Holding

Ahmad Soueid Principal and Senior Vice President, HDR

Antonio Villanueva Peñalver Head of Sustainability, IDOM

Dr. Jihad Awad Jo Palma Head of Architectural Principal and Design Director, Engineering Department at Perkins+Will Ajman University of Science & Technology (AUST)

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