For the construction specialist
Winds of Change Studying wind power in design engineering for super-tall structures ON TOPIC
Ajman strikes big in 2016 property deals
IN PRACTICE
Project financing thoughts from an elite tripartite panel
ON SITE
Autodesk hot on the trail of the technology trajectory
ISSUE 033
January 2017 Publication licensed by International Media Production Zone, Dubai Technology and Media Free Zone Authority A supplement of Big Project Middle East
Floating Houses
CONTENTS
On topic INdUSTRY VIEWS fROm ACROSS ThE mIddLE EAST
07
10 07 ANALYSIS
Ajman’s Real Estate Regulatory Authority (ARRA) is spearheading the drive into the anticipated boom for properties in the emirate 10 OpINION
Examining Dubai’s transportation needs with a projected 400% population increase over the next 25 years
12
20
In practice ANALYSIS, INSIghTS ANd INTERVIEWS
12 INTERVIEW
Dr Roy Denoon, vice president, CPP Wind, brings us up to speed on the latest in wind engineering 20 COmmENT
24
28
Scott Lambert, head of Construction and Infrastructure at Al Tamimi & Company, demystifies public-private partnerships (PPPs) 24 INSIghT
The intricacies of project financing are untangled by an expert trio: an attorney, a financial adviser and a construction professional
On site CASE STUdIES, OpINIONS ANd SNApShOTS
32
34
32 EVENT
A report from the 5th edition of Autodesk University ME, which hosted technologists, thought leaders and teachers 34 REpORT
fischer ME holds hope for increased business as it enters its second decade 36 NEWS
Dar Al Handasah, Perkins+Will to draw up Kuwait’s Master Plan 2040
36
38
JANUARY 2017 1
WELCOME
Group EDITOR’S NOTE
New Year nuances “Ring out the old, ring in the new” goes a line from one of Poet Laureate Lord Alfred Tennyson’s best-known poems, ‘In Memoriam’. As we cross over into 2017, this sonorous reminder of our passage into the New Year echoes our resolve to usher a newness and freshness into the news content and composition of Middle East Consultant. In the new year we will be looking closely at some exotic, esoteric subjects in the construction consulting industry that have long been swept under the proverbial carpet. As a case in point, wind engineering is our cover story in this current January 2017 edition. Blowing in the new. We look at some straws in the wind with CPP Wind, a Colorado company founded by university faculty members and researchers, and its pioneering work in wind engineering for tall buildings with applications across the world including the Middle East. We also delve into the world of mega financing and examine the byzantine, arcane issue of project financing, the indispensable foundation to any mega construction project anywhere in the world. We look at the monetary maze and tangled trail to funding and kick-starting projects. Our three-member high-powered panel representing the consulting industry, the legal and the financial advisory business weighs in on all matters relating to project finance and capital. In this edition, we also return to the world of academia following our attendance at the recently concluded Autodesk University Middle East. There we engaged with Tom Wujec and Callan Carpenter, two of the company’s eminent thought leaders and spokespersons, who have been as relentless as they are passionate about the advent of inevitable disruptive technologies that will soon be upon us in our industry. New and developing technologies such as 3D printing, virtual and augmented reality, robotics, BIM and zero carbon projects will have an impact on the way the construction industry, like all industries, does business in the foreseeable future. In with the new! Do let us have your feedback, we’d love to hear from you. Here’s wishing you all a Happy New Year. May this year be fruitful and fulfilled.
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ON TOPIC
MOST POPULAR
FEATURED
READERS’ COMMENTS
CONSTRUCTION
HYPERLOOP HYPE
Deals awarded for $125m Al Maktoum airport works
PROPERTY
Shapoorji Pallonji starts work on first ME project
In pictures: UAE’s KEF launches $100m manufacturing park in India
There is much excitement over the frequent suggestions that ‘hyperloop’ transport could come to the UAE (“Abu Dhabi to study feasibility of Al Ain Hyperloop”, December 12). But there are many questions over such a system, which has yet to be put into use on a large scale. Would such a system ever be as practical and straightforward to build, and as convenient and cheap to use, as a regular train network? Name withheld, via email
CONSTRUCTION
Dubai’s $40m Deira Islands bridge to set open
DUbAI’S RENT PRICE TREND
CONSTRUCTION
Work on Emaar’s Dubai beachfront hotel starts
INFRASTRUCTURE
Portuguese-Turkish team wins Oman port work
4 JANUARY 2017
Video: Autonomous prototypes on show at Volvo CE Xploration Forum
The UAE construction industry has its challenges. But the prospect of falling rents is not a symptom of this. As the Core Savills study (quoted in “Dubai rents ‘to fall by up to 4%’ in outer areas”, December 19) suggests, more than 20,000 new units are to be delivered to the Dubai property market in 2017. The supply is helping drive down prices in areas – but not to the same extent as we saw during the height of the financial crisis. Siraj Ahmed, via email
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ON TOPIC
ANALYSIS
Ajman Ups the Ante The first Ajman Real Estate Conference spotlighted the healthy growth potential of realty in the UAE’s smallest emirate, where real estate transactions in 2016 surged 39% compared to 2015
T
he Ajman Real Estate Conference 1, the first of its kind organised by the Real Estate Regulatory Agency – Ajman (ARRA), was recently inaugurated by HH Sheikh Ammar Bin Humaid Al Nuaimi, Crown Prince of Ajman and President of the Executive Council. Held under the patronage of HH Sheikh Humaid Bin Rashid Al Nuaimi, the Ruler of Ajman and Member of the UAE Supreme, the theme of the one-day conference at Ajman Emirates Hospitality Center was ‘Sustainable Development according to Global Standards’. The event attracted over 350 official delegates from across the region and the South Asian subcontinent. Among other prominent attendees were Sheikh Abdul Rahman Bin Ali Bin Khalifa Al Khalifa,
Director General of the Survey and Land Registration Bureau – Bahrain, and Sheikh Mubarak Al-Otaibi, a prominent Saudi Arabian business leader. Among those who addressed the gathering was Eng Marwan Bin Galaitha, CEO of Dubai RERA (Real Estate Regulatory Agency), who lauded the hosting of the event and hailed the promising growth of the real estate sector in Ajman. He called for greater vigilance and continued reforms to regulate and oversee the growing interest in realty in order to stabilise markets, instil confidence and protect all stakeholders, investors, buyers and sellers in the emirate. “This debut conference is a major step forward for the Ajman real estate sector and held at a time when we are witnessing strong growth JANUARY 2017 7
ON TOPIC
“This debut conference is a major step forward for the Ajman real estate sector and held at a time when we are witnessing strong growth in real estate in the emirate” in real estate in the emirate. These are exciting times for Ajman, and the immense growth potential on offer will get a major boost from the conference,” affirmed Yafea Al Faraj, executive director of the Ajman Real Estate Regulatory Agency (ARRA), appointed to his position in April 2011. He indicated that real estate transaction regulations in Ajman have been tightened and new payment mechanisms such as escrow accounts have been put in place, in the best interests of purchasers, investors and developers. Ajman has over 18,000 ready-to-occupy units available in the market from reputed developers, at varying price points up 39% over the corresponding 2015 figures. The emirate saw robust real estate activity in 2016, with transactions worth $410 million finalised. Investors inspired
Sweet Homes Group, one of the UAE’s premier property master developers, announced the launch of the company’s first hotel apartment project in Ajman at the event. According to Fahad Sattar Dero, the company’s MD and CEO, the new project, located strategically on Mohammad Bin Zayed Road, is expected to be completed in 2019. The mixed-use development will feature 272 studio units and 72 onebedroom apartments across an area of 11,400sqm. “This new initiative reflects the company’s strategy to offer affordable yet luxurious serviced apartments, and we have also recently completed the first phase of the $750 million Ajman Uptown project,” he added. Farook Mahmood, founder and president of Silverline Realty and 8 JANUARY 2017
vice chairman of the National Association of Realtors, India (NAR), was upbeat about his participation at this event. “Ajman is showing great promise, and we are optimistic about the growth of the real estate sector in the emirate. Investors have been gravitating to Ajman thanks to its nearness to Dubai and within close proximity to the Northern Emirates and good road connectivity.” According to the Cluttons Winter 2016/2017 Property Market report, tenants looking to get more for their money are moving towards significantly more affordable community spaces in Ajman. “Rents in Ajman are competitively priced with buildings of good quality and facility offerings. Presently, Ajman is a winning proposition offering flexible payment plans in addition to better packages, including facilities such as parking,” Suzanne Eveleigh, property management director at Cluttons, a global real estate services company, explained. The Conference offered plenary sessions and workshops on the future of real estate and sustainable practices for real estate development in Ajman. The conference also shed light on international property measurement standards, sustainability in real estate projects and the role of social media in real estate marketing, and held sessions for owners’ associations. State-run ARRA, established under a Royal Decree in December 2008, aims at regulating real estate activities and developments in Ajman and puts in place policies and legislation to authorise real estate projects and investment in buildings. ARRA oversees the implementation of real estate policies and related plans, and regulates ownership.
