Big Project ME April 2016

Publication licensed by International Media Production Zone, Dubai Technology and Media Free Zone Authority

121

APRIL 2016 meconstructionnews.com

THE BUSINESS OF CONSTRUCTION

at the centre of it all how brookfield multiplex and gulf related are working together to deliver al maryah central

Contents

Issue 121 April 2016 08

16

20

26

36

50

16 Looking for options

40 10 tips for project managers

06 ME Construction News.com OnlIne

The biggest stories from Big Project Middle East’s home on the web

AnAlysIs

Orçun Çetinkaya looks at the options open to Turkish contractors looking to go global

08 Saudi salary disputes heat up 20 Zetas Zemin Teknolojisi The bIg pIcTure

Foreign governments step up calls for payment of delayed salaries for expat workers in the Kingdom

In prOfIle

Big Project ME speaks to Omar Itani, managing director of the Turkish groundworks contractor

12 Balfour Beatty renews LU deal 26 Al Maryah Central InTernATIOnAl news

Contractor extends its track partnership deal with London Underground

sITe vIsIT

How Brookfield Multiplex and Gulf Related are working together to deliver the project

14 Abu Dhabi office market review 36 Take the ride MArkeT repOrT

Knight Frank examines the state of the Abu Dhabi office market

IndusTry OuTlOOk

Examining the UAE’s leisure and entertainment sector

IndusTry InsIghT

Zander Muego shares his top tips for managing multiple project stakeholders

44 More than a tick in the box cOMMenT

Nesrine Abdili explains why construction firms need to start taking insurance seriously

58 Top Tenders Tenders

Listing the top tenders in the GCC for April 2016

64 How to stop projects failing lAsT wOrd

Christian Merrett outlines the simple but effective steps that contractor and client must consider before starting a project April 2016 1

Introduction

Let’s start talking

A

s you can probably tell, we’re quite excited by our cover feature this month - the Al Maryah Central project which is being built

by Brookfield Multiplex for Gulf Related. Not only is this project spectacular on a technical level, but it also poses some interesting challenges on the logistical and planning front.

What really stood out for me was how comfortable the two entities are with each other. How often have we heard about conflict between a main contractor and a developers due to one side refusing to compromise or alter its mind-set?

That’s definitely not the case with the team on the Al Maryah Central project, as both sides strive to make the other’s job as easy as possible, while also working in tandem to reduce the challenges faced on this complicated behemoth of a project.

Having spent quite a bit of time out on the project with both Matthew Hewitt and Peter Anderson, it did make me wonder why this sort of attitude isn’t more common in the region.

Surely it would make everyone’s job easier if everyone decided to actually listen to each other once in a while?

Of course there has been a welcome shift towards collaboration and cooperation throughout the industry,

EDItORIAL EDItOR GAVin DAViDS gavin.davids@cpimediagroup.com +971 4 375 5480 REPORtER JeRuSHA SeQueiRA CPI MEDIA GROUP FOUnDER Dominic De SouSA GROUP CEO nADeem HooD

jerusha.sequeira@cpimediagroup.com +971 4 375 5477 OnLInE EDItOR Ben FLAnAGAn ben.flanagan@cpimediagroup.com SUB EDItOR AeLReD DoYLe

PUBLISHInG DIRECtOR RAZ iSLAm raz.islam@cpimediagroup.com +971 4 375 5471

aelred.doyle@cpimediagroup.com ADvERtISInG COMMERCIAL DIRECtOR micHAeL STAnSFieLD michael.stansfield@cpimediagroup.com

EDItORIAL DIRECtOR

+971 4 375 5497

ViJAYA cHeRiAn

SALES MAnAGER FAAJu ABDuLFATAH

vijaya.cherian@cpimediagroup.com

faaju.abdulfatah@cpimediagroup.com

+971 4 375 5472

+971 4 375 5495

4 April 2016

MARKEtInG MARKEtInG MAnAGER LiSA JuSTice lisa.justice@cpimediagroup.com +971 4 375 5498 DESIGn ARt DIRECtOR Simon coBon simon.cobon@cpimediagroup.com CIRCULAtIOn & PRODUCtIOn DIStRIBUtIOn MAnAGER SuniL KumAR sunil.kumar@cpimediagroup.com +971 4 375 5476 PRODUCtIOn MAnAGER ViPin V. ViJAY vipin.vijay@cpimediagroup.com +971 4 375 5713 DIGItAL WEB DEvELOPER mohammad Awais

perhaps driven by the BIM revolution, but I often feel, rightly or wrongly, that there’s an underlying sense of reservation between stakeholders.

This is not to suggest that these parties can’t work together, but that it inhibits the free and rapid flow of information between all parties. In an industry where miscommunication can stall a project and result in valuable time and money being spent to rectify mistakes, this could be something that can be looked at quite seriously.

I feel that the industry is finally ready to embrace collaboration, so perhaps it’s also a good time to nudge things up another level and encourage all parties to start actually talking to each other.

I’ve seen it work wonders for Brookfield Multiplex and Gulf Related and I’d certainly encourage others to follow suit.

Gavin Davids Editor gavin.davids@cpimediagroup.com @MECn_Gavin

PUBLISHED By

Registered at imPZ Po Box 13700 Dubai, uAe Tel: +971 4 440 9100 Fax: +971 4 447 2409 www.cpimediagroup.com Printed by Printwell Printing Press LLc © copyright 2016 cPi. All rights reserved 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.

I NEED JUST THE RIGHT CORROSION PROTECTION – ONE THAT’S LONG-LASTING AND ECONOMICAL Major construction projects cost millions – not only to build, but also to maintain.

There are still too few companies that think to use long-lasting construction materials, in spite of the huge repair costs caused by corrosion. With decades of experience and leading expertise, Master Builders Solutions by BASF is able to offer a broad portfolio of corrosion protection for concrete structural components – such as MasterProtect. Whether during the construction phase or later in life for improving or repairing components: MasterProtect increases the components’ lifespans and reduces costs.

For more information, go to www.master-builders-solutions.basf.ae

Online

Big Project Middle East’s home on the web MOST POPULAR

1

EDITOR'S CHOICE

READERS' COMMENTS

Foster + Partners, BIG and

I completely agree with Rhys Steel (‘UAE storms point to weak spots in building design, and attitudes’). Many buildings, roads and street furniture features in the UAE are just not built for the freak weather – and the recent storms show that they need to be. There’s a clear need for an overhaul of regulation the country over, and also for better safety standards.

Why were window-cleaning cradles apparently left unsecured and hanging from high-rise buildings, and so seen swinging dangerously with the winds?

Grimshaw Architects win

Name withheld, via email

UAE storms bring lessons for construction sector

“Buildings in the UAE have to be built to withstand the elements,” says expert

2

Saudi Arabia’s 1km Jeddah Tower 20% complete

Tower to overtake Dubai’s Burj Khalifa as world’s tallest building

PHOTO GALLERIES

In pictures: Dubai Expo 2020 pavilion designs Three architects’ designs were chosen in an international competition.

See photo galleries at: meconstructionnews.com/photos

3

Dubai Expo 2020 pavilions: Winning architects named

design competition

4

READER POLL Is your company studying the Iran market?

Saudi salary delays: Foreign powers demand action

France, the Philippines and Bangladesh taking up

‘World’s largest umbrella’ under construction

26%

2%

20%

Yes: Iran’s construction sector marks a big opportunity

case of unpaid wages

5

52% VIDEO

in Mecca, Saudi Arabia

UAE storms – impact on buildings, infrastructure

Folding structure at Grand

A collection of videos from social media sites.

Mosque will provide shade

See videos at: meconstructionnews.com/videos

No: There are too few contracts available

Yes: But deals will come in slowly

No: The market is still too difficult to enter

Log on for the latest from across the Middle East construction sector. Write to the editor at contact@meconstructionnews.com 6 April 2016

Geberit urinal system

Rubik‘s Cube ® used by permission of Rubik‘s Brand Ltd www.rubiks.com

Suits every need.

Complete flexibility. Uniform design.

All the components of the Geberit urinal system are perfectly matched to one another.

From the urinal ceramic to the controls. Aesthetic, economical, easy to service. → www.geberit.ae/urinalsystem

The big picture

Foreign powers demand action over salary delays for KSA expat workers France, the Philippines and Bangladesh take up case of unpaid wages Foreign governments are exerting pressure on authorities and executives in Saudi Arabia to ensure construction firms make delayed salary payments to thousands of workers, it has been reported.

Declining revenues from the plunge in oil prices have led the Saudi government to clamp down on state spending, in order to curb a budget deficit running at about $100 billion annually.

This has squeezed the country’s construction firms, leading to delays in paying the wages of thousands of migrant workers in their employment, Reuters reported. Some employees have not been paid for months.

Some 10 million foreigners work in the kingdom, largely from South Asia, Southeast Asia and other parts of the Middle East. Many have low-paid jobs in areas such as construction, domestic work and retail.

Countries taking up the cause of unpaid foreign workers include the Philippines, France,and Bangladesh, it was reported. In Manila, Labour Secretary Rosalinda Baldoz said that the Philippine embassy in Riyadh was contacting Saudi authorities to resolve the issue. Baldoz said she had assigned her official in charge of worker welfare to tackle the issue.

Meanwhile, the French ambassador to Riyadh sent a letter to the chief executive of Saudi Oger – one of the Kingdom’s biggest builders, employing about 38,000 people – asking him to resolve the cases of French staff who hadn’t been paid for four months, 8 April 2016

a diplomatic source told Reuters.

Bangladeshi diplomats also said they had contacted major Saudi construction firms to discuss wages that had been unpaid for over two months.

Saudi Arabia’s labour ministry said all private sector companies were obliged to pay salaries on time and that it would impose sanctions against firms which were late.

An executive at Saudi Set for sanctions Saudi Arabia’s labour ministry has said that it will impose sanctions against firms that delay the payment of salaries.

Oger said his company, like others, had been affected for several months by “current circumstances which resulted in some delays in fulfilling our

commitments to our employees”.

Saudi Oger has adopted a recovery plan that will enable it to resume payments from March 2016 onwards, the executive said.

10 million

foreigners currently working in Saudi Arabia

The big picture

Slowing numbers Pace of hiring slowed in the second half of 2015, experts said.

UAE construction salaries expected to grow by 2-5% this year, analysts say Increases expected, but will still be lower than in 2015 – Morgan McKinley Salaries in the UAE construction sector are expected to grow by between 2% and 5% this year, according to Morgan McKinley.

The forecast comes despite widespread uncertainty over low oil prices, but the increases are still expected to be lower than in 2015, when salaries rose by an average of 5-10%.

A managing director for a general contractor in the UAE, with nine or more years’ experience, can expect to earn AED 100,000 ($27,000) to AED 105,000, while a quantity surveyor with a similar amount of experience is likely to earn AED 27,000-30,000.

“Demand was strong for construction professionals in 2015, particularly during the first half of the year when master developers were making a significant number of hires. Low

“Demand was strong for construction professionals in 2015, particularly during the first half of the year when master developers were making a significant number of hires”

oil prices have begun to affect government budgets throughout the GCC, however, making public spending cuts likely,” wrote Niall Hughes, senior consultant at Morgan McKinley in the UAE. “The squeeze on budgets, coupled with the regional conflicts taking place, has created uncertainty within the private sector and led to several projects being put on hold.

Some construction professionals have been let go when their projects ended, and while many of the larger developers have pushed ahead with both existing and new large projects, the pace of hiring slowed in the second half of the year.”

But major events such as Dubai Expo 2020 and the 2022 World Cup in Qatar will fuel demand, Hughes said. “Despite the low

oil prices, the private sector still needs highly skilled construction professionals – particularly those who have local GCC experience.

Since these people are hard to find, employers are increasingly willing to make counter-offers to retain staff who had been planning to move to a competitor. During 2015, salaries increased by 5-10% across the board. Next year is likely to be a tougher environment, however, and we expect salaries to increase by 2-5%.”

“We expect salary growth to drop below current levels or to remain flat for the year ahead.

We are predicting that for the full year of 2016 that salaries could drop to as low at 2% or 3% below certain levels or remain relatively flat, [depending] on commodity prices,” added Trefor Murphy, MD for Morgan McKinley MENA. April 2016 9

The big picture

Dubai property over-supply claims are false, agents and developers claim Allsopp & Allsopp data shows that demand is beginning to outstrip supply Claims of over-supply in Dubai’s property market and too many developments in the pipeline are “patently false”, claimed Lewis Allsopp, CEO of Allsopp & Allsopp.

He said that his agency is already beginning to see demand outstrip supply as the availability of listed properties for sale declines.

“Dubai’s year-on-year population growth of 7% requires at least 75,000 new properties coming online each year. New developments becoming available is essential to support the growing population,” he said in a statement.

Many developers in the

market have either slowed down construction or delayed the launch of new projects this year.

But with demand continuing at peak levels and a shortage of supply, Allsopp predicts an increase in property prices.

“Under current market conditions, we’re regularly seeing desirable properties listed at an achievable price receive multiple offers from buyers. This shows the real strength of the market and has the combined effect of keeping supply tight, demand high and, as we’re starting to see, prices increasing.”

Demand is rising Lewis Allsopp says that his firm is seeing growing evidence that demand is outstripping supply in Dubai.

10 April 2016

Buyer registration and sales data from Allsopp & Allsopp shows many people still buying, with February recording the highest sales volume since the company started in 2008. The month saw a 62% increase in buyer registration compared to February 2015.

Although over-supply would be a prime indicator of the market being in trouble, what is currently being observed is the opposite scenario, Allsopp said. “We’re actually struggling to find units for the demand.

Thankfully, the developers are aware of the current situation,

and we still have properties due to come online this year despite some projects being held up.”

According to Allsopp & Allsopp’s February sales figures, 52% of the properties it sold last month were on the market for less than two weeks. “The reality is, even if there is a lot of units being built, there still isn’t a lot of choice for the end user,” Allsopp said.

