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SAUDI ARABIA BAHRAIN UNITED ARAB EMIRATES QATAR OMAN KUWAIT

Construction An ITP Business Publication | Licensed by Dubai Media City

WEEK

CONSTRUCTIONWEEKONLINE.COM

APR 17-23, 2010 [317]

NEWS, ANALYSIS, PROJECTS, TENDERS, CLASSIFIEDS, AND JOBS IN THE MIDDLE EAST

MADINACHUS CITYaFgeO28 p

INSIDE NEWS Experts say lack of transparency is hampering recovery PAGE 9

COMMENT Frost & Sullivan sheds light on construction chemicals in the GCC PAGE 14

ALUMINIUM Is history repeating itself? CW investigates the rise in prices PAGE 20

SPECIAL INVESTIGATION

SECTOR FOCUS A look at the transport infrastructure market across the region PAGE 26

IS BAGHDAD REALLY WORTH THE TROUBLE? CW SEES FIRST HAND WHAT IT TAKES TO DO BUSINESS ON THE GROUND IN IRAQ’S CAPITAL


CONTENTS APRIL 17-23, 2010 | ISSUE 317 09

18

FEATURES 16 TOP SEVEN CW identifies some of the most extraordinary cranes ever built.

18 ANALYSIS Is doing business in Iraq a practical possibility? CW visited Baghdad.

20 SPECIAL REPORT Is history repeating itself when it comes to the price of aluminium? CW finds out.

16 20 11

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REGULARS 2 ONLINE 4 MAIL

FRONT

DIRECTORY

9 TRANSPARENCY VITAL FOR RECOVERY

26 SECTOR FOCUS 28 CITY FOCUS 30 SPECIALIST SERVICES

Experts say lack of transparency will hamper recovery of the construction industry in the region.

11 EMAAR MISR AWARDS US $54.5 MILLION MARASSI CONTRACT

12 NEWS IN BRIEF

Orascom Construction Industries has won a US $54.5 million contract to work on homes within Emaar Misr’s Marassi development in northern Egypt.

14 COMMENT

Highlights of the week.

Frost & Sullivan’s Rahul Khare sheds some light on the construction chemicals market in the GCC.

BACK 32 DIALOGUE Abu Dhabi’s department of Municipal Affairs chairman Rashed Mubarak Al Hajeri discusses his plans for Cityscape 2010, which will take place in the UAE capital this week. APRIL 17–23, 2010 CONSTRUCTION WEEK

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ONLINE

www.ConstructionWEEKonline.com m

MOST POPULAR THE 10 GREATEST ENGINEERING FEATS OF THE DECADE SIX PROJECTS THAT DIDN’T MAKE IT: PART II IPAD TO LAUNCH NEW ‘APP’ FOR BUILDING DESIGNERS GREEN BUILDING TECHNOLOGY TO DOUBLE IN 10 YEARS GRAND MOSQUE DESIGNS FOR DENMARK

HAVE YOUR SAY

IN PICTURES: GRAND MOSQUE DESIGNS FOR DENMARK Designs for Denmark’s fi rst purpose-built grand mosque have been released by architects Bjarke Ingels Group (BIG) as the local council gave approval to the development plan. Construction of the mosque is expected to start within a year. The 4500m 2 mosque incorporates a prayer hall for 3000 people, shops, conference facilities, a gallery, an auditorium and an Islamic library. “Our purpose was to design a Danish mosque as an interpretation of the Islamic architectural and cultural tradition adjusted to the Danish context – the same elements that we know from traditional mosques in the Arabic world, adapted to Danish climate conditions and lighting,” said founder and creative director, of BIG, Bjarke Ingels. To read more visit www.ConstructionWeekOnline.com

BURJ OBSERVATION DECK TICKET PRICES Is it fair for ‘At The Top’ to charge as much as it does for a viewing?

JOBS OF THE WEEK ERP Architect, Dubai, UAE Mechanical engineer, Abu Dhabi, UAE Junior estimator, Doha, Qatar

ONLINE POLL HAVE YOU BEEN PAID BY NAKHEEL?

Design

Analysis

SAUDI SUCCESSES Saudi still presents plenty of opportunity for interior designers

GOING FOR GOLD Experts explain what makes Mirdif City Centre a sustainable place

Projects

City Update

100% 0% 0%

10 GREAT FEATS OF ENGINEERING A collection of record breakers from the last decade

BAGHDAD A look at the latest progress in the city and new developments

TO VOTE IN THIS WEEK’S SPOT POLL GO TO

FEATURES

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CONSTRUCTION WEEK APRIL 17-23, 2010

Cheque? What cheques?

Cheque in the bank

Cheque in the mail

www.ConstructionWEEKonline.com


MAIL RE: THE CARROT AND THE STICK As ‘The carrot and the stick’ highlights, regulatory requirement and authorityled incentives are critical to lowering the environmental impact of construction in the GCC. However, it is important to underline that the most dramatic, true and lasting change will only happen when construction businesses are driving the industry’s sustainability agenda themselves. So what will it take for this to happen? Sustainable construction must be made convenient and reliable, and must offer commercial benefits over the less sustainable option. As a producer of secondary lightweight aggregate, our experience tells us that a ‘green’ material will never be widely used if that is its only selling point. Without the solutions our product offers to design or engineering challenges and the project cost and time savings it enables, sales would, without doubt, be much lower. Materials such as this offer the kind of tried-

RE: BUILD SAFE CHAIRMAN REACTS TO TRENCHING FATALITY I have been retired two years after 40 in the industry and 25 of them in the Middle East. It does not surprise me that such fatalities still occur until the MANAGEMENT of the company is held responsible by the authorities (...and I don’t mean arrest

and-tested ‘quick win’ that businesses can adopt readily and use to drive the industry towards a ‘greener’ future. Putting the carrot and the stick in place is crucial, yes; but change for sustainability will be most effective when the agenda is driven by the industry itself for the commercial advantages it offers. In this climate, surely that is carrot enough. LYTAG MANAGING DIRECTOR ANDY DOEL

ITP BUSINESS PUBLISHING CEO Walid Akawi MANAGING DIRECTOR Neil Davies DEPUTY MANAGING DIRECTOR Matthew Southwell EDITORIAL DIRECTOR David Ingham VP SALES Wayne Lowery PUBLISHING DIRECTOR Jason Bowman EDITORIAL SENIOR GROUP EDITOR Stuart Matthews TEL +971 4 210 8476, EMAIL stuart.matthews@itp.com EDITOR Conrad Egbert TEL +971 4 210 8142, EMAIL conrad.egbert@itp.com SENIOR REPORTER Ben Roberts TEL +971 4 210 8318, EMAIL benjamin.roberts@itp.com FM DEPUTY EDITOR Sarah Blackman TEL +971 4 210 8363, EMAIL sarah.blackman@itp.com MEP EDITOR Gerhard Hope TEL +971 4 210 8305, EMAIL gerhard.hope@itp.com PMV EDITOR Greg Whitaker TEL +971 4 210 8150, EMAIL greg.whitaker@itp.com CONTRIBUTOR Alison Luke ADVERTISING PUBLISHING DIRECTOR Jason Bowman TEL +971 4 210 8351, EMAIL jason.bowman@itp.com ONLINE SALES MANAGER Scott Woodall TEL +971 4 210 8595, EMAIL scott.woodall@itp.com STUDIO GROUP ART EDITOR Daniel Prescott DESIGNERS Simon Cobon, Lucy McMurray, Nadia Puma, Angela Ravi DIRECTOR OF PHOTOGRAPHY Sevag Davidian CHIEF PHOTOGRAPHER Khatuna Khutsishvili SENIOR PHOTOGRAPHERS G-nie Arambulo, Efraim Evidor, Thanos Lazopoulos STAFF PHOTOGRAPHERS Isidora Bojovic, George Dipin, Lyubov Galushko, Jovana Obradovic, Ruel Pableo, Rajesh Raghav PRODUCTION & DISTRIBUTION GROUP PRODUCTION MANAGER Kyle Smith DEPUTY PRODUCTION MANAGER Matthew Grant PRODUCTION COORDINATOR Devaprakash V.A MANAGING PICTURE EDITOR Patrick Littlejohn IMAGE EDITOR Emmalyn Robles DISTRIBUTION MANAGER Karima Ashwell DISTRIBUTION EXECUTIVE Nada Al Alami CIRCULATION HEAD OF CIRCULATION & DATABASE Gaurav Gulati MARKETING HEAD OF MARKETING Daniel Fewtrell DEPUTY MARKETING MANAGER Annie Chinoy TEL +971 4 210 8353, EMAIL annie.chinoy@itp.com EVENTS & CONFERENCES DIRECTOR, CONFERENCES, MARKETING & EVENTS Kimon Alexandrou PRODUCER Oscar Wendel

and imprison the poor safety officer who has no power anyhow). DAVID HADFIELD

RE: NAKHEEL SHAKES UP ITS MANAGEMENT Careful about the wording: Are you sure the $8 billion will pay contractors debts or Nakheel’s debts? CHRISTOPHER

