ISSUE 003 | APRIL 2014
Oil and gas
Fujairah’s oil gambit The emirate is emerging as a global oil and gas storage hub
Turbulence at the top Environment should be top priority for the aviation sector
BIM boost for rail projects 3D virtual reality gains traction in public infrastructure projects
Health tourism haven Dubai Health Authority rolls out medical tourism strategy
Iraq power report
H.E. Karim Aftan al Jumaili, Iraq’s Minister of Electricity, shares his country’s power-packed agenda
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PLUS our top-10 kuwait infrastructure projects
003 April 2014 26
04 Regional update
Country-wise news summary: Read about Dubai’s 100 MW solar IPP, Riyadh metro project, shale gas update from Oman, how DP World fared last year and more.
No more power woes Iraq has adopted a multipronged strategy to match power generation with demand. Report by Anoop K Menon
Exclusive reports: Atkins’ take on multimodal transport infrastructure, Lucy Switchgear’s expansion plans, ABB on energy-smart cities and Fujairah’s ascendance as a global oil and gas hub.
17 Infrastructure tenders
Top 10 FEATURE
09 In focus
Kuwait Infrastructure Projects
While Kuwait’s infrastructure programme has been subject to various delays, Infrastructure ME picks the top 10 projects that are expected to make good progress this year.
IME revisits key projects that started it all; this month, we take a trip down the memory lane to UAE’s first-ever airport in Sharjah – Al Mahatta.
56 Infrastructure milestone
24 GCC’s oil shock 51 Water to cost more
INdustry sectors Construction
30 Business of Bridging
48 Dubai’s life sciences master plan
As numerous bridge projects are launched across the region, companies with innovative products and services gear up to support the development. Report by Shruthi Saraf Transport
32 Solving downstream difficulties
Getting to grips with Adaptive Process Control.
42 Gulf airspaces headed for carbon turbulence
Callan Carpenter, Vice President - Global Services of Autodesk on how BIM technology is relevant and beneficial for public infrastructure projects. Report by Anoop K Menon
Ian Jopson, head of environmental and community affairs at NATS, on the environmental priorities for the region’s rapidly growing aviation sector. Report by Anoop K Menon
44 Dubai Tram on track
34 BIM boost for rail projects
38 ‘We are seven digits’
Ahmad Bin Shafar, CEO of Empower on the ramifications of the Palm Utilities acquisition and broader issues related to finance, capacity. Report by B Surendar
49 The root cause Smart City
50 Smart city, smarter apps Telecom
52 Broadband for all Healthcare
An exclusive first look at the Dubai Tram project with Abdullah Yousif Al Ali, acting CEO of the RTA’s Rail Agency. Report by Gavin Davids April 2014
Marwan Abdulaziz Janahi, Executive Director of TECOM Investments’ Science Cluster, on how DuBiotech is creating a life sciences hub for the region. Report by Anoop K Menon
53 Dubai rolls out medical tourism strategy Infra Insight
55 Asset creation is only half the story
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On a broader note… raq’s power crunch is something that never fails to arouse curiosity. A country which is now the world’s fastest-growing oil exporter suffers from acute electricity shortage, or at least did. In October 2013, the Iraqi government claimed that its focus on boosting power generation capacity has paid off with the duration of outages coming down. We interviewed HE Karim Aftan Al Jumaili, Iraq’s Minister of Electricity, at the sidelines of a conference in Dubai, to find out the steps being taken to close the demand-supply gap. Turn to page 26 to read the interview. With this issue, our third, Infrastructure Middle East has cast its net wider to bring you the latest developments in telecom, healthcare, oil and gas and free zone sectors. Marwan Abdulaziz Janahi, Executive Director of Tecom Investments’ Science Cluster told us how Dubai is building a world class life sciences industry in the region. Dubai’s healthcare infrastructure is being primed for growth through the medical tourism strategy unveiled by the Dubai Health Authority last month. In our transport section, we have the latest update on the Dubai Tram project, which clearly shows why the UAE is on the driver’s seat when it comes to public transportation in the region. If the March issue covered the GCC’s crowded skies, the current issue’s aviation story examines its environmental impact. In the utilities section, we speak to the CEO of one of the largest district cooling companies in the Middle East and the man responsible for pulling off one of the largest acquisitions in this sector. This has been our busiest issue so far and we hope you enjoy reading it.
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company said that it plans to expand its capacity this year at its main Jebel Ali port in the UAE and its Rotterdam port in the Netherlands. The opening of Jebel Ali’s Terminal 3 will add another 4 m TEU and take total capacity to 19 m TEU.
UAE Dubai Electricity and Water Authority (DEWA) has awarded the contract for Independent Power Producer (IPP) Advisory Services for its new 100 MW photovoltaic solar power plant to an international consultancy group. DEWA received nine bids for IPP advisory services for the project. HE Saeed Mohammed Al Tayer, MD and CEO of DEWA, said, “The scope of the advisory service includes reviewing existing legislation and regulatory frameworks, IPP tender preparation, tendering and evaluation, negotiation and signing financial closure with IPP developer.” The solar power plant project is planned to be operational by 2017. Etihad Rail has signed a joint venture with DB Schenker Rail, a subsidiary of German-based Deutsche Bahn (DB), to operate and maintain the UAE’s national railway network.
Oman BP has awarded the process and infrastructure work on the greenfield Khazzan project in Oman to Jacobs Engineering. Under the terms of the contract, Jacobs is providing engineering, procurement and construction management services in relation to
The joint venture, Etihad Rail DB, which will be led by Etihad Chairman HE Mattar Al Tayer, will initially provide railway operations and maintenance expertise for Stage One, setting the foundation to also act as consultant for the operations of the future stages of the Etihad Rail network. DB is Europe’s largest railway company, operating passenger and freight services on the approximately 33,500 km German rail network.
Dubai-based port operator DP World announced that its profits rose nearly 11% to $604 m in 2013 as the company opened new ports in Britain and Brazil and expanded its operations at home in the UAE. The gains came despite a 1.5% drop in revenue to $3.07 bn last year. The company invested more than $1 bn in a range of new long-term assets last year, launching new projects in Brazil’s Embraport and London’s Gateway port. The
Development of sour gas fields has become a priority given the requirements for more gas-fired power stations, gas injection to boost oil production and the continuing development of the petrochemical sector. Bader Al Mohamadi, Manager - Projects Division of Adnoc’s Gas Processing Directorate, told Emirates 24|7 that there are many challenges to be overcome and better understood, particularly in terms of appropriate project management, the design and implementation of facilities that contribute to successful gas processing, improved emission controls that adhere to international standards and enhancing and managing HSE systems.
approximately $2 bn of gas gathering and water pipelines, wellhead production facilities and export pipelines for the development of the southern sector of Block 61. Block 61 contains significant volume of unconventional gas, distributed across several reservoirs, with estimates of total gas in place of up to 100 tn cu ft. This first phase of the Khazzan
field development plan will involve drilling around 300 wells, mostly horizontal, using eight drilling rigs over 15 years.
storage facilities, as well as an export jetty. As part of the project, gas and liquid pipeline networks will be built in Salalah.
Oman Gas Company (OGC), the Sultanate’s gas transportation utility, has signed a MoU for setting up a Liquefied Petroleum Gas (LPG) processing plant at Salalah Free Zone (SFZ), as well as for establishing related storage and export facilities at the Port of Salalah. The plant will allow for the very high recovery of propane, butane and condensates from natural gas flowing through OGC’s southern gas grid. While the free zone will house the LPG extraction plant, the port will host LPG and condensate
Public Authority for Electricity and Water (PAEW) will invest $1,508 m in strategic water projects to secure potable water supply across Oman. The projects involve the construction of large-scale transmission lines through to 2019. Key projects include a transmission line to the Dhahirah Governorate ($390 m), reinforcement of transmission line running from Sohar to Barka ($208 m) and reinforcement of the transmission line, reservoirs and the pump station at Sur at a cost of $169 m.
Dr Alexander Hedderich, Deputy Chairman, Deutsche Bahn (DB) and HE Mattar Al Tayer, Vice Chairman of Etihad Rail
BP’s LR5 Drilling Rig at the Khazzan Project
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Saudi Arabia Saudi Arabia is increasingly turning to Shariah-compliant Islamic finance, such as sukuk to finance its massive infrastructure projects, said Richard Banks, regional director of euromoney conferences. The Kingdom, with GCC’s largest population and economy, has $375 bn worth of infrastructure projects in the pipeline. euromoney is organising a conference next month in Riyadh on the topic of using sukuks to finance infrastructure projects in the Middle East. Banks pointed out that sukuks offer lower levels of risk and more predictable rates of return, factors that render them attractive to regional governments seeking funding for infrastructure projects.
GCC states and other MENA countries like Iraq are investing $1 tn in 117 major infrastructure projects across construction, utilities, transportation and logistics sectors, which are set to be completed by 2030. Banks pointed out that total global sukuk issued is set to grow from $130 bn in 2014 to $237 bn in 2018, adding that Saudi Arabia issued $8.69 bn worth of sukuk in the first nine months of 2013. Saudi Arabia has begun construction work on its first metro rail project in Riyadh. The multi-billion project will involve six rail lines extending 176 km and carrying electric, driverless trains. The Kingdom has awarded $22.5 bn in contracts to three foreignled consortia for the design and construction of the system. The $10 bn contract for designing and
Riyadh at night Saudi Arabia claims that Riyadh Metro will be the world’s largest public transport system
building Riyadh Metro Lines 1 and 2 was awarded to a Bechtel-led consortium. The $5.21 bn contract to design and build Line 3 was awarded to the ArRiyadh New Mobility consortium. The $7.82 bn contract for Lines 4, 5, 6 was awarded to the FAST consortium led by Spanish construction group FCC.
Jubail Commercial Port has launched 31 development projects worth $671.5 m to expand the port’s infrastructure. Currently, 10 projects are under implementation at a cost of about $57 m. These include the second phase of the project to deepen the western rotation basin of the northeast area the port, establishment of the sewerage network, modernisation and development of the electrical networks, establishment of a new backup power station, and rehabilitation of roads. SABIC is investing $600 m to create transportation and storage facilities for the export of polymers and polypropylene products. Gulf Contracting Company is implementing a $147 m project to develop a container terminal and cargo port while the Arab Company is developing chemical storage facilities valued at $75 m.
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Kuwait Kuwait’s Zain Group, which operates in eight markets across the Middle East and Africa, has secured a $250 m, four-year Murabaha facility from a syndicate of financial institutions led by Kuwait-based Boubyan Bank. The Murabaha facility will be used to meet Zain Group’s operational and expansion financing needs. In recent years, Zain has invested heavily in upgrading its mobile networks and in rolling out new services across all its operations. Most recently, the company introduced 4G LTE superfast broadband services to several key markets namely Kuwait, Saudi Arabia and Bahrain as well as extensively upgrading and
expanding 3G networks in Jordan, Sudan and South Sudan. In Iraq, the network has been upgraded with a Single-RAN, allowing the operator to offer broadband services once the 3G license has been granted. Additionally, Zain Iraq is aggressively expanding its network in the northern region of the country. Kuwait National Petroleum Company (KNPC) is planning to establish a new refinery with a total capacity of 650,000 bbl/day. KNPC Chief Executive Officer Mohammad Ghazi Al-Mutairi said the refinery will primarily supply low sulphur fuel to the local power plants. He claimed that the new refinery will emit less pollutants, and thus meets the company’s environmental goals. KNPC’s latest sustainable development report sheds light on
a number of eco-friendly projects undertaken by the company including industrial sewage water treatment projects in the three KNPC-affiliate oil refineries, flare gas recovery and gas emission reduction initiatives. Commenting on KNPC’s clean fuel project, Al-Mutairi said that the refining complex will help meet the requirements of the world oil market and maintain high safety and environment standards in line with KPC directions. Kuwait is hoping to increase its oil production capacity to 3.5 m bbl/day by 2015 from existing 3.3 m bbl/day, said Nizar Al Adsani, Chief Executive, Kuwait Petroleum Corporation (KPC). Kuwait hopes to reach 4 m bbl/ day of capacity by 2020 despite slow progress in developing new projects. However, Adsani said his country needed more help from
INFRASTRUCTURE MIDDLE EAST
abroad, in terms of technology and expertise, to achieve that target. Kuwait is currently evaluating bids for the first phase of a project to extract heavy oil in the north of the country.
plant — the ‘Integrated District Cooling Plant’ (IDCP) at the Pearl-Qatar. IDCP will service the entire residential and commercial facilities supplying 130,000TR to the island’s 45,000 residents.
Qatar Large infrastructure projects in the non-hydrocarbon sector will drive economic activity in Qatar in the near-term, states a report by Qatar National Bank (QNB). Double-growth in the nonhydrocarbon sector is expected to accelerate Qatar’s real GDP growth to 6.8% in 2014. Qatar’s Ministry of Development Planning and Statistics (MDPS) data shows that the fastest growing sectors were wholesale trade, hotels and restaurants (19.3% year-on-year) followed by financial, real estate, and business services (18.1% yearon-year). The largest infrastructure projects are mainly in the transport and real estate sectors. These include the Doha metro network,
Zain’s Iraq office The company is aggressively expanding its network in the northern region of Iraq
West Bay in Doha Qatar Cool is planning to set up a new 40,000TR district cooling plant, its third, in the area
modernisation of a network of expressways (30 major projects), local roads and upgrading of existing roads by ASHGAL, the new Hamad International Airport and large private sector real estate projects under construction. Qatar Cool is preparing to open its third district cooling plant in West Bay to meet the cooling demands of residential and commercial April 2014
towers in the area. Two existing plants in West Bay currently serve around 46 towers. With the opening of its third plant, the company can now provide residential and commercial towers with nearly 40,000TR (tonnes of refrigeration) of cooling, once operational. In addition to its West Bay facilities, Qatar Cool also operates the world’s largest district cooling
An HLG joint venture with Al Jaber Engineering has been awarded a $1.7 bn contract for the design and construction of the New Orbital Highway and Truck Route (P023), near Doha for Ashghal – Qatar’s Public Works Authority. Package 3 of this large-scale urban infrastructure project connects the Mesaieed industrial area and New Port Projects to Salwa Road, and includes a total of approximately 56 km of road works and five main interchanges that will service the projected increase in the area’s traffic. Design and Construction works will take approximately 36 months to complete.
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Middle East on track to adopt multimodal transport An integrated multi-modal transport infrastructure supports the economy, the environment and competitiveness of cities with far-reaching social benefits he high level of planning and investment in multi-modal transport infrastructure in major Middle East centres is enough to bring them close to terms with the world’s most advanced cities within 15-20 years, a senior Atkins expert told industry leaders at the Infrastructure Outlook conference in Riyadh, Saudi Arabia. Dr Ghassan Ziadat, Atkins’ director of planning and infrastructure, told delegates that clear government direction, through policy and legislation, remains essential to ensure the consistent and effective adoption of multi modal transportation and transit orientated developments (TODs) in the region’s major cities. Once the benefits of mass transit become clear, however, Dr Ziadat believes there will be a “virtuous circle” for urban design in the region. “The level of understanding and the appetite for transit orientated design among clients in the Middle East is already on an exponential trajectory,” said Dr Ziadat. “As new public transportation, particularly metros and light rail, become adopted this enlightenment can only increase, and I firmly believe we’re going to see cars lose their prime status as the favoured method of inner-city transportation in an incredibly short timescale.” Dr Ziadat told delegates that the effects of public transport investment in cities such as Riyadh and Doha could ultimately have an even more transformational effect than that witnessed in Dubai. But while new metros,
LRTs and other public transportation projects can deliver clear and immediate benefits, the wider social and economic impacts are likely to be realised more gradually. “The adoption of a new public transport network is a journey in itself,” said Dr Ziadat. “What we see now in Dubai is a very robust expectation that new developments need to be well integrated into the public transport network, with strong pedestrian access and an attractive public realm – otherwise they won’t be successful. “This shows a more mature market, and it gives me confidence that we’ll see a similar impact right across the Gulf region which will see major centres playing an accelerated catchup with the most advanced transit cities in the world, such as Hong Kong and Singapore.” When delivered successfully, an integrated multi-modal transport infrastructure
Dr Ghassan Ziadat, Atkins’ director of planning and infrastructure
supports the economy, the environment and the reputation and competitiveness of cities. However, Dr Ziadat said that perhaps the most far-reaching benefits are social. “Transit-orientated developments today promote healthy environments in which people can live, work and play. They enhance communities and encourage active lifestyles, which in turn support the virtuous circle to create a dynamic and sustainable city.” Investment in public transportation in the Middle East over the next 10-15 years is expected to be in the hundreds of billions of Dollars. New metro and LRT systems are either planned or underway in major gulf cities including Doha, Riyadh, Makkah, Jeddah, Dammam and Abu Dhabi, while Dubai is to extend its metro systems and is launching a new tram network.