ON TOPIC
OPINION
01 Nadeem Shakir, technical director and head of Transport Planning, Middle East and North Africa, Aurecon.
Smart Transport Modelling Essential With Dubai’s population set to increase 400% by 2040, creating a forecasting tool that accounts for such dramatic infrastructural changes is an enormous challenge, says Nadeem Shakir of Aurecon The status quo
01
E
ngineers like to joke that the glass is neither half-empty nor halffull, but the wrong size to begin with. It is a useful reminder of the importance of modelling in engineering to ensure that developments are the right size for their purpose. How then do you model two decades ahead with limited data? And how can your model be accurate if your infrastructure will see a four-fold increase in population over 2025 years? Aurecon’s answer is: “You engineer a solution.” 10 JANUARY 2017
Dubai is synonymous with the spectacular. What’s equally impressive is the emirate’s drive to be one of the most technologically advanced places in the world. Transport will play a major role in the development of Dubai, incorporating leading-edge technology such as driverless cars and super high-speed trains. Dubai’s strategic Plan 2021 will transform the future of Dubai, to make it “a pivotal hub in the global economy”. As a key part of its vision to be a world-leading smart and sustainable city, Dubai is developing a seamless and efficient transport network. An improved transport network will also need to take into account the fast-rising levels of vehicle ownership. According to recent reports, Dubai’s vehicle density of 540 per 1,000 people in 2015 is the highest in the region and among the highest in the world. The number of vehicles in Dubai doubled between 2006 and 2014 and is forecast to reach 2.22 million by 2020. However, those projections could be affected by the growing relevance of driverless cars, which have the potential to optimise the transport network capacity with better usage of road space and a better selection process
for route destinations. The technology should also reduce the total number of vehicles on the road by encouraging well-planned carpooling services and by enhancing park & ride schemes, thus promoting an improved share for public transport. The model for success
Aurecon is closely involved in creating the masterplan for Dubai’s transportation. One of our company’s most valuable contributions to this masterplan is transportation demand modelling, showing how Dubai’s transport network will cope with changes in demography and day-to-day usage over several years, or even decades. Modelling in Dubai brings its own unique challenges. For instance, projects here tend to focus on pure development rather than operational upgrades, and are often very large in scale. The region has the luxury of having the major proportion of available land still undeveloped, compared with many Western countries where the opposite is true. From a data perspective, this makes for some stark differences. The West’s large developed areas make deriving data and extrapolating a plan reasonably
ON TOPIC
straightforward. In contrast, there are currently around 2.3 million people in Dubai but the data from travel demand surveys is only available for about 1% of the population. Within the scope of the exercise, Dubai’s population is predicted to rise to 10 million and developments are being modelled for multiple scenarios. Consequently, the first and biggest challenge in terms of modelling for Dubai is data scenario management. Large masterplans evolve rapidly, and the amount of data to handle is massive. Also, new sets of land-use information become available every day and there are fresh ideas for transport options to consider.
relentless pace of development in Dubai, projects rarely have that luxury. To better analyse the data and create more accurate models for the transportation masterplan for Dubai, Aurecon developed its own technologies. Its unique Geographic Information System (GIS) manages the many issues encountered during masterplanning. Aurecon also uses other proprietary software incorporating Visual Basic for Applications (VBA) tools to calibrate a strategic model’s travel demands to suit local requirements. This software is consistently applied to ensure the matrix is correctly adjusted. Intelligent data ignites possibilities
Tailor-made software
Many projects in Dubai have accelerated timelines with additional challenges. One is the widespread use of strategic models for all levels of planning, right down to microsimulation, when its strength is really in providing a big-picture view. But with the
While the challenges of masterplanning for the Middle East vary, it is still one of the most exciting places to be for infrastructure and engineering. The explosion of data and realtime information is bringing greater accuracy to modelling and allowing designers to map increasingly sustainable and innovative
transportation networks. Alongside this, Intelligent Transportation Systems (ITS) and Smart Mobility Systems show us better ways to use technology and data to connect people and places across all transport modes. The Danish physicist Niels Bohr famously quipped that “prediction is very difficult, especially if it’s about the future”. But by using some of the most advanced modelling systems ever applied in infrastructure development, Aurecon is ensuring that Dubai can visualise the shape of its future – an unprecedented advance in terms of masterplanning. Such an advancement will benefit developers, architects, government departments and other stakeholders who collaborate to help Dubai and its growing population reach its goal of becoming a pivotal hub in the global economy. Or, to put it more simply, Aurecon has engineered a solution for Dubai’s complex planning problem. We have created the right-sized glass. Now all Dubai needs to do is to decide what to fill it with.
JANUARY 2017 11
IN PRACTICE
INTERVIEW
Winds of Change CPP is the first US company to provide total wind-engineering consultancies and services to architects and engineers, successfully generated through mathematical models, wind tunnel testing and in-house developed capabilities, software and instrumentation ailwinds are now clearly blowing in the direction of wind engineering. Increasingly, developers and consultants are taking wind factors seriously and studying the effects of wind pressure on façades, cladding and external fixtures, with special emphasis on tall buildings that tend to bear most of the brunt of extreme ill winds that blow nobody any good. The impact of wind on the natural and built environment, and subsequent studies and analyses of wind power in terms of possible damage, discomforts and benefits, is a subject that has long both enthralled and baffled construction engineers. Now there is clearly more and more demand for companies that specialise in wind engineering, structural dynamics, architectural aerodynamics and building physics in the Middle East, with tall buildings dotting all major cities in the region and the vast desert expanses prone to gusts, dust storms, sandstorms and powerful winds. Seeing how the wind is blowing and demystifying the rarefied and esoteric world of wind engineering has become the mission of CPP, a long-established US company engaged in pioneering work in air dynamics in several parts of the globe, including a successful track record in the Middle East, where it has a recognised presence. The history of CPP can be traced back to 1981 when long-serving professors Dr Jack Cermak and Dr Jon Peterka of the Colorado State University (CSU) College of Engineering in Fort Collins, just north
12 JANUARY 2017
of the state capital Denver, developed the first of the company’s wind tunnels outside the university environment, building on their decades of experience in wind engineering and technology. In 1984, Dr Ron Petersen, an expert in pollution dispersion and meteorology, joined the duo to form Cermak, Peterka, Petersen (CPP) Wind Engineering & Air Quality Consultants. So what is wind engineering? The formal definition given by Jack Cermak in 1975, and later adopted by the International Associations for Wind Engineering, is: “Wind engineering is best defined as the rational treatment of the interactions between wind in the atmospheric boundary layer and man and his works on the surface of earth.” In effect, CPP studies the effects of wind on the built environment, whether that is buildings, solar arrays, transportation infrastructure, power lines or constructions. Middle East Consultant interviewed Dr Roy Denoon, vice president, CPP, whose primary role as the leader of the building structures group implies he has the ultimate responsibility for the quality of the product being delivered for wind loading and wind effects on buildings. “In practice, this means that I take a degree of oversight in the specification of projects, and then their delivery. This entails a lot of discussion with clients to make sure we are understanding and catering to their needs and explaining these to our project delivery team,” he says, adding that he is very fortunate to be supported by a team of highly qualified, experienced engineers and competent technical staff. He has been very actively involved in CPP’s overseas expansions,
IN PRACTICE
JANUARY 2017 13
IN PRACTICE
01
“Design engineers have to ensure that the building design isn’t causing excessive wind speeds at ground level or in other open areas that will affect the use of those areas by the public” having recruited the key staff for the company’s Sydney laboratory and leading its foray into the Middle East over a decade ago. “CPP offers the industry almost anything to do with the effects of wind on design. This starts with initial consulting on buildings and new construction products all the way through wind tunnel testing of buildings, right through to forensic investigation of wind-induced failures,” he attests. Site-specific climate analyses to determine wind conditions at a particular location, wind tunnel testing of new buildings, and design and retrofitting of intelligent exhaust control systems to existing 14 JANUARY 2017
buildings constitute some of CPP’s repertoire of professional services. “A large part of our work is wind tunnel testing, where we build a small-scale model of a building and all of its surroundings and then test for effects in the wind tunnel. While there are many wind codes and standards around the world, each of them recognise that they are not applicable to unusually shaped buildings, or those with complex surroundings. In these cases, wind tunnel testing is an alternate route to compliance. “As the codes and standards are designed to envelope the majority of buildings, this means that for the same majority of buildings the use of wind tunnel testing can lead to more efficient and economical design. In the cases where the codes or standards would underestimate the effects of interest, the wind tunnel testing ensures that the right levels of design reliability are achieved,” he adds. According to Dr Denoon, in many parts of the world wind is the major external load on buildings, and a great deal of the structural design of the buildings depends on the wind loading. As well as this, wind affects the performance of buildings. This can range from door and elevator operability to ensuring that exhaust is adequately dispersed outside the building. “Design engineers have to ensure that the building design isn’t causing excessive wind speeds at ground level or in other open areas that will affect the use of those areas by the public,” he cautions. Wind impact
In modern construction, wind engineers are involved from the start of a project and work with the architectural, structural and mechanical design teams to influence the building design. In Dr
IN PRACTICE
01 CPP uses small-scale models in wind tunnels as part of their tests. 02 Applying good wind engineering at the start of the design process is easier than applying retrofit measures. 03 Determining the wind load can be critical in terms of saving costs during construction.
