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JULY 2018 meconstructionnews.com
THE BUSINESS OF CONSTRUCTION
“the sooner the industry resolves the past and adjusts to a more sustainable payment profile, the better off we will be”
HamisH tyrwHitt, ceo of arabtec Holding, sits down for an in-deptH conversation witH big project me
Issue 148 July 2018 07
14 A New Economic Future
40 Finding the Solution
07 Dragon Tower bids assessed
16 Hamish Tyrwhitt
42 Building Memories
The biggest stories from Big Project Middle East’s home on the web The bIg pIcTure
Nakheel assesses 11 bids for the construction of twin-tower project in Dragon City in Dubai
Moe Abeidat analyses the impact of changes to residency laws on the UAE property sector In prOfIle
Hamish Tyrwhitt of Arabtec explains how the construction giant got back on its feet
Okay Barutcu showcases Grundfos’ iSolutions’ range of intelligent pumps OpInIOn
John McNeil of Aurecon says engineers must understand the significance of what they create
10 Arabtec wins $42m Cairo project 26 Artistic Vision Contractor to develop key phases of Emaar Misr’s Uptown Cairo master development
Big Project ME visits the extravagently designed Art of Living Mall in Dubai
48 Top Tenders
12 Bahrain Market Review
36 Intelligent Cooling
52 The Importance of Workflow
Cluttons report looks at the performance of Bahrain’s residential and commercial property markets
HVAC experts highlight how technology can be utilised to improve the performance and sustainability of cooling systems
Big Project ME lists the Middle East’s biggest construction tenders for July 2018 lasT wOrd
Ian Hauptfleisch outlines some key factors to consider when choosing your construction software
July 2018 1
time to pay up
mongst the many challenges that contractors face in this region, the most common complaint I’ve heard is about the lack of liquidity in the industry, which is fuelled by non-compliance with payment terms. Despite being such a common problem, it’s one that contractors of all sizes constantly come up against. Whether it’s a multi-national giant with operations across the world, or a local start up, getting paid on time is something the entire industry is on board with. Sadly, however, the reality is that many companies face severe payment delays, which consequently has a massive impact on the liquidity throughout the market. This was a topic of discussion that came up during my interview with Hamish Tyrwhitt, CEO of Arabtec, who’s been quite vocal about it in the past. Speaking at length about how too much of a contractor’s balance sheet can get tied up in receivables, he makes a passionate and eloquent plea for the industry to resolve this crippling issue. Having heard so many variants of this complaint over the eight years that I’ve been covering this industry, I think we’re well past waiting on change. The time to take on board responsibility and make the change is here, especially given the tough economic climate surrounding us. With there being a greater push for accountability from the government when it comes to sustainability, efficiency and productivity within the construction industry, companies and stakeholders need to start looking at payments as being part of this effort to change things for the better.
4 July 2018
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How can we hope for innovation and evolution within our industry, if we have companies that are constantly wondering where their next payment is going to come from, or if they’re wondering how they’re going to pay their suppliers and staff? These issues around payment aren’t just about an individual company’s bottom line, they impact the entire eco-system in which we operate. As Tyrwhitt says, ‘it may not necessarily be your fault, but it’s certainly your responsibility’. So, rather than pointing fingers and hoping for the best, let’s start taking the first steps towards improvement by committing, across all levels of the industry, from client to supplier, to making sure everyone gets paid on time.
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ASGC LOOkS TO CLOSe CONSTRUCTION INDUSTRY SkILLS GAP
World Cup 2018 stadiums built with Trimble technology
Samsung increasing focus on renewable energy
In Pictures: On-site at Deira Islands
Name withheld by request
Made for the Middle East: Visiting Alstom’s French HQ
RePORT: THe AbU DHAbI COMMeRCIAL MARkeT IN H1 2018
Majid Al Futtaim sets ambitious sustainability targets for Tilal Al Ghaf
Why Dubai’s real estate market is on an upward trajectory 6 July 2018
We have heard for a number of years about the importance of getting younger talent into the construction and I support every attempt for ASGC to achieve its goal of “growing workforce on the cutting edge of technological and engineering advancements”. We’ve seen in the past the industry has lost of its talent whenever there is a change in the economic climate and this is a great initiative to demonstrate that a career in construction is a worthwhile route for local talent.
Feature: How the Founder’s Memorial was built
Really interesting to read: “Landlords who have not adjusted to these evolving market conditions by either adjusting headline rents, upgrading building premises or offering further floor divisions are facing a standoff and losing tenants to better built premises offering flexible terms.” Hopefully, this means that more landlords are going to realise that they can’t take their tenants for granted. As the property market matures, owners will need to work harder to get tenants and that is a good thing for all concerned. Name withheld by request
The Big Picture
Choosing the right proposal Nakheel is assessing 11 proposals for the construction of Dragon Towers, a twin-building residential complex in Dragon City.
Nakheel weighs up Dragon Tower bids
Lowest bid filed for project has come in at under $177m, master developer says Nakheel has revealed that it is assessing 11 proposals for the construction of Dragon Towers, a twin-building residential complex at its rapidly expanding Dragon City close to Dubai’s Dragon Mart. The developer said that the lowest bid filed for the two buildings has come in at under $177 million, with the complex due to have a podium-level clubhouse with a swimming pool, restaurant and gym. A total of 1,142 one- and two-bedroom apartments will be constructed across the two buildings, as well as two floors of retail facilities and four parking floors. Nakheel will award the contract in Q3 this year, with construction completion in Q2 2021. Dragon Towers is due to be available for sales in early Q4 this year and will be directly linked to the highprofile retail and trading hub.
Nakheel also announced this week that the construction of the third expansion at Dragon City has passed 80% completion as it continues to expand the number of retail, hospitality and residential units. The existing ibis Styles Hotel will soon be joined by a second hotel currently under construction. Dragon City, a $46 million showroom and car park complex, is scheduled to have construction completed by Q4 2018, the master developer said. The new facility is the latest in Nakheel’s ongoing retail, hospitality and residential expansion of Dragon City, which will bring the overall size of the mixed-use development to 11 million square feet. Managed by the retail arm of Nakheel – Nakheel Malls – the 375,000sqft complex comprises 118,000sqft of ground floor showroom space and a multistorey carpark for 900 vehicles.
$117m Lowest bid filed for the twobuilding project
Number of apartments being constructed across the two buildings
$46m Value of Dragon City project
Dragon City is already home to Dragon Mart, touted as the world’s largest Chinese retail and trading hub outside China, and sister mall Dragon Mart II, which opened in 2015. Nakheel’s first hotel – an ibis Styles with 251 rooms – opened at Dragon City in 2016 and a 304-room Premier Inn is under construction. Meanwhile, Nakheel’s Dragon Towers, a twinbuilding residential development with 1,120 apartments, is set to break ground in Q3 this year, the developer added. In addition, the developer said it has appointed Wade Adams Contracting to build a 12-lane bridge connecting the Dubai mainland with its Deira Islands development. Under the terms of the $122 million contract, Wade Adams Contracting will work under the supervision of the RTA to provide the main access route to the new 15.3sqkm waterfront city. July 2018 7
The Big Picture
Initial dynamic testing The initial dynamic tests for the Riyadh Metro will use trains that have already been delivered by Alstom to the client, Arriyadh Development Authority (ADA).
Alstom conducts tests for Riyadh Metro
train trials test Metro system’s power supply, signalling and other systems French engineering major Alstom has started initial dynamic tests for the Riyadh Metro at the project’s Line 4 depot test track in the Saudi capital. A statement from Alstom said the tests have been going on for the past few weeks and include the demonstration of the performance of the railway system, from power supply to signalling systems, using trains which have already been delivered. “This test run is a significant milestone for Alstom and for the project. We are proud to
conduct the tests in Riyadh in order to deliver a state-of-the-art Metro to our customer, Arriyadh Development Authority (ADA), and the inhabitants and the visitors of Riyadh,” said Didier Pfleger, Alstom senior vice president for Middle East and Africa. The Riyadh Metro Project, owned by ADA, consists of six lines totalling 176km and 85 stations. It is being built by the FAST consortium, of which Alstom is a part. The French giant is supplying a fully integrated Metro system for Lines 4, 5 and
6, which includes 69 Metropolisbased Riyadh Metro trains, an Urbalis signalling system and a Hesop energy recovery station, as well as tracks. The Metropolis-based train for Riyadh consists of two cars per set and is 36m long. Each train features three classes: first, family and singles. The trains will offer passengers a high level of comfort, ergonomic seating, LED lighting, air conditioning and a passenger information system, said Alstom. The company added that the trains are driverless, with
their movements protected by a state-of-the-art signalling system controlling their speed, ensuring smooth and safe operations including automatic opening of the train doors. The fully air-conditioned stations are equipped with platform screen doors, preventing access to the track. The trains are also equipped with an advanced passenger information system delivering real-time information to passengers through screens and loudspeakers on board and on the platforms.
“This test run is a significant milestone for Alstom and for the project. We are proud to conduct the tests in Riyadh in order to deliver a state-of-the-art Metro to our customer, Arriyadh Development Authority (ADA), and the inhabitants and the visitors of Riyadh” 8 July 2018
The Big Picture
ASGC looks to close industry skills gap
Construction group expands training programmes to prepare for the future ASGC, a leading construction group based in the UAE, said that it is expanding a number of its internal training and development initiatives as it looks to keep its growing workforce on the “cutting edge of technological and engineering advancements”. In a statement, the construction giant said that with sentiment around the future of the UAE construction industry improving year-on-year and the Gulf’s construction markets determined to grow in 2018, the industry is rapidly evolving. “The Fourth Industrial Revolution and digital automation are already influencing the skills and types of jobs required of today’s workforce,” it said. ASGC said it intends to build on global best practices and place additional investments into a number of programmes
for continuous learning and development. One of these is the ASGC Employee Academy, first launched in 2017 with the aim of providing young, talented construction professionals across each of the company’s departments with the education and skills needed to help them progress in their careers. “Selected individuals participating in the academy programme adopt their own passion projects, which include the development of ideas, innovations and technologies that enhance ASGC’s operations, processes and procedures – steering the organisation towards boosting efficiency and growth,” the company explained. In addition, the company has also recently launched an ASGC Labour Academy, an independent facility owned by ASGC and fully
equipped for all kinds of trade and HSE training. The academy is now operational and is currently upskilling more than 200 workers per month, covering various trades. At full capacity the facility can train 400 workers per month, and the company said it intends to reach that target by the end of 2018. “The facility also hosts various HSE trainings in line with the projects’ requirements. The aim of the Labour Academy is to provide development programmes that
Number of workers ASGC aims to train every month at its Labour Academy by the end of 2018
improve the capabilities and skills of ASGC’s workforce while at the same time opening doors to career progression,” the company added. ASGC has also bolstered its Post-Graduate Education programme, which has been running for several years. Under this programme, ASGC covers the cost of post-graduate degree tuition fees, said Bishoy Azmy, CEO of ASGC. “As the UAE transitions towards a knowledge-based economy, the construction field is also evolving so that projects can be done smarter and more efficiently than ever before. Across the industry, this means a shift in skill sets required. It is our responsibility to ensure that the workforce of the future not only has the necessary skills for employment, but the ability to make a meaningful contribution to the community.”