Atkins’ infra roll call •
UAE’s peaceful nuclear new build programme – providing technical assurance to lenders backing the United Arab Emirates’ most ambitious energy infrastructure project Crossrail - designing the Central London twin tunnels and station architecture for Europe’s biggest civil engineering scheme which will see tunnels passing beneath 470 listed buildings and critical infrastructure Etihad Railway - providing multidisciplinary design expertise on the 1,200 km Etihad Rail network Denmark ERTMS - providing multidisciplinary signalling expertise on the first countrywide installation of an ERTMS train control and management system in Denmark; Hong Kong-Zhuhai-Macao Bridge - lead consultant on this integral part of the new Hong Kong link road scheme which will significantly boost land connectivity in the region;
INFRASTRUCTURE MIDDLE EAST
‘Middle East will continue to remain our biggest market’ Lucy Switchgear is expanding its manufacturing footprint and engineering resources in the Middle East, says the company’s Global Sales and Marketing Director Carl Sellick. Report by Anoop K Menon ith an “active” presence in the region that goes back 50 years or so, Lucy Switchgear can legitimately lay claim to some of the oldest electrical installations in the UAE. Today, the Middle East as a whole accounts for 50% of Lucy’s global sales even as the company is expanding its horizons to China and the Far East. “Saudi Arabia is our single biggest market, followed by the UAE,” said Carl Sellick, Global Sales and Marketing Director, Lucy Switchgear. “The Gulf Cooperation Council (GCC) region is hugely important for Lucy. Our factory in Jebel Ali is a centre of excellence for Lucy globally, supplying to the UK, and markets as far away as Australia and South America.” Sellick feels that the utilities sector, at least in Dubai, is seeing an upsurge in demand. “We won the first contracts announced by the Dubai
INFRASTRUCTURE MIDDLE EAST
Electricity and Water Authority (DEWA) in nearly seven years,” he said. “But we are actively pursuing other sectors like oil and gas and especially, renewable energy, where we have substantial experience in the UK and Europe. We expect to see a lot of opportunities in solar power projects in the region.” Product differences when it comes to catering to renewable energy projects are subtle as the switchgear applications don’t diverge across different sectors. “In the case of private generation or solar schemes or smaller decentralised schemes, frequency and other factors related to the electricity generation need to be factored in, but in the end you are trying to connect electricity to the grid,” said Sellick Apart from renewable energy, Sellick is also looking seriously at emerging sectors like railroads. He admitted that Lucy’s existing business model and sales effort would have to be tweaked to cater to these new sectors. “We are looking to work more with consultants and contractors as we want to expand our portfolio, not just geography but also market sectors,” said Sellick. He is fascinated by the buzz around smart cities in the region given Lucy’s involvement in smart grid. “We have been involved in what is now loosely termed as smart grid for some years,” explained Sellick. “We provide remote control and monitoring of medium voltage systems, fast switching, which allows operators sitting in control room to reconfigure networks.” The future, though, is network reconfiguration without the involvement of operators. “This is a huge step forward for utilities because it is a computer, rather than the
operator which reconfigures the network under fault conditions,” said Sellick. “This is an area we are working on with many utilities in the Middle East including Abu Dhabi Distribution Company (ADDC) and Sudanese Electricity Distribution Company (SEDC).” In the long term, Sellick hopes to consolidate Lucy’s market position in the region. He claimed that in switchgear and Ring Main Units, particularly in secondary distribution segment, Lucy’s market share stands at a hefty 50% in the UAE and Oman, a little under 50% in Bahrain and 40-50% in Saudi Arabia. “Being seen as a local company helps because customers can see that we provide good service. If there are any issues, we are just a stone’s throw away. At the same time, we are probably at a level where we can’t increase our overall share. With competition getting tougher, one of our strategies is to diversify our markets, particularly towards China and South East Asia.” However, Sellick is clear that Middle East will continue to remain Lucy’s biggest market. “This is our biggest market, and most of our investment is in this area,” he said. To relieve the pressure on its existing Jebel Ali factory, Lucy acquired two new plots for expansion in the Jebel Ali last year. And with Saudi Arabia encouraging local assembly, manufacturing and employment, Lucy is expanding its manufacturing facilities to the Kingdom. “We are also growing our engineering resources by planning to hire 50 new design engineers, which is almost unheard of in our business,” said Sellick. “In terms of new products, we are bringing in two or three new product lines in the next two or three years. We are very serious about bringing new products and facilities to the region.”
Making smart cities energy smart ABB regional chief sees energy efficiency playing a key role in securing power for Expo 2020 in Dubai ccording to ABB, by 2020, which is also the year when Expo 2020 will be held, Dubai’s electricity consumption is expected to reach 9.6 GW, a 50% jump from 2012 levels. However, by adopting energy efficiency measures, the emirate can ensure that adequate power supply to meet demand while achieving its vision of becoming a ‘smart city’ in time for the Expo 2020. ABB’s Southern Gulf, Kuwait and Pakistan CEO, Carlos Pone said: “This new power generated has to feed the massive developments that are being rolled out to make the city expoready. The existing industries and infrastructure, both commercial and residential, need to start reducing the amount of power they consume to help the city grow. This will also help support the Dubai Supreme Energy Council’s vision which aims to reduce energy demand by 30%.” “We are in a city that is bursting with activity and it’s the responsibility of every person and business to switch to energy efficient products and solutions to make Dubai truly a green economy, keeping in line with the emirate’s vision,” said Pone. He went on to cite the example of installation of drives to explain how a comparatively modest and inexpensive modification can help reduce the usage of energy. In Algeria, ABB’s drives have helped the world’s largest desalination plant reduce electrical costs, which is typically 30-60% of the operating cost. In Dubai, he said, ABB has worked on prestigious landmark projects including the world’s highest substation in Burj Khalifa, Dubai Metro, Jumeirah Beach Hotel, Dubai
INFRASTRUCTURE MIDDLE EAST
Carlos Pone CEO, ABB in Southern Gulf, Kuwait and Pakistan
Aluminium and the Dubai Airport, where apart from providing a reliable network for power generation, ABB systems have helped in reducing more than 30% of the energy consumption. “We have provided the highest substation in the world located on floor 155 of Burj Khalifa,” said Pone. “We have not only got iconic projects in the UAE but iconic technology installations too. We power and control the world’s tallest fountains in Dubai that spray 22,000 gallons of water to a height of 275 metres.” Pone also believed that Dubai’s vision of integrating renewable sources of energy with fossil fuels can be achieved successfully by the use of smart grids. ABB is developing one of the most intelligent grids in Sweden which will serve as a model grid to Europe in terms of minimal land usage and environmental impact. ABB is a market leader in High Voltage Direct Current (HVDC), which is the foremost technology for integrating more intermittent
forms of renewable energy into the local power grid, particularly over long distances. Massachusetts Institute of Technology (MIT) named ABB’s HVDC circuit breaker as one of its top ten breakthrough technologies for the year. ABB’s range of energy efficient solutions and products are today incorporated into the entire energy value chain: from the extraction of resources and their transformation into electricity, liquefied natural gas or refined petroleum products, to their efficient use in industry, transportation and buildings. “We help our customers squeeze the most value from each unit of energy they use. We want to tell the architects, engineers and consultants who are working on making Dubai energy smart that we have the technology and that six years to the Expo is a very short time, so make the most of now. We, in ABB, believe that good things come to those who can’t wait,” added Pone.
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Fujairah gets new oil terminal ENOC’s new US$100 m oil terminal adds to Fujairah’s status as a global oil storage hub
In December last year, Vopak Horizon Fujairah, a JV where ENOC’s Horizon Terminals has 33.3% stake, announced that it is adding 478,000 m3 of crude oil storage capacity in Fujairah
ujairah has further consolidated its status as global hub for oil and gas storage following the inauguration of Emirates National Oil Company’s (ENOC) new oil terminal. The US$100-m Horizon Fujairah Distribution Terminal, built by Horizon Terminals (HTL), the terminals business and wholly-owned subsidiary of ENOC, has a storage capacity of over 240,000 m3 and is directly linked to the oil tanker berths in the Port of Fujairah. HH Sheikh Hamad Bin Mohammed Al Sharqi, Member of Supreme Council and Ruler of Fujairah unveiled a commemorative plaque to mark the official inauguration. The ceremony was attended by representatives of the Fujairah government, Saeed Khoory, Chief Executive Officer, ENOC, Yusr Sultan, Managing Director - Terminals, ENOC and other senior management. While Fujairah has cemented its status as the second largest bunkering port in the world (after Singapore and ahead of Rotterdam), the emirate is set to become a significant oil and gas storage hub as well. Growing oil production in the Gulf to meet demand from India, China and southeast Asia is spurring the construction of storage terminals in the emirate.
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Commencing its soft operations in 2013, the oil terminal is the 11th in the portfolio of HTL, and has 10 bays of tanker truck loading racks, associated facilities, an advanced maintenance workshop, and marine receipt and loading pump house. It is fully equipped to meet the growing demand for storing bulk liquid oil products such as fuel oil, naphtha, gasoline, gas oil, jet fuel and LPG, among others. Located on the west side of the FujairahKhorfakhan Highway, the Horizon Fujairah Distribution Terminal was built by Singaporebased EPC contractor Audex PTE to environment, health and safety standards adhering to NFPA and other international codes. Saeed Khoory, CEO, ENOC said: “The terminal further strengthens the storage capacity offered by Fujairah, which will serve the needs of the Gulf region that accounts for nearly 50% of the world’s crude oil reserves. We are committed to strengthen our operations in Fujairah, and support the government’s vision for all-round social and economic growth.” The second such facility of HTL in Fujairah, the terminal is the company’s sixth in the UAE. Another new terminal is being developed in Jebel Ali with a storage capacity of over 141,000 m3. In January 2014, Royal Vopak announced its seventh phase of expansion at Vopak
Horizon Fujairah, which will add 478,000 m3 of storage capacity. Vopak Horizon Fujairah is a joint venture between Netherlands-based Royal Vopak, ENOC, the government of Fujairah and Kuwait’s Independent Petroleum Group. The expansion will feature five storage tanks for crude oil and includes pipeline connection to the new VLCC jetty in the Port of Fujairah, raising the total storage capacity at Vopak Horizon Fujairah to over 2.6 m m3. HTL manages more than six m m3 of storage with a network of 10 other terminals located in various markets, including the UAE, South Korea, Singapore, Djibouti and Morocco. It provides world-class terminal services for bulk liquids storage as well as a range of value-added logistics services. HTL aims to become the largest independent terminal service provider in the bulk oil storage in the Middle East, Africa and the Mediterranean while maintaining a leading position in the Far East region. It currently owns and operates bulk liquid storage terminals in the United Arab Emirates, Saudi Arabia, Djibouti, Morocco, Singapore and South Korea.
Fujairah’s hub facts • • •
By 2015, Fujairah’s oil storage capacity is expected to touch 9 m m3 IPIC is building a 250,000 bbl/day refinery which is due for completion in 2016 EmiratesLNG, a joint venture of IPIC and Mubadala Petroleum, is constructing the UAE’s first land-based LNG regasification facility in Fujairah, with a projected throughput capacity of 34 m m3 of natural gas per day. The facility is due for completion in 2015 The 49-inch diameter, 380 km Habshan Fujairah Pipeline project can transport 1.5 m bbl/day of crude oil or 70% of UAE’s current crude production, making Fujairah the main export hub for UAE’s crude
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SUSTAINABLE EXPO 2020 WEDNESDAY 21 MAY, HABTOOR GRAND, DUBAI
Sustainability is one of the 3 pillars of Dubai Expo 2020 and with the new Green Building Legislation being implemented now is the time for you and your organization to understand how these opportunities can translate to your bottom line.
Panel discussions with industry experts on: Construction Opportunities for 2020 and New Green Building Legislation Confirmed Panellists: Shaikha Al Mutawa (Dubai Government DTCM) Engineer Kamal Mazayem (Dubai Municipality) Tariq Abbas (Head of Sustainability, Hilson Moran) | Vahid Fotuhi (President, Mesia) Daniel Hajjar (Senior VP, HOK) | Amelie Zegmout (Head of Sales & Business Development, Legrand) Ibrahim Al Zubi (Head of Sustainability, Sustainability Office, Majid Al Futtaim Properties LLC)
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MIDDLE EAST INFRASTRUCTURE TENDERS
Infrastructure Tenders Our monthly analysis of new tenders and key projects across the region
Shaybah Arabian Light Crude Increment Project
Power Plant Project â€“ Yousifiya
Doha West Power Plant Upgrade Project
Integrated Industrial Complex Construction Project
Budget: to be announced
Territory: Dhahran, Saudi Arabia Client Name: Saudi Arabian Oil Company (Saudi Aramco) Postal/Zip Code: 5000 Description: Engineering, Procurement and Construction (EPC) contract for a light crude increment project. Period: 2016 Status: Current Project
Territory: Baghdad, Iraq Client Name: Ministry of Electricity (Iraq) Description: Construction of a Power Plant with capacity of 230 MW Status: Current Project
Territory: Safat, Kuwait Client Name: Ministry of Electricity & Water (Kuwait) Address: Ministry of Electricity & Water Bldg, South Al Surra Street, Ministries Area Description: Engineering, Procurement and Construction (EPC) contract for upgrading an existing power plant. Status: Current Project
Territory: Saudi Arabia Client Name: Saudi Basic Industries Corporation (SABIC) Description: Construction of an integrated industrial complex for the production of petrochemicals from crude oil Status: New Tender Tender Categories: Industrial & Special Projects Tender Products: Chemical Plants
INFRASTRUCTURE MIDDLE EAST
MIDDLE EAST INFRASTRUCTURE TENDERS
Top Tenders Oman
Yanqul Copper Mine Development Project
Bazian Refinery Expansion Project Phase 3
Project Number: NPR038-O Territory: Oman Client Name: Oman Oil Company S.A.O.C. Address: Al-Harthy Complex City: Muscat PC 118 Postal/Zip Code: 261 Phone: (+968) 2457 3100 Fax: (+968) 2457 3101 Email: firstname.lastname@example.org Website: www.oman-oil.com Description: Development of Yanqul copper mine Status: New Tender Tender Categories: Industrial & Special Projects Tender Products: Mining & Metals
Project Number: MPP2888-IQ Territory: Erbil, Iraq Client Name: Qaiwan Group (Iraq) Address: 4th Floor, Sulaymaniyah Mall Phone: (+964-53) 319 0248 Email: email@example.com Website: www.qaiwangroup.com Description: Engineering, Procurement and Construction (EPC) contract for the expansion of a Refinery to increase production capacity from 34,000 barrels a day (b/d) to 84,000 b/d. Period: 2017 Status: New Tender FEED Consultant: Technip (France) Tender Categories: Gas Processing & Distribution, Oilfields & Refineries Tender Products: Offsites & Utilities, Oilfields Exploration & Development
Project Number: WPR112-U Territory: Dubai, UAE Client Name: Deyaar Development (Dubai) Postal/Zip Code: 30833 Phone: (+971-4) 395 7700 Fax: (+971-4) 395 7711 Website: www.deyaar.ae Description: Construction of a twin tower comprising (350) serviced apartments and (219) residential units. Budget: $245,000,000 Period: 2017 Status: New Tender
Fax: (+971-2) 404 2221 Email: firstname.lastname@example.org Website: www.musanada.com Description: Construction of a new state-of-the-art Dialysis Centre at a Hospital. Period: 2016 Status: Current Project Main Architect: Leo A Daly (Abu Dhabi) Design Consultant: Burt Hill (Abu Dhabi) Project Manager: Allen & Shariff International (Abu Dhabi) Main Contractor: Al Faraa General Contracting Company (Abu Dhabi) Specialist Contractor: Pindi General Transport (Abu Dhabi) Tender Categories: Medical & Healthcare, Construction & Contracting Tender Products: Hospital Construction
Maysan Towers Project - Al Reem Island
Corp Al Khoory Hotel - Al Barsha 1
Project Number: WPR122-U Territory: Abu Dhabi, UAE Client Name: Aabar Properties L.L.C (Abu Dhabi) Address: Abu Dhabi Trade Centre (Abu Dhabi Mall), East Tower, 4th Floor Postal/Zip Code: 37624 Phone: (+971-2) 222 2233 Fax: (+971-2) 222 2333 Email: email@example.com Website: www.aabarproperties.com Description: Construction of 41 and 46-storey residential towers. Budget: $110,000,000 Period: 31/12/2016 Status: Current Project
Project Number: WPR115-U Territory: Dubai, UAE Client Name: Mohammed Tayyeb Khoory Real Estate (Dubai) Postal/Zip Code: 114555 Phone: (+971-4) 314 6166 Fax: (+971-4) 340 0107 Description: Construction of three-star comprising 2 basement levels, a ground floor, (6) additional floors and a roof in a built-up area of about 19,000 square metres. Budget: $25,000,000 Period: 31/08/2015 Status: Current Project Main Consultant: Al Baha Engineering Consultants (Dubai) Design Consultant: Al Baha Engineering Consultants (Dubai) Main Contractor: Naresco Contracting (Dubai) Tender Categories: Hotels Tender Products: Hotel Construction
UAE The Atria Tower Project - Business Bay
Dialysis Centre Project - Sheikh Khalifa Medical City Project Number: WPR076-U Territory: Abu Dhabi, UAE Client Name: Abu Dhabi General Services Company PJSC (Musanada) Address: 3rd Floor, Bldg. C6, Al Bateen Towers, Bainuna Street Postal/Zip Code: 33700 Phone: (+971-2) 404 2222
INFRASTRUCTURE MIDDLE EAST
MIDDLE EAST INFRASTRUCTURE TENDERS
Saudi Arabia Hilton Garden Inn Hotel Project Al Jubail
Kuwait Kuwait Schools Development ProgramME PublicPrivate-Partnership Project Project Number: MPP2895-K Territory: Shuwaikh, Kuwait Client Name: Partnerships Technical Bureau (Kuwait) Address: Touristic Enterprises Co.
