Big Project ME August 2014 by Big Project Middle East

AUGUST 2014

101

ALSO INSIDE RAISING STANDARDS IRAQ IN CRISIS – AGAIN PARAMOUNT BLOCKBUSTER BEING FRANK IN BAHRAIN

PICKING THE LOCK Can an education in construction solve the GCC’s job crisis?

CONTENTS PAGE 14

Big Project ME discusses the importance of standards in construction with BSI Middle East and Africa’s regional MD.

AUGUST 2014 04 EDITORS COMMENT BIG NUMBERS, BIG TROUBLE? Stephen White mulls over the financial and economic implications of the Mall of the World

07 THE BIG PICTURE MALL OF THE WORLD TO BE FIRST TEMPERATURE-CONTROLLED CITY Dubai begins work on the $6.8 billion retail and tourist destination

MOHAMMED AL MUBARAK TAKES OVER AS ALDAR CEO Extensive search leads to former deputy CEO to taking over post

QATAR FOUNDATION REPORT SLAMS LABOUR RECRUITMENT Specially commissioned report suggests corrective measures to process

12 Q&A WITH... STEFAN BURCH Knight Frank’s director for Bahrain and KSA discusses Bahraini market

14 IN PROFILE THE STANDARD BEARER BSI Middle East and Africa’s regional MD on the importance of standards

20 SITE VISIT BLOCKBUSTER IN THE WORKS Big Project ME withs the Damac Towers by Paramount construction site

26 FOCUS FEATURE: EDUCATION A MATTER OF PRIORITY Big Project ME looks at the gap in the market for construction education

32 EVENT PREVIEW BIG 5 CONSTRUCT INDIA Big Project ME previews the upcoming Big 5 Construct India show

34 MARKET FOCUS: IRAQNTIVELY ATTACHED TO IRAQ Construction firms hang on in Iraq as insurgency rages around them

38 TENDERS TOP TENDERS Big Project ME lists the region’s biggest construction tenders for August

40 CONSTRUCTIVE CRITICISM VISION FOR THE FUTURE Gavin Davids says that GCC governments need to lay out a clear construction strategy in order to prepare the next generation

At the 2014 Construction Machinery Show we sold 70 units and 100 more units are under discussion. We have delivered a positive message to our existing clients, our competitors, and grabbed new clients. I think gaining such an appreciation from all members in the construction equipment sector is a great honour and will encourage us to work very hard to keep the same level of style, image, and standards.”

This year the CM Show team delivered an exhibition Saudi deserves. For years, we have seen a vision in this Show and this year the vision was achieved. We wanted quality traffic and we saw equipment and company owners; and we were able to offer some promotions to entice sales. I saw an increase in our sales immediately. Our principles, Doosan and Everdigm, really enjoyed themselves. We anticipate the upcoming years to be even better.”

The Construction Machinery Show was perfect from an awareness point of view. We explained Roots Group Arabia’s capability of covering the construction industry with all of its needs and requirements. The attendance was good especially during weekdays and towards the end of the exhibition. See you next year.”

Al-Qahtani & Sons Khaled El Shatoury, Managing Director

Saudi Diesel Equipment Ahmed Alkooheji, Marketing Manager

Roots Group Arabia Abdulaziz Felemban, Brand Manager

Co-located with

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

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

EDITOR’S COMMENT

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Big number trouble As any bank manager of a journalist will tell you, they’re not very good at numbers. That’s why when they see a big one they’re always trying to compare an abstract figure with a real life example. Last month’s major media event was the announcement of the Mall of the World and it allowed for the spurting of figures that numerologists dream of: 180 million visitors; 4.45 million square metres; 20,000 hotel rooms; construction to cost $680 million per year; 7km of temperature-controlled covered shopping, leisure and entertainment ‘streets’. The numbers undoubtedly left journos scrambling for like-for-like comparisons. One and half times the size of the City of London, 650 football pitches, three times the population of the UK, etc, etc. There may be some that live in the city that may question why it still needs another ‘mall’ when it is already fully stocked. However, as hotel owners or air carriers will testify, Dubai currently has to work hard to attract visitors during the long, hot days of summer. So building an attraction that has year-round blockbuster appeal makes sense. That’s why it will also feature theatres, a wellness zone and even a theme park. This, then, is a project to secure Dubai’s status as the world’s number one retail tourist destination. Despite this Bank of America Myrill Lynch says that this venture could precipitate another boom-bust cycle in the local market as Dubai Holding raises $6.8 billion in loans to pay for it. Given the IMF’s recent warnings regarding property flipping following the Expo 2020 win, the Mall of the World could be the big test of Dubai’s economic robustness post-downturn. The fact by the time the multi-phase project is concluded mid-way through the next decade, the idea of going out to shop will be a themed experience in itself will work in its favour. Most of the developed world is seeing a decline in the appeal of traditional shopping as online retail out-prices and out-conveniences its boxed store competition. Possibly the last hurrah of mega-malls, the Mall of the World could hold the title of the world’s biggest for a very long time.

GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5472 EDITORIAL GROUP EDITOR STEPHEN WHITE stephen.white@cpimediagroup.com +971 52 755 5184 DEPUTY EDITOR GAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 375 5480 ASSISTANT EDITOR NEHA BHATIA neha.bhatia@cpimediagroup.com ADVERTISING COMMERCIAL DIRECTOR MICHAEL STANSFIELD michael.stansfield@cpimediagroup.com +971 4 375 5497 SENIOR SALES MANAGER YASIN ALVES yasin.alves@cpimediagroup.com +971 4 375 5496 SALES MANAGER SANDRA SPENCER sandra.spencer@cpimediagroup.com +971 4 375 5473 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 MARKETING ASSISTANT BARBARA PANKASZ barbara.pankasz@cpimediagroup.com +971 4 375 5499 DESIGN ART DIRECTOR SIMON COBON CIRCULATION & PRODUCTION CIRCULATION AND DISTRIBUTION MANAGER ROCHELLE ALMEIDA rochelle.almeida@cpimediagroup.com +971 4 368 1670 DATABASE AND CIRCULATION MANAGER RAJEESH M rajeesh.nair@cpimediagroup.com +971 4 440 9147 PRODUCTION MANAGER JAMES P THARIAN james.tharian@cpimediagroup.com +971 4 440 9146 DIGITAL DIGITAL SERVICES MANAGER TRISTAN TROY MAAGMA PUBLISHED BY

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Stephen White Group Editor

AUGUST 2014

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

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THE BIGGEST PICTURE

MASSIVE MONEY The Mall of the World project will require an investment of $6.8 billion over the next decade.

MALL OF THE WORLD TO BE FIRST TEMPERATURE-CONTROLLED CITY PROJECT WILL SURPASS DUBAI MALL IN SIZE AND SCOPE, DUBAI LEADERSHIP PROMISES THE WORLD’S FIRST temperaturecontrolled city is set to be built in Dubai, it has been announced. The 4.45 million square metre project will feature a shopping mall that will take over from the Dubai Mall, as the world’s largest shopping mall, Dubai Holding has said. The Mall of the World project, which will be built under a giant glass dome, will be one of the most ambitious projects ever planned in Dubai. Local media said that the development is part of a strategy to boost Dubai’s tourism economy by providing more options for visitors, especially during the summer months. The proposed site for the development is along Sheikh Zayed Road and across the highway from the Mall of the Emirates, which is already one of the world’s largest shopping malls. It will take the shape of an extended retail street network, which is a radical

departure from the typical shopping mall concept in the emirate. Additional districts within the project will include a ‘wellness dedicated zone’, which will focus on medical tourists. A range of hospitality options, including 20,000 hotel rooms, will also be built to cater to tourists. The 7km-long promenades connecting all facilities will be covered during the summer and open during the winter, ensuring pleasant temperatures throughout the year. Once completed, the Mall of the World is expected to be a year-round tourist destination, with a projected footfall of 180 million visitors annually. Faisal Durrani, international research and business development manager at international real estate consultancy Cluttons, told Big Project ME that the Mall of the World project would be critical to unlocking Dubai’s vision.

