Davis Langdon Middle East Handbook 2012

MIDDLE EAST CONSTRUCTION HANDBOOK 2012

MIDDLE EAST CONSTRUCTION HANDBOOK 2012 Middle East offices Bahrain (Manama) [email protected] +973 17 588 796 Egypt (Cairo), North Africa [email protected] +202 2 750 8145 KSA (Khobar) [email protected] +966 3 849 4400 KSA (Jeddah) [email protected] +966 2 653 1902 KSA (Riyadh) [email protected] +966 2 213 8500 Kuwait (Kuwait City) [email protected] +965 2 232 2999 Lebanon (Beirut) [email protected] +961 1 780 111 Oman (Muscat) [email protected] +968 2 448 1664 Qatar (Doha) [email protected] +974 4 458 0150 UAE (Abu Dhabi) [email protected] +971 2 414 6000 UAE (Dubai) [email protected] +971 4 423 3690

1 DAVIS LANGDON

An AECOM Company

7

Global presence

7



Rich Middle East history

8



Industry awards

9

2 GLOBAL CONSTRUCTION CONSULTANTS

The bigger picture

13

Sector specialists

13



Cohesive solutions

13



AECOM’s integrated services

14



Thought leaders

14

3 ECONOMIC ROUND UP

Country statistics 2011

19



Economic and construction overview

20



Construction trends and outlook

27

4 ARTICLES

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Is this the dawn of truly integrated project delivery ?

35



Cost-effective carbon reduction

43



Development Management — Creating a bankable scheme 48



Infrastructure: An unprecedented demand

54



Saudi Arabia: Social infrastructure development

60



Hosting global sporting events

65



Kuwait: Infrastructure in motion

69

5 REFERENCE Articles

Procurement routes

77



Middle East forms of contract

80



Building regulations and compliance

85

6 REFERENCE data

Exchange rates

95



International building cost comparison

96



Regional building cost comparison



Mechanical & electrical cost comparison

100

98



Major measured unit rates

102



Major material prices

104



Labour costs

106



Building services standards

107 110



Measurement formulae — two dimensional figures



Measurement formulae — three dimensional figures 111



Weights and measures





113

7 DIRECTORY OF OFFICES

Middle East

117



North Africa

121



Africa

122



Americas

124



Australia & New Zealand

125



UK & Europe

126



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FOREWORD

Welcome to the sixth edition of our Middle East Construction Handbook. I hope you will enjoy this year’s selection of articles, reference information and cost data. As you may know, AECOM provides over 60 professional services to clients across the Middle East geography, on large, medium and smaller sized projects and across all parts of the value chain. These services include Front End Consultancy, Development Management, Program Management, Project Management, Construction Management, Contract Administration and Construction, to name a few. At each point in this value chain there is a critical relationship between the disciplines of time, cost, quality and Safety, Health and Environment (SH&E). AECOM is ideally positioned to manage these services on behalf of our clients. The provision of these services and disciplines may be required individually, or through an integrated offering, dependant on the drivers of a particular client or project. This year, we see a huge opportunity in Development Management — creating a bankable scheme. Development Management considers the overall performance of a project when measured against key drivers. Key drivers will vary from project to project but examples common to all projects include risk, cost, time, quality and design. The project’s performance will guide decisions relating to how the investors can achieve their desired returns, or whether other stakeholders could be interested in participating, such as a hotel operator or retailer for example. Overall, the outlook for the region is positive as discussed in the Economic Round Up section of this handbook, with the drive to invest in education, health and sporting venues expected to provide ample construction opportunity over the coming years. We hope you find the handbook of interest, assistance and value to you, your projects and developments across the region. As with previous years, we are seeking your feedback to support our drive for continuous improvement in everything that we do. Mark Fletcher, Senior Vice President Davis Langdon, An AECOM Company

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1

DAVIS LANGDON

5

6

1 DAVIS LANGDON An AECOM company In 2010, Davis Langdon joined AECOM, a leading provider of professional technical and management support services for government and commercial clients around the world. Listed as a Fortune 500 company, one of America’s largest publicly traded companies, AECOM has over 45,000 talented professionals, including architects, engineers, designers, planners, scientists and management professionals, who serve clients in more than 125 countries around the world. Since AECOM was launched as an independent company in 1990, the firm has grown and diversified through corporate expansion and acquisition activities that have significantly broadened the company’s business lines and geographic reach. In partnership with AECOM, Davis Langdon delivers consultancy services as part of a complete end-to-end offer, while Davis Langdon’s strong cost and project management capabilities bolster AECOM’s growing portfolio of construction management services.

Global presence With over 3,000 people in over 75 offices worldwide, Davis Langdon can support long-term business needs from both a local and global perspective. We have offices in the following regions: Middle East Bahrain, Egypt (North Africa), Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and United Arab Emirates Africa Botswana, Mozambique, Nigeria and South Africa; Cape Town, Durban, George, Pietermaritzburg, Port Elizabeth, Pretoria, Stellenbosch and Vanderbijlpark Americas Boston, Honolulu, Houston, New York, Philadelphia, Sacramento, San Francisco, Seattle and Washington, D.C.

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1 Australia & New Zealand Adelaide, Auckland, Brisbane, Cairns, Canberra, Christchurch, Darwin, Hobart, Melbourne, Perth, Sydney, Townsville and Wellington UK & Europe Azerbaijan, Birmingham, Bristol, Bulgaria, Cambridge, Cardiff, Czech Republic, Cork, Edinburgh, England, Estonia, France, Galway, Germany, Glasgow, Holland, Ireland, Italy, Kazakhstan, Latvia, Leeds, Limerick, Liverpool, Maidstone, Manchester, Norwich, Oxford, Peterborough, Plymouth, Scotland, Southampton, Spain, Wales, Turkey, Ukraine and Uzbekistan

Rich Middle East history Our Middle East history is a commitment and legacy we are most proud of. We are celebrating over 60 continuous years of adding value to construction projects in the Middle East.

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1 Industry awards The consistently high standard of professional service provided by both AECOM and Davis Langdon is recognised throughout the construction industry, as evidenced by the following prestigious industry awards:

Davis Langdon Building “Project/Construction Manager of the Year” 2004 World Architecture “Top International Cost Consultant” 18 years in succession Building “Consultant/Surveyor of the Year” 1995, 1996, 2000, 2001, 2003, 2006, 2007, 2008 & 2009 Times “100 Best Companies to Work For” 2005, 2006, 2007, 2008 & 2009

AECOM Engineering News-Record AECOM is ranked No. 1 on the magazine’s list of the top 500 design firms Newsweek AECOM featured in Newsweek’s list of the Greenest Companies in the US

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1

10

2

GLOBAL CONSTRUCTION CONSULTANTS

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2 GLOBAL CONSTRUCTION CONSULTANTS Davis Langdon has always seen itself as a forward-thinking organisation and has developed a wide range of technical expertise around the development of land, infrastructure and buildings. More recently, ambition has pushed us to think harder about the context in which we give our advice. We believe there are too many consultants who view a problem as a technical issue, and therefore provide a technical solution. In many cases this is simply giving the client the “expected,” but such advice can have limited value. The bigger picture If we were to analyse situations where our advice has been most effective, it is in the creative application of our knowledge and experience. While our roots are in technical delivery, our clients value the fact that our offer always contains a strategic component. Our ability to think big means we focus on the successful delivery of the project in hand, whilst also appreciating our clients’ goals and objectives from a broader perspective. Our engagement with the bigger picture enables us to operate beyond project level and support long-term business strategies. It is this approach which makes us the leading construction consultancy we are today. Sector specialists Where appropriate, we structure ourselves around our clients’ sectors, to maintain a detailed understanding of the dynamics influencing their different markets. Simply put, clients have access to individuals who are experts in their specific field. Our ability to offer specialists and not generalists adds real value and sets us apart from our competitors. Cohesive solutions We can support the challenges and opportunities our clients face throughout the life cycle of a development, from business and investment strategy at the organisational level right through to operational efficiency of the final built product.

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2 Our core services of program management, project management and cost management are augmented by a comprehensive range of specialist services which complement what we do at the core, reduce risk and add value. We combine and tailor our services to support project and business needs. AECOM’s integrated services Davis Langdon’s project management, cost management and consultancy services form a global capability within the AECOM organisation, Program, Cost, Consultancy (PCC). In addition to Davis Langdon’s Program, Cost and Consultancy Services, AECOM offers a full suite of integrated capabilities which includes Architecture, Building Engineering, Construction Services, Design and Planning, Economics, Energy, Environment, Government, Mining, Oil and Gas, Program Management, Transportation and Water. We focus on identifying issues and encouraging our people to find innovative solutions. This approach allows our clients to assemble a business case which is well considered, properly priced and has measurable outcomes. Our people are our greatest asset and investing in them is at the heart of our business. Through our recruitment and development programmes we harness a range of knowledge and skills to ensure our clients are working with the best people for their projects. In addition to our project delivery teams we employ management consultants, economists and financial specialists to ensure we can support all your needs. Thought leaders In an increasingly dynamic and fluctuating market, the need, expectation and ability to capture, analyse and disseminate “big data” separates leading consultancies from their peers and provides predictive and best advice to our clients. The best outcomes for our clients and their programmes are reinforced with content and experiencerich industry best advice. Data, information and knowledge is the core foundation for a consultancy business, providing the content that underpins our professional advice. As a leading consultancy in the built, natural and social environments, we have over 45,000 professionals connected through our knowledge network. This provides unparalleled data from which we

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2 can determine and establish new trends, provide leading advice and innovate in our end-markets with fresh products and services for our clients. This year will see the expansion of our digital solutions offer to the market providing easier access to our knowledge. We are therefore uniquely placed to anticipate and be active in our support of our clients.

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16

3

ECONOMIC ROUND UP

17

18

19

0.9

2.7

2.0

Value of Construction Output*, US$ billion

Project awards, US$ billion

Consumer Price Inflation, %

10.7

n/a

10.4

4.6

6,354

4.8

5.1

225.9

78.3

Cairo

995,450

Egypt

5.0

2.4

1.3

4.8

5,644

4.7

3.1

26.5

6.1

Amman

91,971

Jordan

5.3

59.2

19.0

4.4

23,826

4.7

3.7

434.6

26.1

Riyadh

2,149,690

KSA

4.0

13.4

2.5

1.9

37,849

5.0

2.0

131.3

3.6

Kuwait

17,820

Kuwait

4.0

1.5

5.2

13.3

15,193

3.9

7.5

39.2

3.9

Beirut

10,230

Lebanon

3.3

8.3

3.1

5.4

25,439

4.5

4.2

55.6

3.0

Muscat

212,460

Oman

-2.5

11.2

6.6

5.2

88,559

7.3

16.3

129.5

1.7

Doha

11,437

Qatar

4.4

1.5

1.8

3.1

5,208

5.0

3.2

59.3

20.6

Damascus

184,050

Syria

0.9

41.5

20.7

9.0

48,821

4.0

3.2

301.9

5.1

Abu Dhabi

83,600

UAE

*estimate only, excludes real estate. All data are 2010 data unless otherwise stated. Source: IMF and various national statistics offices. Value of construction in Lebanon, Kuwait, Syria, UAE is calculated based on the share of construction in GDP in 2009 applied to 2010 GDP figures.

3.9

26,852

Construction Output, % of GDP*

GDP/Capita (PPP), US$

4.1

5.0

Real GDP Growth, 2011-2016 pa forecast

22.7

1.1

Manama

665

Bahrain

Real GDP Growth, %

GDP, US$ billion

Population, million

Capital City

Land Area, km2

Country statistics 2011

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3 ECONOMIC AND CONSTRUCTION OVERVIEW Global economy: Volatility in the face of new and old worries In 2011, the global economy faced more political and economic volatility than had been anticipated and this uncertainty is expected to continue into 2012. Supply disruptions in early 2011 and firm demand from fast growing industrialising economies caused oil and commodity prices to rise sharply during the first few months of the year, raising the spectre of inflation. The devastating earthquake and tsunami that struck Japan in March disrupted supply chains around the world and weighed on consumer sentiment and spending. At the same time, a number of countries across North Africa and the Middle East have seen, and are still facing, political upheavals not seen for generations. In addition, the 2008/09 global recession has left scars on the world economy with the main legacy being the large public debt accumulated by many Western economies, most notably in Europe and the US. The political drama in the US surrounding the extension of the US$14.3-trillion federal debt ceiling — or to face a default — rattled financial markets in summer 2011. A last minute deal was made, but there still remains uncertainty about the fiscal stability in the US, with implications for global financial markets and the world economy. Consequently, Standard & Poors ratings agency, downgraded the US long-term sovereign debt rating — the first ever downgrade of the US — which sent shockwaves through markets. Meanwhile, the sovereign debt crisis in the Eurozone continued to escalate over the course of 2011, with more countries, including Italy and Spain, dragged into the spotlight. Global inflation escalated in the first half of 2011 due to soaring commodity prices and accelerating demand pressures in the emerging markets. Many of these fast growing economies have embarked on monetary tightening to cool their economies. All of these events dented optimism about a sustained global economic recovery and caused extreme asset 20

3 market volatility. In August 2011, fears of a renewed global downturn culminated in global stock market crashes. Reflecting this, the International Monetary Fund (IMF) revised down global growth projections for the second half of 2011. More positively, the IMF predicts this slowdown to be temporary, as many of the growth drivers remain in place, including loose macro-economic conditions, pent up consumer and investment demand and strong corporate earnings. The main theme of unbalanced global activity continues; growth will be slow in advanced economies that face fiscal and financial problems, while activity is set to remain sound in advanced economies that do not face such challenges. Looking ahead, there are downside risks to growth, relating mainly to further escalation of the debt crisis on both sides of the Atlantic, a slower US economic recovery and overheating pressures in some key emerging economies. In addition, there are a number of political and economic wild cards that could further derail global growth in the year ahead, including further political upheaval in the Middle East and North Africa region (MENA), sudden regime collapses, natural and environmental disasters, and volatile commodity markets. Many of these events cannot be excluded, but tend to catch markets and investors by surprise if they happen. Global construction stabilised in 2011, driven mainly by public investment in infrastructure, though overall, this was not enough to offset the continuing slack in private construction in many key construction markets. An upturn in private construction is still expected for 2012, but given the current low investor confidence, a full recovery in private demand may still be delayed. Given the trends in the wider global economy, construction growth will continue to shift towards Asia and other emerging markets, including the Middle East, where economic growth, rising populations, a widening middle class and rapid urbanisation is putting pressure on existing infrastructure. Construction in many developed countries will be constrained by slower economic growth, a requirement to cut large public debts and limited population growth. In 2010, the global construction industry was worth US$7.2 trillion and according to latest forecasts, the market is predicted to grow to US$12 trillion by 2020. The emerging markets’ share is expected to rise from 46 per cent today, to 55 per cent by the end of this decade. Asia, Latin America and the Middle East will be the main construction growth areas, with infrastructure as the main beneficiary. 21

3 Middle East: Politics driving economics The impact of global factors on the Gulf Cooperation Council (GCC) and wider Middle East is being felt primarily through financial markets and oil prices. Consequently, the region remains vulnerable to global risks which have delayed a full recovery in private sector activity. After a period of political turmoil earlier in 2011, relative calm has been restored in the GCC. Regional stress points remain in Libya, Syria and Yemen, while the GCC economies have, generally managed to overcome investor concerns through a combination of policy initiatives and, until recently, increasing oil prices. The widely divergent political picture within the region is shaping the outlook for economic growth. In the postrevolutionary countries — Tunisia and Egypt — where the old regimes were toppled in early 2011, interim governments are seeking a “new normality” with the outcome yet to be defined. Both economies are struggling with the impact of the revolutions, most noticeably felt in sharp falls in production, tourism and foreign investment. Weaker economic performance is putting pressure on public budgets, though the risk of fiscal pressures turning into an economic crisis is being reduced by financial support that the Western and Arab governments have promised. Whilst the economies appear to be stabilising, it is likely to take a while until growth returns to trend. Libya, Syria and Yemen continue to face violent protest and a return to the old order is difficult to imagine, though at the same time it is highly uncertain what new order will emerge. Jordan and Oman have limited financial resources and are under pressure to sustain strong economic growth to create enough jobs for their young and growing populations. Whilst social unrest has largely been contained in both countries, investment sentiment has still been hurt and the tourism sector has decelerated, negatively impacting on economic growth. The outlook for the commodity-rich GCC states is more benign as governments have the firepower to support their economies, while high oil prices have improved growth prospects. The strongest economic growth is expected in Qatar, where expansion will be driven by high hydrocarbon prices, a considerable amount of infrastructure projects in the pipeline and a new focussed five-year development plan. Saudi Arabia has weathered the regional political turmoil remarkably well, and expansion in the Kingdom will be driven by strong growth in the oil economy and public 22

3 spending. In addition to an already expansionary 2011 budget, earlier in 2011 the Saudi government announced two additional spending plans worth some US$120 billion (or 30 per cent of GDP), which included social transfers, job creation programmes and capital spending pledges. The UAE is benefiting from strong growth in the oil sector, ensuring that public spending can continue, which is important to support momentum in the non-oil economy. Spared from any political turmoil, the UAE is the region’s safe haven and is repositioning itself as the pre-eminent business and transport hub, boosting long-term growth prospects. Dubai remains vulnerable as its real estate sector has yet to stabilise, and this is also felt in Abu Dhabi. More positively, both Dubai and Abu Dhabi are benefiting from firm international trade and a strong tourism sector, both of which will boost overall growth rates. The political situation in Kuwait remains volatile caused by continued stand-offs between the government and the parliament, which is delaying the flow of public funds and is weighing on private sector confidence. Consequently, while high oil prices are boosting public finances and the overall GDP growth rate, non-oil activity remains slow. Within the GCC, Bahrain’s economy has been hit hardest by political instability in 2011. Whilst the headline growth rate is being buoyed by higher oil revenues, increased public spending and a slow return of private sector confidence, the economy is likely to under-perform its regional peers in the near term. The region certainly continues to face challenges with demographic pressures, high levels of youth unemployment and the need for economic diversification. As regional growth will be relatively robust by global standards this year and next, generating economic growth — inclusive and at a pace that will ensure a high level of job creation — will remain the most important challenge for the region in the years ahead. The medium term prospects for the region remain positive, and most observers expect the Middle East to be among the fastest growing regions in the years ahead. Factors that will drive future economic growth and construction investment remain in place; petrodollars, population, policies, and pent up demand from historic underinvestment in key sectors, such as affordable housing, education, healthcare, energy and water security.

