Construction Week - Issue 319

CW LOOKS AT THE LARGEST AND MOST SUCCESSFUL CONTRACTORS IN SAUDI ARABIA

INSIDENEWSChanges and charges at the troubled Dubai Lagoons developmentPAGE 9

INTERVIEWJames Reed of Abu Dhabi’s UPC on capital district plansPAGE 12

SITE VISITSandoval Gardens is mixing German and Arab expertisePAGE 16

CITY FOCUSAnalysis of the latest news and updates from Muscat, OmanPAGE 28

SAUDI ARABIA BAHRAIN UNITED ARAB EMIRATES QATAR OMAN KUWAIT

ConstructionWEEK NEWS, ANALYSIS, PROJECTS,

TENDERS, CLASSIFIEDS, ANDJOBS IN THE MIDDLE EAST

MAY 1-7, 2010 [319]CONSTRUCTIONWEEKONLINE.COMAn ITP Business Publication | Licensed by Dubai Media City

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1MAY 1–7, 2010 CONSTRUCTION WEEK

CONTENTS

FEATURES12 INTERVIEWDevelopment manager James Reed explains what the Abu Dhabi Urban Planning Council’s 20-year plan involves.

REGULARS2 ONLINE4 MAIL

FRONT9 DUBAI LAGOONSAngry buyers hit with more charges as terms change on long-running and delayed property development.

10 OMAN CEMENTIncome up and profi ts down slightly for Sultanate’s cement supplier.

11 NEWS IN BRIEFHighlights of the week.

16 SITE VISITA look at how the Sandoval Gardens project in Jumeirah Village is progressing.

20 TOP TENThe largest and most successful contractors in Saudi Arabia.

24 PRODUCT FOCUSA look at the fi bre reinforced polymer option for critical bridge repairs.

MAY 1-7, 2010 | ISSUE 319

DIRECTORY26 SECTOR FOCUS28 CITY FOCUS30 SPECIALIST SERVICES

BACK32 DIALOGUEMike Aspinwall tells all about the effi ciency to a construction company of a fully linked-up computer system.

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CONSTRUCTION WEEK MAY 1-7, 20102

FEATURESSector focus

PIPELINESPipeline deals have been constant in the region, CW discovers

City update

YANBUOne of the engines of Saudi Arabia growth, Yanbu’s appeal is expanding

Majid Al Futtaim Properties has recently opened the US 816.8 million (AED3 billion) Mirdif City Centre after a construction time of 31 months. The developer worked with consultants and contractors such as Alec, WSP, Holford Associates and RTKL to complete the project on time. Three hundred and fi fty shops out of 430 were opened on launch day. This equates to 167,225m2 of retail space, which was unveiled to the public. The mall also consists of 75 restaurants and cafes, as well as a 10 screen multiplex cinema totaling 6000m2, a new water-based ‘edutainment’ recreation facility and an indoor skydiving centre.

To read more visit www.ConstructionWeekOnline.com

IN PICTURES: MIRDIF CITY CENTRE

ONLINEwww.ConstructionWEEKonline.com

MOST POPULARPOWER 20: TOP ARCHITECTSINDIAN STEEL MAGNATE NAMED BRITAIN’S RICHEST MANWORKERS CAN BEAT THE HEAT WITH ‘COOLING VEST’CONSTRUCTION DIPS AS DUBAI AND KSA INDICES FALL

TO VOTE IN THIS WEEK’S SPOT POLL GO TOwww.ConstructionWEEKonline.com

HAVE YOUR SAYBURJ OBSERVATION DECK TICKET PRICES Is it fair for ‘At the Top’ to charge as much as it does for a viewing?

JOBS OF THE WEEKProjects administrator, DubaiSales executive, SharjahMechanical engineer, Abu Dhabi

ONLINE POLLWHAT IS EMAAR’S PROFIT A SIGN OF?

31.2%Stringent fi nancial management

26.0%An economic recovery

24.0%Burj Khalifa good will

18.8%A bail-out bonus

Design

HIGH FASHIONItalian architects discuss the art of effective retail design

Analysis

RISKY BUSINESSCW learns fi rst hand if doing business in Iraq is really practical

CONSTRUCTION WEEK MAY 1–7, 20104

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MAILRE: INDIAN STEEL MAG-NATE NAMED BRITAIN’S RICHEST MANI’m proud to be Indian. Just imagine, a mere 63 years ago the British left India impoverished after ruling the country for more than 150 years and here is an Indian named as the richest Briton living in the UK. He started from scratch and worked his way to the top. You make us proud Mr Mittal.SALIM BAIG

Mr Mittal should invest part of his fortune in the infrastructure development and education of underprivileged children in India.MUHAMMED AZEEM

You made more than enough money as an NRI, but now please make India rich and healthy by investing your money into the country. You could make India a live and happening country by creating new employment opportunities for millions of your own brothers. MOHAN N KUNTE

I’m proud to hear the news about Mr. Mittal and, as an Indian, I’m proud for us. Our country as whole should be uplifted economically and develop so that there is a better standard of living. Necessities of life should be provided like water, bread and electricity.MUHAMMAD RAFIKH MOODBIDRI

Congratulations to you and all who stood beside you in your efforts to grow. It would be great to hear your story as it

would inspire people who are striving to improve. GOOGY

Congratulations to Lakshmi Mittal. Hats off to you! You have made India proud. I wish you all the best for the future.MURTAZA SAKARWALA

It is great to hear that UK’s most wealthy man is an Indian - proud to be Indian.JG

MOST INFLUENTIAL CONSTRUCTION SUPPLIERS IN THE GCCCongratulations to CMCI. May your success last forever, especially now a lot of development is going onSHAHID

RE: WORKERS CAN BEAT THE HEAT WITH ‘COOLING VEST’A very practical application. This can be made cheaper if it is used extensively by all contracting companies in the GCC. The cash-rich companies can make it possible.ABHIJIT KUWALEKAR

I recommend cooling products made by a company called Techniche International. They are in the US but distribute all over the world.ERIN MIYAGISHIMA

UPC TARGET AFFORDABLE HOMES IN 2030 OUTLINEI love the statement: “The high-end has been saturated.” There’s no more money there so let’s switch gears and go to the next victims – the middle class. They have a little bit of money, let’s rid them of it.

WRITE TO THE EDITOR Please address your letters to: Post, Construction Week, PO Box 500024, Dubai, UAE or email [email protected]. Please provide your full name and address, stating clearly if you do not wish us to print them. Alternatively log on to www.ConstructionWEEKonline.com and air your views on any one of a number of the latest Middle East business articles.

The opinions expressed in this section are of particular individuals and are in no way a refl ection of the publisher’s views.

PUBLISHED BY AND © 2010 ITP BUSINESS PUBLISHING, A DIVISION OF THE ITP PUBLISHING GROUP LTD, REGISTERED IN THE BRITISH VIRGIN ISLANDS COMPANY NUMBER 1402846


FOREWORD

Infl ation is back. Don’t let anyone tell you otherwise. Amid reports that single fi gure infl ation is expected across the region in

2010 and that Dubai is experiencing year-on-year infl ation lows, let’s take a moment to consider some facts.

The price of petrol has just gone up. Okay, that’s just in the UAE, but a rise is a rise. After years of double digit infl ation, the authorities have taken the opportunity to get a much-needed price rise in, during a period when it won’t immediately make the economic data look bad. Smooth move. Yes, you read that right, much needed. The cheaper something is, the easier it is to waste, and here in the Gulf we waste petrol big time.

Perhaps the petrol authorities took a lesson from Dubai Municipality, which doubled the base rate of metered parking from one dirham to two, just the other week. Not an outrageous sum by any means, but the law enabling the increase had been in place for a couple of years, and had not been acted upon.

The perpetual Salik dodgers among us can only hope the RTA has been preoccupied with fi nishing touches to the Metro’s Red line, else more Salik gates could be on the way too.

Price increases that will be felt throughout the Gulf include the construction commodities of steel and aluminium, which have both been on the rise. Copper has been trying to join them and while it has been a bit all over the place in 2010, it is heading vaguely upward.

