The Start of 2019 in Construction

Dubai construction firms bullish on year ahead

Construction firms in Dubai remained strongly optimistic regarding the 12-month outlook as business conditions in Dubai’s non-oil private sector economy continued to strengthen in February, at a similar rate to January, according to latest data provided by Emirates NBD Dubai Economy Tracker.

Construction, a key sector in Dubai, continued to report growth of new contracts in February. The rate of expansion accelerated from January’s 27-month low, but was still weaker than in any other month over the same period, and much slower than the rise in total construction activity, the report said. Although sentiment slipped from January’s record high, it was still among the highest on record. Growth of construction activity accelerated for the second month running in February, to the fastest since the record pace achieved last November. The seasonally-adjusted Business Activity Index was the fifth highest on record.

“Workforce growth at construction companies was maintained in February. The seasonally adjusted Employment Index eased since January to 50.7, however, indicating only a marginal rate of job creation,” said the report.

The data continued to point to subdued cost pressures in Dubai’s construction sector. The seasonally-adjusted Input Costs Index rose from January’s seven-month low of 51.0 to 51.8, but still signaled a weaker rate of inflation than the long-run series average. According to analysts, with the deadline for completion of several projects before Expo 2020 Dubai looming, construction activity is set to pick up. According to Lodging Econometrics’ year-end Global Construction Project Trend Report, Dubai had a pipeline of 168 hotel construction projects with 49,950 rooms as of 2018, ranking it second in the list of global cities with the largest hospitality pipelines, only behind New York City’s 171 hotels with 29,460 rooms.

“Prices charged by construction companies rose for the second month running in February, but at a rate which remained only marginal. Previously, charges had fallen throughout the last four months of 2018,” said the report. Total business activity in Dubai rose at the fastest rate in nine months, while new business increased at a pace that remained above the 2018 average despite easing since January. Employment, however, fell at the fastest rate since the survey began in 2010. The seasonally-adjusted Emirates NBD Dubai Economy Tracker Index was unchanged from January’s seven-month high of 55.8 in February, signalling a strong improvement in business conditions that was faster than the trend for 2018. While companies in the wholesale and retail sector reported the firmest volume growth in February – although with greater price discounting than in January – travel and tourism firms in Dubai remained strongly optimistic regarding activity levels over the next 12 months in February. The headline index for the wholesale and retail sector rose to an eight-month high of 58.1, above the comparable figure for the travel and tourism sector (56.8, a nine-month high). The third key sector monitored – construction – also registered a stronger performance in February (54.0).

Khatija Haque, head of Mena research at Emirates NBD, said the growth in the volume of output and new work has been underpinned by continued price discounting, particularly in the wholesale and retail trade sector.

“Firms’ margins continue to be squeezed as selling prices have declined on average for the last 10 months, while input costs have increased over the same period. As a result, rising new orders have not translated into increased hiring and job growth in the private sector. Indeed, employment declined at the fastest rate on record in February.”

The report said the data signalled a rise in business activity in the non-oil private sector. Moreover, the rate of expansion accelerated to the fastest since May 2018. Wholesale and retail posted the strongest growth among the three key sectors.

“However, the rate of contraction in workforce was the strongest registered since the series began in January 2010, despite faster activity growth,” it said.

Saudi Arabia to start first phase of Neom project

Construction on Saudi’s $500bn (SAR1.9tn) Neom gigaproject will start in Q1 2019, officials announced on 16 January, 2019.

The Neom Founding Board, chaired by Saudi Arabia’s Crown Prince HRH Prince Mohammed bin Salman bin Abdulaziz, approved the strategic concept of the master plan for Neom Bay, the first urban area to be developed within Neom, as reported by Saudi Press Agency (SPA).

The board gave “gave instructions to complete preparations and start construction work in the first quarter of 2019”, the state-news agency added.Work on Phase 1 of Neom Bay will be completed in 2020. It is expected that a number of key facilities will be completed by the end of this year, including the current airport at Sharma, which will be upgraded to become a commercial airport operating regular flights between Riyadh and Neom.

Speaking on the news, Nadhmi Al-Nasr, chief executive officer of Neom, said 2019 will be “milestone” in the megaproject’s journey.

He added: “The strategy of developing Neom Bay will rely on four key pillars that will be ingrained in the entire project development, with sustainability at the heart of aspect of the project.

“The first is to provide a living experience and an ideal quality of life for families; the second is to create a high-end lifestyle and a luxurious tourist destination; the third and fourth pillars are to support both innovation and creative centers in order to achieve Neom’s economic goals.”

Earlier this week saw another first at Neom when a Saudi Arabian Airlines (Saudia) flight, carrying 130 of its staff, landed at Neom airport in Sharma, located in the Tabuk region.

Backed by Public Investment Fund, which is led by Saudi Arabia’s Crown Prince HRH Mohammed Bin Salman, Neom maps the kingdom’s long-term aspirations through 16 economic sectors.

Stable prices of construction materials offer respite to UAE builders

Three months into the year, the UAE’s construction sector is having a much smoother ride, and it’s not just related to the pickup in activity related to the Expo 2020 works. Instead, it is the relative price stability on building materials that is offering the much-needed respite.

One only needs to look at how aluminium has been faring. In May last year, the metal was commanding $2,700 a tonne on the LME (London Metal Exchange) — now it can be had for $1,841 after being at $2,000 as recently as December 20. As for local contractors, the softening price — and the belief is it will remain under pressure — will sit well on their project costs. And there is quite a bit of that happening.

“There is definitely new activity being pushed by the Expo requirements and we are still seeing that in our recent orders,” said Christian Witsch, CEO at Gulf Extrusions. “But building material suppliers and contractors need to start thinking about the next big event once all the Expo-related supplies and works are done.

“That’s what we need to start looking out and preparing for — the next big event in the UAE.”

The sharp upswing in aluminium prices in May last year was brought on by factors outside the scope of the industry. In short, politics was what dictated the volatility. in particular, the US sanctions on Russia’s Rusal — the world’s largest aluminium producer outside of China. (Early this year, the sanctions were rolled back by President Trump.) “Last year changed my perception that LME price was only driven by effects happening only within the industry,” said Witsch. “But in 2018, the main driver was political forces.”   Gulf Extrusions currently has an annual installed capacity of 50,000 tonnes, of which it currently utilises about 40,000 tonnes. The bulk of its production is used as “architectural solutions” by the local construction sector. Drive down Shaikh Zayed Road and chances are that one or the other tower will have been supplied by the manufacturer, including the Burj Khalifa. Witsch says the sector needs to start preparing for life after the Expo. “When the Expo impact gets less visible in our own offtake, we already have measures in place to grow in other markets,” he added. (Currently, exports make up 10 per cent of its output. It has also been raising its supply of value-added extrusions to the global automotive industry. Gulf Extrusions is currently rated as a Tier-2 supplier and is now working to upgrade it to Tier-1.) 

And what of steel? The UAE in January doubled import duties on steel debars (deformed bars) and pipe rods to 10 per cent, a move that met the long-standing demands of local steel mills to take action against steel dumping from China and Turkey.

“The Ministry of Economy understood the need to support local steel manufacturing that has invested billions in the industry,” said Bharat Bhatia, CEO of Conares, which operates a mill in Jebel Ali. “Current steel consumption in the UAE is between 3.2 million to 3.5 million tonnes, while local production of deformed steel is about 4 million tonnes.

“Imports currently are arriving only from the GCC, but due to quicker delivery, most projects are demanding “Made in UAE” products. Even traders prefer to stock local as they can get it 24×7 and in the required lot size.”

For now, steel prices are at around Dh2,000 plus. As for cement, “They have been stable for the last seven months or so, and that’s because local production had increased capacity quite significantly,” said Mohammad Farooq, Managing Director at Dubai Walls Construction. “These days, a 50-kg bag could be bought for Dh12.2 from Dh12.5-Dh12.7.

“But the biggest plus for local contractors and suppliers has been the relaxing on visa requirements to bring in additional manpower. Paying deposits to source manpower was where a lot of the cash flow of contractors were getting stuck. Now that the UAE authorities has relaxed this, it puts contractors in a much better situation. That’s a huge relief, no doubt.”

After a tough 2018, the local construction sector will take any break that comes its way. Local manufacturers seek tax support on other building materials now that the UAE has raised import duties on steel, local building supply manufacturers are hoping the local and GCC authorities would extend it to other product categories as well.

The GCC Secretariat recently instituted a “safeguard duty” on painted, varnished or plastic coated for a three-year period, with the duty set at $169 a tonne and then reducing thereafter. Market sources say they are awaiting for these measures to be applied at the local level. “In regards to colour coated, since the GCC has imposed safeguard measures we are expecting the same to be applied in UAE,” said Bharat Bhatia of Conares. Also, the import duty on pipes could be looked into as well, according to Bhatia. “Domestic manufacturers would also like to have support from the authorities in protecting pipe and tube manufacturers. “Scaffolding companies are currently exempted from import duties — this practice should stop.