02
Denoon’s estimation, incorporating good wind engineering at the start of the design process is always a lot easier than having to apply retrofit measures. “In a number of regions of the world, this starts in conceptual design, as showing that your building will not have any detrimental effects on pedestrian wind conditions is a prerequisite to obtaining planning permissions.” In the Middle East, the structural design of tall, slender buildings is often governed by the wind effects, given the vast open spaces. This, in his assessment, is initially for strength design and hence affects the sizes of key structural elements such as building cores and columns, but also for occupant comfort, to ensure that the buildings will not sway excessively, causing alarm or annoyance. The wind load can also be critical for major building components, such as canopies. The wind pressure on the building envelope also drives the specification of curtainwall or cladding elements. With this being up to 30% of the total construction cost of a building, Denoon opines that even small reductions in design pressures can result in significant client savings. “If the building has any exhaust sources that might be odorous – kitchen exhausts, for example – or noxious – as in hospitals and laboratories – it is important to ensure that these exhausts will be adequately dispersed and not re-ingested into fresh air intakes.” He further notes that if the building is going to employ natural ventilation, it is important to ensure that the intakes and exhausts are appropriately located on the building to take advantage of the building architecture and prevailing wind directions.
Air permits
Air permits are most common for laboratory and hospital buildings. Laboratory buildings, for example, may have fume cupboards where noxious gases are exhausted out through a stack on the roof. “It is important to make sure that these gases are being exhausted fast enough, and are sufficiently diluted, that they do not pose any risk to people outside the building, or be re-ingested through fresh air intakes.” CPP has an extensive inventory of acceptable concentrations for different chemicals and can advise clients on stack heights, locations and exhaust velocities required for adequate dispersion. “Sometimes
“As the codes and standards are designed to envelope the majority of buildings, this means that the use of wind tunnel testing can lead to more efficient and economical design” JANUARY 2017 15
IN PRACTICE
03
we do this with mathematical models, sometimes through wind tunnel testing, and often through a combination of the two.” One service gaining ground is the design of intelligent control for exhaust systems in existing buildings. “Most of these have been designed to be run at full power all of the time, but with some knowledge of the wind direction and wind speed, the exhausts can often be run at lower speeds with large energy savings.” With wind engineering gaining prominence globally, the major trend he is seeing over the last few years is the increasing understanding of the role of the wind engineer in the design process and the value that can be achieved in involving the wind engineers early in the design process. “This started with the super tall, very slender towers, but we are increasingly being asked to provide early feedback for preliminary design of a much wider range of structures.” Dr Denoon’s vision for both the short and long term is to increase the visibility of the wind engineer within the design team, and to help clients understand the massive construction economies that can be gained. As the industry grows, there needs to be more standardisation in approaches to projects and how analysis is conducted. Different laboratories test, analyse and report in different ways. This can all be 16 JANUARY 2017
Fluid dynamics The major piece of
assessment of wind
technology shaping our
loading on buildings and
future is the development
structures.
of computational fluid dynamics (CFD). This is computer-
Part of that is due to issues with modelling turbulence in the flow,
based simulation of fluid,
and part is due to the
or air, flow that is widely
sheer computational
used in the automotive
power required. At the
and aeronautical
moment, the testing CPP
industries. It is
runs in the wind tunnel
technology that CPP has
in an hour would take
used for many years for
days or weeks to repeat
flows inside buildings,
computationally, and still
but is still not developed
wouldn’t have the same
enough for quantitative
accuracy or reliability.
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IN PRACTICE
“Part of this education will be to make sure that designers don’t just automatically believe results that come out of wind-loading or wind-effect packages that are wrapped into their software programmes” very confusing for the end clients. To this end, and to dispel misconceptions and myths, he has coauthored a guide – Wind Tunnel Testing of High-Rise Buildings – for the Council on Tall Buildings and Urban Habitat (CTBUH). This is a short publication intended to clarify the process of wind tunnel testing for architects and engineers and help them understand the questions that should be asked of a wind engineering consultant. “As an industry, we need to spend more time on this type of outreach, so that we are seen as consultants and not just testing facilities.” One of the key challenges is being able to demonstrate the value that good wind engineering brings to a project, and helping the client understand that a small early investment in this has much larger savings over the lifespan of a building. “The value in mitigating risk also needs to be better defined, along with the role of the wind engineer in that process. It is very interesting comparing the attitudes of our clients with mission-critical facilities (such as hospitals and data
centres) with those of the more typical developers.” Dr Denoon advocates the need to ensure that the next generations of architects, structural engineers and mechanical engineers are provided with some basic understanding of wind effects as part of their education. “Many of the failures and wind problems that we are called in to investigate go back to the original designers failing to recognise that they ought to get a wind engineer involved during design.” He also weighs in on the costs of retrofits and modifications postconstruction, which are generally enormous compared to taking the right approach during design stages. “Part of this education will be to make sure that designers don’t just automatically believe results that come out of wind-loading or wind-effect packages that are wrapped into their software programmes. There needs to be a recognition that these features are limited, and also to be mindful of where the limitations occur,” he concludes.
Regional work Kingdom Tower,
Sun and Sky Towers,
Burj Khalifa, Dubai, UAE:
Aldar HQ, Abu Dhabi, UAE:
Jeddah, KSA: CPP
Reem Island, Abu Dhabi,
Long-term monitoring
This interestingly shaped
worked on an early
UAE: CPP did all the
of the behaviour and
tower saw CPP conduct
concept for this, where
wind tunnel testing to
response of the world’s
studies on the effect of
it demonstrated the
investigate the wind loads
tallest man-made structure
wind on the structure.
feasibility of a tower of up
and cladding pressures on
to the high-velocity winds
The company’s work was
to 1,600m in height.
the towers.
that swirl around its top.
featured in a documentary.