STATS n Total Size of Mall of the World: 4.45 million sqm

n Number of Hotel rooms: 20,000

n Expected annual footfall: 180 million visitors

n Climate controlled promenades: 7km

“Dubai’s malls have thus far been fairly traditional, offering global retail brands in a single ‘shopping destination’. “During the last property cycle, we witnessed the inclusion of leisure attractions at some of the city’s malls, with Ski Dubai, iFly and the Dubai Aquarium all helping the Emirate’s malls position themselves as leisure destinations in their own right,” he said. “With authorities working towards an ambitious annual visitor target, the current hotel and serviced apartment portfolio in the emirate of approximately 80,000 keys is going to have to grow. “It’s not just a question of swelling the hotel development pipeline, but a complex infrastructure of leisure and entertainment facilities have to be built to help drive Dubai’s vision,” Durrani added. Construction which will span the next ten years, with an investment of $680.6 million per annum.

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BIG PROJECT ME SPEAKS TO THEUNS KOTZÉ OF BSI ABOUT THE IMPORTANCE OF STANDARDS – PAGE 14 7

THE BIG PICTURE

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MAN IN CHARGE Mohammed Khalifa Al Mubarak has been appointed as Aldar’s new CEO after months of discussions.

KSA TO BUILD $1.6 BILLION ROAD PROJECT Project will stretch 135km, linking the regions of Asir and Jazan

MOHAMMED AL MUBARAK APPOINTED NEW ALDAR CEO Former deputy CEO set to take over following months of searching FOLLOWING A YEAR-LONG search, Abu Dhabi-based Aldar Properties PJSC has appointed Mohammed Khalifa Al Mubarak as the company’s chief executive officer. Al Mubarak, who was previously the deputy CEO and chief portfolio management officer at Aldar, has been associated with the company since 2006 and also worked on the company’s notable Yas Island project. He is the chairman of Farah Leisure, which is the operator-company behind Ferrari World Abu Dhabi and Yas Waterworld; a board member of the Abu Dhabi Tourism and Culture Authority; and chairman of Aldar Academies. “We are proud that our top internal candidate has proven to be the best person for the role,” said Abubaker Seddiq Al Khoori, chairman of Aldar. “There is no better person to lead Aldar through the next phase of development than Mohammed Al Mubarak. He is a proven leader, effective role model and a leading authority in Abu Dhabi on real estate, leisure and tourism.” On the eve of Cityscape Abu Dhabi 2014, Al Khoori had said it was likely the CEO would be chosen from within Aldar’s top ranks. “Aldar officials and board members, including myself, have actively been on the search for the company’s next CEO,” he had said at the time. “Our top management comprises of excellent representatives, and I am hoping we may be in a position to make an announcement soon.”

$1.6 BILLION

THE COST OF THE 135KM ROAD PROJECT LINKING ASIR AND JAZAN IN KSA

A $1.6 billion road project that will link the regions of Asir and Jazan in Saudi Arabia has been approved, the Emir of the Asir region has said. Prince Faisal Bin Khaled announced that the 135km project would be a dual carriageway that would have all the services necessary for the movement of travellers between the two regions. The road starts from the Al-Far’a recreational park in the south of Abha and runs to Beesh in the north of Jazan, he explained,

adding that the project was part of wider $6.39 billion plan to improve road projects across the Kingdom, as approved by the Custodian of the Two Holy Mosques, King Abdullah. The approval of the Asir – Jazan road project also includes the carrying out of a road project that will link the Makkah and Jazan regions via Asir, which would cost $1 billion. All the required services and rest houses will be built along the road.

HLG SIGNS $395M CONTRACT FOR JEWEL OF THE CREEK Contractor to deliver Package #8 of the $816.7m mixed-use development THE HABTOOR LEIGHTON Group has signed a $395m contract with Dubai International Real Estate (DIRE) to deliver Package #8 of the Jewel of the Creek mixed-use project in Port Saeed, Dubai. The project forms a significant part of the $816.7 million development, which HLG has worked on since 2012. “Upcoming packages for the Jewel of the Creek project will include a 4-star hotel, mixeduse residential offices and retail,” he added, pointing out that this was a significant project

due to its geographical location and strategic importance, as well as in terms of its technical and commercial value. Construction work on package #8 has commenced and completion is targeted for Q3 2017, said Riad T Sadik, chairman of HLG. HLG’s scope of work on the project includes the construction and completion of five hospitality buildings – ranging between 15 and 19 floors. It will also build a marina, including four footbridges and one vehicular bridge.

SIGNIFICANT PROJECT The location of the Jewel of the Creek project makes it a commercially viable and significant.

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BIG PROJECT ME VISITS THE DAMAC TOWERS BY PARAMOUNT CONSTRUCTION SITE IN DUBAI – PAGE 20

AUGUST 2014

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THE BIG PICTURE

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CONSTRUCTION WORK ON NAKHEEL MALL WELL UNDERWAY AS CONTRACTS SIGNED $326 million contract with United Engineering Construction and Actco General Contracting confirmed at signing ceremony NAKHEEL HAS AWARDED a $326.70 million contract for the construction of its Nakheel Mall on Palm Jumeirah to two UAE based construction firms. United Engineering Construction LLC and Actco General Contracting LLC, were jointly awarded the contract in May this year, with the deal cemented at a signing ceremony held in July. Construction work on the project is expected to begin shortly. Nakheel Mall, the new centrepiece of Palm Jumeirah, will have five retail levels with more than 100,000 sqm of shop space, three basement parking levels with 4,000 spaces, 300 shops, two anchor

LUSAIL LRT SYSTEM TO CONNECT WITH DOHA METRO Project to connect to Red Line via two stations The Lusail LRT project will connect to Doha Metro via two stations, Lusail Marina/the Pearl and Lusail’s main station, Abdulla Abdulaziz Al

department stores, a nine-screen cinema, medical centre and an extensive fitness complex. There will also be a roof plaza with a host of fine dining restaurants, as well as a diverse selection of food and beverage outlets inside. The project is expected to be completed in 2016. Alongside Nakheel Mall will be The Palm Tower – a five-star, 50-storey hotel and residential complex – for which a separate construction contract will be awarded soon. The mall is one of several new retail projects currently underway, which are funded by Nakheel.

Subaie, the managing director of Qatar Railways Company has said. Al Subaie added that the LRT project would consist of four operating lines totalling 33km of network and 37 stations, including 10 underground. “Over 7km of the tunnels have been completed, along with the main civil works of seven underground

LABOUR CONDITIONS A report for the Qatar Foundation has criticised labour recruitment processes in the Gulf state.

QATAR FOUNDATION REPORT SLAMS WEAK LABOUR RECRUITMENT PROCESSES Report suggests corrective, preventive measures for Qatar LABOUR RECRUITMENT PROCESSES in Qatar are “unethical” and need government support, according to a report prepared for Qatar Foundation. ‘Migrant Labour Recruitment to Qatar’ was authored for Qatar Foundation by Dr Ray Jureidini, director for research at the Foundation’s Centre of Design Innovation. The report examines the life and employment conditions of migrant workers hired for the construction of stadiums and related infrastructure for the FIFA World Cup 2022. It identifies the core concerns that impact construction workers living in Qatar. “Low skilled prospective migrant workers in the countries

stations. We have completed excavation works, 98% of structure work (is done) for the underground stations and the bridge that crosses over Al Khor Highway. Work is underway to implement the final phase of the project, which includes the rolling stock systems,” he said. The LRT system aims to provide Lusail with an efficient commuting

of origin are paying far more than the maximum recruitment commissions allowed by their governments in addition to other costs,” the report says. “These costs are being paid to private licensed recruitment agencies as well as unlicensed agencies, sub-agents and individual brokers. Some of these charges are being redirected to placement agencies and contracting companies within Qatar,” it adds. In its concluding remarks, the 162-page report states Qatar could form bilateral ties with foreign governments to ensure labour recruitment and transfer is undertaken through fair and measurable channels.

system for its future inhabitants. The development of the city on the waterfront, north of Doha, will extend over 35sqkm and will house more than 50,000 residents. “The next stage of the project would see the delivery of 37 stations’ civil works, internal architecture, MEP equipment, track and trains,” Qatar Rail CEO, Saad Al Muhannadi, said.

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BIG PROJECT ME SPEAKS TO ACADEMICS TO FIND OUT WHY THE GCC NEEDS A CLEAR STRATEGY – PAGE 26

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THE BIG PICTURE

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MIXED-USE DEVELOPMENT PROJECTS SET FOR GROWTH IN BAHRAIN STEFAN BURCH, DIRECTOR OF PROFESSIONAL SERVICES FOR KNIGHT FRANK’S BAHRAIN AND KSA OPERATIONS DISCUSSES THE CURRENT STATE OF THE BAHRAIN PROPERTY MARKET

HIGH RISK Bahrain’s commercial property market is elastic in its supply and potential supply. Burch terms this a risk.