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3 Construction industry: High expectations Headline economic growth in most of the GCC countries has distinctly picked up this year as a result of higher commodity prices. Private sector sentiment continues to be relatively subdued in parts due to higher political risks. Consequently, foreign capital flows have weakened and the recovery in bank lending is mixed across the region. Despite the announcement of large (additional) government spending programmes, the project’s pipeline has not responded as quickly this year as had been expected. Middle East news, data and analysis (MEED) data shows that fewer project awards and a number of cancelled projects have cut the value planned, or projects underway in the GCC by US$378 billion in the first half of 2011 — an 18 per cent drop since end 2010. After a general pick up during the second half of 2010, the value of projects awarded fell back by a fifth during the first half of 2011. Within this, the value of construction and infrastructure project awards across ten Middle East countries fell from US$50.5 billion in the second half of 2010, to US$39.5 billion in the first half of 2011.

Government spending continues to dominate project awards across the region, in particular, the areas of transport (ports, airports, roads and railways), power

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3 and water, and social infrastructure. Expectations are that the second half of 2011 is to remain relatively slow, as continued uncertainty flows through global financial markets. In Qatar and Saudi Arabia, capital spending is expected to enter a new era of strong growth. The (additional) spending programme announced in Saudi Arabia should, once projects start to feed through, result in a general uplift in activity. Progress has been slower than expected this year with US$11.8 billion of construction and infrastructure projects awarded in the first half of 2011, compared to US$19.2 billion in the second half of 2010. The project pipeline remains larger, with the value of projects planned and underway at US$623 billion in August 2011 — the largest pipeline in the Middle East. There has been much excitement in the Qatari construction industry since the country won the right, in December 2010, to host the 2022 FIFA World Cup. Projects worth US$100 billion-plus have been announced across the whole industry, ranging from directly associated football infrastructure (stadiums, venues, hotels and leisure facilities) to an ambitious transport investment programme that includes roads, expressways, and an integrated, highspeed rail, metro and light rapid transport system. Qatar has also prioritised social infrastructure development, with plans to increase the provision of education and healthcare facilities. In addition, increased investment in new power, water and sewage treatment plants are expected over the coming years to deal with population growth. Contract awards have picked up in the first half of 2011, with some US$4 billion construction and infrastructure contracts awarded — double the level when compared to the second half of 2010. With some US$228.3 billion projects planned or underway, predictions are that Qatar will be one of the fastest growing construction markets globally in the years ahead. In the UAE, the value of projects planned or underway stood at US$621.7 billion in August 2011, compared to US$818.6 billion in December 2010, reflecting the continuing challenging industry conditions in the country. Awarded construction and infrastructure projects totalled US$8.8 billion in the first half of 2011, compared to US$9.7 billion in 2010. According to MEED, contract awards in Abu Dhabi have slowed markedly this year, whilst the 2011 federal budget included a 6 per cent cut in spending. Public capital investment should still support the industry going forward.

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3 For example, the federal government has pledged US$1.6 billion in infrastructure development for the northern emirates, while Abu Dhabi in driving forward industrial development at its US$7.2-billion Khalifa Industrial Zone Abu Dhabi (Kizad), to support the set objective of economic diversification. Political instability earlier this year in Bahrain has slowed the flow of projects considerably, with the value of projects planned or underway dropping 30 per cent to US$56.6 billion since the end of 2010. However, the government appears committed to push ahead projects to revitalise the economy. Consequently, Bahrain has seen an increase in project awards during the first half of 2011. In Kuwait, despite high expectations surrounding the announced infrastructure development plan, the value of projects dropped by more than a third this year. A number of big projects have been shelved and this has been blamed on the political paralysis between the government and the parliament.

Overall, the region is expected to start benefiting from the large government spending programmes in the latter months of 2011 and in 2012. Provided that the political environment begins to stabilise across the wider region, market confidence should return and result in increased private spending. Infrastructure spending has been one of the key drivers of economic growth over the past decade, and this trend is expected to continue going forward.

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3 CONSTRUCTION TRENDS AND OUTLOOK All sectors of the construction industry in the Middle East continue to grapple with present and future uncertainty. The corporate and business unit levels of industry organisations are being tested as a result of regional and international events. Although there are geographic and sector highlights, in the short term at least, we could be forgiven for thinking that there is little to offer much in the way of respite from the challenges facing the Middle East construction markets. But there are clear reasons for positivity over the medium to longer term: fundamental requirements for social infrastructure still exist, largely as a result of underlying population demographics, and the need to meet these demands in the future will not dissipate. Furthermore, the Middle East’s geographic location offers excellent potential to capitalise on the newly-coined “South-South” (HSBC, June 2011) trade route between Latin America, Africa, Asia and the wider Middle East. Doubtless, there will be construction sector opportunities as a direct result of this trade and increased capital flows between these emerging markets. Infrastructure investment will be essential to facilitate and support these trade routes. In the medium to longer-term, as HSBC’s report rightly states, the Middle East’s foundations in trading will once again act as a spur to country and regional development.

Global events and regional effects Effects of global economic events continue to be played out and the construction industry often bears a very heavy burden. Consequently, decisions to procure built assets will be influenced by factors outside the control of client organisations. Increasing scrutiny of the sanction decision is understandable as lenders and clients themselves remain cautious, aware that renewed global economic volatility has to bring proportionally higher levels of vigilance. Lending constraints, debt repayment and activities to repair balance sheets amongst other things will exert pressure on client organisations, with consequent effects for market activity and built environment procurement. Generally, the story of 2011 so far has been one of project reviews and reduced workload in a number of markets. Excess contracting capacity combined with low input costs have not persuaded client organisations to procure built assets in the volume expected, even though this combination should be conducive to supporting the 27

3 financial viability of a development. Those organisations with the ability to proceed with built asset construction at this time will reap the rewards of very competitive pricing.

Market pricing Comparatively benign conditions now prevail in those markets that experienced the shake-up resulting from the global events at the end of 2008. This precipitated a marked slowdown in many construction markets in the Middle East combined with significant falls in market pricing. Broadly, changes in tender price trends reflect the adjustments to market and sector activity in the region. A collection of countries maintained capital expenditure and it was this activity and momentum that ensured solidity for tender prices in these markets, with some even providing the opportunity for contractors to increase price levels. Conversely, where market and sector activity have been significantly affected, trends in tender prices have ranged from a gradual drift downwards to notable falls in those countries where industry volumes have been materially impacted. Lower demand and excess capacity continue to be evident although regional variations exist in view of the different levels of government expenditure, and also that of the private sector. In those markets that are currently experiencing falling tender prices, any increased momentum in negative trends depends in part on renewed reductions in aggregate demand for construction. For those organisations that are prepared — or have the ability — to procure built assets, subdued tender prices offer reasons to be cheerful. Parts of the contracting sector have been unable to secure any marked increases in prices due to reduced tendering opportunities, very competitive pricing environments and the ability of client organisations to continue to press for the best possible prices, often through negotiation. Although input costs have fluctuated to some degree in the last 12 months, recent softening of tender prices is still evident. Moreover, there are signs that this is extending to the wider GCC region as confidence is tested by short-to-medium-term uncertainty, either due to economic pressures, social unrest or a combination of both. Market data on workload volumes shows that it is only Iraq — and Oman to some degree — that has experienced noteworthy increases in activity this year. Contractors — and their supply chains too — have experienced onerous trading conditions in the last two years and current circumstances are not much improved.

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3 The ability of contractors to absorb commercial pressures in the event of any pick up in key material prices is likely to inflict renewed financial strain as prices charged for construction work are driven lower. Continual bidding without the surety of project sanction only adds to the squeeze on finances, increasing non-recoverable costs. Turnover and profit-starved contractors continue their hunt for work in the region, although gaining a foothold in some markets does require additional effort to overcome higher barriers to entry. The financial mettle of contractors and the industry supply chain is being tested to the full. Looking ahead, the danger is that the industry loses good skills, knowledge and capabilities. And it is not just amongst contractors that this will prove to be an issue but consultants too.

Looking ahead Despite the challenges facing the industry, fundamental requirements for social infrastructure still exist. Underlying population demographics will translate into significant levels of demand for construction services in these areas of social building. The scale and extent of the grand designs and developments of recent years are unlikely to return in the near-term. History shows us that there is a close correlation with the construction of tall buildings and economic recessions shortly thereafter. Nevertheless, sustainable levels of activity will emerge that are based on fundamentally sound investments and sector-specific demand. Smaller projects will increase in number as a result of tighter risk profiles and lending constraints. Changes in workload activity will not be uniform across sectors — or across countries. Refurbishment and commercial fit-out activity has seen considerable demand for services in this sector. Understandably, businesses will seek to upgrade existing commercial accommodation rather than consider new-build activity. Moreover, a surplus of commercial and residential accommodation in many GCC markets at very competitive rates will entice end-users towards this space solution. The cost of capital and demand generated by social necessity will be some of the key drivers leading to renewed market activity. On top of this, regional unrest and security concerns could prompt amendments to published development strategies and long-term vision documents, as regional governments seek to address the demands of their populations. At the same time, 29

3 governments must balance their expenditure against income, and for oil-producing countries a large proportion of this income is determined by the global price of oil. There are as many forecasts amongst economists for the price of oil to increase as there are for it to go down. It is still the case for these countries that income therefore is determined by events elsewhere in the world. One certainty is that government expenditure acts as a central pillar of construction activity in the Middle East, as governments seek to implement the facilitators of economic growth and related strategies for economic diversification. Furthermore, there are clear links to private investment on the back of public sector expenditure. Particular markets are experiencing reduced volumes of government expenditure and private sector investors therefore remain cautious, mindful of the significant falls in real estate prices over the past two years in many GCC countries. Medium-to-long-term trends will evolve to create regional construction demand. Assuming Saudi Arabia’s latest spending plans remain largely unaltered which maintains its construction momentum, Qatar’s World Cup 2022 investment programme kicks off and many of the suspended projects in other GCC countries recommence as developers attest, the prospect of a quicker pick-up in tender prices becomes feasible. Increased confidence and the psychology of pricing on the back of higher work volumes will see prices increase accordingly, though variation by market will remain. Any improvement in global economic conditions in the short-to-medium-term will be a bonus. Additional considerations in respect of this pricing transition include reduced contracting capacity in the region as a result of strategic business reviews, a spike in the volume of tendering activity and an increased demand for professional expertise. But continued attention to cashflows and finances may mitigate the speed of construction on re-started schemes. Extended project programmes should therefore create a steadier demand for labour and materials and possibly offset any restart pricing spike.

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3 Considerations for project success Uncertainty increases the need for awareness and monitoring. Some of the key issues to ensure active management of projects include: – Entry and exit prices: Lower prices can be an opportunity for clients but at the same time they introduce risk. Too much focus on achieving the lowest price should be counter-balanced by an acceptance that higher transaction costs in post-contract administration may follow. – Risk transfer: A willingness by contractors to accept a wider transfer of risk in the hope of winning work will stretch business fundamentals. In short, incentives for contractors to maximise post-contract returns because of excessive risk transfer should be minimised. It is not only in hard financial metrics where incorrect transfer of risk manifests itself — project team morale can suffer and this in turn affects project performance and quality. – Scenario planning: Uncertainty and volatility in markets require greater attention to the assessment and modelling of the financial viability of developments. – Risk management and removing sources of uncertainty: Design completion, supervision, finding the right people, procurement options and interface risks are all areas for consideration. – Contractual provisions: With heightened risks related to the supply chain’s financial standing, it is imperative to include contractual provisions that ensure the financial stability of the supply chain. Security can be achieved through adequate warranties and performance guarantees.

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ARTICLES

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4 Is this the dawn of truly Integrated Project Delivery? Sir Edwin Lutyens, the major 20th Century British architect, once described production information as “a letter to the builder, telling him exactly what you want him to do.” In 1965, a Tavistock Institute report quoted a Royal Institution of Chartered Surveyors (RICS) meeting from 1910, which stated “Architectural information is invariably inaccurate, ambiguous and incomplete.” By the 1940’s, the impact of this inaccuracy and ambiguity was valued at an additional 10 per cent to the construction cost. The UK’s Building Research Establishment (BRE) undertook research in the 1970’s that led to the Coordinated Project Information (CPI) initiative. This established codes of procedure for production drawings, project specifications and the common arrangement of work sections for building works in 1987. By 1994, the Latham Report “Constructing the Team” along with the subsequent Egan Report “Rethinking Construction” (1998) and “Accelerating Change” (2002), suggested that waste in the industry accounted for 25-30 per cent of project costs. At this time, the UK’s Department of Trade and Industry established a programme called “Avanti” which sought to formulate a collaborative approach between construction project partners. This led to the creation of the construction industry membership organization Constructing Excellence in 2003. Within the design world, technology was also having a direct impact. In the 1980’s, Computer Aided Design (CAD) programs were being released that reduced significantly the need for draftsmen. Autodesk Inc. released its first version of AutoCAD into the market using the DWG R1.0 format in 1982. This software was both affordable and capable of being run and operated on personal computers, thus allowing designers to do their own drafting work, eliminating the need for entire departments. CAD sits within a suite of activities known as digital product development (DPD) that operates within the product lifecycle management (PLM) process. It is used with other tools, which can be integrated modules or standalone products, such as: – Computer aided engineering (CAE) and finite element analysis (FEA)

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4 – Computer aided manufacturing (CAM) linked to computer numeric control (CNC) machines – Photo realistic rendering/rapid-laser scanning – Document management and revision control using product data management (PDM) AutoCAD 2012 is the 26th version of the original software product. It is joined by a number of other complimentary solutions, Revit, and competing systems, including Bentley’s Microstation through bespoke design house software like Gehry Technologies Digital Project, down to Google’s free SketchUp product which provides 3-D modeling for everyone. 3-D design and software capability are now commonplace, not only in media production and other industries, but also within the built, natural and social environments. Integrated project delivery is an approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results. This increases value to the client/owner, reduces waste and maximizes the efficiency through all phases of business case, design, fabrication, construction and operation. The convergence of technology, culture and process has given birth to the notion of Building Information Modelling (BIM). Although relatively new to the construction industry, 3-D modeling in the sense of BIM, has been used in other industries for a significant period of time. With rapid growth in the uptake of BIM, the numbers of designers, constructors and clients with direct experience with BIM is growing significantly. As a minimum, savings with 8-10 per cent of construction cost can be saved through the elimination of conflicts, constructability and reduced change orders. The true benefit of BIM across the whole-life of the asset has yet to be realized though, particularly has integrated with a facility management (FM) strategy. So apart from leveraging IT hardware and software, what does BIM offer and is it the missing link in delivering truly integrated project delivery?

