An exciting place to be

Contractors from all over the world are busy helping Dubai develop its vision and become a reality. Construction Week speaks to contractors with British links about the work they are doing on the city’s various construction sites.

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By  Colin Foreman Published  February 26, 2005

An exciting place to be|~||~||~|Any visitor to Dubai will immediately realise that construction is big business. Whether it is the flock of tower cranes at Dubai airport expansion, one of the various high-rise residential developments, a new interchange, a shopping mall or a reclaimed island, a major construction is never far away. “For anyone interested in construction, Dubai is a very exciting place to be working,” says Grahame McCaig, general manager, Dutco Balfour Beatty Group. “It is growing at a phenomenal pace and is attracting construction companies from all over the world,” he adds. Recent tenders for projects like the Burj Dubai and Dubai’s Metro system have shown that contractors from all over the world are now attracted by the large and prestigious projects on offer in Dubai. For the Burj Dubai, contractors from South Korea, Belgium, Greece, Hong Kong, China, Malaysia, Japan, Australia, South Africa and the UK all formed joint ventures with local partners in the hope of being given the chance to construct the world’s tallest tower. Such relationships are not new phenomena, and some of the longest-standing relationships amongst contractors in the Gulf region are with British companies. One contractor with British links is the Dutco Balfour Beatty Group. The group is a joint venture between Balfour Beatty from the UK and the Dutco Group from Dubai. The relationship between the two organisations started in 1977 when they undertook the construction of Jebel Ali Port in Dubai; they have now been actively involved in development of Dubai’s infrastructure and economy for over 25 years. During this time there have been many changes in both Dubai and the construction business sector. “Having been established in Dubai for over 25 years, our name and reputation for quality generates a lot of business,” says McCaig. The group is involved in a wide range of civil engineering and building construction activities. Most people are aware of its more high profile or visible projects, which include the construction of the Dubai Mall project in joint venture with Al Ghandi & Consolidated Contractors Company for Emaar Properties on the Burj Dubai site. It is said the mall will be the largest in the world when it is complete. Elsewhere, the group recently completed the upgrade work the Interchange 3 on Sheikh Zayed Road and is and now busy building the new Palm Island interchange (4 ¾). In terms of buildings, the group constructs high-quality villas for private clients, and is currently building a 54-storey high-rise in the Dubai Marina. The group also takes on a wide range of less visible jobs that are important to the sustainable development, such as expanding the container handling facilities in Jebel Ali Port, a 17 km-long eight-lane highway Al Khail Road (Backroad) and the Global Village. The group performs a diversified range of construction activities including mechanical and electrical services. Since 1978, Balfour Kilpatrick Gulf (BK Gulf LLC) has undertaken a wide range of mechanical and electrical services associated with such facilities as offshore accommodation modules; offshore oil drilling and production modules; central/district cooling plants; high-rise apartment buildings; office blocks; shopping malls; hotels; aircraft hangars; gas production facilities; and ports and container terminals. The majority of the work that BK Gulf undertakes is, by its nature, less visible, since it is often incorporated within the fabric of the structures that are rapidly changing Dubai’s skyline or buried below ground. However, the importance to the overall quality of the building and its performance in operation can often depend on the quality of the mechanical and electrical services. With the increased emphasis being put on the sophistication of the environmental conditioning within buildings and the constantly developing requirements for state-of-the-art communications, the percentage value of the mechanical and electrical works increasingly forms a major percentage of the value of such projects. “For developers and developments to be successful in the long-term, more attention must be paid to the quality of the mechanical and electrical services. It provides the living and working environment not only for the people who will occupy the development long-term, but also the long-term fitness for purpose of the development. Quality has a significant impact on the ‘whole life cost’ and ‘cost in use’ of any development,” says Bill Ramsay, general manager, BK Gulf LLC. Another M&E contractor working in Dubai is Drake & Scull International. The company is part of Emcor Drake & Scull and has now been active in the region since 1964. It has worked on a number of major projects in the region, including: Dubai Internet City; Nad Al Sheba Racetrack; the Grand Mosque built by His Majesty, Sultan Qaboos bin Said of Oman; Smart Village in Egypt; the Intercontinental Hotel in Riyadh; and the Four Seasons Hotel in Doha. The company has also moved away from its traditional business to provide fully integrated ‘end-to-end’ solutions for buildings and businesses on behalf of, and for the benefit of, its customers. This extends to providing complete solutions for the design, build, maintainence and operations of District Cooling Plants throughout the Middle East. Current projects include the 60 000 t chilled water and distribution system for 54 tower blocks at Jumeirah Beach Residences, and the 50 000 t plant for the multi-use Dubai Festival City project in Dubai. The company also recently opened its first branch in Kuwait, and appointed Offset General Trading and Contracting Company as its partner. The new branch is the company’s eighth in the region, and will add to offices in the UAE, Qatar, Saudi Arabia and Bahrain, as well as Oman, Egypt and Jordan. Another company that has entered the market more recently is Mivan. The company has supplied formwork to a number of major projects around Dubai including Al Fattan towers in the Dubai Marina area, and more recently, a new tower block on Sheikh Zayed Road. The company has also formed a new company called Mivan Depa LLC with locally based hotel interior fit-out company Depa. The company has been set up to take advantage of the wide range of theming opportunities in the Gulf. Mivan has developed a strong reputation in this sector over the last 15 years and has successfully completed major contracts at Euro Disney in Paris, Lego Land, Universal Studios, and Warner Bros. According to James Hicken, business development manager, Mivan, strong experience in the UK and other major overseas projects is a definite advantage. “Expatriates tend to gravitate towards the professional side of construction, which can be very useful for a company like Mivan. We can deal with architects, quantity surveyors and M&E people who know Mivan because they have — or know — people who have worked on the same jobs in the UK or elsewhere, and that gives a very big comfort factor.” Contractors new to Dubai may initially be excited about the prospects of the market here. “It’s really not that easy. There is competition because everyone has been attracted to the honey pot so you have to bring more to the table than the others do. In Dubai, you have to offer more for the price than your competitors,” says Hicken. “The level of competition is high and it is capable,” he adds. For companies that are completely new to the region, a reference project is very important. “I think if you are a new company or a smaller company you have to get a reference project as quickly as you can, and even be prepared to take that at cost or less. You have to have a sample that you can point to,” says Hicken. The pace of development is also something that a contractor new to the region may take time to understand. Development speed is undoubtedly breakneck, and many projects are set extremely tight programmes so that the developers can capitalise on the current strength of the property market, especially when it comes to foreign-owned freehold developments. Despite these time constraints and other market characteristics, working in the region presents great opportunities for contractors. “It is very satisfying to be working in a growing market and a growing company, as it provides opportunities for all members of our staff to develop,” says McCaig. Asked what could be done to help contractors meet the current challenges posed by Dubai’s growth, McCaig answers: “Improved payment terms. The length of time for payments to be made and the amount of retention held are far higher than many other markets around the world. Cash flow is the lifeblood of any business. Improvement of payment terms would be of significant benefit to contractors and assist them with managing and sustaining business growth.”||**||

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