Damac Properties MD Ziad El Chaar previously noted that the number of units that some property consultants forecast were due for handover was grossly inflated.

“Dubai’s year-on-year population growth of 7% requires at least 75,000 new properties coming online each year. New developments becoming available is essential to support the growing population”

CONSTRUCTION AND SUSTAINABILITY AWARDS OF EXCELLENCE NOVEMBER 22, 2016 JUMEIRAH EMIRATES TOWERS, DUBAI www.bigprojectmeawards.com

RECOGNISING EXCELLENCE FOR

THE BEST CONTRACTORS IN THE REGION

FOR AWARD NOMINATION ENQUIRIES GAVIN DAVIDS +97 1 4 375 5480 GAVIN.DAVIDS@CPIMEDIAGROUP.COM

GOLD SPONSORS

FOR TABLE BOOKING & SPONSORSHIP OPPORTUNITIES R AZ ISL AM +97 1 4 375 547 1 R AZ.ISL AM@CPIMEDIAGROUP.COM

C AT E G O R Y S P O N S O R S

The big picture

1

1. Balfour Beatty extends partnership with london underground Balfour Beatty has extended its track partnership contract with London Underground by another two years, following the agreement of a $240 million deal, it has been announced. The alliance between Balfour Beatty Rail and London Underground is responsible for the delivery of essential track renewal work across the city’s network.

The subsidiary won the initial contract in 2010, which included an option to extend for a further two years.

As such, the firm will continue to provide design, labour, plant and materials, as well as providing surveying, supervision and management services for the network. In addition, there will be a focus on enhancing efficiency throughout the two-year extension.

This will include giving project managers more accountability for driving down costs, while continuing to deliver the highest standards of work in a safe manner.

CEO Leo Quinn said that the extension was a “clear sign of London Underground’s confidence in Balfour Beatty”.

12 April 2016

19 years In prison for Marcelo Odebrecht, former CEO of Odebrecht SA, South America’s largest construction company

2. saudi, uae firms in alliance for $3Bn industrial city in egypt An alliance between Saudi Arabian and UAE companies has submitted a request to the Economic Commission of the Suez Canal to obtain

5 million square feet of land to establish an industrial city worth $3 billion.

Ahmed Sabri, the representative for the alliance, said the industrial city would house factories to manufacture various products, including food and cars. He added that a

business city was also planned.

About $300 million would be set aside for the development of basic infrastructure for the project, Sabri said, while as much as $3 billion would be sought from investors to set up the planned 120 factories and a complete city for business.

3

The big picture

$17.1bn

4. russia confirms $5Bn loan to iran for joint projects

Total minimum value of civil engineering packages available from HS2

4

2

472km

Length of railway being built in Kenya by China Road and Bridge Corporation

3. orascom construction wins $200m deals in algeria, egypt Orascom Construction has announced that it has signed a total of $200 million in contracts for industrial and infrastructure projects in Algeria and Egypt. The combined value of both contracts is $180 million, said Orascom, which is jointly listed on Nasdaq Dubai and

the Egyptian Exchange.

The first of two contracts in Algeria concerns a greenfield cement plant with a daily capacity of 6,000t for a private sector client, while the other covers infrastructure work for an industrial complex.

In Egypt, the company’s building material subsidiary, National Steel Fabrication (NSF), has received a $20 million order to manufacture and supply all structural

steel for the West Nile Delta gas development project.

“These new construction contracts build on our substantial track record in Algeria that stretches across a number of sectors including power, water desalination, petrochemicals and cement,” said Osama Bishai, CEO. “We look forward to further participating in this sector through our construction group and NSF.”

Russia has confirmed plans for a $5 billion loan to Iran for joint projects in the Islamic republic, according to a statement by Moscow’s energy ministry representative. Alexander Novak, the Russian Energy Minister, said he plans to visit Iran in the near future to discuss ways to boost trade cooperation on joint projects, particularly in fuel production plants.

He added that the $5 billion loan was a reaffirmation of Moscow’s willingness to provide support to promising projects in Iran. “I am planning to visit Tehran in the near future in order to discuss our projects, the development of trade and economic cooperation, trade turnover and in fact in all areas,” he said in a report by the Islamic Republic News Agency (IRNA).

Novak did not clarify whether the talks would take place within the framework of the RussianIranian Business Council or other frameworks.

“We are now discussing the dates for holding a relevant intergovernmental commission meeting. It will take place in Iran this year.”

April 2016 13

Market report

abu dhabi office 4.0

Forecast

3.5

sq m (millions)

3.0 2.5 2.0 1.5 1.0 0.5 2008

2009

2010

2011

2012

2013

2014

2015

Figure 2: Size requirements, H2 2015 6%

1%

17%

38%

38%

100-500 sq m

1,000-5,000sqm

5,000+ sqm

500-1,000sqm

Figure 3: Demand by sector, H2 2015 6%

20%

3% 1%

8%

21%

12%

14%

4%

Government

Oil & Gas

Construction

Financial

Professional

Hospitality

Technology

Real Estate

General Trading

Other

14 April 2016

• The Economist Intelligence Unit (EIU) estimates that overall real GDP growth in the UAE slowed to 4.6% in 2014 and is expected to fall further in 2015 to 4.0%(f ) and 2.7%(f ) in 2016.

• With economic growth expected to slow and UAE inflation expected to fall in 2016 from 4.0%(f ) in 2015 to 3.5%(f ) in 2016 according to the EIU, the outlook for the UAE still remains positive.

• Current Brent Crude oil price at the beginning of January was c. $36 a barrel, from $50 in the same period last year, which has meant further government reviews on federal spending. There are some analysts predicting that average oil price will stabilise around $60 between 2016 and 2020.

Abu Dhabi Global Market (ADGM) Square and Al Maryah Island

0-100 qm

11%

2016

Oil price instability continues into 2016

• The ADGM has continued to publish additional regulations which affect the real estate market on Al Maryah Island, which it governs.

• The financial free zone and investment zone for foreigners will benefit from better clarity and regulations for all companies and individuals wishing to invest in real estate on the island.

• Current and potential occupiers are also benefiting from further updates on the structure of the free zone and how companies can establish and operate within the free zone. Dual licensing has been a key concern and is to be addressed to allow Department of Economic Development

(DED) and ADGM licences.

• With c. 150,000sqm of vacant office space available on the island and within the jurisdiction of the ADGM, the law and structure will be imperative for growth of the financial free zone.

Market Comment • There is continued downward pressure on the occupier market in Abu Dhabi as the falling oil price affects market sentiment.

We witnessed a slowdown in the number of enquiries in H2 2015, partly due to companies reviewing the impact in falling oil prices, the consequent effect on federal spending and the implications on the wider market.

• The main demand for offices was between 100sqm and 500sqm, with over 75% of enquiries within this size range, as seen in fig. 2.

• Engineering & Construction continued to be the most active sector by the number of enquires, which reflects the recent growth in the number of infrastructure and real estate projects under progress. To date, take-up has been led by Engineering & Construction (21%) and General Trading (20%), as seen in fig. 3.

• Grade A and prime supply remains subdued, which will be important for landlords to maintain headline rents. There are limited new developments under construction and those could see some further delay in completion.

The overall change in market rent over H2 2015 was minimal.

• Prime office rent remained steady in H2 2015 at AED 1,850 per sqm, while rental values for Grade A shell and core office space remained steady at AED 1,250 per sqm, as seen in fig. 4.

Source: Knight Frank Research

Figure 1: Abu Dhabi office stock, 2008-2016

Market report

MaRKeT oVeRVieW 3,000

Forecast

AED per sqm

2,500 2,000 1,500 1,000 500 04

05

06

07

08

09

10

11

12

13

14

15

16

17

Figure 5: Indicative headline office rents, H2 2015 3,000

Indicative rents for shell & core offices

2,500

Indicative headline rents for Category A offices

2,000 1,500 1,000

ADGM Square

Corniche

Abu Dhabi South/Grand Mosque District

Al Bateen/ Khalidiya

Al Reem Island

500 Tourist Club Area

Abu Dhabi has recently published its long-awaited new property law aimed at better regulating the real estate market in Abu Dhabi, which will take effect from January 2016.

The new law, which has been through more than seven years of consultation, review and drafting, is a positive step towards attracting increased real estate investment in Abu Dhabi.

Part One of the law defines several important terms, including but not limited to the real estate register, the interim real estate register, the real estate development register, real estate development projects, escrow accounts, off-plan sales, service charges and community charges.

The law, in summary: • Authorises Abu Dhabi’s Department of Municipal Affairs (“the DMA”) to organise and develop the real estate sector in Abu Dhabi, to supervise and control all aspects related to the sector and to coordinate with

Figure 4: Average Grade A shell & core office rents

Muroor

Abu Dhabi Real Estate Law – Market Update

municipalities in this regard.

• Oversees the types of entities or persons that are allowed to obtain a licence to engage in development-related activities as master developers and subdevelopers, brokers and their employees, owners’ association managers, appraisers and surveyors.

• Ensures developers will not be allowed to engage in real estate development unless they have been registered in the real estate development register.

• Requires that all disposals of off-plan units be registered in the interim real estate register.

• Ensures a developer is not allowed to sell units off-plan unless, among other things, it proves that it owns a real estate right over the project land and that it has opened an escrow account for the project.

• Allows units sold off-plan to be mortgaged, provided the loan amount is paid into the relevant escrow account and the loan is allocated for payment of the purchase price.

• Includes provisions for setting up owners’ associations comprising all the owners of units in multi-unit real estate developments. Owners’ associations will be independent legal entities that hold title to the common parts of developments and will be responsible for the management of those common parts.

• Outlines punishments for anyone who violates its provisions. The law will not be well received by developers that fail to complete construction work. However it is a great achievement for Abu Dhabi, in creating a more favourable real estate investment market. This will also benefit occupiers in the long term, as more developers and landlords will provide competition.

AED per sqm

• With regional unrest and global economic headwinds, we are seeing reduced interest and takeup from international companies looking to locate in Abu Dhabi.

• Buildings which do not meet occupiers’ exact requirements in terms of specification, parking, access and egress will face continued voids, as occupiers that do relocate review the market more carefully.

• GDP growth in China fell to a 25-year low of 6.9% in 2015, which may affect global markets and oil demand, which will have an impact on Abu Dhabi in 2016.

• Weaker market sentiment will affect the government and the delivery of projects and employment, which will reduce occupier take-up.

Figure 6: Vacancy rate, Abu Dhabi 35%

Forecast

30% AED per sqm

Market Sentiment

25% 20% 15% 10% 5% 04

05

06

07

08

09

10

11

12

13

14

15

16

17

Figure 7: Key Market Indicators headline rent Prime rent

AED 1,850/m2 /annum

Grade A

AED 1,400/m 2 /annum

Grade B

AED 1,250/m 2 /annum

Availability

25%

Average inducement

12%

Trending

April 2016 15

Analysis

Looking for options Orçun Çetinkaya, partner at leading Turkish law firm Moroglu Arseven, looks at the options open to Turkish contractors when bidding for international projects The Turkish construction sector has experienced significant growth in recent years, achieving prominence in the international arena. The sector has developed into one of the best-regarded forces in the field. It has also become a crucial element of Turkey’s economy, despite the most valuable segment of the sector actually being international construction projects, rather than domestic operations.

Turkish construction contractors have proven to be skilful in creatively using alternative dispute resolution methods to avoid and resolve disputes, as well as mitigate future consequences. The real possibility of a contractor damaging its chances of receiving future work often casts a long shadow over dispute resolution in the construction sector. Accordingly, a pragmatic approach to disputes will continue to be necessary for Turkish construction contractors, which face regional unrest and an increasingly uncertain future 16 April 2016

in Russia, one of the local sector’s most important foreign markets.

The scale of the Turkish construction sector

The construction sector is an important element of the Turkish economy and a key part of Turkey’s wider role in the international business community.

In 2015, Turkish contractors undertook 7,735 projects in 104 countries, valued at a total of $304.5 billion. According to the Engineering News Record, Turkey was the second highest country of origin for contractors in the 2015 World’s Greatest 250 International Contractors, with 43 companies, second only to China. Construction work in

Turkey generates employment for 1.8 million people and comprises 5.9% of the country’s GDP. Taking into account the direct and indirect effects it has on other parts of the economy, the Turkish construction sector is estimated to contribute up to 30% of the Turkish economy and 10% of national employment.

Common sources of construction disputes

Successful completion of a project relies on the harmonious cooperation of the participants.

However, the nature of construction projects inherently creates a high risk of disputes arising. A single project will almost certainly involve several horizontal

and vertical layers of work, carried out by professionals from and often in different countries. At times, the commercial interests and incentives of the participants can diverge, and expertise and education levels can be dramatically different between the different layers. Projects can also be tied to each other, multiplying the number of parties involved and the associated potential for disputes.

Contractors generally submit their bids to, and ultimately work for, sovereign project sponsors.

Therefore, contractors are forced to make a judgement about possible future work prospects with those sponsors when deciding whether to pursue a dispute.

When wider commercial factors

Analysis

Pre-bid considerations for foreign projects

Contractors must undertake considerable due diligence before bidding on foreign construction projects. In this manner, they can avoid or at least reduce the negative consequences of a possible dispute or breach of etiquette. All efforts should be made to understand the country’s local dynamics and mechanisms, as well as other parties involved in the project.

This allows contractors to determine and consider the systemic, political and regulatory risks involved, ultimately making an informed decision about whether it is in the contractor’s best interests to operate in a particular country. The exercise allows contractors to fully understand a project and mitigate risk margins well in advance.

Specific factors to consider include: Local Fund Transfer Regulations:

Economic contributor The Turkish construction sector is estimated to contribute up to 30% of the national economy.