WRITE TO THE EDITOR Please address your letters to: Post, Construction Week, PO Box 500024, Dubai, UAE or email editor@ConstructionWeekOnline.com. Please provide your full name and address, stating clearly if you do not wish us to print them. Alternatively log on to www.ConstructionWEEKonline.com and air your views on any one of a number of the latest Middle East business articles. The opinions expressed in this section are of particular individuals and are in no way a reflection of the publisher’s views.

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CONSTRUCTION WEEK APRIL 17–23, 2010

ITP GROUP CHAIRMAN Andrew Neil MANAGING DIRECTOR Robert Serafin FINANCE DIRECTOR Toby Jay Spencer-Davies BOARD OF DIRECTORS KM Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin CORPORATE WEBSITE www.itp.com CIRCULATION CUSTOMER SERVICE TEL: +971 4 210 8000 WEB www.ConstructionWeekOnline.com ITPIMAGES Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. SUBSCRIBE online at www.itp.com/subscriptions NOTICE The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. PRINTED BY Atlas Printing Press LLC Dubai CONTROLLED DISTRIBUTION BY Blue Truck Audited by: BPA Worldwide. Average Qualified Circulation 10,400 (July - Dec 2009)

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MOST INFLUENTIAL SUPPLIERS IN CONSTRUCTION From the Burj Khalifa to Meydan, and Yas Marina to the Atlantis, they are the companies that have changed the construction industry forever. Supplying the very best of ceramics, tiles etc… these are the companies that have put the GCC on the world stage. On 24th April 2010, Construction Week will publish the definite construction suppliers list – their

incredible work, the projects they have contributed and their impact on the industry. You have a chance to be involved in this list by contributing to a half page editorial box out for your company. The editorial copy deadline is the 18th April for the box out and the advertising copy deadline is the 20th April.

Please contact me immediately to grow your business across the region Jason Bowman, Publishing Director

T: +971 4 210 8351

E: jason.bowman@itp.com

ConstructionWEEK


FOREWORD GOODBYE

“IT HAS BEEN A LONG AND EXCITING JOURNEY, MUCH OF WHICH HAS BEEN FILLED WITH PERSONAL THREATS, HATE-MAIL, CARCHASES AND EVEN QUESTIONS FROM THE AUTHORITIES.”

Change is inevitable. And the time for the inevitable is here. With a heavy heart, I write my last column as the editor of Construction Week – a regional, home-grown magazine which, in its own right, has become a runaway success story. It has been a long and exciting journey, much of which has been filled with personal threats, hate-mail, car-chases (no, i’m not joking!) and even questions from the authorities. But as the magazine grew and our presence became a force to reckon with, those threats changed to gentlemanly conversations, the hate-mail to compliments and the car-chases, well … into a couple of stretched limo-rides to interview top local and global figures in the construction industry. Thinking back, my first issue of the magazine in January 2005 was number 52; it was just over a year old and relatively unknown. But five years and 265 issues later, it is now one of the most recognised, and more importantly, credible magazines in the Middle East. Internationally, it is not unheard-of either. From the New York Times and Canada’s La Presse to the UK’s Daily Mail and the BBC, the award-winning magazine’s news desk has been the last hope for many renowned journalists looking to stand up that ‘impossible’ story. And we always helped – for the greater good, which is evident in many changes you now see in the region, including better worker rights and higher standards of health and safety on construction sites. But, all of this would not have been possible without the support of the industry – your support through sponsorships and advertising, while allowing us to hold on to our credibility, your letters, comments and most of all, your criticisms. CW is you, and you are CW. The magazine’s success is yours and your success is reflected through it. The construction industry in the Middle East has survived one of the worst economic downturns and also enjoyed one of the biggest booms. I have no doubt it will pull through these times to grow even bigger and better. Change is all around us. And with Construction Week and the industry it serves, working together, a positive change is inevitable. Signing out for the last time, I wish you all the best!

New contact details I have been appointed Group Editor for ITP Publishing’s India office in Mumbai, to help grow the company brand there. India’s economic growth for 2010-2011 is predicted to be as high as 8% by the International Monetary Fund. Just to put things in perspective – the UAE’s predicted growth rate is between 1% and 3% for 2010. I can be reached at my email address which will remain the same at conrad.egbert@itp.com. Website www.itp.com.

CONRAD EGBERT EDITOR conrad.egbert@itp.com

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CONSTRUCTION WEEK APRIL 17–23, 2010


FRONT

>News

11

>Highlights

12

>Comment

14

>The Best 7 Cranes

16

>Rising aluminium prices: is history repeating itself ?

20

GRAHAM WOOD SAYS TRANSPARENCY IS AMONG THE TOP FOUR KEY AREAS ANALYSTS LOOK AT WHEN DECIDING A MARKET’S POTENTIAL.

TRANSPARENCY VITAL FOR RECOVERY SAY EXPERTS By Ben Roberts The construction and real estate industries need to drastically improve their transparency to prevent international investors shying away from the Middle East, say directors of two of Abu Dhabi’s upcoming trade shows. Graham Wood, group director of CityBuild Abu Dhabi, and Chris Speller, group director of Cityscape Abu Dhabi told Construction Week that clarity over project payments and real estate funds was sorely needed for the region to bounce back. “Developers and contractors have learned a great deal over the past five years,” said Wood. “Indeed investors have too - the story of of-plan sales is of two extremes.” “However, looking forward, I think payment terms will hold the key to managing risk combined with legally binding contracts that can be enforced. One of the early features of the slowdown was the lack of cash flow due to late or non–payment. That

situation had a knock-on effect and exasperated the situation.” Transparency was one of four key areas that analysts were looking at, he added. “The federal government is tackling regulation that will lead to greater transparency, which in turn, should help investor confidence,” he said. “When investors gain confidence, it will have a positive effect on the market and therefore reduce risk.” Speller added that addressing concerns over the transparency of real estate funds was paramount, following a report by a Swiss bank that criticised the lack of publicly available data. “For the real estate investment community these have been difficult times so it is not surprising that the combined issues of transparency, regulation and project delivery are among the most important concerns, as strategies are planned for the future,” he said.

He added that investment strategies, among other topics, including the viability of Middle East real estate investment trusts (Reits), including Shariah-compliant vehicles, would be addressed at the conference. “We will be looking at what long-term institutional investors think about Abu Dhabi and the regional markets and how to incentivise them to enter the market,” he said.

TENDER WATCH QATAR Issuer: Public Works Authority Tender No: PWA/GTC/045/09-10 Description: Reconstruction of the Najma Road extension. Closes: April 20 Fees: QR7000 Contact: Contract Department, Public Works Authority

APRIL 17-23, 2010 CONSTRUCTION WEEK

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LIMITED VIP INVITES AVAILABLE FOR MAJOR CONTRACTORS AND DEVELOPERS ACTIVE IN THE KINGDOM Featuring Case Study Presentations on:

King Abdullah Finacial District (KAFD) • King Abdullah University of Science and Technology (KAUST) • Al Wasl Development • Princess Noura University • North Haram development Presentations from senior representatives the industry players on the Saudi market leading the sustainability drive in Saudi Arabia and the Middle East, including:

Saudi Oger • Bin Ladin Group • Saudi Tabreed • WSP • Buro Happold • FXFOWLE • LIMITLESS • Al-Shamiyah Urban Dev. Co Special Features at the conference include: • Market Forecast by Jones Lang La Salle • Panel & Q&A session with leading lawyers in the GCC •A legal perspective on doing business in Saudi Arabia

To attend the conference please contact: oscar.wendel@itp.com For sponsorship opportunities please contact: Jason Bowman, tel +971 4 210 8351, email jason.bowman@itp.com SILVER SPONSORS

ENDORSER

EXHIBITOR

MEDIA PARTNERS

WWW.CONSTRUCTIONWEEKONLINE.COM/CONFERENCES


FRONT EMAAR MISR AWARDS US $54.5 MILLION MARASSI CONTRACT By Sarah Blackman

EMAAR MISR GENERAL MANAGER HAZEM ASHRY.

