For the construction specialist
Managing Expectations Hamed Zaghw outlines how AECOM is adapting to a changing Middle East market ON TOPIC
Maen Nimrawi on the UAE’s energy efficiency journey
IN PRACTICE
Lighting experts illuminate a growing industry
ON SITE
ME Consultant visits Dubai Wharf Development
ISSUE 034
February 2017 Publication licensed by Dubai Production City A product of Big Project Middle East
CONTENTS
On topic INdUSTRY VIEWS FROm ACROSS ThE mIddLE EAST
04
07 07 ANALYSIS
Making sense of economic indicators from the UAE Construction Intelligence Report by analysts at Faithful + Gould 10 OpINION
Maen Nimrawi, senior commissioning engineer, KEO International Consultants, walks us through the energy efficiency journey in the UAE
10
12
In practice ANALYSIS, INSIghTS ANd INTERVIEWS
12 INSIghT
Lighting experts shine a light on the industry, forecasting a bright future ahead 16 INTERVIEW
16
22
Gerhardt Reichert, CEO, Kling Consult Middle East, provides company insights and consulting industry perceptions in a one-onone exclusive 22 INTERVIEW
Hamed Zaghw, the newly minted chief executive Middle East for AECOM, gives his view on taking over the helm and outlines his regional vision for the consultancy
On site CASE STUdIES, OpINIONS ANd SNApShOTS
28
32
32 INSIghT
The businesses of modular design and modular construction are poised for better days, industry experts tell ME Consultant 38 NEWS
Increase in building materials prices to escalate apartment costs 40 ThE BACk pAgE
Julien Soulet from Honeywell Fluorine Products explains how scientifically proven advanced materials can enhance energy efficiency
38
40
FEBRUARY 2017 1
WELCOME
Group EDITOR’S NOTE
Consultant complexities It is a truism that the consultant is an integral part of and inextricably linked to the construction industry. The consultant’s larger-than-life role is indispensable in any building process and looms large on the construction landscape, in a very literal sense. Pass by any construction site and the names of a slew of specialty consultants associated with the project are prominently displayed. This outdoor recognition, and the both in-site and offsite necessity of consultants, belie the notion that they are somehow expendable and can be bypassed. This stands in stark contrast to their being demonised in some non-construction industry sectors. Given the complexities of modern construction, the consultant community has come into its own, giving a fillip to the industry, which benefits from their inventiveness, intelligence and acumen. We talk exclusively to Hamed Zaghw, the newly appointed chief executive of AECOM – a 27-year-old Fortune 500 company that operates in over 150 countries around the globe. Zaghw, a dyed-in-the-wool 30-year+ veteran project management engineer now at the helm, provides fresh insights into AECOM’s strategic and tactical goals and vision going forward. Lighting is central to our lives, and we light up this issue by turning the spotlight on the industry in the region. We get the reflections of industry practitioners, who shed light on the current status quo and what the future holds in store. Modular design and modular construction are certainly coming of age and poised to strike it big in the construction industry, experts point out. With 3D printing increasingly becoming the new mantra and rapidly evolving, the industry is on the threshold of an expected big boom. At the start of the year, there was certainly a sense of nervousness from the industry. It’s now starting to give way to cautious optimism. Whatever happens, it certainly promises to be a fascinating period for the region!
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ON TOPIC
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CONSTRUCTION
ENFORCEMENT wILL bE kEy TO NEw UAE FIRE CODE
Dubai Harbour to include Middle East’s largest marina
CONSTRUCTION
Trump turns down $2bn deal with Dubai’s Damac
In pictures: Meraas to build 20 million sq ft Dubai Harbour project
CONSTRUCTION
Dubai’s $40m Deira Islands bridge to set open
FEATURES
Omnium execs survey the Middle East QS scene
INFRASTRUCTURE
Dubai Wonderland project revived, to cost $490m
4 FEBRUARY 2017
Video: Time-lapse of construction at Aldar’s Shams Meera project
It is common sense that the much-needed new UAE fire code won’t be enforced when it comes to underconstruction developments (“New UAE fire code ‘won’t apply to ongoing projects’”, January 19). This new code is vitally important, given the string of fires that have hit UAE high-rise towers in recent years. There was the memorable fire at The Address hotel on New Year’s Eve at the end of 2015, the Torch tower fire earlier that year, and numerous other cases. The incidents have called into question the regulations and standards when it comes to the cladding used in many UAE skyscrapers, and rightly so. And so additional building standards and guidelines relating to fire safety should be welcomed by everyone in the industry. However, proper enforcement of the new code will be essential when it comes to compelling companies in the industry to comply with the UAE’s new fire safety code. The enforcement methods should include the use of third-party independent inspections to ensure that all players in the industry are following the rules to the letter. Alex Hamilton, via email
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Secure A Better Future The GCC infrastructure market has an estimated value of USD 400 billion worth of projects that are in the planning, design and pre-construction phases. In a region noted for embracing the latest technologies for innovative infrastructure, there is currently a major opportunity for providers of products and services of cutting edge smart infrastructure technology. The “Smart Infrastructure Summit” will discuss and debate the various technologies and systems that bridge the gap between “Now and the Future”. Bringing together more than 200 delegates comprising of government officials, key decision makers, influencers and solutions providers, the Smart Infrastructure Summit 2017 aims to connect minds and bring new ideas and possibilities to a rapidly growing industry.
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ON TOPIC
ANALYSIS
Oil, OPEC and Outlooks Faithful + Gould’s 2017 forecast for the UAE construction sector points to “more robustness”, provided oil price stays at or above $55 per barrel
T
he recently released Faithful+Gould UAE Construction Intelligence Report for Q4-2016 indicates “more robustness” for this sector in 2017, following OPEC’s decision to introduce production cuts. Report co-authors David Clifton, regional development director, and Donal O’Leary, director of Commercial Services, opine that if oil breaches the $55 per barrel benchmark, budget break at the federal level should be more attainable this year, providing OPEC implements the production cutbacks. In reply to a Middle East Consultant question on OPEC production quota verifiability, Clifton replies that historically, by the admission of Khalid Al-Falih, Saudi Arabian Minister of Energy, OPEC has not been overly disciplined in sticking to agreed cuts. “If the most significant contributor to OPEC is wary of compliance, it is reasonable to deduce others should approach the agreement with a level of caution.”
In reply to another query on whether oil can reach the psychological $60 per barrel level anytime soon in the current scenario, he was guarded. “Major efficiency gains by the fracking industry and sluggish demand by leading importers the US, EU and China implies big gains in oil prices are unlikely to occur.” Cautious optimism
The UAE government and related sectors are showing signs of growth. However, with the continued softening of real estate prices, certain private sector schemes, especially mixed-use, will undergo reprioritisation and revaluation as liquidity continues to tighten, the authors say. For 2017, the UAE government is broadly keeping its project investment at 2016 levels, with $900m allocated to federal projects within the budget and $325m to government housing. Dubai’s FEBRUARY 2017 7
ON TOPIC
“As GCC nations look at the most effective ways to deliver developments away from conventional funding mechanisms, recourses such as PPP have become an alternative way of financing schemes” budget of $12.9bn (and a 0.6% deficit), has committed an expected 27% increase in infrastructure spending to support the commitment from government to Expo 2020 works. However, Abu Dhabi is likely to slow schemes again for 2017, the Construction Intelligence Report continues. Tendering activity picked up in the later part of 2016, though with some delays to larger portfolios. This means Q1-17 will be slightly busier than previously expected. Q1-17 will also see a reasonable quantum of other awards as Expo 2020 schemes and those with resolved liquidity issues go to site. The previously forecast 5% increase in awards for 2017 looks realistic in the current market for contracting, the report observes. 2017 will see continued strength in contracting awards in Dubai as the critical path to Expo 2020 starts to be met for numerous schemes committed to completion prior to the event. Sharjah is also emerging, with the emirate approving its largest ever budget ($6bn) with infrastructure development at its heart. According to O’Leary, the four northern Emirates have traditionally made up around 15% of the UAE’s construction sector. “The focus has generally been on infrastructure projects such as the recently announced $163m sewerage expansion and upgrade in Ajman. RAK’s large-scale cement and ceramic production and Fujairah’s aggregates give a strong industrial bias that continues to supply the region and the event projects. Hospitality and housing show continuing signs of growth as freehold property ownership attracts investors,” he says in a statement to Middle East Consultant. 8 FEBRUARY 2017
Clifton also remarks that as the UAE (especially Dubai) and other GCC nations look at the most effective ways to deliver developments and move away from funding ‘on balance sheet’, recourses such as PPP have become an alternative way of financing schemes. Saudi Arabia has already commenced engaging in IWPP (independent water & power projects) in the power and water sector, and regionally this is expected to be a growth area. VAT vagaries
In O’Leary’s estimation, construction inflation has been flat or negative across the GCC over the last year. Certain construction materials are increasing in cost, with others expected to rise. The short-term impact to construction costs is likely to be balanced by the continuing pressure on labour costs. In the UAE, the cost of labour fell every month in 2016. In the longer term, any impact is likely to be compounded by the impending introduction of 5% VAT from 1 January 2018 across the GCC, which will start to feed into tender pricing this year. “VAT implementation will this year and next drive inflationary pressures in the industry across the GCC. The effect will be increases in tender prices, and Faithful+Gould are forecasting at 3% as the tax is priced in. Other ramifications are the costs of administrating the collection and payments of VAT, and the amendments and alterations to systems and invoices to align with the roll-out,” O’Leary says in a separate comment.