“The volatile nature of the region means Turkish contractors have developed the necessary skills to efficiently handle complex and multilayered disputes”

are considered, contractors can discover that simply holding a legal right or a strong case does not necessarily mean pursuing the dispute is in their long-term best interests. The risks of damaging the relationship with the sponsor may be exacerbated by the simple fact that the contractor’s next project bid will almost certainly involve the same project sponsor.

Given these factors, construction disputes are almost inevitable unless proper preventive mechanisms are included at an early stage in the contracts and subcontracts.

These mechanisms must also be understood by all parties and implemented in a timely and efficient manner as disputes evolve.

Restrictions can apply to transferring funds across national borders. Therefore, contractors should investigate and understand the project’s method of payment (cash or otherwise), and in which currency payments will be made.

Tax Arrangements: Taxation can directly affect total project income. Corporate tax rates, stamp duties and withholding taxes for the relevant country should be considered, along with any reciprocal taxation treaties between the countries.

Employment Restraints: The status of foreign employees can be complex and should be carefully considered when the contractor is determining whether the contractor’s own (foreign) personnel will be involved in the project. Some countries apply thresholds for the number or qualifications of foreign workers permitted to work on state-funded projects.

Differences between Legal Systems:

Contractors should consider the different approaches of their home legal system and that of the target country. While complex, largescale international projects use internationally accepted standards, local variations or interpretations can be costly for contractors.

Dispute resolution methods in the construction sector

The complex nature of largescale international construction projects means that construction contracts have developed different features from normal commercial contracts, as well as dispute resolution methods tailored to suit the sector’s unique characteristics.

International contractors, including Turkish contractors, widely accept arbitration as an important dispute resolution method. However, Turkish contractors tend to view arbitration as a method of last resort, particularly when involved in construction projects for sovereign project sponsors.

The risk of potentially losing future business from a sovereign tends to prevent Turkish contractors from arbitrating disputes, even if they have a case. Contractors tend to attempt other alternative dispute resolution approaches, such as negotiation and mediation.

Generally, contractors attempt negotiation first, since it can resolve disputes quickly and involves the least procedural formality. If negotiations fail, mediation can pose a more attractive alternative than arbitration due to its easier formation, comparatively reduced effort required and faster resolution process. These factors can be persuasive, since an arbitrated outcome can take years.

The success of negotiation and mediation can depend on the accuracy and completeness of project records. Each stage of April 2016 17

Analysis

the project should be properly documented, and if problems arise, these should be raised in a timely manner to avoid a domino effect or irreversible problems.

Turkish contractors have shown a preference for using standing dispute boards, particularly for projects involving a sovereign. This runs against a common perception in Turkey that dispute adjudication boards or dispute resolution boards are redundant due to their nonbinding resolutions.

However, the findings of such boards can support a contractor’s position during later negotiations and meditations. Involving a neutral third party such as a mediator or dispute resolution board can help to eliminate differences more objectively and save face, as well as avoid other negative implications of the dispute for the parties.

The experience, expertise, neutrality and professionalism of appointed experts is significant, regardless of whether the parties choose a dispute resolution board, mediation, arbitration or another method. Turkish contractors have shown a clear preference for using internationally renowned individual experts and firms to add objective credibility to their position, claims and perceptions.

Regional developments

Historically, Russia has been an important market for Turkish contractors. Some local names have directly built their global recognition and reputation on the back of major projects completed in Russia. Turkish contractors have benefited from experience obtained in Russia, spreading operations throughout neighbouring countries. Turkish construction companies are involved in more projects in the EMEA region than any other national group.

18 April 2016

“It is critical that the Turkish construction sector be supported by an insurance institution in the near future to cover regional risks�

However, recent Russian sanctions on Turkey threaten prospects for Turkish construction companies in Russia. Russia has announced that projects already granted to Turkish construction companies will not be affected by the sanctions. However, this is a temporary respite and means that no cases or arbitrations will arise from those contracts due to the recent sanctions. Future relations between Russia and Turkey will determine how Turkish contractors position themselves for business ventures.

The tension between Russia and Turkey will harm Turkish construction business on a global scale, beyond projects simply located in Russia. Turkish construction businesses tend to bear the financial risks of difficulties themselves, without a third-party insurance safeguard.

It is common for construction contractors around the world to engage insurance companies to secure against regional risks and possible problems. For example, French contractors have Coface,

and Germans have Hermes.

In Turkey, Eximbank was established to support Turkish firms on the global scene.

However, it is essentially simply a commercial bank at the moment, involved in pre-financing for Turkish contractors. It is critical that the Turkish construction sector be supported by an insurance institution in the near future to cover regional risks.

The recent political turmoil in Syria and Iraq, and heightening tensions in the Middle East generally, continue to cause increased difficulties for Turkish contractors. At the least, the future does not look promising for any construction company in the region.

However, for the disputes already arisen, the fact that the region is full of claims experts, mediators and arbitrators who are well aware of the circumstances and projects, and familiar with the parties, is a relief in that they can help parties reach a quick and effective resolution considering all of the surrounding circumstances.

Conclusion

A special set of skills Due to the volatile nature of the region, Turkish contractors have developed the necessary skills to effectively handle complex and multi-layered disputes.

The volatile nature of the region means Turkish contractors have developed the necessary skills to efficiently handle complex and multi-layered disputes. Turkish construction contractors have proved proficient at creatively using a range of alternative dispute resolution methods to avoid and resolve disputes, as well as mitigate negative consequences and protect commercial interests.

While use of such methods has not developed in other Turkish industries to the same extent, Turkish construction companies exemplify that alternative dispute resolution methods can be quite efficient if industries use them in a way suitable to their businesses, regions, future interests and counterparts.

t a h t e r u s a e r t a is g in Learn e r e h w y r e v e r e n w o s will follow it CCS Candy is the world’s leading construction estimating and project control system and we never stop improving. Our products are continually developed and enhanced in line with industry trends, user requirements and the latest technology. Register now and create your own opportunities and maximise your capabilities using the best construction software tool there is.

In reponse to our client’s demands, we are proud to announce the expansion of the CCS Gulf office to include a much larger training centre in Dubai. We train you for success and nothing less.

Win!

6 x 2-day Can d courses to be y won!

To ente r, an swer th e fo

Dubai - CanDy CourSe CalenDar 2016 Course

Cost

Feb

Mar

apr

May

C201 Construction Estimating & Valuations

US$550

22-23

14-15

18-19

17-18

C202 Construction Planning & Programming

US$550

24-25

C301 Integration of Estimating & Planning

US$275

C305 QTO Workshop

US$250

C205 MEP Estimating

US$550

20 16 16-17

llowi ng qu estio

In which city in the G ulf is CC S’s new trai ni ng centre?

Se nd yo ur an swer with yo ur na m e an d co nt act deta ils to : info @ cc sg ul f.c om

n:

In profile

Big Project ME sits down for a chat with Omar Itani, managing director of Zetas Zemin Teknolojisi, to find out why business is booming for the Turkish groundworks contractor

20 April 2016

In profile

“Long-term projects are actuaLLy a big gain for us, in terms of raising the bar and meeting higher standards. it took us a coupLe of years of preparation to meet those standards, and we’ve done it”

April 2016 21

In profile

L

ast year, Saudi Arabia-based Cayan Group announced that it had awarded Zetas Zemin Teknolojisi the enabling package for its landmark project, Cayan Cantara, in Dubai. The high-end luxury residential development marks an important step in the Turkish contractor’s burgeoning expansion plans in the GCC as it looks to become a major player in the region.

Set up in 1988 as a small geotechnical consulting firm in Istanbul, Zetas has seen a rapid amount of growth and change over the last three decades, moving from being an independent firm into a group that provides clients with a fully integrated chain of services under the umbrella of foundation engineering practices. These services include soil investigations, design, consultancy, implementation, monitoring and a recently added division that specialises in the manufacture of special tools and machinery.

Today, the Zetas group of companies has grown into an internationally recognised foundation engineering and contracting company with established group offices across the Middle East and Africa, in countries as varied as the UAE, Kazakhstan, Azerbaijan, Qatar, Lebanon, Saudi Arabia and Tanzania.

Given the rapid pace of development for the group, Big Project ME caught up with Omar Itani, managing director for the 22 April 2016

UAE, Qatar, Oman and Lebanon operations of Zetas Zemin Teknolojisi, to find out what makes this Turkish firm tick.

“The UAE office opened in 2003, it then became the hub for Middle East and GCC area operations. We’ve been in the UAE during the golden times of construction, and we’ve been through the slow times. Now, things are looking very busy in a market full of momentum and energy,” he asserts during an interview at Zetas’ offices in TECOM. “Since establishing the Dubai office, Zetas has successfully completed more than 200 projects in the UAE, mostly medium to large-scale in size. Some projects were very challenging, technically speaking, while others were and are of a very dynamic nature, given that our work often deals with unforeseen underground conditions encountered high-profile win Last year, it was announced that Zetas had won the enabling package for Cayan Cantara.

“From that perspective, we’re very optimistic [about this].

We’re planning on investing a little bit more into our water resources project division, because we’re unique in this field and we have the know-how and the quality”

during construction.”

Since setting up shop in Dubai, the company has branched out into neighbouring GCC countries, while also using the emirate as base for its expansion into Eastern Europe. However, Itani’s primary focus remains on the management of the Qatari, Lebanese and UAE markets, with Oman likely to be a point of major interest in the near future.

“We are mainly focused on underground works with design build type. We’ve got experience in environmental geotechnics, enabling works [deep foundation and shoring systems], cut-off walls, retaining systems and all types of soil improvement projects.

“We’ve recently added two main services to our company.

The first is related to the installation of vertical conductor pipes for the oil & gas industry, and we currently have a couple of projects in Abu Dhabi.”

In profile

raising standards Omar Itani says that winning big or long-term projects allows Zetas to improve its own standards and quality.

The other new service offered

by Zetas is one that Itani has high hopes for, given its initial success for the company.

“We have also introduced a water resources services which involves underground water storage, hydrogeological studies and exploration wells with the capability to drill up to 800m in depth, well construction and development, pumping tests up to 100 litres per second, infiltration tests, geophysical surveys, hydrogeological modelling and reporting. In addition, Zetas has recently completed an internationally recognised project in Liwa, Abu Dhabi, and are about to complete a project in Tanzania, as well as a strategic project in Dubai.

“From that perspective, we’re very optimistic. We’re planning on investing a little bit more into our water resources project

division, because we’re unique in this field and we have the know-how and the quality. We’ve successfully completed extremely big projects. They may be only a few projects, but they’re big.

“With big projects, you achieve great knowledge, and with water resource type projects, we’re looking forward to securing opportunities on a government and cities level,” Itani asserts.

This willingness to explore new opportunities and push boundaries was part of Itani’s mandate when he joined the company in 2008. Having come in when there was plenty of positive sentiment around the market, he was soon confronted with some very challenging situations as the industry floundered in the wake of the crash. Despite these difficulties, Itani remained positive and decided to set in motion plans that would benefit

“Our target annual turnover based on previous years is in the region of $150 million, and I would say that as of now we’re on the right track, and we’re approaching that figure pretty fast again”

the contractor in the long run.

“You know, as with any other company in Dubai, because of the large amounts of projects that everyone was receiving in the early 2000s, everyone was focusing on projects and getting things done quickly.

However, there was a lot of room for improvement throughout the industry.

“We have utilised, very effectively, the downtime in the market to improve the entirety of our system. Of course we had a very high standard of quality and health and safety and planning, but we decided to utilise this time to further improve what we had. For example, we focused on improving our safety quality services and also got ISOcertified,” Itani points out.

“In addition, resource management was improved by upgrading our planning and April 2016 23

In profile

scheduling. Most importantly, however, our health and safety standards received substantial improvement, especially after getting involved in projects related to the oil & gas industry.

We moved from good to great while realising that there’s always room for improvement.

“When I joined the company, Zetas was already well established in the UAE and had marked its name on big projects.

We were able to secure some big projects during the downturn and that kept us running. In addition, we had good relationships with consultants and clients of smaller projects, so we moved a little into smaller projects during those times. By 2014, it picked up again, and substantially so in 2015. Now, it’s obvious that the market is witnessing a big boost in construction at full thrust.”

While that may be something of a surprising statement, given the fairly gloomy outlook, Itani insists that the figures back him up and calls for more positivity in the market.

“Our target annual turnover based on previous years is in the region of $150 million, and I would say that as of now we’re on the right track, and we’re approaching that figure pretty fast again. We feel that the market has improved a lot, and yes, we do hear different things from here and there, with lots of speculation.

However, we believe in what we see, and so far the market has revealed nothing but very good signs of healthy growth.”

Zetas’ order book certain bears this out, with Itani revealing that in Dubai alone, the contractor has 14 projects ongoing or just starting. These include a project currently underway in the TECOM area, along with a couple of projects in Dubailand, one in Mankhool 24 April 2016

optimistic vision Omar Itani says he’s very optimistic about the health of the Dubai construction market in 2016, with hospitality likely to be a major performer.

and three projects in Dubai Marina. Also included in their order book is the strategic water resources project for DEWA. In addition to this impressive list, there are ongoing longer term projects like the oil & gas ones with the government of Abu Dhabi.

“These are long-term projects spanning several years. They are on an on-call basis, so whenever there’s work to be done, we go there. Long-term projects, specifically the oil & gas ones, are actually a big gain for us, in terms of raising the bar and meeting higher standards. It took us a couple of years of preparation to meet those standards, and we’ve done it,” he states proudly.

“In addition to the O&G

“With big projects, you achieve great knowledge, and with water resource type projects, we’re looking forward to securing opportunities on a government and cities level”

projects, we have a couple of nice projects in Abu Dhabi. One of them is very challenging in both its technical specifications and standards, while the other is for a private client on Al Reem Island.

We also have one project on Dubaitech Al Qudra, in addition to one project in Jumeirah Village Circle and one in Jumeirah Village Triangle. Finally, we also have one project in Business Bay.” In fact, Itani predicts that the hospitality and commercial buildings sectors will gain the most ground in terms of construction, while residential construction will continue to maintain a steady volume.