“Scaffolding companies don’t add any value on pipes. Only true value-added products should be exempted. The UAE has 2 million tonnes of installed capacity on pipes and tubes, and it would help if duties are raised to 10 per cent.”

Saudi Arabia’s Prince Turki unveils multibillion-dollar Asir projects

According to Saudi Press Agency (SPA), Prince Turki said the projects cover sectors such as health, transport, and municipal services.

Major transport projects announced include the construction of the Asir-Jazan road at a cost of $1.6bn (SAR6bn); and the $1bn (SAR4bn) expansion of the coastal road between Jeddah and Jazan, which will link Asir to Makkah and Jazan, providing shorter journey times.

Among the recently progressed Saudi Arabia construction projects is the expansion of Abha Airport’s terminals to increase its capacity from 1.1 million passengers a year to 2.5 million. Plans also include increasing the number of boarding gates for domestic flights to four and for international flights to two.

According to an Arabic-language report by SPA, another significant completed project in Asir is the 1,000-bed King Faisal Medical City, which features a specialised hospital, a cardiac centre, a tumour centre, and a centre for neurological sciences for children. The facility will reportedly serve Asir and the Baha, Najran, and Jazan regions.

The projects follow directives by Saudi Arabia’s Crown Prince, Vice President of the Council of Ministers, and Minister of Defence, HRH Mohammed bin Salman bin Abdulaziz, to raise the quality of medical services and the efficiency of road and air traffic in the kingdom.

The news comes amid of flurry of infrastructure announcements from the kingdom’s senior leadership. Last month saw King Salman bin Abdulaziz Al Saud, Custodian of the Two Holy Mosques approve 1,281 cross-sector development projects in Riyadh.

UAE launches $8.7bn housing project plan

HH Sheikh Mohammed bin Rashid al Maktoum, the UAE Vice President, Prime Minister and Ruler of Dubai, has announced the launch of a massive plan that will see more than 34,000 residential units built across the country within the next six years.

Developed for the local Emirati population, the project has had funds worth $8.7 billion allocated to it, and it is expected to be completed by 2025, a report by WAM said. It added that Sheikh Mohammed had also given directives to raise the value of the salary ceiling of beneficiaries obtaining support from the Sheikh Zayed Housing Programme from AED10,000 to AED15,000.

He also issued a directive to raise the value of housing loans for citizens in government residential neighbourhoods from AED800,000 to AED1.2 million as a maximum loan amount, depending on the value of the premises.

The decisions came in the wake of an inspection tour conducted by Sheikh Mohammed bin Rashid, during which he visited a number of housing and road infrastructure projects in Ras Al Khaimah, the report said.

“We have pledged, from the beginning, to ensure that every UAE citizen is provided with a home, and that no area is left undeveloped,” he said during the tour.

“The quality of housing across the country is of a unified standard,” he noted, adding that housing services for UAE citizens are also unified.

“We want higher levels of competitiveness between government sectors for the benefit of Emiratis. The Sheikh Zayed Housing Programme holds a special value providing necessary services to Zayed’s children,” he added.

HyperloopTT to start construction on Dubai-Abu Dhabi border in Q3 2019

The proposed Hyperloop site is within Aldar’s Seih Al Sderieh landbank, located on the border of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport.Hyperloop Transportation Technologies (HyperloopTT, HTT) appointed a design lead for its planned project on the Dubai-Abu Dhabi border, in a major step towards making the futuristic commercial travel system a reality in the UAE. A team led by Lebanese design and engineering giant Dar Al-Handasah will begin construction of the first commercial Hyperloop system in Abu Dhabi in Q3 2019.

In addition to joining the project as design lead, the Dar Al-Handasah is also on board as investor with HyperloopTT.HyperloopTT signed an MoU with listed property firm Aldar Properties in April this year to develop a new HyperloopTT centre that will include a full scale commercial Hyperloop system, an XO Square Innovation Centre and Hyperloop Experience Centre.The proposed site is within Aldar’s Seih Al Sderieh landbank, located on the border of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport. Construction of the Hyperloop commercial track, as well as HyperloopTT’s XO Square Innovation Centre and Hyperloop Experience Centre, is targeted to begin in Q3 2019.

“We are bringing the future of rapid transportation technology to all those living in the UAE,” said HyperloopTT chairman Bibop Gresta.

Manitowoc to unveil new cranes and lifting solutions at bauma 2019

Manitowoc, one of the leading global manufacturers of cranes and lifting solutions, has announced the debut of six new models from its Grove and Potain lines at bauma 2019 in Munich, Germany. T he company will also present a technology pavilion, highlighting a wide range of customer-focused innovations. Apart from the six new cranes, Manitowoc will display more than 10 new cranes during the show from 8-14 April 2019.

At the company’s stands FS 1201, FS 1202 and FS 1302/1, several new Potain cranes will be on display including those from its topless tower crane and self-erecting Hup ranges.

For Grove, Manitowoc will introduce new cranes from its all-terrain and rough-terrain lines. The company will also present new technologies for the industry, with one highlight involving a recent advancement in telematics.

Commenting on the world’s leading construction equipment trade fair, Barry Pennypacker, president and CEO of Manitowoc, said, “bauma 2019 will be a great opportunity for us to connect with a large number of Manitowoc customers, which will enable us to gather the information necessary to continue our strategy of adding tremendous value to our customers.”

Sources

https://www.khaleejtimes.com/business/economy/dubai-construction-firms-bullish-on-year-ahead

https://gulfnews.com/business/property/stable-prices-of-construction-materials-offer-respite-to-uae-builders-1.62552780

https://www.constructionweekonline.com/projects-tenders/169895-saudi-arabias-prince-turki-unveils-multibillion-dollar-asir-projects

http://www.technicalreviewmiddleeast.com/events/eventnews/manitowoc-to-unveil-new-cranes-and-lifting-solutions-at-bauma-2019

https://www.constructionweekonline.com/168736-saudi-arabia-future-super-city-neom-construction-start-in-2019

https://www.arabianbusiness.com/uae/406731-hyperlooptt-to-start-construction-on-dubai-abu-dhabi-border-in-q3-2019

UAE launches $8.7bn housing project plan

VAT & The Construction Industry in GCC

At the beginning 2018 United Arab Emirates and Saudi Arabia introduced Value Added Tax (VAT) of 5% on most purchases across various sectors. There have been speculations on how VAT would impact the economy as a whole, the growth of different industries, future investments and the employment.

According to the UAE Government website, Value Added Tax or VAT is a tax on the consumption or use of goods and services levied at each point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world. The end-consumer ultimately bears the cost. Businesses collect and account for the tax on behalf of the government.

It continues by stating, businesses will be responsible for carefully documenting their business income, costs and associated VAT charges.

Registered businesses and traders will charge VAT to all of their customers at the prevailing rate and incur VAT on goods/services that they buy from suppliers. The difference between these sums is reclaimed or paid to the government.

In this article, we will review the impact of VAT on different industries in the region, we will then look into its impact on the construction sector in the region.

Why do countries introduce VAT?

According to World Bank, empirical studies have shown the interlinks between the VAT performance of a country and its level of development.   The revenue gains from VAT are likely to be higher in an economy with higher level of per capita income, lower share of agriculture, and higher level of literacy.  VAT proves to be an efficient tool for revenue collection; its performance, therefore, has direct impact on fiscal mobilization, macroeconomic stability, and development.

Compared with alternatives in indirect taxation, the VAT has more revenue potential:  it is generally more broad-based and entails a trail of invoices that helps improve tax compliance and enforcement.

According to The National, The introduction of value added tax had a positive impact on economic growth and development in the GCC in its year of implementation, a report said, as the UAE and Saudi Arabia come up on its first anniversary and Bahrain prepares to roll out the levy in 2019.

Once implemented, a GCC-wide VAT could generate revenues of between 1.5 per cent and 3 per cent of the six-country economic bloc’s total non-oil gross domestic product from next year, the report from the Federation of GCC Chambers said, citing earlier figures from the International Monetary Fund.