ON TOPIC
OPINION
01 Maen Nimrawi, senior commissioning engineer, KEO International Consultants.
Enunciating a UAE energy efficiency strategy Maen Nimrawi analyses the current status quo and makes the case for energy efficiency in the UAE
01
T
he global energy dilemma is demonstrated in two ways – the challenge of meeting ever-surging global energy demand on the one hand and the increased global pressure of lowering carbon emissions and adopting energy-efficient practices on the other. Simply put, world energy demand is expected to double and carbon emissions need to be cut by 50% by 2050 to mitigate the potentially drastic climate change effects, as recommended by the Intergovernmental Panel on Climate Change 10 FEBRUARY 2017
(IPCC) and the International Energy Agency (IEA) since 2007. Energy efficiency is often considered the fifth pillar of any energy policy, the other four being coal, petroleum, nuclear power and renewables. It is a vital consideration in the energy demand challenge. Simply defined, energy efficiency is less consumption of energy while doing the same function or delivering the same output. Energy efficiency can be attained through different methods that yield reduced energy consumption without compromising operational needs, quality and comfort levels. In other words, by doing more with less.
and ownership for executing the strategy. Measurability: As unmeasurable is unmanageable, measurements for progress and outcome must be scalable and clearly defined. ISO 50001: 2011 Standards This Energy Management System (EnMS) was officially launched in 2011. This standard relies on the Plan-Do-Check-Act approach and details the process to achieve energy efficiency and management goals within the organisation as an internal system. This needs in-house engagement and (topdown) enforcement, along with a dedicated team headed by the energy management champion or energy manager.
The way to go
Monitoring Based Commissioning
Energy efficiency is a strategy, and as with any strategy, three essential elements need to be considered for success: focus, measurability and accountability. Focus: The focus must be on specific, measurable, achievable, realistic and timebound (SMART) goals. The priorities and goals ought to be specified in an energy efficiency or energy management policy signed off by top management, and should be shared with all employees and stakeholders. Accountability: Assign a team, reporting to top management, that will take responsibility
(MBCx)
Another proven approach to energy efficiency for existing buildings, focusing on fixing the basics through a systematic process, is Monitoring Based Commissioning (MBCx). MBCx implementation is a tiered process starting from planning for increased efficiency and concluding with sustained saving practices. It has been observed that utility tariffs increase sharply where governments and authorities have implemented a plan to gradually withdraw subsidies for energy and water bills. The increase in tariffs in Dubai
ON TOPIC
since 2009 and in Abu Dhabi in 2015 are cases in point. Further increases in tariffs are expected to support the UAE’s vision of moving towards sustainability and efficiency. Incidentally, the region’s current consumption of electricity per capita is among the highest in the world, as reported by the World Bank. Another method to reduce energy consumption is to delegate responsibility for planning, implementation, saving verifications and other operational obligations to specialised service providers called energy services companies (ESCOs). Energy Performance Contracting
In the UAE, Etihad ESCO was formed as Dubai’s official Super-ESCO by DEWA and the Dubai Supreme Council of Energy in 2013. The mission is to improve the energy efficiency of existing buildings by saving
electricity and water using the ESCO/ Energy performance contracting model. Performance contracting is a challenging business model with many associated risks, as this contract extends sometimes up to seven to ten years based on project volume and contracted return on investment (ROI). It has to be initiated by the private and public firms’ management’s commitment to undertake detailed planning and build a framework for period checks for milestones and key performance indicators for the existing building energy efficiency. The implementation, execution and handling of such business requires specialised, high-calibre expertise. As with any business model, there are barriers that may impede enforcement such as awareness, competencies, regulation and financing. Financing is the main driver of business viability and growth. In this context, ESCOs, aided by government funding, have attained a high
degree of success, thanks to enforcement of well-enunciated performance contracting goals. As the ESCO contract is linked to energy saving and CO2 emission reduction, there are considerably more challenges to be considered, in the form of performance contracts, financing schemes, legal framework and savings and performance verification. Banks’ financing option is the bottleneck for the success of the ESCO business model, due to high transactional and insurance costs and steep interest. This usually amounts to 12-16% of a project’s revenue. The associated risks of this can be mitigated and managed through concrete, well-conceived financing schemes based on successful business case studies, to be funded by the government. Without the mitigation of these risks, the success of the ESCO industry will be limited and restrained.
FEBRUARY 2017 11
IN PRACTICE
INSIghT
Seeing the Light Lighting is indispensable, everyday consideration that is too often left as an afterthought. Middle East Consultant turns the spotlight on lighting consultancy and design ight fosters and facilitates an emotional interface between individuals and the ambience around them. Light also helps us feel safe, enables us to navigate and performs many other functions. “Light can make a space feel warm and welcoming, it can encourage us to spend money in a retail outlet and make a workplace more appealing, more efficient,” says Paul Nulty, a multi-award-winning architectural lighting designer and the founder and CEO of Nulty Lighting, which has worked on several mega projects – hotels, malls, residential and office towers – in his native UK and in the UAE, Saudi Arabia and Bahrain. “Good lighting shouldn’t be noticeable. Instead it should subtly reinforce the architecture or interior of a space so that finishes, form and lighting become one harmonious composition,” he counsels. “Whether we are illuminating a workspace, an education or healthcare facility, a playground or a façade, lighting should be used to support the function of the space,” avers Ghazi Abou Zeid, head of Business Development at the Zumtobel Group, a leading Austrian international supplier of integral lighting solutions. “Lighting helps us to experience the ultimate reality, and thanks to light energy we are able to see. Good lighting also enhances the environment and aesthetics. Proper and adequate lighting is vital for clear viewing,” says Sergio Padula, technical director, iGuzzini (the i stands for ‘illumination’), one of Italy’s largest providers of lighting solutions. Let there be light
“Lighting is important, as it is associated with various everyday aspects of businesses as well as consumers. Man-made light is essential, as it 12 FEBRUARY 2017
allows us to see our visual tasks. It helps in increasing our visibility, improvises usability and well-being. Likewise, efficiency in lighting is key for energy saving, resources and cost,” states Mahesh Patel, CEO, Lamps4U FZCO, based in Dubai Silicon Oasis, which markets its products under the brand names Eurolux and Genlux. “Lighting it right is the key. Proper lighting or good lighting ensures energy efficiency, cost saving and sustainability. 85% of people receive information through the sense of sight. It is important to understand that good lighting conditions have a positive effect on living beings and environment.” Safety Electrical Group (SEG) WORLD was created as a unique one-stop shop retail concept store offering global electrical solutions to diverse B2B and B2C customers, including contractors, architects, interior designers and a range of related service providers. “Good lighting design is the same as beauty in the beholder’s eye. Lighting design relies on a combination of scientific principles, standards and aesthetics to provide the right illumination and design for the specific requirement, as well as saving energy, and that is why the lighting industry is moving swiftly from conventional lighting to LEDs in a move that marks a paradigm shift,” remarks Vineet Kumar Kapila, CEO. There are important considerations around good lighting design and engineering. “Think about the end users. How do you want a person to feel in the space? How should it flow? What is the brand message of the space? Think about people and their requirements – not just a one-size-fits-all approach to tick the regulatory boxes,” states Nulty, a professional member of the International Association of Lighting Designers (IALD) among other professional bodies. “What you don’t illuminate is always as important as what you do illuminate. Light is only light when there is dark. It’s always relative,” he adds.