WHICH SECTOR CURRENTLY DOMINATES THE REAL ESTATE MARKET IN BAHRAIN?

The Bahrain real estate market isn’t dominated by any one sector in particular. However, there is definitely a large supply of commercial projects and structures in the market largely because they are an integral part of the master-plans loaned out for development. In my view, Bahrain’s commercial property segment is very elastic in its supply and potential supply, and it is a risk in my opinion. WHAT APPEARS TO BE THE FUTURE OF THE COUNTRY’S PROPERTY MARKET?

Mixed-use developments appear to be the next big offering in Bahrain. Reef Island and Amwaj Islands are gaining traction in terms of attracting attention from buyers and investors. Historically, Bahrain’s problem has been the lack of people and residents. But areas like Reef and Amwaj have responded very well to the demand from existing and new buyers; they provide more than just a place to live in. Bahrain has traditionally been a single-use development driven market, but developers are now realising that potential

residents need to be offered ancillary developments and retail support as well. WHAT IS THE ROLE OF PRICING IN THE MARKET?

Cost matters to every target market and it unquestionably places a crucial role here too. In the past three years, rental rates have reduced significantly to make developments such as Reef more affordable to buyers. I don’t think there is more value for money in any mixed-use development across the GCC than there is for Reef. Even the commercial sector in Bahrain is considerably lower than its counterparts in Doha or Dubai. Developers have reduced the rate of construction, however, and that is contributing to reduced rental rates since the past six months. WHEN COMPARED WITH ITS GCC COUNTERPARTS, HOW COMPETITIVE IS THE BAHRAIN PROPERTY MARKET?

The boom of 2008/2009 was a pan-GCC phenomenon that impacted all countries in the region. Anecdotally, Bahrain has taken longer to recover the positivity, but it is doing so. The GCC region in itself is a highly competitive one,

so developers have to compete with not only the developments within their country, but also across other cities in say, Qatar, the UAE or Kuwait, which are really a couple hours’ drive away from their location. So competition is, no doubt, high in Bahrain too, because it belongs to a region where planning efficiency and land availability make for a very strong combination. WHAT IS THE UNIQUE SELLING POINT (USP) OFFERED BY THE BAHRAIN PROPERTY MARKET?

It would be great if an event like the Fifa World Cup 2022 Qatar or Expo 2020 Dubai (UAE) were to reach Bahrain. That said, it must be established that the Dubai market was a highly mature one even before the Expo win was announced. It has managed to make residents from its investors instead of making them transiting buyers, which is a positive sign for a real estate market. Bahrain is yet to figure out a clear USP, perhaps, but if the activity on developments like Amwaj and Reef is any indicator, then then Bahrain is set to grow into a mature market too. The growth of interest and activity in the mixed-use sector is great news to me.

MIDDLE EAST

BIG PROJECT ME FINDS OUT WHAT LIES AHEAD FOR IRAQ IN THE WAKE OF ITS LATEST CRISIS – PAGE 34

AUGUST 2014

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IN PROFILE THEUNS KOETZÉ

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THE STANDARD BEARER Theuns Kotzé, the regional managing director of BSI Middle East and Africa, tells Gavin Davids that there needs to be a clear vision on standards covering health and safety in the GCC construction industry

MIDDLE EAST

iven their omnipresence in the construction industry, it’s hard to imagine a world in which contractors and consultants didn’t make use of standards on a daily basis to carry tasks on projects. Construction standards govern everything from the quality of cement used on a project to the nuts and bolts that lock scaffolding into place. They form a vital guideline for all stakeholders involved in a project. For a contractor, they ensure that the materials used on site meet a certain level of quality and reliability, while for a consultant, they allow for proper planning in terms of cost and design. So it makes sense therefore that there are systems and checks in place to ensure that these standards are rigorously tested to ensure they remain relevant and up to date with a rapidly changing environment. This is where the BSI Group come into play. When it was founded in 1901, the group was the world’s first national standards body. As part of its duties, it ensures the development and sale of private, national and international standards and supporting information. It also conducts second and third party management systems assessment and certification. Most importantly for the construction industry, it also provides testing and certification of products and services, along with training services that support the implementation of standards and best practices. It is this that brings Big Project ME to a meeting with Theuns Kotzé, the regional managing director for BSI in the Middle East and Africa. While contractors and consultants follow the many standards that are already in place for the maintenance of physical assets on construction

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sites, concerns still remain about the adherence to health and safety standards in the market. “The general statistics that I can see show that there has been a decline in accidents in construction, and specifically in the number of fatalities. I think that the Dubai and Abu Dhabi governments don’t want to deal with death on construction sites any more. They’ve got inspectors trained to go around and check sites, and we’ve trained some of the inspectors, so we know that they’ve done the training to increase their level,” Theun Kotzé relates during an interview at BSI Middle East’s offices in Bur Dubai. “Abu Dhabi has done a fairly smart job of writing HSE regulations, where every construction company must have an audit done by a company like us. The requirements that they have in Abu Dhabi are very well

“A COUPLE OF YEARS AGO, THE WORST INDUSTRIES (FOR FATALITIES) WERE CONSTRUCTION, MINING AND TUNNEL BORING. I THINK THAT IN COUNTRIES LIKE THE UAE, CONSTRUCTION IS ONE OF THE MORE HAZARDOUS INDUSTRIES TO WORK IN”

written. There’s stuff about working in confined spaces, and there’s stuff about working at heights. All those really hazardous things are really very well described in terms of what should be in place. I think that there’s some world class stuff that’s in there,” he asserts. Kotzé points out that he’s been in Dubai for seven years and in that time he’s seen a tremendous amount of change in the way health and safety is approached in the UAE, which is a consequence of a global rethink. “A couple of years ago, the worst industries (for fatalities) were construction, mining and tunnel boring. I think that in countries like the UAE, construction is one of the more hazardous industries to work in. The dangers are most related to working at height.” This is where he says that the proper enforcement of standards can help the construction industry achieve a zero fatalities target on project sites. However, he takes pains to differentiate between injury prevention measures and accident prevention measures, which is something he believes the industry needs to be aware of. “There’s a difference between preventing and preventing an accident. A seatbelt in a car is an injury preventer, not an accident prevention measure,” Kotzé relates. “Protective equipment is generally an injury prevention measure. Accident prevention measures are generally trickier, in a sense because they deal with unsafe acts and practices. That needs training and qualifying measures.” He explains that accident prevention measures in construction include having properly installed scaffolding, with the correct ladder access and netting and floor boards that

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IN PROFILE THEUNS KOETZÉ

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“PROTECTIVE EQUIPMENT IS GENERALLY AN IN JURY PREVENTION MEASURE. ACCIDENT PREVENTION MEASURES ARE GENERALLY TRICKIER, IN A SENSE BECAUSE THEY DEAL WITH UNSAFE ACTS AND PRACTICES” stop tools or workers from falling through and causing injuries or damage to equipment. Alarmingly, Kotzé says that he’s observed instances in Dubai where these steps aren’t followed, though he admits that overall, there has been significant progress in general. “I’ve seen situations around Dubai sometimes, and I’m not saying that they’re bad, but they’re not up to standard. The problem is that if you do proper accident prevention measures, it’s more expensive and it takes longer, and if you want to cut some of your costs, you cut safety measures. “However, in places like Abu Dhabi, it’s very strictly controlled and in Dubai, it’s fairly good. I think that accident rates decreased by about 30% in the last year in the UAE – according to the statistics that I’ve read,” he explains.

One such project that perfectly illustrates this change is the Dubai International Airport expansion that was conducted by ALEC. During the construction of the newest terminal building, not one fatality was recorded, which was a result of the stringent health and safety standards that were in place and followed to the letter. “I know that there were a lot of people that were rescued (from dangerous situations). Because they were using their harnesses, even though they did fall, it was arrested. The rules for the contractor were very strict. If they caught someone not following the rules, they didn’t punish the worker, but instead they took the worker’s manager or supervisor and put him on a day’s training. I think they even put the site manager on a training course. With these kind

of projects, it’s 100% possible not to have any fatalities onsite,” the managing director insists. Although safety standards have improved a lot, there is an area that BSI’s regional managing director thinks needs more study and education in the UAE. This is the ‘health’ aspect of health and safety Management. While onsite safety is most visible on a construction site, the issues surrounding the management of the health of workers is in many ways, more crucial in the long-term. “In general, health has always taken a back seat. That’s because health issues don’t appear immediately. Long term exposure to asbestos, for example, has been around for years and there are a lot of old buildings that still use asbestos. “In previous years, when asbestos was outlawed in some countries, they dumped it on the rest of the world. So you can find old equipment that has asbestos in it, even in places like Dubai. Silicosis is an occupational disease that is really high up on the list (of dangers),” he points outs. “Then noise induced hearing loss is another health issue that is a concern. It takes a few years for people to feel its effects because they constantly use heavy equipment. They will eventually go deaf,” he points out.