Impact of VAT in the United Arab Emirates

Most countries have introduced VAT, and it has proven to have a positive impact on the economy. According to a study conducted by Entrepreneur Middle East, here are some of the benefits of VAT in the UAE:

  1. Boost to government coffers
    The new tax is expected to bring a significant new revenue stream to the UAE government. According to His Excellency Younis Al Khouri, Undersecretary at the Ministry of Finance, the measure is expected to raise around AED 10bn to AED 12bn in the first year of implementation alone. This revenue will go into creating a more stable economy, which can’t help but have a positive knock-on effect on local businesses.
  2. Improved infrastructure
    Not only will the revenue help to stabilize the economy, but it will improve the country’s infrastructure, making it easier and less expensive to do business in the UAE. Investment in infrastructure often has a significant effect on economic development because of multiplier effects, which means that for every AED 1 invested the impact on GDP is even higher. What’s more, value-creating tax strategies can give you a competitive advantage compared to other countries in the region, although in the UAE’s case this will be neutralized by the fact that all six GCC countries will eventually implement the same measure.
  3. Non-financial benefits
    As demonstrated by a number of successful global implementations, tax regulation can bring many non-financial benefits to an economy. The most important of these is improved liability management. The introduction of taxes, particularly VAT, can play an important role in enhancing government accountability and democracy. Official taxation records, properly managed, result in faster and more informed decision-making, and reduce the incidence of civil fraud, corruption and waste.

    Impact of VAT on the construction sector – regionally

    According to an Article on Khaleej Times about the impact of VAT on the construction sector in the UAE,” The UAE’s construction industry has not been impacted by the recent introduction of 5 per cent value-added tax (VAT) and it will witness over 10 per cent expansion in 2018, the second-fastest growth rate in the world, according to industry executives and research reports.

    The industry executives believe that Expo 2020 is not the end for the construction sector. Rather they are pinning hopes on multi-year plans such as Vision 2021 which would drive the industry in the post-Expo 2020 era.

    “I see good potential for the construction sector. I would say VAT has not impacted us that much; however, there is a pressure on cash flow but people are getting used to it,” said Ravi Murthy, chief financial officer, Arabtec Construction”

    As for the real estate sectors, industry leaders have a similar feedback. “Matthew Bate, CEO, Engel & Volkers, told Khaleej Times that there was no impact of VAT and first quarter of 2018 was its biggest operating quarter during the last three years.

    “VAT didn’t really have any impact because five per cent is negligible, considering some of the rates that exist in a lot of economies. With the way VAT works with input and out taxes, it has got very little effect on developers. I think VAT probably if affects anything is it is from cash flow position. But if you got a nice sustainable business, then VAT has little impact,” he said.

    Bates noted that “the government is behind a lot of construction activity and obviously Expo 2020 is a major factor. But it is a lot beyond that. I don’t’ think any developer or industry is focusing feasibility studies and returns on investments are just based on 2020. It is the whole 2021 plan, and beyond that as well.”

    Future of construction sector and VAT

    If there is one message for businesses to take from the implementation of VAT in 2018 is that a conservative approach to VAT collection and recovery is advisable.

    While the market is getting used to the concept of VAT, a conservative and risk-averse approach to filing VAT returns seems likely to be the most cost-effective in the long run. For areas of ambiguity it is vital that businesses have a clear paper trail to support any decisions which may be examined during any audit.

    For the construction industry the long project timelines, complex supply chains and phased payment programmes are all compounding the challenges of adjusting to the new tax regime. The most crucial issues for the businesses represented revolved around getting clarity on exactly when they should be collecting and reclaiming VAT.

    Processes to narrow the gap between raising invoices and actual payment are much needed in order to prevent businesses having to carry the VAT burden for an unreasonable period. As the four remaining GCC states go live with their VAT systems in the coming years, demand for clear and consistent processes across the region will grow.

    Manitowoc posts positive results

    Crane manufacturer Manitowoc reported full-year orders for 2018 of $1,910.7 million – a three percent increase on 2017’s figure. Manitowoc also reported its full-year revenue for 2018 increased by 17 per cent year-over-year (YOY), from $1,581.3 million in 2017 to $1,846.8 million in 2018.Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $116.2 million, and 6.3 percent of net sales.

    The company’s 2018 results were boosted by its fourth quarter figures, where net sales were $515.3 million versus $481.5 million in the comparable period in 2017. Manitowoc primarily attributed the YOY increase to improved demand in the Americas, driven by higher shipments of cranes for the commercial construction and energy end markets – although this was partially offset by lower demand in the Benelux countries and the Middle-East, coupled with unfavorable changes in foreign currency exchange rates.

    “The Manitowoc team again delivered excellent results in the fourth quarter, marking the seventh consecutive quarter of year-over-year adjusted EBITDA percentage improvement,” commented Barry Pennypacker, Manitowoc president and chief executive officer.

    Fourth-quarter orders, however, of $485.7 million for 2018 decreased 22 percent from the comparable period in 2017. Backlog totalled $670.6 million at 31 December 2018, an increase of 11 percent, from the prior year ending backlog of $606.6 million.

    Looking ahead to 2019, Manitowoc said it expected revenue to increase from approximately $1.85 billion to $1.95 billion and for adjusted EBITDA to increase from approximately $125 million to $145 million. “Our results and outlook demonstrate how our strategic priorities are delivering ever-improving results,” Pennypacker added. “We will continue to provide our customers with the type of cranes they need to increase their return on invested capital. This will be evident with our new product introductions at the Bauma trade show in April 2019.”

    Sources:

    http://guyanachronicle.com/2018/11/27/vat-credits-for-electricity-and-water

    https://government.ae/en/information-and-services/finance-and-investment/taxation/valueaddedtaxvat

    http://www1.worldbank.org/publicsector/LearningProgram/PracticalIssues/papers/Value%20added%20taxation/Value%20Added%20Taxation.doc

    https://www.entrepreneur.com/article/307462

    https://www.saifaudit.com/blog/2015/10/28/vat-in-dubai-how-vat-can-affect-uae-competitiveness/

    https://www.khaleejtimes.com/business/real-estate/No-VAT-impact-on-construction-sector-in-UAE

    https://www.bromheadco.co.uk/insights/construction-drawn-into-vat-reverse-charge-process

    https://mena.thomsonreuters.com/en/articles/the-impact-of-vat-on-the-gcc-construction-sector.html

    https://www.americancranesandtransport.com/american-cranes-and-transport/manitowoc-posts-positive-results/137041.article

Why is everyone talking about PPP?

There have been many talks in recent years in the GCC and primarily in the UAE about the private sector and the growing support for it. The key focus of the Ghadan 2021 vision is to fund, encourage and push the private sector to grow. Some of the benefits of a growing private sector includes its contribution to the GDP, creating employment, attracting foreign direct investments to the country; this is just to name a few.

Now, another topic is in the spotlight: the partnership between public and private sector in the UAE. But what is the nature and the various elements of this type of partnership and what are the benefits for the economy.

The official history of public private partnership (PPP) is not that long ago. According to Law Teacher website, “In 1992 the John Major led government, in the United Kingdom introduced the Private Finance Initiative (PFI), which was the first systematic programme aimed at encouraging Public-Partnerships. The United Kingdom has one the most advanced public-private partnership programmes. Public-private partnership is responsible for about 24% of its public investments. The process has also been adopted by some Australian state governments; a model is the state of Victoria”.

We will review this topic in detail and showcase how such partnership have benefited the economy in the past.

According to World Bank, “There is no one widely accepted definition of public-private partnerships (PPP). The PPP Knowledge Lab defines a PPP as “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance”. PPPs typically do not include service contracts or turnkey construction contracts, which are categorized as public procurement projects, or the privatization of utilities where there is a limited ongoing role for the public sector. For a broader discussion, see PPP Knowledge Lab . An increasing number of countries are enshrining a definition of PPPs in their laws, each tailoring the definition to their institutional and legal particularities”.

“In some jurisdictions, and in particular civil law counties that follow the tradition of the Code Napoleon, a distinction is made between public contracts such as concessions, where the private party is providing a service directly to the public and taking end user risk, and PPPs, where the private party is delivering a service to a public party in the form of a bulk supply, such as a Built-Operate-Transfer (BOT) project for a water treatment plant, or the management of existing facilities (e.g. hospital facilities) against a fee.

In other countries, specific sectors are excluded from the definition, particularly those sectors which are subject to effective regulation or where there is extensive private sector initiative, such as in ICT Telecoms. In some countries arrangements involving more limited risk transfer such as management contracts are excluded from the definition for institutional reasons as the authorities prefer that they fall under traditional procurement processes for goods and services”.

What are the expected outcomes of public private partnerships?

Ministry of finance of the republic of Lithuania has summarized the advantages and some of the disadvantages of PPP, which are as following:

PPP advantages:

  • Ensure the necessary investments into public sector and more effective  public resources management;
  • Ensure higher quality and timely provision of public services;
  • Mostly investment projects are implemented in due terms and do not impose unforeseen public sectors extra expenditures;
  • A private entity is granted the opportunity to obtain a long-term remuneration;
  • Private sector expertise and experience are utilized in PPP projects implementation;
  • Appropriate PPP project risks allocation enables to reduce the risk management expenditures;
  • In many cases assets designed under PPP agreements could be classified off the public sector balance sheet.