IN PRACTICE
“Think about the end users. how do you want a person to feel in the space? how should it flow? What is the brand message of the space? Think about people and their requirements – not just a one-size-fits-all approach to tick the regulatory boxes” FEBRUARY 2017 13
IN PRACTICE 01 Sergio Padula, technical director & lighting design expert, iguzzini. 02
Light luminaries
“An important concern is the people using the space. They ought to enjoy that experience and be comfortable with the surroundings. Lighting should also support whatever visual tasks are being done in the space,” opines Zumtobel’s 01 Ghazi Abou Zeid. “Most of the projects have a design consultant on board, and it is imperative for the lighting designer to bring out the best for their client and the space.” This view is echoed by iGuzzini’s Padula, who emphasises that the lighting consultant must match luminosity and style to the state of the settings and the purpose the lighting is intended for in the first place. “Clearly there is an element of subjectivity in good lighting techniques, but affordability and efficacy hinge on objective considerations.” 02 Lamps4U’s Mahesh Patel, who founded the company in April 2014, advocates giving proper thought to the lighting mix. “A lot of thought process and engineering is required to get the concept of good lighting designs right. For general lighting purposes, it is important to work with the recommended levels for visual tasks, called the Lumen method, based on fundamental lighting calculations.” SEG’s Kapila concurs. “Lighting design professionals usually think of lighting in terms of three categories: general, for background illumination; 03 accent, to draw attention to particular features; and task lighting, to illuminate particular activities.” According to Kapila, a lighting scheme should be planned between illumination requirements and architectural features in the space, and the purpose of the space. “The key is to create a balance between the three lighting categories. The best lighting schemes will offer plenty of flexibility to allow for multi-purpose functions and to create visual texture, so one should aim to use these three types of lighting.” Coming to light
There are also lighting differentials. For example, lighting at home differs 14 FEBRUARY 2017
Paul Nulty, founder-CEO, Nulty Lighting. 03 ghazi Abou Zeid, head of business development, Zumtobel group.
from lighting in offices, in factories and in public places. According to Nulty, the differentiator is emotional engagement. “Offices are more about functionality and productivity, homes about relaxation. To each its own.” Padula says there are different parameters in different zones. “Lighting is a function of the purpose of the setting. The colour, intensity and other factors must suit the mood and need for which the space exists.” As a lighting design consultant, Nulty believes he challenges the thinking of architects, landscape designers and interior designers to develop coordinated and coherent lighting schemes that put people at the centre. “We do it in a collaborative way, so that the junction between lighting and architecture is seamless. We work in the same way as architects, engineers and designers. We develop concepts, technically detail them and then assist contractors with delivery.” Nulty is quick to point out that the company is wholly independent, with no affiliation or association with manufacturers or suppliers. “The Middle East is as technologically advanced as Europe, for sure. However, the biggest difference is surprising – we’re finding in the UAE there is actually less money per square metre to spend on lighting than in Europe,” he observes. According to Abou Zeid, the Middle East is definitely a key region with lots of growth potential and investment in infrastructure and public sector projects. “In Dubai, for example, we have access to local and international consultants and we have seen a trend of more international companies setting up their offices here.” This makes Dubai an important design hub, he adds. The Middle East is quickly catching up with international standards
IN PRACTICE
85% of people receive information through the sense of sight. It is important to understand that good lighting conditions have a positive effect on living beings and environment” in lighting technology. There are plenty of developments in the region on smart solutions that boost energy savings and connectivity. The Smart Dubai initiative is the best example of how Dubai will be a leading smart city in the future, and the lighting industry will experience a complete shift as it is becoming more about offering services rather than lighting solutions only. Making light work
In Padula’s estimation, the emergence of the light-emitting diode (LED) is one of today’s most energy-efficient and rapidly developing lighting technologies. Quality LED light bulbs last longer, are more durable and offer comparable or better light quality than other types of lighting. “As a specification-driven multi-brand manufacturer, Zumtobel works with all stakeholders on a project. As a result, we are able to offer solutions that fit design quality and budget requirements. Connected lighting – smart lighting systems – is another key area where we see great potential for the future. Growing our expertise in the areas of software, connectivity and the Internet of Things (IoT) is therefore an ongoing priority,” says Abou Zeid. Patel believes energy-efficient lighting solutions will have a compound annual growth rate (CAGR) of 13% from 2015 through 2022 in the Middle East and Africa, in terms of revenues. Despite 04 the tumble in the oil price over the last few years, the Middle East market for lighting solutions is expected to remain
04 Mahesh Patel, CEO of Lamps4U. 05 Vineet Kumar Kapila, CEO of SEg.
05
afloat with government support. Events like Expo 2020 in Dubai will give momentum to the industry in the GCC region. Furthermore, states and municipalities are focusing on energy efficiency and sustainability, which is changing the mindset towards lighting solutions in the Middle East. With the development of technology, the lighting industry is advancing in commercial and residential lighting. Technology has brought closer the concept of connectivity; along with phones, lights have become smart too. They are connected, can be controlled, and can sense as well as communicate. Lighting is an ideal network for IoT services. Best practice for designing high performance lighting solutions is very simple. Keeping in view the current trends, a lighting system should deliver the right kind of light source and the right amount of light – exactly where you need it, and only when you need it – at the lowest total lifecycle cost. One has to work within the given parameters to deliver the best possible solution. Initial design meetings provide an opportunity for lighting designers to outline proposed efficiency actions, which may include setting an overall power consumption limit on a project; equipping a project with light sources that are as energy-efficient as possible; and doing a light design with intelligent technology mix. The challenge is to balance creativity with efficiency. The lighting industry is passing through a phase where it has to balance energy efficiency, innovation and customer expectations, which creates opportunities in a competitive environment. This provides good opportunities to all constituents of the market to create a healthy business environment. Globally, revenues exceed $110 billion. By 2020, LED luminaires are expected to account for 45% of the market, so there are good prospects for companies to attain a decent share of the lighting pie. FEBRUARY 2017 15
IN PRACTICE
“The Middle East has not exhausted its potential and yet has much more to offer on the construction front. Opportunities far outweigh the risks and it is still worthwhile to invest in the region� 16 FEBRUARY 2017
IN PRACTICE
INTERVIEW
High-Calibre Consulting Kling Consult Middle East’s impressive track record and fivedecade association with the region puts it in good standing with the construction consulting industry, the company’s supremo tells Middle East Consultant in an exclusive interview he panoramic view from the office of Gerhard Reichert, CEO, Kling Consult Middle East, on the 33rd floor of the prominent I-Rise Commercial Tower, presents an imposing skyline. One can also see frenzied construction activity across the horizon with impressive tall towers and giant construction cranes atop unfinished buildings dotting the landscape. That all-too-familiar scene in Dubai and the UAE holds both promise and potential for Reichert, whose company has worked on several big-ticket, prestigious projects across the region. “Construction activity in Dubai and the UAE is still robust and ongoing despite the headwinds. The government’s continued commitment and investment in infrastructural development and the private sector’s initiatives are the catalysts for momentum in the construction sector,” he says, pointing towards the horizon during an exclusive interview with Middle East Consultant. “Competition is intense but there is room for growth and for a share of the construction pie, so we continue to maintain our position as one of the companies at the top of the league. Our long-established association with this region, reputation and proven track record both in terms of prowess and provenance provides us the competitive edge.” A well-credentialled consultancy for design and civil engineering with a 47-year presence in the region, Kling Consult has worked on numerous developments in the Middle East and North Africa since its first projects in Saudi Arabia and Tobruk, Libya in 1970. The origins of Kling Consult go back to 1954 when Karl Kling,
an enterprising German engineer, founded his eponymous company in his hometown of Krumbach in the industrial state of Bavaria. Now, over 62 years on, Kling Consult is one of Germany’s foremost multifaceted consulting companies, offering a comprehensive portfolio of engineering and consulting services with dedicated departments and teams for architecture, subsoil analysis and structural engineering, among several other operational competencies. Reichert’s tenure with Kling Consult spans over 21 years. He joined the company in 1995 as a project engineer after starting his professional career in 1988, which included a four-year stint in Yemen. Dubai transplant
In 2004, given his commendable performance, Reichert, a civil engineer with a master’s degree in environmental engineering who also holds the additional portfolio of partner, Kling International, was handpicked and tasked with setting up the company’s regional presence in the Middle East with the opening of an office in in Dubai. He has successfully led the regional affiliate since then. It was a modest start, with just four employees. Over the past 12 years, the company has made inroads in Abu Dhabi, Qatar and Saudi Arabia. Kling Consult ME has since grown rapidly in turnover, and current employee numbers, drawn from over 20 nationalities, now exceed 250. “It has never been easy to find ready talent and even more difficult to keep talent that matches our high standards, but we have invested considerably in resources to build a solid capable team, and to retain it by creating a conducive and harmonious work environment and build a culture based on rewards and meritocracy. We are also known for our employee loyalty, and one of our oldest current employees, Johann
FEBRUARY 2017 17
IN PRACTICE
Hartmann, has worked with Kling Consult for 60 years, a feat even recognised by the German government,” he affirms. “The Middle East office works closely with our German parent company in the administrative and operations areas. A majority of our standards and policies are developed by our German office and we adhere to the strict guidelines,” he says, lauding the 01 synergy and symbiosis between the two entities. “There are projects we work on in cooperation with Kling Consult head offices in Germany. Principles are enunciated and developed by our head office which are then internalised and customised for local and regional requirements. That clearly bodes well for our entity, as expertise and experience obtained by our German team can be harnessed and put to use in this region.” Complete suite of services
According to Reichert, Kling Consult ME’s ongoing success is attributable in part to the company providing a diverse range of functions, from architectural design to project management and effective site supervision, and a range of other specialist services. “The present projects portfolio is a mix of high-rise office and residential towers and leisure properties which demands creativity and multi-tasking – coordinating, overseeing and monitoring progress on a periodic basis and working with other service providers on a given project,” he says.