Global best practices ASGC says that it intends to build on global best practices and place additional investments into a number of programmes for continuous learning and development across the group.
July 2018 9
The Big Picture
1. ArAbtec construction wins $42.7m contrAct in uptown cAiro mAster plAn Arabtec Construction has won a deal to develop key phases of developer Emaar Misr’s Uptown Cairo master development. The integrated development is being built in multiple phases and will boast a total built-up area of 61,000sqm. As per the terms of the $42.7m contract, Arabtec will be responsible for phase three and four of Village E Levana. The firm’s scope of work includes the construction of 128 villas, in addition to infrastructure and roadworks. “The Uptown Cairo project award marks one of the first projects we have been awarded outside the UAE in over a year. We look forward to working on another project for Emaar as we build on solid relationships with our key clients,” said Hamish Tyrwhitt, group CEO of Arabtec Holding. Arabtec has worked on multiple projects in the UAE, and is now keen on expanding overseas into key markets with its existing client roster. “We will continue to strategically onboard work in our key competencies and key geographic markets where our clients operate that makes business sense.”
10 July 2018
5,660km Nigeria and Morocco have signed an agreement for the construction of a 5,660km gas pipeline
2. merint completes residentiAl project in indiA Following four years of construction, UAE-based Merint has announced that its 219 Boat Club residential project is now ready for occupation. Located in Pune, the project features 10 luxury apartments which the developer says were designed to give the feel of a sky villa. The project was
conceptualised and designed by Atkins, while interior design work and structural consultancy services were provided by Studio Hinge & ADND, and Fourth Dimension respectively. The developer says the rapid pace of urbanisation, coupled with India’s growing attractiveness to NRIs looking for options to invest in, has led to growth in interest in high-end luxury housing.
“We recognise this trend and were always keen to ride the wave, but not through just another residential tower. We did not desire to make promises, we wished to deliver a dream! These ‘dreams’ are being delivered at a price of around $3m each,” said Fazal Manekia, founder and CEO, Merint. The residential project is said to be surrounded by trees that are over a hundred years old.
The Big Picture
Uzbekistan has offered Russia ten sites across the country for the construction of nuclear power plants
The construction sector’s share in India’s overall gross value added (GVA) declined to 7.4% in the financial year 2017-2018
3. irAq government AwArds mitsubishi $110m port contrAct Mitsubishi Corporation (MC) has won a $110m contract to rehabilitate a port in the southern region of Basra. The project is being funded through ODA loans provided by the Japan International Cooperation Agency. Through the project, the Iraqi government aims to modernise existing industrial port facilities
around Basra by expanding oil product berths at Khor Al Zubair Port. The project will also see the construction of a new service berth for working ships and service boats at Umm Qasr Port. According to a statement from MC, the rehabilitation of ports throughout Iraq is essential to meeting the increasing demand for port infrastructure. The port project will be implemented in partnership with several international
contractors, including two Turkish firms: energy infrastructure provider Calik Enerji (CE) and construction firm Gap Insaat. Both firms are part of the Calik Holding Group and are expected to play a major role in the construction work. MC will be responsible for overall project coordination and will also serve as the prime contractor, responsible for importing steel structures and other necessary supplies from Japan.
4. Abb wins irAq infrAstructure power contrAct ABB says its order from the Ministry of Electricity in Iraq to deliver five fixed and 15 mobile 132kV substations will help strengthen the power grid and provide electricity in central Iraq. The award comes as the government of Iraq continues to rebuild the country, with investment in its grid part of its ambitious plan to develop its power infrastructure to meet electricity needs. The substation projects are supported by Swedish government financing, said ABB in a statement. As part of the projects, ABB revealed it will also deliver key products like gas- and air-insulated switchgear, power transformers and capacitor banks to improve power quality, and advanced IEC 61850-based automation, protection and telecommunication systems for control and monitoring of substation assets. The 15 mobile substations will enable fast electrification in some of the neediest areas, said the company. “The substations will help to improve the electricity supply by expanding capacity and strengthening Iraq’s power infrastructure,” said Patrick Fragman, head of ABB’s Grid Integration business.
July 2018 11
Bahrain residential and COMMerCial Market reVieW
Cluttons Middle East report provides real estate market insight and analysis for Bahrainâ€™s residential and commercial property sectors
Weaker than normal levels of demand The performance of rents in general across Bahrain has been compounded by weaker than normal levels of demand, as slower economic growth takes its toll.
12 July 2018
Average residential rents during Q3 2017 (BD/month) Apartments
a toll on the rate of job creation and, therefore, overall demand for rented accommodation.
Affordability key to success While requirement levels are undoubtedly weaker than this time last year, our experience in the market has shown that established communities remain the most attractive areas for tenants.
Community living in high demand Elsewhere, at Cebarco Tower and Segaya Views in Manama, our residential team has registered exceptionally strong demand across the 130 units in both developments. Rents at Cebarco Tower stand
Rents stable after H1 corrections After rents retreated across the board at the start of the year, we appear to be entering a period of stability, with average rents across the Kingdom firming during Q3. Rents in general have weakened by an average of 16.2% when compared to this time last year and are down by roughly 8% since the start of 2017. In general, villas have outperformed apartments, with rents dipping by 11% over the last 12 months. Indeed, the performance of rents in general across Bahrain has been further compounded by weaker than normal levels of demand as slower economic growth takes
“Rents in general have weakened by an average of 16.2% compared to this time last year and are down by roughly 8% since the start of 2017” between BD 650 and BD 1,500 per month, while rents at Segaya Views are at BD 650 per month. With average monthly residential rents across Bahrain standing at close to BD 650 for apartments, prospective tenants view the facilities and amenities offered at these two schemes as good value for money. In Amwaj Islands, one of Bahrain’s most popular expat residential submarkets, while rents have ebbed by roughly BD 50 per month (for apartments) and BD 100 per month (for villas) over the last 12 months, it retains its appeal. The well-established community infrastructure, retail provisions, access to Bahrain International Airport and the rapidly emerging developments on Diyar Al Muharraq all continue to contribute to the relatively stable demand we are recording here. Furthermore, with the rent corrections that have already taken place, we view the community as exceptionally
good value for money, which is likely to support a turnaround in rental value growth sooner than other locations in Bahrain. Developers are conscious of this ever-strengthening appetite for community living in Bahrain and we are starting to see a handful of such schemes trickle on to the market. Eagle Hills, for instance, has recently launched Marassi Boulevard. Retail still central to unlocking development potential The desirability for developers to select existing communities for new schemes has also been fuelled by the strong penetration of retail developments in many of Bahrain’s established residential areas. We have noted an upturn in the number of community retail developments in locations such as Juffair, while larger shopping malls such as the BD 45 million The Avenues is progressing to schedule and will be a game
changer for the Kingdom’s retail scene with its outdoor waterfront dining concept. Including The Avenues, we expect some 500,000sqm of new retail space to be delivered across Bahrain this year, dipping to approximately 220,000sqm in 2018 and in excess of a further 140,000sqm in 2019. Separate to the development of retail malls, the Gulf’s largest IKEA is on track to open next year at a cost of BD 47 million and is expected to create up to 600 new jobs. Retail remains a significant area of growth in the Kingdom’s property sector and the renewed confidence among retail occupiers and retail developers is reflected in the fact that retail rents across all locations have remained stable over the last six months. Subdued demand for offices Elsewhere in Bahrain’s commercial market, demand for office space remains lacklustre and static,
with a very limited number of enquiries. Encouragingly, rents for both fitted and shell and core space have remained stable since the start of 2017. This is in part linked to the sharp rent corrections that have been recorded since 2010; shell and core space is down by roughly 40-70%, while rents for fitted space are down by a third to a half over the same period. While overall demand remains weak, start-up businesses are active in the market, many of which have been supported by the Tamkeen initiative. Space requirements by this subset of the office market often hover at around 100sqm, with budgets of BD 4-6 psm. The only noteworthy activity among international occupiers has been Amazon’s decision to make Bahrain a regional hub for its cloud computing services, which will see the creation of three data centres in the Kingdom by 2019.
Performance of retail rents across Bahrain’s key submarkets, Q1 2016 - Q3 2017 (BD psm) Al Seef
14 12 10 8 6 4 2
July 2018 13
Delivering a new economic future Moe Abeidat, CTO at Property Monitor, analyses what sort of impact the latest amendments to residency laws in the UAE will have on the country’s real estate market This May, the UAE Cabinet announced a number of amendments to current residency laws, a move that has created a stir in the country’s real estate market, with a number of property experts predicting that the regulatory changes could have a positive impact on the sector.
According to the changes, residency visas of up to 10 years will be available for key professional workers, including doctors and engineers and their families. Furthermore, foreign investors establishing businesses in the country will also be offered 10-year residency visas, while companies will be allowed to own 100% of their businesses in the UAE. Top students graduating from university will also have options to reside in the Emirates. 14 July 2018
The roll-out of long-term residency visas could be a game changer for the real estate industry, says Faisal Durrani, partner and head of Research at Cluttons. He says that the landmark announcement is the clearest indication yet that the UAE government is committed to delivering an economic future that relies on human capital, rather than oil. “Longevity of residence for expats is going to be a game changer as the population’s historically transient nature gives way to semi-permanency,” he explains. “The move will clearly go some way to stemming the loss of human talent from the UAE and will also contribute to more stable and sustainable demand for residential and commercial
property from domestic buyers. This privileged group of expats will undoubtedly feel a greater sense of belonging, which will facilitate the emergence of stronger and deeper communities.” In order to better understand the impact of these changes, Big Project ME spoke to Moe Abeidat, chief technology officer at Property Monitor. What sort of impact do you anticipate these changes of law will have on the existing stock of real estate and foreign investment?
The recent changes will contribute to reducing transience in Dubai and help bring higher certainty and confidence to the market overall. Limitations of foreign ownership within Dubai have historically been
deterrents to individual and institutional investors. With the introduction of 100% non-free zone ownership, along with longer term skilled and student visas, Dubai will likely elevate its competitive edge against other global players, which could potentially help draw and retain serious talents in Dubai, contributing to a significant positive evolution to the economy overall. What sectors of the real estate market do you think will see the biggest shifts?