PPP disadvantages:

  • Infrastructure or services delivered could be more expensive;
  • PPP project public sector payments obligations postponed for the later periods can negatively reflect future public sector fiscal indicators;
  • PPP service procurement procedure is longer and more costly in comparison with traditional public procurement;
  • PPP project agreements are long-term, complicated and comparatively inflexible because of impossibility to envisage and evaluate all particular events that could influence the future activity.

Public private partnerships in various countries

United Kingdom

In 1992, the Conservative government of John Major in the UK introduced the PFI,[30] the first systematic programme aimed at encouraging public–private partnerships. The 1992 programme focused on reducing the public sector borrowing requirement, although, as already noted, the effect on public accounts was largely illusory. The Labour government of Tony Blair, elected in 1997, expanded the PFI initiative but sought to shift the emphasis to the achievement of “value for money”, mainly through an appropriate allocation of risk. However, it has since been found that many programs ran dramatically over budget and have not presented as value for money for the taxpayer, with some projects costing more to cancel than to complete.

United States

In 2017, the State of Texas sought its first ever private partner to join in a project to renovate the G. J. Sutton Building in Downtown San Antonio near the Alamodome, according to Mike Novak, the chairman of the Texas Facilities Commission. Local governments in Texas have already entered into such partnerships including the redevelopment of the HemisFair Arena and the construction by Weston Urban of a new Frost Bank Tower in San Antonio. Named for G. J. Sutton, the first African-American elected official in San Antonio, the six-acre complex was vacated by the state in 2014 because of bat infestation and a deteriorating foundation. In 2015, Governor Greg Abbott, counter to the wishes of Mayor Ivy Taylor, used his line-item veto to remove $132 million which would have funded the rehabilitation of The Sutton. The state expects to see the property used at some point in the future for office space and parking slots. Billy Nungesser, the lieutenant governor of Louisiana, proposed in 2017 that public–private partnerships be established for many of his state’s financially-strapped state parks, which fall under his jurisdiction, particularly citing two popular facilities in Sabine Parish: North Toledo Bend State Park and Hodges Gardens State Park, at which operating costs vastly outstrip revenues from the $1 park admission fees. Because of recurring state financial issues, the fate of state parks in Louisiana remain in doubt after July 1, 2017

Public private partnership in the UAE

According to the UAE government website, “in 2017, the UAE Cabinet issued resolution (1/1) on the procedures manual for partnership between federal entities and private sector. The manual intends to diversify the mechanisms for developing the strategic infrastructure projects and improve the quality of services. It also provides a general framework for project lifecycle of partnerships with private sectors.

Dubai regulatory framework of Public Private Partnerships

Government of Dubai enacted Law No. 22 of 2015 which sets up the regulatory framework of Public Private Partnerships in the emirate of Dubai. The law aims at encouraging the private sector to participate in the development of projects and increase investments in different fields. According to the law, a partnership project may be proposed by a government entity or by the private sector. It also specifies certain terms for partnerships between the public and private sectors. They are:

  • feasibility of the project economically, financially, technologically and socially
  • allocation of sufficient funds in the budget of the government entity to cover the expenses of the project, if any.

The law stipulates conditions for approving the projects. These conditions involve, among other things, funding and methods of partnerships. The term of the partnership contract may not exceed thirty years from the date of execution. For more details, read the guide Public Private Partnerships in Dubai issued by Department of Finance – Government of Dubai”.

Public Private partnership in the construction sector (Case study)

In the UAE, to align with the PPP initiative, according to ConstructionWeekOnline, two public-private partnership (PPP) contracts worth $13.9m (51.3m) have been awarded by Abu Dhabi Municipality (ADM) for the construction of a service station and a market.

UAE firm Tristar Engineering and Construction Company won a $9.8m (AED30m) contract to build the 12.3ha community market in Mohammed bin Zayed City.

Florida Property Development Company will build a $4.1m (AED15.3m) service station in Al Shawamekh city that will provide car repairs, carpentry, and a range of household maintenance services.

Saif Badr Al Qubaisi, ADM’s general manager, said the duo of deals will “step up the development drive and add to the new projects needed for delivering modern services to the community”. He noted that the agreements with Tristar and Florida Property Development Company reinforced the municipality’s mission to bolster “cooperation with the private sector”.

Earlier this year, ADM signed $24m (AED87m) worth of contracts to build social infrastructure projects, including three playgrounds, a sports centre, and four service stations. These contracts were signed as part of growing collaboration with the private sector.

Will other countries in the GCC follow suit?

According to an article published on ME Construction News website, while there has been collaboration between the public and private sectors for some time, the relationship has been restricted to service contracts and to the water, energy and transport sectors. Most projects in the GCC region developed using a recognised PPP model have traditionally done so under each market’s own version of tender and procurement laws.

One of the key reasons PPP has yet to make a mark in the region is due to the lack of legislation, however, experts have pointed out that this is beginning to change. “I’m pleased to see that countries and states that are interested in PPP are trying to regulate it and introduce a framework for it. That’s the very first step,” said Andrew Mackenzie, partner at Baker McKenzie Habib Al Mulla, a law firm specialising in construction disputes and arbitration.

“We haven’t yet seen an explosion of these projects. We’re beginning to see a few of them pop up more regularly, particularly in the power or water sector – where private companies want to partner with public bodies to provide desalination plants or power projects of a particular nature.”

Highlighting the $500 billion NEOM city development as a particular example, Mackenzie told MECN.com that it would be a perfect test for the private-public partnership model. “I think Saudi Arabia will begin to take the lead on more of these megaprojects, but the UAE, Oman, Kuwait, Bahrain and Qatar have a number of significant projects in the pipeline. As we move towards $70, possibly even $80, a barrel in oil prices, these projects become far more commercially viable as more liquidity returns to the market.”

Conclusion

Even though PPP has its clear advantages, but it has its critics as well. Many believe that not all sectors/verticals should fall within the PPP framework, some essential sectors such as water or energy of education should always be controlled by the government as they should always be kept as a non-for-profit entities while other believe that privatization helps sectors grow and become competitive and eventually help us achieve more.

Oman to lay foundation stone for PPP housing project

Oman will lay the foundation stone for an affordable housing development built through a public-private partnership (PPP) in the coastal city of Barka on 22 October. Representatives from the country’s Supreme Council of Planning (SCP) will attend the ground-breaking ceremony for the integrated residential project in northern Oman, on behalf of HE Sheikh Saif bin Mohammed Al Shabibi, Minister of Housing.

Oman’s state-run news agency said the mixed-use residential community was a “first-of-its-kind” project for the sultanate due to its PPP model, which would see “one of the leading real estate companies” develop the community in accordance with international construction standards. The name of the company was not revealed, nor was the project’s value, but it is believed to the be the first time that SCP and Oman’s Ministry of Housing have collaborated on a project of this scale. The Barka-based residential community will have shops, a mosque, healthcare centres, public parks, and an open grassy field for sport. The project is designed to attract Omanis seeking affordable and modern properties. Equipped with integrated infrastructure, tree-lined boulevards, ample parking, and a host of amenities, officials in Oman’s government hope the project will stimulate economic growth and reduce state spending through private sector collaboration, according to Oman News Agency. 

Meanwhile, real estate deals in Oman have been on the slide recently, as Ministry of Housing statistics recorded a year-on-year decline in the value of property deals during the first six months of 2018. Despite a rise in cash generated by stamp duty collection fees, money made by property sales dropped marginally by 0.4% in H1 2018 when compared to the same period a year ago.  A surge in housing plot allocation has partially offset the nominal value decline. In total, 22,128 residential plots were handed out between January and July 2018, marking a 29% rise on the 17,125 building plots granted by the government during the first seven months of 2017.

End.

 

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https://bridgemastersinc.com/u-s-infrastructure-benefits-public-private-partnerships/

http://farsportscars.com/state-federal-goverment-venn-diagram.html

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https://finmin.lrv.lt/en/competence-areas/public-and-private-partnership-ppp/ppp-advantages-and-disadvantages

Allen, Grahame. “The Private Finance Initiative (PFI) Commons Briefing papers RP01-117” (PDF). UK Parliament: House of Commons Library. 

Richard Webner, “State seeking builder for Sutton rehab”, San Antonio Express-News

“Are State Parks closing?”. The Alexandria Town Talk. April 16, 2017. Retrieved April 17, 2017.

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https://www.reuters.com/article/us-dubai-future-analysis/dubai-inc-may-face-shakeup-after-debt-standstill-idUSTRE5AO4J820091126

https://www.constructionweekonline.com/article-50010-abu-dhabi-signs-ppp-agreements-worth-14m

http://meconstructionnews.com/27910/gcc-governments-need-proper-regulations-and-frameworks-for-ppp-to-succeed

https://www.constructionweekonline.com/article-50527-oman-to-lay-foundation-stone-for-ppp-housing-project

Why has the investment in infrastructure increased over the past 5 years in the GCC?