BIM: The basics BIM is set to revolutionalise building design and construction to a point where many traditional functions 36

4 effectively become obsolete. Most people agree that BIM is introducing new ways of working for design and construction teams — and those who cannot or will not adapt will fall by the wayside.

BIM is often thought of as a design tool similar to CAD. In reality however, BIM or Information Modelling (IM) of any asset, is founded on a set of shared, structured and coordinated pieces of information — whether in the vertical built environment, or in horizontal infrastructure. Once created, this information can be used by many and all parties involved in that asset from its inception through design, construction, operation and recycling. The richer and more integrated with BIM, the greater the potential benefit. Many applications can currently be run and operated using BIM, including design drafting, analysis, clash detection, manufacturing and construction sequence simulation. Once operational, the asset BIM model can also be used as the basis for monitoring, managing the operation and maintenance, modification and refurbishment of that asset, updated on a continual basis over its lifetime. Indeed, with the integration and use of rapid laser scanning/cloud point rendering, not only will the digital design data be preserved and used dynamically over the assets life, the as-built data can also be captured, finally resolving the inevitable variances in construction tolerance and use that occur between design and construction. These technologies therefore represent the next stage in the development of 2/3-D CAD. They provide a step change in the ability of design and construction teams to structure and exchange information. The benefits go beyond enhanced design coordination, reduced design costs and improved communications and information exchange across all players and disciplines in the project.

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4 By requiring different design and construction disciplines to collaborate on the development of a sophisticated, information-rich, digitally-based model, designs can be developed and tested “virtually” and many potential problems can be designed out or avoided completely. The benefits are then not only in more efficient and effective design and construction processes, but ultimately in better assets that are more fit-for-purpose and meet their brief requirements and design intent.

Conventionally, a good deal of design and construction work is document-based. Information is communicated and stored via a variety of drawings and reports that, despite being stored and distributed in digital form, are essentially unstructured and thus of limited utility. Not only is this information unstructured, it is also held in a variety of forms and locations, and there is considerable potential for data conflicts and redundancy as well as risk to data integrity and security. By providing an intelligent, digital structure for project information (link back to CPI) and ultimately a means by which it is held centrally in a single model — BIM opens up a wide range of possibilities for improvement. These include better ways of generating, exchanging, storing and re-using project data between different design and construction disciplines through the life of the asset. In this sense, BIM is as much a process of generating and managing project data throughout the lifecycle of the asset, as it is the digital model itself. That is why BIM is sometimes referred to as BIM(M) — Building Information Modelling and Management.

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4 BIM essentials The digital project model at the heart of BIM is usually created by software using “object” technology. “Objects” are essentially digital representations of physical components or more abstract entities (eg spaces). In the past, different software providers tended to have their own ways of defining and handling objects, so their systems and the information contained within them, were not “interoperable.” Interoperability — the effective exchange of information — is key to BIM. Because of that, a good deal of work in the software industry has been devoted to developing standard definitions for objects that ensure they are interoperable across different systems and tools. One such set of definition, called industry foundation classes (IFC’s), is becoming more widely used in construction. Objects are important because of the information and data that they contain and attributed to that object. This includes how they relate to other objects (parametric information). Such information is not only dimensional, but can relate, for example, to thermal performance, carbon emissions, cost, repair and replacement cycles, and so on. Objects are therefore the information-rich “building blocks” of design and construction and can be used well into the operating stages of projects. They can also be stored in digital libraries and re-used and refined on other projects.

Key BIM benefits

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4 The benefits of BIM derive fundamentally from the way in which all parties to the project can contribute to the central data model, and all can draw information from it. It has the potential to improve many functions, from checking compliance with building regulations or codes, through design, cost estimating, work scheduling, fabrication, assembly and construction through to operations, FM and even decommissioning and demolition. Significant benefits are claimed for BIM, particularly when working in a genuinely collaborative way using a single digital model of the project — totally integrated project delivery. The following benefits of BIM include: – Design: Improved coordination of design and deliverables between disciplines; improved project understanding through visualization; improved design management and control, including change control; improved understanding of design changes; and implications through parametric modeling. – Compliance: Ability to perform simulation and analysis for regulatory compliance; ability to simulate and optimize energy and wider sustainability performance. – Costing/Economics: Ability to perform cost analysis and to check for adherence to budget/cost targets; ability to understand cost impacts of design changes; improved accuracy and transparency of cost estimates. – Construction: Reduction in construction risks through identification of constructability issues early in the design process; early detection and avoidance of clashes; ability to model impact of design changes on schedule and programme; ability to integrate contractor/ sub-contractor design input directly to the model. – Operation and management: Creation of an FM database directly from the project (as built) model; ability to perform FM costing and procurement from the model; ability to update the model with real-time information on actual performance, thus enabling predictive analysis and pro-active asset management. The financial impact of all these benefits, taken together, could be considerable. A recent McGraw Hill report, The Business Value of BIM in Europe, 2010, looked at user perceptions of BIM in the UK, France and Germany, concluding that the majority of users believe that they are getting positive return on investment (ROI) in BIM, and also that the business benefits of BIM have not yet been

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4 realized in full. In the UK, most discussions about BIM still relate to its use during the design stages of a project, sometimes referred to as “little BIM.” In other countries, its implementation is more advanced, particularly in Scandinavia, USA, Australia and more recently, South Korea. In recognition of the differing levels of development in markets, UK-based BIM experts, Mark Bew and Mervyn Richards, developed a maturity model in 2008 which has been widely adopted by the industry. BIM Maturity Model

Source: Bew and Richards 2008

The BIM maturity model shows how users can move from use of un-coordinated CAD drawings through various levels of technology and information-sharing, to reach the ultimate objective of fully integrated project delivery. Each stage in maturity represents an opportunity to increase the effectiveness of information exchange and re-use. The model helps to explain why the development of BIM competence is so important in accelerating the realization of BIM’s business benefits. Such a significant change in the way that assets are conceived, designed, delivered and managed, does come at a cost and therefore requires both public policy and market dynamics, to facilitate the change. In Singapore, the government provides assisted funding through their Construction Productivity and Capability Fund (CPCF) with a specific funding provision for BIM. This is designed to support and encourage adoption with assistance provided for improving business process, training, consultancy, software and hardware costs for firms registered to undertake business within Singapore. 41

4 With a clear purpose to incorporate BIM into two levels: – Firm level scheme — enhance business capability around visualization, value-added simulation, analysis and documentation; and – Project collaboration scheme — support business capability in BIM project collaboration to reduce conflicts and expensive reworking of design, construction and specification downstream. Funding is provided up to a ceiling of US$105,000 per business. From 2015, the use of BIM will be compulsory on all UK government projects, which form a part of a series of costsaving/efficiency measures for the public sector.

Davis Langdon’s role in BIM Davis Langdon is a long-term investor, alongside construction software developer Causeway, in the development of specialist software, CADMeasure and BIMMeasure, which automates many manual aspects of the cost management service. We have completed the development of BIM-compatible software which not only integrates the BIM model database, but which also creates automated links between the BIM model and the client’s budget plan. At this stage in the evolution of the commercial and contractual models, we think this is the optimum position for a cost and project manager to hold commercially-sensitive data. However, as clients engage more actively with BIM and applications and datasets develop and mature, we will be prepared and positioned to merge and attribute our own data, information and knowledge into the “objects” thus enhancing the richness and integration of the model and driving further benefits from the creation and ownership of the asset.

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4 Cost-effective carbon reduction The construction world is still guilty of a large amount of green tokenism, with projects wearing their environmental credentials like a badge of honour. There are those that have made the effort but seem to have got it all a little wrong — wind turbines that do not turn, green roofs that shrivel under the sun, bicycle racks with no bicycles. And at the same time, there are those that seem to disregard issues like climate change and resource efficiency as though they are “someone else’s problem.” Of course there are some that manage to find a subtle but important balance of time, cost and quality whilst also balancing social, environmental and economic drivers. These are the projects that should be applauded.

C STEFFECTIVE CARBON REDUCTION One of the failings of the sustainability movement has been the over emphasis on the need to drive change on the basis that it is “the right thing to do.” A change programme driven through guilt or a sense of obligation (or unbridled enthusiasm in many cases) will touch many people, but it is not universal and will also leave many excluded. There has become a link between sustainable design and the “greater good” which for many, simply equates to a cost for which there is no immediate or tangible benefit.

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4 At Davis Langdon, we are repositioning our approach by introducing a new language to help find our client’s better solutions. Instead of focusing on attaining sustainability credits on an artificial rating scheme, we want to focus more on the business case. We want to help our clients understand the real costs and business benefits so that when a choice is made, it is done for the right reasons. Of course, neither is it easy nor always appropriate to consider all decisions in terms of cost and benefits, but the more we do, then the more we will start to find better solutions over the life of an asset. Probably the best place for a business-led approach is when considering energy and carbon, for which there are a few inescapable truths: The rising cost of energy: Whilst beyond discussing the drivers for energy costs and their subsequent rate of change, few would disagree that we are expecting to see long-term global increases in the cost of energy. Building non-performance: The evidence is now overwhelming to prove that buildings consume more energy than their design standards (often 20 to 30 per cent more than forecast). The grounds for this are complex, not least because it is people that use much of this energy rather than the building itself. If we are to drive down energy consumption, we need to tackle these elements1. Technological developments: Technology is rarely the barrier it once was as we have tried and tested solutions which we can pick from. Possibly more challenging is picking your way through the myriad of potential solutions to arrive at the optimum. Climate change: Maybe it is a little strong for some to argue that climate change is an “inescapable truth,” but many now accept it and in doing so, we must accept the need to adapt our buildings and our behaviours, to these changing climatic conditions, or face the long-term economic and social consequences. In addition to the above, many governments around the globe are putting low-carbon strategies at the centre of their manifestos, resulting in a plethora of carbon taxes and support packages — each of which can dramatically change the economic case for a low-carbon solution. Energy and carbon could be seen as a risk. Do nothing on your new and existing buildings and your annual operating costs will increase. Conversely, take the right action and there are investment opportunities which can deliver

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4 long-term savings. We encourage clients to see these as investment opportunities, setting a hurdle Internal Rate of Return (IRR) which this investment should meet. With a focus on carbon and energy, we have identified seven priority areas to focus on. Each of these areas presents an opportunity to reduce risk, reduce cost and reduce carbon: – Financing: Ensuring taxation strategies are efficient and all grant sources are maximised. – Energy supply: Optimising the energy supply strategy, including low-carbon technologies. – Occupiers: Engaging with building users to educate and inform about energy use and targeting long-term staff retention (staff churn is often a very large business cost). – Workspace: Ensuring efficient space use, and ensuring that the space is highly productive. – Transport: Ensuring low-carbon, high-quality, safe and reliable access to and from the building. – Operations: Ensuring all Building Management Systems (BMS) are optimised, effective data capture for monitoring and continuous improvement (few buildings are right first time), effectively procured and monitored facilities management. – Construction: Ensuring that all of the above are adequately considered in early design — especially the issue of future building use and adaptation. FINANCING

ENERGY SUPPLY

OCCUPIERS

CONSTRUCTION TRANSPORT WORKSPACE

OPERATIONS

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4 How does one turn these areas into the best business opportunity? Marginal Abatement Cost Curves (MACC) is a simple tool we use to help visualise all of the variables in a simple structure. MAC curves compare the effectiveness (carbon saved) of a measure with its cost effectiveness. They are a way of representing a range of investment options that allow you to prioritise and make informed decisions about which measures to implement. They can be used when looking at a programme of improvements on an existing building or portfolio, or can be used to test different options on a new scheme. Features illustrated by the curve include: – Relative cost-effectiveness of measures. – Lifetime CO2e saved by each measure. – Likely scale of capital cost required to achieve a target carbon saving. – Lifetime financial payback. This becomes particularly powerful when you compare investment options between different properties in a portfolio. MAC curves help to answer the two key questions of carbon reduction: – What should I do first? – What is the business case?

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4 In summary, we need to move the industry beyond a checklist approach to low-carbon solutions. Instead, we need to think about the long-term (whole life) costs and benefits of different options to ensure these assets are viable, efficient, attractive and “sustainable” buildings well into the future. Davis Langdon and AECOM are part of the CarbonBuzz consortium developing a web-based tool that helps designers understand and tackle the issue of energy non-performance. www.carbonbuzz.org

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4 Development Management — Creating a bankable scheme Development management deals with the coordination and management of the property development process, in line with agreed stakeholder objectives which are defined at the outset, to help define development use or land enhancement, usually for profit and/or socioeconomic reasons. Its success of this lengthy process depends on the development manager’s skill and ability, to assess and guide the project as it progresses and changes over time. Development management considers the performance of a project when measured against key drivers, which vary from project to project. Examples common to all projects include risk, cost, time, quality and design. A project’s performance guides decisions relating to how investors can achieve their desired returns or whether other stakeholders could be interested in participating, such as a hotel operator, or retailer for example. This Middle East market still remains very challenging where revenues have declined and purchasers, tenants and retailers, demonstrate more caution before committing. Raising finance or investment for a developer and purchaser/tenant alike, is one of the biggest issues and the development manager helps address these concerns on behalf of the stakeholders, through their network of relationships. Enabling our clients to benefit from a full understanding of all factors affecting the financial performance of the project as well as driving the top team mentality across the client’s team in all that they promote, culminates the creation of a bankable project in the eyes of funders and investors to help drive development success. Development management is often too closely linked to the performance of the development appraisal itself, without considering broader issues, which in the current market, may actually support the viability of a project. However, whilst the appraisal is the most significant part of the process, the way in which the appraisal is informed is equally as important, whilst guiding the wider team through the stages in alignment with the overall development vision. Appropriate planning, starting with the end in mind, that links to the exit strategy for an investment, whether 48

4 short or long term, is key to success. Many developments are poorly planned and therefore destined for failure.

Development planning milestones These stages transform a vision into a viable project: 1. Initiation 2. Development concept and due diligence 3. Feasibility study 4. Planning and finance 5. Implementation and construction 6. Lease/operate and/or sale These stages often overlap to varying degrees and may have to be repeated until a decision can be made that is aligned to the investment criteria.

Developing a viable scheme If the fundamentals are covered at the outset of a project, this creates a strong foothold for developing a viable scheme. These include assembling the professional team, developing a high-level master programme, obtaining a cost model of construction rates on a gross floor area basis (developed as the design and appraisal progresses), commissioning a market study and establishing revenue streams. 49

4 To continue on the right track, the following should be considered throughout the development process: – Market demand and revenue streams — where are these coming from and who is the target market? – Establishing the best product/asset mix. – Operational and management structure for the asset life. – Establishing project key performance indicators (KPIs) for the development. Internal rates of return, discounted cash flow, net present value, yields and debt equity ratios should all be determined at the outset. KPIs will vary, depending on the performance of each asset and the revenue and construction inputs. – Finance and funding strategy — engage with institutions, explore latest lending costs and arrangement fees, identify which institutions are lending and investing in this type of asset. – Construction methodology — how will the asset be procured and constructed? – Sustainability in design and operational costs. – Developing a phasing and delivery programme which has realistic durations and income generation dates. – Generating a letting and sales programme and a date that delivers the product to the market, thereby meeting the projected absorption rates. – Establishing the legal costs associated with the development, including setting up of special purpose vehicles or specific investment options. – Finance-led design that is viable for the project — focusing on what the project can afford. – Capital values — establishing the true revenues and occupancy levels in order to ascertain the capital value. Running a range to test sensitivities of the development. – Development strategy — develop and hold or develop and exit (three, five, seven, ten years or longer). – Establishing management companies for long-term operation. – Setting in motion any pre-let activity in line with the long-term leasing strategy.