“We have seven very highprofile potential projects in the pipeline, five of which fall into the hospitality category. Also, we’ve always considered the Omani market [to be of particular interest], but the country requires a different strategy given the nature and type of their projects.”

As such, the focus for now remains on the UAE and Dubai in particular, and maintaining the momentum the company has started to pick up. While he does expect there to be some slowdown in certain sectors, Itani remains confident that Zetas will continue to come up with redefined strategies and ideas to cope.

“We’re very optimistic, given that the UAE, and Dubai in particular, is defining a strategy to attract more tourists and companies. I believe that the strategy is clear and well defined and that the future planned projects are big and beautiful.

People love to come and explore the UAE, and shift their plans to come and live here and see things in Dubai. That is extremely good for our business as well.

It keeps us running, and from that perspective, we’re very optimistic,” he concludes.

Site visit

At the Cent Big Project ME heads over to Abu Dhabi’s Al Maryah Island to meet Matthew Hewitt and Peter Anderson, the two men tasked with bringing Gulf Related’s Al Maryah Central project to fruition. Gavin Davids reports

26 April 2016

Site visit

re of it All April 2016 27

Site visit

A

pproaching the Al Maryah Central construction site, the first impression is of its massive size. With hoardings stretching out 600 metres along the main thoroughfare, around all four sides of the site, the scale of the project becomes very apparent, very quickly. Even more so if you’re a confused construction journalist with an unreliable sense of direction, looking for to the project office.

To get there, one must descend through the service roads that run under the main highways that encircle Al Maryah Island, bringing visitors down to sea level, which is where the true mastery of the island’s engineering is revealed.

Driving past the forest of columns holding up the elevated roadways above, it quickly becomes apparent that any sort of construction work in the area requires careful planning, execution and delivery due to the space constraints around the site. It’s easy to see why the idea of building Abu Dhabi’s premier retail destination in such a confined space would be daunting to even the most skilled contractors.

Perhaps this is why Gulf Related, the developer behind the Al Maryah Central project, decided to award the construction contract to Brookfield Multiplex, known for its vast expertise in building challenging projects to tight deadlines and specifications.

In August 2015, it was announced that the international contracting firm had been awarded a $425 million contract to be 28 April 2016

the main contractor responsible for the completion of the $1 billion shopping mall. With the development having broken ground in November 2014, excavation of the site and foundation construction work had been completed before the contractor began operations on-site.

With the mall scheduled to open in March 2018, the pressure is now on Brookfield Multiplex to meet that delivery date. With seven months now passed, Big Project ME decided to head down to Al Maryah Island to find out how work is progressing on the massive project.

“The project itself is close to 288,000sqm of retail-led space.

There are two anchor tenants – Macy’s and Bloomingdale’s.

We call them the bookends,” says Matthew Hewitt, project director for Brookfield Multiplex on Al Maryah Central. “There are another 400 individual shops, food courts, eateries and retail within the main mall.” island landmark Al Maryah Central will be the centrepiece of the island, with more than 400 retail, hospitality and entertainment units within the project.

PRojeCt DetAIls Developer: Gulf Related Main Contractor: Brookfield Multiplex Main Consultant: AECOM Design Architect: Elkus Manfredi structural engineer: Thornton Tomasetti MeP engineer: WSP | Parsons Brinckerhoff Cost Consultant: Faithful + Gould MeP subcontractor: JLW Middle East tower Cranes: Brookfield Multiplex Plant & Equipment earthworks: Emirates Landscape structural steel: Eversendai Engineering Commissioning Manager: AESG Green Building Consultant

Al Maryah Central will include a 213,677sqm super regional shopping mall, which will be home to the first international Macy’s department store, Abu Dhabi’s first Bloomingdale’s and a multitude of high street and popular retail, hospitality and entertainment options. The project will also offer two 37,161sqm integrated towers that will comprise of hotel serviced and residential apartments and luxury residences. These are expected to be completed by 2019.

Furthermore, the mall will link up with the already existing The Galleria development, which is adjacent to the construction site.

Interestingly, these were not the only challenges the team had to face, Hewitt says. The construction team had, and have to, work around a host of constraints.

“There are four stories of basement, and the unusual aspect of Al Maryah Island is what they consider ground floor is actually +14 (which refers to 14 metres above sea level – the level of the elevated roadways around the project). This is entrance level to the mall, also referred to as ground floor or podium level.

So the elevated roadway, that’s actually the ground floor, and the basements start thereafter.

“We’ve got three floors of basement that are actually above ground, but they’re below the roadway. Then we’ve got one sub-basement level, B4, which is actually below ground. That actually touches the water table, because we’re that close to the sea, so obviously that presents some significant challenges with the water table, waterproofing and so on.”

Peter Anderson, executive vice president of Real Estate Development for Gulf Related, adds that this is a prerequisite for the island, with no car parking garages allowed above the +14 level.

“A shopping mall of our size

Site visit

Smart thinking Brookfield Multiplex uses biometrics scanners to keep track of the thousands of workers on-site.

must have a minimum number of car spaces available or more, which means that on the footprint that we have, we had to keep going down until we could accommodate that. It pushed us down to the four levels that we have at the moment,” he says.

Given the nature of the island, working below ground level meant that the team faced challenges due to the proximity of the sea. However, what helped enormously was the advance planning Gulf Related had done with regards to the ground work and foundation. With the developer having already started foundation works ahead of appointing the main contractor, using their in-house team, Brookfield Multiplex’s task was made much easier, as Hewitt explains.

“When we arrived on-site after being given notice to proceed, all the piling, the second piling and the main foundation piling had already been done. Our first tasks were to do the detailed digging around the piling, the crimping and cutting away of the pile-heads,

“What we’ve been able to achieve out here, both from a management perspective and just as a general processing facility, is that we’re getting very beneficial reports on employee engagement.

There’s just a general level of appreciation and happiness”

start the sacrificial blockwork and actually start the pile cap process.

Because a lot of work had already started, that gave us a flying start into actual construction activities,” he says, estimating that the team’s mobilisation period was reduced by at least 50%, if not more. “We were actually pouring concrete within six weeks of being on-site.”

“Our approach to the project has always been to have an aggressive schedule for delivery of the project. To accommodate that, Gulf Related let two early work packages out, separate to the main contract. We managed that ourselves,” Anderson chimes in.

“The two early works packages were an excavation package and a piling and shoring package. We ran and managed those ourselves with a different contractor.”

He adds that this approach had two benefits – firstly, it allowed them to finish negotiations with the tenders they’d called for the project’s main contractor works, and it also allowed Brookfield Multiplex to hit the ground running when the time

came to start construction.

“The biggest aspect, from our side, was that when we were notified that we were the preferred contractor, we immediately commenced working on the project. Even before the execution of the main contract, my immediate team and I were working on the project for about two months before that. It allowed us to get an understanding of the job and to get integrated with the client team.

Particularly, it also allowed us to get integrated with all the major third parties, which is a major part of the project,” says Hewitt.

“On this island, there’s the master developer Mubadala.

Anything we do is as the next level developer. While we’re actually developing the site, Mubadala hold the masterplan for the entire island.

So we have an authority approval process with them for everything that we do,” Anderson adds.

“On top of that, we have the Urban Planning Council [UPC], which keeps the vision for 2030.

We then have the Abu Dhabi Municipality, which looks after all the rules and regulations associated with buildings and makes sure that you build them to the codes and standards.

“And in conjunction with that, you have all the utility authorities, where you generally need NOCs to progress with any form of construction, either on the site or where we touch on the public realm around the site.”

Anderson adds that on top of all of these considerations, the project is also right in the middle of an investment zone, and as such they are answerable to yet another authority in the shape of the Abu Dhabi Global Markets.

“This is less to do with the construction, but more to do with the development side of the project, but that’s another authority level that we have to go through as well. It’s fair to say that the critical April 2016 29

Site visit

path for construction definitely runs through the authority approvals that we have to get.”

Hewitt points out that because the island is already quite well established, with a lot of development already underway or scheduled to start soon, the construction team has to be mindful of what’s going on around them.

“A lot of these infrastructure and major assets are going through an adoption process as well, where they’re changing hands from the master developer back to Abu Dhabi Municipality, the Department of Transport or to the localised utilities – Etisalat, Tabreed and all those. Because of that transition process, we could be dealing with one entity [at the time], or within a couple of weeks we could be dealing with another entity entirely [for the same thing].

“There’s no point in pursuing

flexible technology The team uses different types of formwork onsite for flexibility in construction work.

30 April 2016

something that’s in the midst of being handed over, if it isn’t super-critical. Especially when we can actually physically wait for it, or be led by our client, who have agreed, in certain areas, that the adoption process can wait,” he reiterates, highlighting just how much the project affects the rest of the island.

This translates into certain aspects of the project being pushed back and put on hold, while others have been allowed to go through at an accelerated rate. Gulf Related has also looked to adopt part of the island’s light rail system for the project’s benefit, Hewitt reveals.

“That’s just for the period of the project. It gets handed to us and we can facilitate additional works, logistics and management within our own domain. That’s really been the key – the collaborative work between us and the client.”

That collaboration certainly

BuIlDInG tHRouGH tHe BuIlDInG The design of the mall, with very big open high-level spaces that have floor heights changing from single to double, poses a challenge to the team. In addition, there are loading docks, main atriums and structural steel elements to consider as well, adding further considerations.

“To achieve that, you need different types of formwork.

You can’t just rely on one.

We’re using a type of formwork that’s very malleable, which is the tablet system. We’re also using the more traditional ones to achieve the high-level and heavier construction work,” says Matthew Hewitt.

Interestingly, however, the biggest innovation onsite comes through the use of the six tower cranes in operation, he reveals.

“They’re our lifeline, absolutely. We looked at having more, but the potential for clash and downtime [ruled that out]. It would have been nice to have that redundancy, but it just didn’t make economic sense from a time perspective.

Six cranes can work here, 100% of the time, all the time. “[However], we’ve got to achieve two completion dates on the project. We’ve got to achieve a completion date (which we’ll call BCC 1) for the two anchor tenants. We’ve got a 13-month fit-out period for them, and then we’ve got BCC 2, which is a seven-month fit-out for the rest of the mall.”

In order to achieve either of these dates, the basement of the mall has to be completed, with all the essential life safety and plant equipment in place. Complicating things, however, is the presence of the six tower cranes which go straight through.

“Our intention is that all six of the cranes will climb up through the lower levels, climbing through the mall frame,” explains Hewitt. “That way, we can progressively pull them out of the basements and infill them as we go up, and then take the cranes out as they’re not needed.”

Figuring out how this can be achieved is down to the team at Brookfield Multiplex’s in-house Plant and Equipment division, says Hewitt, who readily admits that it is vital to the successful completion of the project.

“Without the in-house facility, I don’t think that we would have achieved anything near [what we have now].

We couldn’t have been as aggressive, because when you rely on a third party, you can’t guarantee that level of service.”

A comprehensive safety system has also been put in place, the project director adds.

“All our equipment, particularly our tower cranes, are installed by our in-house division. Then we go through a rigorous third-party check.

And that’s not just on the installation, they also go through a comprehensive check that the crane is working properly, and that all of the engineering behind it [is sound]. The base, the piles and the connections are all third-party checked by an independent engineer, who is not part of the project.

“Once we get that tick in the box, that would mean that we’ve had three engineers to run through it. As an additional rigour, we then send it through to Thornton Tomasetti, who will also have to give it clearance. From that point, we all know that the cranes are solid,” he concludes.

Site visit

shows on-site, given that the team is only seven months into the contract but is already pouring, on average, 4,500 to 5,000 cubic metres of concrete weekly. Working together, staff from Gulf Related and Brookfield Multiplex were able to track the approvals process and understand how it could be overlaid and integrated into the aggressive construction programme.

Furthermore, Hewitt says, this also allowed them to cope with one of the most challenging aspects of the job: the location of the site and the congested areas around it.

“The site set-up was absolutely key. [We had to consider] how were we going to deliver materials and how we were going to move men and materials. Because the site is such a large-scale project, and because of the number of sub-trades we’ll have on-site, procurement was probably next on

our critical path, as was our ability to buy those trades in time to meet the aggressive programme.”

As part of Brookfield Multiplex’s contract obligations, the team has had to bring in a number of domestic trades, while there is also a large proportion of provisional sum trades that they have to buy collaboratively with Gulf Related.

“We need to achieve not only budget, but aesthetic and design intent, because they are often the packages that achieve the finishes.

But you know, eight months in, we’re 96% through procurement, so from that perspective, I’m very happy. And from a production perspective, we’re definitely within target of where we need to be on the entire project,” Hewitt asserts.

Another way the team has managed to work around the logistical issues it faces on-site is through the development

“Because the site is such a largescale project, and because of the number of sub-trades we’ll have on-site, procurement was probably next on our critical path, as was our ability to buy those trades in time”

of what Hewitt calls a “bestin-class welfare, logistics and off-site management facility”.

This 52,250sqm plot of land deals with three key issues for Brookfield Multiplex – processing labour to get them on- and offsite, keeping an accurate record of everyone who goes on and off-site through a state-of-the-art biometrics palm scanner system, and finally the management of material required on-site.

“We realised very early on that we would need extra storage area outside the site boundary.

There was an amount allowed for in the contract. Through careful petitioning and demonstrating the benefits of it, Gulf Related were able to assist us in getting more laydown area than we first anticipated,” he says.

“A lot of our material will come in as an on-site delivery service.

The more storage and processing

April 2016 31

Site visit

area that we have outside, the more we can assure ourselves of two key things: one, that we’re keeping programme and delivery dates, and secondly, that we’re lessening the impact on the island as we’re not blocking up roads.”