18 JANUARY 2017
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IN PRACTICE
“It is an opportunity for those who wish to innovate, as the economic times might be right for Dubai, and all governments, to be looking more closely at opportunities to work with the private sector on PPP projects�
20 JANUARY 2017
IN PRACTICE
INSIGHT
Explaining PPP
How should Dubai’s prosperity and infrastructure be funded? Is the new PPP Law an answer? Scott Lambert, regional head of Construction and Infrastructure at Al Tamimi and Company, attempts to answer these questions
JANUARY 2017 21
IN PRACTICE
016 has emerged as a year of challenges for the budgets of many GCC governments. There is talk of the introduction of a VAT to raise revenues, as well as governments reducing fuel subsidies and considering selling off stakes in government-owned businesses to help balance their budgets. The region still needs ongoing investment in infrastructure and projects for its population, to sustain economic growth and more diverse economies. There appears to be little prospect of a resurgent oil price to boost funding, so aside from issuing bonds or taking on debt, governments are starting to again look more seriously at alternative funding arrangements to fulfil these needs. Even one of the more advanced economies in the region, Dubai, needs more infrastructure with its planned growth in population and tourism and the hosting of the World Expo 2020. Firmly signalling an intention to explore alternative arrangements for projects, in November last year Dubai implemented new laws promoting and facilitating the use of public-private partnerships as
a means for the delivery of projects in the emirate, in the form of its new law governing public-private partnerships (Law No. 22 of 2015) which came into force in November 2015 (“PPP Law”). The PPP Law allows the parties to structure the project based on a range of PPP models, including the models traditionally known by the private sector: concession agreements, build-operate-transfer (BOT), build-own-operate-transfer (BOOT), build-transfer-operate (BTO), and manage and operate arrangements. Flexibility is built into this law to allow the emirate to explore other types of project structures, as the PPP Law gives the Financial Department and the proposing government entity an ability to propose other arrangements to the Supreme Committee for approval. Once a model has been selected by a government entity and the Financial Department, the Financial Audit Department will then have oversight over the project. One innovation the PPP Law introduces is that a private sector company may propose partnership projects, not just a government entity. When a private sector company proposes a project, it may bypass the public tender process (set out in more detail below). The PPP Law provides that if the project is specifically developed by a private sector company,
“The region still needs ongoing investment in infrastructure and projects for its population, to sustain economic growth and more diverse economies”
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the interested government entity may directly contract with that company for the project without need of a public tender. However, the PPP Law sets out several preconditions. The private sector partner must form a limited liability project company (a special purpose vehicle) licensed to operate and implement the partnership contract in Dubai. Also, the project must be economically, financially, technically and socially feasible. In addition, a PPP is not permitted where it will require the relevant government entity to make payments that have not been allocated to the project entity’s budget. It should be noted that not all types of infrastructure are available, as the PPP Law expressly excludes projects related to the production and supply of water and electricity. The Supreme Committee may also from time to time exclude other projects or sectors from the PPP Law. The PPP Law sets out clear rules which apply to most PPP projects. Where a government entity is the proponent of a project, it must first obtain certain approvals. Depending on the value of the project, as well as the cost to the government entity, the approvals may be internal or external. In summary: • If the PPP will result in financial income or savings to the government entity, the director general, secretary general or chief executive officer (or a nominee) of the relevant government entity must approve the project. • If the total costs to the government entity are up to AED 200 million, the director general, secretary general or chief executive officer (or a nominee) of the government entity must approve the project. • If the costs to the government entity are between AED 200 million and AED 500 million, the Financial Department must approve the project. • If the cost of the project exceeds AED 500 million, the Supreme Committee must approve the project. The government entity must also form an internal committee, the Partnership Committee, made up of people nominated by the director general of the government entity. The resolution nominating the committee members also sets out how the Committee is to function. If the project requires the government entity to incur costs exceeding AED 200 million, then the director general of the government entity must also nominate a representative from the Financial Control Department to sit on the Partnership Committee.
01 Scott Lambert, regional head of Construction and Infrastructure at Al Tamimi and Company.
01
The government entity must seek private sector partners by means of a public tender. The tender can occur after all approvals are obtained. The invitation to tenderers must be accompanied by project details comprising financial, administrative and technical requirements to be satisfied. When the government entity has a private sector partner, the PPP project agreement to govern the relationship must address the following: • The nature and scope of the works to be performed by the SPV; • Intellectual property rights, title of project assets and transfer of title; • Financing specifications; • Financial and technical obligations of the parties; • Determination of sale price or consideration related to project product or services, as well as a mechanism to amend and determine price; • Termination and amendment of the partnership contract; • Allocation of risk; • Environmental safety. The term of a PPP project may not exceed thirty years, though the Supreme Committee may approve a longer term for public interest reasons. The governing law must be the law of Dubai, unless otherwise provided in the partnership contract. The PPP Law signals that Dubai is interested in business innovation. It is an opportunity for those who wish to innovate, as the economic times might be right for Dubai, and all governments, to be looking more closely at opportunities to work with the private sector on PPP projects. The new PPP law seeks to encourage the private sector to be innovative and creative in identifying and funding projects for Dubai. If successful, this law will lay the foundation for reducing the financial burden on the government to provide and maintain world-class infrastructure in a rapidly growing international emirate. JANUARY 2017 23
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24 JANUARY 2017
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INsIghT
Project Bankrolling Project financing is the backbone, the bedrock of any construction project. Middle East Consultant gets the lowdown on the world of project financing from three professionals with varying backgrounds for their perspectives on big-scale funding t is customary and mandatory for companies, master developers and promoters to make routine and timely announcements in the general and business press about bigticket, high-value construction projects whose costs often run into the hundreds of millions and possibly billions of dollars. Yet providing the cash flow and monetary resources is key to getting started, sustenance and survival. None of these projects would have ever seen the light of the day if it had not been adequately funded. Investment in a constructed facility represents a cost in the short term that returns benefits only over the long-term use of the facility. Costs thus occur earlier than benefits, and owners of facilities must obtain the capital resources to finance the costs of construction. A project cannot proceed without adequate financing, and this can be quite expensive. This is why attention to project finance is an important aspect of project management. Unless an owner immediately and completely covers the costs incurred by each participant, these organisations will face financing problems of their own. Project finance is a complex type of financing. The stakeholders are characteristically the sponsors who form the project company and invest in the project company; the suppliers of raw materials to the project; the off-takers who purchase the finished products produced by the project; the banks who lend to the project company; the construction company that enters into a subcontract with the project company to build the industrial plant; and the facilities management contractor who, after the industrial plant or facility is built, will operate and manage the plant or facility.