This points to an increased cost of doing business. Headline fi gures for manpower costs may be down, in some cities rent has dropped too, but while big noticeable numbers are working to keep infl ation low, others that lie at the heart of construction are on the way up.

If you can’t fi nd the evidence in the infl ation fi gures, try checking your bottom line.

PETROL AND PARKING

STUART MATTHEWS SENIOR GROUP [email protected]

“THE PERPETUAL SALIK DODGERS AMONG US CAN ONLY HOPE THE RTA HAS BEEN PREOCCUPIED WITH FINISHING TOUCHES TO THE METRO’S RED LINE, ELSE MORE SALIK GATES COULD BE ON THE WAY TOO.”

APOLOGY: IN ISSUE 318 CW INCORRECTLY LISTED ALAM STEEL AS BEING HEADQUARTERED IN KUWAIT. THE COMPANY’S HEADQUARTERS ARE IN DUBAI.

HEIGHT

MOST INFLUENTIALAIRPORT SUPPLIERS

From Doha to Dubai, the GCC is leading the world when it comes to airport construction. But who are the companies behind the amazing developments? Who are the contractors, engineers, designers, architects, suppliers and manufacturers?

On Saturday 15 May, Construction Week will publish for the fi rst time the defi nitive list of Airport Power. Over the past six months, our team of researchers has examined in detail every single airport development in the GCC. We have studied the quality, the technology,

the innovation and the track record. Looking at both on-going developments and completed airports – the terminals, facilities and runways, CW will reveal the companies that have had the greatest impact in one of the GCC’s most successful industries.

You have a chance to be involved in this list by contributing to a half page editorial box out for your company. The editorial copy deadline is the 9th May for the box out and the advertising copy deadline is the 11th May.

Please contact me immediately to grow your business across the region

Jason Bowman, Publishing Director T: +971 4 210 8351 E: [email protected]

ConstructionWEEK

HIGH FLIERS

9MAY 1-7, 2010 CONSTRUCTION WEEK

Investors in the Dubai Lagoon project in Dubai Investment Park are to be charged AED 1000 to register their off-plan purchases, despite a delay of up to two years on the project that shows little sign of providing compensation.

The Ogood system from the Dubai Land Department aims to register all off-plan purchases on the AED3 billion project, without which owners will not be able to obtain their title deed later, nor be able to resell or transfer the unit, according to the newsletter to investors.

Sources from the Dubai Lagoon Invest-ment Committee – the investor consortium – believe charges were not transparent from the beginning as the Interim Reg-istry is a new entity, and that AED 4,750 was demanded three months ago. Others argue that property does not have to be registered until it is sold.

At the same time, Schon Properties, the developer, is encouraging investors to switch to a new installment plan in which payments will only be made when phases are completed – a move it says will boost

FRONT

AED 1000 CHARGE ADDS TO DUBAI LAGOON INVESTOR BILLBy Ben Roberts

transparency but that will give some inves-tors paying in a different system no choice but to comply.

Dubai Lagoon has been severely delayed with greatly uneven development, leading to a lawsuit against the company two years ago. Though Zone 1 has all building struc-tures and block works complete, Zones 2 and 4 have completed enabling works, while construction within Zone 3 is only complete up to the second fl oor slab.

Developments in zones 5, 6 and 7 have ground to a halt, the company has acknowl-edged. The payments will be structured as 30% as an initial deposit, and 10% upon every completion of enabling works and the completion of subsequent slabs.

This is opposed to some investors paying 50% for unit construction and 50% over a seven-year period. Schon is still decid-ing the discount for investors that switch payment methods.

Sonia Schon, executive director, said all buyers still have the right to stick to their original contract without anyone forcing them to change.

DUBAI LAGOONS HAS BEEN PLAGUED BY DELAYS AND NOW INVESTORS ARE TO BE HIT WITH FURTHER REGISTRATION CHARGES.

>News 10>Highlights 11>Interview 12>Site visit 16

But if investors in units in Zones 5, 6 and 7 accept the repatriation to a property in Zones 1, 2, 3 and 4 to make up for the delay in their original unit’s construction, they will have to abide by the new payment plan, and may fi nd specifi cations for their new unit very different.

Sonia Schon denied that investors were being forced into the new payments sys-tem if they wanted to obtain a property or unit any time soon. However, she added: “Right now our priority is for those who will switch their payment method”.

She acknowledged that any ‘anticipated completion date’ clause in the original contract signed by investors, which prom-ised compensation would be honoured, given the length in delay for the project as a whole.

However, this compensation cannot be used by zones 5-7 investors as a down-pay-ment on their new unit in zones 1-4, as the compensation would only be assessed and distributed at the handing-over stage.

Full refunds for investors are not an option, she added.


FRONTNAKHEEL BEGINS SETTLEMENT DEALS FOR CREDITORS

Nakheel, the beleaguered developer at the heart of Dubai World, last week began signing two-part cash and securities settlement agreements to pay creditors and kick-start its parent’s US $25 billion restructuring.

The company said in a statement that it is to pay 40% of the amount owed in cash and an annual return of 10% on the recovered claims, with the 60% in listed securities.

Creditors would receive cash “as soon as an agreement on 65% of the total agreed claims” is reached.

“This is expected to be achieved in the very near future,” the company said. “All indications suggest that this will be a prompt process.”

JCB TAKES ON COPYCATS

JCB has taken legal action against three unnamed Far Eastern manufacturers for patent infringements. The action was taken when the Bauma show began and the company successfully applied for court orders in Germany, with preliminary injunctions being served against manufacturers exhibiting the infringing machines at the show.

Lakshmi Mittal and family topped the rich list in the UK’s Sunday Times newspaper.

Mittal heads up the world’s biggest steelmaker, Arce-lorMittal and has had his wealth estimated at £22,450 million (AED126,777 million), up from £10,800 mil-lion in 2009.

Nominally the richest Briton, Mittal hails from India, where his father built up the family steel operation in Calcutta.

In 2009, ArcelorMittal had revenues of $65.1 billion and crude steel production of 73.2 million tonnes, rep-resenting approximately 8% of world steel output.

INDIAN STEEL MAGNATE UK’S RICHEST MANBy Stuart Matthews

Oman Cement Company demonstrated that you may have to produce more and sell less in the Sultanate, according to its quarterly results.

The Muscat-based company’s net income rose RO 7.1 million (AED67.73 million, US $18.4 million) for the fi rst three months of 2010 against the end of 2009, although this resulted in a 2.8% reduction in net profi ts.

Gross margins gained 19.2% to 45.1% over this year’s fi rst quarter compared to 25.8% for the same time period in 2009.

Price cuts imported clinker – the lumps produced by the cement kiln stage that is ground to form cement – was cited as the cause of the year-on-year gains, with the decline in sales volumes accountable for the quarter-by-quarter slip.

Cement produced during this fi rst quarter increased to 495.1 kilotons from 474.8 kilo-tons during the corresponding period of last

OMAN CEMENT COMPANY LEADS SALES DIPBy Ben Roberts

year. Sales volume fell from 580,000 tons to 490,000 tons, according to Global Investment House in Kuwait. Average cement prices remained slightly higher at RO31.33 per ton since the beginning of the year.

The company is currently upgrading a packaging plant is in progress, due for the end of the second quarter.

Raysut Cement last week posted a 32% decline in sales for the fi rst quarter and a fall in revenues to RO 16.3 million from RO23.9 million in for the same period last year. At the same time the company increased its cement production.

Construction Materials Industries & Con-tracting saw sales fall 13.8% as net profi ts declined 152.51% from RO154,776 down to RO81,278, although the company added that the new lime kiln commissioned in March will have a capacity of 200 met-ric tons.

CEMENT FIGURES ARE ON THE MOVE IN OMAN.

LAKSHMI MITTAL IS UK’S RICHEST.

CASH IS ON THE WAY FROM NAKHEEL.

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FRONT

HIGHLIGHTS

Real estateMAG GROUP CEO CALLS FOR TRANSPARENCYA triumvirate of transparency, liquidity and regulations must be enhanced to revive Dubai’s fl agging real estate market, according to the CEO of MAG Group Property Develop-ment. Speaking at the Infra-structure and Property Development MEA Summit, Moham-med Nimer said these three elements were “needed more than ever to reassure and protect legitimate investors seeking a reasonable reward for a reasonable risk”. Trust between buyer and seller is vital, he stated on day one of the three-day summit, as well as affordability and a clear value for money.