Eventually, and when past the current market landscape, residential real estate will continue to develop to accommodate the growth in the longer term population. Global
higher education will likely continue to be attracted towards Dubai and bring with it a solid ability to fuel long-term talent to the market. Commercial and industrial real estate will also likely be positively impacted with this growth, as it is aimed to attract global players to the region.
real estate. A 10-year cycle is a long enough cycle in real estate terms to witness appreciation if the price of acquisition is right.
Will we see an increase in buying transactions in the affordable housing segment?
It is very likely that the market will see an increase in buying transactions in the affordable housing market. Long-term employment and business prospects, beyond what was previously known as an average two-year transient cycle of residency, will help shift the mindset of residents from renting to building equity and buying into
â€œDubai will likely elevate its competitive edge against other global playersâ€?
sustainable construction specifications will be encouraged and harmonious to the potential upcoming growth of innovation in Dubai instigated by these changes.
Do you think developers will be changing or adapting their construction and sales strategies in response to these changes?
What else can the government do to encourage investment in real estate?
I think there is a good opportunity for developers to evolve their strategies to encourage home ownership in Dubai. We are seeing some developers offering rentto-own type plans which provide an alternative to one of the major obstacles in home buying, where buyers are currently required to pay at least 25% down payment towards mortgages. If priced correctly, this can have a positive impact on encouraging home ownership. Also, more innovative and
The government can continue their ongoing efforts towards data transparency to encourage prospective foreign investors and end users to buy into the market, along with overall incentives to manage cost of acquisition in terms of fees. as well as continued and increased regulation over developers and brokers to carry on building and fostering trust in the market. In addition, there is also an opportunity here for banks to revisit their mortgage affordability.
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July 2018 15
16 July 2018
“It may not necessarIly be your fault, but It’s certaInly your responsIbIlIty. the sooner the Industry resolves the past and then adjusts to a more sustaInable payment profIle, the better off we wIll be” Big Project ME’s Gavin Davids sits down with Hamish Tyrwhitt, CEO of Arabtec Holding, for an in-depth chat about lifting the construction giant back to its feet, and why the industry must learn from the past
July 2018 17
ack in May of this year, Arabtec Holding announced its financial figures for the first quarter of 2018, and while they showed a strong performance in the time period (a net profit to parent of $17.2m on revenue of $659.4m), perhaps the most positive aspect was the continued upward progression from 2017. This trend is important, given the UAE construction giant’s recent past. Just a few years ago, the company was in a state of upheaval, having undergone management changes and restructurings that left it on its knees and struggling to operate efficiently, having reported a net loss attributable to equity holders in the parent of $12.63m in the first quarter of that year. Even this was a marked improvement on the $626m loss posted in 2015. These figures serve to illustrate the dire circumstances that the contractor was in when Hamish Tyrwhitt took on the role of CEO of Arabtec Holding at the end of November 2016, and the size of the task that was awaiting him in bringing this homegrown construction giant back to its feet. Having worked for Leighton Holdings for 27 years across Australia and Asia, Tyrwhitt came on board as Arabtec CEO after being appointed as CEO of Depa Group, an interior solutions provider also partowned by Arabtec, in April 2018. Given the situation he faced, he tells Big Project ME that one of the first tasks on his to-do list was to repair the company’s organisation structure, which 18 July 2018
taking on the challenge One of Tyrwhitt’s first priorities when he came on board as CEO of Arabtec was to strengthen the management team through a number of senior appointments.
“One of our strengths is that we’re always going to be here. We’re homegrown. This is not a satellite office, a branch office or a regional hub. This is Arabtec – and it’s the same with Depa – we run operations from our home in the UAE”
had been falling apart for quite a long time due to the turmoil in the company. To support the delivery of the company’s key objectives, he made strengthening the management team, through a number of senior appointments, a priority task. These appointments have already had a positive impact on the business, with clearer accountabilities, driven by improved rigour around project and business reporting and reviews, resulting in a strong focus on cash collection, delivery and the closingout of legacy projects. “The first thing was really the lack of direction that existed within the company, as far as things like a business plan, a structure and how we were facing the market. Obviously, one of the biggest challenges on day one was the lack of liquidity. We had to understand where we were at that point and raise additional capital to ensure that the company had a sustainable future,” he says.
“What that meant was that in the first six months of the role, my whole focus was on capital raising, stabilising the existing projects that we had rolling. We also had to rebuild the confidence and trust of the market and put in place a team that would be able to deliver on our commitments.” In 2017, he and his team set out to deliver Phase One of the strategic roadmap that he had mapped out to stabilise the business. In June that year, they achieved their first major milestone, raising $408.3m through a rights issue. Not only did this strengthen the group’s working capital and liquidity, but it also allowed Arabtec to extinguish its accumulated losses, thereby accelerating its path towards resuming dividend distributions, he explains. Having now been in the role for just over a year and a half, Tyrwhitt says the positive financial performance for Q1 2018 was down to the simple strategy that he had put in place, which came with the full backing of Arabtec’s board. “If you do work that has the ability to make a cashback profit, and if you perform on the project and deliver it on time, with productivity and efficiency, then ultimately you’ll be making a return,” he points out, adding that the first year of the plan was really about stabilising the business, with the focus on capital raising and putting resources into place. “The second phase was about leveraging the efficiencies and the synergies across the group. It’s about putting the right companies in front of the right clients and doing the right projects in our core competencies. It was about getting that focus right and getting the clients that we wanted to work for, in the sectors that we’re good at. We’re just starting
“If you do work that has the ability to make a cashback profit, and if you perform on the project and deliver it on time, with productivity and efficiency, then ultimately you’ll be making a return” to see the benefits of that project performance,” he asserts. One benefit has been the reestablishment of Arabtec’s image in the market, with Tyrwhitt explaining that the industry has begun regarding the company and its subsidiaries as viable partners again, a fact evidenced by the hundreds of millions of dollars’ worth of contracts signed over the course of the last year and a half. In fact, the company’s order backlog was $4.41bn for the first quarter of this year, further supported by a solid
pipeline of $4.35bn of tenders submitted or under preparation in its primary market of the UAE. “Putting in place a team of people who are contractors means that when we have conversations with people and concerns or issues are raised, we are able to answer them in a construction manner and take appropriate actions. It’s a small town, and as a construction business, we touch just about everything and we employ people through every cross-section of society. So, very quickly, word gets around
that this is a company that’s delivering on its promises, or that this is a company that has other struggles that are distracting it from being able to deliver. “We’ve got a series of stakeholders that we look at. We’ve got our shareholders, we’ve got our clients, we’ve got our employees and we’ve got our subcontractors and our supply chain. You’ve got to rebuild the trust with every one of those stakeholders, in order to be successful.” However, this doesn’t mean it
has been an easy process for the company. The transformation process Tyrwhitt has overseen has resulted in some tough decisions being made. In November of 2017, he quoted by local media as saying that the construction firm intended to outsource a range of functions that it had been carrying out in-house for many years. The thinking behind this move was that it would make the company more streamlined and focused. Over the years, a range of internal functions
re-establishing arabtec’s image One of the benefits of the strategic plan put in place by Tyrwhitt has been the re-establishment of Arabtec’s image in the market, with the industry regarding the company as a viable partner again.
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had been developed to allow the company to run smoothly. Whether this was processing visas and arranging travel for staff, or establishing labour accommodation camps and running catering for them, almost everything was done in-house. While this may have been necessary years ago, back when the industry was still finding its feet and the supporting industry infrastructure was not there, Tyrwhitt feels that with the market maturing, these services and functions are simply too inefficient for a modern-day construction firm to have in-house. “We did have quite a few redundancies or restructurings,” he says of the transformation process. “That was really a necessary evolution, because
“The first thing was really the lack of direction that existed within the company, as far as things like a business plan, a structure and how we were facing the market”
if you look back to when construction companies first set up here, everybody was selfsufficient. You had to build your own labour camps, you had to do your own catering and set up your own transportation business. Everybody had internal subcontractors – you had your own interiors business, you had a piling company, an MEP company and so on, but over time, the industry matures, and it becomes more efficient to outsource. “There’s a huge amount of outsourcing that we’ve done, but the company hasn’t really evolved over a long period of time. It hasn’t kept innovating and evolving to the changes in the marketplace, and we’re still only halfway through that journey. It’s going to be our main focus, and in fact it’s the main focus of the UAE
as well – innovation, productivity, sustainability and efficiency. “I see it as our duty to understand the direction and the vision that the country’s leaders have, and for us to implement that vision. I think there are many things that the construction industry can do to become more productive and efficient. Part of that is measured in headcount, but there are also many things that we’re doing that have absolutely nothing to do with our core competency, which is construction.” However, he is keen to stress that this restructuring process is also part of the natural evolution of a construction company, pointing out that the regional industry is quite transient. “The bulk of employees in the construction sector are
following the uae’s vision Tyrwhitt says that Arabtec, and other construction companies, must understand and follow the vision that the country’s leadership has when it comes to productivity and efficiency.
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expatriates from overseas – that’s throughout the workforce. When people come here, how long do they come here to work? If we say that it’s an average of eight years, then that means that you have a 12% annual turnover rate, just with people departing. “We have approximately 48,000 people working at Arabtec. For us to have 6,000 people out, it’s only just over 10% of our workforce. So yes, the number is large, but it’s made up of people that are departing, and us not necessarily replacing them, and also putting in place the right processes of outsourcing.” While part of the reason behind streamlining the company is reducing operational costs and overheads, another factor is the need to be more competitive in a market that has grown increasingly more difficult to operate in for contractors, given the tight margins and increased demands they face. Given that so much construction has taken place over a sustained period of time, the market has become quite crowded, which has created a situation where companies no longer feel they can operate efficiently and profitably. With Arabtec’s status as a homegrown tier-one contractor, leaving isn’t an option for the company or for Tyrwhitt, but to thrive, tough decisions need to be made across the board. Key to this is adopting new methodologies and systems, many of which have become
putting in place a culture Tyrwhitt says he is keen to put in place a culture that embraces new methodologies and systems and makes them part of Arabtec’s day-to-day operations, rather than just setting up departments to fulfil a requirement.
major focus points for the industry. However, he asserts that rather than being reactive to market forces, he’s keen to put in place a culture and ecosystem that embraces these methodologies and makes them part of day-to-day operations. “I think, for whatever reason, the productivity output of the construction sector in the UAE has been low, if you look at the global benchmark. We are not as productive as we should be. Part of this has been driven by the cost of labour, but as costs have been
rising, the market has become more competitive and contractors can no longer be complacent. “Contractors now have to look at ways of differentiating themselves and evolve and be sustainable. To me, sustainability is about a culture, it shouldn’t just be a department. I remember when the ISO certifications came out in the 1980s, everybody ran around getting ISO-certified for quality and management systems and for safety and setting up safety departments. In my view, that’s a responsive reaction to a
need. We all have a desire and an aim to ensure that everybody involved in our projects return home as safe as when they came to work. You do that by having a culture where people look after themselves and their colleagues, and by engineering safe solutions and construction methodologies. “We need to realise that empowerment of people happens when we give people clear responsibilities and accountability, and that’s whether it’s sustainability, safety or efficiency.”