Financing legalese
Gordon Prestige is a partner at Baker McKenzie Habib Al Mulla law firm. His focus is project finance transactions, including publicprivate partnerships (PPPs) and renewables projects. We asked him to demystify project financing, beginning with his definition. “Project financing is often bank financing to a project company, where the loan proceeds are used by the project company to pay for the construction costs of developing the relevant facility or infrastructure.” The facility or infrastructure could be mega infrastructure projects involving transport systems, building complexes, schools, stadia or an accommodation project, or industrial facilities such as oil & gas and other large-scale assignments. According to Prestige, the project company is usually an SPV (special purpose vehicle) company formed specifically to develop and operate the project, rather than an existing trading company. “Accordingly, the only revenues of the project company will be the revenues the project company earns, after the project facility is built, from operating the project facility. So the bank providing the project finance loan relies on the project operating successfully, in order to enable the project company to repay the bank.” The project company will usually enter into subcontracts, particularly a construction contract for the building of the facility or infrastructure and a facilities management contract where an operator operates and maintains the facility or infrastructure after it is built. The banks and the sponsors want to be as certain as possible in advance of what the project will cost, and the construction contract is accordingly often a fixed lump sum turnkey contract. JANUARY 2017 25
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01 Niall greene, managing director, Linesight Middle East . 02
Gordon says the indispensability of project financing cannot be overstated. The sponsors of a project have to find the up-front capital cost to build the facility or infrastructure. The sponsors are the companies who invest share capital into the SPV project company. Often a sponsor is an affiliate company of one of the subcontractors. The project is often financed by a mix of equity and debt. The equity is essentially the share capital invested by the sponsors into the project company and includes shareholder loans which will be subordinated in terms of repayment to the bank debt. The debt will often be provided by a commercial bank operating through its project finance department or team. It is advantageous, according to Prestige, for a sponsor to use project debt. This reduces the amount of equity that the sponsor has to contribute to the project company, which in turn increases the profit the sponsor can make on its equity contribution (for the company raising money for the project costs, debt is a lower cost of capital than equity). “However, banks will not usually want to lend more than around 75% or so of the total capital costs of the project, as they want to see the sponsors having a financial incentive to ensure the project succeeds,” he notes. Corporate Finance Advisory
gordon Prestige, partner, Baker McKenzie habib Al Mulla. 03 Umer Ahmed, head of Project & Infrastructure Finance, Corporate Financial Advisory, Deloitte, DIFC. 01
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Umer Ahmed is the head of Project & Infrastructure Finance, Corporate Finance Advisory at Deloitte Corporate Finance Advisory Limited in DIFC. ‘Typically, projects are financed by the government, the private sector or in between. As a corporate finance advisory, it is this intermediate space that is of interest to Deloitte,” asserts Ahmed. “Given our mandate and nature of our activities, we offer a wide array of expert consultancies and services related to project financing by examining a myriad of factors such as demand risk, cost estimates, financial liquidity, nature of project – whether greenfield or brownfield – market conditions, risk appetite, political and social conditions,” he explains. 26 JANUARY 2017
Public utility projects are also able to attract financing based on the model proposed by the promoters. A case in point is the concession or build-ownoperate-transfer (BOOT), a type of procurement strategy using project finance to fund infrastructure projects. The term may be relatively new, but privatised infrastructure projects have been around for several decades. “In a BOOT project, a project company, normally an SPV, is given a concession to build and operate a facility that would otherwise be operated by the public sector,” Ahmed adds. This facility can be a manufacturing plant, rail or communications network, power station, toll road, hospital, airport, bridge, tunnel, water supply or sewerage system, or any public utility project. Project financing can be a mix of debt and equity. According to Ahmed, the difference between recourse and non-recourse debt is the ability of the lender to take the assets of the borrower if the debt is not paid. Non-recourse debt favours the borrower, while recourse debt favours the lender. When a lender is given recourse rights in a borrowing arrangement, it implies the lender can pursue payment of the debt from the borrower by seizing designated borrower assets. Thus, recourse debt refers to an agreement where the lender can attach borrower assets, while nonrecourse debts refers to an agreement where the lender cannot do so, other than for assets specified as collateral, explains Ahmed. There are also various forms of financing: project finance, trade finance and venture capital. While project and venture finance are usually longer-term (three years plus), trade finance combines working capital lines of credit where capital is typically paid back
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within six months. Both project and trade finance usually require insurance or other guarantees, with trade often handled through an export credit agency. Meanwhile, banks are also looking for project viability and bankability of the borrowers. This in essence means that the terms and conditions are acceptable or intended to ensure profitability for the bank. “Project financing is also a painstaking process that could well last even nine months to a year, depending on the speed of the negotiating process,” Ahmed adds. Perspectives from services provider
Project financing should be structured with the aim of optimising the resources available for any given project, with equal sharing of risk and opportunity among those involved – shareholders, sponsors and financiers. “To drive continued investment into the construction sector, it is important that the principal lenders, who are often the first to take on the burden, are able to meet their objectives,” says Niall Greene, managing director, Linesight, Middle East (formerly Bruce Shaw International), a multinational company that provides professional services and strategic services to the global construction industry.
As evident from the recent economic slowdown, the risk is significant in projects delivered through traditional procurement. Project financing, especially with a private sponsor, makes everyone involved more accountable. “Construction risk is kept at a minimum, cost overruns are often negligible, and the project remains attractive to investors,” continues Greene. Project planning is key to any project, no matter what part of the world you are in. The project brief, the feasibility model and the funding strategy must be well tested and put in place before many commitments and decisions are made. Over the course of a project’s lifetime, more often than not, market conditions change drastically. Another factor susceptible to change is the end user itself. “Maintaining cash flow through the course of time, a steady supply chain and keeping the slate clean from contractor claims and disputes are crucial to securing the best form of project financing.” Challenges abound and there are constraints, particularly in the light of current challenges. Low oil prices continue to cause projects to be paused, delayed or cancelled unexpectedly. “We have experienced the worst in terms of oil price, and now I believe we are looking at a period of relative stability and predictability in pricing. That will filter through to industries like ours very soon.”
“Maintaining cash-flow through the course of time, a steady supply chain and keeping the slate clean from contractor claims and disputes are crucial to securing the best form of project financing” JANUARY 2017 27
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01
PROFILE
Pioneering Sustainability As one of the leading specialist and commissioning consultancies in the region, home-grown AESG has been intensely involved in pioneering sustainability and energy conservation
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ESG director Saeed Al Abbar is a true environmental campaigner. The company’s mantra is ‘sustainable urban development’, harnessing energy efficiency and renewable energy as the means to address the big challenges of climate change. Al Abbar, a UAE citizen, believes that for his country and any other country to comply with the targets set in the Paris Climate Change Summit (dealing with greenhouse gases emissions and signed by 194 countries, including all of the GCC states), all stakeholders, including the construction consulting industry, need to rethink their approach to urban development and move rapidly to zero-energy buildings. Headquartered in Dubai and with offices in Abu Dhabi and a newly set-up office in London, AESG’s services are represented in five core departments: Sustainability, Environmental, Fire and Facades, Energy, and Commissioning, which provides commissioning management and testing services. Masdar City, the IRENA (International Renewable Energy Agency) headquarters in Abu Dhabi and the UAE Pavilion at Expo 2020 are 28 JANUARY 2017
three of the plum projects AESG has been closely associated with. Last year, AESG completed a first-of-its-kind comprehensive assessment of the cooling market in Dubai, which provided government policymakers with critical information on the current energy consumption and efficiency of air conditioning in the emirate. Al Abbar reiterates AESG’s determination to continue to support the region in transitioning to a low-carbon green economy. “I believe we also have a very important role to play in the global context to ensure that our projects contribute positively to society and the environment and that solutions put forward are of the highest quality,” he points out. “As a consultant, we believe we have an important role of being professional and trusted advisors to our clients, to enable them to translate their project visions into reality in the most effective manner. The most important aspect of any relationship is trust and transparency from all parties,” he adds. One of their flagship projects, the IRENA Headquarters in Masdar City, is a great example of this. The project had numerous challenging criteria to achieve, such as an Estidama 4 Pearl-certified project with very
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stringent energy efficiency requirements. AESG managed all of these aspects comprehensively and implemented a number of innovative firsts for the region on the project. The project has won numerous awards internationally and regionally as one of the world’s most 02 sustainable office buildings. Technology is evolving very quickly in the market, and as a consultant Al Abbar realises it is vital to be up to speed on the latest technologies as well as any challenges or issues with the implementation of new technologies. “From a relationship perspective, communication technology can be a challenge in fostering collaborative work environments, so we always encourage our consultants to meet with their clients face to face on a regular basis,” he asserts. He also believes the role of consultants is becoming increasingly complex. He cites examples in the world today, which is changing at a rapid pace with advancements in technology and global challenges such as climate change, exponential population growth, mass migration to cities and resource scarcity. “The role of consultants, now more than ever, is to deliver solutions that not only meet the client’s brief in the most effective manner but meet some of these global challenges in a sustainable manner,” he emphasises. Meanwhile, clients are continuing to push consultants to deliver higher-value projects in the most cost-effective manner. “We thoroughly enjoy this challenge, as it allows us to develop innovative design solutions to meet the project objectives,” he notes.