Bldg., 2nd Floor, Al-Jahra Street Phone: (+965) 2496 5900 / 2496 5902 Fax: (+965) 2496 5901 Email: firstname.lastname@example.org Website: www.ptb.gov.kw Description: Development of nine schools, including five kindergartens, three elementary and one middle school, a residential building for female teachers and an Olympic-size swimming pool Status: New Tender Tender Categories: Construction & Contracting, Education & Training Tender Products: Educational Developments
Bahrain Yasmeenat Saar Villas Project Project Number: WPR104-B Territory: Manama, Bahrain Client Name: Naseej (Bahrain) Address: 46th Floor, East Tower, Bahrain Financial Harbour Postal/Zip Code: 1383 Phone: (+973) 1655 7999 Fax: (+973) 1655 7990 Website: www.naseejproperties.com Description: Construction of (32) villas on an overall plot size of 17,000 sqm Status: New Tender Main Consultant: Mohammed Salahuddin Consulting Engineering Bureau - MSCEB (Bahrain) Design Consultant: Mohammed Salahuddin Consulting Engineering Bureau - MSCEB (Bahrain) Tender Categories: Construction & Contracting Tender Products: Villas Construction
Produced in association with Big Project Middle East and Middle East Tenders M MIDDLE EAST
Project Number: WPR124-SA Territory: Saudi Arabia Client Name: Hilton International (Dubai) Address: Dubai Internet City, Bldg. 15, Office 101-111 Postal/Zip Code: 500200 Phone: (+971-4) 391 5100 Fax: (+971-4) 391 6790 Website: www.hiltonworldwide.com Description: Construction of a five-star hotel comprising (125) rooms featuring a range of facilities, including a fitness centre and an outdoor pool Period: 2016 Status: New Tender Hotel Consultant: Faisal Al-Ansari Contracting (Saudi Arabia) Tender Categories: Construction & Contracting, Hotels Tender Products: Hotel Construction
INFRASTRUCTURE MIDDLE EAST
ten KUWAIT INFRASTRUCTURE PROJECTS
KUWAIT INFRASTRUCTURE PROJECTS
While Kuwait’s infrastructure programme has been subject to various delays, Infrastructure ME picks the top 10 projects that are expected to make good progress this year
INFRASTRUCTURE MIDDLE EAST
Doha Link Bridge Construction Project
Owner: Ministry of Public Works Budget: $1 bn Progress: bids received The Doha Link Bridge will link Shuwaikh to the port village of Doha in the Jahra region. The 13-km long bridge will contain three traffic lanes and an emergency lane in each direction. It is part of a scheme which provides new strategic highway routes to facilitate planned development to the north of Kuwait City. The Doha Link is predominantly a marine bridge structure and connect with the Subiya Causeway. South Korea’s GS Engineering & Construction is understood to be the lowest bidder at $593 m. Other bidders include China Communications Construction Company at $675 m, China Civil Engineering Construction Company at $771 m, Greece’s Archirodon at $775 m, South Korea’s Samsung C&T at $829 m and Italy’s Salini Construttori at $886 m.
ten KUWAIT INFRASTRUCTURE PROJECTS
Sabah Al Ahmad Future City Project
Bubiyan Port Development Project
Kuwait National Rail Road System
Owner: Public Authority for Housing & Welfare Budget: $27 bn Progress: Under construction
Owner: Ministry of Public Works Budget: $1.2 bn (estimated) Progress: Phase 1 under construction
Owner: Ministry of Communication Budget: $10 bn Progress: Design stage
Sabah Al Ahmad Future City, located north of Kuwait, is a 35 m sqm community comprising of universities, schools, hospitals, residential units, commercial buildings and associated infrastructure such as roads, sewage, water, electrical and telecommunications networks. The development will comprise a total of 11,000 residential units over an area of 40 sq km that will house more than 110,000 people. The project, which is split into five separate sectors, includes more than 45 schools, 70 mosques, a football stadium and 15 hospitals. Areas C, A1, A2 and A3 will be completed by end of 2014, while Areas D and E are expected to be completed in 2015.
Bubiyan is Kuwaitâ€™s largest island. Long undeveloped due to its poor soil conditions, the Kuwaiti government approved a plan to develop Bubiyan in 2004 and turn it into commercial seaport with a total handling capacity of 2.5 m containers/year. A local/ Chinese joint venture of Gulf Dredging & Contracting, Shaheen Alghanim Roads & Bridges and China Harbour Engineering Company were awarded $409 m Phase 1 contract for the construction of a 34 km road, a 1.4 km road bridge, landfill, soil improvement works and a railway embankment. The entire work is expected to be completed by 2018. Phase 3 has been put on hold.
The Kuwait National Rail Road System will be an integrated rail network with a total length of 511 km double track. The system will carry freight and passengers with a 120 km/h speed regional line and a 200 km/h high speed line. The network will link the Saudi border in the south with the Iraqi border in the north and the eastern and western regions of Kuwait. The scheme was on hold as the Ministry of Communications mulled PPP and direct government procurement routes. The project, now revived as a build, operate, and transfer (BOT) project, is in the final process of design. Budget and allocations have already been made and the tendering process is expected to commence soon. April 2014
INFRASTRUCTURE MIDDLE EAST
ten KUWAIT INFRASTRUCTURE PROJECTS
Kuwait Metro Project
Owner: Ministry of Communications Budget: $7 bn Progress: EOI invited for design and supervision The Kuwait Metro scheme spans more than 160 km comprising 69 stations. Line 1 will connect Kuwaitâ€™s southern metropolitan area with the centre and also run through the main university, a total length of 25.8 km. Line 2 will contain 25 stations along 20.9 km and connect the main business district with the main residential areas of Salmiya and Hawally. Line 3 will be 18.5 km long and connect the city to Kuwait International Airport and Shuwaikh Industrial Zone. Nearly 65% of the network will be underground. The Ministry of Communications has invited international consultants to express interest in the design and supervision role for this scheme and is currently preparing to issue tender documents.
INFRASTRUCTURE MIDDLE EAST
Lower Fars Heavy Oil Development Project Phase 1
Owner: Kuwait Oil Company Budget: $4.2 bn Progress: EPC prequalification The Lower Fars field is located about 80 km northwest of Kuwait City. The Engineering, Procurement and Construction (EPC) contract covers drilling of hundreds of wells and data collection, as well pilot schemes using various extraction methods. Australiaâ€™s Worley Parsons has completed the FEED study on this scheme. First package includes a central processing facility which will house a water treatment plant and hazardous waste disposal plant for effluent water. Second package will include a 24-inch diameter, 165-km long oil export pipeline to south tank farm at AlAhmadi, as well as in-field pipelines. Around 19 EPC firms have pre-qualified for the deal,
Heavy Oil Production Facilities Project
Owner: Kuwait Oil Company Budget: $4.2 bn Progress: EPC pre-qualification This oilfield cum refinery project is located in the north of Kuwait and includes transportation, storage and distribution of crude as part of exploration and development of oilfields. The project is expected to play an important role in helping Kuwait meet its oil production target of four million bbl/day by 2020. KOC has invited contractors to prequalify for the EPC contract to build heavy oil production facilities with capacity to produce 60,000 bbl/day. Scope of work covers steam injection and production for heavy oil along with a support complex tank farms and a 270,000 bbl/day pipeline. The project is expected to be completed by 2017.
ten KUWAIT INFRASTRUCTURE PROJECTS
Clean Fuels Project
Owner: Kuwait National Petroleum Company (KNPC) Budget: $15 bn Progress: EPC prequalification stage
Owner: Kuwait National Petroleum Company (KNPC) Budget: $14 bn Progress: EPC awarded
The scheme to build a new refinery at Al Zour, in the south of Kuwait, has been planned for years but has repeatedly suffered delays. KNPC awarded the five main contracts in 2008 to South Korean, US and Japanese contractors. However, before work could begin, the deals were cancelled on instructions of Kuwait’s Supreme Petroleum Council after questions in parliament over the way the contracts were awarded, according to MEED. The project has now moved ahead from retendering of FEED to EPC pre-qualification stage. KNPC is expected to invite bids for the EPC contract in May 2014. The new refinery is expected to have a capacity of 615,000 bbl/day and is touted to be the largest refinery in the region.
The EPC contract for implementation of Clean Fuels scheme involves upgrading and increasing capacity at Mina Al-Ahmadi and Mina Abdullah refineries. Work is being split into three main packages which will cover process units at Mina Abdullah refinery, revamping the plant together with off-sites and utilities and revamping and installation of units and interfaces at Mina Al-Ahmadi refinery. A consortium led by Japan’s JGC Corporation won a contract worth $4.82 bn to work on the Mina Ahmadi refinery. The $3.5 bn conract for the 270,000 bbl/day Mina Abdullah refinery went to UK’s Petrofac while US’ Fluor Corp will also work on Mina Abdullah with the contract valued at $3.4 bn. The conract signing will take place this month.
Kabd Waste-to-Energy Plant
Owner: Kuwait Municipality Budget: TBA Progress: Pre-qualification for BOT contract The plant will be located in Kabd, about 25 km from Kuwait City. It will occupy an area of about 500,000 sqm and will treat up to half of Kuwait’s municipal waste. The waste-toenergy plant will have an initial capacity of 3,275 tonnes a day. To be developed on a BOT basis, the contract term will be for 30 years in addition to two year period for construction and equipment installation. The initial study was carried out by UK’s Baker Tilly. A consortium led by UK’s PwC has been awarded a contract to provide transaction advisory services for this project. PTB has invited companies to pre-qualify for the BOT contract. Firms have until May 25, 2014 to express interest in the scheme. April 2014
INFRASTRUCTURE MIDDLE EAST
GCC’s oil shock
According to a Moody’s special report, an oil price scenario of US$90 per barrrel will be negative for some GCC economies, neutral for others
he effects on the economies of Gulf Cooperation Council (GCC) countries would be negative to neutral under an adverse scenario in which oil prices decline to US$90 per barrel by 2020, says Moody’s Investors Service in a Special Comment report. While Moody’s central oil price scenario for the period until 2020 anticipates a gentle decline in oil prices, the rating agency has also considered the likely implications of the aforementioned adverse scenario because a number of GCC countries are already experiencing fiscal pressures in the current stable oil price environment. Moody’s adverse scenario is based on the expectation of (1) greater-than-expected new global oil and gas capacity on the supply side; and (2) slower-than-expected commodity demand growth in emerging markets, largely due to the maturing Chinese economy. “Under such a scenario, sovereign credit quality in the GCC would be affected to varying degrees, with Bahrain and Oman most vulnerable to a potential downward adjustment of their sovereign ratings, given their high fiscal breakeven prices and declining oil production,” said Thomas J Byrne, a Moody’s Senior Vice President and co-author of the report. “The UAE and Saudi Arabia would, despite their large non-oil sectors relative to GCC peers, face reduced fiscal flexibility. Kuwait and Qatar on the other hand have the most headroom and fiscal flexibility to withstand a protracted oil price decline.”
Fiscal consolidation Moody’s anticipates that the policy responses of the affected GCC governments are likely to include continued efforts to diversify the economies away from hydrocarbons and to step up fiscal consolidation, which would have negative implications for corporates and banks.
INFRASTRUCTURE MIDDLE EAST
In terms of the impact of a protracted oil price decline on GCC corporates, Moody’s believes they are vulnerable to weakening public finances because the respective governments play such a dominant role in their economies. “A sustained oil price decline would likely result in significant adjustments to major parts of these economies, with some exceptions such as utilities. It would also reduce the availability of subsidies, such as cheap access to feedstock; funding at preferential conditions through the local banking channels; and government support,” said Martin Kohlhase, a Moody’s Senior Analyst and co-author of the report. The fiscal response to a sustained oil price decline would include a combination of asset sales, debt financing, expenditure cuts and revenue enhancement measures. The report notes that there is some scope for phasing out energy subsidies to industrial users, despite its negative impact on non-oil industries. Impact on select industries The petrochemical sector in the GCC: The region’s crude oil and natural gas are increasingly processed within the GCC, thus providing employment opportunities to the local population. However, the presence of subsidised feedstock and energy may affect decisions linked to efficient production, and the increased hydrocarbon production from elsewhere (such as shale gas in the US) may lower the competitive positioning of the GCC’s petrochemical sector over time. In fact, while more recent GCC investments in the sector have tended to bring in state-ofthe-art processes, lower oil and gas prices may position GCC petrochemical producers at a competitive disadvantage in terms of newer investments as they come on-stream in light of (1) governments’ lower propensity to subsidise investment and (2) the benefits that non-GCC producers stand to gain from lower input prices, thereby somewhat levelling the playing field.