“The bulk of that work is in our core market of the UAE, but we’ve also picked up work in Egypt, Saudi Arabia, Bahrain and Jordan – but the UAE is where we’re really focusing, particularly on the bluechip clients that have also evolved over the last few decades” July 2018 21
Tyrwhitt says the company has already seen the benefits of implementing such an inclusive culture, starting with its increased market share over the last year. Rather surprisingly, he reveals that despite being a tier-one homegrown contractor, Arabtec only had around 4% market share in the UAE. Last year, that figure increased to 9%, but he insists there is more to come. “One of our strengths is that we’re always going to be here. We’re homegrown. This is not a satellite office, a branch office or a regional hub. This is Arabtec – and it’s the same with Depa – we run operations from our home in the UAE. We’ve got Depa offices in China, Malaysia, Singapore, Germany, the US and all through the Middle East and North Africa. “Arabtec has a footprint all through Egypt, Saudi Arabia, Bahrain and Jordan, but if you look at the spread we have for the business – for both companies – the largest share of the business is actually here in the UAE. In the case of Arabtec, it’s over 80%. “I was very surprised by how low our market share was. Last year, we actually won about 9% of the UAE market share and that put us at the top of the list, but when I look at the breakdown of the market here in the UAE, it is heavily centred around building works. Over time this will shift towards more infrastructure opportunities coming out,” he predicts. “Infrastructure isn’t just roads and bridges, it’s the assets that invest in societal needs to function efficiently. It’s hospitals, schools, airports, extensions to public transport. This is all infrastructure that joins and glues all of the private development that’s going on. “The strain that has been put on infrastructure over the last couple of decades here 24 July 2018
focus on infrastructure Tyrwhitt predicts that the coming years will see an increased focus on the development of social infrastructure projects, such as hospitals, schools, airports and transport solutions.
is enormous. You look at the expansion of the airports, you look at Sheikh Zayed Road, when they were first built and what they replaced. People must have thought there was never going to be traffic on SZR, but there’s not a day when there’s no traffic jams. Even the Dubai Metro if you’re on it, or drive past the Metro stations during peak hours, there’s an enormous number of people who are using it, and it isn’t a network that has all the connectivity yet,
nor is it capturing all the major population hubs in the city.” Looking ahead, Tyrwhitt says one of his biggest concerns is payment. He points out that too much of a contractor’s balance sheet is tied up in receivables, and that there is a lack of liquidity in the market, which is crippling it. “If you’re a property developer, you use your balance sheet to buy a landbank, and you use your balance sheet to
fund a project until you sell it. The assets of a construction company should be things like tower cranes, construction equipment and its people. “But that’s not the case here. Too much of our balance sheets are tied up in receivables, and we enter into contracts that have payment cycles, but inevitably that’s not what transpires over the life of a job. “The lack of liquidity is crippling the industry. If
tier-one contractors are not paid, then they can’t pay their supply chain, and then their suppliers can’t pay their own supply chains. It becomes like a disease that filters through the sector,” he warns somberly. “A construction company needs two things – liquidity and people. We talked about how you need the right people in the right roles, but you also need to have the cash to build, because it’s predominantly a cash-based business and you need to move that money through the cycle of a construction job. We employ so many people, and we have a duty and a responsibility to make sure that those people are paid,” he emphasises. To that end, Tyrwhitt says more needs to be done to monitor and manage the construction industry in the region. The industry here is relatively easy to enter, and in the past almost anyone could come in, find a local partner and incorporate a company. That has led to a very crowded market, which in turn has created several legacy issues. While the market is slowly correcting itself, with construction companies that don’t have the balance sheets to withstand the pain associated with a drag on payments dropping out, he maintains that the industry must take it upon itself to resolve these issues. “It may not necessarily be your fault, but it’s certainly your responsibility. You’re empowered to do that, and the sooner the industry resolves the past and then adjusts to a more sustainable payment profile, the better off we will be.” Despite all these challenges facing the industry, Tyrwhitt says the future for Arabtec is looking good, as evidenced by the strength of the 2018 order book. The aspect he’s most proud of is
“The assets of a construction company should be things like tower cranes, construction equipment and its people. But that’s not the case here”
that the company hasn’t won any work in the last 18 months that is part of a joint venture, meaning that everything that Arabtec is doing, it is doing by itself. “We’re utilising the strengths of the group, whether it’s EFECO that does MEP, or a company like Depa which does interior fit-out. What this means is that we’re in control of our own destiny, and therefore, it’s easier for us to deliver on our commitments. Not having a joint venture partner means that we can respond to drivers that affect us, and not necessarily what might be affecting another company. “The bulk of that work is in our core market of the UAE, but we’ve
also picked up work in Egypt, Saudi Arabia, Bahrain and Jordan – but the UAE is where we’re really focusing, particularly on the blue-chip clients that have also evolved over the last few decades. “Their project management skills are now much better, as are the consultants that they’re using, and they’ve incorporated the lessons learnt [from the real estate crisis]. As such, I think that the overall efficiency, productivity and relationships that exist now are healthier on the projects that we’ve got,” he asserts, signing off the interview with a sense of optimism for both his revitalised company and the construction sector it serves.
curing the disease Tyrwhitt says the construction industry must address the lack of liquidity in the market, which he likens to a disease spreading through the sector.
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26 July 2018
Big Project ME visits the Art of Living Mall to find out how Airolink, MMS Global and LACASA are creating an architectural masterpiece in Dubai
July 2018 27
hile Dubai may already have a plethora of shopping malls, such is the appetite for consumerism in the city that developers are constantly looking for new concepts and ideas to launch into the retail space. As a result, over the years we’ve had shopping malls built around particular styles or concepts, while others have been built to cater to specific sectors and markets. However, despite this variety and range of offerings, there has yet to be a dedicated space for
the home design and interiors market, says Dr Samer Al Omari, managing director and CEO of MMS Global, the developer behind the Art of Living Mall. It was because of this gap in the market that the decision was made to launch a retail project that answered that need, he tells Big Project ME during a site visit to the Art of Living Mall. “The idea emerged from Dubai city itself, as it’s a city that’s always looking for new ides and where projects strive to be the best, first and biggest by challenging existing situations and finding suitable solutions. “One of the factors that led to this project is the horizontal expansion of the city along Sheikh Zayed Road, which divided the city into old and new zones,
separated by long distances and heavy traffic. Thus, the furniture market as well was divided into several areas. On the other hand is the environmental situation in the UAE, which makes home renovation a nightmare to someone who has to suffer a long shopping experience in open markets. Therefore, the Art of Living Mall aims to solve all of these challenges by uniting everything under one roof, with the most luxurious of shopping experiences.” The mall is spread over a plot area of 14,957sqm in the Al Barsha Two area, along Umm Suqeim Street. With a built-up area of 47,380sqm and 22,262sqm of gross leasable area, it will house around 100 shopping outlets offering a variety of products, including home design items such
as carpets, furniture, interiors, lights, curtains and art. Consisting of three levels – a ground floor, a mezzanine level and a first floor – in addition to a basement, the project uses space and light to create a sense of openness and freedom. “The interior design of any project requires a lot of mix and match formulas which will not be possible when moving from one place to another, from one shop in the Marina to another in Salah-Aldein, for example. That is why shops should be united under one roof, so that the process will be easier when matching curtains with sofa fabrics, or matching lighting with accessories. That is why a one-stop destination is much more logical than separated shops,” explains Al Omari.
“The freeform structure is the biggest challenge for us. Structurally, internally there’s a lot of ins and outs, and each structure is unique. There’s no repetition or any of that. It’s just a series of structures and you have to think about it, plan and coordinate it”
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Backbone of the project The steel structures are described as being the backbone of the mall, with Airolink appointed specifically as an EPC contractor for that segment of the project, Nair says.
“In the Art of Living Mall there will be different brands coming from all around the world, with a lot of ranges in price, from medium to high. Whatever your requirement, you will be able to find it here.” As befits the ethos of the project, the design of the mall has been carefully planned and considered, with the developers stressing that the building should live up to its name and be a work of art itself. “We play with volumes and materials that range from the transparent to the solid, while adding a distinctive lighting for the exterior elements and landscape. This is so we can attract the eyes of visitors, so that we could create and add yet another architectural landmark to Dubai’s skyline.” One of the most striking aspects of the mall’s design is the massive freeform steel structure that covers the mall’s two main entry points, creating eye-catching designs that serve to attract attention in an area surrounded by busy highways and heavy traffic. However, as attractive as these structures are, their design, construction and installation have posed a major challenge to Airolink, the main contractor on the project, and the company specifically appointed as an EPC contractor for the steel structures. “The entire steel structure, which is the backbone of the project, has been designed
by us as an EPC. Fully, from engineering, procurement and everything,” says Ajith Nair, senior project manager for Airolink on the Art of Living Mall. “The freeform structure is the biggest challenge for us. Structurally, internally there’s a lot of ins and outs, and each structure is unique. There’s no repetition or any of that. It’s just a series of structures and you have to think about it, plan and coordinate it, for MEP, for structural works, architecturally and then get it done. It’s a very tough element of the project.” Although there was a
consultant hired for the rest of the project – LACASA Architects and Engineering Consultants – Nair says Airolink took on the challenge of designing and building the steel structure as an EPC contractor specifically because of how complex a structure it was. One benefit of this approach is that it allowed the team to conduct a thorough value engineering process on the steel structures, ensuring they were able to make it viable. “We have a very strong architectural and technical team which looks at the structural,
architectural and design elements of [the steel structures]. This entire design went through the same team, the freeform structure and the building. We did a huge value engineering exercise with it – the outside steel façade structure was supposed to be made up only of steel, but one of the major changes that we did was that we made it into a steel plus aluminium combination. “It’s a radical solution and it’s not done generally in the market as it’s a difficult solution to come to. But because of that, what has happened is that while the entire steel structure was supposed to weigh 1,400 tonnes, we took on the challenge and made it into a structure that weighs around 800 tonnes. The whole structure quantity has been reduced. This was a major component of the value engineering process, which in turn has helped us to get the project completed faster.” Al Omari points out that MMS Global has been an enthusiastic partner in the value engineering process, explaining that the biggest challenges on the project have been the short
Access all areas Due to the construction team needing access to the site from all four sides, Airolink worked with the RTA and Dubai Municipality to use a road running alongside the site.