Stand out in the face of competition
The consulting sector is certainly competitive, and Al Abbar says that by being able to differentiate AESG’s offerings and by focusing on highend projects, the company has been able to deliver double-digit growth consistently for the past five years. “We have a strong belief that by offering the best-in-class consultancy in all our services, that clients will come to us when faced with their biggest challenges.” He reiterates that AESG will continue to ensure that it delivers bestin-class services to the market. “We have built an excellent reputation in the market over the years, having delivered many of the most prestigious projects in the region, and we will continue to ensure that we set the highest quality standards in the market.” AESG is also expanding its services geographically and has recently opened an office in London in order to take the model of excellence it has developed in the Middle East to more international markets. He believes that the prospects for the industry are strong. While there have been challenges in the market due to reduced oil prices, he still sees a very strong demand at the high-end segment of the market. “In fact, we have expanded our team by over 30% in the past 12 months and we are very optimistic of the prospects in both the short and long term. We believe that the demand for high-end consultancy and commissioning services will remain strong in the region,” he concludes. 03
01 ICD Brookfield Place. 02 Saeed Al Abbar, director, AESG. 03 Opus, Business Bay, Dubai.
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Educate ME When Technology Meets High Performance Markus Plettau of Dow Corning – Building & Construction explains why structural silicone is important for façades
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ur fascination with glazed façades looks set to continue. They have an enduring beauty, are increasingly functional and have an inherent ability to connect and protect building occupants from the outside world. The well-being, comfort and happiness of people have been linked to their local environment for generations, but it is only in recent times that we have recognised the criticality of designing a building around the needs of the future occupants. Structural glazing is an increasingly popular means to realise total vision glass façades. However, structural silicone in a pure glass façade design is not visible and not even likely to be acknowledged. Such technology enables high performance, which must meet design and functional needs exactly over the whole lifetime of a façade. Besides an endless desire to achieve ultimate design freedom and aesthetics, some of the big trends in modern glass facades are: • More glass, more light, higher transparency: XXL glass units • Energy saving: high-performing façade skins with low u-values • Safety and protection against high wind, hurricanes, seismic loads, bomb blasts and the elements A great example of how technology responds to customer needs with regard to aesthetics, safety and quality is a new generation of structural silicones for insulating glass. These 30 JANUARY 2017
customer needs have been addressed and translated into a high-tech silicone solution. Impact of trends on design and productivity
With increasing insulating glass unit sizes reaching jumbo proportions in modern glass façades, the secondary sealant joint size will
naturally increase. The huge glass surface transfers the wind loads to the glass edge, which results in larger joint sizes. Energy efficiency is a key requirement for modern façades, as buildings account for around 40% of overall CO2 emissions. So there is much room for improvement. One of the technical answers is to transition from
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Additional information and supporting literature is available at www.dowcorning.com/highdesignstrength; or to contact us directly, please visit www.dowcorning.com/contactus
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gas-filled insulating glass where high strength and slim, economical joint sizes are required. This silicone sealant addresses some of the key trends in modern glass façades. 50% higher design strength – with European approval (ETA)
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Dow Corning 3363 Sealant performance
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(design strength: 0.21 MPa)
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gas-filled double-glazed units to gas-filled tripleglazed units. However, triple-glazing increases exposure to higher climatic loads, which in turn results in larger joint sizes. In demanding tall building design, safety, longevity and durability requirements are incredibly high. Glass designs that have to withstand high wind-loads and 5kPa are no longer exceptional. As an example, the Burj Khalifa Tower has been designed to withstand 7.5kPa; in other words, it must withstand winds of more than 375km/h. For the insulating glass edge, large secondary sealant joints are required to accommodate the high loads, resulting in larger joint sizes. Finally, what happens when all these elements come together – XXL glass, tripleglazed units and high wind? Well, this results in even larger secondary sealant joints. Technical requirements, durability and
quality form just one part of the challenge; the second part is economical production. To properly fill a large secondary sealant joint, the insulating glass (IG) line has to run at a slower speed, which has the consequence of a lower production output, negatively impacting overall productivity. And finally, the visible element is the aesthetics. More light and more transparency is incompatible with larger joint sizes. Enhancing productivity and enabling economical joints
Dow Corning has developed a new highstrength silicone sealant that addresses all the aforementioned issues in demanding applications: enhanced productivity and at the same time more economical joints. Dow Corning 3363 Silicone Insulating Glass Sealant is engineered specifically for use as a secondary seal for double and triple air- and
Dow Corning 3363 Sealant is a two-part, high modulus, neutral and fast-curing silicone sealant with a design strength of 0.21MPa. It has outstanding strength, approximately 50% higher than conventional silicone sealants, which have a design strength of about 0.14MPa. It enables smaller yet stronger IG jointing in tall building design and construction, and is the first product in the market providing this level of design strength with European approval. Because of its good UV and high temperature resistance, as well as its outstanding weatherability, silicone is a very durable and well established solution. Dow Corning has just proved in an external study that even a 25-year-old structurally glazed façade can pass the European structural glazing guidelines for a second time – so far beyond 50 years of proven performance in practical and theoretical performance. Get more with less
Because of its high design strength of 0.21MPa, economical joint sizes are possible, permitting the use of up to 30% less sealant. Higher-strength slim joints also enable improved aesthetics and design options while contributing to better durability and energy efficiency over a building’s lifespan. Additional benefits include: • Up to 5% more light transparency • Less than 1% gas loss over 25 years (EN 1279 part 3) • Excellent service life • About 20% lower thermal conductivity (0.29W/m²K) • Increased manufacturing productivity The Dow Corning Corporation is a wholly owned subsidiary of The Dow Chemical Company. JANUARY 2017 31
ON SITE
EVENT REVIEW
Convergence of Thought Autodesk University Middle East explores the future of design – architectural, technological or fashion – living up to its catchphrase: Imagine, design and create a better world
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ver 650 designers, builders, makers and creators attended the fifth edition of Autodesk University Middle East (AU Middle East), hosted by Autodesk, developers of 3D design, engineering and entertainment software. Speaking at the event, Callan Carpenter, vice president, Global Named Accounts at Autodesk, said, “AU Middle East was an inspiring platform for all our users to explore the future of design. We believe this annual event has become a magnet for the regional design community and will act as a catalyst to further accelerate innovation and growth across diverse sectors in the Middle East.” Technology is radically disrupting the way buildings and infrastructure are designed, built and used. As a result, the implications for the future of making things are huge. Topics included 3D printing technologies, advances in virtual reality and the latest technologies, including BIM (Building Information Modelling), available to designers and engineers. 32 JANUARY 2017
According to Louay Dahmash, head of Autodesk ME, AU Middle East was created to enable industry professionals to engage with global speakers and thought leaders and take a peek into the latest technology innovations that have continually disrupted the way buildings are designed and constructed in our region. In an interview with Middle East Consultant, Tom Wujec, fellow at Autodesk and thought leader, explains that Autodesk University is one of the main and most effective methods of connecting with customers. “We have 15 Autodesk Universities globally with over 50,000 professionals, educators, business, thought leaders and students. It also serves as an opportunity for Autodesk to showcase our latest technologies and discuss critical issues as the future of merging technologies, as well as opportunities to learn, engage, network, get inspired and advance our design applications and innovations.” According to Wujec, Autodek has a strong and growing footprint in BIM technologies with computers acting as creative advisers and partners. “The future for the construction industry is robotics and 3D
ON SITE 01 Callan Carpenter addresses Autodesk University ME. 02 Tom Wujec, fellow, Autodesk & thought leader. 03 Callan Carpenter, vice president, Global Named Accounts, Autodesk. 02
printing, both of which offer infinite expressabilities going forward.” “Translated, this means that robotic arms can mix the right materials in the right places at the right time and in the right manner and in the right proportion. Autodesk can then develop appropriate computational models, algorithms and technologies to get the right mix in producing the right materials for building construction.” Technology triumph
03 Wujec says the GCC has the boldest vision and propensity for harnessing the latest technologies, which augurs well for the construction industry. The region will harness the latest available technologies in the construction process. “Short-term experimentation with developing new types of concrete, composites, metals, alloys and facades will continue as material sciences continue to advance. More robots will also be used on-site. These will be safe and co-create with humans. Also, self-driving trucks will haul the right amount of materials required at the site.” Wujec, a prolific author, a multiple TED (Technology, Entertainment, Design) conference speaker and a pioneer in the emerging practice of business visualisation, says the buzzwords ‘augmented reality (AR)’, ‘3D printing’ and ‘BIM’ now have a practicality and can be used in real time. He also cites new trends in the construction industry, such as local assembly, where manufacturing occurs off-site and assembly on-site. For example, materials such as timber logs will come in modular from an external site and be assembled on-site. The process of constructing buildings by modular methods has already begun in China, and the process is gaining steam.