Saudi Arabia may face a highly unsustainable domestic oil consumption rate by 2018
The utility sector in Saudi Arabia: The IMF has calculated that, based on Saudi Arabia’s current consumption levels, population trends and its installed power generation technology, 20% of the country’s current oil production will have to be re-channelled for domestic power production by 2018. The Saudi government recognises that this is an unviable situation and is targeting a reduction of subsidies, such as the provision of low-cost oil, by (1) changing the energy input mix; (2) offering incentives for lower consumption; (3) introducing production efficiencies and (4) proposing changes to the regulatory framework to encourage greater efficiencies through the promotion of competition. The current process of reorganising Saudi Electricity Company (SEC, A1 stable) into separate distribution and production entities aims to address inefficiencies by encouraging privatisation of the electricity sector and to eventually lower oil subsidies. Aluminium smelters in the GCC: As Europe has lost its aluminium-producing facilities over recent decades because of increasing energy costs, large production sites in much of the GCC have sprung up (e.g. Alba in Bahrain, Dubal in Dubai, Emal in Abu Dhabi, Sohar Aluminium in Oman and Ma’aden in Saudi Arabia). Amongst the global top 10 aluminium smelters, three are located in GCC countries. GCC smelters have received material energy subsidies from governments to diversify their respective countries’ economies. When the government of Bahrain decided to cut subsidised energy for Alba in 2011, Alba reported a drop in net profit in the fiscal year ending 2012 due to the resulting 50% hike in energy input costs. A reduction in energy subsidies – which makes up about 35% of production costs for a smelter – would lead to an erosion of the GCC’s competitive advantage.
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no more power woes
The Iraqi government has adopted a multi-pronged strategy to match power generation with demand, says HE Karim Aftan Al Jumaili, Iraqâ€™s Minister of Electricity Report by Anoop K Menon 26
INFRASTRUCTURE MIDDLE EAST
Two strategies 2012-2015 • Capacity additions to satisfy the unmet demand 2016-2020 • Demand side management • Large scale conversion of the gas turbines from burning crude oil/ HFO to natural gas • Large scale conversion of the simple cycle gas turbine units to combined cycle units • Mapping the renewable potential (solar, wind, waste and bio-energy)
Capacity expansion In 2011, the Iraqi Ministry of Electricity awarded the consortium of Alstom and URUK Engineering & Contracting the 728 MW Al Mansurya gas-fired power plant in the Diyala Governorate
raq has an abundance of oil and suffering. The country sits on the world’s fifth-largest proven oil reserves, is the world’s third largest oil exporter (and OPEC’s second largest) but suffers from a severe shortage of electricity. Three wars and international sanctions in between served to devastate the country’s electricity infrastructure and recovery has been a painful and slow process. As one energy sector limps along, another energy sector is poised to break records. The Iraqi oil sector is all set for its biggest annual jump in crude oil exports this year, sustained by growing output from the country’s giant oil fields down south. But no records are being broken in power production. According to a report by Energy Information Administration (EIA), daily outages lasting 16 hours per day have not been uncommon in key cities like Baghdad; additionally, the number of privately-owned generators has increased, with those in Baghdad alone providing an additional 1 GW of capacity. A study by Parsons Brinckerhoff showed that residential customers were paying 10-15 times more for the electricity
supplied from private generation than from the grid. International Energy Report (IEA) notes that the net capacity available at peak in 2011 was around 9 GW while the estimated net capacity required to meet peak demand was 15 GW, resulting in a need for around 6 GW more available capacity – an increase of around 70%. At present, Iraq’s power generation capacity stands at 11,000 MW while peak demand is more than 16,000 MW. Shortage of power imposes major cost on the Iraqi economy, mainly in the form of lost production time, damage to capital assets from interruption of power supply and delays to normal commercial processes. According to a report published by the Iraqi parliament’s Oil and Energy Committee in September last year, power shortage is causing the country an annual loss of around $40 bn. Moreover, the heavy use of private diesel generation imposes high cost of operation as well as noise and air pollution. In recent years, Iraq’s government has been stepping up investments in its electricity sector, with an ambitious target of matching generation capacity and demand by 2015. In an interview with Infrastructure Middle East, at the side lines of MEED’s Iraq Energy Projects conference, HE Karim Aftan
By 2020, Iraq expects to add: 9,573 MW from gas-based power 10,180 MW from thermal power 400 MW from solar and wind power 5,900 MW from Independent Power Plants 5,632 MW from combined cycle power plants Al Jumaili, Minister of Electricity, Iraq said his ministry has drawn up a master plan with Phase 1 extending to 2015 and Phase 2 extending to 2030 that will address all areas of power generation, transmission and distribution as well as renewable energy and human capacity building. “The three main pillars of this central plan are rehabilitation of existing gas and oil-fired power plants, addition of new generation capacities and sustainable energy programmes,” said Al Jumaili. He pointed out that Iraq is targeting to add 20,000 MW of new power generation capacity - gas, oil-fired and diesel - by 2015. This would increase the average power generation capacity in Iraq to 26,000 MW if one includes the 6,000 MW already in operation. “As of now, 15,000 MW are under execution and 5,000 MW are under study and contract negotiation,” he said. The minister noted that the power sector is a top priority for the Iraqi government. “The government has financially supported April 2014
INFRASTRUCTURE MIDDLE EAST
Solar potential in Iraq
Share of residential consumers in Iraq’s electricity consumption
The ministry is planning to launch an awareness campaign to educate consumers on preventing waste of electricity
the electricity sector so that it can improve and ensure reliable supply of electricity to the citizens of Iraq and to key economic sectors like oil, manufacturing, agriculture, education, health and housing,” he added. Between 2012 and 2030, Iraq is planning to invest $75 bn in its electricity sector. This year, Iraq’s government has allocated $4.7 bn in its annual budget to finance existing and future power projects. During the interview, Al Jumaili highlighted the business opportunities thrown up by his ministry’s push to make Iraq’s power sector more energy efficient. “We will convert all existing power plants using crude oil to natural gas to reduce carbon emissions,” said Al-Jumaili. “We will also convert all existing gas power plants from simple cycle to combined cycle to increase production and reduce fuel consumption.” The conversion drive is expected
to add 5,632 MW in terms of additional capacity, which he noted, needs private sector participation to succeed. According to the IEA, the efficiency of gas-fired plants in Iraq was 31% compared with around 55% achievable for new combined cycle gas turbines. Iraq has also launched an ambitious renewable programme focusing on wind and solar power. “Initially, we will utilise solar and wind power to supply small isolated locations that cannot economically be connected to the grid,” said Al Jumaili. “In the first phase, which has been tendered, we will be setting up 15 plants that will together generate 60 MW. The second phase consists of plants of higher capacities - 100 to 150 MW - linked to the grid. We expect renewable energy to account for two per cent of the country’s total power generation by 2018.” The Iraq National Energy Strategy, approved by the cabinet in 2013, sets a target
Share of liquid fuel (crude oil and fuel oil) in Iraq’s power generation mix
for renewable energy at five per cent of total energy generation by 2030. On the Transmission and Distribution (T&D) front, Iraq is planning to re-enforce its existing transmission network by building new 132 kV and 400 kV substations and associated overhead lines. To strengthen the distribution side, plans are afoot to build additional 33/11 KV substations. Al Jumaili said that in addition to building new generation capacity and improving transmission and distribution networks, his ministry is planning to introduce legislation to reduce wastage in the sector. “We will be launching an electricity consumption awareness campaign to educate consumers on preventing waste,” he said. The minister added that Iraq is actively seeking private investors for its power projects. In the area of Independent Power Projects (IPP), the government is planning to open up 8,000 MW in generation alone. This includes green field simple cycle and thermal power plants and combined cycle projects. The World Bank is currently funding a study which is studying the feasibility of privatising Iraq’s electricity distribution sector. “Our programmes are promising and ambitious and they aim to meet the country’s electricity demand,” said Al Jumaili. “So far, signs are positive as the number of hours of power supply has increased significantly.” Meanwhile, several Iraqi officials have gone on record that from this year, Iraqis will start to enjoy the benefits of continuous power supply. It remains to be seen if it is going to be summer of broken promises or uninterrupted power.
“We expect renewable energy to account for two per cent of Iraq’s total power generation by 2018” HE Karim Aftan Al Jumaili, Iraq’s Minister of Electricity 28
INFRASTRUCTURE MIDDLE EAST
The Leading MENA Swimming Pool & Spa Event
April, 22-24 2014 Abu Dhabi National Exhibition Centre Abu Dhabi
United Arab Emirates
Non contractual document - RCS LYON 380 552 976 - Photos: Fotolia.com / ÂŠ Jeff Schultes - Fotolia.com
dge on a b e e fr r u o y Ask for dleeast.com id m e in c is www.p CONTACT: firstname.lastname@example.org
Piscine Middle East is colocated with
Business of bridging As numerous bridge projects are launched across the region, companies with innovative products and services gear up to support the development By Shruthi Saraf ome of the most challenging structures to build are the bridges, be it in terms of design, construction or materials. According to IQPC, which is organising Bridges and Highways UAE 2014 Summit, the UAE alone has already budgeted to spend over US$1-bn in 2014 as part of a broader objectives to reduce traffic congestion, promote sustainable urban development and improve maintenance and management of country wide infrastructure, which, other than highways, includes a number of bridges. Possibly one of the biggest bridge projects currently in UAE is the Al Ittihad Bridge in Dubai, which will be built with a width of 61.6 metres and a 100 metres high arch. The project, which starts next year, will take three years to implement, and consists of 12 lanes (six in each direction), according to Ventures Onsite. With an approximate value of $136m, another big project, this time in Sharjah is the Al Arouba Street expansion, which entails construction of additional two lanes on the route from Marija-Umm Tarafa Bridge to Al Khalidiyah area in both directions. The existing bridges going to Khalid Lagoon (Sharjah and Khalidiyah Bridges) will also be replaced by a five lane bridge. An intersection will also be built in Al Layyah near the government buildings, as well as, two bridges, one from Al Mamzar to Al Layyah and the other from the government buildings area to Al Arouba Street, according to Ventures Onsite. The project is expected to begin in late 2014 and be completed by 2016.
Other projects include numerous interchanges across Dubai, most notably phase one of the Dubai - Abu Dhabi Motorway – a 34km stretch with three interchanges, the extension of E12 highway and the improvement of MafraqHimeem interchange. In this first part of a series of interviews with companies that specialise in products or services that support building bridges, Infrastructure ME puts the spotlight on Elasto Plastic Concrete (EPC) and RAK Precast. Chips of strength Elasto Plastic Concrete’s BarChip fibres are used as a replacement for steel mesh and steel fibre reinforcement; they are an engineered copolymer fibre used for temperature and shrinkage control or as structural reinforcement in concrete. BarChip synthetic fibres are being used to reinforce tunnels, mines, underground caverns, industrial floors, precast concrete, footpaths, roadway paving, metro/railway slab track, water/sewer lines, general municipal infrastructure, marine structures and flood prevention works. The fibres help improve shrinkage and temperature crack control, eliminating bending, cutting and placing of steel mesh, thereby increasing efficiency and productivity while reducing cost and making it safer and lighter to handle than steel. Many engineers believe that the future of concrete reinforcing exists in alternatives to steel products. As the tendency for development, in many countries of the region, is to follow the coast, the non-corrosive benefits of BarChip make it an important consideration for all designers. Engineering confidence in BarChip
Paul Hamilton, Business Development Manager, Elasto Plastic Concrete (EPC)
structural fibre is highlighted in projects such as the Docklands Light Rail Track in London, cast in situ linings on the Oliola Water Tunnel in Spain and the Cerro Somberero Highway in Chile to mention but a few. EPC has been in the region since January and is currently supplying two projects. “Our office in Dubai will form EPC’s hub for the region with ease of access to and from Dubai World Central and Jebel Ali Port. We expect the MENA region to become one of the busiest in terms of business as awareness of BarChip grows. We are alteady supplying to Saudi Arabia and the UAE, and expect to have an order in Qatar soon,” said Paul Hamilton, Business Development Manager at EPC. According to Hamilton, BarChip’s significant advantages include anti-corrosion benefits along with substantial cost and time savings (30-50%), lower transport and handling costs (80%) and up to 70% lower carbon footprint compared to steel reinforcement. More important, BarChip fibre reinforcement is not affected by the high saline water table common to the UAE and other Gulf countries. “Our product is a structural fibre and although it has been in existence for many years, has only recently been introduced to the Middle East. We are getting established in the shotcrete and tunnelling markets but the potential is endless especially in the context of corrosion. I expect to make progress into rail, large pavement areas, marine environments, and the precast sector,” said Hamilton. Barchip Macro is EPC’s bench mark residential fibre which proved that structural synthetic fibres could outperform steel
“Having participated in the recent Middle East Tunnelling and Rail Shows, the level of interest in BarChip has been so great that EPC decided to open an office in Dubai” PAUL HAMILTON, BUSINESS DEVELOPMENT MANAGER, ELASTO PLAST CONCRETE (EPC) 30
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alternatives. It was the first structural synthetic fibre specifically designed for low strength concrete. The company’s other products include BarChip R50 and R65 that are the first ever structural synthetic fibres made using recycled materials and designed for shotcrete reinforcement. Ease of Precast Constructing bridges with 40m long girders weighing 120 tonnes and concrete piers that go
45m below the sea bed are part of RAK Precast’s area of expertise. “We do a lot of concrete structures as precast such as the beams. We manufacture them in our factory in Ras Al Khaimah, transport them to the site and erect them by crane,” said Emad Abdullah, Chief Executive Officer, RAK Precast. “We also have a sister company, Tower Technology, where we do the concrete structures on site. For example, we made a bridge to link Abu Dhabi to Gaga Island near Saudi border. It is a combination of conventional construction and pre cast construction. We also do on-site concreting and do offshore precasting.” RAK Precast, located in the Ras Al Khaimah Free Trade Zone, was established in January 2007 with total area of 1.4 million sq ft including production plant and logistics. Its facilities have obtained certificates such as the ISO 9001:2008 for quality, OHSAS 18001: 2007 for health and safety and ISO 14001: 2004 for environment. But most importantly, the company has the
SYNTHETIC FIBRE REPLACING STEEL IN CONCRETE EUROPE – AFRICA – MIDDLE EAST- NORTH & SOUTH AMERICA – AUSTRALASIA
Environmental Performance Certificate, given by the Government of UAE. “We are the only precaster in the whole of emirates and the Gulf to have this certificate. We really do care about our waste, water, soil and air. We don’t produce any dust, and there is no sound pollution too. And our products are very green because we use recycled material,” said Abdullah. The company supplies to Oman, Saudi Arabia, Iraq, Kuwait and Qatar but it supplies and erects structures only in the UAE. “Last year, we did three bridges in Abu Dhabi. Now we are quoting for other bridges in the region. Ghantoot is the main contractor, we are quoting the girders for them,” he said. According to Abdullah, even though the recession has had a negative effect on the regional construction market, RAK Precast has been immune to it. “It may be luck, but we actually have grown during the recession. We were growing very fast,” he said.