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“We have completed more than 2,600 drawings on this project. It’s a huge volume for a project like this. Because of the complexity, we had to do more and more of the design elements, so as to make sure that everything was coordinated properly”
timeframe for construction and the value engineering process. “Our strategy is focused on providing a smart design that gives a fantastic luxurious look, as well as being feasible cost-wise. Our team is always keeping an eye on the small details and for any value engineering possibilities,” he says. He adds that during the tender process, the developer was keen to appoint a contractor that valued a sense of teamwork and cooperation, so as to work hand-in-hand in reaching company’s goals. “We were impressed by Airolink’s portfolio and projects, the size of their technical team and their design and build capabilities. Furthermore, we were glad to feel the sense of enthusiasm and the positive attitude from their CEO and top management for the project, as they understood the uniqueness and importance of such a landmark. All of that were great assets for us to sign the contract with them,” he asserts. Appointed to the project on a $54.4m construction contract, Airolink intends to hand over the shell and core of the mall by
shell and core Airolink has been appointed to hand over the shell and core of the project by October 2018, following which the developer will work with retailers to finish up the interiors of the mall.
October, with Nair explaining that the project will then be handed over to the client for the rest of the work to be carried out. “We’ll hand over the project – the shell and core – with the external finishes done, but the rest of the work, inside the shops and opening for business Dr Samer Al Omari says MMS Global has begun speaking to retailers and future tenants about the fit-out works that have to be done within the mall.
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all, will still be going on. That may take between three to six months for the client to decide. But we will hand it over. By September we should complete the structure, while the approvals process and all will be done by October. “Externally, we have done the plasterwork of at least 70% of the area, it’s the front that needs to be developed. We’re doing that now, the finishes to the front. As for the steel structure, the entire atrium is completed, now the glass has to come on top of it. We’re about 75% to 80% complete, but we can surely do it [by the scheduled handover date].” Al Omari adds that with the final stages of the project ongoing, he and the team at MMS are eager to open as soon as possible and to start fit-out works with future tenants. He highlights that there has been a strong response from retailers in the region, with booking requests exceeding the area of the mall. “However, we are responsible for ensuring the correct mix between tenants and their distribution across the various
The ConSuLTAnT’S RoLe How did LAcAsA go about designing and planning the Art of Living Mall? The client requested an iconic building that would attract customers from near and far. We had the task of creating a design that differs from other retail experiences while also standing out in an industrial area, without losing that raw expression that we find in nearby warehouses. Our team worked on a contemporary museum-like experience and language, made up of glass, aluminium cladding, steel and polished concrete walls. The massing is expressed, with a blank concrete wall covered with an architectural LED mesh screen to display advertising during the night and a simple roof with cut-outs. Furniture design was used as a concept, with the building being ‘wrapped’ like upholstery. The façade’s only glass mass is used to highlight the entrances to the mall, while visitors will be drawn in by
eye-catching fragmented structures made from steel and lightweight aluminium louvers. These freeform structures surround the two main entry masses as a ‘Jubilation of Art’. The wavy forms play the role of strong urban signals in a busy site surrounded by highways. The entrances open into triple-height lobbies, with fluid internal circulation routes to encourage a voyage of discovery around attractive landscaped interiors. The two big cylinders defining the entrance are emptied from inside and topped with skylights. The urban visual entities play the same role inside the project, as a space articulating vertically and horizontally the circulation of shoppers inside. What were the biggest challenges you faced on the project? The large span of skylights needed a special steel structure that had to be
lightweight as well. We chose a space frame system. The space frame system needed a rigid boundary supporting element. We used pre-engineered box sections supported on vertical columns and vertical trusses. The full glazing of entrance elevations meant providing brackets from concrete elements to support major ring beams. The free form structure needed to be pin supported on the main elevation vertical elements without affecting main structure stability or elevation view. The steel structure on the roof needed comprehensive coordination among architectural, structural, MEP, waterproofing and ID disciplines. The interface locations between the concrete structure and the steel framing systems were a challenge to achieve
structural integrity without affecting the beauty of the project elevations or the height of the internal space. How did you work with Airolink to map out the construction programme for the project? LACASA and Airolink worked hard to establish and develop an effective construction programme by adopting a primary emphasis on time and cost control. This involved the choice of technology for the smooth operation, the definition of work tasks, the estimation of the required resources and durations for individual activities, and the identification of any interactions among the different work tasks. The project went through various stages during the construction period, from initiation, planning, scheduling and coordinating to executing, monitoring and controlling project activities to reach the closure stage.
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levels of the mall, in order for the final result to match our leasing concept.” Another challenging aspect of the project has been the design of the mall itself, says Nair, pointing out that there are multiple levels, curved walls and slabs that go in and out. Although it’s a distinctive design that will look beautiful when completed, he admits that the complexity has caused progress to slow as the team works to get every element and part of the project absolutely right. “Structurally, there are more than a thousand changes that have had to be done. A structure of this complexity will need the steel structure to be connected to the concrete properly. The MEP also has to come through everywhere. It takes a lot of coordination and technical planning.” As a result, there is a large team on-site for the technical coordination, and their job is to supervise the various segments of the job, from structural engineering through to coordination. Their job is made even more difficult due to the lack of BIM on the project, he adds. “We didn’t have the option of using BIM, because the original software, the drawings that were developed, we were not able to do it at that stage. That made our job more complicated,” Nair relates, but adds that the strong rapport with the rest of the stakeholders has ensured smooth progress. “We have a very good rapport with the consultant, structural engineer and architect, plus we have a good relationship with the client designer as well. At the initial stages, all the drawings were passed on to us and our technical team coordinated everything, superimposed the drawings and checked it through and found the flaws. “A project of this magnitude cannot be done basically with 32 July 2018
The FiT-ouT ConTRACToR’S RoLe What is Abanos’ scope of work on the project? The entire fit-out for the public spaces of the mall includes fit-outs for creative ceilings, flooring layouts, lift lobbies and state-of-the-art bathrooms. These combine with a bespoke metal spiral staircase and stainless steel mashrabiya elements on the walls and the columns. How is Abanos going about fulfilling the brief from the client and consultant? As with many of the projects Abanos undertakes, this interior fit-out and joinery project requires efficiency and a wealth of knowledge in completing such projects. For these reasons, Abanos has become widely recognised in the region for its ability to exceed client expectations while also delivering works on time. The project is going through a fast-track schedule, with all the various professional disciplines working together to best align their resources. What were the biggest challenges Abanos encountered on the project, particularly with regard to the design and engineering of the interiors? There were no major challenges encountered in the project. With regard to the design, the materials and finishes for the interiors were sourced from
renowned global producers from Spain, Germany, Italy and the United States. These include a contemporary organic ceiling, a custom-made stainless steel mashrabiya, a range of hand-selected premium materials including flooring imported from Spain, Villeroy & Boch wash basins and toilets, Grohe mixers, Italian lighting materials and American landscape features. What sort of impact did the client want to have with interiors? How does the project compare to other malls in the region? The main concept behind the art mall was to reflect art and luxury while ensuring unity and harmony between the different elements throughout the project. This extends from the floor layout, which reflects the main façade, to the ceiling’s intricate design, the interior and exterior landscape elements, to the architecture as a whole. The colour scheme is based on calm, elegant colours that range from off-white to grey and from black with brass to white marble. There is a gap in the market for a one-stop shop for interiors that has become even more urgent with Dubai set to host Expo 2020, which will drive further expansion – a need that the Art of Living Mall aims to address within the most luxurious shopping experience.
just the design drawings. We have completed more than 2,600 drawings on this project. It’s a huge volume for a project like this. Because of the complexity, we had to do more and more of the design elements, so as to make sure that everything was coordinated properly. “To do a project of this complexity, it’s not possible if our design team had not coordinated initially. It’s the teamwork between our design team and LACASA’s design team that made sure everything worked,” he stresses. As part of the effort to work together, Nair says weekly coordination meetings, project progress review meetings and technical coordination meetings are held with the consultant, contractors, subcontractors and client. With more than 14 subcontractors on the job, it is crucial that everyone is on the same page. Another aspect of the project that has needed close attention and coordination has been the MEP for the mall. In fact, getting this part of the job right is so important that the MEP team holds a separate weekly coordination meeting to discuss progress on-site. “For the MEP, the main challenge is that it’s a mall. It requires all these additional features – there’s Wi-Fi, building management systems, security features and more. To get all of this together and coordinate it is very difficult,” he explains. “The client is also very insistent that the floor height be maintained. For a 6m slab, for example, he wants 4.7m as a minimum. That means that you’re only left with 1.3m of space, and in that the slab itself is 300cm. “So you’re left with 1m to fit the AC ducting, the fire lines, the pipes and so on. It’s very difficult. In some areas, we’ve had to go through the beams and
third-party testing Comprehensive third-party testing was carried out for the steel structures, with each component tested prior to being installed.
put them in there. There was no other way to do it,” Nair asserts. When it comes to the construction of the site itself, Nair says the project is a cast in-situ structure, with precast not an option due to the large number of curves and shapes in the concrete works. Furthermore, for the steel structure, comprehensive thirdparty testing was done for each element, with not even 5% or 10% of the elements missed. To put this into context, he points out that generally this is a random testing process, with 25-30% of elements tested. However, for this project, each component was tested first at the manufacturing facilities in Sharjah and in other parts of the UAE, before being further processed and transported to site. Logistics has been another challenge for the team, given that it is a fast-track project with more than 1,400 works on-site at peak. Not only is work conducted in two shifts, 24 hours a day, the team also has to cope with working in an area with limited accessibility and space around it, given its proximity to a major highway and residential areas. “The programme, from the beginning, was a fast-track project. We had two shifts working on it, day and night. The major concreting works were done during the night shift so as to 34 July 2018
avoid major delays. We have a very good relationship with Dubai Municipality and the RTA. We utilised those relationships to take an entire stretch of road outside the site. There would have been a lot of difficulties getting materials in otherwise.” Not having a proper laydown area for materials also posed a problem for the team, and once again the Airolink team was forced to adapt and improvise. “The steel structure sites go down to the basement, so from the beginning we have allotted this area as the place where we’ll keep the space within Because the steel structures extend right down to the basement and cover about 1,000sqm of area, the contractor used the space within as a laydown area for building materials.
incoming materials. No work has been done in that area yet. Once the steel structure starts coming in, the materials that are currently inside will be moved out. These are about 1,000sqm each in area. “We have set up the tower cranes in such a way that they’re easily accessible to this area. We restricted it to two tower cranes. Originally there were four cranes planned, but we brought it down to two. This is a project that needs to be accessible from all four sides, and with the tower cranes, we’re limiting the tonnage and maximum loads that can be
carried. What we’ve done instead is use mobile cranes around the perimeter, along with the tower cranes and boom loaders to lift in and bring in all the materials.” At present there are 1,000 workers on-site; there were 1,400 at peak construction. Despite these large numbers, Nair is proud to report that there have been no major accidents, with the health and safety record currently perfect. “We have a very strong safety team with us. There’s a senior safety manager, who’s also our safety manager across the UAE. There are two safety officers each on the day and night shifts respectively, and all of us [the on-site leadership team] are committed to directly imposing safety principles. There’s no separate team here, we all want the safety standards to be followed. “There are continuous, regular toolbox meetings, plus we have separate meetings for new activities. That is, for each activity, before it starts, there is a task briefing. It’s full-on, we take care of everything and only then do we start the work,” he concludes.