However, with its expertise and performance, he says that recently Kling Consult ME has been more focused on the hospitality and recreational sectors, due to increased market demand. “Delivering quality services for a residential building is entirely different from services provided to an amusement park, but we have made our mark in various segments and now have projects in the pipeline that reflect our forays in this arena.” The Middle East is indeed significant for Kling Consult, which now works with top-tier bellwether master developers such as Wasl Asset Management, Deyaar, DIRE (Dubai International Real Estate), Dubai Properties and Meraas. Reichert is also currently examining new potential markets, with planned expansion into Kuwait and Iraq in the foreseeable future, and specifically exploring business prospects in India. He predicts that business will spurt in the second half of 2017, and is hopeful momentum will come into the market and counter the largely subdued performance during 2016. “I foresee the construction 02
01 An aerial view of Dubai Design District. 02 A view from an internal street of Dubai Design District.
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The awards are a great platform to share knowledge and the achievements of the industry. We enjoy the opportunity to network and collaborate at the event, as it is very well organised with a great turn out from all players in Construction. The Big Project ME awards highlights the best projects, people and innovations in the region.
KEZ TAYLOR
CHIEF EXECUTIVE OFFICER ALEC
27 November 2017 19:00 - 23:00 Habtoor Grand Dubai Al Andalus Ballroom United Arab Emirates bigprojectmeawards.com
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“The Middle East construction market is progressive enough, and fiercely competitive. Our resolve is to offer high-calibre and consistently good consultancy services” sector to be fairly flat during most of the first half of the year 2017, but the second half looks more promising following recent announcements of infusion of investment by GCC governments, particularly the UAE, Saudi Arabia and Qatar.” Technologies and trends
New technologies are reshaping the construction consulting industry, which is currently undergoing a rapid and long overdue technological change. In the modern world, there are both architectural minimalists and those who go for the jugular and the unconventional. In the Middle East, creativity and ambition are pushed to the limits, which manifests
in architectural designs that are exotic, exquisite and even complex creations such as lakes, canals and lush green parks in the desert. “Another substantial advantage given by technology is acceleration of all the processes in project development. From feasibility studies to concept designs and construction delivery, from structural engineering to interior design, our portfolio of services is comprehensive and we do it much faster now than before, keeping abreast with the latest technologies.” Concern for the environment and sustainability are now global issues, and the Middle East is no exception. “This consciousness has now translated into the design and engineering sectors as well. Sustainability
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03 A panoramic daytime view of Jewel of the Creek. 04 An artist’s rendition of the masterplan of Jewel of the Creek.
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in buildings is now more of an obligation than an option,” he notes. An increasing number of projects and developments are aiming for LEED certification or are at least designed to have energy- and water-efficient systems and waste segregation. “As designers and consultants, Kling Consult ME is conscious of ecological concerns and endeavouring to incorporate as much of the green components into project specifications as possible,” he says. “BIM – Building Information Modelling – software also helps us create more precise drawings while modelling a project. Our professionals have undergone extensive training and now successfully implement BIM knowledge in practice.”
“In the Middle East, creativity and ambition are pushed to the limits, which manifests in architectural designs that are exotic, exquisite and even complex creations such as lakes, canals and lush green parks in the desert” 20 FEBRUARY 2017
He believes the Middle East is not only keeping up, but even surpassing Europe, the US and other regions in the development of iconic construction projects. The tallest buildings, artificial islands and skiing centres are all being constructed in the middle of the desert, where extreme climatic conditions pose one of the biggest challenges in terms of construction and maintenance. Consultancy on the upswing
Reichert says the role of the consultant is indispensable. “The consultant’s importance is growing as a result of the increased degree of complexity and demands of developments. Recently the industry has started comprehending the need for specialist consultants in the industry with proficiency and skills in niche industry sectors.” Unfazed by the increased competition in the industry, he regards it as the driver of progress. He acknowledges competition leads to improvement and develops aspirations to excel. “The Middle East construction market is progressive enough, and fiercely competitive. Our resolve is to offer high-calibre and consistently good consultancy services – the hallmark of Kling Consult. For this market, with high demands and expectations, this adds up to the challenge in terms of creativity, efficiency and added-value deliverables,” he says. Meanwhile, Kling Consult ME aims to consolidate strategic partnerships with clients, sub-consultants and specialists to reinforce the available collective proficiencies and capabilities. The company also plans to expand its portfolio by focusing more on areas such as healthcare, urban and infrastructure development, due to increased demand and the involvement of government in terms of planned investments in these public-sector projects. The present situation in general is still positive despite the slowdown compared to previous years. Reichert believes the region is still in development mode and anticipates increased business
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opportunities in the future, citing mega projects such as Expo 2020 and the 2022 World Cup in Qatar and also the distinct possibility of the UAE hosting the Olympics in the foreseeable future. Despite the current downslide, which he characterises as temporary, Reichert is upbeat and bullish about the future and prospects in the region. “Although it has developed at a frenzied pace, the Middle East has not exhausted its potential and yet has much more to offer on the construction front. Opportunities far outweigh the risks and it is still worthwhile to invest in the region. With our strong roots in the construction consulting community, reputation and healthy order book, Kling Consult ME is committed to staying the course. We are devoted to and well on track to enhancing our footprint in the region,” he concludes.
Kling Consult feats SOME CURRENT PROJECTS • Jewel of the Creek (JoC) Mixed-use development by DIRE: 17 buildings, man-made island, waterfront promenade with marina, foot and vehicular bridges • Six-star Lusail Katara Hotel with floating island in Qatar • The Galleria and King Road Tower in Jeddah, KSA SoMe CoMpLeTed pRoJeCTS • Legoland Theme park with six themed areas, 40 rides and attractions, first indoor Miniland in the world • Rajmahal Theatre A theatre dedicated to Bollywood culture, designed in traditional Rajasthani (western Indian) style • dubai design district (ddd) A block of 11 office buildings for designers and representatives of the art and fashion industry • Riyadh TV station, KSA • Steel plant in Jubail, KSA • desalination plant in Al Khobar, KSA 04
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INTERVIEW
Managing Expectations Middle East Consultant sits down for an exclusive chat with Hamed Zaghw, the new chief executive, Middle East for AECOM. He talks about adapting to life in a challenging economic environment, and why he’s optimistic about where his firm is headed or any company, no matter how well structured or organised, the period just after the handover of leadership is usually a tricky one. There’s inevitably an element of uncertainty and confusion that surrounds any new executive as staff and colleagues attempt to understand the way they work and operate. Clearly, this was on the mind of David Barwell and Hamed Zaghw when they joined forces in 2014 as Zaghw came on board as chief operating officer, Middle East for AECOM. Back then Barwell was the chief executive of the global consultant’s regional operations, and as Zaghw puts it, they began working together from the start to ensure that the firm continued to flourish. With Barwell stepping down from his position, the onus is now on Zaghw to build on the work he’s done, and to continue with the plans they put in place when he first joined. “I’ve been with AECOM for more than two years now,” says Zaghw, speaking to ME Consultant in an exclusive first interview following his recent appointment as chief executive, Middle East for AECOM. “I became the COO and it’s been a tremendous journey that has been very exciting. My background was in horizontal construction and design engineering, whereas at AECOM, we do everything. So
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to me, it was exciting to get into the vertical space and understand what we had to offer and present it to the market. It’s been a very rewarding experience. “David Barwell was AECOM’s chief executive since 2009. He and I worked very closely together for the last couple of years, and we complemented each other in many ways. Over the last six months leading up to the handover, we embarked on a transition of the organisation. We pretty much reorganised how the business is structured – from a country- or geography-based business to an endmarket organisation that breaks the barrier between countries and turns the focus onto what each end-market has to offer our clients, regardless of the country they’re sitting in. “This change or restructuring is just about complete now. We’ve reshaped the organisation in the way we wanted, so as to be best positioned to lead our growth and capture an even better share of our market, going forwards. It’s been a work in progress for some time.” With a background in civil engineering, Hamed Zaghw moved from Egypt in the 1980s to the US, where he completed his graduate studies. Specialising in bridges, he moved around the US, working on a variety of projects, until the early 1990s, when he decided to return to the Middle East. Settling in Abu Dhabi for the first five years of his tenure in the UAE, Zaghw came to Dubai in 1995, which is where he’s remained since.