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Elasto Plastic Concrete Ltd. Paul Hamilton P.O.Box 66523, Dubai, UAE Mob: +971 50 137 2083 | Office: +971 4 443 2912 E-mail: email@example.com | Website: www.elastoplastic.com http://bit.ly/EPCCorporateVideo
Solving downstream difficulties
Adaptive Process Control can help refining and petrochemical companies effectively deal with constantly changing operating conditions. By John Hague
he oil, gas and petrochemical industries encompass a range of complex challenges, including the need to maintain product quality, reduce energy consumption, maximise throughput and increase yield, whilst meeting safety and environmental standards. Advanced Process Control (APC) helps successfully address these diverse production process issues. With the evolution of APC, innovative modelbased predictive control techniques today deliver increased profits by reducing process variability and allow plants to be operated closer to true constraints. Essentially, APC comprises a supervisory control and optimisation layer above the basic level of regulatory control. It provides models that automate regulatory and constraint control, while optimising the process. With regards to batch processes, improvements in automation and regulatory control will help manufacture the product in a consistent way resulting in reliable product quality and allow operators to successfully manage varying conditions. With continuous process industries, APC can better coordinate the interactions that invariably occur in single loop control systems, reduce the process variability and allow plants to run closer to operating constraints. Advanced multivariable constrained control is a major advantage in helping cut energy use, as well as raw materials and waste processing costs. It can also improve product yield and process safety and productivity. Typical benefits of APC include the ability to reduce product quality variation by up to 75%
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through improved process inferentials leading to better control and understanding of the process. The approach has also been shown to increase yield of high value products by 2 - 5% due to reduction of losses in quality issues. APC can help increase throughput or production capacity by up to 10% through pushing the plant up against its true operating constraints. Another benefit is the ability to reduce energy consumption by up to 10% by maintaining operations within desired limits and not over-purifying products. All of these factors combined lead to an increase in reliability by up to 4%. Under Adaptive Process Control, the controller is modified over time in more of a continuous process. The update of the model occurs without the need to take the controller off-line and enables a company to reap the benefits of control and optimisation
while the model is under maintenance. In contrast, with the traditional approach to controller maintenance (sustained value), revamping the controller was done as a lengthy and costly project. Adaptive Process Control is innovative technology developed by AspenTech, which eliminates the need to approach APC maintenance as a project and creates a continuous process of assessing model quality, collecting current data and generating new models as the behaviour of the plant changes. With Adaptive Process Control non-expert engineers can do everything required to update the models without the need to turn off the controller. They can also ensure that the controller exhibits robust behaviour during the periods between model updates, make maintenance a built-in and continuous part of the process and eliminate the need to wait for turnarounds to revamp controllers. Crucially, the software permits the engineer to always be in the loop in terms of making decisions when new models would replace existing ones in online applications. For process industry, the message is simple. Traditional advanced process control and offline, open-loop optimisation no longer delivers sufficient economic benefits because of the constantly changing conditions of todayâ€™s plants. APC software allows facilities to be operated with greater safety, cost effectiveness, reliability and compliance with environmental regulations, all of which delivers sustainable, measurable and profitable benefits. (The author is senior vice president and managing director of Middle East and North Africa for AspenTech)
Welcome to the future of environmental technology
May 5–9, 2014
Register now online! Save up to 30% and gain time at the venue! www.ifat.de/tickets/en
World’s Leading Trade Fair for Water, Sewage, Waste and Raw Materials Management Be a part of this get-together of the worldwide environmental technology sector— at IFAT 2014 in Munich. Come and experience innovative new products and learn about successful strategies for the future. And benefit from the exclusive supporting program at IFAT and the opportunity for international networking.
www.ifat.de Visit IFAT’s sister events around the world: May 20–22, 2014 www.ie-expo.com
October 9–11, 2014 www.ifat-india.com
Information: German Emirati Joint Council for Industry and Commerce (AHK) | Dubai Tel. 04 447 0100 | firstname.lastname@example.org
BIM boost for rail projects Last month, Autodesk announced that Qatar Rail has awarded the company a Building Information Modelling (BIM) services contract, which includes implementation, consultancy and advisory services. Anoop K Menon spoke to Callan Carpenter, Vice President - Global Services of Autodesk to understand how BIM technology, which was originally developed for the buildings sector, is no less relevant and beneficial for public infrastructure projects like railroad Why is Building Information Modelling (BIM) regarded as a transformational concept when it comes to the construction industry? How does it change the way we normally deliver construction projects? The global construction industry generates more than US$7 tn per year and growing. But it is also an industry known for low margins and high risk of cost and schedule overruns. Some estimates place the cost of waste and rework as
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high as 30% of project costs. These are big issues, and to effectively address them we need new strategies for managing and coordinating the activities of the many disciplines that contribute to the design, construction and operation of major construction projects. BIM is just such a strategy. If BIM were only about a new set of CAD tools, we wouldn’t be talking about its transformational nature. In fact, BIM is mostly about changing work processes. In particular, BIM changes the way information is created, captured, stored and
shared among all the project stakeholders from architects to engineering consultants to constructors to owner/operators. Overall productivity improvements are consistently reported in studies such as the recent McGraw Hill report, ‘The Business Value of BIM for Construction in Major Global Markets.’ These improvements come from fewer errors and omissions, less rework, and fewer clashes between trades on the job site. In addition to increasing productivity, BIM is also improving predictability. Construction
“There are fewer industry-wide data standards for infrastructure elements, so it is important for the stakeholders to agree ahead of time how critical elements of the railroad will be modelled”
projects are notorious for exceeding their schedules and budgets due to design changes, poor communication and contractual disputes, among many other reasons. By providing a new basis for collaboration, BIM is increasing the likelihood that a project will come in on time and on budget with higher quality of results. Improved productivity and improved predictability will make a difference in project outcomes and in the profitability of the industry. Typically margins for building construction in Europe and North America are in the low single digits. Even the price volatility of materials like steel and copper can have a meaningful impact on project profitability. By implementing a BIM-based methodology for quantity estimation and construction sequencing, the industry can reduce waste and recapture lost margins.
Given that BIM was first developed for buildings, is it applied differently to railway projects? While BIM may have originated in the world of vertical structures, the principles apply equally well to infrastructure projects such as rail or roadway design. All major construction projects – vertical or horizontal – can benefit from fewer errors, less rework, reduced clashes between trades and clearer visualization of the design intent. In addition, the transition from construction to commissioning and operation is enhanced for both kinds of projects because of better reuse of information. Of course railroads are not buildings (except for their stations!) so there are some important differences. For example, the effective integration of GIS and CAD data is essential for large-scale civil engineering projects. Also, there are fewer industry-wide data standards for infrastructure elements, so it is important for the stake-holders to agree ahead of time how critical elements of the railroad will be modelled, and in what form metadata will be captured. All this is possible by establishing a solid BIM strategy from the beginning – a key reason clients engage
organisations like Autodesk Global Services to help develop their BIM standards. In general, what are the benefits that BIM can bring to the delivery of railway projects? Could you also elaborate on the cost savings aspect? Railway infrastructure projects are incredibly complex projects with multiple dimensions. BIM can bring benefits to all phases of the project, from early planning and conceptual design through to detailed design, construction coordination, commissioning and long-term operations and maintenance. At the centre of the BIM methodology is the creation of a comprehensive 3D model of the entire project including railway stations, tracks, attached buildings and other assets. When combined with a set of BIM-based workflows such as for RFI management or multi-discipline design reviews, BIM facilitates better management of information, enhanced collaboration and fewer clashes among diverse project teams. For example, consider the construction of railway stations. The design and planning phase must consider diverse aspects such as security, passenger footfalls, existing public infrastructure, and railway track connections.
“Autodesk will outline specific BIM standards and processes
for the (Qatar) railway project that will serve as the foundation for BIM requirements” April 2014
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“At the centre of the BIM methodology is the creation of
a comprehensive 3D model of the entire project including railway stations, tracks, attached buildings and other assets”
This is where BIM can play an important role through efficient design, visualisation and simulation of data making the construction faster and simpler. In short, it is much less costly to make mistakes in the virtual world of BIM, than to discover them on the job site, or worse, after commissioning. With sufficiently detailed models, BIM will also make quantity estimation simpler and more accurate, further reducing waste. Another important aspect of BIM is the ability to preserve information from one phase of the project to another. As a project moves from concept to completion, similar information must be captured or recreated many times over. This redundant data creation leads to unnecessary costs, as well as increased incidents of errors or omissions. For example, a large percentage of the information required to operate and maintain the railroad will be recreated at the end of the project. A properly designed BIM strategy will allow information captured since the beginning of the project to flow directly into the owners O&M system, potentially saving thousands of man-hours. What convinced Qatar Rail to give the BIM deal to Autodesk? What is the scope of this deal? Qatar Rail decided several years ago to BIM deliverables from its contractors as a part of its strategy to leverage world-class technologies
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and processes in the implementation of its many high-profile rail and metro projects. Autodesk and several other companies participated in a rigorous public tender process to determine who would earn the privilege of being Qatar Rail’s BIM partner. In the end, you would need to ask Qatar Rail what criteria most informed their decision, but I can share with you several reasons other customers have selected Autodesk as their BIM solution supplier in the past. First, Autodesk was one of the originators of BIM, even supplying the industry with the BIM name over a decade ago. Second, Autodesk is the most experienced BIM service provider in the industry. We have been helping governments, owners, contractors and consultants develop BIM standards and strategies for years. Finally, Autodesk offers
the industry’s broadest and deepest selection of tools, data management solutions and BIM collaboration platforms for BIM. Over the next three years, Qatar Rail will employ several services offered by Autodesk starting with the company’s expertise on BIM standards, quality control and integration across organizations. Autodesk will also implement a technology platform within Qatar Rail to train, support and collaborate with the company’s assigned staff for the railway project. Additionally, Autodesk will outline specific BIM standards and processes for the railway project that will serve as the foundation for BIM requirements and as a starting point for BIM implementations for future contracts. Is there any aspect of this rail project you are particularly excited about? The Qatar National Vision 2030 has laid out an exciting roadmap for the development of the country, and has spawned some of the largest infrastructure investments in the world. It is rare privilege to participate in such an ambitious undertaking, especially when it means that someday all of us involved in the project will be able to say we played a role, however small, in the advancement of a nation. At the same time, I can think of no bigger stage upon which to highlight the compelling benefits of BIM. I can’t wait to take my first ride on the new metro!
‘We are seven digits’ Ahmad Bin Shafar, the CEO of Empower, in conversation with B Surendar on the ramifications of the Palm Utilities acquisition, one of the largest ever in the District Cooling industry, and on broader issues related to finance, human resources, spare capacity, operational efficiency and growth plans… What was the thought process behind the acquisition of Palm District Cooling? Dubai does not need more than one District Cooling company, because District Cooling is about a unified way of building plant rooms. If we opened it up for everybody, we won’t get significant savings. Now, with the volume of work, we will be able to receive special rates from contractors and suppliers. Also, if you look at it from a technical point of view, 10 engineers will give 10 different answers. They are not wrong, but we prefer to club all the activities. And the savings that add up will help all the players. The acquisition has a number of synergy points. Empower has excelled at saving money in operating the plant rooms in the most efficient and cost-effective manner possible. Likewise, we have excelled at getting finance from banks in a cost-effective manner. We have also done well to manage overheads and staffing. As a business, we will be saving US$12.25 m (AED 45 m ) for Empower and PDC in 2014.
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Could you take us through the behind-thescenes activities leading to the acquisition announcement? We have done the acquisition based on heavy and intensive studies over the past one year. Before any acquisition, there is financial, commercial and operational due diligence to be done. It took us one year to take PDC. We have done the due diligence. We have noticed the good progress in trade, hotel, real estate and other sectors. Also, the next eight years are going to be a busy schedule, owing to the World Expo 2020. They definitely will go with District Cooling for the Expo. In fact, we are in negotiations to serve the Expo site, near the new Dubai World Central - Al Maktoum International Airport. The Expo halls will be ready in 2018, and we will go in, but not before 2016. Also, don’t forget, the site will be used even after the Expo, so there will be continuous service. So overall, Empower took the decision at the right time to take over PDC. I have always been enthusiastic about
consolidation. As early as 2008, I spoke about consolidating the companies to pass the benefit to the end-users. Now that we have acquired PDC, people will see the benefits, such as no discontinuity of service, no wrong billing. In 12 months’ time from now, it will be very efficient. I don’t have a magic wand to sort out the billing-related problems. I would need at least six months for that. What is the financial structure of the acquisition? The deal is around $500 m. It is fully financed through a syndicated loan with two local and two international banks. It is funded through debt, equity and internal accruals, owing to the strong financial position and credibility that Empower enjoys. The banks’ faith in us is based on our strong track record, technically, operationally and financially. Speaking of which, what is the value of the overall loans Empower has taken? We have $750 m in loans, of which $600 m is from Citibank, Standard Chartered Bank,
Mashreq Bank and Emirates NBD. We have an additional loan of $150 m from Doha Bank. Empower will have a debt repayment obligation of about $109 m (AED400 m) a year. Once the final formalities of the acquisition are complete, will Palm Utilities and Palm District Cooling eventually come under the Empower brand name? The merger and acquisition will take us at least two years, but we are trying to expedite the process. The two-entity flagship will be carried over the next two years, because merging them will pose a challenge to contractors, suppliers, etc. We will run in parallel, and the acquisition will be done. The two entities are being taken in as subsidiaries of Empower. All their business operations will be run by Empower. We will eventually dissolve the two names in two years’ time. Palm Utilities and Palm District Cooling are maturing entities. The market-speak is that they are struggling entities. How will you be ringing in operational efficiencies and plugging other aspects? A lot of business practices for Palm Utilities and PDC are outsourced, while in our case, we have our own team, whom we have trained to raise their level of performance. We have 46 plants at Empower, and PDC has 11. So as I see it, we will be adding only 11 to our existing profile. We are confident we can operate the 11 as well as we operate the 46. We have the system and the knowhow. You don’t need two operating teams. A central command team will run both. Do you have redundancies as a cost-savings strategy? Have you begun making cuts? By combining, there definitely will be some redundancies. We have to look at how we can give benefit to our shareholders, so there will be redundancies. If we keep the same number, there will be no synergy to business operations. In fact, redundancies have already started since November 2013.