Big Project ME speaks to HVAC experts to determine how technology can improve the performance, efficiency and sustainability of cooling systems
Real-time adjustment Devices that can automatically connect to HVAC systems to adjust the temperature in real time can help increase energy efficiency and contribute to savings.
The last few years have seen major developments in the HVAC industry, with technological advancements helping to sate increasing end user interest and appreciation for energy-efficient technologies that optimise operational costs and reduce the consumption of resources. This reflects a wider trend in society, where smart technology and intelligent systems are driving the demand for more efficiency and functionality in buildings, infrastructure and transport systems, and the HVAC industry is no exception.
36 July 2018
Hadi Ismail, senior director, Energy Solutions and Mega Projects at Taqeef, explains that this demand for energy-efficient technology in HVAC systems means there is also increased demand for IoT technologies, with the penetration of IoT in the overall HVAC industry changing the field remarkably. “Smart technologies are increasingly becoming more mainstream, including the smart thermostat. This is a device that connects to Wi-Fi and can automatically connect to HVAC systems to adjust the temperature.
This real-time adjustment helps increase energy efficiency and contributes to savings as a result,” he tells Big Project ME. “Variable refrigerant flow (VRF) systems – which feature several smaller indoor units that can be individually controlled and piped back into one system – are becoming increasingly popular in the regional market. “VRF has the ability to control the amount of refrigerant flowing through each of the small air handlers, and given their success, the use of them in larger, more commercial
and residential developments will undoubtedly increase.” Johan Samuelsson, vice president, Middle East and Africa for Trane, adds that there is a direct link between saving energy from HVAC and other building systems, explaining that having smart solutions for HVAC leads to an overall increase in efficiency and performance for buildings. “It is imperative to keep a building running at optimal performance and to choose sustainability experts who can transform your buildings’ environments with digitally
driven solutions. A range of upgrade solutions should be available to give building owners the precise, measurable, digital controls to analyse, optimise or modernise their systems, based on business priorities.” With efficient HVAC systems playing a critical role in a building’s environmental impact, he points out that taking a whole-systems approach to building design and construction is critically important. “This method puts you in a much better position to help building owners and managers achieve their goals. Depending on the building requirements, HVAC systems can be incorporated to minimise environmental impact and maximise building performance.” Miro Donabedian, general manager, TSSC UAE, agrees with Samuelsson, pointing out that an efficient HVAC system design, in conjunction with an energy-efficient and climate responsive construction building design, can result in significant energy savings and improve the efficiency and productivity of the HVAC system. “In line with the purpose of the UAE’s Green Building Regulations, it is essential in developing HVAC systems that we reduce the consumption of energy and improve comfort of living,” he says. “A building’s HVAC system does more than just provide temperature control. Proper system design helps to maintain indoor air quality through air filtration and ventilation, creating a safe and more
Increased demand for technology Hadi Ismail says the HVAC industry has had to adapt to increased demand for energy-efficient and smart technology from end users.
comfortable environment for a building’s occupants.” While HVAC systems account for significant energy use in buildings, Donabedian points out their heavy consumption creates an opportunity to realise significant savings by improving the control of HVAC operations and their efficiency. “Whole building design, coupled with the use of highperformance HVAC equipment and certified duct insulation, can result in considerable energy, emissions and cost savings,” he says, adding that by combining energy management systems (EMS) and building management systems (BMS), owners and operators can create improved building performances. “For this, the connected systems need to be dynamic and provide visibility and context, in order to drive performance forward.” Ismail says sustainability is increasingly driving the UAE development agenda, and as
A direct link Johan Samuelsson says there is a direct link between saving energy from HVAC and other building systems.
a result there are a number of different government-driven targets that have a direct impact on the HVAC industry. Despite this, he feels more stringent regulations and tariffs are needed, as these will encourage sustainable practices rather than enable inefficient equipment through subsidies. However, he does point out that new energy-saving regulations and associations are emerging at a rapid pace, with many becoming mandatory across the industry. “A few examples include the Emirates Green Building Council, Dubai Municipality Green Building Regulations, LEED and Estidama’s Pearl Rating System in Abu Dhabi. DEWA has also invested $114.3m in electricity projects to support Expo 2020; a considerable portion of that is to reduce HVAC’s energy consumption, and we expect investments in renewable technologies and sustainable practices to significantly rise.”
“The GCC has experienced rapid growth in the construction sector in recent years – it’s visually apparent how the countries have developed when compared to just five years ago, particularly in the UAE. This growth has caused an increase in the need for HVAC products and services, especially in residential and urban areas. In hot, arid and humid desert conditions, developing innovative systems that improve air conditioning, water availability and quality while keeping the carbon footprint to a minimum becomes paramount. “As half of the energy used in buildings in the UAE comes from HVAC systems, it is no surprise that concerns over price and reliability prompt building owners and managers to focus on greener buildings. Plus, with sustainability a subtheme for Expo 2020 Dubai, the first World Expo to be staged in the Middle East, the determination to become more efficient has never been stronger. “When building owners use less power, they reduce the number of emissions released by power plants, including the amount of CO2 that goes into the atmosphere. When building owners save energy, those energy savings can be directly calculated to saving greenhouse gas emissions, which contributes to the overall green rating of a building. Green technology that has a high energy efficiency ratio (EER) will translate into a decreased electrical bill and lower carbon footprint,” Ismail concludes.
“Whole building design, coupled with the use of high-performance HVAC equipment and certified duct insulation, can result in considerable savings”
July 2018 37
Comfort and Safety can Go Hand in Hand
Mark Westermayer of KIMMCO ISOVER explains why fire safety needs to be considered for HVAC systems Our modern city lifestyle demands that we spend most of our time indoors and in air-conditioned spaces. As a result, HVAC systems play an important role in offering thermal comfort in every type of building, whether it’s a home or an office.
According to the Environmental Protection Agency (EPA), the average American spends 87% of their life indoors, another 6% of their life in automobiles, and only 7% outdoors. All kinds of insulation material are used to achieve optimum thermal and acoustic comfort in an HVAC system, but unfortunately little attention is given to the safety of the construction. The residential tower fire in London and the hotel fire on New Year’s Eve in Dubai are examples of how building materials can quicken the rapid spread of fire and smoke. Investigations into these accidents have concluded
36 July 2018
that the presence of combustible insulation material in the façade was the prime reason for the rapid spread of the fires, as well as the related damages to property and loss of life. It was also reported that patients were treated for toxic smoke inhalation. The silver lining of the Dubai fire was the formulation of a new Dubai Civil Defence code. The new code is more stringent and emphasises the importance of fire safety in buildings, and especially the selection of building materials. The new code recommends the use of a non-combustible façade system, which also must undergo fire tests before obtaining the required approval from Dubai Civil Defence. It is worthwhile to note that many of the building materials which have been the cause of fire incidents in high-rise buildings all over the world are also used inside the building. For example, the HVAC
ducts and pipes, walls and roof insulation. Therefore, it would be good practice to consider fire-safe insulation material for interiors as well. Material properties – such as flame spread, ignitable, smoke development and droplets – also need to be evaluated before selecting any insulation. According to the NFPA report: LargeLoss Fires in the United States 2016, there was a total property loss of $348.6 million in 22 large fires. There are several existing standards related to fire safety and the most stringent one is the European standard, EN 13501. This standard provides the reaction to fire classification procedure for all products and building elements. Standard products are classified as A1 to F, wherein ‘A1’ is listed as ‘NonCombustible’ products (normally stone wool and glass wool insulation material is classified as non-combustible),
whereas ‘F’ rated products are classified as ‘Easily Flammable’. EN 13501 also has sub-testing to classify the materials according to smoke release and droplets. Most GCC countries use the ‘Reaction to Fire Test according to ASTM E84’ as a qualification test, but this may not be a complete representation of a real fire. An actual fire will be more intense than any surface burning test as the temperature reaches well over 700oC during a real fire scenario. Smoke and droplets must also be seriously considered before choosing any insulation material. According to NFPA Fire Analysis & Research, 3/4 of all fire deaths are caused by smoke inhalation. Furthermore, approximately 57% of people killed in fires are not in the room of the fire’s origin. Smoke is a major risk to health as it can pass through small, narrow openings and
can travel as fast as 120 – 420 feet per minute under fire conditions, meaning that smoke and droplets can seriously hamper the rescue and firefighting efforts of civil defence forces. Considering the current global scenario, sustainable and energy efficient buildings are the need of the hour. It is estimated that globally, buildings make up more than 40% of total energy usage. Insulation can also significantly reduce energy demand, but this should not compromise the safety of the building. Consultants and designers must not only look for newer construction technologies and materials, but they must also have genuine interest in promoting building materials that offer both comfort and safety, while also including products and systems that have cleared the latest and most stringent testing standards.
Market leaders provide valuable insights and opinions for the construction industry
embedded in their dnA Barutcu says that sustainability is embedded in Grundfos’ DNA, explaining how they walk the talk, from strategy through to their own operations’ environmental footprint.
Finding the Solution Big Project ME speaks to Okay Barutcu about the Grundfos iSolutions range and how it contributes to the development of smart cities and systems
What are the challenges faced by the pump industry? How does Grundfos intend to address them? The world around is changing at an ever increasing pace, and the pump industry is no exception, as it faces many challenges, but also opportunities. The main challenges are: • Addressing all new regional and local legislation in areas such as energy efficiency, technical standards, and health and safety. It is critical to reduce the energy consumption of pumps, so as to minimise energy costs and the environmental impact for consumers • Maintaining a competitive 40 July 2018
edge against global competition through innovation, best efficiencies and matching our solutions more closely with the changing needs of customers. • Embracing digitalisation, which is completely changing the world around us today by adding intelligence, scalability, monitoring and self-optimisation capabilities to pumps. Customers want to work with a company who can solve their problems in an intelligent, efficient and environmentallyfriendly manner. This in turn offers great opportunities to companies who are innovative.