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4 Developing the appraisal The demand for property does not automatically exist. Before embarking on a project, an initial understanding of market demand is essential. Market research determines the initial mix and asset uses for a site. Market research also defines the end user’s requirements which form the basis of the development process, informing areas, quality standards and achievable revenues. Considerable skill lies in using this information to deliver the right product at the right cost and at the right time with an emphasis on: – Developing a project that will support economic growth and diversification. – Taking account of social and cultural responsibilities as well as commercial gains. – Identifying potential social economic impacts — job creation and community enhancement opportunities. – Stimulating long-term investment and growth. – Interconnectivity and a correctly positioned product that complements the existing or proposed wider developments. – Identifying utilities and transport strategies early, setting in motion the implementation to meet the proposed phasing plan. – Achieving cost-effective design, procurement and construction. – Establishing the status of other third party developments, thereby identifying competitors.

Davis Langdon’s expertise Davis Langdon has strong global relationships at all levels of the development supply chain, from financiers through to contractors and subsequently end users. This enables us to provide a holistic solution to development from business strategy through to operation of the final built product — an approach which has not yet been seen in the Middle East market. Our aim is to agree KPIs with clients which align with the fundamental success criteria for a particular project or programme, and form a business partner culture where we guide, inform and support, to ensure the right decisions are made at the right time and by the right people.

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4 With lowering returns across the region and a drive for quality from the end user, developers need to plan carefully before committing. Tight funding means they also need to understand the funding criteria required to support development, while acknowledging that a feasibility report is only theory, until actually delivered to the end user. We specialise in every commercial aspect of development, be it time, cost or quality related, helping to set and inform the feasibility through our vast experience of delivery. We bring global relationships with joint venture partners and funders to the table, and align their investment criteria with client KPIs where possible. Our robust teams work alongside “business partners” every step of the way, from the initial idea, through finance, delivery and operation to ensure the delivery of viable schemes.

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4 Infrastructure: An unprecedented demand Good quality infrastructure is widely recognised as a key contributor to the well being and growth in both the economic and social fabric of our nations, throughout the modern world. Over recent years, infrastructure has been the backbone of the global construction market accounting (on average) for just over 50 per cent of construction output in most countries around the world. The big question is, what does the landscape for infrastructure look like for the next decade or two?

The global construction market The global economic downturn of 2008 thrust infrastructure onto centre stage in the western world. Governments channelled unprecedented levels of investment towards infrastructure in the hope that their actions would act as an “economic stimulus” for much needed future growth. In the east and other parts of the globe, investment in infrastructure continued largely unabated by the problems experienced in the west as those nations looked to secure their own economic growth and social well-being, by putting in place the building blocks of well designed infrastructure, albeit in response to very different demands and drivers. Looking forward, estimates show that construction output will have grown by 70 per cent to US$12.7 trillion by 2020 and will account for 14.6 per cent of world output. Infrastructure is forecast to increase on average, as a proportion of the spend in some countries, to as much as 65 per cent of construction output. There is not a consistent picture across the globe. Unsurprisingly, as emerging markets such as China, Brazil and India become more significant in their share of the world economy, so does infrastructure’s share in the total construction output by climbing among those emerging markets. For developed markets in the west, infrastructure is more likely to experience a steady pace, or perhaps a modest decline.

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4 A forecast total of US$4.3 trillion will be spent on construction across the Middle East and North Africa over the next decade, representing growth of almost 80 per cent by 2020. Notably, Qatar will be the fastest growing construction market globally with planned growth accelerated by US$100-billion on rail, roads, water and other infrastructure, including preparations for hosting the 2022 FIFA World Cup.

Sustainable infrastructure As we look to the coming decades, there are perhaps four significant trends and challenges that are leading to an unprecedented level of demand for continued investment in sustainable infrastructure: – Urbanisation: Population growth, particularly the rapid rise in urban population growth, has led to forecasts that 70 per cent of the world’s population will live in cities by 2050, bringing significant challenges around energy and transport infrastructure. – Decarbonisation and energy security: As natural resources and deposits diminish, demand for and consumption of energy increases. The requirement for secure and sustainable sources of energy has never been greater. – Provision of water and sanitation for all: Approximately 20 per cent of the world’s population do not have access to clean drinking water and around 40 per cent lack basic sanitation provision. Water conservation is paramount. – Obsolescence: There are many examples around the world, predominantly in developed countries, where the existing infrastructure has gone beyond its useful life, or where the technological advances made in recent years have rendered the existing infrastructure obsolete. In such cases, there is a pressing demand for renewal — often in the face of restricted funding. What level of investment is required to respond to these trends and challenges? The Organisation for Economic Cooperation and Development (OECD) estimates that around US$2 trillion per annum needs to be spent on infrastructure globally over the next 20 years.

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4 Will budget constraints limit infrastructure in developed countries? 2011 has seen a switch in fiscal policy for many developed countries burdened by the financial crisis. Many of these countries have abandoned the stimulus funding packages and have adopted austerity measures as an alternative. The constraint on government spending is likely to last for a number of years, which results in a sharp contrast between developed countries and emerging markets. A number of the emerging markets are enjoying the levels of economic growth and population increase, putting demand on infrastructure for new capacity. However, there is still a basic “supply and demand” business case, which means that we are likely to see major infrastructure projects concentrated in the emerging markets and economies. Perhaps the challenge most commonly shared by both these developed and emerging markets, is the ability for governments to raise the capital required for new investments. There is perhaps, a unanimous agreement that governments need to be involved in infrastructure projects, whether it be on matters of policy, strategy, financing or implementation. Certain traits characterise most infrastructure projects. Lead times to project completion are long, costly and often require upfront expenditure long before any return on investment is seen. Cost benefit analysis is often difficult to assess on a typical “business case” or “development appraisal” basis, as the benefit is generally to the economy at large, and not only limited to a specific project. For most governments, raising finance is a challenge that will usually result in debt finance with income tax or user charges to fund the investment being raised. It is therefore not a surprise that an estimated 55 per cent of infrastructure projects are privately funded, using vehicles such as the Public Private Partnerships (PPP). Even less surprisingly given the current fiscal policies, governments around the globe are seeking to work in partnership with the private sector, to meet future infrastructure funding and project demands. This suggests that we will see an increase in popularity of privately-funded schemes that might use the PPP approach, or a variant to it.

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4 Driving better value solutions Much has been done to identify areas in which costs can be reduced and there are some common themes that can be applied around the globe: Function over form — We are likely to see the perennial debate of form versus function coming back to the fore. Buzz phrases like “more for less” are common amongst many governments and are all about better functionality from spend. The reality is that we need to acknowledge for the next period that the pendulum has definitely swung towards function, and we need to embrace that as an industry. Cost benefit analysis — To achieve better value, we need to focus on scope that drives real or tangible output and we need to set best practice measures and benchmarks on “output per US$ of spend.” The size and scope of an infrastructure project should be determined by its contribution to business or economic growth, or to tangible social well-being. We should make more use of the costbenefit ratio to allow informed decisions on prioritisation and value for money assessments. Greater efficiency in delivery — For greater efficiency in delivery, there are two key drivers to improvement. Firstly, we need to eliminate waste, gaps and conflict in the team. Too often we set up teams to work independently. We need a move towards integrated teams and consortiums. We are also going to see an increasing requirement for entire teams to put equity into special-purpose vehicles, greater use of incentivisation and pain/gain shares in contracts. The second point is about re-evaluating processes to take away unnecessary tasks and effort. The obvious area to streamline is the procurement. A whole life cost perspective — We need better alignment of “build” and “operational” requirements. We need to bring energy, carbon, capital expenditure and operational expenditure budgets and priorities in line at an early stage so that we can really drive whole-life cost down, reduce energy in use and improve value through the life of the project. Making use of technology — Invest in technologies, including Building Information Modelling (BIM) to improve efficiency in design, promote compatibility of design, enable interdependencies to be worked through at an earlier stage, allow for more accurate design to reduce waste and unnecessary space.

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4 A Middle East perspective The Middle East is not immune to such fiscal challenges. Despite the resource-rich economies of many of the GCC and neighbouring states, recent social and political events have had both a positive and negative impact on infrastructure investment plans. Around the region, governments are looking at large-scale investments in both physical and social infrastructure as a way of confirming their commitments to improving the quality of life for all of their citizens. In Saudi Arabia, an ambitious spending programme on both social and physical infrastructure has been announced across the country. Large-scale transportation, energy and utility projects have been identified, funded and their programmes, if anything, accelerated. Latest reports have put Qatar’s estimated infrastructure investment programme as part of its lead in to the FIFA World Cup in 2022, at US$100-billion. The programme encompasses every aspect of infrastructure delivery, from major sanitation, energy generation, utility and telecoms provision, to numerous transportation schemes. Many of these were seen as being instrumental to the Qataris successful bid to host the World Cup and an imperative for hosting a successful event. One of the most ambitious aspects of the programme is the establishment of an integrated railway comprising of long distance freight and passenger services, multiple metro lines and several light rail transit schemes. With around 10 years to design, construct, commission and implement many of these schemes, Qatar probably has one of the greatest infrastructure delivery challenges in the world. The UAE has continued to see a number of its major commercial, residential, cultural and leisure projects downsized or postponed. Infrastructure projects have not escaped this review but there remains a strong recognition of the requirement to push forward with the development of the nation, and the critical infrastructure to support future development, and long-term economic growth and diversification. Ambitious projects like the new National Rail Network — led by Etihad Rail — is a classic example of such a programme, with work due to commence in the near future. Oman and Bahrain have seen significant disturbances through the Arab Spring and this has led to a refocusing of efforts into public projects which are designed to have an 58

4 immediate meaningful impact on the nation’s less wealthy residents. It is no surprise that some of the first schemes announced by new ministers involved major new public transport initiatives, which will play a key part in achieving this outcome. Despite these challenges, GCC investment in infrastructure will continue by taking a more balanced view of function over form, greater focus on delivering measureable benefits through the life of the asset and greater emphasis on efficiency across the region. (1) (2)

Global Construction 2020

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4 Saudi Arabia: Social Infrastructure Development With the global downturn affecting construction markets in the Middle East, Saudi Arabia is seen by many as a potential panacea for shrinking order books and a large opportunity for the region. Davis Langdon has established offices in Saudi Arabia and offers an overview of the country’s market. Modern Saudi Arabia was formed in 1932, when Abdul Aziz bin Abdul Rahman Al Saud united different regions of the Arabian Peninsula into one nation. On 23 September 1932, he was proclaimed king. The current ruler, King Abdullah, became king after the death of King Fahd in 2005. Forming 80 per cent of the Gulf’s land mass, Saudi Arabia dwarfs its regional neighbours. The country is split into three main areas: the central region which is dominated by Riyadh, Saudi Arabia’s capital and commercial hub; the Western Province which houses the holy cities of Makkah and Madinah and the historic gateway city of Jeddah on the Red Sea coast; and the Eastern Province which is an industrial area but also houses the headquarters of Saudi Aramco in Dhahran. The Eastern Province is linked to neighbouring Bahrain by the 25 kilometre King Fahd causeway.

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4 In August 2010, the Saudi government announced a US$385-billion development fund for the following four years, its largest ever and 67 per cent greater than its investment in the previous four-year period. Most sectors are very active: Education Over half of the Saudi government’s US$38-billion development pot for 2010 to 2014 has been earmarked for human resources, with controversial plans to overhaul the Kingdom’s education system. There are 610 schools planned, costing US$40-billion. Healthcare The burgeoning population will require new healthcare facilities. There are currently 12 new hospital or health facilities planned costing US$18.6-billion, over and above the 120 hospitals that are currently under construction providing around 26,700 additional beds. Once completed, these facilities will provide significant business and job opportunities for the healthcare and medical sectors. Housing An estimated 250,000 to 300,000 homes are needed each year between now and 2014. Current high-end mega projects include many new projects; Emaar Properties’ 19,000-unit Jeddah Hills and Dar Al Arkan Real Estate’s US$13-billion, mixed-use residential, hotel and retail complex in Jeddah. With a million new homes needed in a few years, there could be opportunities for modular specialists at the affordable end of the market. Industrial Industrial developments are seen as the key to the country’s economic diversification. According to MODON, the Saudi Industrial Property Authority, 75 square metres of land will be developed on industrial estates between 2010 and 2015. Hotels A healthy sector due to the government’s strategy of increasing tourism in the Kingdom and the influx of foreign firms whose expat workers require accommodation. Airports The airport sector is already busy, with projects at every stage from feasibility through to construction. The General Authority of Civil Aviation has said that it will spend between US$10-billion and US$20-billion on developing and upgrading airports by 2020, with the private sector expected to chip in up to US$10-billion. 61

4 Ports The Saudi Ports Authority recently announced that the Kingdom is envisaging an investment of US$8-billion on modernising and equipping all of its ports, with more investment hopefully forthcoming from private investors. Rail Huge plans to create new links within Saudi Arabia and with neighbouring countries include the Haramain Railway, a high-speed line linking Medina, Mecca, Jeddah and King Abdullah Economic City, the North-South railway and the Land Bridge. The drive for development stems predominantly from Saudi’s current youthful demographic profile. The oil boom in the 1970s allowed significant investment in social infrastructure and medical facilities which resulted in rapid population growth during this period. Top proven world oil reserves at January 2010 Rank Country (bbl) 1 Saudi Arabia 262,600,000,000 2 Venezuela 211,200,000,000 3

Canada

175,200,000,000

4

Iran

137,000,000,000

5

Iraq

115,000,000,000

6

Kuwait

104,000,000,000

7

United Arab Emirates

97,800,000,000

8

Russia

60,000,000,000

9

Libya

46,420,000,000

10

Nigeria

37,200,000,000

11

Kazakhstan

30,000,000,000

12

Qatar

25,380,000,000

13

United States

20,680,000,000

14

China

20,350,000,000

15

Brazil

12,860,000,000

16

Algeria

12,200,000,000

17

Mexico

10,420,000,000

18

Angola

9,500,000,000

19

Azerbaijan

7,000,000,000

20

Ecuador

6,510,000,000

Source: Central Intelligence Agency (CIA) Country Comparison Oil proved reserves

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4 The current population is reportedly growing at 2.5 per cent per year, resulting in a potential doubling in the next 28 years if the current growth rate is sustained. 40 per cent of Saudi nationals are under 20 years of age and 70 per cent are under 30 years of age. These people will want an education, a career and a home to live in and potentially own. Some estimates calculate a demand for double the number of current homes over the next 15 years — estimated at nine million new homes. The drive to build homes will be boosted further when mortgages are allowed for the first time, under a new law coming into effect shortly. Saudi Arabia population forecast Nationality:

Saudi Arabian or Saudi.

Population (July 2011 est.):

26.1 million (20.5 million Saudis, 5.6 million foreign nationals).

Annual population growth rate (2011 est.):

1.536%.

Ethnic groups:

Arab (90% of native pop.), Afro-Asian (10% of native pop.).

Religion:

Islam.

Language:

Arabic (official).

Education:

Literacy-total 78.8% (male 84.7%, female 70.8%).

Health:

Infant mortality rate (2011 est.) 16.16 deaths/1,000 live births. Life expectancy: male 72 years, female 76 years.

Work force:

7.3 million, about 80% foreign workers (2010 est.); industry 21.4%; services (including government) 71.9%; agriculture 6.7%.

Various economic cities are underway, as follows: King Abdullah Economic City, Rabigh (US$27-billion to US$50-billion) If the government’s plans are realised, when completed in 2025 this vast new city 130 kilometres south of Jeddah will be the size of Washington, D.C., 168 square metres. Authorities hope it will provide a million jobs and host a population of 2 million people. The seaport, which will be the biggest in the region, and huge industrial park are the key to attracting private investment, which has been slow to materialise. It will also boast waterfront resort areas and a central business district.