You have taken the liability of loans of two companies? How will that impact the acquisition? When you speak of the liability of loans, there are two parts – equity and debt. We have assumed the liability of PDC, which was $212 m, and that has been fully settled. We are now starting with a clean slate. As Empower, how much of spare capacity do you have? At Empower, we have zero spare capacity. We are highly diversified, and so we absolutely don’t have any spare capacity. And now with the acquisition, how much of spare capacity do you have? PDC has a spare capacity of about 30%, and all of this is in the Crescent, in Palm Jumierah. In the Crescent, out of the installed capacity of 120,000 TR, about 65,000 TR are in operation. And about 40,000 TR will be absorbed this year by four hotel projects coming there. So that will leave us with approximately 15,000 TR in spare capacity. As for other PDC plants, Discovery Gardens is running to full capacity, as are Jumeirah Lake Towers and the Trunk in Palm Jumeirah. Coming back to the Crescent, with the about 40,000 TR that will go operational this year, we will just be connecting. We are not going to be investing anything. So, we will be getting returns without any investment. By the end of 2015, most of the spare capacity will be drastically reduced. The hospitality industry is a substantial portion of your customer base. Are we going to see a change in the customer profile? Dubai hotels have whole-year occupancy, and they are part of our core revenue as customers. The hospitality industry is about 20% of our customer base, I would say. Now, that’s about 20% of the 715 buildings that are receiving our services, including those of PDC. Empower has a diversified customer base of banks, hospitals, hotels, financial centres and shopping malls. We are serving diversity. And we are individually monitoring
different customer clusters. For instance, we are monitoring shopping malls in a bid to raise efficiencies. Our customer base will increase. Business Bay is still not fully developed. There is a strong likelihood of a 20-30% increase in occupancy in Business Bay. Would you look to include more industries to your customer base? For instance, DUBAL is going for a huge captive power plant and could offer a stable revenue model. In comparison, some sectors probably have a saw-tooth demand of seasonal highs and troughs? And would you be considering DEWA? If your father is a contractor and if you are building a house, would you go to another contractor? The answer is ‘no’, correct? I will be working with DEWA. Broadly speaking, I am open to industries as customers. Absolutely! If DEWA wants the service, we will offer it. Currently, in IMPZ, we are providing chilled water to the industry sector in the nature of factories. We do not follow an approach of restricting ourselves to hospitals or the residential sector, say. Wherever there is money, whoever is paying money, we will go. As a business, are you looking to expand beyond Dubai’s shores? For instance, would you explore possibilities in North America, the Subcontinent or, closer to home, in other GCC entities? After the acquisition of Palm Utilities and PDC, we have 57 plant rooms and a total of 45,000 customers. We have $2.31 bn (AED 8.5 bn) in total assets and $0.82 bn (AED 3 bn) in debts. If you were to bring an external auditor, our assets value may be in double digits, so what I have said is a conservative figure. Today, we have almost one million TR of District Cooling. These are all massive numbers. To put things in perspective, US, Canada and Mexico combined have 700,000 TR of District Cooling. And they have been doing District Cooling for several decades. The International District Energy Association (IDEA), for instance, is over 100 years old. What we have achieved in 10 years is
“Today, we have almost one million TR of District Cooling. To put things in perspective, US, Canada and Mexico combined have 700,000 TR of District Cooling” April 2014
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remarkable. And there are new projects coming up, which we shall soon be announcing. In the next two to three years alone, you will see five to six plants coming up. The point of my saying all this is that we are content with being in Dubai, which to me, is the hub of transport, finance and health. I firmly believe that Dubai is going to be the star of the entire continent for the next 15 years. I am proud I am operating out of Dubai. During the Arab Spring, a large number of businesses moved to Dubai. There are plenty of opportunities here for contractors and other stakeholders to build, improve and supply spare parts, etc. I like the way Dubai operates. Decisionmaking abroad is slow compared to Dubai. Here, we received a mandate from the Government, and so we went ahead. Saudi Arabia is not in my radar. Our strength is Dubai. To give you a specific example, we recently got instructions that they need a large District Cooling plant in Jadaf. I am talking big numbers here, about 150,000 TR. Also, there is something happening in the airport area. Once Jadaf is a reality, I would want to connect Healthcare City with Jadaf and Business Bay. That way, if there is a shutdown anywhere, it will be one network, and there will be no disruption of services. And such a network will be one of the largest in the Middle East. You said you like the way Dubai operates. Many in the District Cooling industry have
been waiting for better power tariffs for a long time now. Is there anything on the anvil? What is DEWA saying? Why all this talk about reducing the tariff? We don’t want to subsidise the rate. Let District Cooling providers run their plants in an efficient manner instead of complaining that there are no subsidies. We should be thankful to the Government that there is no taxation. We should be very robust in our approach, accept the tariff as such and focus on the full picture. We should aim for energy efficiency through R&D. You are a member of the Board at IDEA. What does that mean to the region, to Dubai? As a Board Member, I would like to spread knowledge and transfer technology from North America to the MENA region and to India, etc. At this point in time, the challenge is to make people travel from here to North America, so we need to bring a team from the United States to Dubai. We will build an association for District Cooling, and it will be part of IDEA. It will be operated from there. We want to bring them here to lecture to people in Dubai. To be effective, we would like to bring all the District Cooling companies here to the table and to jointly examine the challenges and issues we face as an industry. The equipment in your oldest plant is, what, eight years old. So, what are your service plans? For instance, for every 40,000 hours of operation, a chiller has to
Model of Empower’s New District Cooling Plant at Business Bay 2
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go for service, yes? What is your overall maintenance strategy? For the last 10 years, have you heard of any customer complaints on service? You wouldn’t have. And that’s because we believe in preventive maintenance. We are always preventing any hits. We need to be like Rolex and always offer reliable service. We follow a strategy of preventive maintenance and regular maintenance. It is our aim to stretch the life of our plant rooms to 50 years. We pay attention to all components and equipment, from strainers to filters and from cooling towers to chillers. It is important to keep them in good condition, because they are linked to energy efficiency. Most of our plant rooms operate at 0.95kW/TR. Even in the case of air cooled, we achieve efficiencies of 1.3 to 1.4. We do regular maintenance in winter. In Healthcare City, if 20 chillers, we run two and shut down 18. The diversity of winter and summer allows us a proper maintenance schedule. Our maintenance team is very busy from October to May – so much so that they can’t go on leave in this period. We prepare for summer by identifying and rectifying in winter. What is the ambition of Ahmad Bin Shafar? I dream to have one big District Cooling company in Dubai. We need to be like Etisalat. We need to be one among the Top 10 brands. I would like to see us as a blue chip company.
Pioneers in Fibreglass Pipes With its huge product portfolio of large diameter fibreglass pipe systems, Dubaiheadquartered Gulf Eternit Industries (GEI) is the only company in the world which provides bespoke solutions across the three sectors; oil & gas, water and industrial. Vice President GCC Sales Mounib Hatab discusses his company’s competitive differentiators in the GCC’s water sector s a member of Future Pipe Industries Group, what have been the key milestones in GEI’s journey towards the top position in the market for fibre glass pipes in the region’s water sector? GEI has played a pioneering role in converting pipe demand in the GCC region into fibreglass; today, the GCC has one of the largest penetration rates for fiberglass pipes at 22%. Over the last10 years, the use of fiberglass pipes has increased dramatically due to their advantages over pipes made out of traditional materials, whether it is their superior anti-corrosion properties, safety, longer life cycle or cost-effectiveness. One of our biggest achievements was the introduction of GRE H20 pipes in water lines, a first for the region. We introduced them in UAE through Dubai six years ago. This is a unique offering as no other company offers it. GRE H20 pipe systems minimise water losses in the network to the maximum. They are flexible, corrosion-resistant and styrene-free, and were developed mainly to serve potable water transmission and distribution networks. The H20 pipes range from 80mm to 4,000mm in diameter and are able to withstand pressures up to 25bar, making them suitable for use in a wide range of applications for both underground and above-ground installations.
region for Glass Reinforced Polyester (GRP) pipe systems. The group also spends considerable time and money acquiring and maintaining international certifications and accreditations that support our quality offering.
In a highly competitive market, what does your company do better than any of your competitors? Our strategy is based on offering integrated engineering solutions and bespoke products to support our customers, by providing manufacturing, supply, engineering, site installation, field support and fabrication support. As we always work in close partnership with our customers, we are able to anticipate and
respond to their changing needs and schedules to develop products and solutions that answer their requirements, on time and on budget. Today, the technology has matured and the industry appreciates the product’s advantages, from reliability to low cost of maintenance, greater life span and anti-corrosive attributes. The group has manufacturing facilities across the region, and can increase its production capacities as per project requirement in relatively short periods. The group’s integrated business model gives it the opportunity to control the complete process, from quality of the materials to end product testing. Our testing facility in Abu Dhabi is the largest in the region and utilises the latest state- of-the-art equipment. The facility is assessed and certified by the independent agency, TÜV Rhineland. We offer both short term and long term testing for optimised quality and long term performance. Our pipe systems have a 50-year lifespan. Our engineered products have also been recognised for their quality and excellence, receiving the first ever Kitemark award in the
Where are you seeing the strongest demand for your products and solutions? The strongest demand is coming from the water distribution and transmission sector. Thanks to fast growing population and increasing urbanisation, there has been a surge in the demand for power and water across the region, which is already ranked the largest in terms of consumption. Last year, during the meeting of the GCC Electricity and Water Co-operation Committee, a $10.5bn water network project including two desalination plants to serve the entire GCC was discussed. Therefore, the increase in demand for pipelines is also likely to be fuelled by the massive growth of the desalination sector. What are your plans for investment and growth for the next 2-3 years? We want to invest in R&D. We are constantly striving to expand the envelope on pressure and diameter, the two critical components of a pipe, where we already enjoy the highest product capabilities in the world. We will also focus on strategies to explore customer-driven innovations. Through a strong focus on customer service, we strive to offer sustainable and reliable integrated solutions and further develop and improve our technologies and leverage our existing capabilities. Customers can help us identify the problems we need to focus on solving and provide new insights on how to better deliver our products and services. Contact email@example.com Visit us at WETEX 14-16 April at Stand MS-01 April 2014
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Gulf airspaces headed for carbon turbulence
Ian Jopson is the head of environmental and community affairs at NATS, which provides air traffic services to 2.2 million flights a year and to the 15 biggest airports in the UK. He spoke to Anoop K Menon on the environmental priorities for the Gulf region’s rapidly growing aviation sector What are the environmental issues associated with aviation that we should be worried about? Can we quantify them or put some numbers to understand them better? Since the early days of jet aircraft, aviation has dramatically improved its environmental performance. Since the 1960s, fuel efficiency has improved by some 70% per passenger km. Today’s aircrafts are 75% quieter than those manufactured 50 years ago, while levels of carbon monoxide have come down by 50% and unburned hydrocarbons and smoke by around 90%. However, the key issue still facing the aviation industry is the need to reduce global greenhouse gas emissions. Airlines’ top
priority are flights that reduce emissions and fuel burn. This is a completely practical demand – fuel costs money so there is genuine motivation to achieve improvement. We need to consider the environmental impact of how we control aircraft every day. This includes how we improve the efficiency of our airspace, route network and in the investment decisions we make regarding new technology. The penalties for not demonstrating environmental progress have never been more damaging. Environmental taxes, fees and legislation can have an adverse effect on the health of the industry – and, of course, we must also consider the environmental impact itself. And in this regard, what is good economically, is good environmentally too.
How do these issues impact the Gulf region’s rapidly growing aviation industry? What are the opportunities to mitigate these issues? It is increasingly clear that better environmental safeguards sit squarely at the top of the aviation agenda. In expanding regions, such as the Gulf Cooperation Council (GCC), there is an opportunity to get it right from the start rather than having to upgrade legacy systems. Environmental performance can be incorporated into the airspace structures and procedure designs from day one, which gives the GCC a distinct advantage over other markets which have to contend with outdated existing systems.
“The Middle East has the opportunity to create an airspace optimised for environmental performance, which can accommodate today’s traffic load and aircraft capabilities, and anticipate future growth” 42
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Reduction in CO emissions achieved by new generation aircrafts
Air traffic movements/day, managed by GCAA’s Sheikh Zayed Air Navigation Centre
More effective air traffic management also has a considerable impact on environmental performance. While improvements in engines and airframes play a large part in reducing aviation’s carbon footprint, even the most efficient planes waste fuel when stuck in a hold, flying stepped climbs and descents, routing in a zig-zag pattern instead of a straight line, or cruising at 20,000 feet when it could be at 35,000. For example, air traffic over the UAE will nearly double by 2030. Currently, the General Civil Aviation Authority’s (GCAA) Sheikh Zayed Air Navigation Centre located in Abu Dhabi manages more than 2,100 air traffic movements a day. If the GCC region can collaborate to ensure less congestion in airspace, this will help the environment and reduce fuel burning. The Middle East has the opportunity to create an airspace optimised for environmental performance, which can accommodate today’s traffic load and aircraft capabilities, and anticipate future growth. What’s more,
an environmentally efficient airspace is an economically efficient one, too. Many in the industry have asked the question: should we have capacity or environmental efficiency? With a fast growing aviation system like the UAE and the right designs and innovative thinking – you can have both capacity and sustainability!’ How can NATS help the industry stakeholders in this regard? NATS is committed to playing its part in limiting, and where possible reducing, the environmental impact of our operations, whilst still delivering social and economic outcomes to society as a whole. Our long term success as a company is dependent on our success in achieving environmental improvements in parallel with our other business targets. We work with regulators in the aviation industry to encourage collaboration and deliver new and innovative solutions to the environmental challenges that we face as an industry. For instance, NATS has recently implemented 3Di, our innovative three dimensional inefficiency score. This measures the environmental efficiency of each flight in our airspace and gives us an average score, on which we are financially incentivised to meet our targets. This was a self-initiated programme that has given NATS clear incentives and penalties directly tied to our environmental performance. Through programmes like 3Di, we aim to stay ahead of the legislative curve. And right now there is an opportunity in the Gulf region to show how well aviation can work. With new airports, new aircraft and new airspace design, and with sustainability at the core of the region’s thinking, the Middle East can set the standard for a fully optimised system. From the level of both industry and government, how is sustainability in aviation being addressed? Are there any particular local, regional or international initiatives that you have found to be interesting? NATS fully congratulates the GCC aviation authorities’ sustainability initiatives and we work across the region on improving airspace and reducing environmental impact. We participate in a range of environmentallyfocused sessions including work with the Committee on Aviation Environmental Protection (CAEP). Such committees help highlight the region’s commitment to the
sustainability of the aviation industry and its impact on the environment. NATS’ role within CAEP is to advise states in deliberations on operational opportunities to reduce fuel burn, aircraft noise and emissions. We have carried out analysis on the environmental benefits of the deployment of ICAO’s Aviation System Block Upgrades. This is particularly important for the industry as ICAO is increasingly showing support for the development of a global emissions trading scheme for aviation and an emissions standard for new aircrafts. NATS is the first air navigation service provider in the world to have developed environmental measurement as part of regulatory performance targets. Having developed techniques to monitor environmental performance daily, monthly and annually, we can now track progress towards CO2 targets in much detail. Our operational Centres and Airport Units have Environment Action Plans and annual environmental targets, to improve fuel and emissions savings.
“ICAO is increasingly showing support for the development of a global emissions trading scheme for aviation and an emissions standard for new aircraft” April 2014
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Dubai Tram on track
Gavin Davids gets an exclusive first look at the Dubai Tram project with Abdullah Yousif Al Ali, acting CEO of the RTA’s Rail Agency
ver since the Roads and Transport Authority launched the Dubai Metro project in 2009, the city has seen a constant focus on the improvement of its public transport network. Having first opened with 10 of 29 stations in 2009, Dubai Metro’s Red Line was declared complete in April 2010. This was swiftly followed by the completion of the Green Line of the Metro in September 2011, extending the metro transport network across the entire city. Coupled with the preexisting bus and taxi network, it was assumed that Dubai’s public transport needs were covered for the foreseeable future. However, that would have been an underestimation of the vision of the UAE
and the RTA, with plans launched almost immediately to construct a tramway that would encircle the Dubai Marina and Al Sufouh Road. The project has been designed to be an integral part of the Dubai transport network, linking the Dubai Metro and Palm Monorail. It will run along Al Sufouh Road and Jumeirah Beach Road, from Mall of the Emirates to the Dubai Marina. Originally planned for completion in 2009, the Dubai Tram project has endured a difficult run, with the economic crisis having delayed it until 2012, and then subsequently to 2014. It was finally announced, at the end of last year, that testing on the trams would commence in January 2014, ahead of a scheduled November 2014 launch. “The Dubai Tram is expected to further consolidate the public transport image in Dubai
and help improve the accessibility and mobility within Dubai in general, and the new leisure and business districts of the city in particular,” says Abdullah Yousif Al Ali, acting CEO, Rail Agency – RTA, in an exclusive interview with Big Project ME. “Being the first of its kind in the region and one of the most sophisticated tram projects in the world, it will add more value to the existing public transport networks in Dubai.” On January 25, 2014 the RTA announced that testing on the $1.02-bn project would begin, with the first zone nearly completed and ready for operation. The second stage of testing has been pencilled in to start on April 16, the authority says. Testing on zone three – that which connects Dubai Marina and Jumeirah Beach Residence – is due to begin on June 14.