Human resourcesENGINEERING STUDENTS GET CHANCE AT INTERNSHIPAn intern programme for emerging engineers is being developed by Dutco Balfour Beatty, working in partnership with Heriot-Watt Univer-sity. This is the fi rst time the

company has entered into a formalised intern arrangement with a university in Dubai.

“As an organisation we obviously gain from

getting people involved during their education, as opposed to graduates,” said Martin Harper, commercial manager for Dutco Balfour Beatty. “They can see how things work practically and obviously, if we take interns during their study period, we

can have a look at the good students and perhaps offer post-graduate internships too. There’s an opportunity there for both sides. It will give the student a general feel for construction and us the chance to have a good grad programme if things go well.” A typical intern will become a deputy to an intermediate engineer, moving between roles every few weeks. The long-term aim is to help develop a sustainable local workforce.

BusinessPIERLITE BUCKS DOWNTURN WITH AED22M UPGRADEPierlite Middle East, a leading manufacturer of light fi ttings and accessories, is bucking the downturn by forging

ahead with a major expansion of its local manufacturing operation. The company has completed the fi rst phase of an AED22 million upgrade. This will add 9 290 m2 to the existing facility, which will have a total output of 1.2 million recessed ceiling light fi tting units and louvres a year, in addition to 1.8 million batten fi ttings. The expanded facility in the Sharjah Airport International Free (SAIF) Zone was inaugurated by Sheikh Abdullah Bin Moham-med Al Thani, chairman of Sharjah Aviation and SAIF Zone, at a function held at the factory premises on 21 April 2010. The company was established in 2008.

35MARCH 13–19, 2010 CONSTRUCTION WEEK

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INTERVIEWJAMES REED


JAMES REED, DEVELOPMENT

MANAGER, CAPITAL DISTRICT – URBAN

PLANNING COUNCIL


ABU DHABI’S CAPITAL DISTRICT IS TAKING SUSTAINABILITY AS FAR AS IT WILL GO, AS THE EMIRATE’S STAR INTERNATIONALLY CONTINUES TO RISE

By Ben Roberts

THE START OF SOMETHING BIG

create a sustainable city that is also cul-turally sustainable.”

He added that although the drive to be green ‘will always be a big part’, the project must keep its focus on the end users of the retail, commercial and residential develop-ments. This is what is meant by culturally sustainable. “If people don’t want to be there, if no-one lives there, then it’s just a series of buildings.”

Reed’s experience arguably leaves him well-placed to help with the implementation of the project and fi t the holistic ‘macro scale’ of the government’s plans. He has worked in all three main elements of construction – design, development and fi nance. Most recently this has been in project fi nance for a hedge fund, where he essentially provided the bridge between investors and the asset management division – ‘neither of these two are real estate experts’. This role, he says, ended last year when com-mercial development was waning in the US and Europe.

Private fi nance, muted recently in the latest stage of the downturn, may grow again through further public-private part-nerships for the right investor. “There’s a conservative outlook as to how outside investment is approached and rightly so. How you leverage real estate has become an important question. Traditionally fi nance has been government backed, and per-haps Dubai was an example of a change in that process.

The fi gures for the capital district are extensive. “The capital covers 45km2, or

45 million m2. There will be 370,000 per-manent residents and 450,000 workers and visitors per day on top of that, meaning that the capital district alone could have 820,000 people. We forecast the 1.4 million current population to be as high as three million by 2030.”

The statistics are compiled from sev-eral government departments as private research. “This also includes real estate companies and management consultants, asking questions such as ‘how many use the high-speed rail; how many people can be absorbed through retail?”

The capital district will have approxi-mately 3000 villas on plots, single family plots, adjacent to the Khalifa ‘A’ neighbour-

hood. “Many homes will be for fi rst time buyers,” he said. The infrastructure is to be completed by the end of 2015. “We can factor it so that we can start some areas

immediately. The capital district will serve as the home of the central government, municipalities, as well as many of the larger embassies.”

The development will be subjected to the Estidama system, which is based on LEED criteria but more specifi cally suited to the Middle Eastern climate. At the core of Estidama – whose code book is now in full effect – is its Pearl Rating system, which Reed says is more detailed ‘and includes a few more things’ than LEED. Compared to the US, where sustainability is assessed on a project-by-project basis, Reed said it would apply to fundamental under-liers, such as water sustainability. “We’re

Abu Dhabi’s land-mark plans for its capital district will be driven by a dual effort towards both environmental and ‘cultural sustain-

ability’, combining local and international knowledge, says James Reed of the Urban Planning Council (UPC).

The development manager for the district, said in an interview on the second day of Cityscape Abu Dhabi that the UPC’s 20-year plans and assistance for the implementa-tion of those plans will provide a ‘model for how master plans are executed’.

“UPC is taking a central role regarding planning and assisting in the implementa-tion. We’re not the developer but assembling planners property owners and facilitating executors.”

On the other side of the UPC’s stand from the big screen that relayed to onlookers at regular intervals a video feature of the project, the Texan-bred manager said his recent entrance into Middle East develop-ment presented familiar fundamentals as working in the US – except for the double-speed of execution.

“I didn’t really have a ‘transition’,” he explained. “The basic project assembly, land, money and buildings are the same. Then at the next level it becomes ‘real estate’ – from non-market issues to market issues. Then you are asking ‘will this building do what we want it to do?’

“We’re combining all these things through the Urban Planning Council and the Abu Dhabi government. We’re taking the energy, money and leadership of the government, of where it wants to go, to

“THE UPC IS TAKING A CENTRAL ROLE REGARDING PLANNING AND ASSISTING IN THE IMPLEMENTATION

OF THOSE PLANS”


that the price of materials will always be a concern, particularly for steel and cement. “Steel was up by around 36% for months, and that’s not even the biggest impact. Most of the villas will be in concrete frame-works with concrete blocks, so they’re very solid constructions.”

These prices will be factored in over the many years of fi nancial monitoring, however. You’ve got to remember that

this is 45 km2 over the next 20 years, so [today’s price] can-not be too much of a concern.”

Sustainability will also be represented in the capital district

at a human level. The Emirati population of the upcoming villas will continue to develop their skills and this combination with foreign expertise will cement Abu Dhabi on the world stage. Eventually, Emirati building expertise will be a key export.

“Part of economic and sustainability is the transfer of knowledge – the skills that the expatriate community can pass on to the next generation. Most of the construc-tion work will still be carried out by other nations – that will perhaps always be the case – with the Emiratis looking to fulfi ll analytical positions.

“What’s happening among the Emiratis is a concerted effort to have an impact at

all levels. The UPC is a great example of how people can work together – it’s not just talking the talk.”

Despite seeing the similarities between the GCC and the US, he is still impressed by the speed from drawing board to con-struction, adding that in other countries a project might be restructured a few times in the space between these two stages. And this is clearly a special project overall at a timely Cityscape.

“It’s a very interesting convention – well represented by local developers. People who attend come from all walks of life, so it’s very interesting from an attendee standpoint. Abu Dhabi should be the focus of every consultant out there.

“For me, what’s most it’s the sheer impact of what is planned. Nowhere else in the world is this being repeated.” �

looking on a macro scale; so for example, how does Reem Island and Downtown work together?”

He added that the UPC continues to drive for the Estidama system to be mandatory. “Currently, the LEED system is voluntary; the Estidama system needs to be regula-tory. It needs to be part of the approval process, just to encourage developers to ‘build a better building’.

“We’ll apply the most sustainable measures in our land development; not just in the GCC but in the world, everything we do is measured through the Estidama system.

“We’ll have requirements for investors and governments and encourage the uti-lization of pearl as much as possible. The UPC is taking sustainability as far as we can take it.”

Reed added that this includes where materials are sourced. He said plans for a concrete plant nearby are in the pipe-line, as well as a plant to source steel. “We can call our buildings sustainable, but if we’re fl ying the materials from half-way around the world then it nullifi es that carbon offset.”