What does sustainability mean to Grundfos? For us, sustainability is not limited to a department or words on a poster on the wall. It is anchored in the way we do business, the way we think, the way we design our products and solutions, the way we operate our factories and facilities. We make products that can be recycled more than 90%, we build energy efficient facilities, we monitor our carbon and water footprint and constantly try to reduce it. Today we work very closely and actively with the UN on Sustainable Development Goals 6 and 13, namely Clean Water for All
and Climate Impact. Both goals are fully embedded in our Strategy. Back in 2008 we made a promise that we will not emit any more CO2 than we did back then and despite the significant growth of our company we have kept our promise and reduced our CO2 emissions year on year. Now, we want to go a step further and in the next strategy period become “Net Positive”. Why has Grundfos integrated the SDGs into its core business goals? Two simple reasons: There is no Plan(et) B that we can leave to our children and as a foundation company, the Sustainable
For further information, please contact: Tel: +971 4 8815166 Fax: +971 4 8815136 www.grundfos.ae
Development Goals are very much aligned with our purpose. Working to achieve the SDGs, will not only create a better world and bring business opportunities, it will also help to engage in the right partnerships, and attract like-minded customers as well as new talent to our organisation. Making sure everybody has access to clean water and basic sanitary conditions is extremely close to our hearts and we can make a real difference here as pumps consume 10% of total electricity production, we operate hundreds of facilities around the world and use machines and tools that consume power. In that regard Climate Action (SDG13) is extremely relevant tour business too. So it is therefore quite natural that both these goals are firmly embedded in our strategy. How do you support cities wanting to be smarter and more sustainable? Today, more and more people live in cities and with that a huge amount of infrastructure is needed. The 10% of all electricity consumed by pumps, which I mentioned before, can potentially be halved by swapping old, inefficient and overdimensioned pumps with new, efficient ones. Further savings and operational efficiency and comfort can be added by connecting and monitoring these pumps and the whole water network to a smart management system which requires intelligent pumps. On the other side of the loop, collecting, cleaning and re-using “dirty water” also requires pumps and technology and expertise which Grundfos can provide. With our technical and practical know-how we can be an ideal partner for municipalities and their utilities in their efforts to make the water infrastructure
Reducing the risk Adding intelligence to pump systems and digitising them results in a significant reduction of risks and costs associated with unplanned downtime.
“Making pump systems smarter and more connected to the Internet and to ‘the Cloud’, streamlines condition monitoring, predictive maintenance and engineering improvements, along with overall system optimisation through data analysis”
in the risk and costs associated with unplanned downtime and an increase in energy efficiency.
in their cities smart, efficient and better for the environment. We can work in different ways; support cities and utilities by being a technical partner, introducing our intelligent, digitally enabled solutions to them, and we can take it further by entering into closer partnerships designing and even operating these smart solutions. How can pumps contribute to smart building and smart city initiatives? Pumps play a very important role both in buildings and water utilities in the city infrastructure. To make the buildings or cities smart, they need to be made more connected, more adoptable, energy-efficient and more reliable, and every sub-system of the smart eco-system needs to be smart. Making pump systems smarter and more connected to the Internet and to ‘the Cloud’, streamlines condition monitoring, predictive maintenance and engineering improvements, along with overall system optimisation through easy and online access to data and big-data analysis. By adding intelligence to the pump systems and digitising them, there could be a significant reduction
What does Grundfos offers in terms of smart pump solutions? We offer a wide range of intelligent pumps with integrated variable frequency drives, state-of-the-art intelligent pump controllers, drives, sensors, communication modules and cloud connectivity, digital services, real-time monitoring, remote control, fault prediction and system optimisation for commercial buildings, industries and water utilities. We call it Grundfos iSOLUTIONS. With Grundfos iSOLUTIONS, you get intelligent pumps, cloud connectivity and digital services all working seamlessly together to reach a new level of performance, reliability and serviceability with high energy efficiency and reduced complexity. How will intelligent pumps and technology lead to greater efficiency? Grundfos iSOLUTIONS, with its demand driven distribution (DDD) system, optimises water distribution. Water supply companies everywhere struggle with leaky burst pipes that lead to costly repairs, lost water and excess energy consumption. These issues are caused by excessive pressure and an inability to detect a leak. DDD offers a unique pressure management solution that secures a stable and smart water supply system, which saves energy and significantly reduces water loss. We are also launching a similar solution for wastewater, called Waste Water Network Connect (WWNC) which optimises the collection and treatment of dirty water. In short, we can reduce downtime, increase comfort and save energy and water in various applications, across water and wastewater grids. July 2018 41
John McNeil, technical director – Bridges at Aurecon, says engineers need to understand the significance of the buildings and infrastructure they create for cities Have you ever experienced that feeling when you had to stop and take a mental picture of your surroundings, taking in every second, every moment you had in that place? Those moments when buildings become monuments, when a bridge becomes the place you met, and arches become childhood landmarks that welcome you home. Regardless of whether you want to preserve that memory or not, you just know, then and there, that a piece of this place will always be a part of your life, no matter what. For Londoners who survived the Blitz in World War II, one of these places is the Underground. Back then, air raid sirens screamed as families rushed to take refuge. Crowds of people piled in and pushed tightly together, panicked eyes darting around. Parents clutched children; children clutched teddy 42 July 2018
bears. An immense droning magnified the destruction above, as people waited in the corridors of sanctuary beneath the city. Since that moment, the Underground has had a profound meaning for Londoners. The Tube is not just a modern-day metro system for England’s WWII survivors; it formed an integral part of people’s lives, letting the memories that transpired back then live on. Spaces have stories, and it’s our job to capture them. Stari Most, the Sydney Opera House and the Te Rewa Rewa Bridge all have similar historical meaning, inspiring users and visitors alike. How can today’s engineers impart significance through design and create structures that are more than functional pieces of engineering, reflecting the past and shaping cities people want to live in?
Engineering is evolving Engineers have traditionally been trained with a specific set of skills. Projects involve research, calculation, design and construction to produce something useful, practical and problem-solving. What has been overlooked in training is the social impact a project may have on a population. It seems that following the plan, ticking a box and moving on is no longer accepted as job done. Today, our engineers must ask ‘Why?’ and ‘How will people respond?’ to seek understanding about where the surface problem lies and uncover the underlying needs of the community. The ultimate question is: how do we define success in a project? By identifying how people will use and respond to this infrastructure, engineers can address wider issues and design to accommodate the needs of a community. Leading academic Professor Roberto Verganti puts it this way: if all of London was on fire, which part of the city would you save? An entire generation might choose to save the very construct that saved their lives: the Underground. It has served above and beyond its initial intent; to say that the Tube has been a successful project would be an understatement. Don’t underestimate the power of sentimentality to forge value and galvanise community support around spaces. When you think design, he argues, think beyond the commercial value of a project to include its historical significance.
reconnecting with the past The Sydney Opera House was used to celebrate the cultural heritage and history of Australia’s indigenous people in 2017.
The power of projects to pick up the pieces When designing, look for opportunities to rewrite and redeem a broken story. Projects can be platforms for healing and
restoration. That’s what Bosnia’s Stari Most project has illustrated over time. For centuries, the iconic bridge was a proud symbol of its city, but in 1993 Croat military forces deliberately destroyed this pedestrian walkway as nothing other than an apparent act of ‘killing memory’. It was a tremendous blow to morale and left a cultural heritage and 16thcentury bridge in shambles at the bottom of the Neretva River. Fast forward one decade to a post-war Bosnia, utterly determined to pick up the pieces of their splintered past. After huge demand for the heritage and meaning to be restored, the bridge was rebuilt in 2004 with the same materials and technology as before. Parts of the original bridge were fished out of the river and grafted into the tenelia stone as a statement of resilience and patriotism. Today, Stari Most is one of the country’s most recognisable landmarks and a symbol of what can rise from the ruins when a nation works together. A city icon reconnects with indigenous cultural meaning The Sydney Opera House is undoubtedly one of the great architectural masterpieces of the 20th century. Its iconic sails are a meaningful feature of Sydney’s skyline. Danish architect Jørn Utzon blew up architectural expectations, advancing technology ahead of its time and generating passionate community debate in the process. Upon completion in 1973, the long history of the site of Bennelong Point was changed as Australia raced to define itself as a new land with this innovative building. The fact that a Wangal man, Woollarawarre Bennelong, was given the land in 1790 to build a hut was overlooked. But the Opera House, in time and July 2018 43
designing meaning into projects Engineers must broaden their thinking and embrace a humanities-socio-cultural approach when planning their projects and structures.
as necessary, grew to involve Aboriginal culture and give the once-forgotten Bennelong history a new platform. The opera’s sails were reinvented in July 2017 as skybound canvases to celebrate the rich and vibrant heritage of Australia’s indigenous community. During the week of the National Aborigines and Islanders Day Observance Committee (NAIDOC) – exactly 50 years since indigenous peoples were included in the census – the stark white facades were illuminated in extraordinary indigenous artwork known as Badu Gili. It was such a powerful presentation that Sydneysiders have been enjoying the show ever since. For seven minutes every evening, the Opera House is emblazoned in colour and light, a palette on which to write the story of Bennelong and his people into the Australian narrative. Inclusive design to create significance With the higher level of education and wider understanding 44 July 2018
“Today, our engineers must ask ‘Why?’ and ‘How will people respond?’ to seek understanding about where the surface problem lies and uncover the underlying needs of the community. The ultimate question is: how do we define success in a project?”
of today, engineers should celebrate rich cultural histories in their progression of projects and achieve inclusivity from the beginning. In 2010, Te Rewa Rewa Bridge in New Plymouth, New Zealand, was thoughtfully and sensitively designed from the start, taking in the history and culture of the land and its people. On the Northern side is a historic pã and burial ground, and the arch hangers are curved lightly at this end to honour the deceased. Entering the bridge from this side, the elegant white ribs of the structure frame magnificent Mount Taranaki in the background, positioning it in perfect view for people leaving the sacred ground. This extension to the Coastal Walkway was made possible by a special agreement between the New Plymouth District Council and Ngãti Tawhirikura hapú, with the social impact of the bridge understood and considered at the design stage, and the history of the site respected and integrated. While this bridge is a popular destination recognised for its
design and picturesque appeal, it’s the meaning behind it that has created a huge impact on visitors. Can we design meaning into projects? It’s true that it’s difficult to predict (or contrive) the meaning a building could have at the design stage; sometimes it takes generations, cultural events, disaster or even war to shape the meaning of infrastructure. A brand-new shiny skyscraper isn’t going to cut it as a historical masterpiece overnight. But engineers can broaden their thinking, embrace a humanitiessocio-cultural approach, begin to ask how people will respond, and consider the many facets of communities before putting pencil to paper. Imagine a future where the design process is led by the who, not by the what. The more human our solutions to tomorrow’s problems become, the greater chance we’ll be building monuments that become meaningful parts of people’s lives, and not just monoliths.