“The Dubai Tram is expected to further consolidate the public transport image in Dubai and help improve the accessibility and mobility within Dubai, in general” 44
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Total number of trams (11 in Phase 1 + 14 in Phase 2)
Expected riders per day when phase 1 starts operations
Expected riders per day by 2020
“The first test run went exactly as planned and testing will continue till October 2014 to ensure that all systems are performing and the safety of the tram during operation is assured” “Test activities include both static and dynamic tests. The first test run went exactly as planned and testing will continue till October 2014 to ensure that all systems are performing and the safety of the tram during operation is assured,” Al Ali explains. Given that the Tramway is being built in the midst of pre-existing infrastructure, the challenges associated with the project are considerable. One of the main causes of the delays has been that the construction team, consisting of a consortium of Alstom, Besix and Parsons, have had to work around utilities that could not, under any circumstances, be interrupted, as Al Ali explains. “(Furthermore) there were a large number of road diversions in an already congested area. As a result, there had to be coordination with a number of developers, who all had different and sometimes conflicting needs,” he adds. “The Dubai Tram project came immediately after the Dubai Metro project and a large number of lessons learnt on the Metro were implemented on the Tram. We in the RTA usually produce a report containing all the lessons learnt at the end of all our projects,” Al Ali continues. “These are used to develop and improve the works on new projects. Some of the most notable lessons learnt are: “Firstly, early coordination with all the stakeholders to ensure that their needs and requirements are included in the contract.” “Secondly, the tram and metro projects should be run as an integrated program of sub-projects to ensure the proper integration of all activities related to the successful launch of revenue service,” he explains further. However, Al Ali is quick to point out that the consortium is working together with the consultant, Systra and the RTA team, to
successfully deliver the project, pointing out that the teams are in daily communication to resolve any issues or difficulties that may arise. He terms the performance so far as ‘satisfactory’. As mentioned earlier, the over-arching plan for the Dubai Tram project is to eventually integrate with the rest of Dubai’s transport infrastructure. As such, the consortium and the RTA Rail Agency
“The building of some of the tram stations near Metro stations was intended to provide a direct link and transfer of passengers between the two modes of public transport”
have worked together to ensure that the tram stations are accessible to commuters. “The building of some of the tram stations near Metro stations was intended to provide a direct link and transfer of passengers between the two modes of public transport. The Dubai Metro project comes as part of the RTA’s strategic plan, which aims to develop an efficient integrated multimodal public transport network for Dubai,” the acting CEO of the Rail Agency explains to Big Project ME. “The outcome of the Dubai Tram system will help provide a faster and more reliable way to get around in some of the most vital communities in Dubai, with zero emissions and hassles. The trip to Downtown and other major business hubs of Dubai will be more convenient and hassle free, thanks to the new integrated multi-modal rail system of Dubai,” Al Ali asserts. With the deadline for completion fast approaching, there still remains much to be done. With the current project extending a total of 14.6-km, with 17 stations along the way, Al Ali says that Phase I of the tram project is just the start, with plenty more to come. “The RTA has developed a comprehensive Rail Master Plan that responds to the current and future needs of Dubai,” he explains. “The plan has adopted some proposals for new rail lines (metro and tram), as well as the future extension for some existing lines.” “In this domain, the current Dubai Tram project is 10.6-km, which extends between Dubai Marina and the Tram Depot near the Dubai Police Academy. It represents Phase I of the Dubai Tram project. Phase II will be extended for a further five kilometres and seven stations to both the Mall of the Emirates and Burj Al Arab at Jumeirah Road,” Al Ali says, highlighting the ambitious vision behind the project. April 2014
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Dubai’s life sciences master plan Marwan Abdulaziz Janahi is the Executive Director of TECOM Investments’ Science Cluster, which comprises of two free zones — DuBiotech, for the life sciences industry and ENPARK, for the alternative energy and environmental industries. In an interview with Anoop K Menon, he spoke on how far DuBiotech has progressed with its agenda of creating a life sciences hub for the region in Dubai and industry trends that will shape DuBiotech’s future What have been key milestones in DuBiotech’s nine year journey? When Dubiotech was launched in 2005, we were the world’s first free zone dedicated to the life sciences industry. We took up HH Sheikh Mohammed bin Rashid Al Maktoum’s vision of developing Dubai’s knowledgebased economy by creating a regional hub for life sciences. The goal was to leverage Dubai’s proximity to customers and suppliers in the Middle East, Central Asia, Africa, the Indian Subcontinent and the Eastern Mediterranean. When we looked at the leading countries in this field, like Singapore, Germany and the US to finalise our strategy and model, we realised that Dubai lacked certain components they had and vice versa. We also realised that it is important to attract companies with proven technologies who are interested in the Middle East market. We started out by talking to the majors like Pfizer, Merck Serono and Bayer to understand their needs and challenges and how they market their products. After they came on board, several small and mid-sized companies too signed up. I think there has been two major milestones if I may call them. One was development of the infrastructure. What was bare land in 2005 is now equipped with roads, power, water, sewers and telecommunication infrastructure. We built this over a period of four years up to 2009. We had started off with three major projects of which two are complete. Our warehouse complex with 25 units is 100% occupied while the laboratory building is now fully operational. Our office towers are currently under construction. The laboratory building has 50%
occupancy and in two to three years, it will probably be 100%. We are already thinking of expansion plans for the warehouses and once we launch our offices, we will look into building more of them. We have also been very active in wooing companies. In 2013, we registered 42 companies, matching our 2013 numbers. However, DuBiotech is more than just a business cluster; our master plan has a residential compound, a commercial compound and a light industrial compound. The commercial and residential elements include a school, which started last year and retail community centre, and more developments are on their way. Do you think the domestic market is key consideration for companies looking to set shop in DuBiotech? The government, whether it is the Dubai Health Authority or the Ministry of Health or the Ministry of Environment, has always viewed us the gate keeper of the life sciences industry. If they need something from the industry or if it is a technology they want to know more about, they talk to us because we are in constant contact with the industry. For example, one of the outcomes of brainstorming session conducted by HH Sheikh Mohammed is to put plans for developing national programme of periodical screening for citizens to protect their health and creation of a national database for all medical records on the government’s agenda. These steps are very much in line with industry’s thinking of prevention is being better than cure, and companies in DuBiotech can definitely contribute in these areas. Access to the domestic market is a key factor for life sciences companies to invest with us.
What are the industry trends that stand to benefit Dubai and DuBiotech? Globally, the life sciences industry is going through several changes, ‘Patent Cliff’ being one of them. A lot of the drugs that have been produced for the past 15-20 years are losing their patents and becoming generic products. Local companies can now actually produce them and are not restricted to the brand. However, we also need to educate the patients about generic products as opposed to their branded counterparts because we have been very brand loyal. We have allowed companies to come in and take comfortable share of the market by insisting that a certain drug must come from a certain company. A very good example is Ireland where the government was struggling to reduce its healthcare bill because it was paying a premium to the non-generic companies. (This has been addressed through a generic drug law passed in 2013 allowing pharmacists to substitute prescribed drugs with generic ones - Editor) The ‘Patent Cliff’ phenomenon gives us a great opportunity to develop a local manufacturing base in generics. Thanks to population growth, market feasibility is no longer an issue. From a manufacturing point of view, the dynamics are clearly becoming more favourable. The other trend is the growing interplay between Information Technology (IT) and life sciences, which is another area for us we plan to get into. Clinical trials is still relevant but is a very complex matter because it needs the support of both the government and the society. Key challenges include whether people are ready to work with researchers, allow them to do April 2014
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trials on patients, or whether doctors are ready to devote their time to patients to work on things still under development. Recently, I was part of a panel discussion on clinical trial and innovation. Though there were differences of opinion, the panel agreed that they should put together recommendations that can be taken up with the higher authorities through DuBiotech. In terms of the number of clinical trial sites, we are among the lowest in the world and this needs to change. Do you have a wish list that could help the life sciences sector in the UAE grow faster? I would like to see industry and academia engage more with each other. For example, if the industry is facing challenges with a product, they could work together with academia to see if these challenges can be overcome. At DuBiotech, we want to be part of such collaborations and hopefully, we will have good R&D coming out of our universities. We have good capabilities, good labs and good facilities for R&D, but again, such relationships need to be fostered. Another area which is very important is regular interaction with the regulators. Currently, some things are either not allowed or are restricted because there are no rules. If there are rules that say no, then we can go ahead and ask why? But if there are no rules, we are dealing with a grey area. Of course, we have instituted a regular dialogue with the Ministry of Health. In 2012, we signed a MoU with the ministry under which companies based in DuBiotech are allowed to practice a number of activities including operation of scientific offices, import and re-export of pharmaceuticals, medical devices and equipment and the manufacture and production of these products, with ministry’s approval. When there are discussions at a higher level on topics like stem cells for which there are no regulations, they turn to us what do you think? What do the companies from your side suggest? For us, it is quite easy because we can tell them what is happening in a particular country, what
are the best practices. Of course, we don’t compare ourselves to the US but seek out smaller countries that have excelled in certain areas. We request information on their best practices and share that with the UAE authorities. A regular dialogue with the government and the regulator is very important for industry’s growth. Where do you see DuBiotech from a manufacturing standpoint? When companies approach us and tell us they need a big cold storage facility, for example, we refer them to our colleagues in JAFZA where they already have specialised companies managing cold chains. DuBiotech, I believe, has a niche advantage in terms of light manufacturing, and it is an area that we intend to fence off. I am not saying that we are better than JAFZA or we are competing. Rather, my focus is on developing the entire value chain. Today, we have companies doing sales and marketing and providing services in the cluster, and in a couple of years, we will have manufacturing and hopefully R&D. Having that entire value chain in close proximity is important. We have met up with companies who have great technologies and want to collaborate on the manufacturing front, and we see ourselves facilitating that. One of the things,
especially with multinationals, is they don’t necessarily want to invest in capex from day one. They want to collaborate, and if we have local manufacturing, that can happen easily. We are very keen to promote our value proposition with regard to manufacturing. How do you plan to sustain and develop your first mover advantage? What is important is that we have been very serious about putting together a good infrastructure for attracting companies from the life sciences industry. We have also zoomed in and looked at their specific requirements; hence, we have collaborated with the Ministry of Health. When it comes to the life sciences industry, we know exactly what is required, both from business and regulatory stand points. When we have discussion with potential companies, we don’t start by asking how much space they need. Rather, we ask them what is your business, what do you want to do, what kind of activities they are interested in. This helps us to tailor our offerings according to their needs, which has been a key factor in attracting companies. From an investment standpoint, we have been targeting specific countries. These include the US, Germany and some parts of Europe and India in that order, and we will continue with that focus.
“DuBiotech has a niche advantage in terms of light manufacturing which we will fence off” Marwan Abdulaziz Janahi, Executive Director, TECOM Investments’ Science Cluster 48
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The root cause The global energy sector has sustained property damage losses in excess of $34 bn since 1974 ultiple system failures have caused energy sector’s largest losses, says Marsh report. The failure of multiple process and safety systems is the most common cause of the largest property damage losses in the global energy industry over the past four decades, according to a report released by Marsh at its bi-annual National Oil Companies (NOC) Conference held in Dubai last month. Marsh is a leading player in insurance broking and risk management. The 23rd edition of Marsh’s report, The 100 Largest Losses, details the most significant property damage losses in the global hydrocarbon extraction, transport, and processing industry since 1974. According to Marsh’s report, seven of the 100 largest property damage losses have occurred since 2012. Marsh estimates that the global energy sector
has sustained property damage losses in excess of $34 bn since 1974, based on current estimated values; with the majority attributable to offshore and refining incidents. Andrew George, Chairman of Marsh’s Global Energy Practice, commented: “The global energy sector is becoming increasingly sophisticated in its approach to risk management, most notably in the deployment of new technologies and in emerging markets. “However, none of the losses detailed in Marsh’s report should be considered ‘black swan’ events. These accidents generally occurred because of the failure of a number of interlinked control barriers within process and safety management systems. “The proper maintenance of these barriers depends not only on them being routinely inspected and audited, but also on senior management’s clear support of the safety processes. Continued risk minimisation in the global energy sector depends on
maintaining vigilance on new and developing threats, and forming strategies to prevent and mitigate their impact.”
The 20 largest losses Of the 20 largest losses, eight occurred in the US, three in Europe and two in Brazil. The Piper Alpha explosion in the North Sea in 1988 remains the costliest property damage loss, at $1.81 bn (inflated to December 2013 value). Date
Property loss US$ millions
10/23/1989 01/19/2004 06/04/2009 03/19/1989 06/25/2000 05/15/2001 09/25/1998 04/24/1988
Petrochemical Gas processing Upstream Upstream Refinery Upstream Gas processing Upstream
Vapor cloud explosion Explosion/fire Collision Explosion/fire Explosion/fire Explosion/fire/sinking Explosion Blowout
US Algeria North Sea US Kuwait Brazil Australia Brazil
1,400 940 840 830 820 790 750 700
09/21/2001 05/04/1988 05/05/1988 03/11/2011 04/21/2010 09/12/2008 06/13/2013 04/02/2013 12/25/1997 07/27/2005
Petrochemical Petrochemical Refinery Refinery Upstream Refinery Petrochemical Refinery Gas processing Upstream
Explosion Explosion Vapor cloud explosion Earthquake Blowout/explosion/fire Hurricane Explosion/fire Flooding/fire Explosion/fire Collision/fire
France US US Japan US US US Argentina Malaysia India
680 640 610 600 600 550 510 500 490 480
Vapor cloud explosion
Piper-Alpha, North Sea Pasadena, Texas Skikda Norwegian Sector Gulf of Mexico Mina Al-Ahmadi Campos Basin Longford, Victoria Enchova, Campos Basin Toulouse Henderson, Nevada Norco, Louisiana Sendai Gulf of Mexico Texas Geismar, Louisiana La Plata, Ensenada Bintulu, Sarawak Mumbai High North Field Pampa, Texas
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Smart city, smarter apps Dubai’s infrastructure providers have chalked out ambitious plans, which will play a crucial role in helping the emirate turn smart in a few years ast month HH Sheikh Mohammed bin Rashid Al Maktoum, VicePresident and Prime Minister of the UAE and Ruler of Dubai, launched the strategy to transform Dubai into a ‘Smart City.’ Transport, infrastructure, electricity, and urban planning are among the key sectors that the emirate wants to improve with the help of nearly 100 smart initiatives and 1,000 government services. The Smart Dubai initiative is to be achieved within three years. The Dubai Water and Electricity Authority (DEWA) has been inching towards enabling smart services for its customers, which started with the introduction of smart meters in the region. It has developed a five-year plan to complete the project, estimated to cost $1.3 bn, with a dedicated DEWA team replacing 250,000 meters in the residential, industrial, and commercial sectors. DEWA is also proposing to allow home and building owners to install solar panels to power their homes or buildings. DEWA eventually plans to connect those panels to a distribution network and buy energy from the consumers. However, how useful is such purchases during winter, when the national grid is overflowing with power, is questionable. Saeed Mohammed Al Tayer, MD and CEO of DEWA, said that 150 smart services are already available and as far as electricity reliability is concerned, Dubai is currently at the top position, with latest statistics suggesting that each person in Dubai has experienced only five minutes without electricity. More recently, DEWA has established Etihad ESCO in an effort to improve the energy efficiency of nearly 30,000 existing buildings in the Dubai. Etihad will also help companies enter the energy services contracting (ESCO) market with the help of Regulation and Supervisory Bureau for power and water, Dubai.
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Dubai Metro The Road and Transport Authority (RTA) is planning to set up a unified control centre for all means of transportation and traffic services
Aiding DEWA in its mission to enhance energy efficiency are projects like the Silicon Park, the first integrated smart city project to be built in Dubai Silicon Oasis (DSO) at a cost of $299 m and spanning an area of 150,000 sqm. The project is compliant with the UAE Green Building Regulations and Specifications and the international LEED standard. It will be built using ‘green’ building material and control mechanisms, as well as solar panels and double-glazed windows to reduce heat absorption. The Road and Transport Authority (RTA) too have come up with a number of programmes, one of which is the unified control centre for all means of transportation and traffic services. Smart Taxi, where people can pay through credit or smart cards, Smart Buses that can tracked and Smart Parking apps to check empty parking slots are some projects being built. The RTA expects to provide more than 200 services, using smartphones by the end of 2015, in addition to its current services. Dubai’s Smart City project aims to encourage
collaboration between the public and private sectors to achieve all the targets. The next stage will involve the integration of all systems in all organisations — public and private — in all aspects, which will be a challenge.
Silicon Park is the first integrated smart city project to be built in Dubai at a cost of US$299 m and spanning an area of 150,000 sqm
Water to cost more Alice Cowman
Alice Cowman, Programme Director, Clean Energy Business Council (CEBC) analyses the issue of disappearing water and increased energy demand in the MENA region
n the wake of the International Water Summit, held in Abu Dhabi in January, the Middle East & North Africa (MENA) region’s water woes are big news. Studies carried out by the Abu Dhabi Environmental Agency (EAD) contained frightening statistics as to why we should all be worried about falling groundwater levels in the UAE. It might be less than obvious as to why the Clean Energy Business Council (CEBC) has just launched a research paper on water. The answer lies in looking at the extraordinary amount of energy used to create alternatives to natural water supply in the MENA region. In fact, the IEA estimates that six of the biggest users of desalination in MENA – Algeria, Kuwait, Libya, Qatar, Saudi Arabia and the UAE - use approximately 10% of their energy demand for desalination purposes. Huge potential for energy savings and renewable energy alternatives for generating water supply propelled CEBC to look at this topic in more detail. Clean energy may actually be driven by the desperate need for water generation in the region.