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HIDDEN HAZARDS Noise induced hearing loss is one of a number of ‘hidden’ health issues that affect construction workers.

AUGUST 2014

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IN PROFILE THEUNS KOETZÉ

BIGPROJECTME.COM

BEAT THE HEAT Kotzé moots the introduction of an acclimatisation period for workers in high heat conditions.

Another health hazard that construction workers in this region face is heat exhaustion. While Kotzé is reluctant to define it as such, terming it more as an ‘injury’ hazard, he concedes that it does have a long term health impact on construction workers. This is evidenced by recent reports of workers in Qatar suffering from heart attacks due to the temperatures they work in. One suggestion that Kotzé has to combat this issue is to introduce an acclimatisation period for construction workers, similar to what the Chamber of Mines in South Africa has introduced for the workers in their mines.

MIDDLE EAST

“I THINK THAT THE DUBAI AND ABU DHABI GOVERNMENTS DON’T WANT TO DEAL WITH DEATH ON CONSTRUCTION SITES ANYMORE”

AUGUST 2014

“I know that in mining, you have temperatures of 45°C in shafts that are kilometres deep underground. Not only that, but the shafts are heavily ventilated, so not only is it very hot, but it’s very windy. The acclimatisation period for that is two weeks and you lose the effects only after about three weeks. So once you’ve acclimatised to those conditions, if you go home or away for a month, you have to go through the acclimatisation programme again. “Where I think problems occur is when people arrive and they put them straight to work,” he says, referring to the construction industry in the GCC. “I would rather suggest that there is an acclimatisation process or period before they start work. Acclimatisation has been the science for a long time, it’s just that it has not necessarily been practiced here,” Kotzé claims. “The Chamber of Mines in South Africa, they do this and it’s nothing new. It needs to be done. Workers can be fit enough to work in these conditions, and they should be (looked after). It’s a health issue ultimately, and health has taken a back seat. You want people to get the education and to teach workers and to train them. Put them through the acclimatisation process, it’s definitely possible, but it may be new to some of the countries here,” he asserts.

A LIFETIME OF STANDARDS Prior to taking over as regional managing director of BSI Middle East and Africa Theuns Kotzé was based in London as the sales and marketing director for BSI – Management Systems in Europe. Before that, he was an executive director for Nosa International where he was responsible for Auditing and Certification Globally. In 2002, Kotzé developed an AIDS management standard now known as AMS 16001. The AMS 16001 is now the South African standard for HIV/AIDS management and could become the ISO standard for HIV/ AIDS management in the future. He as conduced more than 2,000 assessments on various standards over the last 20 years. Kotzé also has a private pilot’s license with multi-engine ratings and has flown many types of aeroplanes. His specialties are: General Management, P/L Management, 3rd party Certification of management systems, HIV/AIDS management, accident management, occupational health and safety, aviation, quality management.

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ON SITE DAMAC TOWERS BY PARAMOUNT

Damac Towers by Paramount

Location

Burj Area - Downtown Dubai

Total height

250m (70 storeys)

Building Type

Residential and Hospitality

Rooms

540 hotel and 1,400 serviced apartments

Project Cost

$1 billion

Contractor

TAV Construction

Consultant

KEO Consultants

MIDDLE EAST

Project Name

AUGUST 2014

BIGPROJECTME.COM

ON SITE DAMAC TOWERS BY PARAMOUNT

BLOCKBUSTER IN THE WORKS Constructing four towers within 33 months, in tandem, would often be a task beyond most contractors. For TAV and Damac, it’s just another day in the office. Big Project ME investigates

ubai’s construction ambitions have always veered to the high life, with the city’s architecture reflecting an obsession with glitz and glamour. When driving down Sheikh Zayed Road, it can often feel like the city is part of a giant movie set. This image has been further reinforced by a number of Hollywood and Bollywood movies being set or shot in the city and amongst its landmarks. Over the years, Dubai residents have seen Tom Cruise climb up the Burj Khalifa to save the world in Mission Impossible: Ghost Protocol, while George Clooney and Matt Damon have tackled the murky world of oil espionage from Dubai. Even Bollywood has made regular use of the city to stage elaborate dance numbers and even the occasional coherent plot point. However, what people weren’t expecting was a project that would bring one of Dubai’s most audacious developers into partnership with one of Hollywood’s most revered studios. In March of 2013, Paramount Pictures, the studio that brought the world The Godfather and Indiana Jones, announced that it would be partnering with Damac Properties to launch its first ever luxury hotel property in Dubai. The development of the hotel have been in motion since March 2012, when Paramount licensed their name and logo to a luxury hotel

investment group. The company, subsequently named Paramount Hotels and Resorts, aims to build as many as 50 hotels around the world. With such ambitious plans in place, it comes as no surprise that the project intends to live up to the hype generated by the announcement. Comprising of four 250m towers built around a common podium, the Damac Towers by Paramount will include 1,800 units of one, two and three bedroom serviced hotel rooms and residences spread across 70 storeys. Built in the Burj Area of Downtown Dubai, the four towers are being constructed together in a punishing 33 month schedule. The expected completion date is in mid-June 2016. With construction only starting in September 2013, this presents a fairly formidable task for TAV Construction, the main contractor, as Nasser Fakhoury, assistant vice president for projects at Damac, explains. “So far, work is progressing based on the agreed schedule. There have been changes to the design and additional work awarded to the contractor. The expected completion date might get delayed by about two months as the contractor is experiencing difficulties with a shortage of material suppliers like concrete and steel, which will pose a slight difficulty with progress,” he tells Big Project ME.

AUGUST 2014

MIDDLE EAST

“QUALIFIED LABOUR IS NOT EASY TO FIND THESE DAYS. THESE ARE THE CHALLENGES WE’RE FACING. NOT JUST US, BUT MOST OF THE CONTRACTORS HERE ARE FACING THESE ISSUES”

ON SITE DAMAC TOWERS BY PARAMOUNT

MIDDLE EAST

“Also, there’s the issue of labour. Qualified labour is not easy to find these days. These are the challenges we’re facing. Not just us, but most of the contractors here are facing these issues. Apart from these problems, everything else is moving smoothly and we’re working in accordance with the programme.” In January of 2014, the construction team announced that it had completed the casting of the raft foundation for the project, which would allow work on the four towers to begin. More than 19,000 cubic metres of concrete and in excess of 2.2 metric tonnes of reinforced steel bars were used to construct the raft, Fakhoury says. Since the completion of the raft, work on the towers has progressed fairly quickly, with the podium having reached the fifth level and work on the towers well underway. While the design and construction of the towers on an individual basis may be fairly straight forward, the biggest complications come with the requirement that all four towers must be built together so as to meet the schedule. In effect, Ugur Anliatamer of TAV Construction, is having to manage four sites as one. On its own, this would present quite a major challenge to most contractors, but what compounds their problems is that the site is situated between two of Dubai’s busiest road arteries – Al Khail Road and Al Awer Road. “At the concept stage of this project, it was decided that all four towers would simultaneously move forwards. We’re trying to separate the podium areas and the towers themselves will move upwards to give us time to finish on time,” Anliatamer explains. “The decision (to build all four towers together) is mainly because of the location of the project,” adds Fakhoury. “Logistically, there is a difficulty in terms of handling of materials, access to the site, providing storage and loading areas. We have challenges that we’re dealing with and we’re trying to cope with the challenges we’ve had so far.” Both men agree that in order for the project to succeed and not get bogged down more than it already has, the need for cooperation between all stakeholders is absolutely crucial. “It’s a joint-effort between the engineer, the client and the contractor. The contractor, from his side, is working on reinforcing his management style to provide sufficient teams for each tower, so that they act independently from the others. It’s not like you complete one tower and then move to another. The four of them have to go together. Our plan is to cast four slabs in six days.”

AUGUST 2014

FOUR IN ONE TAV Construction has to manage the building of four 250m towers on one site.