From a health and safety perspective, and from an emergency evacuation perspective (in keeping with Urban Planning Council guidelines), the biometrics palm scanner system allows the team to keep track of the 3,500 men moving in and out of the site on a daily basis. At peak construction, that number is expected to be closer to 6,000.

The effort to develop the massive laydown area is part of a company-wide initiative that puts worker welfare and worker rights in the spotlight for 2016.

So seriously is this being taken that the contract for the project explicitly lays down the set criteria that have to be achieved.

“What we’ve been able to achieve out here, both from a management perspective and just as a general processing facility, is that we’re getting very beneficial reports on employee engagement. There’s just a general level of appreciation and happiness,” Hewitt states proudly. “Apart from validating what we’re trying to do, it does

fast pouring schedule Within six weeks of being appointed as the main contractor on the project, Brookfield Multiplex was pouring concrete.

32 April 2016

make you feel good that you’ve actually achieved what you’ve set out to do, right from the outset.”

Impressively, the team has recorded more than two million man hours without any significant HSE incidents, testament to the way things are being run on-site.

“No one has to step outside what we call the ‘back of house’ and affect footpaths or even the underground levels that are used to access the site. That’s public highway, so we don’t walk across there. In fact, we don’t need to walk across there,” the project director says.

“From our facility – where we can sit 3,000 men at any given time – we can funnel workers through the biometrics palm readers, up a flight of stairs, across an underslung bridge that sits under the main highway and straight onto the site. There’s obviously an expense that comes with that, but we think the benefits far exceed the initial set-up costs.”

Anderson fully endorses this methodical and considerate approach, telling Big Project ME that Gulf Related is very conscious of the difficult conditions the team is working in.

“We’re very committed to what Brookfield Multiplex is doing, and we’re trying to raise the bar on that sort of thing. We

ConCRete BooM The other big challenge facing the construction team is the pouring of concrete on-site, which is more than half a kilometre in length.

“It’s huge. From a concrete perspective, it’s not so much the volume of concrete, it’s the amount of area that we have to cover,” says Hewitt.

“We’ve got upwards of 12 placement booms that cover approximately 95% of the entire job. That will allow us to climb with the job, and will also give us 12 areas where we can offload concrete.”

This has the added advantage of not restricting the team to just one or two entrances to the site, but in fact giving them 12 access points, thereby limiting the disruption to traffic flow on the surrounding roads.

“We’ve got better coverage.

That means we can put more trucks on the road, while having less of an impact and being able to pour more concrete. We can dispatch, on any given evening when we’re pouring concrete, anywhere between 100 to 200 wagons an evening. Logistically, that’s a lot to deal with!”

have our own health and safety officers, two actually, who are full-time employed by us. We also have a number of incentives that we run independently of what Brookfield are doing to motivate and reward people on-site.”

This rigorous approach to health and safety paid off in spectacular fashion in March, when a massive thunderstorm hit Abu Dhabi and Dubai. With severe flooding and high wind-speeds causing chaos around the cities,

Site visit

team leader Matthew Hewitt (L) walks the site every morning to find out what issues are being faced.

workers on the Al Maryah Central site were kept safe and secure due to the planning put in place by Hewitt, Anderson and their teams.

“We had no reportable injuries with 3,500 men onsite, so I was very happy with that. We were actually pretty empty before we even got the Abu Dhabi Municipality bulletin that all sites had to be closed,” recollects Hewitt.

“Once the storm was over, we went through on-site engineering and safety tests all of the next afternoon. We were given a clean bill of health to reopen on the following day, and were back pouring concrete by the next evening.

“The formwork systems that we’re using actually stood up to the storm really well. We did have water ingress, but because we’ve finished most of the basement level, 3,000 men were able to weather the storm in the basement before we had to pull them out. That was probably the biggest saving grace that we had – the aggressive nature

of the programme allowed us to have a basement where the guys could go. And then we had the facilities where we were able to transport them off the island within two hours.”

While Brookfield Multiplex is undisputedly in charge of operations on-site, there is a clear sense of collaboration and cooperation between all the partners on the project.

Rather unusually for a GCC project, this process is led by the developer, which has taken the initiative to make sure its consultant team and main contractor are communicating clearly with each other.

“We’re working with AECOM, who are a locally based firm. We’re working with Elkus Manfredi, who are our design architect, while our structural and MEP engineers are Thorton Tomasetti and WSP | Parsons Brinckerhoff respectively. Faithful + Gould is our cost consultant, and obviously Brookfield Multiplex is our main contractor,” recounts Anderson.

“They’re all international,

well respected consultants.

We’ve worked very hard and long to pull together a consultant team and a contractor who could deliver this project to the quality aspirations, and to the schedule that we’ve set down.”

Hewitt is quick to give credit to Gulf Related for the atmosphere of cooperation surrounding the project, pointing out that the developer has allowed Brookfield Multiplex to closely assist its design team in certain instances.

In return, the developer has been integrated into the contractor’s supply chain so that it can be involved in the selection process and be comfortable with who is chosen to come on-site.

“I walk the site every morning at 6am with the vice president of construction for Gulf Related,” says Hewitt. “That way, I know what’s on his radar for the day and he knows the issues that I’ve got for the day. Then we collectively work to get over them.”

“You hear it all the time: collaboration, collective motivation and all those catchphrases. But

this project is truly – from our perspective – a partnership. We’ve got an aggressive programme, and both sides of the fence recognise that. Anything that we can do to get over that, we try and do.”

“A successful construction team is not all about how you build a project,” says Anderson. “It’s about how you react to issues onsite, and at a major construction project, it’s all about the way you react. And the way you react will determine how quickly and how well you go forward.”

“We have a number of forums between ourselves and the main contractor. At a senior level, at the next level down and the next level below that. We continuously talk about issues on a daily, weekly and monthly basis. There’s a forum of the four senior guys from Gulf Related and the four senior guys from Brookfield Multiplex.

This goes all the way up to the managing director for the region.

We meet on a monthly basis, we talk about high-level issues and try to address them proactively.”

That cascades down through to the site team, Hewitt says, explaining that progress meetings between all stakeholders are held once a week, in addition to a collective programme meeting and two main design coordinating meetings a week.

“And there’s breakouts from that! There would probably be 14 different coordination disciplines that are carried out during the week. So all of these are either facilitated in the Brookfield Multiplex site office, or 25 feet away at the Gulf Related office. It’s all part of the original thought process.”

“There’s a method to the madness!” both say, almost in unison, summing up just how intertwined these companies are when it comes to delivering this fascinating and complicated mega project to Abu Dhabi.

April 2016 33

Industry Outlook

36 April 2016

Industry Outlook

take the ride Big Project ME looks at the scope and potential of the UAE’s leisure and entertainment sector

April 2016 37

Industry Outlook

O

ver the last decade, the UAE has developed itself into a global hub for tourism, with visitors attracted to the Emirates’ retail offerings, high-class hotels, year-round sunshine and good weather.

The country offers tourists a wealth of experiences, from exotic desert getaways to cultural highlights such as the Sheikh Zayed Grand Mosque in Abu Dhabi. Sandwiched in between are high-end luxury offerings such as the Burj Al Arab and Burj Khalifa, which offer visitors a taste of the finer things in life.

However, like any tourismbased economy, there is a danger of becoming stagnant, leading crowds to dwindle as they look to alternative destinations that offer greater thrills and excitement.

As such, it becomes necessary to regenerate and evolve to continue being relevant in a rapidly changing marketplace.

destination management The UAE needs to create a holistic approach to its destination management as it looks to overtake the likes of Orlando.

According to a 2015 PwC report entitled UAE’s Transformation into a World-Class Leisure and Entertainment Destination, the country needs to “once again step up if it is to go on to new heights to become a worldclass leisure and entertainment destination that can rival Orlando, the current market leader”.

Therefore, it’s interesting to note that the UAE government has set the stage for large-scale public and private investment in tourism enablers (airports, hotels, transport infrastructure, new attractions and theme parks). This is expected to provide a strong base for an expected doubling of here to stay A theme park destination encourages visitors to stay and explore over a period of time.

38 April 2016

tourist arrivals over the next five to six years to more than 30 million visitors, the PwC report says.

However, to ensure the longterm success of these projects, there needs to be a holistic approach to the UAE’s destination management, with a country-wide vision in place that encourages cooperation and partnership between all stakeholders.

Orlando, Florida is perhaps a good example for the UAE to follow, the report suggests. Known as the ‘Theme Park Capital of the World’, the city is home to Walt Disney World Resort, the Universal Orlando Resort and SeaWorld, among many others. It is estimated that the city’s tourist attractions drew more than 62 million visitors in 2014.

Given that a successful leisure and entertainment destination should have multiple offerings that appeal to a wide range of visitors, all within close proximity, the UAE seems to be well on the way.

It already has the beaches, the shopping malls and the cultural activities. The next step is the development of good transport links that allow visitors to move freely and quickly between attractions.

The infrastructure needed to support this has already begun taking shape, with the Dubai Metro network already connecting the bulk of the emirate to its key offerings. Meanwhile, plans to link

Abu Dhabi and Dubai through a rail link are also well underway, with the rest of the country set to follow.

Furthermore, the UAE’s wellestablished road networks allow visitors to move quickly between emirates, allowing them to sample the various offerings from the different cities within a few days.

The next step is to develop the theme park destinations that will bring visitors from all around the world to the UAE. And here again, significant steps have already been made, with the Dubai Parks and Resorts project one notable example, says Philip Taylor, managing director of leisure consultancy practice Team-Leisure.

“The worldwide theme park design industry, with the UAE leading the way in the Middle East, has never been in better health,” he says. “The major role that theme parks can play as a destination driver are being increasingly recognised. This is especially true for branded attractions.”

Spread over 232,257sqm, the Dubai Parks and Resort project is set to open in October 2016 and will house three theme parks, one water park and a hotel and retail dining district. Among its attractions will be Legoland, a theme park made up of 60 million Lego bricks and 40 interactive rides in six themed areas; Motiongate, a theme park based on Hollywood films which

Industry Outlook

will feature 27 rides and attractions; and Bollywood Parks Dubai.

The idea behind this massive $2.6 billion development is simple, says Klauss Assmann, vice president of Retail and Hospitality at Dubai Parks and Resorts. There simply wasn’t a similar offering in the market, and the developer spotted an opportunity.

“It’s the first time we’re introducing a theme park destination and not just a theme park into this region,” Assmann says in an interview released by Arabian Hotels Investment Conference.

“We believe that if you look at the flight patterns of two, four and six hours away from Dubai, there are millions of people we can tap into.”

“We refer to a theme park as something that you can finish off within a day or half a day. A theme park destination, on the other hand, gives you an abundance of rides and attractions, and it can take you up to three or four days to finish.”

While Dubai Parks and Resorts may have been among the first to recognise the opportunity in the market, they certainly aren’t the only ones now. Last November, the Al Ahli Holding Group announced that it had agreed a deal to build a Fox-branded theme park and resort in Dubai, to open by 2018.

The UAE conglomerate says it has signed an international licensing partnership with

Twentieth Century Fox Consumer Products, a division of Twenty-First Century Fox, to build a 371,612sqm theme park that will feature rides, attractions and retail outlets based on Fox productions such as Rio, Alien vs. Predator and The Simpsons. Design and production services on the theme park are being provided by California-based Rethink Leisure & Entertainment.

The upcoming project will be the second Twentieth Century Fox World theme park and the first Fox-branded resort. The deal with Al-Ahli will allow it to roll out up to three additional Fox-branded resorts in territories outside Dubai.

“20th Century Fox World, Dubai is the second Fox theme park destination and marks an important step forward in our global theme park strategy,” says Jeffrey Godsick, president of Twentieth Century Fox Consumer Products. “This park builds on the foundation being laid by 20th Century Fox World, Malaysia, currently under construction.”

This bears out Phil Taylor’s assertion that today’s successful theme parks are more likely than Branded attraction Branded theme parks are becoming increasingly popular around the world.

“A theme park destination, on the other hand, gives you an abundance of rides and attractions, and it can take you up to three or four days to finish”

ever to be inspired by Hollywood characters and storylines. “There is a noticeable, ever-increasing trend towards the use of intellectual property-led attractions, both at an individual attraction level within theme parks and for whole parks,” he explains.

As more and more plans for theme park destinations get announced, it’s clear that the UAE’s shift in strategy is working, and numbers will only continue to grow, as figures released last year by Euromonitor International indicate.

Theme park revenues in the UAE are set to increase by 78% to $837 million by 2019, the report said, while a PwC expert adds that it is likely that the country will become a serious rival to theme park world leader Orlando by 2021.

“Globally, theme parks in Europe, the Far East and the USA, Orlando in particular, dominate the market. However, theme parks in the UAE have the potential to see over 18 million visits by 2021, versus Hong Kong’s 15 million,” says Philip Shepherd, Middle East Hospitality and Leisure Leader at PwC. “With its central global location and excellent hospitality facilities, we predict the UAE has the potential to become a serious rival to theme park world leader Orlando by 2021.”

As construction work continues in the UAE on other leisure projects beyond theme parks, such as two safari parks, the three upcoming museums on Abu Dhabi’s Saadiyat Island (Louvre Abu Dhabi, Guggenheim Abu Dhabi and Zayed National Museum) and the world’s longest indoor ski slope, it’s clear that this could very well be the case.

“This is arguably the most leisure development currently underway in one location in the world and is a huge undertaking.

But if anywhere in the world has the resources, vision and power to pull it off, I believe it is the UAE,” Philip Taylor concludes.

April 2016 39

Industry insight

Top 10 Tips To manage mulTiple sTakeholders on a projecT

Zander Muego, regional director at Thomas & Anderson, shares his top ten tips for managing multiple project stakeholders

40 April 2016

Zander Muego, regional director at construction and property consultants Thomas & Anderson, is well versed in delivering project management and cost management consultancy for a wide range of projects. Covering everything from leisure and entertainment industry fit-outs to large-scale government construction projects, he has extensive experience in managing the various aspects of a project site.