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“We’ve reshaped the organisation in the way we wanted, so as to be best positioned to lead our growth and capture an even better share of our market, going forwards. It’s been a work in progress for some time”
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“I’m a firm believer that the best part of our workforce is the youngest and brightest. They are the ones who have the energy and new ideas, they want to learn and get the experience, and given the opportunity, they can do wonderful things” “Dubai was a very promising place at the time. There were lots of plans and talks, but when I came it was still a fairly small, sleepy town. It’s been a tremendous journey to see it become what it is today. The first phase [of growth] was UAE-focused, but when we got to the year 2000, everybody in the industry started looking at expanding. Big companies started looking at places like Bahrain and Qatar, new markets that were at the time really emerging markets. So that’s when I began to branch out into operations in Saudi Arabia, Qatar and so on.” That wealth of experience is set to come in handy, given the way the 2017 regional construction market is unfolding. With the slump in oil prices clearly having an impact on budgets and payments, there has been a slowdown across the board.
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However, Zaghw points out that while there have been cash flow problems and a slowness in payments, this is hardly unique to AECOM. He asserts that the key to thriving in this environment is to manage your organisation’s requirements, in line with market conditions. “I would venture to say that here in AECOM, we managed that very well in FY16. Our performance in 2016 has been tremendously good. We have been able to manage our projects and the market. From the little that has come out, I think we’ve been able to maintain our market share, while we have seen some growth in certain areas. However, there’s no denying that we’ve seen a downturn in the market. “Perhaps the most important thing that we’ve been able to achieve [in 2016] is the stabilising of our business in Saudi Arabia. FY15 was a challenging 01 year for us in the Kingdom, but we rode it out and now work better internally and externally with our clients. The current downturn market has really required us to be able to respond to the cost pressures that clients have been facing,” he outlines. While clients have been cutting budgets, they still want to deliver their projects. This put AECOM in an unfamiliar position, and the consultancy had to be agile and responsive in the face of new market realities, while also continuing to be a partner to clients, working with them to enable them to achieve their objectives. The firm was helped in this regard by the completion of its integration with the URS Corporation, which they acquired in late 2014. While the acquisition did not have as much of an impact on operations in the Middle East as it did with the US business, the company did have a significant presence in the Middle East, Zaghw explains.
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02
“We had to integrate people and processes to make sure that they operate seamlessly with the rest of the organisation. This addition has been very positive and very complementary to what we traditionally have to offer.” Returning to the firm’s challenges in Saudi Arabia, Zaghw says AECOM is engaged in a number of large programmes in the Kingdom, and asserts that the key to success is a realistic understanding of the projects and the risks associated with them, and managing them accordingly. “I think the biggest pitfall people fall in is going in with unrealistic expectations, or taking their business model and trying to impose it on another location. Each place has its own peculiarities, its own special requirements. You need to understand these and work to that system, try to figure it out and work with it to achieve your objectives. “When you hear people express their frustrations – not necessarily just in Saudi Arabia, but in other markets as well – it’s where they go in and expect that they’re going to get things done the same way that they do in their home country. To me, that’s unrealistic. It shows a lack of understanding of the market conditions in the countries they’re operating in,” he states bluntly. “The first thing that anybody should do is research how business is conducted in a particular location, before they engage it without full knowledge.” This is clearly a topic that Zaghw has given a lot of thought to, and he’s keen to stress the importance of understanding the market, pointedly mentioning that in a competitive and cost-driven
environment, consultants, contractors and subcontractors all have to make sure they know what they are offering and how it can be delivered, and – crucially – at what price. “The client always wants to get the most of what they have to pay out for, the service and goods that they’re acquiring. In an economic climate like the one we’re in now, that’s a reality. So we need to make sure that when we’re taking on new work, that we’re aware of all of that, and that we’ve priced it in [the right] way. We may not have the same margins that may have been possible in different conditions, but one has to price to deliver, not price just to get work and then have problems down the road. You have to be able to deliver,” he repeats firmly. Turning the conversation back to AECOM, Zaghw says the firm is approaching 2017 with a strong sense of realism, and will be pushing forwards with projects and opportunities that offer the promise of stability. He adds that the work he and AECOM’s senior management have done has positioned it to take advantage of the bigger opportunities available in certain markets – ones that are still in the gestation period, or haven’t fully matured yet. “Our plan for 2017 is one that reflects on these conditions. We’re focusing on the parts of the market that we think are real, and that are going to materialise and promise stable operations for the next year. There are certain basic needs. “Being in the infrastructure business – in the broader sense, you’re talking about roads, transportation systems, housing and so on, all of them fall under the infrastructure definition – there are parts of this broad market that have very real needs and demands that governments FEBRUARY 2017 25
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have to address. Those are the sectors of the market that we have to be ready to engage with and try to capitalise on.” Zaghw identifies the housing market in Saudi Arabia as one such key opportunity, while Kuwait’s emerging market for housing and related services is another market they’re looking at. “The restructuring of government services’ delivery approach in Saudi Arabia presents opportunities for us. We would like to be a part of that transition, and we would like to be a partner to as many clients there as we can, to help and serve them in being able to achieve that vision. In the UAE, there are the obvious projects in Dubai, where they have the Expo-related activities. Those are very real. It varies from one place to another across the GCC, and you just have to look at each market and see what is real and focus on that.”
Having recently achieved the major milestone of opening the Hamad Port in Doha, Zaghw says this mega project is an example of the type of project AECOM will be focusing on in the coming months and years. A number of large-scale infrastructure related projects are also in the consultant’s pipeline, with plenty scheduled to be delivered in the near future. “We’re working with ASHGAL, the Public Works Authority, on delivering the Orbital Highway. We’re looking to deliver the first part of that early next year. That’s going to be another important milestone. In the UAE, the opening of the Abu Dhabi-Dubai extension of the Mohammed Bin Zayed Road is another big, important project. Midfield Terminal is another iconic project we’re working on. “There have been challenges, and there has been a lot of value
“FY15 was a challenging year for us in the Kingdom, but we rode it out and now work better internally and externally with our clients. The current downturn market has really required us to be able to respond to the cost pressures that clients have been facing” 03
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01 Ferrari World is one of AECOM’s most famous projects in the GCC. 02 Midfield Terminal in Abu Dhabi presented a number of engineering challenges. 03 A prototype for the Tatweer Schools programme. 04 Etihad Towers required specific engineering for tall buildings. 04
engineering that has taken place on some of these projects, where we’ve had to take out part of the scope that may not be immediately required or that can be phased in over a longer period, so as to manage the cash flow on these projects. We work with our clients to allow that to happen. That’s part of our role. “We’ve also seen movement in the commercial side. You have clients that are still investing and building malls and other commercial facilities, and there are a lot of activities that are happening in the commercial space that we’re very much a part of,” he says. The uncertain financial times also mean interest in alternative financing has never been higher in the GCC. Zaghw is firm in his belief that this will come to pass in the region, but is equally keen to temper the enthusiasm, saying that alternative financing models are still in their infancy and will take time to really take off in the regional construction market. “I think it’s going to happen, but it’s one of those things that takes time – to have that legal framework in place, to have the maturity of the market, to be able to take part in the delivery and in the various jurisdictions of the GCC countries. You’ll actually see that there are certain markets or sectors where projects are already being delivered that way, but it’s not a common platform for delivery across the board. It’s going to take a while. Give it two or three years to actually start bearing fruit. But, yes, we are very much interested in it, and we’re engaged – internally and externally – in developing opportunities along these lines.” Finally, talk turns to the future of AECOM. Much as he worked closely with former chief executive David Barwell, Hamed Zaghw is keen to ensure that AECOM lays the groundwork in terms of continuing to attract the best and brightest in engineering, technology and construction.