“Organisations are looking at their own strategic ways of differentiating themselves, a full spectrum of services. In Switzerland, for example, robots lay brick and mix materials. Then there are also additive and subtractive technologies. For example, we can now additively manufacture jet engines and blades and then have them polished and smoothened by a subtractive process.” Also speaking to Middle East Consultant, Callan Carpenter says that as a thought leader he chose to come to Dubai because, in his words: “Thought leaders go to where the other thought leaders are.” His message to the assembly: “The future is coming faster than you think; the future is one in which disruptive technologies will invade every industry, including construction. Disruptive technologies are here to stay. We can hide, curse, ignore or embrace these trends, but we should look at disruptions as opportunities for growth. Computers have evolved from becoming the documenter of designs to co-creating designs.” The future is cloud
He is also all praise for cloud computing. “We can now do things that were technically possible but not economically possible; we now have algorithms called generative designs where instead of telling the computer ‘here is my design’, the architect, designer or engineer tells the computer ‘this is my problem’. The computer, thanks to its cloud computing capabilities, will then generate hundreds, even possibly thousands, of designs and alternatives. The computer has now become the partner and solutions provider.” Callan also remarks that we can now take advanced design technology and make it available to a much broader range of customers. “Today the cloud is just another example of that step function change. We sum it up in our single catchphrase: Autodesk helps people imagine, design and create a better world.”
“The future is coming faster than you think; the future is one in which disruptive technologies will invade every industry, including construction” JANUARY 2017 33
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EVENT REVIEW
01
Faith in fischer With its global reputation, range of highly regarded fixing solutions and premium customer service, fischer Middle East is forging ahead as demand for its products continues to soar
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uoyed by continued progress and expansion, fischer ME recently hosted a commemorative ceremony at its offices in Jebel Ali to celebrate the tenth anniversary of the company’s operations in the region. Present on the occasion was Alexander Bässler, the Germany-based regional managing director for Asia and the Middle East, who flew in for the celebrations. In an exclusive interview with Middle East Consultant on the sidelines of the event, Bassler expressed his satisfaction with the pace and progress of fischer ME over the past decade. “Fischer fixings are now a fixture in the Middle East. Fischer occupies a place of pride and is a much sought-after brand among local, regional and international clients in the GCC and across the Middle East. We are represented or have offices in all of the six GCC countries.” Business has been growing in the region, and Bassler is unfazed 34 JANUARY 2017
by any talk of recession or slowdown. “Our business shows no sign of reduction, and we are expected to close strong with a substantial increment in 2016 over corresponding 2015 figures,” he said without providing numbers. He added that this is evident in the company’s expansion in the region, reflected in terms of turnover, operations space, employee numbers and growing optimism about maintaining the current momentum. Demand for fischer products continues to grow across the region, and business is booming to the extent that the regional hub in Dubai struggles to keep pace with supply. Larger and bulk deliveries, including urgent ones, are made directly to customers from manufacturing plants in Germany. When questioned, Bassler said he does not anticipate setting up a regional manufacturing facility in the foreseeable future. “Not in the short term, as that is a major decision for us to make, but we are
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
ON SITE
“We are in growth mode with sales growing yearon-year in the region. We will close strong in 2016, with sales exceeding corresponding 2015 figures” always examining ways and means of streamlining product delivery and supply in the region. It may be a possibility in the future.” fischer forward
According to Bassler, despite the current low oil prices, the Arabian Peninsula remains an economically prosperous region in the long term. Increasing tourism and large-scale events such as the 2022 World Cup in Qatar, as well as advances in industrialisation and urbanisation, will see construction activity continue for many more years. Large infrastructure projects such as roads, energy parks and building construction signify the long-term utilisation of the construction industry and building suppliers, and Bassler is hopeful of bagging a significant segment of the business. Fischer ME is also scouting out markets outside the GCC, particularly in Egypt, Iraq and North Africa, where it is hopeful of business prospects. The company’s forays into the Middle East have been very fruitful, and the brand has been associated with several exceptional projects,
including Dubai’s Burj Khalifa, the tallest building in the world; King Abdullah Sports City, 60km north of Jeddah in Saudi Arabia; Doha’s Metro; the Etihad Towers in Abu Dhabi; and the Avenues Mall in Kuwait. The family-owned premium German multinational manufacturer, founded by Artur Fischer in 1948, is known for its fastening products for the construction and DIY industry. The fixing systems division is the biggest of the company’s four segments, with a current product portfolio of over 14,000 articles that is continually growing. The other sectors are automotive, educational toys and consulting. The fischer group of companies, headquartered in Waldachtal in Germany’s northern Black Forest, generated sales of $738 million in 2015, with 4,423 employees worldwide. Fischer operates 44 of its own companies in 33 countries and exports to more than 100 countries. 20 times more patents per employee are registered than in the average German firm. 14.5 million fixing products are sold every day – 10,000 every minute. Also, fischer has the highest number of construction approval certificates in the whole of Europe. 02
01 Alexander Bassler, regional managing director, Asia and Middle East, fischer. 02 Kusum Rawat, regional marketing manager, fischer ME, addresses invitees at the media meet.
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ON SITE
Saudi RCC to build $500 million chemical complex Saudi Arabian downstream company Rufayah Chemicals Company (RCC) is building a new $500m chemical complex in PlasChem Park in Jubail Industrial City, in Saudi Arabia’s oil-rich Eastern Province, the company revealed in a press communiqué. Sadara Chemical Company, a $20 billion joint venture between Saudi ARAMCO and US multinational Dow Chemicals, will supply RCC with aromatics concentrate (Pygas) and Pyoil, generated from cracking naphtha. The supply agreements will cover a period of 20 years. The RCC chemical complex will use the feedstock obtained from Sadara, and potentially other liquid crackers in Saudi Arabia, to produce a wide range of downstream chemical products. The complex is projected to be on-stream in December 2020. PlasChem Park is a collaborative effort between Sadara and the Royal Commission for Jubail and Yanbu (RCJY). “We are delighted that RCC has selected PlasChem Park as the site for one of the largest hydrocarbon resin plants in the world, and certainly the biggest undertaking in PlasChem Park thus far,” said Mohammad Alazzaz, director of Value Park, Sadara.
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ACTS wins material testing bid for Riyadh Metro Project Advanced Construction Technology Services (ACTS), a consulting organisation in the field of construction materials and geotechnical engineering, has been awarded a contract to carry out testing and analysis on construction materials to be used for Riyadh Metro Lines 1 and 2, the company stated in a press release. The contract win with the Riyadh Metro is the second for ACTS after it was awarded a previous assignment to carry out geotechnical and geophysical works on the same two Metro lines in support of the BACS (Saudi Arabian Bechtel, Almabani General Contractors, Consolidated Contractors Company and Siemens) consortium. The new three-year contract will see ACTS operating one of the largest site laboratories for infrastructure in the Kingdom, setting up an 800sqm laboratory space to perform the expert services required under this assignment. The laboratory is fully equipped with state-of-the-art field testing equipment to investigate and assess related construction materials. More than 150 highlytrained professionals will be deployed on three different site locations, ACTS added.