With such a diverse scheme of projects for the capital district, Reed acknowledges

Location - seven kilometres inland

south of Abu Dhabi island, between

Mohammed bin Zayed City and Abu

Dhabi International Airport

Land space - 45 km2

Residents – 370,000

Workers – 450,000

Infrastructure project manager

(Capital District) - AECOM

CAPITAL DISTRICT

“CURRENTLY, THE LEED SYSTEM IS VOLUNTARY; THE

ESTIDAMA SYSTEM NEEDS TO BE REGULATORY. IT

NEEDS TO BE PART OF THE APPROVAL PROCESS”

INTERVIEWJAMES REED

CAPITAL DISTRICT, ABU DHABI IS SET TO ACCOMMODATE 370,000 PERMANENT RESIDENTS.


FRONT

BAVARIA GULF’S FLAGSHIP SANDOVAL GARDENS PROJECT HAS BEEN AN INTERESTING MIX OF GERMAN AND ARAB EXPERTISE,

AND ITS TOWNHOUSES ARE NEAR TO COMPLETION

By Ben Roberts; Photos by Shruti Jagdeesh

T here is so much sus-picion in the market now, everything is questioned. That’s why we’re very transparent,” says Raymond Lefevre,

general manager of Bavaria Gulf, standing in the doorway of one of the sand-coloured townhouses in the company’s Sandoval Gar-dens complex in Jumeirah Village.

He explains that all buyers of the town-houses receive a detailed specifi cation, which is an advance on the state of communica-

an AED260 million twin-development of the overall Sandoval Gardens that will also include a fi ve-star-level apartment build-ing. The designs and construction are part of a new niche of German design for the UAE market. The company is now close to handing over the residences, which it says are 95% sold.

All townhouses conform to TUeV, a Ger-man standard of quality that is a common benchmark in Lefevre’s home market. This means that all construction and fi nishing is assessed by a third-party, which essentially represents the buyer. “These third parties

tion between developer and customer in the context of the last few years.

“If you bought a property three years ago often there would be no specifi cation,” he explains. “I bought a property and for a specifi cation there was a blank sheet that simply said: ‘to be provided later’. We wanted to be a transparent company, and that’s why we have a huge list. All items are listed, including which brands and which models. This is very important – when you target end users they want to know what they’re getting for their money.”

The 36 townhouses are the fi rst part of

SITE VISITSANDOVAL GARDENS

DEUTSCHLAND TO DUBAI


FRONT

are important because they represent the buyer and ensure specifi cations are fulfi lled – otherwise the buyer would just have to trust the developer!”

He adds that the transparency message – which includes monthly newsletters containing pictures and interviews with suppliers – has been well received by the buyers. Site visits are also accommodated, and frequently popular. “Some people come every month,” says Lefevre.

The German paint on the outside is one of the fi rst notable aspects: it has a fl exible component that makes it elastic – important to cover cracks and adapt to minor expan-sions in the building. “As every civil engineer knows, there will always be cracks. The paint can expand and contract with the building, from the heat of the day when it can be 40 degrees to the evening when it’s 20 degrees. “

Lefevre explains that 90% of the fi nish-ing materials came from Germany and the rest of Europe, as well as some of the MEP materials. “With TUeV we’re committed

Another slight delay to construction proceed-ings lay in the developer’s decision to install some elements such as TRASTA outside clad-ding in a way typical to the German market. This resulted in a German specialist fl ying in to train the workers. Khammash was amused by the international variations of this task. “No-one here knows their method of instal-lation. You can get materials in the UAE from anywhere in the world, yet the local method of installation is the same. But every country has different ways of installing!”

Lefevre says that the fi nancial slowdown reduced some of the profi tability, but still not below initial values. In Europe that price

to German standards and some fi nishing materials, for example from China, we couldn’t get them.”

He admits that there had been some delay to the construction based on the ubiquitous problem of rising material costs, and that this problem is exacerbated by purchasing across continents.

This admittance was echoed by Bassam Khamash, assistant civil engineer at Al Sayegh Contracting, the main contractor who worked closely on the project. “There was a delay in the delivery for many of the materials that came from Europe. For local materials, we found that suppliers have less in stock as they have not ordered more than they need from their sources.”

He forecasts that the recent problems to air freight coming from Europe caused by Icelandic volcanic ash might have an effect on the materials for the other parts of the project still to be completed.

Khamash says that he was very impressed by the standard of materials procured from Europe.

CONTRACT DETAILSTender date: December 2008

Construction start date: April 2009

Contract period 21 months

Completion date: December 2010

Project cost: AED 235,000,000

Construction cost: AED 175,000,000


for some fi nishing materials has not come down, and with the currency exchange we’ve had to purchase at a higher price. For us, the strategy is that we’re looking to break even. We still have to deliver on what we promised. I think breaking even is a good result in today’s market.”

But he adds that the fact that projects such as this have been able to continue has been testament to some important principles.

“In the last two years the industry has seen many projects stop. Now, the big question to ask is why?

“It’s an interesting point. The fi rst answer is that the properties were bought by end users and not speculators, and our policy has been to only sell to end users. The sec-ond is to be totally transparent. If you as a buyer are left in the dark, you are going to be scared to pay. The third point is that we try to help customers be as fl exible as possible with their payments.

The land was purchased three years ago from Bavaria Gulf’s own funds, and the

project is funded by the so-far steady stream of payments from buyers. “If you are the end user, it is in your interest to keep the payments coming,” he notes.

Upstairs the sand-coloured walls of the corridors lead to bedrooms in the front and back. Taps in the bathrooms are fi tted with a mechanism that will cause the water run-ning out to bubble, thus reducing the number of litres used over a typical day, along with two levels for the toilet fl ush.

The master bedroom contains a balcony that looks over the skeletal construction of the apartment building, which stands between the two sets of townhouses. Over-looking the structure slowly taking shape, populated by workers carrying poles and corrugated metal sheets above their heads, he explains that the Leadership in Energy and Environmental Design (LEED) certifi -cation that is voluntary in some parts of the world, is mandated in this part of the city by the planning and construction regula-tions for commercial developments in the Jebel Ali free zone (JAFZA).

“JAFZA amended LEED to make the standard workable – so there are different require-ments for different things depending on the environment,” he says. “Here it would be things like water conservation, and, of course, you would need special provisions for air conditioning, with less of an emphasis on how rain water is used.”

He adds however, that the townhouses have a facility to collect rainwater to be used for the irrigation of the plants.

He is happy with the company’s choice of Al Sayegh. “Al Sayegh is a good contractor with high standards. It was very open to bring the quality to a higher level.”

It is a time of quiet excitement for Bavaria Gulf, close to completion of the fi rst phase after a year in construction for what is for RAYMOND LEFEVRE, OF BAVARIA GULF.

MAIN ROOM OF THE SHOW TOWN HOUSE.

VITAL STATISTICSBuilt up area: 27,127 m2

Value of townhouses (cumulative):

AED95 million

Target date of completion: May 2010

Target date of whole project: Q4 2010

Project: Sandoval Gardens 10 Townhouses

on Plot JVC14IFRP003, Sandoval Gardens

16 Townhouses on Plot JVC14IFRP001,

Sandoval Lane 10 Townhouses on Plot

JVC14CFRP001, and Sandoval Gardens 165

Apartments on Plot JVC14IMRP200

Consultant: Planquadrat Middle East,

Project manager/management contractor:

Bavaria Middle East

Main contractor: Al Sayegh Contracting LLC

Sub contractors: Protech Company,

DULJIN Fze, Marieo Aluminum, United

Technology, Al Fahidi Gas, ASKOF

International, VIEWTEC, Bin Marah

Painting, EMS (Electro Mechanical

Specialised Group), ThyssenKrupp

Elevators UAE, CCL Gulf Pre-stressed

Concrete LLC

Architect: Planquadrat Middle East

Materials suppliers: Taps & More , Rehau,

Hofemeier Kitchens, Comtuer, Marazzi,

M&E consulting engineer: Dynamic

Engineering Consultant

Mechanical, electrical, plumbing

contractor: Al Sayegh Engineering Est.