In the past few years GCC countries have seen significant investment going toward the infrastructure and almost every month, the news headlines consist of major projects being announced. In the report we are looking at the factors behind the growth in the infrastructure in the region and introduce some considerable projects.

According to a report by the International Monetary Fund (IMF), “The GCC economic model relies on oil as the main source of export and fiscal revenues (Figure 1). The government is the dominant force in the economy, receiving oil export revenues and in turn distributing them to citizens. A portion of these revenues is spent directly by the government and provided to citizens through transfers and public sector jobs; another portion is invested in infrastructure and real estate, education, and health; while the rest is saved, including in sovereign wealth funds (SWFs). Most GCC countries have long oil and/or gas production horizons and, consequently, have significant wealth underground as well as saved in SWFs or at the central bank”.

According to Global Finance, An infrastructure boom is taking place in the GCC. Most of the GCC countries have some kind of 30-year plan or vision to develop projects, as these oil-rich countries look to invest surplus funds in transport, utilities (power, water) and petrochemical infrastructure to keep pace with their rapidly growing economies and populations.

Before getting into the details, according to Invstopia, infrastructure is the term for the basic physical systems of a business or nation — transportation, communication, sewage, water and electric systems are all examples of infrastructure. These systems tend to be high-cost investments and are vital to a country’s economic development and prosperity.

Visions of the leaders

In the UAE, the government has a dedicated ministry specially for infrastructural development. According to Khaleej times, Energy, utilities and transportation sectors in the UAE will see massive growth in the next two decades as the government will pump Dh1.3 trillion in the development of these sectors, analysts said. Recently, Abu Dhabi National Oil Company (Adnoc) has announced plan to invest Dh165 billion in downstream sector. Also, the UAE is investing billions of dirhams in transportation sector such as Etihad Rail, Dubai Metro and Hyperloop.

According to Middle East Rail, $250 billion is expected to be invested in the Middle East on various railway projects over the next decade. This year alone, it’s estimated that spending on 162 regional projects to be over $86.7 billion.

In addition, billions of dirhams are currently being pumped into the development and expansion of Al Maktoum International Airport and Abu Dhabi Airport. In addtional, the metro line expansion for the Expo 2020 site where NFT has a dozen tower cranes installed, is another main infrastructure project. According to Strategy& report, other GCC governments are also investing significant amount to develop infrastructure. Saudi Arabia is likely to spend Dh4 trillion ($1.1 trillion) from 2019-2038, while the UAE is scheduled to invest $350 billion over a similar time frame. These large development schemes can allow local companies not just to substitute imports, but also to grow non-oil exports by enhancing their capabilities.

According to Strategy& report, GCC governments need to think logically about how they balance the need to localize manufacturing while pursuing sound economic policies. There are many capabilities that the region does not possess because of its small size and hence needs to import to build infrastructure. According to Emirates News Agency (WAM), earlier this year, the development journey of the UAE aims to place the country at the highest levels of global competitiveness, to provide the best in class quality of life to people and achieve their happiness, said His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. His comments came during his visit to The Sustainable City – the first net zero energy city in Dubai. He was accompanied by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai.

“Our vision is clear in terms of establishing sustainability’s pillars as a key component of our development journey, which is part of the national agenda. We are committed to sustainability, which is a top priority that we strive to implement taking into consideration environment conservation, and balance between economic and social development,” Sheikh Mohammed said.

Saudi Arabia and the increase in Foreign Direct Investment (FDI)

According to a report by CNBC, Saudi’s $500 billion mega-city NEOM is attracting ‘overwhelming’ interest from investors

With ambitious plans to transform its economy as part of the crown prince’s Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI).

With ambitious plans to transform its economy as part of the crown prince’s Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI) into the country as it embarks on a post-oil era and ambitious mega projects like the futuristic city of NEOM.

Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA), said foreign direct investment (FDI) was growing in Saudi Arabia. Official figures from the World Bank show FDI net inflows were $7.453 billion in 2016 while net outflows were $8.936 in the same year. Since then, however, Saudi Arabia’s Crown Prince Mohammed bin Salman has appeared to take the reigns on transforming the economy and society by introducing a raft of liberalizing reforms.

“We have seen a growth for foreign investment — about 50 percent comparing the first quarter this year to the same period last year. Also, the (FDI) inflows we have seen about 40 percent,” Al-Omar – governor of the Saudi Arabian General Investment Authority (SAGIA)- told CNBC as she hosted a session on the Saudi Arabian FDI landscape at the Gateway Gulf investment forum in Bahrain.

The project is estimated to take between 30 to 50 years to complete, however, with the first phase due by 2025.

“And the $500 billion, we’re not going to spend it all tomorrow and, quite frankly, a lot of it will come from private investments,” Kleinfeld (NEOM’s Chief Executive) said. “But what I’m seeing today is that the interest in partnering is overwhelming.”

Kleinfeld said that key concepts for NEOM, such as mobility around the city, were still being explored and there “there are gazillions of players that are willing to help and willing to invest in that,” he said. With the current wealth of the region, which have significant amounts in their Sovereign Wealth Funds (SWFs) and an increase in Foreign Direct Investment (FDI), the plans to improve the infrastructure in the region is well underway.

Fluctuations in the price of crude oil

Oil prices have been fluctuating in the past few years and based on most sources, the outlook doesn’t seem that the prices will increase significantly next year. As outlined in the graph below by Macrotrends website, the oil prices have decreased since 2014.This decrease in oil prices is another reason as to why, GCC countries have looked into diversifying their economies and lower their dependencies on oil and consequently investing in infrastructure.

More populations – the need for better infrastructure

The graph above by Worldometers website, clearly show the significant increase in the population of the UAE and just in less than 15 year the population has almost doubled. This amazing increase in population not only shows more job opportunities in the country but also a major need for a better infrastructure.

Economic diversification in the region

According to a report by the International Monetary Fund (IMF), the Gulf Cooperation Council (GCC) growth model has delivered strong economic and social outcomes over several decades. GCC economies rely on oil as the main source of export and fiscal revenues. Over the years, GCC governments have increased public sector employment and spending on infrastructure, health, and education. This has helped raise standards of living and support private sector activity, particularly in the non-tradables sector.

The current growth model has weaknesses, however, and increasing economic diversification is paramount. Greater diversification would reduce exposure to volatility and uncertainty in the global oil market, help create private sector jobs, increase productivity and sustainable growth, and establish the non-oil economy that will be needed in the future when oil revenues start to dwindle. A number of policies have been adopted to diversify the GCC economies and reduce their reliance on oil. A stable, low-inflation economic environment has been achieved, the business climate has been strengthened, education has been expanded, trade and foreign direct investment (FDI) has been liberalized, and the financial sector deepened. National development plans are being implemented with a view toward boosting the human capital of nationals, and developing new industries and services that can employ high-skilled labor. Nevertheless, to date these diversification strategies have yielded mix results. The share of non-hydrocarbons output in GDP has increased steadily but is highly correlated with oil prices, and progress with export diversification, a key ingredient to sustainable growth, has been more limited.

One of the key reasons as to the increase in the investment in infrastructure is to make sure the economic diversification plans can actually be achieved but of course as mentioned above, it has had its challenge as well.

In Summary

 With $1.2 trillion of roads, buildings and infrastructure projects planned across the GCC at the start of 2018, according to Research and Markets report, the region offers abundant opportunities for construction contractors, engineers, project managers and manufacturers. In the next two decades, according to Strategy& non-OECD states are projected to spend more than $57 trillion on infrastructure projects, compared to $34 trillion by OECD countries, it said. Historical under-investment in infrastructure, rapidly-growing populations, the emergence of the new Silk Road trading route between the MENA region and Asia and the need to diversify beyond oil and gas are all contributing to the need for heightened investment in infrastructure.

New Kuwait 2035 needs smart city-led contracts

The six-strong panel, moderated by Charles Lilley, partner at law firm Bryan Cave Leighton Paisner (BCLP), took to the stage to discuss all things related to the Kuwait National Development Plan. Commonly referred to as New Kuwait 2035, the programme seeks to increase the country’s revenue from $43.6bn ( KWD13.2bn) in 2017 to $164bn (KWD49.8bn) by 2035. With these figures in mind, the country’s leadership has placed great emphasis on the development of transport infrastructure, commercial buildings, industrial facilities, and renewable energy infrastructure.