Orascom Construction Industries (OCI) has won a US $54.5 million (EGP300 million) contract to work on homes within Emaar Misr’s Marassi development in northern Egypt. OCI will execute the finishing works including interiors and exteriors of Catania homes within the 6.24 million m2 tourist resort. Once complete the resort will feature up to 3000 hotel rooms, a marina, golf course and health care facilities. Speaking to ConstructionWeekOnline.com Emaar Misr general manager Hazem Ashry said: “In Marassi, Emaar Misr has already marked a milestone with the completion of the beach clubhouse in the summer of 2009.” “The first homes in the development will

be handed over this year.” Meanwhile, Emaar Misr’s other developments, Uptown Cairo and Mivida, are progressing on schedule.

TENDER WATCH EGYPT Issuer: Egyptian Electricity Transmission Company Description: Implementation of two overhead power transmission lines. Closes: April 27 Fees: EP 10,966 Bond: EP 7,677,320 Contact: 5 Sixth October Street El Mounib, Giza

RIO TINTO JOINS STEEL CONTRACT REFORM AS LOCAL COSTS MOUNT By Ben Roberts Iron ore giant Rio Tinto has added its name to the shortlist of mining heavyweights pushing through pricing contract reform, which has seen the price of steel for local suppliers leap in recent weeks. The London-based company, the world’s second biggest miner, said in a statement to the Australian Stock Exchange that it has entered talks with customers to switch from annual to quarterly pricing. It believes the system is better than ‘benchmark’ pricing that only works if it reflects market fundamentals. However, speculation on iron ore pricing – which has already led to the arrest of four Rio Tinto employees in a Chinese court for industrial espionage and bribery – saw spot prices increase far above their benchmark rates.

AED 3000 COST PER TONNE THAT STEEL HAS RISEN TO IN THE MIDDLE EAST

It follows similar moves by Anglo-Australian rival BHP Billiton and Brazilian firm, Vale, to negotiate business based on shorter-term contracts and capitalise on the peak in demand for iron ore. Higher prices have led to the inevitable knock-on effect on steel product producers and their customers in construction.

Mr Govia of Dubai-based Emirates Buildmat, whose subsidiary company Euro Gulf Steel Industries sources scrap both locally and internationally to produce mild steel products, said that raw material prices had been kept relatively low until recent months due to a lack of local demand. He added that steel prices are also affected by the wider landscape of the world’s biggest producers, such as India’s 20% export duty. “We have to accept the fact that steel prices will stay high for some time. Here it can be as much as AED 3000 per tonne, where in China it is between AED 690 and AED 720.” He is also phlegmatic about the wider industry for steel products. “I don’t believe in 2010 people will anticipate any growth, or at least the growth should be no more than 1% to 1.5%.”

CAREER OPPORTUNITY TENSAR INTERNATIONAL is a world-leader in the manufacture and provision of soil reinforcement and ground stabilisation solutions. The superior performance of Tensar products has benefited thousands of roads, rail, runway, embankment and many other applications across the world. Backed by regional offices and an international network of specialist distributors, our products and services have delivered cost saving, effective solutions to the civil and construction markets worldwide. To help support our rapid growth in strategic markets, we are looking to recruit Area Managers in Saudi Arabia, Northern Africa and the UAE. A preferred candidate is a civil, preferably a geotechnical engineer, with a background in sales and management in the civil engineering industry. The Area Manager will be responsible for development of business in the respective country reporting to the Regional Manager. He/she must be self reliant and disciplined, extremely motivated to achieve objectives with excellent time management and communication skills. He/she would ideally be a 25-35 years old Arab engineer, fluent in spoken and written English and proficient in using MS Office. An attractive package will be offered and will be based on the candidates’ skills, experiences and qualifications. Send your CV to hr@tensar.ae. FOR MORE INFO VISIT OUR WEBSITE WWW.TENSAR-INTERNATIONAL.COM OCTOBER 17–23, 2009 CONSTRUCTION WEEK

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FRONT HIGHLIGHTS Technology

IPAD TO LAUNCH NEW ‘APP’ FOR BUILDING DESIGNERS Last week, Ian Keough, senior technical designer at international engineering consultancy Buro Happold, launched the ‘goBIM’ App. The tool enables Building Information Modeling (BIM) – the generation and management of building data using three dimensional, real time, dynamic building modeling software – to be viewed on iPhones and therefore in remote locations including on site. While there are several Apps that enable users to view three dimensional models, goBIM will be the first iPad-compatible App to enable users to navigate models and review data tagged to model elements such as materials, manufacturer information and volumetric information. Business

BUOYANT EMAAR LEADS STOCK MARKET TRADING Emaar has been the most traded stock by value and volume on the Dubai Financial Market Index over the last

Contracts

FIRM WINS HIGH-POWER GENSET DISTRIBUTION A deal has been signed between local firm Al Futtaim Auto and Machinery Company (Famco) and generator maker Himoinsa. The agreement will see Famco become the exclusive dealer of the Spanish brand in the UAE. “The market for diesel generators in the UAE is very promising, and as a major distributor we hope to build on Himoinsa’s global reputation as a recognised leader in the generator indus-

try,” said Paul Floyd, managing director, Famco. Projects

‘UPSTART’ SOLAR ASSOCIATION IN CREATION An ‘upstart’ association for solar power providers in construction is currently in its earliest stages of creation. An industry source told CW that some of the leading product developers were involved in the first five meetings, including representatives of Sole UAE Solar Systems and Environmena. It will be the first multi-firm association for solar power in the region. Business

EMAAR ‘VERY COMFORTABLE’ AFTER DEBT ROLL-OVER Emaar Properties has announced it will roll over its US $1.32 billion (AED4.84 billion) debts into long-term project funding as fears recede of a repeat of the bail-out needed for stricken developer Nakheel. In a statement to the newswires the company said it was ‘very comfortable’ with its US $1.22 billion loans and pointed to

NEWS IN NUMBERS

1.5 million

US $227 billion

The amount of new homes that are planned in Saudi Arabia once the new mortgage law is enacted.

The value of the ‘green building’ industry in 2020 according to Lux Research, a New Yorkbased consultancy for emerging technology. 12

week, as confidence in the group grows further following its debt rollover at the beginning of the month. The developer’s shares, last week, rose almost 7% to 4.06 from their previous price of 3.8. The last seven days represent more than 8000 trades at a value of US $362 million, outstripping rival Arabtec Holdings (5391 trades at a value of $167 million for the week) and Dubai Financial Markets (7082 trades at an $222 million value), which both closed up last week at 2.7 and 1.9 respectively.

4500m2 The size of Denmark’s first grand mosquee that has been designed ned by architects Bjarke ke Ingels Group.

CONSTRUCTION WEEK APRIL 17–23, 2010

its debt-equity ratio, which is one of the best in the sector. The successful debt conversion indicates that it will not need to divest any projects, which includes Burj Khalifa, the world’s tallest building, to shore up its balance sheet in a run-up to its annual general meeting on April 29. Projects

DUCAB HV PLANT TO BE UP AND RUNNING BY EARLY 2011 The new Ducab HV Cable Systems facility being built on a 22,000m2 site in Jebel Ali will start producing its first high-voltage cable by early 2011, says CEO Jon Vail. The total investment in the new facility is US $136 million (AED500 million), including working capital. Ducab HV is a joint venture between Ducab, Dewa and Adwea. The groundbreaking ceremony was held in November 2009. Khansaheb is the main contractor while MACAir is in charge of MEP works. Dutco Balfour Beatty has won the piling contract while the new facility was designed by Holfords, the architectural division of Hyder Consulting.