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4 Jazan Economic City (JEC), Jazan (US$27-billion to US$30billion) In a remote area in the southwest corner of Saudi near Yemen, 725 kilometres south of Jeddah, on the Red Sea, Jazan (often referred to as “Jizan”) is one of the country’s poorest cities, with little industry and high unemployment. Jazan Economic City (JEC) hopes to secure 100,000 jobs and a population of 300,000. With two-thirds of Jazan Economic City’s 100 square metres area earmarked for industry, one of its biggest selling points to date is that it has secured the government-run oil company Saudi Aramco which is going to build a US$7-billion refinery there. Malaysian engineering group Malaysia Mining Corporation (MMC) and the Saudi Binladin Group (SBG) won a 30-year contract in late 2006 to develop JEC and attracted US$26billion in investments from Saudi, Chinese and Malaysian firms, though details were not given. Ground broke for basic infrastructure in 2009. Reuters reported June 2010 that the government had allocated US$1.6-billion to build 6,000 homes for people displaced from the border area after a two-month conflict with Yemen Shi’ite rebels. Knowledge Economic City, Medina (US$7-billion) Situated in the second most holy city of Saudi, the focus for Knowledge Economic City, launched June 2006, is meant to be residential and religious tourism combined with knowledge-based industry such as IT, health and education. The 4.8 square metres city aims to create 20,000 jobs and be home to 50,000 people. The first phase will see the development of villas and apartments, schools and colleges, museums, hotel and retail space. It is worth noting that only Muslims can work in Medina. In the continued worldwide downturn, Saudi Arabia offers huge opportunities as it forges ahead with its social infrastructure developments.

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4 Hosting Global Sporting Events In December 2010 it was announced that Qatar will host the 2022 FIFA World Cup. Five candidates presented their bids to stage the 2022 edition of the world’s greatest sporting event, with Qatar being successful, making it the first Arab state in history to host the World Cup. More recently it has been publicised that Qatar has also bid to host the Olympic and Paralympic Games in 2020. This article explores the impact of hosting a global event and looks at challenges faced in hosting such events in the Middle East.

Global event legacy While winning the right to host global sporting events such as the Olympic and Paralympic Games and World Cups stirs a great deal of national pride, another equally important outcome is the long-term benefits that the hosts can enjoy. Global events can be a springboard for regeneration and development and have the potential to enrich a nation both economically and socially. There is a delicate balance though which rests in the sustainability of the economic and social development of the host nation at the conclusion of the event. The 1992 Barcelona Olympic Games, for example, were the catalyst for major urban regeneration. Barcelona witnessed frantic building activity as a result of the Olympic candidature, with an increase in the housing and land prices, and a huge urban transformation that entailed the conversion of a considerable amount of industrial land into service or housing plots. The spotlight is currently on the masterplan for the London 2012 Olympic Games which includes the regeneration of the East of London. As one of the most disadvantaged areas of the English capital, it will benefit immensely from hosting the 2012 Olympic Village and the bulk of the competitions. The facilities and venues have not been designed as an enclave, but as a normal piece of the city and after the games they are planning to create opportunities for education, cultural development, training and jobs. However, not all host nations have experienced a positive outcome after such events. In 2004 more than £9-billion was spent to bring the 2004 Olympic Games “home” to Athens, yet today the majority of venues lie unused and 65

4 falling into disrepair. Cash was spent with abandon, and the price is still being paid. Greece did not plan for the post Olympics.

Testing long-term viability There is obvious excitement following Qatar’s selection to host 2022 FIFA World Cup, but those tasked with delivering the event must test the long-term viability of each programme and question: – How does the vision for the event investment correspond with Qatar’s long-term needs and objectives? – Which financing models best apply? – How will it be sustainable — environmentally, economically and socially? – What is the real legacy? – What are the projected whole life costs? – How will procurement occur? – What kind of governance should be put in place? To bid to host the 2020 Olympic and Paralympic Games, applicant cities have to formally apply to the International Olympic Committee (IOC). The bidding and award process lasts for two years and, during that time, Qatar will need to prepare its bid book and consider: – How to best score against the IOC’s evaluation criteria. – What impact hosting the 2020 Olympic and Paralympic Games would have on hosting 2022 FIFA World Cup in terms of location of venues and non-competition venues, transport and energy infrastructure, scheduling of construction works, logistics of ensuring enough labour, materials and major plant is available for both programmes, governance and political considerations. – How to integrate 2020 Olympic and Paralympic Games into Qatar’s National Vision 2030.

Global events in the Middle East Whilst many outside the region consider the 2022 FIFA World Cup in Qatar to be the first global sporting event held in the Middle East, the region has a rich history of hosting major events.

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4 Qatar hosted the 15th Asian Games in 2006 — recognised by the IOC as the world’s second largest event behind the Olympics — following Tehran for the Middle East in 1974. Abu Dhabi in the UAE hosted the FIFA Club World Cup in 2009 and 2010. The Asian Football Confederation (AFC) Asian Cup has been hosted by Qatar, Iran, Kuwait, UAE, Lebanon and most recently Qatar again in January 2011. In addition, Bahrain and Abu Dhabi in the UAE have been hosting the FIA Formula 1 Grand Prix since 2004 and 2009 respectively. That said, the FIFA World Cup in 2022 will be a truly huge event, larger than any other in the region to date. The World Cup is the most prestigious sporting competition in the world. His Highness Sheikh Hamad bin Khalifa Al Thani, the Emir, has set out his vision for Qatar that goes far beyond the hosting of this major event and includes an ambitious capital investment. Qatar is “flying the flag” for the Arab nations that will enhance its reputation and globally create a true insight into the culture of the Middle East. A reported US$64-billion is going to be invested of which around US$5-billion is related to the stadiums and training sites, indicating the immense expenditure required on infrastructure.

Use of facilities after a major event Major events are often blighted by poor post tournament use (under-use) of the venues. It is essential that the legacy plan, business and design factors are agreed at the time the vision is produced. A strong legacy can be achieved by ensuring a successful club or organisation takes residence post event. One of the most successful examples of this was the conversion of the City of Manchester Stadium (now Etihad Stadium) from Commonwealth Games athletic mode, into football mode, with Manchester City Football Club as the main tenant. An athletics legacy has been maintained by the use of the warm up track with circa 5,000 capacity, and the area has been regenerated with a well used and frequently populated sports city at its heart. In terms of Qatar’s legacy, one of the main objectives is to develop academies for training and education. Many of the facilities will be targeted at this market in the long-term, as well as serving to boost local sporting capabilities. However where there is a lack of demand after the event in Qatar, the legacy plan includes demountable stadiums that can be 67

4 fully or partly dismantled, and used elsewhere in the world for a variety of purposes. Legacy also needs to consider the wider community and that is where master planning for a socially and economically sustainable future is crucial. London is confident it will achieve this through its 2012 Olympic masterplan.

Our sector expertise Davis Langdon’s sports and venues specialist group offers an international team who have been involved in the delivery of a number of high-profile global sporting events in the Middle East. These include recent and future Commonwealth and Olympic Games and football World Cups.

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4 Kuwait: Infrastructure in motion Kuwait is in the process of reforming. The country’s four-year National Development Plan (NDP), endorsed by the National Assembly in 2010, focuses on developing the non-hydrocarbon sector, including plans to overhaul infrastructure, boost private sector activity and reduce dependence on oil. With liberal economic policies and openness to international investment, Kuwait aims to become a regional hub for transport and services. Against this background, the Kuwaiti construction market presents our business with genuine opportunities for engagement in a diverse range of sectors.

Implementing a national vision Hit by the Iraqi invasion in 1990/91, another conflict in Iraq from 2003, and the 2008/09 global financial and economic crisis, Kuwait has not had the best of fortunes in the past two decades. 2011 marks a double anniversary for Kuwait — 50 years since its emergence as an independent country, and 20 years since liberation from the Iraqi invasion. This year may also prove a major turning point for the Kuwaiti economy and its construction sector.

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4 Today, Kuwait is heavily reliant on its oil revenues and whilst the importance of hydrocarbons will certainly not diminish in the years ahead, the government sees economic diversification as a matter of national importance, crucial for setting the stage for Kuwait’s long-term growth. Against this background, the Kuwaiti parliament in February 2010 approved one of the most ambitious reform and development plans in the Middle East. The NDP 2014 is part of Vision Kuwait 2035, which aims to transform Kuwait into a regional finance and transport hub — a logical aspiration given Kuwait’s strategic location at the head of the Gulf. The NDP 2014 sets out investments across oil and non-oil sectors, including energy, transport, housing, healthcare and education, with a spending total of US$105-125-billion. One of the main elements of the NDP 2014 is to boost private sector activity, primarily through various reforms and incentives to stimulate private investment. Half of the planned investments are anticipated to come from the private sector either as direct investments through build, operate and transfer (BOT) schemes, or Public Private Partnerships (PPP). On the hydrocarbon side, Kuwait Petroleum Corporation (KPC) plans to spend some US$340-billion on upstream and downstream projects over the coming two decades, which will breathe new life into the industry, creating fresh opportunities for investment. Kuwait’s energy and power generation sectors provide significant opportunities, given strong energy demand, growth and historic underinvestment. Capital investments in the past have been hindered by bureaucracy and political stalling over privatisation, however, a new set of laws are intended to boost the flow of private schemes, by making it obligatory for all power schemes larger than 500 mega watts, to be developed as Independent Water and Power Projects (IWPPs). Kuwait’s location at the head of the Gulf provides a natural advantage to serve as a regional transport hub, despite neighbouring countries heavily investing in their transport and logistics infrastructure over the past years. The National Transport masterplan maps investment requirements until 2035, within which the NDP 2014 sets out more than US$23-billion to improve Kuwait’s transport infrastructure. Boubyan, Kuwait’s largest island, is located in the northeastern part of the country and is separated from the mainland by the Subbiya Channel. The Boubyan Seaport 70

4 Project is one of the most important projects in the plan and will be the Northern Gulf’s largest port. Apart from the port itself, infrastructure projects include the construction of a highway linking the port on Boubyan Island with the Subiyan-Iraq road on Kuwait’s mainland, and the construction of a railway line to the north of the highway. One of the most important projects is the ongoing expansion of Kuwait International Airport (KIA), by expanding the airport terminal capacity from six million passengers per annum, to 20 million passengers per annum by 2030, turning KIA into a major regional passenger and cargo hub. Another key infrastructure development is the expansion of the road and rail network, and the implementation of a mass transport system. The proposed US$7-billion for Kuwait City Metro is fundamental to the country’s transport plans. The metro will comprise of four lines, each of which will be tendered as a separate PPP contract. Rail plans include the US$10-billion national railway network that will eventually form a section of the Gulf Co-operation Council (GCC) railway network. Housing is another major focus of the NDP. Local demand for housing is driven by the constitutional right of Kuwaiti nationals to receive housing when they marry. Kuwait’s public authority for housing welfare has a waiting list of 100,000 housing applicants, and a further 65,000 applications are expected by 2014/15. To deal with this, the housing authority is implementing a US$8.6-billion plan to build and allocate between 50,000-75,000 residential housing units by 2015. Kuwait has a substantial higher education building programme, with some US$5-billion of university building projects being planned or under construction. The programme is centred on the US$3-billion Sabah al-Salem University at Shadadiyah, 20 kilometres west of Kuwait city. Meanwhile, the healthcare sector is focusing on new hospital construction. The healthcare development plan sets out construction of eight public hospitals by 2016 and investments are planned in medical facilities and health centres. Whilst the investment plan creates exciting opportunities for the construction supply chain, there are some concerns regarding Kuwait’s capacity to meet ambitious goals. Kuwait‘s construction sector is still small by regional standards, accounting for just 2 per cent of GDP. This compares to approximately 9 per cent of GDP in the UAE,

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4 5.2 per cent in Qatar or 4.4 per cent in Saudi Arabia. Historically, construction growth has been hindered by political deadlock, particularly between the executive and parliament, which has held up many public projects, and bureaucratic red tape resulting in significant delays to the procurement and execution of projects. More recently, private sector companies have struggled to allocate required funding for projects as banks are unwilling to finance them.

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4 However, the political willingness to push through the programme is evident with approval of new legislation, to help the private sector attract foreign investment, including a privatisation law and capital markets and labour law. The Partnerships Technical Bureau (PTB) — a new governing body — has the mandate to promote build operate transfer (BOT) and PPP schemes. The PTB identifies priority projects and aims to boost private sector involvement. There are currently over 30 PPP projects being developed under the PTB in Kuwait, with the most significance in the Middle East. Already in 2010, the PTB has had a catalytic impact on construction activity, providing greater impetus for projects by speeding up the bidding process.

Our history and future involvement Davis Langdon has maintained a time-honoured relationship with the Kuwait market, originally founding an office within the country during the 1980s. Following the events that occurred during the early 1990’s and more recently in neighbouring Iraq in 2003, we have re-established a local presence within the country in support of our global reach, local delivery strategy, through provision of comprehensive consultancy services throughout the Middle East. Commitment is critical when developing successful business relations in Kuwait and we as a company are demonstrating our commitment to Kuwait by achieving our ambition to become “partners of choice.”

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74

5 Expand and empower the energy sector

8 Improve dynamics of the labour market

11 Protect the environment and fostering green development

4 Promote a sound and sustainable fiscal position

7 Develop a niche financial centre

10 Build a stronger healthcare system

Policy Targets

Political system

2 Improve access to land

People

1 Reduce red tape

Economy

5 Pillars

International positioning

12 Build a cultural haven, promoting leisure, sport and media

9 Upgrade the education system

6 Regional transport centre

3 Create fair and equal opportunities in the market

Cultural environment

“Transforming Kuwait into a financial and trading hub for investment, in which private sector leads economic activity fuelled by the spirit of competition, and raising the efficiency of production under a supporting institutional State agency, establishes value, preserves the social identity, achieves balanced human development and provides appropriate infrastructure, improved legislation and encourages business development.”

Kuwait Vision 2035

4

5

REFERENCE ARTICLES

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5 PROCUREMENT ROUTES Most clients and construction professionals can name at least one project that failed to be delivered on time, to budget, or to the quality levels expected. All clients embark upon their developments expecting them to be built to an established quality level with the risk rightly managed by their professional and contracting team. In reality though, which other multi-million or, in terms of the Middle East, multi-billion dollar business goes from having no staff or expenditure, to the final delivery of a unique product as quickly as the construction industry? This is why identifying the right procurement process, systems and approach is fundamental to achieving the development goals set by clients. To use a simple analogy — a new model of car priced in the market at US$50,000, will have gone through a significant amount of planning, refining and design very early in the development process, the cost of which will be in excess of the US$50,000 asking price. Within the construction industry, the luxury of rolling out thousands of the same structure in advance of the final version does not exist, which is why it is crucial that construction professionals seek to understand and define what made a project successful. In doing this, we can all come to understand which procurement methods should be followed and why it is important to consider the structure and process for delivery right from the outset of the development. Over its significant history, Davis Langdon has developed procurement strategies for the delivery of buildings that we know work and provide successful outcomes to achieving client expectations. New and existing developers have the opportunity to learn from this knowledge and maximise the value from their time, cost and quality mix, whilst adhering to a process that increases the likelihood of their building being successfully procured. Studies conducted with our key clients who regularly undertake development work, identify that buildings can be delivered for 12-15 per cent less cost when procured correctly, with no impact on quality or time. Another finding relating to correct procurement was that buildings are also more likely to be completed on time and meet quality expectations.