BIGPROJECTME.COM

IN FIGURES n Contract: $272 million

n Concrete: 200,000m3 n Steel: 30,000 tonnes

n Post tensioned systems: 440,000m2

n Formwork: 600,000m2 n Workers at peak: 4,000

n TAV Staff: 250 n KEO Staff: 40 n Damac Staff: 20

ON SITE DAMAC TOWERS BY PARAMOUNT

Sameer Abukhalil, senior manager for Projects at Damac, chimes in, pointing out that when it comes to logistics, a serious effort is being made by all stakeholders to ensure that work progresses as smoothly as possible onsite. “We have here, day-to-day planning. As well as two week planning ahead, we also have six week planning. We have a live document which is updated every two weeks with the coming six months. This is just so we know when materials are coming on site and how they’re to be handled. This is so that when anything comes on site, there is no problem and it goes to the designated place without any issues.” This care and attention to detail is second nature to TAV Construction, who have been one of the pioneers for BIM technology in the GCC. “Of course, the logistical challenges is one of the prime factors. Even though our specifications do not state BIM requirements, what we’ve put in is our BIM team – who are a couple of people whose job it is to understand the project in more detail,” Anliatamer explains. “We’ve introduced a BIM model as well, which gives us an advantage. You can elaborate and plan your activities sufficiently. And coordination wise, especially in MEP and civil coordination, by using the BIM model, you can understand more.” Fakhoury adds that Damac Properties has been quick to get on board with this philosophy, pointing out that the developer has appointed a sub-consultant to handle BIM services and to keep an archive of work done on the site. He says that he hopes it will be used as a document management tool and then later on as planning management tool. “BIM was introduced after the beginning of the project and it significantly impacted our project planning. The amount of information that we are taking as an output from BIM is huge and severe in its effect. The big thing is detecting those issues early and resolving them early. It gives us the privilege of moving fast without impacting the engineering or the work itself,” he explains. Due to the constrained nature of the project, both in terms of physical space and time, this

advanced planning and adaptability gave the team the opportunity to plan the project out properly and minimise wastage. “BIM is not only a tool for engineering and for design coordination. It is also a tool that you can use to calculate the exact quantities of materials – like concrete, like steel, whatever you want to use. You can get exact, precise details. This will of course, give us an advantage during the procurement, logistic and planning stages,” Anliatamer says. The team is so conscious about wasting time, they decided that despite having a concrete batching plant next to the project, they would also have a concrete supplier as a backup. With 200,000 cubic metres of concrete calculated to

HOLLYWOOD COMES TO DUBAI Damac Towers by Paramount was the first project announced as part of the collaboration with Paramount Hotels & Resorts. Since then, Damac Properties has introduced the Paramount Hotel Jumeirah Waterfront, in addition to the Damac Villas by Paramount being developed at the Akoya by Damac master development and Damac Tower by Paramount luxury serviced apartments on King Fahd Road in Riyadh, KSA. “The projects with Paramount Hotels & Resorts have proved to be among the most popular in Dubai, as our clients see the intrinsic value of branded real estate, which is realising values nearly 60% more than non-branded projects in the Burj Area,” added Naill McLoughlin, senior vice-president, Damac Properties. “The consistent construction on the project will only enhance the attractiveness of Damac Towers by Paramount to buyers interested in the Burj Area of Dubai.” Damac Properties has completed 8,887 units to date and has a further 23,688 units at various stages of progress and planning across the Middle East region.

AUGUST 2014

MIDDLE EAST

“IT’S NOT LIKE YOU COMPLETE ONE TOWER AND THEN MOVE TO ANOTHER. THE FOUR OF THEM HAVE TO GO AT THE SAME TIME. OUR PLAN IS TO CAST FOUR SLABS IN SIX DAYS”

be used on the project, and steel at about 30,000 tonnes, it makes sense for these precautions to be taken. Post tensioned systems are calculated to be at 440,000 square metres of area, while there is set to be 600,000 square metres of formwork. “The other component is steel reinforcement. We are working with two backups from two companies. So far the challenge point in this market is deliveries, especially in such a fast track type of job. Deliveries should be precise and our logistics teams have to be organised,” Fakhoury points out. “We organise and structure various disciplines – procurement, logistics and site deliveries. So first of all, with the procurement team, you’re investigating the markets as per the programme. The whole procurement is finalised based on that programme. And then afterwards, it goes to logistics and it’s a requirement of the site. “Logistics is planning how to receive the materials and where it’s going to be stored. That’s another challenge, especially in Dubai. Everything is being occupied and that’s why you have to manage your storage efficiently,” he adds. With 1,600 staff onsite at present, the need for planning ahead will only increase once peak construction time approaches. By then, the team expects 4,000 workers to be onsite, including those from subcontractors who will be providing their own team and staff. All considered, by the time the project is in full swing, there will be 10 or more subcontractors operating onsite. In addition to this, there will be 200 to 250 professional staff that will set up shop from TAV, along with 40-plus senior staff from consultants KEO and 20-plus staff members from Damac Properties itself. With all these people involved in the project, health and safety management and onsite safety procedures are issues that TAV and Damac are not prepared to take lightly. As such, each tower has its own health and safety engineers, who are fully trained and certified, ABC says. “No fatalities have been recorded, with no major accidents,” he asserts. “Damac Properties have hired a safety team from the consultants just to make sure that all safety regulations are there, and to make sure that there are no safety hazards on this project. We also have our own safety team who come weekly to the site to make sure that things are progressing properly. It’s a team effort here (with regards to safety) and this is on all our projects,” Fakhoury points out.

Al Garawi Group

Al Garawi Galleria, Al Orouba-King Fahad Highway Junction Olaya P.O. Box 41122, Riyadh 11521, Saudi Arabia Tel.+966 1 4196096 / 4195058 Fax. +966 1 4196101 / 4196103 email: infoalgarawigroup@saudi.net.sa / www.algarawigroup.com

Al Garawi Group an authorized distributor of the following licensee for Saudi Arabia, U.A.E., Bahrain, Qatar, Oman, Jordan, Lebanon, Kuwait and Yemen. Wolverine World Wide, the global footwear licensee for Caterpillar Inc.

Medco

P.O. Box: 17301, Jebel Ali, Dubai, U.A.E. Tel.: +971 4 881 8821 Fax: +971 4 8818944, Showroom: Al Kwakeb Building, (B-Block) Sheikh Zayed Road, P.O. Box: 2904, Dubai, U.A.E Tel.: +971 4 343 7400 / 343 7500 Fax: +971 4 3437600 email:medcodxb@emirates.net.ae

MIDDLE EAST

SPECIAL REPORT EDUCATION

AUGUST 2014

BIGPROJECTME.COM

SPECIAL REPORT EDUCATION

A MATTER OF PRIORITY

As the GCC pushes forwards with infrastructure and development projects worth billions of dollars, is it missing a trick when it comes to providing educational opportunities to its residents? Big Project ME finds out

he development of the GCC states is well underway, with heavy financial investment from the government into a number of billion dollar infrastructure projects. Saudi Arabia is the biggest market for the construction industry thanks to projects such as the Riyadh Metro and the Haramain Railway. The UAE is not far behind, with projects that are required to fulfil its aims to host the Expo 2020 and to support Vision 2030 in Abu Dhabi. Qatar, as is well known, is spending massively to get ready for the World Cup in 2022 and for its own Vision 2030. Given the scale of these construction projects and what they mean to the future of the GCC, it’s quite surprising to find that there isn’t actually a strong support system in place that will feed into their development. Of course, there are huge contracting and consulting firms bidding for the right to build these projects. It’s certain that they’ll do an excellent job in bringing them in on schedule and hopefully, on budget. But the bulk of these projects will require expertise to be brought in from overseas. It’s no secret that the professional staff in the construction industry in the GCC is dominated by expatriate workers providing the engineering and technical know-how to get things done.