The issue of technology as part of Kuwait’s New Vision 2035 was also discussed, particularly in the context of numerous planned high-profile smart city initiatives rolling out across the region, notably the planned $86bn (KWD26.1bn) Silk City mega-project. “Smart cities are no longer just something that is nice to have, but a requirement by default,” said Nabil Kobrosly, vice president of business development for Parsons’s built environment division in the Middle East and Africa. “In each and every project that we do, especially in construction design, provisions are made for smart city consultants or technology operators to be able to bring in their equipment.

End.

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https://internationalbanker.com/finance/making-infrastructure-investment-more-attractive-to-private-capital/

https://www.investopedia.com/terms/i/infrastructure.asp

https://www.imf.org/external/pubs/ft/sdn/2014/sdn1412.pdf

https://www.khaleejtimes.com/business/economy/uae-to-invest-/dh13-trillion-in-/these-sectors

https://www.cnbc.com/2018/05/10/saudis-500-billion-mega-city-neom-is-attracting-overwhelming-interest-from-investors.html

http://wam.ae/en/details/1395302665808

https://www.gfmag.com/magazine/september-2013/gcc-infrastructure-investment

https://www.macrotrends.net/2516/wti-crude-oil-prices-10-year-daily-chart

http://www.worldometers.info/world-population/united-arab-emirates-population/

http://whatson.ae/dubai/2016/09/dubai-future-accelerators-programme/

http://www.mei.edu/publications/rise-gulf-investment-india-searching-complementarity-and-synergy

https://www.uae-embassy.org/news-media/uae-economic-diversification-efforts-continue-thrive

http://www.constructionweekonline.com/article-50521-leaders-kuwait-2018-new-kuwait-2035-needs-smart-city-led-contracts/

Abu Dhabi’s “Ghadan 2021” Vision

The Middle East region is going through some economic changes and there has been massive projects revealed and announced by head of states. On September 16 Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed announced the budget and initial round of projects for the Ghadan (Tomorrow) 2021 strategy, a three-year plan designed to further reduce the emirate’s dependence on oil revenues.

Ghadan 21 – which means ‘tomorrow’ in English – is the banner name for a series of reforms aimed at stimulating investment, creating jobs, encouraging innovation and improving the overall quality of life for citizens. The plan will feature 50 initiatives focused on four areas – business and investment, society, knowledge and innovation, and lifestyle. According to Gulf News, A Dh50 billion three-year development accelerator programme for Abu Dhabi has been approved. The announcement was made on Twitter by His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces. Shaikh Mohammad said that the programme, dubbed Ghadan 21 (Arabic for Tomorrow), was approved during a meeting with members of the Abu Dhabi Executive Committee.

“We have approved a three-year, Dh50 billion budget for the Abu Dhabi Government Accelerators Program Ghadan 21. Dh20 billion will be allocated to the 2019 development package,” Shaikh Mohammad tweeted.

Approved on September 16 by His Highness Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the work on Ghadan 2021 (translated to Tomorrow 2021 in English) will commence from the beginning of 2019.

Push for economic reform

According to The National, the plan has 50 initiatives to stimulate investment and job creation, including investment in the knowledge sector, the employment and education of Emiratis, and overall quality of life. It will slash red tape for businesses and build confidence in the emirate’s economy. Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, and Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, were among those present at the meeting. During the session, the Cabinet ratified an agreement on cultural exchange between the UAE and France, and an air transport agreement between the UAE and Belize, the UAE and the Marshall Islands and air services between the UAE and the Caribbean country of Grenada. Additionally, it approved agreements to promote and protect UAE investments with Kazakhstan and Costa Rica, and agreed that the Emirates join the 1997 Protocol of the International Convention for the Prevention of Air Pollution caused by ships.

Private sector – the key focus of business development in the Ghadan 2021 strategy

According to Oxford Business Group, Abu Dhabi has moved ahead with plans to bolster the emirate’s non-oil economy following the launch of a Dh50bn ($13.6bn) programme aimed at fast-tracking economic growth and social development. Key to the Ghadan initiative is the improvement of the emirate’s business environment, with a particular focus on facilitating greater private sector participation.

“To this end, the Abu Dhabi Executive Council – the body tasked with overseeing the programme – announced the establishment of a new business licence registration process, which should allow for the approval of 91% of commercial activities within five minutes. To support this, the Tajer licence, which allows operators to establish businesses without having a permanent office, has also been expanded to cover all nationalities and more than 1000 different commercial activities.

Meanwhile, in terms of financing, officials announced that a credit guarantee programme will be established before the end of the year. Under this initiative, banks are expected to offer small and medium-sized businesses Dh10bn ($2.7bn) in funding over the next three years. This was coupled with the announcement that a new public-private partnership (PPP) law would soon be issued, and the initial tranche of these PPPs will be tendered in the first quarter next year, with up to Dh3bn ($816.9m) worth of projects in housing, infrastructure, energy and health care on offer. On this note, the Ghadan strategy is expected to generate opportunities for a range of service providers, with the construction and materials supply sectors in particular set to benefit from the uptick in projects forecast over the coming three years”.

Additionally, the government is also moving to support domestic services and materials suppliers, looking to adopt by early next year a new content policy giving preference to local suppliers in state tenders.

Innovation, Research & Development

According to the same report, another key feature of the programme is the facilitation of Abu Dhabi’s knowledge economy through a series of developments promoting innovation and research and development (R&D).

“Key to meeting these goals is the establishment of a new tech incubator, expected to open by the end of the year.

On top of developing local expertise and start-ups through cooperation with the private sector, the committee said the incubator will serve to increase Abu Dhabi’s attractiveness as a destination for tech-sector talent, and support industry-based R&D efforts. In terms of education, officials announced plans to add some 30,000 places to the emirate’s school capacity over the period, to be made up of 15,000 new students in private schools by 2021 and 15,000 in existing state schools by next year”.

Reaction from the market leaders

Walid El-Hindi, chief executive officer of Abu Dhabi-based developer Imkan, also voiced his support for the development strategy.

“We are delighted to learn of the Tomorrow 2021 reforms, which represent a further step towards strong economic diversification in the UAE,” he said.

“Our leadership’s long history of strategic initiatives represents their vision to create a capital city with diverse and robust sectors that go far beyond oil. We believe this is a strong step towards stimulating  investment and further enhance the quality of life for Abu Dhabi’s residents and visitors.”

According to Weetas, the CEO of Al Dar Properties and Developments, one of the biggest Abu Dhabi-based developers, Talal Al Dhiyebi, commented on the strategy by saying that it reflects how the government seeks to accelerate the emirate’s economic growth and support its property market, adding that re-evaluating Abu Dhabi’s regulations and rules for infrastructure, residential and commercial projects is a significant step towards cutting the industry costs for both residents and investors.

Conclusion and summary: The reasons and the impact of this economic reform

According to a report by The National, this major initiative has been analyzed as following:

Why?Government officials were set a 90-day deadline to put economic reforms in motion as part of a Dh50 billion stimulus package over three years. The aim is to diversify Abu Dhabi beyond its reliance on oil income and cement its status as a growing world power.

What is the plan? Tomorrow 21 is a four-point plan to shape the economic future of the capital. The idea is to:

Stimulate business and investment, as well as promote economic development for the private sector and small businesses and support industry projects for the renewable energy sector.

Improve the lives of UAE nationals by launching new housing projects and providing quality education at an affordable cost.

Develop the knowledge sector by encouraging technology companies, supporting research and development centers, and training and developing talent and expertise.

Enhance the quality of life for all through improved cultural, sporting and transport initiatives

How will it affect jobs? The package will also include the creation of 10,000 new jobs for Emiratis in private and public sector over the next five years, while dual licenses will be available for companies in Abu Dhabi free zones to allow them to work outside free zones and bid for government tenders.

UAE leads Middle East countries by total hotel rooms in construction

The Middle East room construction total represented a 27.4% increase compared with October 2017 according to a report released by STR.

Rooms in construction in Africa, however, is down by 2.3% year over year.

The Middle East has a total of 423 hotels in the construction pipeline with 127, 177 keys which up by 27.4% compared to October 2017. Out of that, the region has 127 properties in final planning stage with 191 properties in the planning stage.

Africa has a total of 139 properties in construction with 65 of them on final planning stage and 121 in the planning phase.

UAE takes the lead spot among top MENA countries by rooms in constructions as of October 2018 with 54,371 keys making up 33.5% of the existing supply. Saudi Arabia takes second place with 48,224 rooms in construction but leads in terms of overall growth with the construction making up 51.4% of the existing supply as of October 2018.

Oman has 4,471 rooms in construction which tallies to 24.4% of the exiting supply while Egypt has 3,925 hotel rooms in construction which is 2.3% of the current supply.

Geda and Potain hoist partnership

Tower cranes from Potain will be fitted with the Geda Potain Cab-In internal mast crane operator hoist as part of a new supply agreement.