Lighting designer: Power Point Trading

WHAT IS TUEV?Technischer Überwachungs-Vereinare

–(English: Technical Inspection

Association) German organizations that

work to validate the safety of products of

all kinds. As independent consultants, they

examine plants, motor vehicles, energy

installations, devices and products that

require monitoring.

the company its ‘fl agship’ project in Dubai. It is likely to be particularly satisfying for Lefevre, who claims not to have had a vaca-tion for two years – ‘next year, maybe’ – and has spent an unusual amount of personal time coordinating onsite.

Every day is a challenge, he says, though he is buoyed by the fact that this is just the beginning. “Next year we will be diversify-ing into property management and facilities management and have another project.

“We took into account the regional aspects of the design, we took care with the com-munal areas so there will be some beautiful landscapes. So much effort has been put into this project, probably much of which the client won’t see. What we hope is that over the next couple of years people will notice certain parts of the design and say we put a lot of thought into it.” �


CW LOOKS AT THE 10 LARGEST AND MOST SUCCESSFUL CONTRACTORS IN SAUDI ARABIACW LOOKS AT THE 10 LARGEST AND MOST SUCCESSFUL CONTRACTORS IN SAUDI ARABIA

TOP 10 SAUDI CONTRACTORS

hile the global economic crisis has

brought irrepress-ible pressure on the

region’s construction sector, the kingdom of

Saudi Arabia has shown itself to be less affected than most economies in the GCC.

Even as Dubai was announcing project cancellations and stalls – valued at US $500 billion at the peak of the crisis – Saudi Arabia, seemingly isolated continued to announce major public sector schemes that continued to drive forward its construction and real estate market.

Unsurprisingly, contractors in the kingdom, while cautious, have not seen work dry up, buoyed by the government’s latest budget, which emphasised spending on new proj-ects, particularly in education. Although some fi rms whose clients operated purely in the private sector have felt the pinch, more than those backed by government-funded public sector schemes.

Speaking to contractors in the kingdom, CW discovers the mood is overwhelmingly

positive among the majority. Their faith in the ability of the country to avoid the worst affects of the economic crisis is total.

As none are publicly listed, the top ten contractors have been positioned through a combination of profi le, staff numbers and value of current projects.

The list is dominated by local Saudi family-run fi rms. The big two, Saudi Oger and Saudi Binladin Group have ruled the market for decades and consistently secure the biggest projects through a combination of resources – both personnel and material – and extent of capital backing.

A family-run fi rm may be common in the GCC, but according to a report by Booz &

Company published in 2009, it also offers specifi c advantages such as access to capi-tal, information and business networks. In a survey of 25 family-owned fi rms in the GCC showed that nearly half (48%) were involved in fi ve or more sectors, 40% were engaged in three or four sectors and 12% active in two sectors or fewer.

This dominance is not viewed favourably by other fi rms in the kingdom. A complaint often heard by smaller contractors is that the sheer scale of projects in Saudi Arabia negate the option of even tendering, leav-ing the big two to pick and choose. Once secure they then subcontract work out to the same smaller fi rms who have to take what is on offer.

To combat this, at least 11 local construction companies are planning to merge to form one of the kingdom’s largest contractors, to be called Saudi Consolidate Contracting Company, which is expected to be worth US $1.1 billion.

Plans to fi nalise the number of fi rms involved in the merger are expected by July 2010, before establishing an operational compa-ny in 2013.

THE UNDER CONSTRUCTION MECCA ROYAL CLOCK TOWER HOTEL COMPLEX IN THE HOLY SAUDI CITY OF MECCA IS BEING BUILT BY THE SAUDI BINLADIN GROUP.

20 CONSTRUCTION WEEK MAY 1–7, 2010


Abdullah Al Rashid & Brothers was established in 1957 in Al Hufof city. Upon relocating its headquarters to the Saudi Arabian capital city of Riyadh, the company merged with Rashid Abdul-rahman Al Rashid Company to form Al Rashid Trading & Contracting Com-pany. In partnership with Germany’s EADS, RTCC secured one of the most

> For more top 10s visit www.ConstructionWEEKonline.com

The kingdom’s largest con-struction fi rm has subsidiaries

across the region including Egypt, Jor-dan, Lebanon and the UAE. Following its inception in 1931, the fi rm’s reputation was secured when close links between King Abdulaziz Al Saud – the founder of Saudi Arabia – and SBG’s chairman Mohammed Binladin saw the fi rm work on the extension of the holy mosques in Mecca and Medina. In 1964 it was commissioned to reclad the Dome of the Rock in Jerusalem. Since that time the

fi rm has grown to work on some of the country’s major infrastructure and real estate projects including the North-South railway project, the $36 billion King Abdullah Economic City, Abraj Al Bait residential scheme in Mecca and the Jabal Omar scheme, also in Mecca. Away from construction, it also acts as developer on a number of projects. It is jointly-developing the $30 billion Jizan Economic City with Malaysia’s MMC Group. In 2007 the fi rm won contracts valued at approximately $4 billion.

Saudi Binladin’s main rival, Saudi Oger occupies a similar

sphere of infl uence within the kingdom’s construction sector. Since its inception in 1978 by former Lebanese Prime Minister Rafi q Hariri – when he took over the French fi rm Oger – the family fi rm has become a multi-divisional giant with subsidiaries in Dubai, Abu Dhabi and the

UK. In 2007 the fi rm won work valued at approximately $5 billion and consistently operates on the grandest schemes in Saudi Arabia. Unsurprisingly they mirror those of Saudi Binladin; KAEC, the $2.7 billion Jabal Omar, which is being jointly constructed between the two fi rms, and Princess Nourah bint Abdulrahman Uni-versity for Women.

SAUDI BINLADIN GROUP

SAUDI OGER

AL RASHID TRADING & CONTRACTING COMPANY (RTCC)

high-profi le but sensitive projects to be tendered in Saudi Arabia in years. The kingdom’s $3 billion border fence project covers a distance of about 6 000 km to detect incursions along its border with Iraq, Yemen, Jordan, Kuwait and Qatar. In 2009 it also won a $427 million contract to build residences for staff at King Saud University in Riyadh.

One of the kingdom’s oldest contracting fi rms, El Seif has been operating since the 1950’s. Initially dealing in commerce and transport sectors where it comprised a large vehicle fl eet, El Seif expanded in the 1970s into general contracting with branch offi ces in Qatar, Lebanon, Bahrain, the UAE and Iraq. With over 8 000 employees, the fi rm has successfully partaken in a number of iconic projects, including the symbolic Kingdom Tower in Riyadh, the Jewels Twin Towers project in Dubai Marina and Qatar’s Silhouette Tower. Its chairman, Khaled Al Seif is also chairman of the Saudi-British Joint Busi-ness Council. In 2008 it also secured one of three initial packages for the Princess Nourah bint Abdulrahman University for Women valued at SR8 billion.

EL SEIF ENGINEERING & CONTRACTING

US$5BILLION

VALUE OF SAUDI

OGER’S WORK

IN 2007

8000CURRENT

EMPLOYEES

AT EL-SEIF

THE AL FAISALIYA TOWER IS ANOTHER RIYADH LANDMARK BUILT BY THE SAUDI BINLADIN GROUP.

THE CONSTRUCTION SITE OF THE KING ABDULLAH UNIVERSITY IN JEDDAH, FOR WHICH

SAUDI OGER IS THE MAIN CONTRACTOR.

KINGDOM TOWER, A LANDMARK OF RIYADH, COUNTED EL SEIF ENGINEERING & CONTRACTING AMONG ITS CONSTRUCTION CONTRACTORS.

22 CONSTRUCTION WEEK MAY 1–7, 2010

Established in Jeddah in 1972, it has since expanded to become one of the kingdom’s largest contractors with offi ces in Khobar, Riyadh, Jubail, Beirut and Qatar. The fi rm has established a niche in the kingdom for infrastructure projects, in particular aviation-led schemes. It is carrying out the modernisation and redevelopment of seven regional airport runways, as well as bidding for two huge tenders for King Abdulaziz airport at Jeddah valued at $5 billion to $6 billion. It is also carrying out a road tunnel project under Riyadh airbase, which will alleviate traffi c in the capital.