While it is unrealistic to expect that the demand from the construction industry will be fully met from the region, it isn’t unreasonable to suggest that there is a large pool of talent that is being under utilised. According to World Bank projections, the GCC labour force will exceed 20.5 million by 2020 – which is an increase of almost 30% from the current estimated labour force of 15.6 million. Back in 2008, national unemployment in Saudi Arabia and the UAE was estimated to be 13% and 14% respectively, a report released by Booz & Co says. In Bahrain and Oman, despite the rapid economic growth since 2003, national unemployment stood at 15%. Qatar meanwhile, fared much better, with just 3.2% unemployment in 2007. However, the vast majority of nationals employed work in the government sector. The Booz & Co report pinpointed the main reason for this high unemployment rate. “Education failings are the cause of a lot of the GCC’s employment problems. Vocational training, science curricula and alignment with industry needs all need to be improved,” it says. This was starkly obvious during the researching of this feature. Focusing solely on identifying what was needed to service the needs of the regional

AUGUST 2014

MIDDLE EAST

“WE NEED TO LOOK AT SOLUTIONS. WE NEED TO LOOK AT IT. IF YOU LEAVE IT TO MARKET FORCES, YOU’LL FIND THAT LOCALS ARE ALREADY VOTING WITH THEIR FEET”

SPECIAL REPORT EDUCATION

MIDDLE EAST

construction industry, Big Project ME found that there was a surprising lack of educational institutions that focus on equipping graduates with the skills they need to survive in an extremely competitive and challenging environment. “It’s interesting that the educational issues in relation to construction in the Gulf in general is different to the UK and the Commonwealth approach. In most universities in the UK, Malaysia and Singapore – places that are part of the Commonwealth – it’s typical to see a department of construction management or a built environment school. You hardly see them in the Gulf,” says Professor Ghassan Aouad, president of the Chartered Institute of Building (CIOB) and vice-president for Academic Affairs at the Gulf University for Science and Technology in Kuwait. “There are exceptions with some universities, such as Heriot-Watt University in Dubai and the British University in Dubai, but most of the construction education is done within civil engineering departments. Some universities may have masters in engineering management or construction management, but they are engineering or business colleges, they don’t focus on construction, which is surprising to me. Construction as a discipline is part of civil engineering in general, they’re covering the subjects, but they don’t have the focus,” he asserts. While the scale of construction and infrastructure investment in the Gulf will eventually force private and public universities to start paying attention to this neglected segment of the market, Prof Ghassan admits that it might already be too late to have an impact on ongoing construction projects. “When you think about the massive building and infrastructure projects in Dubai, Qatar and Saudi Arabia – who’s going to maintain them? Unless you produce qualified individuals who have done degrees in facilities management or maintenance management, it’s going to be a problem. I think it needs to be a national priority,” the academic urges. This is something that Professor Mohammed Dulaimi (Project Management and Innovation), the director of CIB MENA, member of the CIB board, and part of the Faculty of Business at British University of Dubai, is in complete and wholehearted agreement with. “In the GCC, the majority of the industry is an expat industry. Whether it’s individuals or at corporate level. We try to identify what are the priorities of the industry and that’s where the role of government can come in. Not only as regulators, but as clients,” Prof Dulaimi says.

AUGUST 2014

BIGPROJECTME.COM

ADDRESSING DEMAND Locally trained graduates may have some advantages when it comes to working in the GCC, says Dr Assem Al-Hajj of Heriot - Watt.

“What is the government’s priority? What are they trying to achieve? How does the industry need to respond in order for them to achieve their targets and objectives? Personally, having been in this region for the last ten years, I feel that there’s not much happening in this regard. At best, you’ll find companies or individuals trying to foresee what will happen. “What would be very helpful, to the industry, but also to academia, is if we have an effort to foresee the future and identify our priorities,” he tells Big Project ME. “More importantly, how the government wants to see the industry respond to (those priorities).

“WHAT WOULD BE VERY HELPFUL, TO THE INDUSTRY, BUT ALSO TO ACADEMIA, IS IF WE HAVE AN EFFORT TO FORESEE THE FUTURE AND IDENTIFY OUR PRIORITIES”

SPECIAL REPORT EDUCATION

unemployment through nationalisation of the workforce in the region. Universities can help in this regard by creating opportunities for both fresh undergraduates and professionals looking to further their education, says Doctor Assem Al-Hajj, academic head and director of Studies CMS at Heriot – Watt Dubai. “We have about 600 students all together, between the undergraduates and postgraduates. The vast majority are expats, there are some local students and we have students from Qatar, Kuwait and other GCC states, but it’s mainly expats who actually study these courses. We have 54 different nationalities (enrolled),” he says.

“As you know, the UAE is one of the biggest construction markets in the world. The level of investment in construction is very high and there’s no escape from having to bring in expertise from outside, but what I think we can do is increase the level of provision from within the UAE, rather than from outside. People who understand the culture, who are born here or have lived here for a long time, when they become engineers that are working in the country, its good.” “In the GCC, we actually have an agreement with Bahrain where our courses are taught. There was a project and 500 students joined in to be trained on quantity surveying skills,” he adds,

AUGUST 2014

MIDDLE EAST

Knowing this, universities will be able to design programmes that reflect these priorities,” he explains. “You can look across the globe and see what the emerging themes and trends are, and say: ‘these are the issues that our programmes need to address’. But you find that you actually need to focus on priorities, and in many cases we have to rely on our own understanding or on the views of the industry, instead of a strategic view that’s been developed,” Professor Dulaimi says. Having a strategic view of where the construction industry is headed is increasingly important when governments look to address the

SPECIAL REPORT EDUCATION

highlighting how his institution is working to actively engage with the construction community in the GCC. “We’ve introduced a PhD programme here and the reason we did that is to enhance research in the region and help governments set up their policies and improve decision making. So yes, if there are clear strategies in the region, it’s much easier for us to work with them (the government and the industry) to achieve their objectives and goals,” Dr Assem points out. On the subject of nationalisation, Prof Dulaimi adds that perhaps the best thing to do is gather the industry and the governments together with academia and map out a coherent strategy to take the region forwards. “If that’s the case (nationalisation), then how do we approach that? In many countries, it’s very much a case of ‘give them a degree and we’ll give them a job’, but I don’t think it’s as simple as that, especially in an industry that is predominantly expat,” he explains. “From talking to people in the industry, I personally feel that people are excited, local students are excited about project management as we engage them in the programme and develop their skills. The shock they sometimes have is when they go to work and they tend not to find it very interesting. Hence you find the turnover is high on that side. A few years back, I was talking to a local student who was responsible for recruiting locals to the procurement department, and we were discussing how projects are procured and how exciting this topic is. She said to me – ‘I can

BIGPROJECTME.COM

“EDUCATION FAILINGS ARE THE CAUSE OF A LOT OF THE GCC’S EMPLOYMENT PROBLEMS. VOCATIONAL TRAINING, SCIENCE CURRICULA AND ALIGNMENT WITH INDUSTRY NEEDS ALL NEED TO BE IMPROVED” see how exciting the topic is, but my problem is that in my department, they don’t last for long. They find that boring’. My response was that you have to look at how you’re approaching the work that you’re putting into a project. Is it structured? Or so bureaucratic that after a while, they find that after three or four months of going through the processes, it’s not very interesting,” he relates. A further complication is that the GCC construction sector, which is predominately privately-owned, has to compete with larger salaries and better working conditions on offer in the region’s vast public sector. It’s often the case that locals in the private sector feel undervalued and as a result are keen to switch over to a government job. This is where full and frank discussions about the issues faced

MIDDLE EAST

LACK OF FOCUS Prof Ghassan Aouad says that universities in the Gulf are ignoring construction focused higher education.

AUGUST 2014

by GCC nationals can help, Prof Dulaimi says. He argues that not only will the private sector have a clearer idea of what the government expects as a result and concerns about locals not doing meaningful jobs and filling quotas can also be addressed. “I have come across a number of cases (job dissatisfaction) where it is justified,” he comments. “It does not stack up – why should someone say, ‘Why I should stay working for this company, when I could be doing something more worthwhile in government’?” he asks, not unreasonably. “I think it’s realistic to expect to see the local population take an important part in strategic industries. If you look at the major tasks companies have in trying to develop solutions and services that reflect the needs of the local community, then it’s in their interests to have that reflected in their own staffing. He continues: “How can we do that? Emphasise on creating interesting jobs and you’ll have students who’ll attach a value to having an exciting job. It’s not like with like compared to a government job, but they’ll be able to say: ‘Working in the private sector, having these challenging positions and tasks and developing this expertise has a value that I can include when I compare the two positions’.” “We need to look at solutions. Is it for the government to step in? Will there be some compensation for locals taking a job in the private sector? I don’t know, but we need to look at it. If you leave it to market forces, you’ll find that locals are already voting with their feet.”

12-14 OCTOBER 2014

ADNEC, ABU DHABI, UAE

ABU DHABI NATIONAL EXHIBITION CENTRE (ADNEC)

REGIONAL

OPPORTUNITIES

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

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

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

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速

EVENT PREVIEW THE BIG 5 CONSTRUCT INDIA

BIGPROJECTME.COM

GROWTH MARKET Growth in key sectors like steel, concrete and other building materials make India an exciting construction market.