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5 Finding the right procurement approach Which funding strategy, funding partner, team behaviours, attitudes, communication channels, budget and programme delivers the best approach and how can we best combine these to lead clients to ultimate success? Davis Langdon offers important early advice to help determine the correct procurement approach that will add the most value throughout the building process. This considered understanding of our clients’ time, cost and quality requirements, assists us greatly in maximising the value that we bring. Several procurement strategies that are regularly adopted are listed below, but the real challenge is mixing the right approach to an individual client’s requirements. – Traditional lump sum: The entire building design, produced by the client’s consultants, is completed prior to the appointment of a contractor. The contractor commits to a lump sum price and a completion date for the final design prior to appointment. The contractor assumes responsibility for all financial and programming risks whilst carrying out the construction, and the client takes responsibility by accepting the risk for the quality of the design and the design team’s performance. – Accelerated traditional: As above, but procured in the market place before the design is fully complete (normally 80-85 per cent designed), leaving simple elements of the building to be procured once the contractor has been appointed. It is important to understand the way in which a client procures the remaining elements of work under this approach and to design out those areas that carry inherent risk early in the process. It may also involve the procurement of an early works package for enabling and/or piling works. – Two-stage: A contractor is invited to become part of the project team right at the outset of the design process, usually by way of a pre-construction fee. The team designs and procures the project on behalf of the client, until such time that a second stage lump sum offer can be agreed, which should be prior to construction starting on site. An understanding of the original appointment and the subsequent framework under which the second stage is agreed are the important aspects of this approach. – Design and build: Detailed design and construction are both undertaken by a single contractor in return for a lump sum price. Where a concept design is prepared 78

5 by a design team employed directly by the client before the contractor is appointed (as is fairly common), the strategy is called develop and construct. The contractor commits to a fixed price for completing the design and the construction by a given date, prior to his appointment. The contractor can either use the client’s design team (if the develop and construct strategy has been adopted) to complete the design or use his own team. With design and build, it is important to design out or specify in detail those parts of the building the client wants to see perform a particular function or provide a certain visual impact. – Management contract: A contractor is appointed early to tender and let elements of work progress by trade or package contracts. The contracts are between the management contractor and the trade contractors, rather than between the client and sub-contractors. The management contractor in theory assumes responsibility for the financial (and programme) risks for the works, but in reality this is normally diluted by the terms of the contract, so his liability is similar to that of a construction manager. – Design, manage and construct: Similar to the management contract, with the contractor also being responsible for the production of the detailed design or for managing the detailed design process. – Private finance initiative: A detailed and complicated form of procurement used predominantly for public services when the private sector feels it is advantageous to design, build, finance and operate a particular service or building type. It is becoming more popular in the Middle East as a way to limit public sector spending whilst meeting the demands of a growing population. Davis Langdon has been involved with private finance for over 20 years, successfully completing many projects worldwide and using this global knowledge to benefit clients locally. – Engineer, procure, construct or turnkey: This form of procurement places risk in the hands of an engineer, procure and construct (EPC) or turnkey contractors who offer a complete design, procurement and construction solution to a client. In theory, the client’s role is to “turn the key” of the building and begin operation. Many of the large utility companies procure work in this way, bringing high levels of certainty from the supply chain helping to achieve critical benefits over the long-term.

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5 MIDDLE EAST FORMS OF CONTRACT This article considers the different forms of contract used in construction across the region.

Bahrain Government work in Bahrain is undertaken using a bespoke suite of contract forms which were issued in 2009. Private developers predominantly use the current FIDIC Conditions of Contract for Construction, the 1999 edition of the “red book,” which is well understood in the local market but often heavily amended for specific use. Most of the work completed in Bahrain is under a traditional lump sum form of contract, where the design is completed upfront and a price agreed with a contractor before work begins on site. However, many of the new developments are looking at faster procurement routes to adapt to market difficulties that are prevalent within the Middle East. Progress is slow as Bahrain has a limited number of contractors with the capacity and capability to undertake large-scale projects. Historically it has been difficult for new contractors to enter the Bahrain market. Design and build and two-stage procurement are in use across the Kingdom but are not considered to be the industry norm. As more international private developers have started working in Bahrain with time constraints as their main driver, the market has adjusted to accommodate this demand. Design and build contracts, however, are not routine. This is largely due to the Committee for Organising Engineering Professional Practice (COEPP) restrictions on contractors undertaking in-house design which necessitates the novation of the client’s architect or a subconsultant appointment.

Lebanon Construction contracts in Lebanon are generally based upon the International Federation of Consulting Engineers (FIDIC) forms of contract. Some large-scale developers in Lebanon, as well as the Lebanese Government, have promoted the development and use of bespoke forms of contract, tailored to each client. Such contracts generally use the FIDIC 4 “red book” form as a basis, amended to a greater or lesser degree depending upon the risk profile of each client.

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5 In the public sector, all works are procured on a remeasurement basis. The private sector, however, uses either fixed price lump sum or re-measured contracts. It is worth noting that there is no standard method of measurement of building works for Lebanon and the RICS Principles of Measurement (International) for Works of Construction (POMI) is widely used. Design and build contracts are not yet popular in Lebanon. Both arbitration and litigation methods are available for dispute resolutions in the private and public sectors.

Oman Public works in Oman are undertaken using a bespoke government contract known as the Standard Documents for Building and Civil Engineering Works, 4th edition, 1999. The document is based on early FIDIC contracts with the 4th edition containing only minor changes from the previous 3rd edition, 1981. The most important change is that the contract is now printed in Arabic. The Ministry of Legal Affairs is in the process of preparing a new edition but its launch date is yet to be published. The Standard Document facilitates both a re-measurement and lump sum contract dependant on choice of clauses, and is based upon a fully completed design, specification and bill of quantities. The RICS Principles of Measurement (International) are the most widely used method of measurement. Infrastructure projects have their own method of measurement, as detailed within the Ministry of Transport and Communications document, Highway Design Standards. Oman Tender Board laws require all government projects to utilise the Standard Documents on every project, without amendment. The only current exception to this law is the new Muscat International Airport project which has been let on a series of heavily amended FIDIC “yellow book” design and build contracts. In addition, the Tender Board facilitates all government tenders, centrally, through the tender board process. Only Royal Office and Royal Court of Affairs projects are exempt from this process although they do go through a similar internal tender process. Standard Documents are commonly used by private sector clients in the local market, particularly for small-to81

5 medium sized contracts. Private clients tend to prefer the 3rd edition, as this is written in English, but varies only in a minor way from the Arabic 4th edition — preferred by the government ministries. International and private sector clients with large project contracts, US$150 million-plus, commonly use an amended version of the FIDIC “red book.” Whilst some of the larger integrated tourism developments have used a design build form of contract, design and build as a procurement route is not routinely used.

Qatar In Qatar, the most common forms for building works are those issued by the Public Works departments through the Ministry of Municipal Affairs and Agriculture (MMAA) and the Qatar Petroleum Company (QP). These are lump sum contracts, generally using bills of quantities or specifications and drawings. These contracts are onerous and slanted towards the client, but are usually administered in a reasonable manner. In the private sector, similar contractual arrangements are adopted. However, there are now some construction projects being let using cost plus or design and build arrangements, although these are usually for smaller scale fitting out or highly specialist works. The last 12 months has seen an increase in the number of FIDIC-based contracts being implemented for both private and key public sector clients. In addition, in some very long duration contracts, the government is beginning to introduce a price adjustment mechanism to allow compensation for fluctuations in market prices. Before any contract is awarded, there are commonly a number of rounds of negotiation, during which the price and other contractual terms can be modified to respond to a reduction in contract price.

Saudi Arabia Construction contracts in the private sector are generally based on FIDIC forms of contract and are amended to suit the particular conditions for each project. Employers prefer lump sum versus re-measured contracts, and normally exercise great control in the administration of the construction process by imposing various restrictions on the engineer’s (consultant) authorities under the contract. All contracts are subject to Saudi Arabian laws where Islamic Sharia is the prime source of legislation. 82

5 Litigation and arbitration are both available for resolution of disputes in the private sector. Within the public sector, however, construction contracts are based on the Standard Conditions for Public Works, which are amended to suit particular projects. These conditions are generally based on those given in the FIDIC Conditions of Contract for Works of Civil Engineering Construction, but with greater control given to the employer for the administration of the contract. All public work contracts are let on re-measured basis and subject to the Saudi Government Tendering and Procurement Regulations, as issued by Royal Decree M/58 dated 4.7.1427 AH. Disputes are referred to the Grievance Board and will not be dealt with under arbitration, unless a Special Council of Ministers Resolution is issued.

UAE Construction contracts in the UAE are predominantly based upon the FIDIC forms of contract. The growing number of large-scale developers and major repeat clients in the region has led to the development of bespoke forms of contract, tailored to each individual client. Such contracts generally use the FIDIC 4 “red book” form as a basis, amended to a greater or lesser degree depending upon the risk profile of each client. This also applies to works procured by Dubai Municipality. Abu Dhabi Municipality, however, bases its contract on a modified FIDIC 3 form, taken from the 3rd edition of the FIDIC Conditions of Contract for Works of Civil Engineering Construction. Contracts based on the 1999 “red book” are now starting to be used in the UAE, but in general the market remains firmly rooted in the FIDIC 4 form. Civil works contracts within the UAE are mostly procured on a re-measurable basis, whereas building works will generally be based on a fixed price lump sum. However, there are exceptions. More and more clients are procuring projects using a fast-track approach and will therefore incorporate a re-measurable element, reflecting those parts of the design which are incomplete at tender stage. Design and build contracts are used on some major projects, but this procurement route is not yet commonplace. 83

5 The increasing tendency for clients to demand a fast-track approach to projects does require a greater design input from the contractor, but this requirement is not always formalised in the contract wording itself.

84

5 BUILDING REGULATIONS AND COMPLIANCE This article outlines the procedures for obtaining building permission across the region.

Bahrain Procuring a municipal building permit in Bahrain is done through a three-stage process: Stage 1: Seeking the preliminary building permit This is preliminary permission sought from the Municipality of Bahrain. To complete the application, it is generally sufficient to include a simple outline plan or cross-section to indicate overall heights and an area statement. The main authorities involved at this stage are the municipality, the Physical Planning Directorate and the Roads Directorate. Stage 2: Informing the various Directorates This should be done in writing to the Town & Village Planning Directorate, Roads Directorate, the Civil Defence and Fire Services Directorate, the Electricity Distribution Directorate (EDD), EDD Damage Protection and Control Unit, the Sanitary Engineering Operations and Maintenance Directorate, the Water Distribution Directorate and Batelco. The initial contact should be made through the Central Planning Office (CPO) of the Ministry of Works. Copies of the title deeds must be submitted at this stage. All relevant information and documentation is given to each of the above directorates, until the final building permit is in hand. Stage 3: Obtaining the final municipal building permit This is the third and last stage and is processed through each of the directorates in specific sequence. All documents, drawings and municipality forms must be filled in and submitted together with the appropriate fees for each directorate. Municipal charges must be paid for the following elements: 1. Site sign board. 2. Insurance on the site sign board. 85

5 3. Insurance for Construction Contract (refundable). 4. Fee for occupying road. If the Environmental Affairs Department is involved in the process, they will charge a reviewing fee.

Lebanon Obtaining a building permit in Lebanon requires various procedures and approvals from the Order of Engineers and Architects, the Urban Planning (Development) Department, statutory authorities and the local municipality. The time needed to obtain these approvals is typically between six and twelve months. In general, the procedures and documents required for obtaining a building permit are the same throughout Lebanon, except for the cities of Beirut and Tripoli where the Urban Development Department is located within the individual municipality. The following is a general outline of the steps needed to obtain a building permit: Stage 1: Obtaining “Ifadat Takhteet Wa Tasneef” The following documents must be submitted to the Urban Planning (Development) Department: 1. Real Estate Registry (Ifedeh Ikarieh) from the Real Estate Department in each Mohafaza. 2. Official Land Survey (Kharitet Masaha) from the Cadastre Department. 3. Receipt “Wasel Takhteet Wa Irtifak” from the municipality. Stage 2: Appointing a registered civil engineer or an architect from the Order of Engineers and Architects to finish the permit file The engineer must submit the following documents: 1. Three copies of the contract agreement between the owner and the appointed engineer. 2. Four copies of the preliminary design drawings. 3. A written undertaking from the appointed engineer to submit the execution drawings. 4. A contract with other engineers involved in the project. Following no objection from the Order of Engineers and Architects, the appointed engineer or the owner must pay them the building permit fees to enable them to

86

5 present the building permit file to the Urban Planning (Development) Department. Stage 3: Appointing a Chartered Land Surveyor to prepare a topographic drawing of the land The appointed Chartered Land Surveyor must prepare a topographic drawing of the land illustrating the different levels of the plot and register this at the Syndicate of Land Surveyors. Stage 4: Submitting the building permit file to the Order of Engineers and Architects for their approval The appointed engineer must submit an application which includes a copy of the building permit file for power connection to Electricité du Liban (EDL) and for other statutory authorities depending on the region in which the building is located. Stage 5: Study of building permit file 1. Submit and register the full building permit file to the Urban Planning (Development) Department. They will inspect the property and plans to ensure they conform to construction laws and regulations and then issue clearance for the building permit. 2. The Urban Planning Department calculates the building permit taxes depending on the area of the building and the region in which this building is located. 3. On approval by the Urban Planning (Development) Department, part of the calculated building taxes need to be paid to the Order of Engineers. The building permit file is withdrawn from the Urban Planning Department and registered at the municipality. 4. On approval of the buildingpermit by the mayor, the owner shall pay the building permit taxes to the municipality and the Ministry of Finance. Stage 6: Obtaining the building permit The applicant collects the building permit from the municipality. The appointed engineer is allowed to apply at the Order of Engineers and Architects for a letter of commencement of works following the submission of the execution file.

87

5 Oman The following is a general outline of the procedure for obtaining a building permit in the Sultanate of Oman but there are many further obligations and procedures to be completed within each of the stages. It is generally the responsibility of the lead consultant to obtain the building permit, although all applications must be signed off and submitted by locally registered consultants. Stage 1: Submitting concept design/master plan stage application The applicant submits a Concept Design/Master Plan application to the Ministry of Housing - Directorate General of Planning for approval of the proposed usage. At the same time utility requirements are identified and indicated to the relevant utility providers. If the project is tourism related, further approvals are required from the Ministry of Tourism and the Supreme Committee for Town Planning. Stage 2: Obtaining No Objection Certificates (NOCs) No Objection Certificates are obtained from various governmental and municipal departments, including, Royal Oman Police, Security Department, Traffic Department and Civil Defence, Ministry of Environment, Municipality Road Department, Ministry of Transport & Communications, Civil Aviation, and many more project-specific ministry departments, e.g. Ministry of Education if the project is a school or university. Stage 3: Submitting a building permit application The full building permit application, including all NOCs, is submitted to the relevant municipality or statutory authority. Stage 4: Obtaining building occupancy certificate Upon completion of the building works, it is the responsibility of the construction contractor or lead consultant to obtain the occupancy permit. This is achieved by having the building permit signed off, effectively closing it out. To obtain this closure, the contractor must obtain certificates and signatures from various government departments, including Civil Defence, Food and Hygiene, etc, prior to presenting these to the municipality or statutory authority for final approval.

88

5 Qatar Compared with many countries, the planning and building approval process in Qatar is relatively clear and structured. Land ownership, other than by Qatari nationals and the state, is still extremely limited. The key process in securing development rights is obtaining a land title or “pin” number; since without it all other permits and applications cannot be commenced. Once the land is secured, the project masterplan is submitted for approval to the planning department and local municipality offices. Stage 1: DC1 approval General overviews and strategies for the utilities and primary infrastructure are submitted to the relevant utility companies for comment. During this process each department usually issues a series of reference numbers which are then used as the file number for all future submissions. The culmination of this round of submissions is the DC1 approval. Stage 2: DC2 approval As the design develops, a second round of submissions is made to the same utility departments for final approval. In addition, a submission is made to the Civil Defence department who reviews the fire and life safety aspects of the project. Depending upon the scale and nature of the project, separate traffic studies may be required and these would be submitted to the Road Affairs Department for approval. Stage 3: Building permit Once the DC2 approval is secured, a further set of standard forms are circulated with a consolidated set of documents for final signing and approval. These documents constitute the building permit. As a general guide, the whole process usually takes at least 80 days, depending upon the quality of the submission, although in practice it often takes much longer due to comments from different departments and progressive design revisions. During the whole of this process, it is not advisable to revise or modify any submission as it may delay the approval process.

89

5 All submissions have to be either in Arabic or bilingual and endorsed by locally registered and approved design companies. International companies cannot make these submissions by themselves. There are some parts of Qatar which are exempt from the building permit approval process, but these are generally related to the oil and gas production facilities. Recently, a number of revisions have been made to the design standards of buildings, in particular high-rise structures. These address issues such as fire safety, refuge areas, the use of lifts in the event of fire, and the nature and extent of façade glazing. All fit-out projects are being brought under the control of the regulatory departments, in particular Civil Defence, and all such works are now required to be submitted for approval prior to commencement. This submission must be made by a registered local consultant and failure to do this can significantly delay the approval and permitting process.

Saudi Arabia Obtaining a building permit requires various procedures and approvals from the main municipality, the branch municipality and the fire department. Obtaining these approvals typically takes between three to four months depending on the nature of the building. The following is a general outline of the steps needed to obtain a building permit: Stage 1: Obtaining letter from the main municipality A letter from the owner is submitted to the main Riyadh municipality, along with a copy of the land deed. The municipality checks the masterplan of the area to ensure the suitability of the plot for the construction of a building. The municipality then writes a letter to the branch municipality of the area where the plot is located. This process takes five days and does not incur a charge. Stage 2: Obtaining preliminary location permit from branch municipality The owner submits a copy of the letter obtained previously from the main municipality to the branch municipality, requesting an inspection of the plot to ensure that the plot length, width and total area are as indicated on the deed. The branch municipality then issues an approval to use the land. This process takes five days and does not incur a charge. 90

5 Stage 3: Obtaining approval from the Fire Department The branch municipality writes to the fire department, or Civil Defence, to obtain its approval of the plan submitted by the owner for the fire-alarm and fire-fighting systems. The fire department approves these plans and sends them back to the municipality. This process takes ten days and does not incur a charge. Stage 4: Obtaining a final building permit The branch municipality issues a building permit and sends it to the main municipality for approval. The owner can collect the permit from the main municipality after one to three months. The cost of this permit is SAR 1,200.