Having been established in 1983, the Riyadh-based Al Arrab Trading & Contracting has expanded from simple contracts into one of the kingdom’s major contractors. Consisting of 16 subsidiar-ies it has a workforce of 12,000 and saw a turnover of just over $500 million in 2007. In 2004, the Mada Group for Industrial

Founded by the late Shiekh Kamal Adham in 1978, the com-

pany commenced operations in the spe-cialised fi elds of pre-fabricated and pre-stressed concrete. The fi rm evolved and grew into general contracting including building complexes, hospitals, industrial projects and other civil projects. Possibly one of the lower profi le fi rms, Saudi Frey-ssinet nonetheless consistently secures

Jeddah-based Redwan Contracting Com-pany enjoys a strong position within the market despite not retaining the highest profi le. It secured a $120 million contract on KAEC, the biggest project underway in the kingdom to build 134 villas within the Resort Cove district of the new city. One of the fi rms bigger projects is the con-struction of the Le Meridien Hotel Tow-ers in Mecca, which will form one of the components to the regeneration of Islam’s holiest city. The Al Redwan Group, the company has offi ces in London, Montreal, Cairo and Singapore.

The fi rm established itself in the kingdom in 1965 with offi ces in Riyadh, Lebanon, Kuwait and the UAE. It has experience across a range of projects, from heavy civil works and highways to residential villas and palaces. At present, it is involved in a number of governor res-idences for the Interior Ministry at Baha, Mecca and Najran. It also is involved in a number of education projects. These include the Taibah University expansion and the headquarters of the Saudi Ara-bian Ministry of Education, which is due to be completed in Q2, 2010.

What started life in the 1950s as a small contractor targeting

the Eastern Province industrial sector has grown into the Al Khodari Group. Com-plete with two main fi rms, numerous sub-sidiaries and joint ventures, it now has a presence across general contracting, steel manufacturing, industrial services and

ALMABANI GENERAL CONTRACTORS

AL ARRAB TRADING & CONTRACTING (ACC)

& Commercial Investment acquired a majority stake in ACC, which saw the fi rm expand through acquisition and growth. Subsequently, the company won the fi rst-phase of the $6 billion Haramain high-speed rail line between Mecca and Medina. The fi rm has a presence in Asia, African and Europe.

SAUDI FREYSSINETmajor residential and real estate projects in the kingdom. Notably, it won a US $191.98 million contract to build commer-cial buildings in King Abdullah Economic City (KAEC), a $85.3 million contract for work with Saudi Binladin Group on the light railway in Riyadh’s Princess Noura bint Abdulrahman University for women and the $193.3 million Corniche Tower in the city of Jeddah.

AL REDWAN CONTRACTING COMPANY

AL HARBI TRADING & CONTRACTING

AL KHODARI SONS COMPANYshipping. It currently employs more than 10,000 people and is benefi tting from the government’s recent push to expand and modernise its educational system. It is the main EPC contractor on staff housing for Taibah University, which comprises 629 villas and 24 buildings across 4km2. The project is due to be completed in the second quarter 2012.

SR720MILLION

KAEC CONTRACT TO BUILD COMMERCIAL BUILDINGS

24

REPAIRING BRIDGES EFFECTIVELY CAN BE DONE WITH A TECHNIQUE DEVELOPED IN JAPAN. HOWEVER, CARE MUST BE

TAKEN, WARN EXPERTS

There are lots of great bridges over the Middle East. From the majesty of the new span to Saadiyat Island, to the length of the King Fahd Causeway, to the eccentricity of the Floating Bridge, it is clear that engineers will often take different and fascinating approaches to solve the same problem.

One area where bridges remain the same though, is the need for maintenance. You might have heard a seemingly never-ending and repetitive task is ‘like painting the Forth bridge’ due to the need for maintenance crews on a bridge over the Firth of Forth in Scotland, to start painting again as soon as one end has been fi nished.

CONDITIONSWhile conditions in the Gulf are a little different to the North of Scotland, erosion of structures from winds effectively sandblast-ing the sides is common, as is decay of metal parts from working under load in an extremely hot and humid environment. Factor in bridge strikes by vehicles, vandalism, fi res, and in some cases

FIBRE BRIDGE REPAIR

indifferent quality concrete when the initial structure was poured, and you will understand why it is sometimes necessary for bridge repairs to take place. The challenge for engineers is to work out a way to restore full structural integrity to a crossing, without having to start from scratch.

One method of doing this is FRP, otherwise known as Fibre Rein-forced Polymer. Simply put, this involves applying panels, sheets or rods made from carbon fi bre over the exterior of an existing struc-ture. The technique has been in use since the mid-1980s, when the Japanese government researched a way to put the strength back into an old bridge, as well as protecting is from seismic movements.

However, as Muneer Merchant, GM of Structural Preservation

PRODUCT FOCUSBRIDGES


“ONE OF THE LIMITATIONS IS THAT THIS PRODUCT CAN ONLY BE USED AS A SUPPLEMENTARY

REINFORCEMENT, NOT A PRIMARY REINFORCEMENT”

APPLICATION OF THE FIBRE REINFORCED POLYMER MATERIAL.

CONCRETE IN NEED OF REPAIR.

AREA PREPARATION PRIOR TO INSTALLATION.

Middle East pointed out, this is not a matter of simply painting the goo on. First of all, one needs to be certain of the carbon fi bre being the right grade for the job: “The most comprehensive code in carbon reinforcement design is ACI 440.2R-08” he explained.

“That is the most comprehensive guideline – it isn’t a code – but a guideline for external bonded reinforcement. In fact, the Cana-dian Highways Association has incorporated this guideline into its DOT codes and it extensively uses carbon fi bre reinforcement to upgrade its bridges.”

CALCULATIONS Careful calculations need to be made in terms of how much strength can be added to an existing structure. “One of the limi-tations is that this product can only be used as a supplementary reinforcement, not a primary reinforcement,” Merchant cautions. “If the existing structure cannot withstand the loads involved, then carbon fi bre cannot be used. In the past people have abused the technology and then there are failures because they haven’t used the right material.”

“If you use carbon fi bre in the right application you will have benefi ts, but if you design it wrong or are not experienced enough to install it, you will get failures and you’ll blame the product – but there is nothing wrong with the product or technology” he said. Merchant adds that he fi nds it crucial to have an experienced civil engineer involved in any area of bridge repair, who will consider such factors as vandalism or fi re reinforcement.

Another interesting development is that of FRP rods, which although measure just 12mm in diameter have a strength of several times that of conventional rebar, though of course it will be applied externally, and corroded rebar left in situ. “We can analyse the concrete to determine if, say, 25% of the strength of the rebar has rusted away. The strength can then be put back in with the carbon” Muneer explained. �

THE FRP MUST BE USED AS A SUPPLEMENTARY REINFORCEMENT.

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Hall 5, Stand G45


NEW AND IMPROVING INFRASTRUCTURE MEANS BIG BUSINESS FOR ROADING CONTRACTORS

By Stuart Matthews

R esidents in Gulf countries are addicted to their cars. A heady combination of cheap petrol, competi-tively priced vehicles and limited options for other

modes of transport, mean this is unlikely to change in the next decade.

This makes for a region heavily reliant on its roads. Add a growing population and in some cases, tired infrastructure, and you get traffi c congestion. However, govern-ments in the GCC are moving to address these issues through projects of expansion and improvement.

Saudi Arabia is a case in point, having allo-cated US $3.17 billion in its 2010 budget for construction of 6400 km of roads. This fol-lows its 2009 allocation of SR 11.5 billion (US $3.06 billion) for road construction.

In Dubai, where many freehold residential projects remain in limbo, the powerful Road & Transport Authority has allocated US $2 billion for project development in 2010. The money will cover around 129 jobs, 13 of which will be new.

SECTOR FOCUSROADS

GULF ROAD ROLL OUT

Among the billion dollar road projects com-ing on to the map is the Mafraq-Ghweifat Highway in the UAE’s isolated Western Region. The Abu Dhabi Department of Transport has set aside an estimated US $2.7 billion for the required work. The suc-cessful contractors will win a 25 year con-cession to upgrade, operate and maintain the highway.

The project will see the highway widened to four lanes in each direction (three around Ghweifat) and upgraded to meet international standards in design and safety.