INDUSTRY EVENT THE BIG 5 CONSTRUCT INDIA

HEIGHTENED INVESTMENTS INTO THE INDIAN CONSTRUCTION SECTOR MAKE IT AN EXCELLENT TIME FOR INDIAN, GCC-BASED COMPANIES TO ENTER THE LOCAL MARKET

MIDDLE EAST

FOLLOWING THE ELECTION of a new government, the Indian construction sector is expected to surge, with forecasts suggesting the $157 billion-worth market will grow at a rate of 8% per annum over the next decade. The Big 5 Construct India 2014, to be held between the 11th and 13th of September in Mumbai’s Bombay Exhibition Centre, could well be arriving at an opportune time for the Indian construction industry. According to a report prepared by PricewaterhouseCoopers (PwC), the removal of barriers to foreign government will “spur demand for construction” over the next 12 to 18 months in India. “With a new government having been formed at the centre, with a strong mandate to stimulate economic growth, the outlook for the sector appears positive,” says the PwC report prepared for The Big 5 Construct India Exhibition. An investment of up to $1 trillion is expected into Indian infrastructure by 2017, with heightened investment in industrial projects by the government. In July 2014, newly-elected Indian prime minister Narendra Modi set aside $1.2 billion in the annual national budget for the construction and investment in smart cities.

AUGUST 2014

Muhammad Kazi, senior project manager for The Big 5 Construct Exhibition believes this is the right moment for Indian construction firms to enter both, international building markets such as in the GCC, as well as the country’s major domestic markets. “A majority of Indian companies primarily look to concentrate on domestic markets as they are well established and connected with their core clients,” Kazi explains. “Having said that, many Indian companies trade successfully in GCC, which is one of their most important export markets. “Many of international firms are also quite active in India,” Kazi continues. “With the new government in place, it is even more encouraging for them to consider entering India which offers huge potential.”

Kazi says representatives from each building material market which can be expected to boom in light of the new government’s infrastructure plans will be exhibiting at the show. “Growth will be evident in key sectors like steel, water technology, concrete, construction chemicals, marble, ceramics and stones,” he proudly reveals. The total construction market in India for fiscal year 2014 was $157 billion, an increase of $4 billion over the fiscal year 2013. Infrastructure accounts for 49%, housing and real estate for 42% and industrial projects for 9% of the market. The Big 5 Construct India is expected to bring top-notch Indian construction firms, such as Jindal Steel and plumbing manufacturer giant Astral under the same roof.

“A MA JORITY OF INDIAN COMPANIES PRIMARILY LOOK TO CONCENTRATE ON DOMESTIC MARKETS AS THEY ARE WELL ESTABLISHED AND CONNECTED WITH THEIR CORE CLIENTS”

17 - 20 NOVEMBER 2014 Dubai World Trade Centre 11:00 - 19:00 Daily

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MARKET FOCUS IRAQ

ATTACHED TO IRAQ

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Insurgent forces have taken over key pockets of Iraqi territory, but some construction firms have chosen to stay on as the country finds itself in the face of yet another conf lict

AUGUST 2014

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MARKET FOCUS IRAQ

n October 2013, optimism appeared to reign in Iraq. A bevy of Iraqi ministers had visited Dubai to promote the nascent economic benefits their country could offer to affluent GCC construction businessmen. Meanwhile, the country’s housing, rail, aviation and public works ministers began conversations meant to lure monetary flow and investor confidence into the country. A lot has happened since then. Less than a year down the line, bleakness has returned to Iraq’s security situation through insurgency and civil clashes. Sectarian divisions have been attributed to this round of internal conflict, causing bloody combat in Mosul, Iraq’s second largest city, which fell to the extremist group, ISIS – the Islamic State of Iraq and the Levant. 400 kilometres north of the capital Baghdad, trouble had officially returned to Iraq. Rearranging Iraq’s security and infrastructure requires a sound government be established. This seems unlikely given the failure to form a working parliament despite the clear need for one. Parliament was adjourned twice before a speaker was finally elected on 15 July, 2014, and the disagreements between various political Iraqi factions have held up the creation of a new government. The prompt appointment of a prime minister and president for the country is crucial to alleviating extremists’ presence, which has gravely impacted Iraq’s pivotal infrastructure and commercial operations. Surprisingly, construction professionals in Iraq seem less defeated than one would assume. Speaking to Big Project ME from Baghdad, Sabah Ghaidan, CEO of construction machinery distributor firm Al Ghodwa Group says that the uncertainty in the country (and therefore, its construction market) will only clear once a solid parliament has been established. “It (the security situation) will be solved, but it needs time,” he asserts over a crackling phone line. “Everything is okay; everyone wants to solve this situation and we need a strong government for that.”

The construction industry in the GCC has kept a keen eye on the security situation in Iraq, which in January 2014 was found to be the third-largest projects market in the region with developments worth $519 billion either planned or underway in the country. Only Saudi Arabia ($1.05 trillion) and the UAE ($713.15 billion) had larger projects markets as per MEED’s Gulf Projects Index as of January 2014. The absence of a cohesive government threatens to detriment Iraq’s infrastructure rebuilding, consequently also discouraging foreign firms from participating in the Iraqi market. Ammar Al Assam, owner of Dewan Architects & Engineers knows this all too well. 130 kilometres north of Baghdad lies Samarra, part of Iraq’s Salah ad-Din governorate where his firm has been commissioned to undertake a university design project. Listed as a UNESCO World Heritage site, fears of an encore of the 2006 attack on Samarra’s historic Al-Askari mosque have returned to the fore. Assam had expressed confidence in the security of the culturally significant Samarra when the project was announced in February 2014. Despite all that has transpired since, he hasn’t been deterred from his stand. He remains confident that the security situation in Iraq – more specifically, Baghdad – is one his team can still contend with. “The owners of Dewan are originally from Iraq. We left the country in the 1970s, but were probably one of the first few companies to return. I think it was in May 2003, a month after the war. “We still have ties with the country and weren’t concerned about going to Iraq per se. The security situation has been bad from 2004 onward and that’s unfortunate, but we know how to work around things.” Assam insists that maintaining one’s security in Iraq also depends on the vigilance deployed by employees and firms. “All our employees there are Iraqi and have a sense of where to go or not go. This isn’t to say it’s 100% safe to live there – people get killed

“EVEN THOUGH THE MAIN ROADS IN THE COUNTRY ARE ALMOST CLEAR, TRANSPORTATION COSTS TO MOVE MATERIALS FROM THE NORTHERN PART OF THE COUNTRY TO THE SOUTH HAVE INCREASED ALMOST THREE-FOLD”

AUGUST 2014

MIDDLE EAST

BLEAKNESS RETURNS With the invasion of ISIS into Iraq, the country has been thrown into fresh turmoil just as it was getting back to its feet.

MARKET FOCUS IRAQ

every day. You could be waiting at a traffic signal or headed for the ministry for some paperwork and God forbid, anything could happen.” “But we’re Iraqi. We blend in easier and don’t keep excessive security,” he adds. “In Iraq, the more low-key you are, the safer you’ll be.” Bora Yildiz, executive partner at Turkish contracting firm EID, was at the conference held in Dubai in October 2013. Speaking about his experience of working in Iraq, Yildiz had said at the time: “Challenges exist in terms of security, logistics, international labourers, suppliers and so on. Logistical problems persist when the need for getting machinery, materials and manpower into the country arises.” Despite having highlighted the glaring flaws in the apparatus of the Iraqi construction market, Yildiz was buoyant about the investor returns the country’s untapped market could offer. Today however, entering and capturing the temperamental Iraqi market will require strategic managerial forces on the ground, which Yildiz admits are difficult to source. “The challenge at the moment is to alter expats’ opinions of Iraq,” he tells Big Project ME from Turkey. “They’re focusing on only the specific areas of the country where conflict is occurring. There are some territories which are relatively safer, but overlooked when considering the condition Iraq is in right now. “Around 400 EID employees are currently based in Iraq,” Yildiz reveals. “We have had to increase security on-site like most firms have. But the real difficulty for firms, including us, has consistently been to encourage SAFE HAVENS The south of Iraq and the Kurdistan region remain relatively safe for firms operating in the country.