“I’m a firm believer that the best part of our workforce is the youngest and brightest. They are the ones who have the energy and new ideas, they want to learn and get the experience, and given the opportunity, they can do wonderful things. “Our proposition to graduates is that we offer a career in consulting and engineering, with the opportunity to learn and grow and to get exposed to leading-edge knowledge with a particular field. I think that is what we’d like graduates to be coming to work for us for,” he enthuses. “In fact, we have a programme at AECOM which we call Reverse Mentoring. We have young employees, mostly graduates, that are actually mentoring us [senior staff]. I actually had my first mentoring session recently, and one of the things I picked up on from my ‘mentor’ was the interest and eagerness to be part of the management side – the managing of projects, and highly valuing the role of project managers and so on. My response to that was: do not underestimate the value of the technical competence and ability that you can bring. “Typically, when you first start out in this career, that is all you can offer. It’s not the management experience, because you don’t have that yet. It’s about being a competent graduate, engineer or scientist, whatever the field you’re in, and doing that very well. My advice would be to do the best job that you can, in whatever area you’re in, and just put your heart and soul into it. You will advance. There is no substitute for hard work, and doing that allows people to progress,” he insists, pointing to his own history as proof that it works. “If you can continue to round your education, round your experience and expose yourself to different parts of the business that you’re involved in. I’ve personally worked in just about every area of the transportation industry, and it’s not because I had to, it’s because I wanted to. I think that’s been a tremendous asset for me down the line,” he concludes. FEBRUARY 2017 27
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SITE vISIT
Wharf Wonder The Wharf Development project in the heart of the planned Culture Village alongside Dubai Creek is making waves, as Middle East Consultant found out on a recent site visit ubai Creek must easily rank as one of the most picturesque and best-known locales in the emirate. Meandering through the historical Deira and Bur Dubai districts, it now begins and flows back to the Arabian Gulf thanks to the recently inaugurated Dubai Canal, an ingenious master development conceived by HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai. Also rapidly taking shape on the shoreline of Dubai Creek and overlooking another Dubai icon, the famed Dubai Clock Tower, is master developer and asset manager Dubai Properties’ (DP) Wharf Development project in the core of the Culture Village, a multi-purpose (residential, hospitality and entertainment) development project on a 3,700,000sqm plot of land. When fully completed, the village will include a harbour, cultural and exhibition centres, and dockside development. The mixed-use 30,000sqm luxurious waterfront project, costing $218 million, will eventually comprise four buildings, 594 apartments, 110 retail shops and over 2,080 parking spaces, most in basements. Dubbed a low-rise JBR along the canal of Culture Village, the first of the completed quartet of residential towers, a ground plus seven-storey structure, was recently handed over to Dubai Properties, the property 28 FEBRUARY 2017
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“Stretching along the banks of the creek, the Wharf Development is designed to reflect the local ethos, art and heritage through the bespoke architecture of its residences and the diversity of the retail offerings� FEBRUARY 2017 29
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“The Wharf Development will also support Dubai’s strides towards 2020 with a successful pipeline of timely handovers that support thriving occupancy rates across housing and retail” arm of Dubai Holdings, three months ahead of schedule. The two other towers are currently well on track for scheduled handover in Q1 2017, while the fourth tower and development retail space will be completed in Q4 2017 as part of the phased handover. A whiff of the wharf
On a walkabout as part of the site tour, Abdullah Abu Shabeib, senior executive director, Customer Care and Government Relations at Dubai Properties, is effusive about the offerings and pace of development at the Wharf Development. “The Wharf Development is our newest flagship project and the latest in our long list of premium offerings in this prestigious location in the centre of the city, with close proximity to the major business districts and other leisure and entertainment centres. 01
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“The completion and handover of the project ahead of schedule is in line with Dubai Properties’ commitment to delivering projects on schedule. The Wharf Development is a testimony to and reinforcement of our impressive track record in handing over quality properties that meet the highest and most demanding construction standards.” The Wharf Development, as an integral part of the Culture Village, was conceived as a contemporary Arabesque township on the waterfront. “Stretching along the banks of the creek, the Wharf Development is designed to reflect the local ethos, art and heritage through the bespoke architecture of its residences and the diversity of the retail offerings,” he adds. “Blending traditional and modern architecture brings a new flair and ambience to the residential community,” he observes. “This old-world charm and soothing atmosphere, complemented with the nearness
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to the Dubai International Airport and close proximity to the historical districts and both the traditional and new business enclaves of Dubai, is a great selling proposition.” Dubai Wharf is the new address at the centre of Culture Village, dubbed a future landmark for leisure, dining and entertainment, with magnificent views of 02 the historical Dubai Creek. The residential towers have a distinctive contemporary design with a stone exterior featuring a large proportion of glazing and wooden textured shading while playing a functional role of improving efficiency, particularly in the building’s climate control and energy conservation capabilities. Pedestrian bridges will be constructed over the canal to offer full connectivity throughout all Culture Village developments, while three pedestrian accesses will provide convenient seamless entry points to Dubai Wharf, retail facilities and the canal promenade. Blissful living
According to Abu Shabeib, the complex has been designed to enhance living experience, with sustainable infrastructure, ample amenities, good security and natural beauty throughout. It has a private recreation area for residents including a state-of-the-art gym and swimming pool, as well as green spaces for a relaxed living experience. Conveniently located near Al Jaddaf station on the Metro green line, the complex, along with DP’s contiguous Manazel Al Khor and Anantara hotel developments, is easily accessible from Al Khail Road, Business Bay Crossing and Al Jaddaf Road. “Dubai Wharf will be an attraction for both shopping and entertainment and is set to complement and boost Dubai’s reputation as a world shopping and culture hub. Retail outlets will ring the walkways and the six km waterfront promenade of the Culture Village, and along with several other comprehensive conveniences and entertainment propositions will boost the available lifestyle attractions and make it a compelling case for potential investors and buyers,” asserts Abu Shabeib. “To date, over 70% of the 124 available apartments in the first completed building have been sold and sales transactions for the few remainder are at fairly advanced stages of negotiations and finalisation. The buyers constitute a mix of nationalities,” he says. “The Dubai Wharf project has three basement parking levels, common podium floors at ground and first level, and four towers
01 Abdullah Abu Shabeib, senior executive director, Customer Care and Government Relations at Dubai Properties. 02 The residential towers have a distinctive, contemporary design.