UAE The following is a general outline of the procedure for obtaining a building permit in the UAE, but there are many further obligations and procedures to be completed within each of the stages. Building permit application stage 3, for example, requires no less than 15 different forms, documents and separate approvals to be submitted as part of the application. It is the responsibility of the construction contractor or lead consultant to obtain the building permit, although all applications must be signed by locally registered consultants. Stage 1: Submitting preliminary application The applicant submits a preliminary application to the relevant municipality or statutory authority and pays a deposit. Stage 2: Obtaining No Objection Certificates (NOCs) No Objection Certificates are obtained from various governmental and municipal departments including Civil Defence; Fire Department; Drainage; Communication; Water and Electricity; Civil Aviation; Oil and Gas, Coastal and Military. Stage 3: Submitting a building permit application The full building permit application, including all NOCs, is submitted to the relevant municipality or statutory authority.

91

5 Stage 4: Obtaining building permit On approval, the applicant collects the building permit and applies for a Demarcation Certificate. Stage 5: Obtaining building occupancy certificate Upon completion of the building works, it is the responsibility of the construction contractor or lead consultant to obtain the occupancy permit. This is achieved by having the building permit signed off, effectively closing it out. To obtain this closure the contractor must obtain certificates and signatures from various government and quasi-government departments, including Civil Defence; Food and Hygiene; Criminal Investigation Department (CID), etc, prior to presenting these to the municipality or statutory authority for final approval. Davis Langdon’s Project Management team is experienced in the procedures for obtaining building permits across the region and are able to oversee this process.

92

6

REFERENCE DATA

93

94

2009

0.37-0.39

3.66-3.68

0.36-0.38

3.51-3.66

0.27-0.30

3.73-3.75

44.4-47.2

0.69-0.71

5.24-5.75

1432.2-1543.4

Range



Source: Oanda.com

3.67

0.39

Omani Rial

0.29

Kuwait Dinar

UAE Dirham

3.75

Saudi Riyal

3.65

47.46

Syrian Pound

0.38

0.71

Jordanian Dinar

Bahraini Dinar

5.60

Qatari Riyal

1524.3

Egyptian Pound

Average

Lebanese Pound

Local currency to US$1.00

Exchange Rates

0.39

3.67

0.38

3.65

0.29

3.76

47.27

0.71

5.59

1519.4

Average

Half Year 2010

0.37-0.39

3.65-3.67

0.36-0.38

3.50-3.67

0.27-0.31

3.69-3.77

44.4-46.5

0.70-0.71

5.32-5.70

1447.2-1511.7

Range

0.39

3.67

0.38

3.64

0.29

3.76

48.25

0.71

5.74

1512.1

1/7/2010

6

95

96

3410

3940

High Quality – Low Rise

High Quality – High Rise

2450

3070

- High Rise

2640

3820

- Medium Rise

- High Rise

High Standard Offices

1950

- Medium Rise

1350

- Low Rise

Average Standard Offices

COMMERCIAL (shell & core only)

Basement Car Parking

710

3220

Podium Car Parking

2820

Medium Quality – High Rise

London, UK

Multi Unit – Low Rise

RESIDENTIAL

Building Type

3200

2800

2900

2500

2000

2400

2000

4500

4100

3700

2400

New York, USA

2300

2100

2800

2300

1700

2100

1600

4200

3700

3500

2300

Los Angeles, USA

International Building Cost Comparison (US$/m²) Q2FY11

2340

2180

2100

2020

1940

1310

770

2785

2705

1695

2060

Singapore

960

740

730

640

515

450

375

935

720

740

590

Manila, Philippines

2640

2580

2175

2140

2100

1770

985

2370

3690

2145

2770

Hong Kong

1285

1160

960

850

775

465

460

1005

850

565

535

Beijing, China

3270

2700

3050

2250

1830

1410

1090

3660

2720

2360

2040

Sydney, Australia

1210

1160

880

800

720

520

445

1595

1360

865

785

Jo’burg, South Africa

6

1640

1460

Heavy Industrial

Attached Offices

4090

n/a

5 Star/Luxury

5 Star/Resort

GBP

0.61

EXCHANGE RATES

Mid Year 2011 US$1.00

1.00

USD

1700

1500

6000

4800

n/a

4800

2400

1600

1900

1100

1.00

USD

1600

1500

7300

5100

4600

4600

2200

1400

1700

1100

1.24

SGD

2260

2500

n/a

2500

3470

3470

2585

n/a

1375

1130

43.50

PHP

660

850

1020

1130

1700

1410

1100

525

420

380

7.80

HKD

2640

2275

3110

2540

n/a

3320

2615

1595

1245

1140

6.47

CNY

1295

1100

1190

1005

n/a

1940

1180

n/a

n/a

n/a

0.94

AUD

1890

1410

3300

2450

3660

4050

2450

1720

850

680

2.20

ZAR

1110

905

2085

1665

5590

3610

2430

750

525

500

These rates (US$/m2) are indicative and represent competitively tendered prices for a typical specification building of the type stated. Local market expectations and building requirements are addressed in the rates. Location factors should be applied to account for geographic variations within each country. Large fluctuations in exchange rates can create short-term anomalies in costs. Included: service installations and preliminaries. Excluded: external works and services; tenant fit-out; fittings, furnishings and equipment (FF&E); professional fees; land acquisition costs; financing costs; Value Added Tax (VAT) or similar, where applicable.

2170

Regional Shopping Mall

District Centre

n/a

3410

District Hospital

RETAIL (shell & core with public areas finished)

1970

District Medical Centre

HEALTH (excluding FF&E and medical equipment)

2220

3 Star/Budget

HOTEL (including FF&E)

1060

Light Industrial

INDUSTRIAL

6

97

98

1350

- High Rise

- Medium Rise

1400

1200

- Medium Rise

High Standard Offices

1000

- Low Rise

Average Standard Offices

COMMERCIAL (shell & core only)

850

1800

High Quality – High Rise

Basement Car Parking

1500

High Quality – Low Rise Apartments

700

1300

Medium Quality – High Rise

Podium Car Parking

1200

n/a

Beirut, Lebanon

Medium Quality Villa Compound

Affordable Housing

RESIDENTIAL

Building Type

500

1200

1250

1150

1000

800

600

1700

1400

1400

1250

Riyadh, KSA

Regional Building Cost Comparison (US$/m²) Q2FY11

755

1370

1785

1370

1015

650

725

2000

1600

1370

1150

Doha, Qatar

1185

1185

1110

985

790

650

1625

1310

1305

1240

520

Manama, Bahrain

1195

n/a

1090

1040

780

650

n/a

1510

n/a

1430

715

Muscat, Oman

1400

1500

1250

1050

850

550

1800

1450

1350

1000

700

Abu Dhabi, UAE

6

- High Rise

1600

District General Hospital

1340

1175

2700

1995

1505

1225

3420

3575

3350

2100

1200

1050

925

2475

1440

1260

2465

3250

2660

1890

850

730

650

n/a

1305

n/a

1352

1092

2275

2470

2210

1560

830

730

570

n/a

1750

1275

1400

3290

3410

3130

2400

1010

870

650

2300

These rates (US$/m2) are indicative and represent competitively tendered prices for a typical specification building of the type stated. Local market expectations and building requirements are addressed in the rates. Location factors should be applied to address geographic variations in each country. Included: service installations and contractors’ preliminaries. Excluded: external works and services; tenant fit-out; fittings, furnishings and equipment (FF&E); professional fees; land acquisition costs; financing costs; Value Added Tax (VAT) or similar, where applicable.

1200

1500

District Centre

Regional Shopping Mall

RETAIL (shell & core with public areas finished)

3000

2950

3000

HEALTH (excluding FF&E and medical equipment)

5 Star/Resort

2650

1650

2750

3 Star/Budget

5 Star/Luxury

1600

1000

1100

HOTEL (including FF&E)

Attached Offices

900

800

1000

700

2250

Light Industrial

n/a

1750

Heavy Industrial

INDUSTRIAL

- Super High Rise

6

99

100

343

369

437

130

161

High Quality – Low Rise Aparts

High Quality – High Rise

Podium Car Parking

Basement Car Parking

322

343

- Medium Rise

- High Rise

369

416

- Medium Rise

- High Rise

High Standard Offices

296

- Low Rise

Average Standard Offices

COMMERCIAL (shell & core only)

302

Medium Quality – High Rise

Beirut, Lebanon

Medium Quality Villa Compound

RESIDENTIAL

Building Type

Riyadh, KSA

478

416

416

354

343

172

156

510

426

406

322

Mechanical & Electrical Cost Comparison (US$/m2) Q2FY11 Doha, Qatar

720

575

480

410

370

245

225

530

415

365

315

670

590

n/a

340

320

300

120

730

680

440

340

Manama, Bahrain

n/a

510

n/a

340

320

160

135

n/a

390

n/a

320

Muscat, Oman

580

550

450

410

360

240

130

540

450

410

280

Abu Dhabi, UAE

6

364

494

426

n/a

290

425

325

1150

1150

1050

495

365

335

350

470

420

1250

1000

870

580

410

400

310

440

325

n/a

940

n/a

n/a

360

420

360

550

520

1170

880

820

410

440

480

These rates (US$/m2) are indicative and represent competitively tendered prices for a typical specification building of the type stated. Local market expectations and building requirements are addressed in the rates. Location factors should be applied to address geographic variations in each country. Included: subcontractor preliminaries and main contractor mark-up. Excluded: incoming service utility lines and connections; site distribution networks; associated builder’s work; and Value Added Tax (VAT) or similar, where applicable.

348

426

District Centre

n/a

Regional Shopping Mall

RETAIL (shell & core with public areas finished)

District General Hospital

HEALTH (excluding FF&E and medical equipment)

728

676

754

5 Star/Luxury

5 Star/Resort

832

416

276

3 Star/Budget

HOTEL (including FF&E)

Attached Offices

322

312

416

229

296

Light Industrial

Heavy Industrial

INDUSTRIAL

6

101

102

kg

m²

Structural Steel in Trusses

Hollow Concrete Block Partition (200 millimeters (mm) thick)

1.2

kg

kg

Reinforcement in Beams

25

200

m²

m²

Formwork to Side and Soffits of Beams

Precast Wall Panel Architectural with Sand Blast Finish

Structural Steel in Beams

20

m²

Formwork to Slab Soffits (under 5 metres (m) high)

130

29

3.75

3.75

125

m³

m³

Concrete in Walls (32 megapascals (Mpa)

35

115

m³

m³

Imported Structural Fill

Concrete in Pad Footings (25 megapascals (Mpa)

Concrete in Slabs (32 megapascals (Mpa)

16

m³

Foundation Excavation

15

Beirut, Lebanon

m³

Unit

Basement Excavation

Description

Major Measured Unit Rates (US$) Q2FY11

13

13

11

30

3

3

1.2

200

32

32

125

125

115

Riyadh, KSA

206

28

28

185

195

180

25

13

11

33

3.56

3.56

1.37

Doha, Qatar

30

3

3

1.2

205

20

20

135

135

128

13.5

8

7

Manama, Bahrain 7

21

2

2

1

169

16

15

104

104

105

9

10

Muscat, Oman

22

3

3

1.1

180

26

26

118

118

109

13

15

5

Abu Dhabi, UAE

6

m²

m²

m²

Ceramic Tiles to Walls

Average Quality Marble Paving on Screed

Anti Static Carpet Tiles to Office and Admin Areas

65

130

35

10

32

50

750

300

60

160

35

8

35

51

615

440

69

151

33

6

22

50

548

247

39

160

53

8

48

52

535

220

61

98

26

5

34

91

520

270

40

170

29

6

35

41

484

250

These rates (US$) are indicative and represent competitively tendered prices for average specification works of the type described. Location factors should be applied to address geographic variations in each country. The rates are exclusive of contractors’ preliminaries (site establishment, scaffolding, hoisting etc) and Value Added Tax (VAT) or similar, where applicable.

m²

m²

m²

Average Quality Steel Stud Partition (with single layer plasterboard each side)

Suspended Mineral Fibre Ceiling

m²

Aluminium Curtain Wall System (including structural system)

Paint on Plasterboard Walls

m²

Aluminium Framed Window (6.5millimeters (mm) clear glass commercial quality)

6

103

104

m³

Grade 20 Ordinary Portland cement (OPC)

Tn

Tn

High Tensile

Mild Steel

REINFORCING STEEL

m³

m³

Grade 50 Ordinary Portland cement (OPC)

m³

m³

Grade 40 Ordinary Portland cement (OPC)

READY MIXED CONCRETE

19millimeters (mm) thick Aggregate

AGGREGATE

Sand for concreting

SAND

Tn

Tn

In Bags

Unit

In Bulk

ORDINARY PORTLAND CEMENT

Description

Major Material Prices (US$) Q2FY11

890

870

74

88

97

17

22

94

103

Beirut, Lebanon

88

60

70

75

14

12

78

690

690

Riyadh, KSA

Doha, Qatar

83

808

850

90

96

100

32

22

77

800

800

80

90

100

25

20

80

95

Manama, Bahrain

774

800

60

72

79

11

11

65

78

Muscat, Oman

830

765

61

65

70

15

12

71

70

Abu Dhabi, UAE

6

m³

Softwood

Litre

Petrol Premium 95

4

1.2

0.88

550

1600

1700

8

7

0.16

0.07

432

732

1400

9

9

0.25

0.27

767

1125

1507

10

18

0.27

0.27

395

790

1300

20

7

0.30

0.38

504

891

1040

8

7

0.47

0.79

461

922

1226

9

These cost rates (US$) are indicative and represent supply-only costs of the materials listed. Location factors should be applied to address geographic variations in each country. The rates are exclusive of Value Added Tax (VAT) or similar, where applicable.

Litre

Diesel

FUEL

m³

Tn

Hardwood Meranti

TIMBER

Mild Steel Grade 50 to BS 4360

STRUCTURAL STEELWORK

m²

m²

100 millimetres (mm) thick

200 millimetres (mm) thick

HOLLOW CONCRETE BLOCKWORK

6

105

106

Day

Day

Day

Day

Day

Day

Day

Day

Mason

General Labourer

Crane Operator

Heavy Machinery Operator

Dump Truck Driver

Plumber

Electrician

Foreman

8000

4000

100

32

32

30

50

55

20

30

35

27

27

Beirut, Lebanon

90

65

70

55

65

25

25

50

50

50

45

13000

5000

Riyadh, KSA

88

55

55

50

66

66

27

44

44

40

40

12330

6850

Doha, Qatar

11130

5250

132

87

75

59

75

84

46

50

58

58

29

Manama, Bahrain

66

47

47

35

52

52

26

39

47

39

39

11050

3900

Muscat, Oman

11000

5000

82

49

40

49

55

55

22

33

28

32

32

Abu Dhabi, UAE

These rates (US$) are indicative and represent an all-in unit cost for each of the disciplines listed. Location factors should be applied to address geographic variations in each country. Included: wages, salaries and other remunerations prescribed by local labour legislation; average allowances for costs of employment; recruitment; visas/permits; paid leave; travel; accommodation; health and welfare. Excluded: overtime working; contractor mark-up for overheads and profit; VAT (Value Added Tax) or similar, where applicable. These cost rates should not be misinterpreted as contractors’ daywork rates.