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“WE’RE IRAQI. WE BLEND IN EASIER AND DON’T KEEP EXCESSIVE SECURITY. IN IRAQ, THE MORE LOW-KEY YOU ARE, THE SAFER YOU’LL BE”

and stimulate people to work in Iraq. They demand higher salaries which places an increased burden on our existing expenses of security, material sourcing and so on.” Pragmatically viewed, the security of manpower is not the only facet construction companies operating in high-risk zones have to worry about. Over a poor quality phone line from Baghdad, Rebin Mukerji, sales manager of oil well cement for Lafarge Cement’s Iraqi operations highlights the impact increased product prices have had on business in the country. “The problem is mostly in and around Baghdad. The south of the country and Kurd region is relatively safe,” Mukerji says. “Even though the main roads in the country are almost clear, transportation costs to move materials from the northern part of the country to the south have increased by almost three-fold.

“The prices of our products have had to be lowered, and this is something all companies operating in the market have had to do. Most companies, much like us, have kept their operations on hold until the end of Ramadan,” he adds. To each person interviewed for this piece, the Holy Month of Ramadan has become one of hopes and expectations. Amal Al Dabbagh, member of the economic section at the Consul General of Iraq’s office in Dubai is worried about her family in Iraq – which is, at the moment, safe in the South – but she cannot wait for Ramadan to end so that she has a better idea of what the future holds for her country. “We’re all very confused,” she rues. “Everything has stopped and I have no information at the moment. Hopefully, after Ramadan, I will have a better idea of what the situation is like in the market. “But right now, we don’t even know who the ministers for each portfolio are, when the government will be formed or what happens next.” Pegging recovery hopes on Ramadan is a sensible move says Assam, since the government is – technically – meant to be formed during July, which coincides with the holy month in 2014. “Ramadan is meant to be the month of forgiveness and peace,” he says. “It has unfortunately become about politics in Iraq this year. I don’t think the ‘Ramadan factor’ will necessarily deter any violence, but I’m hopeful. “Maybe it will be a good omen for the country.”

IN IRAQ, UNDER KAFALA A report released by Amnesty International in the last week of June 2014 said “several hundred” Indian labourers were trapped in Iraq’s Najaf province, “unable to return home because their employer refuses to return their passports.” The workers, with whom Amnesty conducted interviews, were told by their employer infrastructure and construction company that they were “safe” despite the advancing threat of the Islamic Caliphate (formerly ISIL.) “The workers said their employer had told them that they were safe and would be moved to safer locations if they perceived a threat from the armed groups led by the Islamic State in Iraq and al-Sham (ISIS),” the report said, adding 40 Indian

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workers were also trapped in Mosul.

AUGUST 2014

TENDERS

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TOP TENDERS

REGION Jeddah , Saudi Arabia CLIENT General Authority of Civil Aviation (GACA) – Saudi Arabia ADDRESS Jeddah Area POSTAL/ZIP CODE 21165 PHONE (+966-12) 640 50 00 EMAIL gaca-info@gaca.gov.sa WEBSITE www.gaca.gov.sa DESCRIPTION Carrying out expansion of King Khalid International Airport, with capacity to handle 20-25 million passengers per year. STATUS Current Project

PROJECT ETIHAD RAIL NETWORK PROJECT - PHASE 2 (PACKAGE E) BUDGET TBA DESCRIPTION Construction of a new hospital comprising a basement, ground floor and 14 floors STATUS New Tender

PROJECT DUBAI LAGOON DEVELOPMENT PROJECT - DIP BUDGET $600,000,000 REGION Dubai, UAE CLIENT Schon Properties Limited (Dubai) ADDRESS City Tower-2, Sheikh Zayed Road POSTAL/ZIP CODE 11197 PHONE (+971-4) 352 66 65 EMAIL info@schonproperties.com WEBSITE www.schonproperties.net DESCRIPTION Construction of 52 low-rise buildings, 3800 units and associated facilities STATUS Current Project

PROJECT AL JAHRAA NEW HOSPITAL CONSTRUCTION PROJECT BUDGET $1,400,000,000 REGION Safat, Al Jahraa, Kuwait CLIENT Al Diwan Al Amiri (Kuwait) ADDRESS Sief Palace – Building 100 POSTAL/ZIP CODE 13001 PHONE (+965-1) 88 88 81 EMAIL amirsoffice@da.gov.kw WEBSITE www.da.gov.kw

PROJECT NORTH AL-WATHBA HOUSING COMPLEX DEVELOPMENT BUDGET $2,000,000,000

REGION Abu Dhabi, UAE CLIENT Etihad Rail Company (Abu Dhabi) POSTAL/ZIP CODE 989 PHONE (+971-2) 499 99 99 EMAIL communications@etihadrail.ae WEBSITE www.etihadrail.ae DESCRIPTION Construction of depots, passenger stations, freight facilities and marshalling yards. STATUS New Tender

REGION Abu Dhabi, UAE CLIENT Abu Dhabi General Services Company PJSC (Musanada) ADDRESS Bainuna Street, Al Bateen POSTAL/ZIP CODE 33700 PHONE (+971-2) 404 2222 EMAIL Musanada.helpdesk@musanada.com WEBSITE www.musanada.com DESCRIPTION Construction of roads, general infrastructure, housing, civic, institutional and commercial buildings, parks and open spaces. STATUS New Tender

PROJECT KING KHALID INTERNATIONAL AIRPORT EXPANSION PROJECT BUDGET $800,000,000

PROJECT INDEPENDENT POWER PRODUCER PROJECT BUDGET $2,000,000,000 REGION Beirut, Lebanon CLIENT Council for Development and Reconstruction (Lebanon) ADDRESS Tallet Al Serail – Riad El Solh POSTAL/ZIP CODE 20239201 PHONE (961-1) 98 00 96 EMAIL infocenter@cdr.gov.lb WEBSITE www.cdr.gov.lb DESCRIPTION Design, build, operate and transfer (DBOT) an independent power producer with a capacity of 2500 MW. STATUS New Tender

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AUGUST 2014

CONSTRUCTIVE CRITICISM

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GAVIN DAVIDS

Vision for the Future Gavin Davids says that it’s time for GCC governments to lay out a clear strategy for the construction industry in order to best prepare the next generation of construction professionals

MIDDLE EAST

DURING MY CONVERSATIONS with some of the leading academics in the GCC construction industry this month, there was a common theme that ran through the discussions. They all called for the governments of the region to have a clear construction strategy. It’s all well and good announcing projects and developments that will spur the economy on to greater growth, but if the GCC is serious about providing a platform for its nationalisation plans, then they could do worse than involve the academics. We’ve already seen that there has been quite a bit of push back from the construction industry over the issue, given that the local population often don’t have the requisite skills or experience to be assets in a hugely competitive field. Perhaps if the governments laid out a clear strategy for the industry, then academia could begin preparing the next generation of construction professionals for what is expected of them. I was surprised to find that there are only a handful of universities in the entire GCC that offer specialised construction programmes as part of their syllabus. Given the scale and importance of the

AUGUST 2014

construction industry, I’d hope that this going to change soon. This is an industry that employees tens, if not hundreds, of thousands of people across the region, and contributes billions to the overall economy. Pushing nationalisation makes sense for the region, given the high local unemployment rates, but it has to be done correctly. As Professor Dulaimi from the British University in Dubai quite rightly points out, to force the construction industry to take on employees who aren’t ready to match their expatriate counterparts will only lead to them hiring locals as token gestures, spots to fill a quota. This is grossly unfair on both employee and employer. I’m sure that there are thousands of budding engineers and quantity surveyors out there amongst the local GCC

population. While they may not be able to answer the total demand from the industry, they can certainly help redress the balance. What they need is proper education and qualifications, and the best way the academic sector can provide this is if they know what the government wants, so that they can tailor their programmes to best answer the industry’s needs. While we’re on the subject of preparing for the future, I’d like to take the opportunity to tease an upcoming feature in the September issue. We’ll be looking at future construction technologies in the global industry. While we’re focusing on software technology and its evolution, there’s also going to be a look at the use of smart building materials. As something of a science fiction nerd (which regular readers may have picked up on in previous columns), this is a development I’m hugely excited about. We could finally have buildings that respond to their environment, adapting to changes in light, temperature and weather. Imagine the possibilities that could afford…

“IF THE GCC IS SERIOUS ABOUT PROVIDING A PLATFORM FOR ITS NATIONALISATION PLANS, THEN THEY COULD DO WORSE THAN INVOLVE THE ACADEMICS”

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