with residential levels starting from the second level, which also has a range of amenities,” explains Moataz Al Talla, senior project manager at LACASA, architecture and engineering consultants for the project. “The project team on-site is ensuring that the highest standards are delivered in terms of quality and HSE requirements, following the authorities’ compliance.” Engineering Contracting Company (ECC) is the main contractor for the project. At the peak of activity, over 2,000 construction workers were involved at the site, working simultaneously at different levels. “We are excited to work on this prestigious project and fully committed to ensuring the project is ready for occupation within the set timelines. In fact, we have beaten our own deadline by delivering the first tower a good three months ahead of schedule,” remarks general director Khodr Aldah. Infrastructure work in the Wharf Development includes road networks, internal bridges and electricity substations, sewage systems, irrigation pipelines, provision for storm water and potable water, and landscaping. The Wharf Development is yet another addition to Dubai Properties’ robust leasehold portfolio and its completion will meet the growing needs and leisure demands of a rising population, says Abu Shabeib. “The Wharf Development will also support Dubai’s strides towards 2020 with a successful pipeline of timely handovers that support thriving occupancy rates across housing and retail.” The Wharf Development is a special concept that synchronises both value and family comfort. It goes beyond floor space and plot sizes to create intelligent and practical living in a welcoming and soothing ambience. “The Wharf Development is livability coming together through thoughtful design, central locations, bespoke individuality and architecture meant to enhance lives. It has become integral to individuals and families who wish to take comfort to the next level,” Abu Shabeib concludes. FEBRUARY 2017 31
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DESIGN
Building Blocks Modular design, an approach that focuses on the ease of off-site manufacture and efficient on-line assembly, is poised for a major take-off, industry professionals tell Middle East Consultant odular design and modular construction, a method of design that maintains similarities between the spaces being designed using repeated modules, with fixed dimensions and simple shapes, is in for a major boost. With emphasis on repetitive items, the big advantage is manufacturing in pre-fabricated units. This alternative approach to design, where each element of a whole unit is designed and developed separately in modules, has major implications for the present-day construction industry and is gaining increasing acceptance for reasons of both speed and cost. In the infrastructure development context, modular design or manufacturing is implemented in an assembly line format, at off-site locations with an industrial setting. Experts believe this method offers a new and more efficient form of construction, taking the building out of the physical site and into a controlled factory environment. “The traditional approach to construction is centred on the delivery of large quantities of raw materials to the construction site, where large numbers of workers bring them together, often in challenging working conditions,� says Vanessa Currie, Dubai-based strategic development 32 FEBRUARY 2017
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“This 85% off-site methodology comes with 30% saving in manpower, 30-50% in time saving, more than 70% health and safety enhancement when compared with conventional precast construction�
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“It is difficult to predict the long-term impact of modular design on the region, but I expect that the practices we follow today will be completely overtaken by cyberphysical systems, which is at the core of modular design” director for Laing O’Rourke Middle East. Currie explains that her firm has successfully developed an approach to Design for Manufacture and Assembly (DfMA). In simple terms, the approach is to provide a defined set of high-quality construction products such as concrete floor-slab elements, structural columns, modular plant rooms, bathroom pods or MEP service modules. “These are then manufactured off-site in a factory environment and pre-tested or commissioned before being transported to site. On-site, these components are then assembled into the completed building or infrastructure asset,” she remarks, making the case for increased use of modular design in modern construction. By industrialising the entire construction process, off-site manufacturing dramatically reduces waste of resources. “This approach reduces the utilisation of manpower and materials, while additionally cutting down on the margin of error through automation. As a result, 01
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the products or elements assume a very high level of quality, even as they are produced to meet delivery and cost targets that are considerably lesser than what one would pay in the case of traditional construction,” says Faizal E. Kottikollon, founder & chairman, KEF Holdings, headquartered in Dubai International Financial Centre (DIFC). KEF Infra, the infrastructure subsidiary of KEF Holdings, was conceived as the off-site facility for a whole new paradigm for construction. “Here, up to 80-90% of the building is manufactured, precast or prefabricated at the location,” he adds. On the upswing
According to Faizal, globally the modular construction industry is witnessing year-on-year CAGR of 6.5% over the period starting from 2015, with the upswing expected to continue through 2020 to touch $209 billion.
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01 A view of the KEF Holdings
He sees a reflection of this trend in the Middle East, although he concedes that currently this has been limited to specific developments such as the façades or bathrooms. However, he is convinced that modular construction is bound to gain momentum in the 02 foreseeable future with initiatives such as the Dubai Industrial Strategy and the 3D Strategy, which he believes will change the face of the industry in the region. Faizal’s forays into modular construction have met with all-round success. KEF Infra, with its sprawling and growing prefab plant in Krishnagiri in the southern Indian state of Tamil Nadu, is currently working on a number of different projects across varying building types, including specialised infrastructure. These include, among many others, 03 a flagship mega hospital healthcare project, a 12,100sqm school set for completion in a record five-and-a-half months and a 148,700sqm commercial project to be completed in a record 13.5 months. DuBox Precast Industrial Products, a subsidiary of Amana Contracting & Steel Buildings, is another major player in this modular construction space. DuBox handles modular design, modular manufacturing and modular construction. As would be expected, Yasser Baaj, vice president for Business 04 Development, is a strong advocate of modular designs, which he asserts are easy to execute, can be used in all forms of construction, maintain high-quality standards and are produced speedily, saving valuable construction time. An industry professional, he draws the distinction between modular design and modular construction and outlines the benefits at the outset. “It is important to differentiate between modular design and modular construction. Whereas the first is just about the form of design outputs, modular construction is the methodology of construction that takes the majority of the work to the factory away from the uncontrolled or difficult to control conditions. This 85% off-site methodology comes
precast factory . 02 Vanessa Currie, strategic development director, Laing O’Rourke. 03 Yasser Baaj, vice president, DuBox. 04 Faizal E. Kottikollon, founder & chairman, KEF Holdings.
with 30% saving in manpower, 30-50% in time saving, more than 70% health and safety enhancement when compared with conventional precast construction.” “The modular design industry is still rudimentary in the GCC. However, the industry is evolving rapidly and labour and staff accommodation projects are increasingly being designed in modular shapes. However, other types of constructions, even the hotels, are not designed modular until now. It will take some time to bring about a change in the engineering and construction industry in favour of modular construction, but we are gradually moving into this arena,” continues Baaj, whose firm produces modules in its 62,000sqm factory in Dubai Industrial City. DuBox’s order book is full. The company has just delivered three staff accommodation projects in Saudi Arabia, two staff accommodation projects in the UAE’s Western Region and Ruwais, a high-end villa project in Ruwais, a hospital extension in Abu Dhabi, two office buildings in Dubai and a villa complex project, in addition to a modular school project in Dubai. “Through the last four years, we managed to field test the application of modular construction on housing, staff accommodation, hospitality and healthcare industries, and we tested the remoteness of the projects to confidently cover GCC countries with much success,” he adds. Modular versatility
According to Vanessa Currie, modular design can be used for all forms FEBRUARY 2017 35
ON SITE
05 DuBox prefabricated structures at a construction site in Ruwais, Abu Dhabi. 06 A Laing O’Rourke prefabricated family bathroom.
of construction; it is simply a matter of scale. Modular design can range from complete modular room units assembled together onsite through to MEP service. 05 “Modules or bathroom pods can be installed within an otherwise traditionally constructed building. Modular design can be used across different sector building types such as residential, hotels, hospitals, and for low-rise or high-rise structures.” She believes a major benefit of modular design and DfMA is a significantly reduced construction programme on-site. “For many of our clients, the programme savings that DfMA enables is an important driver. Imagine the reduced disruption that is associated with delivering a new school in less than one academic year. Similarly, a property developer may see benefits from reducing the amount of time during which capital is tied up before an asset can be leased or sold,” she comments. Other key benefits of the DfMA approach are quality and safety. “By removing construction activities from the site and placing them in a controlled factory environment, there is a significant positive impact on safety.”
“One of the major trends in modular design that has everyone’s attention and is taking the region by storm is 3D printing. This is of course an increasingly appealing solution for smaller-scale structures” 36 FEBRUARY 2017
Off-site manufacturing is definitely the new way to think about construction, since it guarantees numerous benefits that cannot be ignored, both in the business sense and from a long-term sustainability point of view. He goes on to enumerate the benefits in terms of time savings, resource savings and being a one-stop solution with guaranteed Return-On-Investment. “Off-site combines every aspect of construction into an intelligent whole, through tools such as BIM, which offers a basic structure for building an intelligent structure, and automation, which speeds up the process by a significant margin. Off-site manufacturing benefits greatly from the controlled ecosystem that is typical in factories. “In simple terms, this means that the mix of the cement, to the quantity of paint used on a piece of furniture, can be limited to avoid wastage. At the same time, the automation process reduces the dependence on manpower, and additionally makes it possible to reduce health and safety challenges traditionally faced at construction sites. “Modular construction is the future and offers monetary and investment benefits. The KEF modular construction model can revolutionise the way we think of construction, essentially making it as simple as catalogue shopping in a way. We build everything from the façade to bathrooms and furniture at KEF Infra One, on timelines that can be determined down to the day of delivery. I think you would find that a lot of developers find timely delivery to be their biggest challenge, and that this kind of solution can serve to revolutionise the industry with cost benefits.” Getting attention
“Laing O’Rourke have witnessed a significant interest from clients in modular design in the Middle East. The importance of programme and delivery certainty is resulting in clients seeking an approach and embracing modular design,” confirms Currie. In addition to a 25,000sqm industrial
ON SITE
park facility in the UK, the company has large modular manufacturing facilities in Jebel Ali and Al Quoz in Dubai, where it has manufactured items for installation in the UK, Qatar, Saudi Arabia and Oman, among other places. The company’s notable projects include the Atlantis Hotel, Motiongate theme parks and the Hilton Garden Inn Hotel in Dubai’s Mall of the Emirates, among many others. For the latter, 70% of project components were manufactured off-site and the hotel was delivered in a record 18 months from concept design through the DfMA approach, using precast, pods and MEP modules. Currie says current trends in modular design construction are to use bathroom pods, MEP modules, precast stairs and prefabricated rooms. The use of precast is sometimes limited to certain elements, due to design restrictions in line with local municipal regulations. She also believes the modular construction industry is as competitive as the wider construction sector and that companies like Laing O’Rourke will increasingly provide customised solutions combining traditional and modular methods that best serve the requirements of clients. “Through the repeated delivery of DfMA on projects to date, we have formed a strong understanding of the tangible value that this approach delivers to our clients and to our industry. As more and more clients recognise these benefits in the coming years, we expect that a DfMA approach will lead to a substantial evolution of the construction industry.”