US $1225 T The starting price for a 16GB iPad tablet, which w was launched in the UAE last week.


COMMENT > For the latest news and comments log on to www.ConstructionWEEKonline.com/comment

How important have construction chemicals been for GCC growth? FROST & SULLIVAN’S RAHUL KHARE SHEDS SOME LIGHT ON THE CONSTRUCTION CHEMICALS MARKET IN THE GCC

“THE CONSTRUCTION CHEMICALS MARKET WAS WORTH US $770 MILLION IN 2008. THIS MARKET HAS GROWN AT AN AVERAGE ANNUAL RATE OF AROUND 20% BETWEEN 2004 AND 2008.”

Rahul Khare is a senior consulting analyst with Frost & Sullivan’s material practice for the South Asia & Middle East region. Rahul is responsible for tracking the paints, polymers, packaging and construction chemicals industry for the Chemicals & Materials practice. He has an MBA in Strategy & Marketing, and an Engineering degree in Chemicals. His past work experience includes working in capacity of assistant product manager for various engineering projects. The opinions expressed in this column are of the author and not of the publisher.

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APRIL 17–23, 2010 CONSTRUCTION WEEK

The GCC construction industry witnessed unprecedented growth starting in 2003 and fuelled by key a large infrastructure gap, a clear focus on economic diversification to non-oil sectors and a reserve of petro-dollars (accrued from 2007 oil prices). In 2008, the total value of projects in the GCC was close to US $1.3 trillion. Tough climatic conditions, project scale and intricate designs posed engineering challenges, while investors demanded quicker project cycle times to realise the much needed cash. Construction chemicals played a seminal role in overcoming these challenges and contributed in a big way to the growth of the construction industry in the GCC. The construction chemicals market was worth US $770 million in 2008. This market has grown at an average annual rate of around 20% between 2004 and 2008. Concrete admixtures form the largest single product category and accounted for over one-third of the market in 2008. Flooring systems accounted for close to one-sixth of the market, making it the second largest product segment. Liquid waterproofing systems constituted 12.6% in 2008. This is part of much bigger water proofing application segments, which are dominated by sheet membranes, mainly because of significantly lower prices. Concrete repair products accounted for 8.5% of the total market. This is noticeable, particularly because the GCC construction market is a relatively new one and the majority of demand is from new construction repairs. Construction chemical suppliers generally work in close association with the ready-mix concrete companies and other subcontractors. This is because the specific formulation for a particular application has to be designed based on requirements for maximum efficiency.

For example, the right admixture can significantly reduce the shuttering time and improve the finish, which can shorten the project cycle and avoid rework expenses. Considering the value that construction chemicals bring to a construction project, it is evident that construction chemical companies have emerged as strategic partners in project engineering and execution. Abu Dhabi has emerged as a new centre for construction growth in the UAE. Also, some of the big projects like Dubai Metro Green line and Reef Island in Manama are likely to be finished in 2010. Labour and construction material costs are significantly lower (close to 2006 levels) and this creates a case for investment in construction projects targeting real demand. While a recovery is expected by mid 2010, the new market is very unlikely to be what it was during the great boom of 2003-2008. With higher price sensitivity, excess capacity and tighter budgetary control on projects, construction contractors could be very demanding customers. This will mandate that construction chemical suppliers will have to revisit and reinforce their value proposition by innovation and value engineering. Working closely with other stake holders, such as ready-mix concrete suppliers and construction contractors to understand their pain points and creating an innovative value-engineered offering, is the mantra for success. Also, learning from the past the construction chemical suppliers need to manage their customer pool as a portfolio in order to diversify business risk and reduce volatility in income lines. In the short run, the theme for managing should be to watch cash flows, allocate resources to innovation (a slowdown in market reduces the opportunity cost for an alternative investment) and prepare for the steady growth post market recovery.


HEIGHT


TOP 7 CRANES WE TAKE A LOOK AT SOME OF THE TOP CRANES EVER BUILT AND HIGHLIGHT SEVEN OF THE MOST EXTRAORDINARY ONES IN ENGINEERING TERMS By Greg Whitaker

TEREX-DEMAG CC8800-1 Launched to huge acclaim here in Dubai back in 2007, the CC8800-1 Twin features an unusual double-boom lattice arrangement. Operating as a pick-and-carry crawler crane with 3200te (3527 tonnes) lifting capacity and a maximum load moment of 44,000 tonnes, the ‘Twin’ represents a considerable saving of both time and space requirements in the erection of large industrial facilities – when compared with ring lift cranes and jacking towers. The crane belongs to Al Jaber Heavy Lift, which played a significant part in its inception.

LIEBHERR LTM 11200-9.1 This is the king of all-terrain cranes. The German factory has said that the production run of this model is strictly limited to eight pieces – and Al Faris of Dubai got the first one. The LTM 11200-9.1 is the strongest telescopic crane in the market and has the longest telescopic boom in the world. The eight-part boom is fully automatically extended to, and fixed at, the desired length. In addition, various lattice extensions are available. The Y-shaped telescopic-boom guying system offers remarkable increases in load capacity. The active, speeddependent rear-axle steering developed by Liebherr is integrated into the nine-axle chassis.

ALE SK90 In September 2008 Abnormal Load Engineering unveiled the world’s highest capacity and based crane. Designed and built by ALE’s Research & Development Unit in Breda, Netherlands, the crane has a capacity to lift 4300 tonnes. Intended for use in the engineering construction, nuclear and offshore fabrication industries, the crane can be dismantled and shipped around the world in standard 20ft and 40ft shipping containers. In what is a first for a crane of this type, it can be relocated 16

CONSTRUCTION WEEK APRIL 17–23, 2010

on site fully rigged saving considerable time during the construction schedule of major projects. The ability to lift heavy loads at large distances allows engineers to complete foundations and pipe racks in advance of major equipment installation.


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

MAMMOUT ‘PTS 160-DS’ Ok, they don’t exist yet, but Mammout, a worldwide specialist in heavy lifting and transport, announced the introduction onto the market in 2011, of two new generation cranes, developed in-house, for the very heaviest lifts. These two cranes, the PTC 120 DS (maximum load moment 120,000 tonne meters) and the PTC 160 DS (160,000 tonne meters) introduce a whole new range to the world of cranes. The key feature of the new generation is that the cranes combine outstanding capacity with great versatility to facilitate a new approach to heavy lift and construction projects. The new generation cranes will enable the company to respond to the changing needs of the markets and projects. The designs of the new generation cranes are based on the successful Mammout PTC concept, over forty years of experience, and the emerging needs of the market. The PTC 120 DS and PTC 160 DS carry the ballast (max. 3400 tonnes) on rings, hence they are relatively compact and can operate in confined areas. The ring design enables the cranes to slew (rotate) a full circle on its bogies relatively quickly. The cranes can also move in a straight line on the bogies while carrying a load on the hook. Finally, the whole crane can be relocated on the job site using

(3900 psf) (5500 psf)

SPMTs (self-propelled modular transporters), or on its own bogies. PTC cranes use winches for lifting the heavy loads quickly. Furthermore the PTC 120 DS and 160 DS also have auxiliary winches which can lift smaller loads at even higher speeds. This makes the cranes more versatile and ensures they can be used at all stages onsite.

WOLFF 1250B

DEMAG CC12600

The title for the world’s largest tower crane is disputed at the moment, as Wilbert claim to have made one larger than the recently launched Wolff 1250B. What is not in doubt though is the size and quality of the Wolffkran luffer. Lifting capacity is 60 tonnes. The 132 kW hoisting gear gives 20 tonnes capacity in one-fall operation, 40 tonnes on two falls and 60 tonnes on three falls. A four-fall 80 tonne capacity version is also possible. These cranes are popular where round the clock lifting of heavy sections are necessary.

Another entry for Demag, the world’s largest tracked lattice boom crawler crane (as far as we know). This leviathan was built as far back as 1997, yet it still wears the crown. An interesting fact is that in our archive pictures, the crane is seen building the Miller Park stadium back in the late 1990s. This site saw a tragic accident involving another mighty crane known as ‘Big Blue.’ The Lampson Transi collapsed while handling a major section of the roof, killing several people and demolishing a section of the stadium.