Arguably the most important element of Muego’s job is acting as the pivotal point and lead on projects, building and coordinating the team of

Industry insight

representatives from suppliers, stakeholders and the client, which can be as many as ten individuals.

Here are his top 10 tips on how to excel when dealing with multiple stakeholders.

1. Tone at the top

This is a term used in corporate governance. Sitting around the table with a number of contractors and consultants, the atmosphere is heavily influenced by the approach taken by those leading the project. This is usually a combination of the client and project manager (PM), who must both lead by example.

When dealing with several entities, it is even more important for the success of the project that the PM is positive and ensures that any negative influences do not demotivate the team and interfere with the team’s function.

2. Lead from the front

The PM has to lead by example – ticking boxes and moving responsibility around the table will more than likely result in nothing getting done. The PM should take appropriate areas of responsibility on his/her own shoulders, which in turn creates

acceptable norms within the group. A proactive and hands-on approach will inspire the team.

to be checked and monitored to ensure everything is covered and there are no gaps.

3. Cover all the bases

4. Face time

When pulling multiple entity teams together, clearly defining roles and responsibilities is essential. There is often a unique set of circumstances surrounding a project with multiple entities, and when there are gaps, problems will arise. The project manager needs to ensure that every element of the required scope is covered. Developing a responsibility matrix helps – as the team is formed, this needs

You need to meet regularly, but not too much. Striking a balance in this regard is important. Often in multi-party projects there is too heavy a reliance on meetings.

If team members are based in different locations, meetings can turn into an inefficient use of time, leaving insufficient time for the actual work.

Finding ways to collaborate without the need for physical attendance can work very well – there are a multitude of online platforms that facilitate sharing of documents and related content while you speak face to face.

Where in-person meetings are required, a great approach which has been implemented by one of our clients is the use of high tables with no seats. This avoids people getting too comfortable and keeps the meeting brief and to the point. The result can be quite impressive, with people getting through the discussion in half the time.

clearly define roles When pulling multiple entity teams together, clearly defining roles and responsibilities is essential.

5. Team selection

There is a whole world of academic research about which composition of individuals produces the best team, but from experience this is very difficult to put into practice when dealing with multiple external entities rather than internal teams.

However, you still have the challenge of ensuring the team functions properly together, so this cannot be ignored.

Often, with multiple-entity teams, the focus is on function, technical skills and cost.

Wherever possible, keep an eye on bringing together the right mix of personalities and consider who works well together.

April 2016 41

Industry insight

include everyone Zander Muego says it’s important to establish a culture within the team where everyone is willing to contribute.

deliverables and project KPIs so that all parties are working towards a common goal.

9. Linking strategy to deliverables

6. Culture of inclusion

You must try and establish a culture within the team where everyone is willing to contribute in an appropriate way. This is particularly relevant for regions like the Gulf, where there are often many nationalities and cultures involved in a project.

If one entity has a particularly strong position, they will voice their opinion passionately over a more circumspect or cautious member of the team.

The responsibility falls to the group leader, who must encourage everyone to give an equal level of input where appropriate and allow each team member to contribute in a manner they feel comfortable with.

7. Establish a communication protocol

With this newly formed group of multiple entities, you must consider how to ensure the right information goes to the right people at the proper time.

Important messages can get lost, and there can be breakdowns in

42 April 2016

the project as a result. On the flip side, an equally challenging problem can be individuals copying everyone in to every piece of communication, resulting in information overload.

The project manager should establish the protocol at the outset and monitor this as the project proceeds, to ensure the process is followed throughout.

8. Align incentives

If multiple entities from several companies are working under different financial incentives, there may be disparity in terms of the common goal. Therefore, the PM must ensure everyone has the same KPIs, or that they are at least interlinked. For example, when managing the design phase of a construction project, issues can arise where specialist consultants are too focused on their specific area rather than the wider project objectives.

The project manager must ensure the coordination between such diverse team members is reflected within their contracted

“When dealing with several entities, it is even more important for the success of the project that the PM is positive and ensures that any negative influences do not demotivate the team and interfere with the team’s function”

Always ensure the deliverables and KPIs are tied to the wider objectives of the project, as this often gets lost along the way.

This can be a common problem in the business world in general, and is one of the most challenging concepts for any manager or business leader to get a grip of. It is common in the construction industry for projects to have gateways or milestones throughout the design phase, to ensure that the project team takes a step back and reviews the status of the project against the original brief. This often identifies that the project needs to be pulled back in line, to ensure that the solution being developed represents value, as defined in the original project brief.

10. Cope with conflict

Particularly while going through the forming stage of the group’s development, there will almost certainly be conflict. This needs to be addressed quickly in order for the entire team to perform as a unit. This task often lands at the doorstep of the project manager.

Conflict resolution is best tackled by getting the disagreeing parties to communicate with each other in a constructive manner. This usually involves taking the issue ‘offline’ in the sense of the wider team and working through what are often communication breakdowns rather than fundamental issues.

Such issues should always be dealt with as soon as possible; otherwise they can fester and resurface later in the project in a much more damaging way.

Comment

Nesrine Abdili

Professional indemnity – more than a tick in the box Nesrine Abdili, professional indemnity expert at Marsh, explains why construction firms need to start taking insurance more seriously Through day-to-day conversations with construction professionals, designers and employers, it is apparent that when considering a project bid, insurance may be one of the last items considered. Faced with a project experiencing some unexpected difficulty, the first thoughts would be: how can this be rectified, and who do we turn to in order to ensure rectification or avoid any further delay? The answer is usually insurance.

44 April 2016

If you are a construction professional, designer or employer, you need to be aware of all the facts when it comes to professional indemnity insurance purchasing.

This allows you to become a more informed buyer, able to make a balanced and qualified decision when it matters.

Whether you are the one procuring the insurance, acting as the construction professional or in the hot seat as the employer making the insurance requests,

do you really know what your money is getting you by way of coverage? What is professional indemnity (PI) really?

In the simplest terms, a PI policy indemnifies a construction professional, consultant or designer against the cost of rectifying a negligent error or omission as a result of a failure in professional service or faulty design. Unlike a contractor’s allrisk insurance policy, a PI policy applies to the costs of rectification

of a defect whether or not physical damage has occurred, upon legal liability being established.

The scope of coverage offered by insurers varies significantly.

PI policies, both annual and project-specific, can contain ambiguous or restrictive terms and conditions which can limit your ability to recover from insurers when you claim.

The primary reason for the varying levels of coverage is price; contractors and designers (and

know your policy Construction professionals need to be clear about what is required from their PI policy.

Comment

“Faced with a project experiencing some unexpected difficulty, the first thoughts would be: how can this be rectified, and who do we turn to in order to ensure rectification or avoid any further delay? The answer is usually insurance�

to a certain extent employers) choose to sacrifice reasonable coverage in return for the cheapest possible premium, to simply tick a box under an awarded contract.

Such restrictive policies are rarely beneficial, as you later find that what you deemed covered is excluded or restricted.

You have to ask yourself whether you are looking for value of price or price of value when procuring insurance. Construction professionals, designers and

consultants all need to be clear what is required from their PI policy. Likewise, employers need to be clear as to the extent of PI cover that they require their appointed professionals to carry.

The cheapest PI policies are unlikely to afford adequate scope of coverage. In some instances, for more complex or larger projects, employers have been known to take over the insurance procurement rather than leave it to the contractors or designers

to arrange. The main reason for this is simply to control insurance costs, as well as gain transparency on the exact coverage levels at the procurement stage.

As an insurance buyer, you need to know how to make full use of the policy when appropriate and ensure that claims made are covered. First and foremost, a PI policy should be looked at by any good risk manager as a security blanket; it’s there should you need it.

The aim is to get the most value in the event of a claim; this is when the true value of a PI policy becomes apparent. A PI policy with restrictive terms and conditions may prove to be the most costly PI policy when a claim is declined due to lack of appropriate coverage.

A prudent insured needs to be sure of putting scope of coverage before price; value for money should be an over-riding consideration. Having said that, however, an appropriate PI April 2016 45

Comment

policy need not always be the most expensive. Price can be negotiated, as can coverage.

Clients are becoming more prudent and are asking the right questions. In the event of a claim, when will coverage apply? Is it from the date when services commenced or the start of the policy? In certain cases, the two do not correspond.

As a general rule, you need to be aware of three key items: how to trigger a claim under a policy, should you need to; the term ‘Claims Made’; and the term ‘Retroactive Date’.

There are, as standard, four conditions that trigger a Claims Made PI policy: 1) The policyholder must receive the first notification of a claim or potential claim/circumstance during the policy period; 2) The claim or potential claim/circumstance must be reported to the insurer during the policy period; 3) The negligent act giving rise to a claim must occur after the policy retroactive date; 4) You, as the policyholder, must have had no knowledge of the alleged error on the date coverage was purchased.

What does ‘Claims Made’ mean, you ask? All PI policies should be underwritten on a Claims Made basis, making them ‘long tail’ policies. Consider that a significant proportion of negligent design claims emanate after construction or maintenance periods have finished.

This means that a PI policy needs to be maintained not just for the period of the contract/ project, but for an extended period afterwards, in order for you to be able to notify any claims which may arise for work done and completed in the past. For annual PI policies, as long as you maintain your policy and renew annually, then there is no need 46 April 2016

early mitigation is a must Early mitigation of potential problems faced at claim stage is a must, says Nesrine Abdili.

“You have to ask yourself whether you are looking for value of price or price of value when procuring insurance.

Construction professionals, designers and consultants all need to be clear what is required from their PI policy”

for a specific extended reporting period. When it comes to projectspecific policies, you can seek an extended reporting period for a maximum period of 10 years.

This then takes us to ‘Retroactive Date’. A PI policy does not automatically pick up all past works; it covers past works that are within the applicable retroactive date. The retroactive date is the date from which you as the policyholder started procuring PI insurance.

Provided a PI policy is maintained (continually renewed), if it is an annual policy or contains an Extended Reporting Period (is a project-specific PI policy), PI coverage will apply to claims made after the design construction or maintenance period has expired.

A general example of how a retroactive date works: • Design services are performed by you, the Insured, in 2012;

• The building is completed in 2014; • In 2015, the owner discovers a design defect and makes a claim against you for negligence; • The claim is dealt with by you and your insurers under the 2015 PI policy.

In this region, there is a common misconception that the retroactive date is changed yearon-year in line with the policy period. This in fact removes coverage for your past acts and services. In the event that you look to change the insurer of your PI policy, as long as you or your insurance representative can demonstrate to any new insurer that you have had uninterrupted PI insurance in place, there is nothing stopping you carrying the existing Retroactive Date over to the new insurance policy.

It is imperative that the right level of attention and review be undertaken prior to contract or project commencement, to ensure that the PI insurance procured meets the requirements under contract, and provides sufficient levels of coverage in the event of a claim.

Early mitigation of potential problems faced at claim stage is a must. We are well aware that contract negotiation needs to take place prior to the contract being in force.

An insurance policy in itself is a contract; therefore, the negotiations between you and the insurers to ensure all parties are aware of the coverage offered should be seen as an extension of the project itself.

As a parting thought, a sufficient insurance policy needs to follow the basics of identifying the risk, assessing the coverage available and implementing the most effective insurance solution to cover the risk and, ultimately, protect your balance sheet.

Your partner in creating a Safer World •

Performance Testing

•

Fire Safety Testing & Certification

•

Field Labeling of Fire Doors On-site

•

Existing Building Fire Risk Assessment

Dubai Tel: Fax:

•

Certification to EN/BS, ASTM, UL and NFPA

www. intertek.com me.contactus@intertek.com

www.intertek.com/building

Abu Dhabi Tel: +971 2 613 1000 Fax: +971 2 642 8009 +971 4 317 8777 +971 4 331 6719

Comment

Rhys Steel

Build to last

Rhys Steel, a chartered building surveyor in Cavendish Maxwell’s Project and Building Consultancy team, reacts to the damage caused by last month’s storms in the UAE Last month, the UAE was subject to severe storms including heavy rainfall and winds. This weather has highlighted that some buildings and infrastructure are not designed to meet the demands of this uncharacteristic weather. We have seen car park expansion joints opening up and water streaming in, shopping malls swimming with water, ceilings collapsing, roads turning into rivers and roofs being blown from buildings.

48 April 2016

These events highlight two main issues. The first is that buildings and infrastructure are not designed to consider the likelihood of this extreme weather, as there is generally the attitude that it never rains in the UAE; the second is the issue of whether you are insured if your properties or possessions are damaged.

Building and infrastructure design The watertightness and wind

resistance of a building is established when it is designed.

The design of a building should take into consideration the climate in which it is constructed and also allow for the extremities, to ensure that a building is futureproof. Buildings tend to have two basic waterproofing mechanisms: below-ground waterproofing that protects the building from water in the ground, and above-ground waterproofing that protects

the building from natural elements such as rainfall. This week we have seen the failure of the latter and, in particular, the details at construction joints. These are considered weak spots and are prone to water penetration in extreme conditions, due to the fact that a construction joint is weak.

If you were in the UAE last month, you undoubtedly saw flooded roads and highways.

The main reason for this

draining issues The lack of effective drainage in buildings and on roads can have dangerous consequences.

“It is important that as a building owner or tenant you understand your insurance responsibilities”

is insufficient drainage.

As previously mentioned, the design of buildings and infrastructure does not consider heavy rainfall, and therefore villas do not have gutters and downpipes. Balconies in highrise residential towers tend to have small drainage outlets and roads do not have drains for the water to run into, and as a result the water ponds. This can cause streets to effectively become rivers, as highlighted

Comment

on social media with members of the public kayaking through what previously were streets.

The extreme wind has caused issues with industrial buildings.

Aluminium sheet roofing panels have been stripped from the frame. This can be caused by the fixing being insufficient and an ineffective design allowing the strong winds to get a grasp of the panels and tear them off.