26 November 2018 Double Tree Hilton JBR
Dubai, United Arab Emirates
The prestigious Big Project Middle East Awards deserves its place as one of the most important forums recognizing the most influential and successful people and companies in the construction industry. Those in the industry that demonstrate their commitment to excellence. The award night event always offers a wonderful opportunity for networking with leaders in all sectors involved in the delivery of major projects; from clients and important developers to well-known consultants and contractors. Itâ€™s a must evening to attend.
President & CEO of KEO International Consultants
Understanding the ValUe in ValUe engineering
Alistair Davis of Black & White Engineering clears up some misconceptions about value engineering and provides concrete examples of its benefits on a project Since the commercial and financial challenges of 2008, the words ‘value engineering’ have been bandied about frequently, without due regard for what they actually mean. Value engineering should not just be about cost-cutting but should focus on optimising a design which results in the end product being more beneficial to the stakeholders than the original proposed. This effective engineering approach needs to be considered in the light of whole lifecycle costing, not just initial build costs, especially when your stakeholders are owner-operators, etc. 46 July 2018
Through value engineering, it is possible to provide a higher quality design with greater resilience and flexibility for the same monetary value as initially proposed. This is still considered value engineering, but the value has been added to the project rather than monetary savings achieved. Of course, there is an important need to ensure projects are built within budget, and without this due consideration projects would very likely fail. The best time to implement value engineering is at the very outset of a project. This should be carried out by the base design team and not observed at the end by an outsider. If optimised
starting at the beginning Value engineering works best when the value engineering team is brought in alongside the base design team and the exercise is undertaken in a collaborative environment.
designs can be considered from the beginning, then all supporting systems can be considered collaboratively, resulting in a more efficient and successful project. A good example of this is the sizing of MEP plant rooms. If equipment is oversized then there are usually penalties to be paid, which include inefficiencies, additional installed electrical infrastructures or the need for larger rooms, which in return reduces NLA and increases initial build and running costs. Value engineering works best when the value engineering team is brought in alongside the base design team and the exercise is undertaken in a collaborative
environment. This ensures that efforts are made to discuss ideas, which promotes greater synergies to the project as a whole. The standard approach to any form of value engineering exercise is based on the following steps: 1. Information Gathering – Understand the project and the stakeholder requirements. 2. System Analysis – Analyse the project’s systems and associated components in order to understand and clarify the required functions. 3. Optioneering – Review the possible design options in order to achieve the required design intent and identify specific value improvements.
“If optimised designs can be considered from the beginning, then all supporting systems can be considered collaboratively, resulting in a more efficient project”
4. Development – Develop the selected alternatives that provide the best stakeholder value improvement. 5. Presentation – Present the value engineering recommendation to the project stakeholders. 6. Implementation – Incorporate agreed value engineering into the design. The key team players in any value engineering exercise are the stakeholders. Whenever Black & White Engineering is brought in to undertake a value engineering review, this starts by understanding every single stakeholder’s needs. Without a clear understanding
of the requirements of the client, the operator, the user or indeed any key stakeholder (including the cost consultant), there is no way of successfully optimising the systems. Along with fully understanding the stakeholder’s needs, it is also the consultant’s responsibility to inform the stakeholder of the decision process by providing the necessary technical expertise and project experience. A simple but effective example of this is undertaking the cooling calculations for a building. Firstly, it is essential to use software that can dynamically model the peak coincidental cooling load, so that an accurate base load is
obtained; secondly, an in-depth review of system profiling and diversities needs to be undertaken. Once this is completed, a review of fresh air controls is typically undertaken. At this point the stakeholder’s input is massively beneficial to the project, to verify the implemented assumptions and identify any further areas of modification, especially where benchmarking data is available. B&W Engineering has had the good fortune to undertake many value engineering exercises where the stakeholder has also been the end user. This has led to the project greatly benefiting from accurate benchmarking data used to verify the optimisations proposed. Value engineering is a process typically inherent to all design phases, and primarily undertaken during the concept design stage. This process can suffer for many reasons, typically due to a lack of stakeholder input, aggressive design programmes and insufficient knowledge of local authority requirements. The incorporation of value engineering into the design process from the initial stage of a project provides the following substantial benefits: 1. The functionality of the project is often improved, as well as producing savings for both initial and lifecycle cost. 2. Concept stage option reviews give the assurance that all reasonable alternatives have been explored. 3. Design documentation reviewed by the quantity surveyor to provide accurate cost estimates, which are checked thoroughly and signed off by all stakeholders, assure that nothing has been omitted or underestimated. 4. Assurance that the best value will be obtained over the life of the building. July 2018 47
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50 July 2018
Period 2020 Status Current Project main Contractor Aknaf Al Khaleej Company (Saudi Arabia) tender Categories Construction & Contracting, Education & Training, Leisure & Entertainment tender Products Commercial Buildings, Educational Developments, Hospital Construction, Residential
PrinCe SultAn hotel toWer ProjeCt – Al nASeem DiStriCt Budget $20,000,000 Project number WPR3463-SA territory Saudi Arabia Client Saudi Commission for Tourism & Heritage (Saudi Arabia) City Riyadh 44586 Postal/Zip Code 66680 Phone (+966-11) 880 8855 Fax (+966-11) 880 8844 email firstname.lastname@example.org,sa Website www.scth.gov.sa Description Construction of a hotel tower comprising 2 basement levels, a mezzanine floor and 12 floors Period 2020 Status New Tender tender Categories Construction & Contracting, Hotels tender Products Hotel Construction
Postal/Zip Code 393 Phone (+968-24) 602 177 Fax (+968-24) 602 647 Website www.moh.gov.om Description Expansion of a hospital Period 2019 Status Current Project main Consultant Khatib & Alami Consolidated Engineering Company (Oman) main Contractor Oman Shapoorji Company LLC (OSCO) meP Contractor International Electric Company LLC (Oman) tender Categories Construction & Contracting, Medical & Healthcare tender Products Hospital Construction
City Muscat PC 118 Postal/Zip Code 87 Phone (+968) 2453 4400 Fax (+968) 2453 4401 email email@example.com Website www.almouj.com Description Construction of a community centre designed and created to be a place where people can connect, share and learn Period 2019 Status Current Project main Contractor Shaksy Engineering Services LLC (Oman) tender Categories Construction & Contracting, Education & Training tender Products Educational Developments, Public Buildings
Community huB ProjeCt – Al mouj muSCAt
Al nAFiSi toWer ProjeCt
Budget $10,000,000 Project number WPR3422-O territory Oman Client Al Mouj Muscat (Oman)
Budget $25,000,000 Project number WPR3383-K territory Kuwait Client Al Nafisi National Real
Estate Group (Kuwait) Address Salhiya Complex, Entrance 4, Fahad Al Salem Street, 3rd Floor, Al Qibla Area City Safat 13001, Kuwait Postal/Zip Code 255 Phone (+965) 2240 6968 Fax (+965) 2246 0101 email firstname.lastname@example.org Website www.nafisi.com Description Construction of a mixed-use tower featuring a basement level, a ground floor, 2 mezzanine floors, a garden floor and 14 floors of office space and commercial areas along with a lower and upper roof Period 2019 Status Current Project main Consultant OHA Engineering Consultants (Kuwait) main Contractor Al Bahar Construction for Trading & Contracting Company (Kuwait) tender Categories Construction & Contracting tender Products Commercial Buildings, Mixed-use Developments
Oman the royAl hoSPitAl exPAnSion ProjeCt – Al ghuBrAh Budget $35,000,000 Project number WPR2926-O territory Oman Client Ministry of Health (Oman) Address Opp. Khoula Hospital, Bldg No. 105 City Muscat PC 113
INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | email@example.com
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The Importance of Workflow and Routing Ian Hauptfleisch of CCS Gulf outlines some key factors to consider when choosing construction software The modern software market is extremely competitive, with multiple providers supplying what can appear to be very similar solutions. In that environment, how can you choose the right provider for you? A business owner or manager with a strategic outlook will know to look for a solution that offers routing and workflow.
A key challenge to adapting the right solution is that a considerable number of businesses view construction management systems as something they have to adopt, rather than understanding fully the benefits and ROI. This can often lead to a solution being selected on the basis of price rather than suitability. Where businesses take the time to align the selection of their software solution to the tactical and strategic plans of their organisation, the benefits are amplified exponentially and drive effectiveness through ensuring the work they bid for is profitable.
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So, what should you be looking for in a construction software partner? You will be best served by a solution that has workflow and routing. Let’s take a look at a few examples: Bidding for Profitable Work – At the bidding stage of a potential project, stakeholders and actions can be pre-determined, ensuring all these elements can be managed and carried out effectively and consistently. Your construction software will ensure that all the internal and external partners who need to input elements to your bids will be provided with the right information at the right time through workflow and routing, allowing them to respond effectively. Retaining Margin – Management of correspondence, RFIs, change orders and status (to name a few) are commonly identified challenges in the construction industry. Effective document routing and timely identification of approaching or missed due
“As a construction professional, you apply fundamental principles to how you go about building a structure. You make a plan and consider contingencies and variations. Apply the same principle to choosing your software partner”
dates vastly mitigates risk and reduces the chance of error. Efficient management of change orders in itself has a visible and identifiable impact on the final margins. Minimise Commercial and Corporate risk – Managing elements such as payment approvals and accounts payable should be routed within the software system. This routing function looks after these processes and allows for situations such as the primary signatory being absent, to ensure delays are not encountered. Delays in payments out (and of course invoices to payments in) are a core and common cause of delays and overruns that present significant commercial risk in the modern world, where margins are typically less than 10%. Corporate risk is further reduced when dealing with subcontractors, for example where elements of pre-qualification and progress tracking are used. Management or Reduction of
Infrastructure Costs – Having best practice automation embedded in your system and processes allows maximum efficiency. Removing manual processing and data collation frees up your personnel to carry out work that requires human interaction and attention, rather than tying up hours, days or weeks completing tasks that the systems can accurately complete in moments. This can lead to requiring fewer staff (and less cost) or ensuring you gain maximum productivity from those individuals in the core specialisations they cover. As a construction professional, you apply fundamental principles to how you go about building a structure. You make a plan and consider contingencies and variations. Apply the same principle to choosing your software partner. Plan what you want to achieve from the system, to make sure you get the best fit for your business.