TADANO ROBOTOPS We’ve seen remote control cranes before, but Tadano’s concept looks like the stuff from our nightmares. Crawling on six legs, which also double as outriggers, the concept, named ‘Robotop’ weighs a total of 2.7 tonnes and has 29 joints allowing 360 degree movement. It also has three

in-built cameras, so an operator walking with a remote control can see all around. Payload is a little low for a construction crane though, as the machine is capable of only lifting 220lb. The study was put together by Okayama University as a design exercise and while there are no plans to put it into production, the makers state ‘we plan to apply and utilise the technologies of this robot in the development of our future products.’ APRIL 17–23, 2010 CONSTRUCTION WEEK

17


ANALYSIS

Risky business CONSTRUCTION WEEK EVENTS DIRECTOR, OSCAR WENDEL, TRAVELLED TO IRAQ TO LEARN FIRST-HAND IF DOING BUSINESS IN THE COUNTRY IS REALLY A PRACTICAL POSSIBILITY

A

city of both peril and opportunity, Baghdad is a contradiction on most counts when one talks about doing business there. The feasibility of risk premiums for doing business in Iraq, as well as the first mover advantages for entering the market are debatable. Many have been overly optimistic about the prospects.

18

CONSTRUCTION WEEK APRIL 17–23, 2010

But again, the untapped abundance of natural and human resources alongside a pent-up demand for new public infrastructure, is begging to be explored. For instance, electricity is estimated to only reach a quarter of the population in many areas, with contracts consistently being awarded to western firms on a large scale. The ongoing plan is to invest around US $150 billion in infrastructure development by 2025. Housing is a


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satellite tracking system, if he was killed. The cars are monitored by US Army heli10 STEPS TO BETTER copters circling the city at all times and BUSINESS IN IRAQ the routes are announced and cleared at 1. Increased security and safe housing least 48 hours in advance. I wondered if 2. Improved import logistics the security measures were a little exag3. Access of personnel to the country gerated and driven by transport costs in 4. Efficient visit and work visa processing the region, which were $6000 to $10,000 5. Competitive wage levels for competent per convoy. expatriates But just two days after I returned from 6. Maturity of frameworks for contractual Baghdad, the embassy area where I was staying, located in the International Zone implementation with investment 7. Clearer financial laws (former Green Zone), was attacked with 8. RFP processing more transparent and bombs, mortars and firefights took place. efficient The first reports were of 35 dead and 200 9. Stability and predictability of wounded. Yet, these events are becoming government less frequent. 10. Less corruption Speaking to CW on security concerns in the city, Mohamed Al Assam, founder, chairman These points were listed by country managers of some western firms that have been operating in Baghdad’s International Zone and MD of Dewan Architects said he saw for several years on the condition of anonymity. steady improvements during each passing month. He also pointed out that his compriority in Baghdad, with the mayor, Sabir pany’s order book was evenly split between Al Issawi, having revealed a five-year plan government and private contracts. to build 300,000 houses in addition to a $3 Work won by Dewan includes the Bab Al billion city metro, 12 new power plants, Murad complex which includes a 10-floor hospitals, hotels and schools. The $6 billion hotel and three-level shopping centre, Rotana port, south of Basra, was also recently put Hotel Baghdad which is scheduled to open in 2012. It will be the out to tender. Yet, security, politifirst 5 star hotel in “URBAN REGENERATION cal stability and the Baghdad since the PROJECTS AND seventies. And the lack of an adequate INFRASTRUCTURE WORKS legal framework for Urban Renewal projARE PRIMARILY FINANCED tendering and projects for Aadhamiya, BY GOVERNMENT BODIES, ect management, Karbala and Najaf traSUCH AS THE BAGHDAD MUNICIPALITY AND THE remain a significant ditional city centers MINISTRY OF TRANSPORT.” concern. that according to Al On landing at BaghAssam, “aim to find dad International Airport, I was picked up methods to adapt the area to contemporary by one of the major security firms. demands without damaging the spiritual legacy In general, the Personal Security Detail contained in its historic structures.” Al Assam asserts that a success factor for Units travel in convoys of four. With constant radio traffic between the drivers, a getting business in Iraq is having a presence seamless teamwork efficiently cuts off any in the country, with daily dialogue and close car from coming too close to the clients in relationships with the project offices of the the armored vehicles. The art is called CP ministries, where companies register. driving (Closed Protection). The urban regeneration projects and infraThe former SAS soldier in my car was structure works are primarily financed by armed with a machine gun and said that government bodies, such as the Baghdad if something should happen they would Municipality and the Ministry of Public physically move me to safety if needed. Works and Ministry of Transport. The final instruction given to me was how The most inspiring story from my Baghdad to activate the emergency sequence on the visit was at the State Company for Automo-

tive Industry (Scai) where the assembling of Scania trucks resumed last December. Manager of truck manufacturing Abed Abbas Nahi claimed that during the second Gulf war, looters falsely informed the Americans that his factory was loyal to Saddam. “I spoke to the Americans and they were surprised I spoke English and was an engineer, almost expecting us to be riding around

LEADING FOREIGN FIRMS IN IRAQ AECOM Pell Frischmann Cyril Sweett RMS Makyol Mebex Khatib & Alami

on camels. The Americans told us to leave. I said ‘You want to kill me, you can kill me, but I’m not going to leave’.” Ten men stayed with him and defended the factory buildings. “We had Kalashnikovs and two RPG7 rocket launchers. We barricaded ourselves around the buildings and on the roofs with almost four months of firefights going on. The factories around us were all looted down to the bricks with only the columns left standing.” Today, Scai is the only vehicle assembly plant in Iraq with its first 50 trucks completed. Has a page been turned and is Iraq proving itself business worthy? You decide. 

SETTING-UP COSTS IN IRAQ Office rent: $3000 to $5000 per month for a small office that can accommodate 4 to 5 staff Car: $25,000 to $35,000 to buy a car Hiring staff: $1000 per month to hire an office manager Security staff: $28,000 per month ($700 each for 4 people – minimum required number of security staff for an office) Office boy: $500 per month Driver: $700 per month

APRIL 17–23, 2010 CONSTRUCTION WEEK

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SPECIAL REPORT

HISTORY REPEATING ALUMINIUM SUPPLIERS AND MANUFACTURERS ARE GETTING A FEELING OF DÉJÀ VU AS PRICES ARE ESCALATING JUST LIKE THEY DID BEFORE THE CRISIS. CW TALKS TO COMPANIES WITHIN THIS SECTOR TO FIND OUT HOW THIS SITUATION IS AFFECTING THEM AND HOW IT WILL AFFECT THEM IN THE FUTURE By Sarah Blackman

I

n August 2008 the prices of building materials, from concrete to copper, peaked as a result of rising oil prices and the increased demand on supplies, due to the construction boom. Prices then plummeted during the financial crisis – a time when projects were halted and the demand for materials diminished, particularly in Dubai. Suppliers, which were attracted to the Gulf during the time when construction was rife, were left to compete with the many other manufactures and deal- THE PRICE OF ALUMINIUM ers trying to get work. IS SET TO EXCEED At present, it seems that the price hike is repeating itself – just last week CW reported that steel prices PER TONNE THIS YEAR had increased by US $272 (AED1000) per tonne, and

$2400

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CONSTRUCTION WEEK APRIL 17–23, 2010

now the cost of aluminium appears to be gradually following the upward trend. “Over the last 12 months between February 2009 and February 2010, the 60 building work categories [including metals and timber] have recorded an average rise of 1.4%, but over the last six months between August 2009 and February 2010 an average rise of 2.0% has been recorded, illustrating how the trough of the cost trend occurred mid summer last year,” says a recent report from Davis Langdon.

HIGH PRICES The London Metal Exchange (LME) listed the price of primary aluminium in January 2009 as US $1413 per tonne, falling slightly to $1330 per tonne in February before rising to $1420 per tonne in April. The price of aluminium is now rated at $2380, that’s a 67% increase on last year. And oil costs recently rose above $85 per barrel, which could rocket the price of aluminium even further.