The threat The water supply and demand gap is a growing problem. The World Bank estimates that the gap will reach 200 km cubed in 2040 in an average climate change scenario. This is 50 times the amount of renewable sources of water available in the GCC countries as a whole every year. Basic economics tells us that an increasing supply and demand gap can only mean increasing water prices and CEBC warns that this means profit impacts for the private sector when the true cost of supply is passed through to them. Of the water supply options, wastewater reuse is far more economical than desalination, mainly due to its lower energy requirements.
Also, the wastewater process is starting to produce interesting by-products such as plastics and fertiliser. However, in spite of the high cost of desalination, the urgent need to bridge the water gap in MENA means that the region will account more than 54% of the world’s growth in desalination capacity according to Navigant Research Group. The impact on industry Traditionally, within MENA, authorities met their power and water demands by co-locating natural gas power plants with desalination plants. An analysis of these plants now shows that power generated by them is only required during the summer when all the air-conditioning units are switched on and demand peaks. As a result, the energy savings from co-location are only enjoyed during those summer months. The rest of the year the plants are run purely for desalination purposes, resulting in substantial fuel inefficiencies. On CEBC’s analysis, power and water generation will increasingly be separated in years to come to increase flexibility for utilities and maximise fuel efficiency. MENA will also come to embrace renewable sources of energy for desalination purposes in a greater way, not least because of the uncertainty surrounding natural gas prices in the region. This will make not just environmental sense but economic sense in the near future. Cost estimates for all forms of renewables are surprisingly close to the equivalent fossil fuel desalination cost, with solar CSP and geothermal sources leading the competition for base load desalination purposes. Better use of water by all within the MENA region is required. Eighty per cent of water in the MENA region is used for agriculture yet it only contributes two per cent to GDP. Ironically, the cost of repairing damage to our groundwater resources could cost us that two per cent of GDP earned by agriculture. Reducing demand from agriculture and other sectors is key to keeping
The cost of repairing damage to our groundwater could cost us 2% of the GDP earned by agriculture
the bill for the bridging the water gap down. The World Bank estimates that up to $300 bn can be saved by reducing demand. CEBC noted that higher water tariffs in Dubai do not necessarily impact a person’s decision to drink more water. Why is this? Is everyone actually charged for the water they consume? Maybe an employer pays so that individuals don’t feel the pinch from increased prices or are individuals simply exempt from tariffs? Why is this value of this precious resource not adequately appreciated or costed? CEBC calculated that for an industry such as cement, an increase in the cost of water could push the companies looked at into the red with increased costs of up to $15 m a year in some sectors. The conclusion can only be that it is not just the public sector that may lose a night’s sleep over water, the private sector will have to sit up and take notice of water management issues sooner rather than later. For a copy of the CEBC research paper ‘Water & Energy in MENA - Challenges, Opportunities and Potential,’ please visit www. cleanenergybusinesscouncil.com April 2014
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Broadband for all WTDC 2014 in Dubai focussed on universal broadband connectivity and the role of public-private partnerships towards achieving this goal Last month, more than 1,600 government policy-makers and industry leaders from 145 countries gathered in Dubai to chart the future development of Telecommunications and Information and Communications Technology (ICT) as a catalyst for sustainable, socio-economic development powered by universal broadband connectivity. The theme of ITU’s sixth quadrennial World Telecommunications Development Conference was ‘Broadband for Sustainable Development.’ The conference opened with a welcoming statement by the Chairman of the United Arab Emirates Telecommunication Regulatory Authority, HE Mohamed Al Qamzy. Speaking at the opening session, ITU Secretary-General, Dr Hamadoun I Touré said that ICTs, and in particular broadband networks, offer the greatest opportunity to make rapid advances in global social and economic development as the world approaches the cusp between the Millennium Development Goals (MDGs) next year, and the beginning of the post2015 development process. Dr Touré noted, for example, how the fall in the number of fixed-line subscriptions had contrasted with the exponential growth of mobile cellular subscriptions which had increased by almost 2.2 bn over the same period. The developing world accounted for 90% of the net additions. The same pattern had occurred with the Internet, with 817 m of the one billion new Internet users over the past four years coming from the developing world.
Number of smart phones in use
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The theme of ITU’s sixth quadrennial World Telecommunications Development Conference was Broadband for Sustainable Development
At the same time, less than one third of the populations in less developed countries have access to the Internet compared to more than two thirds of people in the developed world. The ITU Secretary-General also noted that fixed and mobile broadband penetration rates at the beginning of 2014 stood at 27.2% and 74.8% respectively in developed countries compared to 6.1% and 19.8% in developing countries. “By delivering efficiencies across so many areas – from education and healthcare to transportation, water and energy – broadband networks can quickly pay for themselves, creating a virtuous circle of investment, productivity and human development.” Dr Touré pointed out that public and private sector partnerships, which worked so well in the creation of mobile cellular networks in the developing world, could be replicated for broadband as well.
Number of mobile subscriptions worldwide April 2014
ITU Telecommunication Development Bureau Director Brahima Sanou made special mention of three successful initiatives he has launched, namely the m-Powering Development Initiative to extend the benefits of mobile technology to all segments of society; the Smart Sustainable Development Model to establish a link between rural telecommunications and ICT development and disaster risk reduction and management; and the ITU Academy, which integrates all ITU training activities under one umbrella. In his speech, Sanou recalled that there are people who had “never seen a phone, people who do not know what the Internet is; and people who do not know that ICTs can change their lives” and that 92% of those not online were in in developing countries. “And that is the reason why we are here. Our mission is far from over.”
Mobile broadband penetration in developing countries
Broadband (fixed and mobile) penetration rate in the UAE
Dubai rolls out medical tourism strategy The Dubai Health Authority (DHA) is driving a multi-stakeholder initiative that will leverage the emirate’s tourist and healthcare infrastructure to develop medical tourism ubai’s ambitions to duplicate its appeal as a global tourist destination in medical tourism received a boost with the emirate’s executive council okaying Dubai Health Authority’s (DHA) new medical tourism strategy. To be executed in two phases, the strategy sets investment targets in six medical areas of specialisation: dentistry, plastic surgery, ophthalmic surgery, general medical check-ups, orthopaedic surgery and sports medicine, in addition to recuperation and healing from skin diseases. Phase 1 extends up to 2016 and phase 2 up to 2020. The medical tourism strategy takes into account the growing visitor numbers to Dubai for business, exhibitions, conferences, shopping and entertainment, which has helped create one of the best tourism infrastructure in the world. This, together with a regulated health sector and state-of-the art medical infrastructure, is expected to help increase Dubai’s share of global medical tourist traffic. HE Eng. Essa Al Maidoor, Director-General of DHA said: “We have carefully selected health services to be promoted taking quality and prices into consideration to attract tourists to the emirate. Developing a strategy will help ensure that the complete process, from the time a patient visits Dubai for medical tourism right through the discharge and follow-up
Total number of health facilities in Dubai
The Dubai Healthcare City Authority is one of the key stakeholders in the medical tourism initiative
stage, is smooth.” DHA is already engaging with Department of Tourism and Commerce Marketing (DTCM), Department of Economic Development (DED), Dubai Healthcare City Authority and General Directorate of Residency and Foreigners Affairs (GDRFA) to hasten the development of requisite healthcare infrastructure. Currently, the total number of health facilities in Dubai is around 2,518 of which more than 70% are internationally accredited. There are 25,846 health professionals in the private sector who speak more than 40 languages. DHA’s director of Health Regulation Dr Ramadan Ibrahim is heading Dubai’s medical tourism initiative. He said the ground work for the initiative started in the last quarter of 2012. In 2013, DHA carried out a gap analysis,
Number of healthcare professionals working in the private sector
identified medical specialties and target markets and carried out benchmarking of prices. DHA’s plan for this year is to launch a dedicated portal for medical tourism, work on branding the initiative and launch medical tourism packages for the target markets. The initial target markets will be Russia, CIS countries, South Asia and neighbouring GCC countries. In 2015, the focus will be on brand building and growing the facilities. In 2016, DHA will evaluate the progress made to decide on the future course of action. “All through, the key element will continue to be a well-regulated health sector as quality of services is an essential component for organic growth of medical tourism,” said Dr Ibrahim. “In 2012, the number of medical tourists that visited Dubai were 107,000 and the revenues generated were more than US$177 m. By 2016, we expect a 15% increase in the number of medical tourists to 170,000 and the revenues to $322 m. By 2020, if we consider a 20% jump, the numbers increase to 500,000 and revenues to more than $713 m.” Dubai Healthcare City Authority, which is one of the key stakeholders in medical tourism initiative, announced the launch of its second facilitator Meditour, which will join Salamatak Healthcare Management in connecting overseas patients with healthcare providers in Dubai. The facilitators connect medical tourists to healthcare professionals, covering requirements like travel, accommodation and transportation.
Number of hospitals under construction
Global medical tourism revenues in 2013; this is expected to double by 2020 INFRASTRUCTURE MIDDLE EAST
“Asset creation is only half the story” John Abi-Hanna, Business Development Director, Black & Veatch Middle East, on what the region’s priorities should be to better manage its water infrastructure
wo areas we believe will have a significant impact upon the Gulf Cooperation Council’s (GCC) future ability to deliver sustainable water services are asset management and knowledge transfer. It is predicted that more than US$300 bn will be invested in GCC water and desalination projects between 2012 and 2022. Asset creation, however, is only half the story. To deliver the levels of customer service and environmental performance end-users and governments seek, GCC states’ infrastructure asset base needs to be managed effectively.
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PAS 55 is recognised around the world as the benchmark for asset management quality. Use of the specification in the GCC is growing; Abu Dhabi Distribution Company (ADDC) announced last year the appointment of Black & Veatch to help it achieve PAS 55 certification. In a recent advance in the discipline of asset management, the International Organisation for Standardisation - commonly called the ISO - published ISO 5500X, the world’s first international suite of standards for asset management. We anticipate this will further increase the implementation of effective asset management regimes and help utilities in the GCC ensure their investments deliver the performance desired in the long-term.
In addition to developing infrastructure, the GCC needs to develop people. Reliance on expat expertise to deliver and manage utility infrastructure is unsustainable. Knowledge transfer is now essential to a project’s success. The companies best-placed to meet this need will be those with a world-class understanding of energy and water technologies, and the ability to provide effective knowledge transfer programmes. For us this means empowering local leaders and working to develop our client’s GCC professionals as well as our own. For example, as a result of our PAS 55 work with ADDC, the client’s teams will be empowered to make world-class performance business-as-usual.
Also coming soon…
May MENASOL 2014 6 – 7 may, 2014, DUBAI With over 3GW of solar forecast to be completed in the Middle East & North Africa by 2020, over 150 senior executives from leading solar companies will be meeting at the 6th Annual Middle East & North Africa Solar Conference & Exhibition (MENASOL) next month. Contact: Letty Thomas Email: firstname.lastname@example.org www.csptoday.com/menasol/
HAPPENING THIS MONTH…
WETEX 2014 14–16 APRIL, DUBAI Held under the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and under the patronage of HH Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance of the UAE and President of DEWA, the 16th Water, Energy, Technology, and Environment Exhibition (WETEX) 2014 will take place at the Dubai International Convention and Exhibition Centre. Last year’s edition saw more than 1,360 exhibitors from 32 countries participating and showcasing their latest technologies and equipment, raising their corporate profiles and building awareness about products and services, while sharing ideas and best practices with the world’s leading players in the water, energy, and environment technology industries. At WETEX, UAE-based GEI, a global market leader in fibreglass pipes pipes, will be showcasing its Wavistrong H2O product line,
which is its own fiberglass pipe technology developed specifically for water transmission pipelines. Schneider Electric is displaying its smart energy and water management solutions at the event while BWA Water Additives, a leading global provider of specialty water chemicals for desalination, will launch its Belgard Optimax system which monitors plant performance and optimises Belgard antiscalant dosage in thermal brines. The World Green Economy Summit (WGES), which is the first green economy summit in the Middle East and North Africa region, will be held in Dubai from April 15-16, in conjunction with WETEX 2014 and in association with Dubai Green Economy Partnership. Contact: WETEX 2014 Team Tel: +971 4 515 1460 Email: email@example.com www.wetex.ae April 2014
project qatar 2014 12 – 15 may, 2014, DOHA The 11th International Construction Technology & Building Materials Exhibition (Project Qatar) moves to the Qatar National Convention Centre (QNCC) for the first time. The 2013 edition hosted 2,100 local and international exhibitors from 50 countries spread across 62,000 sq m of exhibition space. Contact: IFP Qatar Tel: +974 44329900 Email: firstname.lastname@example.org www.projectqatar.com
OPW Efficiency & Conservation 2014 18 – 19 may, 2014, MUSCAT The two-day conference, held in partnership with the Public Authority for Electricity and Water (PAEW) will focus on the latest projects and regulations from the relevant authorities and utility companies in Oman Contact: Loy Pinheiro Tel: +971 4 360 2821 Email: email@example.com www.omanpowerandwater.com
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#003 Al Mahatta
We reminisce about UAE’s first-ever airport – of simpler times with just one runway and barely-there infrastructure ong before the advent of swanky T3s where you can shop for a Givenchy sipping on hot kahwa, nearly 80 years ago, UAE’s first ever airport had a humble beginning with a single runway. Sharjah did the honours, hosting the country’s first airport, Al Mahatta, way back in 1932. In 1929, Imperial Airways, the forerunner of British Airways, wanted to fly from England to India and needed someplace between Bahrain and Muscat as a staging post, and thus Sharjah was chosen. The British government is said to have signed an agreement with Shaikh Sultan Bin Saqr Al Qasimi, the erstwhile ruler of Sharjah, and Al Mahatta - meaning ‘the station’ - was built within two months. On October 5, 1932, the first plane landed at Sharjah - a Hanno H 42 (Hannibal Class) built by Handley Page. It had four passengers on board and its British captain. They flew in from
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Gwadar (now in Pakistan) and were on their way to Bahrain. It is believed that a monthly rent of around 800 Indian rupees was paid for the airport and an additional five rupees was paid every time an aeroplane landed at the airport. During World War 2, the Royal Air Force (RAF) made Al Mahatta into a base and continued to use it until the 1970s. As air traffic increased, a new control tower was opened in 1956 and later, in 1968, a new terminal was added. The airport was also the first weather forecast centre in the UAE and Oman, operating from 1934 up to 1976 before being moved to the new Sharjah International Airport in 1977. Not only does Al Mahatta boast of a significant aviation history, it also housed the first cinema in the region. Set up by the RAF in 1949, the cinema introduced the masses to the wonder of motion pictures. After the new Sharjah International airport opened in 1977, Al Mahatta fell into disuse, eventually being abandoned in the mid-1990s. After being a landing strip, a RAF station and
Fast facts First plane landing: October 5, 1932 New control tower: 1956 New terminal: 1968 Operational until: 1977 In 1998: Converted into a museum
Sharjah’s first commercial airport, Al Mahatta’s buildings were converted into a museum in 1998, becoming a repository of the UAE’s and the Gulf’s aviation history. And the runway? Well, it is now better known as King Abdul Aziz Street, becoming a part of Sharjah’s expanding cityscape. In memory of the old airport, HH Dr Shaikh Sultan Bin Mohammad Al Qasimi, Supreme Council Member and Ruler of Sharjah ordered for a part of the original runway - next to King Faisal Mosque - to be left as is. Further, the museum retains the airport’s original architecture including the old control tower. The hangar houses old aeroplane models and photos that take visitors through the history of flying in Sharjah and the world. In 2012, as part of celebrations commemorating the 80th anniversary of the first aircraft landing in Sharjah, an Auster took off from Sharjah International Airport and flew over Sharjah Creek and Buhaira and landed near Al Mahatta Museum.
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