With more than 100,000 cranes sold and more than 60 models produced in France, Italy, Portugal and China, Potain has evolved since its early beginnings in 1928 into a world market leader.

The two traditional companies collaborated closely in the development of the Cab-In, exclusively for the Potain top slewing crane. It is based on the Geda 2 PK crane operator hoist that has been on the market for several years.

The new internal mast Cab-In enables a fast route to and from the cab. It fits inside all crane mast systems and is compatible with all Potain bases and drive frames. It also increases cost efficiency since the hoist remains permanently in the crane avoiding any additional transport costs and separate storage areas being required at the installation site.

The Cab-In is easily accessible and therefore easy to maintain and service. For additional safety Geda and Manitowoc have also developed a new, enclosed sliding landing level safety gate specifically for the hoist.

Johann Sailer, managing director of Geda, said, “Always with our eyes on the market, one of our ultimate objectives is to offer our customers tailor-made height access solutions. Our existing expertise in crane operator hoists along with the exclusive collaboration with Manitowoc, has enabled us to develop the Geda Potain Cab-In, a product that precisely reflects the customer’s requirements and which already meets the future legal regulations coming into force in France.”

The market launch of the Cab-In is planned for the end of 2018 but it already complies with French regulations, which from 2019 will make the installation of a crane operator hoist obligatory for every crane with a lifting height of 30m. The hoist also complies with regulations in the Netherlands and in Scandinavia.

Since the partnership Manitowoc and Geda have agreed a five-year deal for several hundred devices. Existing Potain cranes are to be retrofitted with the new hoist.

MEA smart city spending to double in next four years.

Annual technology spending by smart cities in the Middle Eastand Africa (MEA) region is expected to double from $1.3 billion to $2.7 billion in the next four years, according to KPMG’s ‘The Rise of Smart Cities – Digital Transformation in the Public Sector’ report.

Addressing the Digital Saudi 2030 conference in Riyadh, Dr Samer Abdallah, head of digital, KPMG Al Fozan & Partners in Saudi Arabia, revealed that Riyadh and Dubai are the top spenders when it comes to the development of smart cities.

“Given the Saudi government’s move to embrace digital transformation in alignment with Vision 2030 and the National Transformation Program 2020, information technology (IT) spending in the kingdom is slated to grow by at least 14 per cent each year,” he added.

Global smart city spending is set to accelerate from $81 billion in 2018 to $158 billion by 2022, Dr.  Abdallah said, citing data from International Data Corporation.

The critical success factors of digital transformation of a city include an individual strategy, a holistic approach, and technology partners. This entails, however, several challenges such as cyber risk, technology gap, funding gap, and skills gap, which need to be appropriately addressed.

r. Abdallah advised assembling a dedicated cross-functional transformation team; describing the future vision of a smart city and deriving the related digital transformation projects; selecting appropriate technologies and detailing the business cases; identifying suitable partners among tech providers and co-investors, and executing consistently under one governance, and allowing for agile project delivery as the model to building a smart city.

In another presentation on ‘The Race to the Cloud: Present and the future of cloud platforms in fuelling Artificial Intelligence’, Dr. Abdallah said: “As Saudi Arabia makes great strides to build a sophisticated digital infrastructure under its Vision 2030, cloud computing will be a catalyst for digital transformation.”

Cloud computing will play a key role in promoting Artificial Intelligence (AI), and Machine Learning (ML) as these technologies are adopted across the broader business spectrum, he said, emphasising that companies will increasingly use AI-based cyber defence systems to detect and fend off any cyber-attacks.

Dr Abdallah pointed out that data analytics is becoming increasingly important tool for businesses, particularly Business Intelligence, as modern business problems require the analysis of large and complex combinations of data sources and sophisticated data models.

When The National was launched in 2008, the UAE was best known for spectacular building projects: an indoor ski slope, and islands shaped like continents and palms.

The rate of construction was so remarkable that an urban myth was told of a Keralite crane operator named Babu Sassi, whose crane on the Burj Dubai was so tall that he lived in the cab at the top.

At the time it was widely reported that Dubai was home to a quarter of the world’s 125,000 cranes. (It was actually no more than 2 per cent.)

Building and infrastructure would transform the landscape and social fabric of the country over the next decade in a manner made more astonishing by the backdrop of the 2008 global financial crisis and the Arab uprisings.

Boom time: a decade when the cranes ruled the UAE’s skies 

When The National was launched in 2008, the UAE was best known for spectacular building projects: an indoor ski slope, and islands shaped like continents and palms.

The rate of construction was so remarkable that an urban myth was told of a Keralite crane operator named Babu Sassi, whose crane on the Burj Dubai was so tall that he lived in the cab at the top.

At the time it was widely reported that Dubai was home to a quarter of the world’s 125,000 cranes. (It was actually no more than 2 per cent.)

Building and infrastructure would transform the landscape and social fabric of the country over the next decade in a manner made more astonishing by the backdrop of the 2008 global financial crisis and the Arab uprisings.

The month The National was launched the Burj Dubai, as it was then known, reached level 160 and became the world’s tallest man-made structure. But within a few months, the effects of the 2008 global financial crisis hit.

Major infrastructure projects including the 52-kilometre Metro, enabled the city to withstand the effects of the crisis, says Dr Yasser Elsheshtawy, an architect, historian and former professor of architecture at the UAE University. It would open a year later in September, 2009.

“It is as if the city’s central nervous system is starting to shoot signals to previously detached limbs,” National reporter Hugh Naylor wrote at the time.

A 14.5km tramline followed in 2014, connecting Sheikh Zayed Road with the Marina and Palm Jumeirah, and even now construction continues with a 15km extension to the emirate’s next big project – Dubai 2020 Expo.

The city is undergoing a renewed inward focus, Dr Elsheshtawy says, with projects such as the new creekside retail area of Marsa Al Seef. After a proliferation of malls, Dubai is now tending towards pedestrian-friendly, open-air retail outlets.

“In many ways the past 10 years have witnessed a maturation of the real estate market and a closer focus on livability – walkable areas, outdoor places for social interaction and mixed-use developments,” Dr Elsheshtawy says.

“A proliferation of cultural projects moves the urban development paradigm away from a profit-making paradigm.

“While admirable in many ways, there is a clear tendency towards focusing on the higher-end of the market, and the immediate impact and relation to the existing city is sometimes not studied carefully.”

Abu Dhabi

In 2008, Abu Dhabi’s Urban Planning Council began to implement Plan 2030, starting the capital’s transformation from an island city to a city of islands.

When The National was launched, there were two crossings into the city – the Maqta and Mussaffah bridges. But there were plans for 32 more connecting the main island with Reem, Maryah, Yas and Saadiyat islands.

The 10-lane, 1.4km Sheikh Khalifa bridge to Saadiyat opened in October 2009, just before the first Formula One GP on Yas Island. It connected the Corniche to Saadiyat Island, Yas and the E11.

The mainland satellites of Khalifa City, Mohammed bin Zayed City and Mussaffah were linked to the Corniche by the 2010 opening of the 800-metre Sheikh Zayed Bridge, designed by celebrated British-Iraqi architect Zaha Hadid.

In late 2012, the much-anticipated, Dh5 billion Salam Street expressway, later to be renamed after the Founding Father, Sheikh Zayed, was completed after more than five years of construction.

Meanwhile, 80 metres underground, the Dh5.7bn Strategic Tunnel Enhancement Programme was under way. With 91km of sewers, it is one of the longest gravity-driven wastewater tunnels in the world.

Changes were not without growing pains. In its early years, The National reported extensively on the effects of the Salam Street tunnel building and another infrastructural innovation – paid parking. The Mawaqif paid parking scheme was introduced in October 2009. As parking lots were plotted out, drivers spent evenings circling for hours.

“It wasn’t ever intended to be a revenue-generating operation. It was a way to get all these cars off the streets,” says Dr Jane Bristol-Rhys, an associate professor of anthropology at Zayed University.

In the Western Region, later renamed Al Dhafra, life improved with the upgrade of the 327km Mafraq-Ghweifat motorway to the Saudi border.

In 2014, the region launched the country’s first railway and commercial operations began on the 264km line from the Shah oil and gasfields to Ruwais port. Plans for a trans-Gulf passenger line were held.

Running in the opposite direction, from sea to desert, is a water pipeline to the 21 billion litre underground reservoir in the Liwa desert near the Empty Quarter. The Dh1.6bn project, finished in January, is the world’s largest reserve of high-quality desalinated water.

End.