Trends bode well for the industry
DuBox’s Baaj concurs with this trend toward greater use of modular construction going forward. “Housing and hospitality projects are the common trend in the market and they all lend themselves to the modular construction, and we are looking forward to increased business and additional projects with our unique system,” he says. He also accepts that the industry will get progressively competitive and is optimistic about the short- and long-term futures of the industry in the region. “The industry is surely aligning towards modular construction as the way forward,” he confirms. Faizal also echoes the sentiments of his peers with regard to these ongoing technologies, trends and inclinations in the modular design and construction arenas. “One of the major trends in modular design that has everyone’s attention and is taking the region by storm is 3D printing. “In the Middle East, we continue to face deficits in essential infrastructure, such as affordable housing, hospitals and schools. These are areas that need solutions such as off-site manufacturing, in order to keep pace with the demand. It is quite difficult to predict the long-term impact of modular design on the region, but I expect that the practices we follow today will be completely overtaken by cyber-physical systems, which is at the core of modular design and modular construction,” he concludes. 06
FEBRUARY 2017 37
ON SITE
KONE wins order for BIA terminal expansion Finland’s KONE Corporation has won an order to supply 145 elevators and escalators for the new passenger terminal building at Bahrain International Airport (BIA). The order is part of an extensive modernisation project at BIA aimed at making it one of the most modern and futuristic airport buildings in the world, the company indicated in a press statement. Serving as a gateway for Bahrain to the rest of the world, BIA is expected to handle 14 million passengers annually by 2020, from the current nine million. The airport currently hosts over 40 airlines and is home to national carrier Gulf Air. KONE will supply 85 elevators, 40 escalators and 20 auto-walks equipped with KONE e-link monitoring. “The economic development in Bahrain has remained robust, with its tourism industry expected to grow steadily to $1 billion by 2020. We are excited to play a part in Bahrain’s tourism and public infrastructure development through effective people flow solutions,” said Pierre Liautaud, executive vice president for KONE South Europe, Middle East and Africa.
38 FEBRUARY 2017
Building materials price rise to escalate apartment costs An increase in building materials prices could push up the prices of apartments, villas and office space if not contained in the next few months, a Dubai-based property developer has warned. “The escalation of certain building materials prices will push the construction cost upwards that might have a knock-on effect on the property prices going forward,” remarked Rizwan Sajan, founder-chairman of Danube Group and Danube Properties, in a press statement. “Therefore, those property buyers contemplating investing in real estate should not waste time. They should fast-track their buying decision before developers and contractors start revising prices upwards to adjust to the new prices.” The price of steel – a major cost component in the building industry – jumped 20% in the fourth quarter of 2016 compared to the first quarter, according to market indices, while prices of plywood increased by 5% and sanitary ware increased by 10-15%, which will have a knock-on effect on the prices of property.
ON SITE
Cayan Group closes strong in 2016
Kuwait to spend $15.6bn on infrastructure in FY17 Kuwait is set to spend about $15.6 billion on infrastructure and other projects in fiscal year 2017-2018, with the private sector contributing 16.9% of the spend, said a report in a local daily. The projects cover housing, roads, electricity, ports, airports, telecommunications and renewable energy, reported the Kuwaiti Arabic newspaper Al Anba, quoting Dr Khaled Mahdi, the secretary general of the General Secretariat of the Supreme Council for Planning and Development. He revealed that the government will contribute 49.3% of the investment. 33.8% will be spent by the state-owned oil sector, while 16.9% will be spent by the private sector within a public-private partnership (PPP) programme, he said. “The 2017-2018 Development Plan, which is part of the second FiveYear Plan, includes projects intended to diversify the income sources, develop the tourism sector and increase investment flows,” Mahdi said. There are programmes for complete privatisation and new opportunities in the education, tourism and commercial sectors, with a view to reducing dependence on oil, in addition to petrochemical expansion projects. Among the strategic projects outlined in the development plan for 2017-18 are Sabah Al-Salem University City; the Zour refinery; clean energy; the Kuwait Airport expansion, Terminal 2; the Sheikh Jaber AlAhmad Bridge; and a sewage treatment plant.
Saudi Arabian property developer and real estate investment company the Cayan Group has achieved its strategic business objectives and surpassed some of its financial aims for 2016, it has announced in a statement to media. The master developer said that $1.47 billion worth of ongoing projects announced in 2016 are currently ongoing. Throughout 2016, the Cayan Group surged ahead with planned projects and made steady progress in both construction and sales. In Riyadh, CMC (Cayan Mefic Centre) Tower structural works were completed ahead of schedule in May 2016. In addition, the group successfully launched the Samaya project, a high-end mixed-use development in a very prime area of Riyadh. In Dubai, the group launched the Cayan Arjaan Hotel Apartments in November 2016. “The general fluctuation in economic conditions in the Gulf region, and in particular in Saudi Arabia, has thrown some challenges our way too, but these have not had a lasting or deep effect on our plans,” noted Ahmed Alhatti, chairman and president of the Cayan Group.
FEBRUARY 2017 39
THE BACK PAGE
LAST WORD
01 Julien Soulet, managing director, Honeywell Fluorine Products.
Green Initiatives Honeywell’s Julien Soulet explains how the use of scientifically proven advanced materials can enhance energy efficiency
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ith environmental sustainability remaining high on the global agenda, it is vital to look for alternative ways to reduce harmful greenhouse gas emissions and improve energy efficiency. One method to do this is by improving building insulation, an area which has seen significant advancements in recent years. If you access the inner structure of walls of old buildings, you will likely find 40 FEBRUARY 2017
newspapers, magazines, cotton or even wood shavings being used as insulating materials. In some cases, there might be no insulation at all! With inferior insulation, the building’s internal heat will increase or decrease more rapidly to the outdoor ambient temperature, and therefore more energy is required to heat or cool the building. Today, insulation is an important factor in many aspects of our daily lives. Advanced materials like fibreglass and polymers are used for modern insulation, helping us keep food fresh in our appliances and stay comfortable in our homes and workplaces. Scientists and engineers consider many factors when developing insulating materials. These include energy efficiency, environmental impact, cost, safety, government regulations and standards the technologies must meet. One form of insulation that has gained increased worldwide adoption because of its ability to meet these factors is foam made out of polyurethane. This highly effective product has shown dramatic increases in energy efficiency in buildings. Foam not only fills cracks but also improves sustainability, durability, strength, water resistance and thermal properties of structures. Honeywell introduced Enovate 245fa (HFC-245fa) to solve the challenges posed by chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), which ultimately changed our approach to insulation.
Enovate 245fa, a liquid blowing agent, has been successfully used in a wide variety of closed-cell spray polyurethane foam systems and applications across the globe. In October, the signatories to the Montreal Protocol, more than 190 nations, agreed to an amendment that would phase down the use of HFCs. Honeywell anticipated the need for HFC replacement technology and developed hydrofluoro-olefin (HFO) blowing agents, which have dramatically reduced GWPs and helped to reduce greenhouse gas emissions. Across the Middle East, governments are continuously striving to increase their energy efficiency and climate control efforts to meet regional goals such as Abu Dhabi’s mandatory Estidama (Arabic for sustainability) programme and the Saudi Vision 2030. Honeywell recently gathered regulators, contractors, foam insulation manufacturers, regional stakeholders and global industry experts for an exclusive workshop to review and collaborate on the region’s myriad sustainability objectives. Estimates suggest that global adoption of solstice products would reduce greenhouse gas emissions by 475 million metric tons of carbon dioxide by 2025, the equivalent to removing 100 million cars from the roads for a year. Through greater use of HFOs in industries such as construction, we can improve safety, cost-effectiveness and energy efficiency today and for generations to come.
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