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“THE DEMAND FOR ALUMINIUM HAS NOT YET PICKED UP.”

“The LME rate will cross the $2400 per tonne level this year,” predicts Khalfan Al Suwaidi, general manager of Emirates Extrusion Factory, a subsidiary of M’Sharie, a private equity arm of Dubai Investments. “If the Iranian nuclear issue MODAR AL MEKDAD.. escalates, this may be the biggest factor that affects the oil prices, which is directly correlated to the price of aluminium. Also, if the US and European economy picks up, then aluminium prices will definitely go up.” Before the financial crisis, the price hike was perceived as good news for aluminium suppliers because, due to the high demand for building materials, they were able to negotiate prices. Some packages acquired for Infinity Tower in Dubai Marina, for example, were subject to price escalation. “Between 2007 and 2008 material prices went up, which is when we signed the sub contracts. Still to this day, we have very high prices supplies on site,” Cayan chief development officer Ahmad Kasem told CW on a site visit in February. Dubai’s Mirdif City Centre also suffered a few knock backs due to the high prices of materials. “We started off the job when Dubai was red hot and as we got it to the project the market escalated quite rapidly and some of the later packages we acquired were prone to inflation,” says Majid Al Futtaim senior vice president for project management Jonathan Emery. “Sub contractors and supply chains were taking advantage of the market and, due to the demand, they were able to renegotiate prices, so we had to deal with that.” But, things are different now and the demand for construction supplies is shrinking rather than souring.

LOW DEMAND, OVER SUPPLY “As the aluminium industry in the Middle East was mainly catering the construction sector, the present market conditions have largely affected the industry. The demand for the aluminium has not yet picked up,” says Gulf Extrusions managing director Modar Al Mekdad. “The demand has been declined dramatically by around 70% so far,” agrees Suwaidi. The low demand for aluminium has also had a knock on effect on the number of supplies available. The construction boom led to hundreds of suppliers setting up base in the GCC, and those suppliers are still here. “Before the financial crises there were enough projects to cover the supply. The situation has changed and there aren’t enough projects to meet the supply of aluminium,” says Reem Emir-

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ALUMINIUM COMPANIES TO KNOW ALUMCO Alumco is a specialised aluminium façade contractor whose prime business is the design, engineering, manufacture and installation of façade systems. The firm’s scope of work covers skylights, cladding, doors, and windows, double glazing, tempering, powder coating and steel fabrication. www.alumcouae.com GULF EXTRUSIONS Gulf Extrusions, which is part of the Al Ghurair Group of Companies, is one of the largest extrusion plants in the Gulf. Located in Jebel Ali, Dubai, it produces more than 7000 profiles ranging from architectural sections to air conditioning grilles and customised products. The plant is designed to produce aluminium sections in mill, silver and colour anodised, gold dyed and powder coated finishes. Nearly 70% of the output is used in the local market to support the building and construction projects; the remainder is exported to South East Asia, other GCC countries, Europe and Canada. www.gulfex.com REEM EMIRATES ALUMINUM Reem Emirates Aluminium (REA) was formed in May 2006 to serve the rising demand for architectural finishes and metalwork in Abu Dhabi. The firm is part of the Abu Dhabi-based Royal Group and is a designer and manufacturer of aluminium curtain walls. REA has a 20,000m2 aluminium curtain wall factory that specialises in custom-built architectural cladding elements, with particular emphasis on designing and manufacturing unitised curtain wall panels. It can produce more than 65,000m2 of curtain wall panels each month. The firm is involved with highprofile projects including Etihad Towers Development and MIST. www.reemalum.com GULF METAL CRAFT Gulf Metal Craft (GMC), a subsidiary of M’Sharie, is a manufacturer of sheet

ALUMINIUM PRICES HAVE A FAR-REACHING IMPACT ON THE CONSTRUCTION INDUSTRY.

metal products. Established in 1989, the company produces a range of products made from electro galvanised steel, aluminium and stainless steel. GMC has developed manufacturing facilities and has recruited a team of specialist engineers who can offer a custom designed service, from initial design stage through to installation. The company has supplied electrical enclosures for DEWA substations, Dubai Internet and Media City, Dubai Marina Towers and Al Raha Beach resorts. It has also produced stainless steel architectural products for projects such as the Burj Al Arab, Abu Dhabi’s Marina Mall and Sharjah Exhibition Centre. All sheet steel enclosures are manufactured from electrogalvanized sheet steel and all aluminium enclosures are manufactured from high grade aluminium alloys. www.gulfmetalcraft.com EMIRATES ALUMINIUM Emirates Aluminium (EMAL) is a joint venture between Dubai Aluminium (Dubal) and Abu Dhabi investment vehicle Mubadala. The company was formed to build a new hi-tech aluminium smelter in Abu Dhabi and is currently the largest industrial project in the UAE outside the oil and gas sector. The US $5.7 billion complex is located on a

6km2 site in the Khalifa Port Industrial Zone in Taweelah. www.emal.ae ALUMA SYSTEMS MIDDLE EAST Aluma Systems Middle East rents and sells a patented portfolio of fast-track aluminium formwork systems that is designed to reduce floor cycles and labour needs. The firm’s most well known product is the Alumalite Truss Flying Table-Form, which is among the fastest slab shoring systems in the world. Within the Middle East, its head office and main GCC production facility is in Al Quoz, Dubai. It also has a sub office in Abu Dhabi. www.aluma.com EMIRATES EXTRUSIONS FACTORY Established in 1993, Emirates Extrusion Factory (EEF) produces high quality aluminium systems for architectural and non-architectural applications. EEF is a wholly owned subsidiary of M’sharie, a private equity arm of Dubai Investments. The company uses mainly aluminium billets as raw material in the production process and also trades in the finished products. EEF aluminium profiles are used in a variety of applications including curtain walling. www.msharie.com

APRIL 17–23, 2010 CONSTRUCTION WEEK

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ates Aluminium brand manager LME OFFICIAL PRICES GREEN CHANCE (US$/TONNE) FOR 12 APR 2010 The economic situation has Timour Asfour. Suwaidi seconds that argument also given many aluminium ALUMINIUM and adds: “The existing capacity suppliers the time to concentrate CASH BUYER 2,380.50 in the GCC is 500K tonnes of aluon embracing sustainability CASH SELLER & SETTLEMENT 2,381.00 minium, while the demand may regulations in the region. 3-MONTHS BUYER 2,414.00 not exceed 200K tonnes. And, local“Gulf Extrusions is working 3-MONTHS SELLER 2,415.00 ly [in the UAE] the supply is 150K closely with Masdar City in Abu Dhabi to promote the recyclable, tons and around 45K tonnes is 15-MONTHS BUYER 2,522.00 sustainable, and versatile feain demand.” 15-MONTHS SELLER 2,527.00 tures of aluminum, which we But, it isn’t all doom and 27-MONTHS BUYER 2,610.00 gloom for the aluminium refer as the ‘green aluminium’ 27-MONTHS SELLER 2,615.00 and this supports the initiative sector. Many companies are expanding into of reducing carbon emissions MR KHALFAN AL SUWAIDI. other regions and exporting into the environment,” says Al Mekdad. their products overseas. REA has also developed an energy saving, mechanically venti“WE ARE CUTTING “We are cutting our costs, man- lated double skin façade, which saves more than 50% of energy COSTS, MANAGING aging our cash flow and selling due to the integration with floor cooling and chilled beams. OUR CASH FLOW AND 70% of our stock abroad. We Between 2007 and 2008 prices of aluminium rocketed, but the SELLING 70% OF OUR are also hoping to expand our drop in demand meant that prices fell. Will this happen again and STOCK ABROAD.” business into Africa,” explains will the market stabilise? “We will see the prices progressively Suwaidi. increasing until quarter three of this year and they will level out And, Gulf Extrusions still has big plans for the GCC: “The projects again during the last quarter,” insists Al Mekdad. we will be supplying our materials to soon include developments And, Asfour adds: “We expect to see the prices stabilise in the within Reem Island, Abu Dhabi and Barwa City, Qatar.” next two quarters.” 