As chartered building surveyors, we are experts in diagnosing defective construction in buildings. All our building surveyors are UK-trained and therefore well rehearsed in diagnosing defective waterproofing and inadequate design in buildings, and recommending suitable repair solutions and designs for appropriate detailing.

It is recommended that an expert be involved at the earliest possible stage in a building’s lifecycle, to advise on defective waterproofing details at design stage and monitor the construction of the waterproofing details and construction quality in general during the construction phase.

Existing buildings can be inspected for waterproofing defects. The survey is executed with a two-stage approach. The first is a desktop review of the construction details to establish any weak spots and to ensure that details are sufficient to withstand extreme climactic conditions, and the second is a visual inspection of the construction to access the condition and establish any potential issues that may arise from defective construction.

Equipment such as a borescope can be used to access voids in the building that cannot be seen with the naked eye.

Repair solutions can then be proposed, in order to ensure that during the next bout of

extreme weather the building can withstand the wind and rain.

Insurance It is important that as a building owner or tenant you understand your insurance responsibilities, and sadly it is all too common in the UAE for building and contents to be underinsured or, in a worst-case scenario, there to be no insurance at all in place.

If you live in an apartment block or lease a unit in a tower, the owner’s association manager is responsible for ensuring that the building structure is insured, but this may not cover your contents. If water damage occurs in your unit and your possessions are damaged, you will only be covered if you have taken out your own contents insurance and the policy is sufficient to cover this event. If you own a villa or detached commercial unit, you will most likely be responsible for insuring both the building and its contents.

It is important that your building and its contents be insured for the correct value, to ensure that you are suitably covered in the event of a total loss.

An insurance reinstatement valuation of the building can be undertaken to ensure the building is suitably insured. For commercial buildings, our plant and machinery valuations team can value your assets to ensure they are adequately insured and can be replaced like for like in the event of flooding. This will minimise the impact on business continuity.

If we have learnt anything from the last few months, it is that buildings in the UAE have to be built to withstand the elements. They need to be constructed with consideration of high temperatures, heavy rainfall, strong winds and the risk of fire, and insurance needs to be adequate to reflect the risk.

April 2016 49

Sustainability

GrowinG Solar

Big Project ME speaks to Dr Raed Bkayrat, vice president of Business Development for First Solar, about its pilot project on Al Watania Organic Farm and how it can change the perception of solar power in the region

50 April 2016

Earlier this year, it was announced that First Solar, a NASDAQ-listed provider of photovoltaic solar systems, and the Al Watania Agriculture Company, one of the largest agricultural enterprises in the Middle East, had completed a pilot project to evaluate the use of solar electricity to sustainably power irrigation on large-scale farm projects.

This was an interesting development, marking one of the first real explorations into the viability of solar power as an alternative to the region’s energy needs. The 684kW photovoltaic plant powers groundwater extraction and distribution operations at a 25,688sqm site for the not-for-profit Al Watania Organic Farm, which covers 319 sq

km in Saudi Arabia’s Al Jouf region.

Jointly funded by First Solar Saudi Arabia and the Al Watania Agriculture Company, the facility could be a game-changer for an entire range of industries, from agriculture to construction and infrastructure development.

Big Project ME spoke to Dr Raed Bkayrat, vice president of Business Development for First Solar in the Middle East, on how the project will be a benchmark for solar power and sustainability in the GCC. Can you provide an overall description of the project?

First Solar and the Al Watania Agriculture Company’s pilot project is designed to evaluate the use of solar electricity to

Sustainability

Sustainable power The solar power plant replaces a diesel generator which would ordinarily consume 628,000 litres of diesel annually.

“In the year 2000, the total solar PV capacity installed worldwide was about 1.5GW. Less than 15 years later, First Solar alone has over 10GW installed globally”

sustainably power irrigation at a large farm in the Kingdom of Saudi Arabia. The facility produces 1,476MWh of electricity per year, reducing greenhouse gas emissions by 1,100t per year based on national averages, which is equivalent to planting 28,000 trees per year.

The solar power plant replaces a diesel generator which would ordinarily consume 628,000 litres of diesel per year, if run continuously. The installed PV generator will pump over 3.1 million cubic metres of water per year, unaided by diesel-driven engines.

What sort of work did you do to carry out the project?

After the site was prepared for construction, which included

levelling the ground, concrete foundations were laid so the steel posts – which are used as structural support for the PV array – could be installed. Once the steel posts were in place, we installed the tilt brackets that are used to support the mounting structures. Brackets are installed to the steel posts using three bolts at a 20-degree angle. PV modules are installed on a four-high fixed tilt structure and co-located at the well-head pump.

For this project, we used one of First Solar’s out-of-the-box mounting systems that are designed to significantly increase the speed of installation, while reducing the overall system costs. The mounting system allowed for easy assembly without compromising on durability and reliability. The

design, which allows us to install the PV modules in landscape orientation, four modules high and five wide, supports wind speeds of up to 120 miles per hour.

The construction phase of the project took 40 weeks to complete, while commissioning took an additional two weeks.

What challenges did you face during construction?

The location of the project posed a major challenge for us for several reasons. The site is located in Al Jouf, a remote and arid region in Saudi Arabia bordering Jordan in the northern part of the kingdom.

When making the appropriate technology choice for the plant, it was crucial to consider Saudi Arabia’s climate. Boasting high

April 2016 51

Sustainability

temperatures and high soiling conditions, the plant required modules that were able to not only withstand abrasive environmental conditions but also provide the client with the high performance required to run a business.

Offering highly predictable energy in all climates and applications, First Solar’s advanced PV modules have been independently tested to pass accelerated life and stress tests beyond industry standards. With both a superior temperature coefficient and superior spectral response, they have been independently certified for reliable performance in high temperature, high humidity, extreme desert and coastal environments.

The logistics of the project also provided us with a major learning

52 April 2016

curve. First Solar was both the solar technology provider and, in conjunction with the client, the Al Watania Agriculture Company, the contractor for the project.

During the construction process, getting the necessary technology and construction materials to such a remote location proved to be a trying task.

We learned a great deal when it came to the process involved in the shipping and handling of materials to not only Al Jouf, but the Kingdom of Saudi Arabia overall. We’re also more familiar with the specific paperwork and certificates required to get things through the port and airport.

The actual execution of the project was another welcome challenge. As you can understand, the assembly of solar

PV installations is something that requires knowledge and expertise, and is generally not a field many are well-versed in.

For this reason, we spent a large amount of time training workers from the Al Watania Agriculture Company that lacked the necessary experience in the construction field or with solar technology, thus ensuring the solar project was constructed up to par and met all of the required efficiency and performance benchmarks.

For the apt management of a solar plant such as the one found on the Al Watania organic farm, know-how of solar technology is required past what is needed for the execution of the construction phase.

In this matter, we were also able to provide the client with the

required materials, guidance and knowledge, in order for them to make the most of their investment and maintain it to the best of their ability. We are pleased to say that following the completion of this project, the Al Watania Agricultural Company is more comfortable and highly capable when it comes to dealing with solar power plants.

How will the project shape the way solar power is seen in the GCC?

The project has to be evaluated from a different perspective to the utility-scale projects that we have undertaken in the past, such as our work with DEWA on the first phase of the Mohammed bin Rashid Al Maktoum Solar Park.

The Watania project is a pilot effort to demonstrate the effect that incorporating solar PV can

All-steel casing Suitable on extremely rocky surfaces Extra-long tread life High puncture resistance Outstanding stability

bkt-tires.com

Sustainability

have on applications such as water pumping, farming and agriculture, while reducing the dependence on fuels such as diesel, particularly in the Saudi Arabian market.

In this case, solar was brought in to replace an increasingly costly, noisy, energy-inefficient and messy system that is present in identical form throughout the GCC. This project is an excellent example of the scalability and flexibility that solar PV offers. Easy to deploy and able to address very specific needs, innovative solar-powered solutions can address a wide range of energy challenges, as this pilot facility demonstrates.

investing in solar energy remains positive. In addition to minimising the opportunity cost of domestically consuming hydrocarbon resources, solar also provides these nations with the opportunity to localise technology, diversify their economies and create jobs, all of these playing a significant role in the achievement of the region’s socioeconomic ambitions.

What is the next step in the evolution of the technology?

What has the response been from different sectors of the KSA market?

As this is a pilot project, the response has been a mix of both interest and curious observation of what is happening in Al Jouf.

The Watania Agriculture Company is now closely monitoring the progress being made with the solar-assisted electrical system that is in place and comparing it to the diesel-run application they had previously. The response we receive is dependent on the ability of solar to deliver a costcompetitive, efficient and reliable solution – which it has until now.

This solution is scheduled to displace over 628,000 litres of diesel for Watania Agriculture Company, smart savings that companies across many industries in the Kingdom would like to make.

How far can solar power go in the region? Will it ever be a viable total energy solution?

These are exciting times for solar.

It’s safe to predict that moving forward, the share of renewables in the regional power generation portfolio will continue to grow at an exponential rate. Unlike other energy sources, solar energy offers resource reliability and isn’t

54 April 2016

Growing solar The share of renewables in the regional power generation portfolio will continue to grow, says Dr Raed Bkayrat.

threatened by volatile market factors, fluctuating currencies or inconsistent supply.

The numbers speak for themselves. In the year 2000, the total solar PV capacity installed worldwide was about 1.5GW. Less than 15 years later, First Solar alone has over 10GW installed globally. The rise of solar energy can be attributed in part to the fact that a series of recent technology innovations have made solar energy more economical and dependable than ever before.

When examined from a Levelised Cost of Electricity basis – a holistic view of the total cost of ownership from project development and financing through operations and maintenance over the plant’s operational life – solar is cost-competitive with a wide range of conventional generation sources, including peaking generation sources and liquid fuels, such as diesel, on an unsubsidised basis.

Even in the region’s oil-rich countries, the net present value of

“The facility produces 1,476MWh of electricity per year, reducing greenhouse gas emissions by 1,100t per year based on national averages, which is equivalent to planting 28,000 trees per year”

From a technological aspect, solar pumping has been around on a small scale in the Middle East for a while. If you look at Egypt, there are several locations where they look at solar pumping in the range of 25-30kW in terms of the power on the pump.

In the GCC, diesel has been relatively cheap, so there hasn’t been an incentive to look into solar pumping. Nowadays, with GCC governments revising and slowly removing long-standing subsidies, this is now blossoming into a project area of interest.

When considering the Watania pilot project, while it incorporates standard technology, its size is very much something new. There has not been any solar-assisted water pumping application in the region bigger than 400kW, and this one is in the range of 600-700kW. When discussing module technology, First Solar invests more in research and development than any of its competitors. The results of these efforts are visible, with First Solar recently presenting the ninth substantial update to CdTe record efficiency since 2011, having achieved 22.1% efficiency.

This accomplishment confirms that First Solar is on pace with its established research cell roadmap, and validates CdTe’s growing competitive advantage over multicrystalline silicon technology and other commercial thin film PV.

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

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

SPONSORS

Event preview

Klaus Fischer to Be honoured with GloBal diY liFetime award

PROJECT QATAR Annual four-day event will be held with new operating hours of 2pm to 9pm this year, organisers announce

Building on a decade of history and 12 editions, Project Qatar has been growing exponentially since its inception in 2004, piling up successes and attracting a larger number of professionals every year.

Project Qatar 2015 hosted 1,130 exhibitors representing more than 2,000 companies and brands displaying their products to 32,167 visitors, in 21 national pavilions from 40 countries.

This year, it’s taking place in convenient Downtown Westbay at the Doha Exhibition and Convention Center (DECC) between 9 and 12 May, with new operating hours from 2pm to 9pm.

56 April 2016

Klaus Fischer, the CEO of Fischer, will be honoured on June 8, 2016 in Stockholm with the Global DIY Lifetime Award 2016. Europe’s technical DIY associations and the special global DIY interest group are awarding him this honour for his “outstanding contribution to the worldwide do-it-yourself segment”.

Klaus Fischer has worked in the DIY segment for over 40 years. In all these years, it says in the laudation, he has advanced his enterprise to a decisive degree and changed this segment of industry.

“I am pleased to accept this award on behalf of all my employees, because it is only by joining hands and minds that we can be successful,” said Fischer in a statement following the announcement.

The award ceremony is to be held at the same venue where the annual Nobel Prizes are awarded, Stockholm’s City Hall, in a gala event for the fourth Global DIY Summit. The event is the world’s biggest for retailers and producers in the DIY and gardening segment. It is considered a first-class information platform for current and future developments.

Klaus Fischer is only the fourth personality to be honoured with the Global DIY Lifetime Award. Before him, the award was given to Obi co-founder Manfred Maus; Ray Colman, former CEO of Woodie’s DIY; and Jim Inglis, former deputy chairman of the Board and in charge of the strategic development of Home Depot.

Earlier this year, Fischer Middle East hosted its annual partnership meeting and awards on a yacht in Dubai Marina, an event that also included the company’s valued business partners.

The event celebrated the success and achievements of 2015. The staff and management of Fischer also used the event to raise awareness of Senses, a special needs charity based in Dubai, by inviting them on board to share in the festivities and presenting them with a gift.

Tenders

Top tenders Ain SokhnA Steel PlAnt Project Budget $350,000,000 Project number ZPR105-E territory Cairo, Egypt client Ezz Steel (Egypt) Phone (+20-2) 3762 2144 Fax (+20-2) 3762 2188 email sales@ezzsteel.com Website www.ezzsteel.com Description Engineering, procurement and construction (EPC) contract to build a steel plant at Ain Sokhna with production capacity of 3 million tonnes a year (t/y), including a direct reduction facility with capacity of 1.7 million t/y and an electric arc furnace with capacity of 1.3 million t/y.