ON SITE
ONEIC bags four contracts worth $14.3 million
Kleindienst awarded major construction project Kleindienst, one of Europe’s biggest real estate companies, has awarded construction projects worth $1.3 billion for the development of the Heart of Europe, a giant project featuring a cluster of six islands on The World, 4km off the coast of Dubai, the company revealed in a press communiqué. Leading global engineering firms JK Bauen Building Contracting, Wuchang Ship Building Industry Group Company and Sino Great Wall International Engineering have been signed up for the project, which will integrate sustainability into various aspects of the project, from the coral reef to the floating seahorse interiors. “The combination of JK Bauen’s vision and Wuchang’s experience will work hand in hand to bring the Heart of Europe to life,” stated Josef Kleindienst, chairman of both Kleindienst and the Heart of Europe, after signing the letter of award (LOA) with the officials of the Chinese firms. The design will boast specialised insulation around the windows and doors which will conserve up to 70% of electricity output, largely exceeding current standards for sustainable building. The project also features a coral nursery which will be home to 100,000 natural corals feeding in a protected coral garden which, once completed, will cover a surface area of 5 million sq ft. Earlier this year, the company announced that it was planning a new five-island, 1,500-unit project on The World. The Pearl of Asia will be a mixed-use project which will be part of a joint venture.
Oman National Engineering and Investment Company (ONEIC) has bagged four contracts worth around $14.3 million, two each from Dhofar Power Company and Muscat Electricity Distribution Company. In posts on its website, ONEIC CEO Dr Rashid Bin Mohammed Al Ghailani said that two contracts were awarded by the Dhofar Power Company (DPC), responsible for supply and distribution of electricity in the sultanate’s southern Salalah region. Additionally, in separate filings to the Muscat Securities Market, the company said it had been awarded the contract by Muscat Electricity Distribution Company (MEDC) for construction of a 3×20 MV amps (MVA) 33/11KV primary substation at Al Amerat-2 in Muscat for $5.3million. It also bagged another MEDC contract for construction of a 3×20 MVA 33/11KV primary substation at Mawalleh South, also in the Omani capital, for $5.17 million. Separately, Petroleum Development Oman extended a potable water supply contract with ONEIC for a period of five years commencing in October 2016, for the sum of $24.22 million, according to another posting on the ONEIC website.
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ON SITE
Sage launches solutions for construction Sage, a technology leader for integrated accounting, payroll and payment systems, has joined hands with development partner Specialized Application Workshop (SAW) and Software Mill to launch Sage X3 for Construction. Sage X3 for Construction is an enterpriseclass next-generation business management software solution built to address both front and back office operations of organisations in the construction sector, said a statement from the company. It has core capabilities of project and contract management, subcontract management, support for estimating, full construction document management including transmittals management, project financial tracking and cash flow, personalised dashboard, work-flow automation and alerts, integrated HR and payroll, time-sheet transactions, and development and integration tools. The solution accelerates collaboration and reporting, and delivers real-time insight into all operations of the business. It is designed to support multi-level and holding companies which have constructionrelated interests.
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Sheikh Jaber Al Ahmad Cultural Centre opens The SSH-designed, $775 million Sheikh Jaber Al Ahmad Cultural Centre (SJAAC) recently opened in Kuwait, with an inaugural performance by legendary Italian tenor singer Andrea Boccelli. The four jewel-styled buildings are set to be the centrepieces of the new cultural district in central Kuwait, close to historic Flag Square. The Centre creates a new architectural reference for the Middle East, and the technical and multi-functional theatres make it one of the outstanding performing venues in the world. “It was a challenge for us to complete the design and construction of a project of this size and complexity in 22 months. This achievement was possible thanks to the support and intervention by the office of the Amiri Diwan,” stated Sadoon Al Essa, executive partner, SSH. “We have designed to the highest international quality standards within such a challenging time frame. With other successfully completed mega assignments, this makes us the consultant of choice,” commented Bob Hope, CEO, SSH Architects. SSH was the lead architecture and engineering designer working with the world’s renowned specialists in lighting, acoustics, theatre engineering and historical archives. “SSH worked closely with theatre engineers and acoustic specialists, and other consultants and contractors, to create multiple performance spaces that are sophisticated in design and engineering,” added Hope. The Centre also includes libraries, parks and a music centre.
ON SITE
Kuwait awards contract for Master Plan 2040
Growth expected in UAE MEP sector in 2017 The mechanical, electrical and plumbing (MEP) sector of the UAE construction industry will be buoyed by investment in tourism and hospitality development, leading industry executives have said. In a report by Zawya Projects, Fabio Sbacches, MEP manager at LC Partners Engineering Consultants, said the sector is likely to see 5% growth in 2016, with 2017 likely to be “even bigger”. He estimated that the current total value of the UAE MEP market is around $1.9 billion. “This is a market that will increase step by step – next year it will grow 20% for sure,” Sbacches said, adding the MEP sector had not been hurt by the broader slowdown in the construction industry. “The MEP sector is not struggling at all,” he continued, pointing out that the MEP market would benefit from opportunities related to Dubai hosting Expo 2020, and with new tourism developments and investment. Nathan Cartwright, partner at Godwin Austen Johnson, an architecture consulting firm that operates in the MEP sphere, added that the sector was “looking pretty bright in the UAE”, because of an increase in retrofit and refurbishment opportunities.
Kuwait Municipality has appointed a global consortium comprising Beirut-headquartered multinational engineering and consultancy group Dar Al Handasah and US international architecture and design conglomerate Perkins+Will to draw up Kuwait’s fourth Master Plan, in line with the vision of HH The Emir of Kuwait to transform the country into a commercial and financial hub by 2040. The contract signing ceremony was attended by Prime Minister, HH Sheikh Jaber Al Moubarak Al Hamad Al Sabah, reported the Kuwait News Agency (KUNA). The municipality said it has embarked on steps, in cooperation with the Kuwait Direct Investment Promotion Authority (KDIPA), to identify the financial areas in the country where foreign firms will be allowed to operate with no local agents, and permitted to own these areas with tax and customs exemptions. Saad Al-Muhilbi, head of structural planning at the Kuwait Municipality, referred to the Fourth Structural Plan 2040 as the country’s “urban constitution and roadmap for development projects”.
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THE BACK PAGE
01
LAST WORD
Duncan Denley, managing director of desert INK landscape architects.
Designing Local Architects should look to the native environment and resources to create a new landscape design vernacular for the region
01
D
esert INK is on the cusp of a revolution. We have managed to partner with a number of enlightened clients who have realised that we must stop looking towards more temperate climates for our landscape inspiration. Ten years ago, the region was a place of mimicry, where architects were largely tasked with copying ideas from overseas, fighting 40 JANUARY 2017
against the harsh desert environment as best we could. The creation of miniature Hyde Parks and tropical jungles proliferated, and we all congratulated ourselves on how green it all looked. Like a musician who starts out learning the music of others before graduating to his own melodies, this region is now poised to write its own songs. Critically, the public also seems ready to listen to this new music. Markets are now yearning for a more sustainable landscape which takes account of the climate, culture and materiality of the region. There is much to learn from overseas projects, of course, but we must interpret, develop and then reinvent, rather than copy these ideas. We only need to look towards Australia and the southwestern states of the US to see how distinct and exciting an arid vernacular can be. So what will we create? What will it look like? What are the benefits of this kind of landscape? Well, our starting point at desert INK has involved extensive travel in the region. Our latest commission, for the landscape design of an Ajman mall, was inspired by the mountain terraces seen while trekking, for example. Our design stacks gabion terraces with stone excavated from the site, while monocultures of ornamental grasses create a field pattern reminiscent of the high valleys of
the Musandam. Combinations of Hatta stone, olive trees, swaying grasses and crushed local bluestone create an exciting new vernacular which is almost exclusively sourced within the Gulf. The next big leap for us is creating native and xerophytic soft landscapes. We highlighted the numerous species of native desert plants growing freely in rough ground outside the site offices of an airport project recently. The client was fascinated by the possibilities of these plants, and the new local vernacular that harnessing them could create. In terms of benefits, saving money is a good starting place with your clients. Fewer inputs equals savings. With water supplies becoming strained, irrigation water will inevitably increase in price and reduce in supply in coming years. In terms of case studies for this new direction, there are many in the pipeline and several under construction. Our Akoya Oxygen sales centre project, completed in mid-2015, is now flourishing in Dubai. This landscape was extremely costeffective and requires very few inputs to cope in the harsh desert environment. Desert INK’s Habtoor Polo Resort landscape design will be the first to fully express this sustainable arid-scape vernacular, when it is completed next year. We look forward to sharing this project with our readers soon. We’ll keep you posted…
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