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APRIL 17–23, 2010 CONSTRUCTION WEEK

25


SECTOR FOCUS TRANSPORT

SHIFTING GEARS

INTERNATIONAL DEAL AGREEMENTS HAVE BEEN THE PICK OF A DIFFICULT ENVIRONMENT FOR THE SECTOR By Ben Roberts

T

he transport sector has been typical of the heavy recent involvement of government and stateowned institutions in projects, including international link-ups, as private funding resources dwindle. Qatar produced a key example last week. Public transport firm Mowasalat is close to finalising a deal with the Eritrean government to provide complete transport solutions, according to chairman Jassim Saif Al Sulaiti. In February Eritrean president Isaias Afwerki visited Mowasalat’s office. Like Eritrea, Saudi Arabia has also been looking abroad for the right project partners. Last week, Saudi Arabian Railway (SAR) signed a US $74 million (SR278 million) agreement with India’s state-owned Rites Limited to run a major mineral railway linking the northern Jelamaid region with Ras Azzour near the industrial port city of Jubail. This 26

CONSTRUCTION WEEK APRIL 17–23, 2010

comes two months after SAR shook hands with NEC Portugal - a subsidiary of one of the telecommunications and electronics giants - to supply GSM-R Cab Radios to allow communication between train drivers and the operations control centres.

“THE GOVERNMENT IN THE UAE ACCEPTS THERE IS A PROBLEM OF FUNDING FOR ROADS AND BRIDGES. OTHER JOBS FUNDED BY PRIVATELYINVESTED PROJECT ARE GOING ON, BUT AT A SLOWER PACE. ” At the same time the Riyadh-based institution became the sole operator of the $7 billion Saudi Landbridge development, a cargo and passenger railway that will link Jeddah on the Red Sea coast, and the ports of Dammam and Jubail on the Gulf coast, to ship onwards to the UAE, Iran, Kuwait and other destinations in the Gulf region.

It will also be used to transport passengers between Jeddah and Riyadh. The private sector in the UAE has had few deals come to fruition in the last year. Mr Govia of Emirates Buildmat told CW: “The government in the UAE accepts there is a problem of funding for roads and bridges. Other jobs funded by privately-invested project are going on, but at a slower pace.” As transport-related projects are feeling the squeeze, so too is transporting the materials for the projects, or those hiring such a service. Sharjah, last week, confused the haulage industry with announcements of new road tolls in May – potentially enforcing charges of up to $82. A cancelled press conference accounted for the gap in details. The toll – announced by the Sharjah Department of Public Works - will hit all lorries passing between Fujairah and Dubai on Al Dhaid Road and aims to create a revenue stream for the maintenance of the roads impacted by heavy vehicles heading to Dubai.


01/2010 en

Paul Austin-Price, senior business development manager at trailer manufacturer Gorica, said: “You can be sure that if a transport company incurs an extra toll cost it will be passed on to its customers.” He was skeptical about the visibility of such maintenance funding. “With the sort of money coming from transport companies in costs in the past – [you have to ask:] where’s that money gone?” Towering over all projects in the region is the Al Maktoum International Airport, the brainchild of Dubai Airports that on paper will be the world’s biggest passenger and cargo hub – forecasted to be worth around $8 billion. CEO Paul Griffin told a newswire in February that expansion plans for Dubai International Airport would run into “millions of dirhams.” Construction delays pushed the first stage of completion to June this year. Al Naboodah Contracting Company is contracted to build the first runway. The big tender in Saudi Arabia - that closes in the next few weeks - is the second phase of the Haramain High Speed Rail Project that will link Madinah and Makkah via Jeddah. The project was spurred on by a study by the Ministry of Hajj, that found the number of pilgrims to Makkah would grow by three million and the number of Umrah performers to more than 11 million over the next 25 years. The annual increase

is expected to be 1.4% for pilgrims and 3.14% for Umrah performers. The first phase of the electric high speed passenger line link – which will eventually have a top speed of 360 km/hr - will be completed in two parts. The first consists of the civil works, including viaducts and retaining walls, subways, shafts, tunnels and embankments. Part two includes construction of the five passenger stations linking Makkah Central, Jeddah Central and Jeddah Airport, King Abdullah Economic City in Rabigh and Knowledge Economic City in Madinah. The second phase sees the designers drafted in along with construction, operation and maintenance of the track, installing signalling and telecommunication systems, rolling stock, power supply and catenaries. Alstom are among the bidders to provide the rolling stock, and Saudi Bin Ladin Group (SBG) is also believed to be in the mix. Ahmed Anees of SBG called it “an important project”. In Kuwait, work began on the $96 million construction of the road intersection in Al Fahaheel at the beginning of 2010, won by Combined Group Company for Trading and Contracting. The work includes establishment, creation, and maintenance of the intersections on main roads (Road Fahaheel Highway to Southern Alsobaheya and Mangaf). 

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APRIL 17–23, 2010 CONSTRUCTION WEEK

27


CITY FOCUS MADINAH

BROADER HORIZONS MADINAH HAS HAD TO FIGHT ITS CORNER AGAINST SAUDI’S BIGGER CITIES, BUT MULTIPLE PROJECTS LOOK TO TRANSFORM ITS FORTUNES By Ben Roberts

L

ocal developers in Madinah will be hoping that the increase in the number of pilgrims to the city at the end of last year for the Hajj season is the first of many boosts to visitor numbers. The city has long dreamed big dreams to expand its full-to-bursting borders and drive its reinvention as one of the key destinations for Middle Eastern talent. Despite its historical importance the city has fought to escape the shadow of the two biggest cities, Jeddah and Riyadh. As such not all Saudi companies are looking to extend their business into what is Islam’s second most holy city. A spokesperson for Injaz Development Company, the Riyadh-based master developer and investment company, said Riyadh, Jeddah and the Eastern Province remain the company’s chief targets. Of the 1.5 million houses to be built in Saudi Arabia, he believed few of them will

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CONSTRUCTION WEEK APRIL 17–23, 2010

be coming out of the ground in Madinah. With 70% of the people working for the government, and another 30% in the hospitality industry, he estimates, the lack of clamour for these homes “might come from the fact that the population is not growing as much as Riyadh”. But this year it has typified the resilience of KSA amid a wider economic challenge

“THERE WILL BE A TENDER, PROBABLY NEXT MONTH, FOR THESE INFRASTRUCTURE ELEMENTS, INCLUDING SITE GRADING.” as huge projects are set to begin that will better connect the city with the rest of the country, the Gulf, and the wider world. The newest project was announced at the end of last month, when the city was confirmed as the venue for the country’s first private airport, a four-year task. It

will be built on the other side of the existing Prince Mohammad Bin Abdul Aziz Airport and will eventually replace it. The new airport has been designed for a capacity of 8 million passengers per year and will cost SR7-8 billion. An international tender is due to be floated next month. Alaa Samman, general manager of business development at the General Authority of Civil Aviation, told Arab News: “The actual work on the airport will start one year after the contract is awarded. It will take at least two years to complete.” The long-awaited Haramain high-speed train is another project far on the horizon. Civil work by Al Rajhi Alliance has been ongoing for a year now, though the line from Jeddah to Madinah is the second stage after the Makkah-to-Jeddah line is installed. For a dense population, the bare essentials seem to be working well. Data collected from Madinah Urban Observatory (MUO), in an ongoing study on


the social and economic dynamics of the city, found few complaints from locals about water or electricity, despite a few laments from locals for the state of some of its old buildings. But there is little doubt that one particular project is to transform the city and give international access as never before, and this month it reached a key point. The Knowledge Economic City, fi rst announced in 2006 as the third of six economic cities, has completed some of its initial infrastructure work. For a project of such scale that will incorporate business, retail and residential innovations, create 20,000 jobs in the so-called ‘knowledge-based industries’ and bring in around SR10 billion a year this is somewhat understandable. Nevertheless, Mark Dickson, project manager at KEC charged with delivering the ambition to reality, the change in the office is palpable. “Certainly there’s a mixed sense of apprehension in the office,” he tells ConstructionWeek. “We’ve almost been a victim of our own success as we’ve seen an increase

KNOWLEDGE ECONOMIC CITY LOWDOWN Land area: 4.8 million m2 Total investment: SR30 billion Expected population capacity: 150,000 Visitor capacity: 30,000 Jobs created: 20,000 Main features: Business centre, Islamic civilization studies centre, theme park, residential areas, passenger station, commercial complexes.