The road, which stretches 327 km from Mafraq to the border at Ghweifat, provides the only access route to the Western Region, including the industrial centre of Ruwais and several tourist destinations.

“IN THE CITY OF ABU DHABI REGULAR COMMUTERS WILL

BE RELIEVED WHEN WORK ON SALAM STREET AND THE MINA ROAD DEVELOPMENT

IS COMPLETE.”

Payment to the winning consortium will be made via a series of equal payments spread over the 25 year period. These ongoing pay-ments will be subject to deductions for failure to meet the prescribed performance stan-dards and will ensure the consortium remains accountable for the operational performance of the road over the 25 year period.

In early February, the Department of Trans-port (DoT) in Abu Dhabi received bids from three international consortia. Among the three that made bids were Irtibaat, includ-ing Abu Dhabi Commercial Bank; Constru-tora Norberto Odebrecht; Besix, Al Jaber, Mouchel Middle East and others; Mafraq Motorway Group, including Strabag SE; Saif Bin Darwish; Joannou & Paraskevaides, Egis Projects and others; and MTD-CSCEC Con-sortium, including MTD Group; China State Engineering Construction Company and Ghantoot Transport. The widening and sur-face improvement work is due to begin this year and end in 2014.

In the city of Abu Dhabi regular commut-ers will be relieved when work on Salam Street and the Mina Road development is

MANY ROAD SYSTEMS IN THE REGION ARE IN NEED OF AN UPDATE OR IMPROVEMENT.

MA

RW

AN

NA

AM

AN

I/A

FP/G

ET

TY

IMA

GES


IS THE HEAVIEST SINGLE DRUM ROLLER IN THE WORLD.

WEIGHING IN AT 32 TONNES, THE MANUFACTURERS

BOAST A COMPACTION DEPTH OF FOUR METRES AND A

WORKING WIDTH OF 2.4 M.

complete. This US $1.4 billion improvement project focuses on the development of a key route into and out of Abu Dhabi.

Once completed, the road’s capacity will be increased to more than 6000 cars per hour in each direction. Work includes construction of a 3.1 km, eight-lane tunnel, and the con-struction of 1.2 km of roads leading into and out of the tunnel. This will serve projects on Reem, Suwa, Saadiyat islands and the Mina area to the east of Abu Dhabi Island.

A joint venture of Saif Bin Darwish Engi-neering Co. and Samsung Engineering & Con-struction was awarded the main construction contract early in 2008. Completion of phase one is pencilled in for the end of 2010.

In Oman, the Batinah Coastal Road involves construction of a four-lane carriageway (two lanes on each side) running from Naseem Garden to Khatmat Malaha in Wilayat Shinas. With an estimated value of US $712 million the 241 km project is split into two phases. In turn phase one has been split into two packages. The fi rst, worth US $325 million, was awarded to Turkey’s Makyol. It involves construction of a 60 km road from Naseem roundabout to Sayyid Said bin Sultan Naval Base at Wudam Al Sahel in the Wilayat of Musannah. The second, worth US $387 mil-lion, was awarded to India’s Nagarjuna Con-struction Company. It requires construction

of a 65.7 km road from Majees roundabout in Sohar to Khatmat Malaha. Construc-tion of the remaining stretch of the road, around 116 km, will be covered in phase 2 of the project.

Al Rajhi Company has been contracted to build 2200 homes for people displaced by the

junctions and fi ve tunnels. Dar Al Handasah is the project consultant. Tekfen Construction was awarded the main construction contract in October 2008, with work beginning soon after and due for completion in 2010.

In Dubai upgrades to Al Khail Road seem perpetual, but are proceeding in four concur-rent phases. With a combined cost estimated at US $591.5 million, the upgrade project involves widening and improving a 15km stretch of Al Khail Road between the junc-tions at Muscat Road and Emirates Road.

The road will also be extended by 9 km to connect it to Dubai Bypass Road. All four phases of work are currently underway. Gunal Construction, Wade Adams and Ascon are among the contractors involved in the project.

In Saudi Arabia the King Abdullah Highway development is being carried out by prominent contractor Saudi Oger. The project includes modifi cation of the road to be a highway, construction of three tunnels, service roads, subways, and beautifi cation works.

The development will increase the capac-ity of the highway from 190,000 cars to 520,000 cars. Saudi Oger was awarded the main construction contract in early of 2008. Construction started in May 2008. The devel-opment is expected to be completed in early of 2012. �

BOMAG’S BW 332

QATARConsultancy Services for

Development of Road in Area No. 1300Issuer: Public Works AuthorityTender no: PWA/GTC/005/10-11Description: The works comprise the construction of all roads in the project, composed of packages 1, 2, 3, 4, & 5. Tender fee: 1000.00 QAR Closes: May 4, 2010Contact: www.ashghal.gov.qa

OMANDuqm Port – Road works and

Infrastructure PackageIssuer: Ministry of Transport and CommunicationTender no: 115/2010Description: The scope of work includes road works and infrastructure package for Duqm Port.

Tender fee: 1500.00 OMR Closes: May 31, 2010Contact: www.tenderboard.gov.om

SAUDI ARABIABridge and Intersections in

Yanbu Industrial CityIssuer: Royal Commission for Jubail & Yanbu (RCJY)Tender no: PIC A-1019 (RE-BID)Description: The scope of work includes procurement, construction, testing, commissioning and all work necessary for a complete operational facility of bridge and intersections to connect the highway with the industrial and community areas at Yanbu Industrial City.Closes: Jun 20, 2010Contact: Director Purchasing & Contracting Department,

Madinat Yanbu Al-Sinaiyah, fax no +96243216092, tel +96243210222

KUWAITInfrastructure Works for

Jamal Abdul Nasser StreetIssuer: Central Tenders CommitteeTender no: RA/167Description: The scope of work includes construction, completion and maintenance of roads, overpasses, storm-water drainage, sewer and other services for Jamal Abdul Nasser Street.Bond: ApplicableTender fee: 600.00 KWDCloses: Jul 11, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water

For more tenders, visit constructionweekonline.com/tenders

new road. Work on phase one is underway and scheduled to fi nish in 2012. A timeframe for phase two has not been released.

The Al Khor to Al Ruwais Road, phase three, is a US $600 million development project in Qatar, involving further development of the Al Khor to Al Ruwais Road. The road is 61km long and will include four lanes in each direction. It will also feature 11 cloverleaf

CURRENT TENDERS


READY BUT STEADY

Construction in Muscat and its surroundings has been a microcosm for the Gulf region. Familiar stories of a drought in fi nancial support one end, and buyers unwilling to purchase properties prior to completion at the other, have been a headache for some developing around the capital’s region. But

with a more modest boom and bust than Gulf rivals, the capital looks set to squeeze through more completions in the next year.

Ibrahim Alhosni, investment manager at Omran, the government-owned tourism, investment and development company, said the city – like the country – takes a similar cautious approach as Abu Dhabi. “We’re going from a steady base, making calculated invest-ments based on analysis.”

He added that there remained a strong bi-partite link between the public and private sectors. “There’s a huge involvement [from the private sector], the two work hand in hand,” adding that the government infrastructure projects help the private sector, so that the private sector can lend their expertise to further projects down the line.

“WE’RE GOING FROM A STEADY BASE, MAKING CALCULATED INVESTMENTS

BASED ON ANALYSIS”

WHITE KNIGHTS:1. Muscat Hills - a collection of luxury homes and apartments around a golf course near the airport, fi nished quickly to see an increase in secondary market sales this year2. The Waves - a set of white villas running along the coast

WHITE ELEPHANTS:1. Blue City – the 20-year mega project of schools, apartments, villas and recreation areas said to have collapsed through lack of sales and fi nancing interest2. Salam Yiti, an RO770 million resort

THE QUIETEST CAPITAL OF THE GCC MAY HAVE WEATHERED THE WORST AND IS LOOKING

TOWARD GROWTH

First, the good news. Economic growth and capital investment has been overall buoyed by the returns from oil, which in 2009 increased from around US $35 to $75 per barrel. Then a decision by the government last year to grant two-year visas to expatriates, which can be renewed, started to fi lter through to an increase in house purchases, followed by a rise in prices.