Period 2016 Status Current Project tender categories Industrial & Special Projects tender Products Steel Mills

tender categories Prestige Buildings tender Products Commercial Buildings, High-rise Towers

centrAl ProceSSing FAcility conStruction - yiBAl khuFF Project Budget $300,000,000 Project number WPR894-O territory Muscat 113, Oman client Petroleum Development Oman (PDO) Phone (+968) 2467 8111 Fax (+968) 2467 7106 email external-affairs@pdo.co.om Website www.pdo.co.om Description Construction of a new central processing facility Period 2020 Status Current Project tender categories Gas Processing

& Distribution, Oilfields & Refineries tender Products Gas Exploration & Production, Oilfields Exploration & Development

tender Products Museums/ Art Galleries

DeirA MAll Project - DeirA iSlAnDS MuSeuM oF the Built environMent Project - king ABDullAh FinAnciAl DiStrict Budget $134,000,000 Project number BPR623-SA territory Riyadh 11564, Saudi Arabia client Rayadah Investment Company (Saudi Arabia) Phone (+966-11) 205 9911 Fax (+966-11) 205 9922 email info@raid.com.sa Website www.raid.com.sa Description Construction of a Museum comprising permanent and temporary galleries, a 150seat auditorium and a destination restaurant and terrace Period 2019 Status New Tender tender categories Construction & Contracting, Leisure & Entertainment

Budget $450,000,000 Project number DMS 145117 territory Dubai, United Arab Emirates client Nakheel PJSC (Dubai) Phone (+971-4) 390 3333 Fax (+971-4) 390 3314 email info@nakheel.ae Website www.nakheel.ae Description Construction of a new mall comprising 3 floors of shopping and entertainment area featuring a state-of-the-art atrium with retractable roofs, including a combined 600-room hotel and 300 serviced apartments. closing Date May 1, 2016 Status New Tender tender categories Construction & Contracting, Hotels, Leisure & Entertainment tender Products Hotel Construction, Retail Developments

hSBc heADquArterS Project - DoWntoWn DuBAi Budget $250,000,000 Project number WPR893-U territory Dubai, United Arab Emirates client HSBC Bank Middle East (Dubai) Phone (+971-4) 353 5000 Fax (+971-4) 353 1005 Website www.hsbc.ae Description Construction of Headquarters building comprising (20) floors Period 2018 Status Current Project

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

58 April 2016

CONSTRUCTION INDUSTRY QUIZ 28 September 2016, from 7pm

Baggot Room, McGettigans, Jumeirah Lakes Towers, Dubai

BRING YOUR BRAINS! BE THE SMARTEST CONSTRUCTION COMPANY IN THE REGION Our annual golf days foster a fun environment for the industry to get together, network and relax. Keeping the spirit of this tradition alive, Big Project ME and Middle East Consultant present their first quiz night for the construction industry.

A range of topics such as general knowledge, sports, geography and history will be included, along with a special round dedicated to construction, keeping in mind the theme of the night. So round up and register your best and brightest colleagues for some friendly competition.

Free registration is exclusive to teams of four colleagues from the developer, contractor or consultant industries.

Contact info: For registration enquires: Lisa Justice +971 3755 498 lisa.justice@cpimediagroup.com For sponsorship enquires: Michael Stansfield +971 55 150 3849 michael.stansfield@cpimediagroup.com

Tenders

Middle East tenders UAE Al jiMi MAll reFurBiShMent & exPAnSion Project Budget $90,000,000 Project number WPR887-U territory Al Ain, United Arab Emirates client name ALDAR Properties PJSC (Abu Dhabi) Address 13th Floor, Abu Dhabi Chamber of Commerce Tower Phone (+971-2) 810 5555 email info@aldar.com Website www.aldar.com Description Carrying out refurbishment and expansion of an existing Shopping Mall Period 2018 Status Current Project Main contractor Pivot Engineering & General Contracting Company WLL (Abu Dhabi) tender categories Construction & Contracting, Leisure & Entertainment tender Products Retail Developments

innovAtion huB Project - DuBAi internet city Project number WPR884-U territory Dubai, United Arab Emirates client name Tecom Investments FZ LLC (Dubai) Phone (+971-4) 391 1111 email najla.alshihhe@tecom.ae Website www.tecom.ae Description Construction of an Innovation Hub, which will provide 1.6 million square feet of

dedicated space to around 15,000 knowledge and creative workers Status Current Project Main consultant RMJM (Dubai) Main Architect Dubai Consultants MeP consultant Ramboll Middle East Ltd. (Dubai) Design consultant Ramboll Middle East Ltd. (Dubai) Project Manager Tamdeen (Dubai) Foundations, Enabling & Piling contractor Zetas Foundation Technology (Dubai) tender categories Construction & Contracting tender Products Commercial Buildings

client name Emirates National Oil Company Ltd. - ENOC (Dubai) Postal/Zip code 6442 Phone (+971-4) 337 4400 Fax (+971-4) 313 4402 Website www.enoc.com Description Engineering, Procurement and Construction (EPC) contract to build an underground 16-kilometer jet fuel pipeline extension Period 2018 Status New Tender tender categories Gas Processing & Distribution, Oilfields & Refineries tender Products Crude Transportation, Storage & Distribution, Gas Distribution

jet Fuel PiPeline extenSion Project

SolAr energy iPP - SWeihAn

Project number WPR895-U territory Dubai, United Arab Emirates

Project number MPP2999-U territory Abu Dhabi, United Arab Emirates

client name Abu Dhabi Water & Electricity Authority (ADWEA) Address ADWEA Building, Al-Falah Street Postal/Zip code 6120 Phone (+971-2) 694 3333 Fax (+971-2) 626 7725 / 626 6089/ 694 3717 Website www.adwea.gov.ae Description Development of a Solar Photovoltaic Independent Power Project (IPP) with capacity of 350MW Period 2019 Status New Tender Financial consultant Alderbrook Finance (UK) legal consultant Akin Gump Strauss Hauer & Feld L.L.P (Abu Dhabi) technical consultant Fichtner Consulting Engineers (Abu Dhabi) tender categories Power & Alternative Energy tender Products Independent Power Plants (IPP), Solar Energy

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

60 April 2016

The 17th edition of the International Trade Fair for Tools, Hardware, Materials and Machinery

23 – 25 May, 2016 Dubai, United Arab Emirates www.hardwaretoolsME.com

Are you equipped to take your business to the next level? We are.

In addition to sourcing all your tools, hardware, construction materials and machinery, at Hardware+Tools Middle East, you will reinforce your network and expand your business prospects.

Register online www.hardwaretoolsME.com/AD

Tenders

Qatar 4-StAr hotel Project Al BuStAn coMPlex Budget $30,000,000 Project number WPR878-Q territory Qatar client Rotana Hotels, Suites & Resorts (Abu Dhabi) Address 7th Floor, East Wing, Abu Dhabi Mall Postal/Zip code 45200 Phone (+971 2) 699 4444 Fax (+971-2) 699 4445 email sales.abudhabi@rotana.com Website www.rotana.com Description Construction of a 4-star Hotel comprising 2 basements, a ground floor, 6 upper floors and penthouse Period 2018 Status Current Project Main consultant Dara Engineering Consultants (Qatar) MeP consultant Dara Engineering Consultants (Qatar) Main contractor Al Bandary Engineering Trading & Contracting (Qatar) MeP contractor Electro Watt (Qatar) tender categories Construction & Contracting, Hotels tender Products Hotel Construction

email contracts.services@qp.com.qa Website www.qp.com.qa Description Engineering, procurement, installation and commissioning (EPIC) contract to build a 24-inch jet fuel pipeline Status Current Project Main contractor Consolidated Contractors International Co. Ltd. - CCC (Qatar) Main contractor (2) Teyseer Contracting Company (Qatar) tender categories Gas Processing & Distribution, Oilfields & Refineries tender Products Crude

Fax (+966-11) 205 9922 email info@raid.com.sa Website www.raid.com.sa Description Construction of a four-story Science Museum and a five-story Geo-Climate Centre Period 2017 Status Current Project Main consultant Zuhair Fayez Partnership Consultants (Jeddah Branch) - Saudi Arabia MeP consultant Zuhair Fayez Partnership Consultants (Jeddah Branch) - Saudi Arabia Design consultant Cambridge

Transportation, Storage & Distribution

Seven Associates Inc. (USA) Project Manager Hill International Middle East Ltd. (Saudi Arabia) Design consultant-2 FXFOWLE Architects (USA) Design consultant-3 Magnusson Klemencic Associates (USA) Master Plan consultant Henning Larsen Tegnestue (HLT) Architects – Denmark graphic Design concept HER Design (USA) Main contractor Al Bawani Company Ltd. (Saudi Arabia) tender categories Construction & Contracting, Leisure & Entertainment

Saudi Arabia Science MuSeuM & geocliMAte centre Project - king ABDullAh FinAnciAl DiStrict Budget $300,000,000 Project number MPP2566-SA territory Riyadh 11564, Saudi Arabia client Rayadah Investment Company (Saudi Arabia) Postal/Zip code 56850 Phone (+966-11) 205 9911

tender Products Museums/ Art Galleries

jeDDAh 4 DeSAlinAtion PlAnt Project Budget $100,000,000 Project number ZPR1350-SA territory Riyadh 11691, Saudi Arabia client name Saline Water Conversion Corporation - SWCC (Saudi Arabia) Postal/Zip code 85369 Phone (+966-11) 463 1111 Fax (+966-11) 464 3235 email info@swcc.gov.sa Website www.swcc.gov.sa Description Engineering, Procurement and Construction (EPC) contract to build a Seawater Reverse Osmosis (SWRO) desalination plant with capacity of 400,000 cubic meters per day closing Date May 16, 2016 Period 2019 Status New Tender Design consultant Black & Veatch (Saudi Arabia) tender categories Water Works tender Products Reverse Osmosis (RO) Plants/Spare Parts, Water Desalination Plants

rAS lAFFAn - hAMAD internAtionAl AirPort jet Fuel PiPeline Project Budget MPR1492-Q territory Doha, Qatar client Qatar Petroleum (QP) Postal/Zip code 3212 Phone (+974) 4440 2000 Fax (+974) 4483 1125/ 4449 1400/ 4483 1995

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

62 April 2016

Last word

How to stop projects from failing Christian Merrett, director with Driver Trett, outlines the simple but effective steps for contractor and client to consider when embarking on a project to lessen the risk of project failure, in response to Ahmed Hassan’s article published in Big Project ME in February 2016 There are two main categories of clients: those who are well informed, know what they want and have a very clear but rigid view of how to get it, sometimes resulting in poor decisions; and those who are less well informed, fail to realise their obligations under the contract and ultimately present problems. Both need to be managed carefully.

be a simple presentation to show the client the logical sequence of his project.

During the presentation, identify long lead issues and particular areas of risk which are common, such as visa and labour issues, customs clearance and manufacturing for specialised equipment being delivered to the project.

Contracts & Procurement

Time & Risk

Unless professional advice has been sought previously, make every effort to convince your client not to simply guess a time period or pluck a completion date out of thin air! Unless the project has a date that simply cannot move, such as with a major sporting event, then lead the client through the process and make sure it is clearly explained and understood.

The explanation need not be an over-complicated and detailed critical path network-based programme, but can often

64 April 2016

Explain the impact of the choice of procurement route and the effects this could have on risk allocation and the programme. Placing all the risk in the lap of a contractor will not always provide a trouble-free route to project delivery, and could end in disaster. Conversely, allowing an inexperienced client to determine key deliverables could equally create problems.

If it isn’t broken, then don’t fix it! Often, in an attempt to reduce risk, clients are tempted to make amendments to the terms of the contract. It

is unwise to attempt this, as clauses are carefully drafted to interrelate with other elements of the contract and modifying them is inadvisable, with potentially messy legal outcomes. Although some forms of contract may not appear perfect, in the event of any dispute the certainty of well-established clauses will prove beneficial to a resolution.

Cheapest is not necessarily the best! It is important when engaging a contractor that it be done after considering many factors, such as its capability, resources and financial ability to deliver the project. Assess contractors carefully and engage at every possible stage to understand the structure of their tender proposals; after all, if you don’t ask the right questions, you won’t get the right answers.

You often hear people say, “Act in haste, repent at leisure.” This is very much

the case in construction, therefore the process of due diligence is essential.

So don’t think that signing a contract on Monday and starting on-site on Tuesday will save you money in the overall scheme of things.

Tendering

Contractors need to correctly assess the risks, as not every job needs to be won at any price.

They are often blamed for taking shortcuts and unnecessary risks in order to secure a project, and then often wish they hadn’t. If properly approached, allowance for risk and contingency is a mechanism that the contractor should consider more often. If this is presented to a client in an open and clear manner, this could provide the client with confidence that the contractor has prudently considered the issues. This is a trait demonstrated by many successful contractors.

Communication

You hear this good advice in every aspect of life.

It is wise to spend time engaging with the team now, compared to the less desirable alternative of speaking to lawyers and claim consultants when it all goes wrong!

Comprehensive and regular briefings are therefore crucial.

It is always a good idea to involve key members of the client’s team, which enables you as an advisor to ascertain their competence and where necessary coach individuals who may present themselves as obstacles to the client’s objective. Providing team members with a sense of ownership can often yield surprising results!

On large or complex schemes, clients and contractors should engage in a series of workshops that help them understand and develop business relationships and common project goals.

EMPOWER

YOU R B U SI N ES S W I TH F U S O

THE DEPENDABLE

PERFORMER...

NO.1 SELLING TRUCK BRAND IN THE UAE

• LOWER COST OF OWNERSHIP

• HIGH SAFETY STANDARDS

• BEST FUEL EFFICIENCY IN ITS CLASS

• BEST SERVICE INTERVALS IN ITS RANGE

• BUSES FROM 15 TO 34 SEATS

• PAYLOAD RANGE – 1.5 TONS TO 30 TONS • WORKSHOP OPEN 7 DAYS A WEEK

Terms & Conditions apply*

350847

| Website: www.habtoormotors.com | Email: crm@habtoormotors.com