Month

Day

Carpenter

Construction Manager

Day

Steel Bender

Month

Day

Concreter

Site Engineer

Unit

Description

Labour Costs (US$) Q2FY11

6

12 (*)

10 litres (*)

Fresh Air Supplies (*) litres per second per person

Ventilation - Water closet (WC) (Extract) (*) air changes per hour

22oC, +/-2oC

22oC, +/-1oC

Heating and Air Conditioning Internal Criteria (degree centigrade)

3-10 (*)

12-16 litres (*)

Fan coil units, Variable air volume (VAV), downflow units

Single sex 1 person to 12m² using 70/30 (*)

1:7/m²

1:10-1:15/m²

75-80%

UAE Specification*

Fan coil units, Variable air volume (VAV), Direct expansion (DX) , constant volume

Form of Air Conditioning

Single sex 1 person to 12m² using 70/30 (*)

1:7-1:12/m²

Occupancy Standards - Dealer

Occupancy Standards - Toilets (*) male/female ratio based on 120% population

1:10-1:14/m²

70-80%

Bahrain Specification

Occupancy Standards - Typical

Net: Gross Ratio (Typical)

Subject

Building Services Standards

10 (*)

12-16 litres (*)

22oC, +/-2oC

Fan coil units, Variable air volume (VAV), VAV with re-heat, Direct expansion (DX), constant volume, plate heat exchangers

Single sex 1 person to 12m² using 70/30 (*)

1:7-1:12/m²

1:10-1:14/m²

70-80%

Qatar Specification

10 (*)

12-16 litres (*)

22oC, +/-2oC

Fan coil units, Variable air volume (VAV), VAV, downflow units

Single sex 1 person to 12m² using 70/30 (*)

1:7/m²

1:10-1:15/m²

70-80%

Oman Specification

none stated

12-16 litres (*)

22oC, +/-2oC

Fan coil units, Variable air volume (VAV), VAV, displacement, chilled ceiling/beam

Single sex 1 person to 14m² using 60/60 (*)

1:7/m²

1:12-1:14/m²

80-85%

Lebanon Specification

6

107

108

60-215 w/m²

none stated

Internal Heat Gains Equipment load (Dealer)

Supplementary cooling allowance (e.o/% area)

NR 40

15 w/m²

35 w/m²

400, 800 or 1,500 w per desk

none stated

Acoustics - Common Areas

Primary Power - Lighting

Primary Power - Typical

Primary Power - Dealer

Primary Power Upgrade (e.o power/% area)

NR 35

25 w/m²

Internal Heat Gains Equipment load (Typical)

Acoustics - Offices

15 w/m²

Bahrain Specification

Internal Heat Gains Lighting load

Subject

25 w/m², 25% area

800 or 1,600 w per person

25 w/m²

12 w/m²

NR 40-45

NR 30-35

25 w/m², 25% area

45 w/m²

15 w/m²

12 w/m²

UAE Specification*

none stated

none stated

30-40 w/m²

12-15 w/m²

NR 40

NR 30-35

none stated

none stated

15 w/m²

12-15 w/m²

Qatar Specification

none stated

none stated

25-30 w/m²

12-15 w/m²

NR 40

NR 30-35

none stated

none stated

15 w/m²

12 w/m²

Oman Specification

20-25w/m², 20-25% area

none stated

15-25 w/m²

12 w/m²

NR 40-45

NR 35-38

25w/m², 25% area

none stated

12 w/m²

12 w/m²

Lebanon Specification

6

80% loading with 35 second waiting interval, handling 15% in 5 minutes. Population density 1:14

none stated

none stated

none stated

350-500 lux, Uniformity Ratio 0.8

UAE Specification*

80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14

150 lux

200 lux

250 lux

500 lux

Qatar Specification

80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14

215 lux

215 lux

200-270 lux

400-500 lux, Uniformity Ratio 0.8

Oman Specification

none stated

none stated

none stated

300-500 lux, Uniformity Ratio 0.8

Lebanon Specification

80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14

* Specific to the Emirate of Abu Dhabi. Excludes implications of new building code regulations for the emirate due to come into effect in 2012.

80% loading with 35 second waiting interval, handling capacity of 11% to 17% in 5 minutes. Population density 1:12

215 lux

Passenger lifts Capacity and waiting times

215 lux

Lighting - Plantrooms

200-270 lux

Lighting - Stairs/Circulation

Lighting - Water closet’s (WC)

400-500 lux

Bahrain Specification

Lighting - Office

Subject

6

109

6 Measurement Formulae — Two Dimensional Figures Figure

Area

Perimeter

Square

a²

4a

Rectangle

ab

2(a + b)

½ ch

a+b+c

π r² ¼π d² where 2r = d

2π r πd

ah

2(a + b)

½h (a + b)

a+b+c+d

Approximately πab

π (a + b)

Triangle

Circle

Parallelogram

Trapezium

Ellipse

Diagram

Hexagon

2.6 x a²

Octagon

4.83 x a²

Sector of circle

½ rb or q π r² 360 note b = angle q π r² 360

110

Segment of circle

S-T where S = area of sector T = area of triangle

Bellmouth

3 x r² 14

6 Measurement Formulae — Three Dimensional Figures Figure

Surface Area

Volume

6a²

a³

2(ab + ac + bc)

abc

bd + hc + dc + ad

½ hcd

Cylinder

2π rh + 2πr² πdh + ½πd²

πr²h ¼πd²h

Sphere

4πr²

4/3r³

Segment of sphere

2πRh

Pyramid

(a + b) l + ab

Frustrum of a pyramid

l (a+b+c+d) + √ (ab+cd) [regular figure only]

Cube

Cuboid/ rectangular block Prism/ triangular block

Diagram

/ πh (3r² + h²) / πh² (3R - H)

1 6

1 3

/ abh

1 3

h/3(ab + cd + √ abcd)

111

6 Measurement Formulae — Three Dimensional Figures Figure Cone

Frustrum of a cone

112

Diagram

Surface Area

Perimeter

πrl + πr² ½ πdh + ¼ πd²

π² + πR² + πh (R+r)

/ πr² h / πd²h

1 3

1 12

/ π (R² + Rr + r²)

1 3

6 WEIGHTS AND MEASURES Metric Measures and Equivalents Length 1 millimetre (mm)

= 0.0394 in

1 centimetre (cm)

= 0.3937 in

= 10 mm

1 metre (m)

= 100 cm

= 1.0936 yd

1 kilometre (km)

= 1000 m

= 0.6214 mile

Area 1 square centimetre (cm2)

= 100 mm2

= 0.1550 in2

1 square metre (m2)

= 10 000 cm2

= 1.1960 yd2

1 hectare (ha)

= 10 000 m2

= 2.4711 acres

1 square kilometre (km2)

= 100 ha

= 0.3861 mile2

Capacity/Volume 1 cubic centimetre (cm3)

= 0.0610 in3

1 cubic decimetre (dm3)

= 1000 cm3

= 0.0353 ft3

1 cubic metre (m3)

= 1000 dm3

= 1.3080 yd3

1 litre (litre)

= 1 dm3

= 1.76 pt

1 hectolitre (hl)

= 100 litre

= 21.997 gal

Mass (Weight) 1 milligram (mg)

= 0.0154 grain

1 gram (g)

= 0.0353 oz

= 1000 mg

1 kilogram (kg)

= 1000 g

= 2.2046 lb

1 tonne (t)

= 1000 kg

= 0.9842 ton

USA Measures and Equivalents USA Dry Measure Equivalents 1 pint

= 0.9689 UK pint

= 0.5506 litre

USA Liquid Measure Equivalents 1 fluid ounce

= 1.0408 UK fl oz

= 29.574 ml

1 pint (16 fl oz)

= 0.8327 UK pt

= 0.4723 litre

1 gallon

= 0.8327 UK gal

= 3.7854 litre

113

Imperial Measures and Equivalents Length 1 inch (in)

= 2.54 cm

1 foot (ft)

= 0.3048 m

= 12 in

1 yard (yd)

= 3 ft

= 0.9144 m

1 mile

= 1760 yd

= 1.6093 km

1 int. nautical mile

= 2025.4 yd

= 1.853 km

Area 1 square inch (in2)

= 6.4516 cm2

1 square foot (ft2)

= 144 in2

= 0.0929 m2

1 square yard (yd2)

= 9 ft2

= 0.8361 m2

1 acre

= 4840 yd2

= 4046.9 m2

1 sq mile (mile2)

= 640 acres

= 2.59 km2

Capacity/Volume 1 cubic inch (in3)

= 16.387 cm3

1 cubic foot (ft3)

= 0.0283 m3

= 1728 in3

1 fluid ounce (fl oz)

= 28.413 ml

1 pint (pt)

= 20 fl oz

= 0.5683 litre

1 gallon (gal)

= 8 pt

= 4.5461 litre

Mass (Weight) 1 ounce (oz)

= 437.5 grains

= 28.35 g

1 pound (lb)

= 16 oz

= 0.4536 kg

1 stone

= 14 lb

= 6.3503 kg

1 hundredweight (cwt)

= 112 lb

= 50.802 kg

1 ton

= 20 cwt

= 1.016 tonne

Temperature Conversion C = 5/9 (F – 32)

114

F = (9/5 C) + 32

7

DIRECTORY OF OFFICES

115

116

7 MIDDLE EAST Kingdom of Bahrain Davis Langdon, An AECOM Company Al Saffar House Unit 21, Building No. 1042 Block 436, Road 3621 Seef District PO Box 640 Manama Kingdom of Bahrain T: +973 17 588 796 F: +973 17 581 288 Office E: [email protected] Contact: Clarke Morton-Shepherd E: [email protected]

Kingdom of Saudi Arabia (Al Khobar) AECOM Arabia Ltd Al Khereji Business Centre, Level 1 King Faisal Road PO Box 1272 Al Khobar 31952 Kingdom of Saudi Arabia T: +966 3 849 4400 F: +966 3 849 4411 / 8494422 Office E: [email protected] Contact: Andy Ritchie E: [email protected]

Kingdom of Saudi Arabia (Jeddah) AECOM Arabia Ltd 7th floor, Bin Sulaiman Center Al Rawdah Street PO Box 15362 Jeddah 21491 Kingdom of Saudi Arabia T: +966 2 213 8500 Office E: [email protected] Contact: Andy Ritchie E: [email protected]

117

7 Kingdom of Saudi Arabia (Riyadh) Davis Langdon, An AECOM Company PO Box 58006, 4th Floor, Tower 4 Tatweer Building King Fahd Road Riyadh 11594 Kingdom of Saudi Arabia T: + 966 1200 8686 F: + 966 1200 8787 Office E: [email protected] Contact: Andy Ritchie E: [email protected]

Kuwait Davis Langdon, An AECOM Company PO Box 29927 Safat 13160 Kuwait T: +965 2 23 22 999 F: +965 2 23 22 990 Office E: [email protected] Contact: Adam Ralph E: [email protected]

Lebanon Davis Langdon, An AECOM Company Floor 1, Chatilla Building Australia Street Rawche, Shouran PO Box 13-5422 Beirut Lebanon T: +961 1 780 111 F: +961 1 809 045 Office E: [email protected] Contact: Muhyiddin Itani E: [email protected]

118

7 Oman Hanscomb, An AECOM Company PO Box 434 Al Khuwair, Postal Code 133 Muscat Oman T: +968 2448 1664 F: +968 2448 9491 Contact: Chris Beasley E: [email protected]

Qatar Davis Langdon, An AECOM Company Salwa Commercial Complex Building 1st Floor, Behind Al Seal Building Salwa Road PO Box 3206 Doha State of Qatar T: +974 4458 0150 F: +974 4469 7905 Office E: [email protected] Contact: Steven Humphrey E: [email protected]

119

7 United Arab Emirates Davis Langdon, An AECOM Company Level 7, Building 54 Dubai Healthcare City PO Box 7856 Dubai United Arab Emirates T: +971 4 423 3690 F: +971 4 423 3691 Office E: [email protected] Contact: Steven Coates E: [email protected] AECOM Al Jazira Sports & Cultural Club Muroor Road, 4th street PO Box 43266 Abu Dhabi United Arab Emirates T: +971 2 414 6000 F: +971 2 414 6001 Office E: [email protected] Contact: David Barwell E: [email protected]

120

7 NORTH AFRICA Egypt Ground Floor, Corner Road 23 / El Sharifa Dina Street Building 13 Maadi Helwan Egypt T: +20 2 2750 8145 F: +20 2 2750 8146 Contact: Chris du Toit E: [email protected]

121

7 AFRICA Botswana Davis Langdon, An AECOM Company Plot 127, Unit 10 Kgale Court Gaborone International Finance Park Gaborone Botswana Mailing address: PO Box 201855 Gaborone Botswana T: +267 390 0711 F: +267 395 7550 Office E: [email protected] Contact: Fred Selolwane E: [email protected]

Mozambique Davis Langdon, An AECOM Company Rua D Estêvão de Ataide No 38/48 Sommerschield 1 Maputo Mozambique T: +258 21 490 696/7 F: +258 21 490 699 Office E: [email protected] Contact: Charle Viljoen E: [email protected]

122

7 Nigeria Tillyard Nigeria Ltd, in Association with Davis Langdon, An AECOM Company Fourth Floor, 241 Igbosere Road Lagos Nigeria

Mailing address: PO Box 2167 Lagos Nigeria T: +234 (0) 1 764 4272 F: +234 (0) 1 815 6558 Contact: John Tuffrey E: [email protected]

South Africa Davis Langdon, An AECOM Company 3rd Floor MPF House Sunnyside Office Park 32 Princess of Wales Terrace Parktown, Johannesburg South Africa Mailing Address: PO Box 1642 Houghton, 2041 T: +27 11 666 2000 F: +27 (0) 86 650 0711 Office E: [email protected] Contact: Indresen Pillay E: [email protected] Also at: Cape Town, Durban, George, Pietermaritzburg, Port Elizabeth, Pretoria, Stellenbosch and Vanderbijlpark

123

7 Americas USA Davis Langdon, An AECOM Company 301 Arizona Avenue Suite 301 Santa Monica California 90401 USA T: +1 310 393 9411 F: +1 310 393 7493 Contact: Nicholas Butcher E: [email protected] Also at: Boston, Honolulu, Houston, New York, Philadelphia, Sacramento, San Francisco, Seattle and Washington, D.C.

124

7 AUSTRALIA & NEW ZEALAND Australia Davis Langdon, An AECOM Company Level 45, 80 Collins Street Melbourne, Victoria 3000 Australia T: +61 3 9933 8800 F: +61 3 9933 8801 Office E: [email protected] Contact: Mark Beattie E: [email protected] Also at: Adelaide, Brisbane, Cairns, Canberra, Darwin, Hobart, Perth, Sydney and Townsville

New Zealand Davis Langdon, An AECOM Company Level 10, Citigroup Centre 23 Customs Street East Auckland 1010 New Zealand Mailing Address: PO Box 935 Auckland 1140 New Zealand T: +64 9 379 9903 F: +64 9 309 9814 Office E: [email protected] Contact: Chris Sutherland E: [email protected] Also at: Christchurch and Wellington

125

7 UK & EUROPE Central Eastern Europe AECOM 141-143 Calea Floreasca Street 3rd floor District 1 Romania T: +40 (0)21 316 11 66 F: +40 (0)21 316 11 68 Contact: Alan Baker E: [email protected] Also at: Bulgaria, Czech Republic, Estonia, Latvia and Ukraine

CIS AECOM Moscow 29 Serebryanicheskaya nab 109028 Russia T: +7 495 783 7360 F: +7 495 783 7361 Contact: Alan Baker E: [email protected] Also at: Azerbaijan, Kazakhstan, Turkey, Ukraine and Uzbekistan

Ireland Davis Langdon, An AECOM Company 24 Lower Hatch Street Dublin 2, Ireland T: +353 1 676 3671 F: +353 1 676 3672 Office E: [email protected] Contact: Paul Mitchell E: [email protected] Also at: Cork, Galway and Limerick

126

7 United Kingdom Davis Langdon, An AECOM Company MidCity Place 71 High Holborn London WC1V 6QS United Kingdom T: +44 20 7061 7000 F: +44 20 7061 7061 Contact: Steve Waltho E: [email protected] Also at: Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Maidstone, Manchester, Norwich, Oxford, Peterborough, Plymouth and Southampton

Western Europe Davis Langdon, An AECOM Company Calle Serrano 98 – 2nd Floor 28006 Madrid Spain T: +34 91 431 0290 F: +34 91 576 9211 Contact: Jon Blasby E: [email protected] Also at: Germany

Full contact information is available on our global website www.davislangdon.com www.aecom.com 127

www.davislangdon.com www.aecom.com

US$25.00 DL30017 (2012) | Designed in-house by AECOM’s PCC business development team