The capital is now at the centre of ongoing construction proj-ects that total RO104.6 billion. So far only RO6.5 billion has been put on hold.

The Wave, a joint venture between Majid al Futtaim and the Omani government to develop a set of white villas running along the coast, saw the benefi ts of the visa change and oil rise last month. At the beginning of April it was announced that the company

was to launch its fi rst sales drive since August 2008 and has sold 140 of 168 apartments. This was enhanced by a canny decision 18 months ago to change the proj-ect’s plans from building luxury

villas to more affordable apartments. Almost half the buyers are Omanis, with the other buyers comprising of 38 nationalities, mainly from India and the UK.

Michael Lenarduzzi, The Wave CEO, said that though the com-pany has started to hand over apartments in the Qarat Al Marsa district, other apartments in the same district have not been built yet.

“The fl oor plan of apartments has been modifi ed and enhanced based on the feedback we received from previous apartment own-ers and also to consider pricing and market demand,” he said.

Carillion Alawi and Al Turki are among the local contractors with which The Wave is doing business. The expansion to the Muscat airport – tendered last year with construction started – is also ticking over. The RO462 million (US $1.2 billion) project hired two big hitters in consulting from outside the GCC, Turkish fi rm TAV and Greece-headquartered Consolidated Contracting Company, but they are making their presence felt in the region.

CITY FOCUSMUSCAT

The project calls for expansion of the airport, partly driven to the increase in visitors. The fi rst phase is due for completion in the third quarter 2012, though Ryan Wilson, project manager at CCC, declined to specify the exact progress of the project.

But some of the other mega projects are hanging as albatrosses around the neck of the city’s region.

Blue City – a 20-year venture situated less than an hour from Muscat that was to comprise schools, apartments, villas and recre-ation areas for the burgeoning commuter belt – is widely deemed to have collapsed because of a lack of sales.

The board of Al Sawadi Investment and Tourism Company, the parent company of the project, sent out a notice in February calling for investors to vote on the ‘dissolution of the company and fi ling subsidiaries’. Moody’s Investors Service, which rates the bonds issued by Blue City to fund construction, said that as of November last year, Blue City had sales of US$74.6 million – less than a tenth of its $860 million target.

Similarly, Salam Yiti, an RO770 million resort project coordi-nated by Omran, the government-owned tourism developer, and Sama Dubai, has stalled completely. A spokesperson for Omran said: “In terms of project development it is still on hold and has been so for the last year, due to the fi nancial crisis.”

Wael Lawati, CEO of Omran, told journalists earlier this month that the two parties were in discussions about how to move the project forward – and if those talks break down, Omran may have to fi nd a new partner to fi nish the project, he said.

The spokesperson denied to CW that there were any problems with their relationship with Sama Dubai and said there were no new partners involved. Ibrahim Alhosni, Omran’s investment manager who coordinates partnerships, refused to comment.

The scope of material suppliers to Muscat projects may soon change greatly, based on circumstances in surrounding countries. Hattish Kumar, senior fi nancial analyst for Global Investment House in Kuwait, points out that the overall slump in construc-tion in the UAE may cause many suppliers in the country to sell into Oman, to chase slipping profi ts.

“The prices between UAE and Oman are very similar, meaning that there will be very little margin in selling into the country,” he says.

The two leading cement producers have both cited this enhanced competition for a dip in recent profi ts and sales.

Kumar adds that as long as the country overall meets the expecta-tion of a 94% completion rate for projects, the future looks good for Muscat-based suppliers. Oman Cement Company saw net income rose RO 7.1 million for the fi rst three months of 2010 against the end of 2009, although this resulted in a 2.8% reduction in net profi ts. Falls in sales revenues were a direct result of drop in sales volume from 580,000 tons to 490,000 tons, according to Global Investment House in Kuwait. Average cement prices remained slightly higher at RO31.33 per ton since the beginning of the year.

Despite such declines for suppliers, Kumar says: “I think that if the rest of the projects can go ahead it looks good for companies that produce cement or steel.” He highlighted the as-yet unlisted Al Madinah company as a future player in the country. It will begin production in 2011 with a start-up capacity of 800,000 mega tons. �

MUSCAT SECURITIES MARKET – STOCKS TO WATCH1. Al Jazeera Steel Products Company – leaped from RO0.32 to RO0.39 between 25th March and 4th April, normalising since to around 0.362. Construction Materials IND – shot up in three months from RO0.1 to RO0.9 between 25th January and 25th April3. Majan Glass – up from RO0.65 at the beginning of January to RO0.8 by the third week of March

OMAN IS LOOKING TO GROW OMAN IS LOOKING TO GROW FORM A STEADY BASE.FORM A STEADY BASE.

FUR

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AFP

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DIALOGUEMIKE ASPINWALL

How did RedSky IT established itself in the Gulf?RedSky IT had a number of customers in the region over the last ten years from a number of UK fi rms that had partnered with Emirati companies in joint ventures. The customers were using the software in the UK, and when they established themselves in this region they bought the software with them. Five years ago we thought it was appropriate to have a presence in the region. Due to its British background construction is similar; for example, how a project gets commissioned, and the fact that architect works for the client rather than the contractor.

How do you assess the last year – and have we turned a corner?I think in the fi rst quarter of last year things ground to a halt. Up to about January 2009 there was the idea that Dubai ‘is the biggest and the best’ and would not be affected, and then there was a big crunch. A lot of projects went on hold, although I think we’ve seen that normalise over the last few months.

Tell us about the product.The key focus is the project. Say with a piece of land you may have an idea for a tower. You work with architects and consultants to produce a design and then a document for the pricing of construction – this bill of quants can be big, detailed documents.

The system can import this document for the contractor to start pricing it. As a main contractor you will slice these details into perhaps 20 to 30 pieces for sub-contracting. Then you will compare sub contractors’ prices and choose which bids to use in your tender response. Hopefully you win the contract and may have to restructure how the project will be performed. You’re placing orders, potentially driven from updated material needs and when you will need them onsite. The system tracks ‘goods received’ information, so your cost reporting is as up to date as possible. The payroll feeds costs directly to the projects and Sub contractors valuations can be performed which drive their payments. The client valuations then creates the application for payment to the client. The internal valuation gives the true picture of the project’s performance.

So RedSky IT’s software can provide a system that can manage all of the business process or just the part you need now.

Red sky thinkingThe managing director tells all about the efficiency to a construction company of a fully linked-up computer system

By Ben Roberts

How does this meet market needs today?Until recently, when projects were sold off-plan and made money, perhaps the control of costs didn’t have to be as tight. I think what’s happening is that the smarter companies know they have to be accurate with their costs and must tightly track variations when billing clients. I think the companies that will be making a profi t over the next few years are those who know where exactly they are on projects. This is a question of information, visibility, and low overheads. We’re going to see those companies that take this opportunity to invest in system, when the economy in the country recovers these companies can capitalise, and that even when margins on a project are still quite low they can still make a profi t. This will allow them to bid for more contracts and make more profi ts.

What are prospective customers asking you?They like the idea of a big-picture solution but often don’t know how it can be effectively installed in bite-size chunks. They can start, for example, with just the core accounting system in place, with a payroll system that best monitors all labourers. Further, you can know if all machinery hired is working, has their use in fact fi nished and can be sent back rather than incurring a lot of money needlessly in weekly hiring charges. Then there’s getting sub-contractors paid. In the past it has often been diffi cult to get this joined up, where in a typical company the estimating person will run his bit, and the commercial person will run his, and they don’t cross over.

What are your forecasts for the rest of the year and the company’s opportunities?I actually think it will pick up this year, perhaps more

government-related projects. I think we have established ourselves so that when companies expand into different markets they can have the same solid systems in place. Up to recently we’ve sold into the top end of the market, partly due to our initial customers. One focus now is to address the small-to-medium players, as well as educational seminars in Dubai, Abu Dhabi and Saudi Arabia – the latter of which we’ve been in contact with a number of prospective clients.

A Cambridge graduate with an

engineering and computer science

degree, Mike Aspinwall was initially

involved with running bespoke

development projects for manufacturing

and government before moving into the

construction sector. As development

director for Red Sky he led the design

and development of the AXiM product. In

January 2007 he was appointed MD.

BIO

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