“AS A MAJOR DEVELOPER OUR AIM IS TO PROVIDE THE INFRASTRUCTURE AND ABOUT 20% OF THE FACILITIES OVERGROUND.” in demand for our services on the back of this project, but that hasn’t slowed us down.” He adds that the initial infrastructure that includes sewerage pipelines for the 480 hectares marked out can be a frustrating element of jobs like this, as for a long time it does not appear that anything is happening at the site. But now things really are starting up – almost at the half way point between its announcement and its prospective completion. It has been a long half-year, mainly at the design stage for those on the construction and project management side, along with the initial public offering on the financial side. “What’s happened in the last six months is that there’s been a closing out of the infrastructure design process and some of the initial residential projects, and we are now looking to procure them,” he says. “This is the procurement for the main contracts: the infrastructure contracts and gated communities. There will be a tender probably next month for these infrastructure elements, including site grading; all of what we would call ‘enabling work’.” The unique selling point for the KEC, he adds, is that it is not exactly a stand-alone city – instead it is very much part of Madinah. It means that it will share the city’s electricity and water supply. Dickson says the KEC has been in discussion with the Saudi Electricity Company and the National Water Council thrashing

HARAMAIN HIGH SPEED TRAIN LINE Phase 2 deal value: US $2 billion Top speed: 360 km/h Distance between Jeddah and Madinah: 372 km Time between cities: 2 hours (time saving: ½ hour)

out the details of supply to all its facilities. “We are close to the city, so what we needed to do is arrange agreements to be able to guarantee supply. For the project there will be approvals on design requirements passed back through them, though we’re hoping this won’t add any extra time. He expects a lengthy procurement time, however, as contractors bid for the design and construction aspects of this unprecedented project – which will essentially be completed in stages based on demand. “As a major developer our aim is to provide the infrastructure and about 20% of the facilities overground. Our aim is to provide 220 hectares of infrastructure; that will be developed and then when that reaches critical mass the rest will be rolled out in phases based on demand.” 

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When the highest building in the world opened on January 4 in Dubai, Hansgrohe AG from Schiltach in the Black Forest was also celebrating. The German bathroom fittings and shower manufacturer supplied more than 5000 fittings for the Burj Khalifa. The wash basin mixers from the Axor Starck luxury collection were made in the company’s manufacturing plant in Schiltach owned by the international company, which has been operating its own subsidiary in the UAE for many years. The installation started in 2008 and was finished in June 2009. The project made a noticeable difference to the company’s sales and strengthened its position in Dubai. “Hansgrohe was given a great deal of credit for not pulling out of the market in the face AXOR STARCK ELEKTRONIC. of the economic crisis, unlike other companies,” said Siegfried Gänßlen, chairman of the management board of Hansgrohe AG. This success story, he believes, shows how developers, architects and interior designers value German innovation and engineering. “This is why we were able to acquire numerous projects in the United Arab Emirates even during the crisis year

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CONSTRUCTION WEEK APRIL 17–23, 2010

of 2009,” said Gänßlen. “We see further great potential in this region, and consequently Hansgrohe will be opening a new subsidiary in Abu Dhabi later this month, as well as a new flagship store in Dubai – not far from the Burj Khalifa.” Hansgrohe attributes its success on the project to excellent teamwork between local partners in Dubai and the Hansgrohe team at the site. “With our designer brand Axor we met the requests of the involved parties to deliver highquality modern bathrooms. We regularly and intensively trained the sub-contractors of the construction company that carried out the installations. “Our team from technical services also gave advice onsite in case of complicated installations. It is important to have a professional team that is able to answer all questions regarding design and bathroom concepts. We had interior designers and engineers on site who support all the companies involved in the tendering and planning process.” Hansgrohe is nearing 109 years in business and during 2008, the company generated sales of about US $908 million (EUR668 million) with its Axor, Hansgrohe, Pharo and Pontos brands. The Hansgrohe Group currently has a global workforce of around 3200 employees, with about two-thirds of them working in Germany. 


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APRIL 17โ€“23, 2010 CONSTRUCTION WEEK

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DIALOGUE RASHED MUBARAK AL HAJERI City scope Abu Dhabi’s department of Municipal Affairs chairman Rashed Mubarak Al Hajeri discusses his plans for Cityscape 2010, which will take place in the UAE capital this week By Sarah Blackman

What are your plans for Cityscape 2010? We plan to celebrate our success. We really want to emphasise our commitment to actively achieve plan 2030, by showcasing projects that commit to a new dimension in quality municipal services, taking into consideration the needs of residents and visitors to the emirate. How will this year’s event compare to last year’s? This year we have a unique unified stand together with the Abu Dhabi City Municipality, Al Ain Municipality, and the Western Region Municipality. DMA’s ‘Membrane’ stand design will showcase world class technologies and is our main theme at Cityscape Abu Dhabi 2010. The ‘Membrane’ conveys the message of an independent and transparent authority that protects and covers all. The stand’s design is also permeable to outside influences, innovations and yet acts as a filter to protect and retain its own culture and identity. The stand’s technology consists of a 4D theatre, augmented reality kiosk, projector shows, and touch screens.

What are the benefits of attending Cityscape? We are working harder, smarter and more effectively to deliver a better quality of life and to achieve a sustainable living environment in the emirate of Abu Dhabi, and Cityscape is a great opportunity to develop a sense of interest in the sustainability projects taking place in the emirate of Abu Dhabi. What important initiatives do you have planned for this year? Among our major initiatives is adapting international building codes and global standards of regulation in Abu Dhabi. One of the most important projects to be showcased, the building codes will provide a better quality of life across the emirate of Abu Dhabi, and will spread a new culture of climate sensitive, durable, high performance ‘green’ buildings among the construction and investment companies.

How have you seen Abu Dhabi change since DMA’s establishment in 2007? We have been working together to achieve an advanced municipal system that enables sustainable development and enhances quality of living for the emirate of Abu Dhabi. Since 2007, we have succeeded in our mission to achieve the Abu Dhabi Government’s objective of providing distinctive municipal services that enhance the quality of living of all residents through coordination, oversight and monitoring of the Abu Dhabi municipalities and municipal councils. Will there be any major announcements from DMA Abu Dhabi has been in a position to weather many of the at Cityscape? economic storms and, frankly, exploit its relative strength Together with Abu Dhabi to position itself more than City Municipality, Al Ain ever as a destination of BIO Municipality, and the choice. We have been able to Al Hajeri was appointed as the chairman of the Department of Western Region Municipality, host a series of world class Municipal Affairs in January 2009. He is also a member of the we will be showcasing 30 events of which Cityscape is Executive Committee of the Executive Council, the Environment projects through worldjust the latest, while pushing and Infrastructure Committee of the Executive Council, the Urban class technology. These on with a raft of regulatory Planning Council and the board of directors for Holding Company projects are spread to include measures that have proven in Abu Dhabi. Al Hajeri commenced his professional career in 1984 infrastructure, landscape, a great platform in saying to at Abu Dhabi Investment Authority before becoming the deputy and customer services. These the world that conforming director of Financial and Administrative Affairs to the end of 1993. projects will highlight having to the highest standards in He was later appointed as a member of Executive Council of Abu one, unified municipal system building and planning only Dhabi and a chairman of Department of Civil Service. Al Hajeri holds working to deliver a better underscores our ambition a bachelor in Public Administration and Law from UAE University. quality of life, work, and to be considered among the investment. world’s elite. Do you expect to see an increased number of visitors? Yes, I hope so. The GCC remains a stable and prosperous region. However, it would be pointless to deny that in terms of global perception the area needs a beacon and I firmly believe Abu Dhabi’s resilience and ambition have provided that. I really believe there is a sense of energy and interest around Abu Dhabi and believe Cityscape provides a great opportunity for people to see and experience that.

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CONSTRUCTION WEEK APRIL 17–23, 2010


Allegro Larvik photo: Morten Rakke

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Construction Week - Issue 317  

Construction Week - Issue 317 - ITP Business

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