Sources:

http://www.constructionweekonline.com/article-50278-property-developers-hail-abu-dhabis-5bn-ghadan-2021-strategy/https://oxfordbusinessgroup.com/news/launch-diversification-strategy-pushes-abu-dhabi-towards-development-goalshttp://english.alarabiya.net/en/News/gulf/2018/09/16/Abu-Dhabi-crown-prince-reveals-Tomorrow-2021-plan-to-push-economic-reform-.htmlhttps://www.thenational.ae/uae/government/tomorrow-2021-new-drive-to-develop-start-up-businesses-in-abu-dhabi-unveiled-1.773753https://www.stlucianewsonline.com/discontinuation-of-private-sector-essential-services/https://distributed.com/news/how-blockchain-innovation-can-help-cost-efficiency-construction-industry/https://www.thenational.ae/uae/government/the-uae-explained-what-are-the-new-plans-for-the-economy-and-why-1.771143https://gulfnews.com/uae/government/dh50-billion-development-plan-announced-for-abu-dhabi-1.2278929https://www.weetas.com/gccnews/developers-praise-ghadan-21/http://www.hoteliermiddleeast.com/34582-uae-leads-middle-east-countries-by-total-hotel-rooms-in-construction/https://www.khl.com/access-international/geda-and-potain-hoist-partnership-/133904.articlehttp://www.constructionweekonline.com/article-50741-mea-smart-city-spending-to-double-in-next-four-years/

An insight into green construction & eco-friendly construction

The topics of green construction and green buildings have been trending the construction industry for some time now and many governments are even encouraging companies to go “green”. The trends towards green initiatives, green energy and construction has been increasing. In this report, we will be looking the structure of the market, the market size and the future of green and eco-friendly construction

Before we start, it’s worth mentioning that the market size of green buildings material will be about $370B by 2022.

What is eco-friendly construction?

By definition, According to Sustainable Build, “Eco-friendly, or ecological, construction is building a structure that is beneficial or non-harmful to the environment, and resource efficient. Otherwise known as green building, this type of construction is efficient in its use of local and renewable materials, and in the energy required to build it, and the energy generated while being within it”.

Eco-friendly construction has developed in response to the knowledge that buildings have an often-negative impact upon our environment and our natural resources. This includes transporting materials hundreds or thousands of miles, which has a negative impact in the energy required to transport them, and also in emissions of hazardous chemicals from a poorly designed building that creates and traps them.

There are many options for companies who are wishing to design and build an eco-friendly housing. Architects, engineers and builders worldwide are now using construction techniques that have been developed throughout human history, in response to local environmental concerns and the physical resource opportunities available, coupled with 21st century technological refinements.

These range from rammed earth construction, which involves clay-based material mixed with water and then rammed into brick or solid wall form, suitable in hot and dry climates, to straw bale houses, literally using bales of straw as the core structure. Straw is a great insulator, is a breathable material that filters the air passing through it, and contrary to expectation, is fire-resistant when compressed. And it is low cost. See our page www.sustainablebuild.co.uk/strawbale for instructions on how to build.

Other options are so-called earth ships, which use recycled car tyres filled with earth as the buildings walls, or Yurts or Gers, the semi-permanent nomadic tents of Inner Asia, that utilise local wood, wool and canvas, to literally live on, with the land. These examples can be seen as development that has a low impact upon the environment, which utilise and blend in with the local environment, and could be dismantled and moved easily.

Features of Ecological and eco-friendly buildings

In more conventional building construction, it is how technology and building materials merge and create ecological resources that are the key to green success, as well as using simple and readily available materials.

Other features of an ecological building might include:

  • Different uses of solar panels for water heating for domestic use
  • Water conservation, possibly including biological waste water treatment and re-use, and the simple collection and recycling of rainwater for garden use
  • Low energy and cost saving light bulbs that live up to 100 times longer than conventional light bulbs
  • Cellulose insulation
  • Non-toxic or lead-free paints and wood preservatives

“The market size of green buildings material: Green buildings materials market size worth $364.6 Billion by 2022”

The global green building materials market size is expected to reach USD 364.6 billion by 2022, according to a new report by Grand View Research, Inc. Growing demand for environmental-friendly and sustainable building materials is expected to propel the growth of the market.

Green building materials stops the usage of toxic paints containing lead, in turn improving indoor air quality. Furthermore, the products also offer plentiful natural lighting thereby reducing energy usage which thereby reduces the overall expenditure. Copious raw material availability coupled with a large number of manufacturers are expected to aid the growth of market.

Technological innovations have facilitated a rise in demand in green building materials, as products are becoming increasing affordable and readily available. As a result, the demand has increased dramatically over the past few years majorly due to rebounding construction market.

Increasing demand for green building materials coupled particularly in emerging economies are expected to have a positive impact towards market growth. In addition, presence of large number of manufacturers is expected to increase the ease in sourcing the products. Oversupply of green building materials is expected to lower product price which will drive the market growth over the forecasted period.

The market exhibits the presence of a large number of manufacturers engaged in the manufacturing of wide range of products including roofing, insulation, and frames. Easy accessibility to raw materials coupled with product demand is likely to increase industry rivalry aim to improve product quality.

According to the same report, here are some key points about the market size of the eco-friendly construction industry:

  • Structural product segment is expected to reach USD 239.1 billion by 2022, owing to their superior aesthetics, and durability, and ability to reduce carbon emissions.
  • Insulation is estimated to be the fastest growing application with a growth rate of 11.7% over the forecast period, on the account of its high energy efficiency coupled with heightened emphasis on the installation of interior insulation solutions
  • The demand for the product in Asia Pacific is expected to reach a value of USD 78.4 billion by 2022 in the wake of rising residential construction and growing infrastructure development.Key question: Is this the right time for eco-friendly construction in the UAE?

    According to a special report on Gulf News on eco-friendly construction, the UAE’s increased commitment to sustainability puts it ahead of the other GCC countries, according to architects and industry experts. Yet, while the situation is improving, the market still must overcome the misconception that greening and improving a building’s energy efficiency is a costly affair.

    “The UAE has a good framework and we are seeing the process in Abu Dhabi setting good examples, including the goal of reducing energy bills by 20 per cent in all new homes built across the emirate,” says Antonio Ceci, Sustainability and Permitting Section Manager at RW Armstrong, an engineering consultancy and architectural firm. “The question that arises is whether sustainable architecture is worth the investment, and what the investment actually is,” Ceci adds. “A sustainable building should cost marginally less to build and have much lower operating costs. Developers are well informed and see the long-term benefits. But contractors, in some cases, lack the experience of implementing environmental design principles into the construction methods and procedures. This makes it complicated to fulfil the requirements as stated in the building code regulations, especially regarding the sustainable supply chain, construction and demolition waste management.”

    At what cost?

    According to the same report, “How can designers ensure that their buildings are really more energy-efficient without breaking the bank? Says Engi Jaber, Architect and Sustainability Coordinator at Dewan Architects & Engineers: “Active design methods include solar water heating, solar collectors and generators such as PV or solar panels (pictured above), automated lighting and ventilation systems, using efficient lighting fixtures — such as LEDs — and the use of energy-efficient appliances and equipment.

     

    “On the other hand, passive design methods include designing by orientation, high envelope insulation, having airtight building shells and efficient glazing systems, increasing shading structures and overhangs to limit solar gains, as well as balanced energy recovery ventilation.”

     Green buildings trends in the Middle East

    According to EcoMENA, “the Middle East region faces a unique set of environmental and socio-economic challenges in the form of water scarcity, harsh climatic conditions, ecological degradation and abundance of fossil fuels. Commercial and residential buildings in the Middle East consume more energy than those in other parts of the world, mainly on account of extremely hot weather, rampant use of glass exteriors and heavy reliance on air-conditioning. The Middle East building industry, in recent years, is actively trying to make widespread use of”.

     

    Some of the other drivers for the progress of green buildings sector in the Middle East are carbon-neutral buildings, self-sustaining urban planning and cultural sensitivity incorporating traditional Islamic architecture. Many countries in the region are increasingly promoting energy efficiency as a means to achieve energy security which has catalyzed the local green buildings industry. As far as social reasons are concerned, improved health and greater productivity are the top reasons for companies going green in their construction.

    “In recent years, green building design has emerged as a top priority in the Middle East. The number of LEED-registered buildings has increased rapidly across the region, from 623 in 2010 to more than 1400 in 2015. United Arab Emirates is leading the pack with almost two-third share, followed by Qatar, Saudi Arabia and Egypt. Some of the prominent green buildings are Masdar Institute of Science and Technology (Masdar City), Climate Change Initiative Building (Dubai), Qatar National Convention Centre (Doha), King Abdullah University of Science and Technology (Jeddah) and World Trade Center (Bahrain). Siemen’s headquarters in Masdar City has the distinction of being the first LEED Platinum-rated office building in the entire Middle East. Msheireb Downtown Doha is regarded as the world’s first sustainable community, with more than 100 buildings targeting LEED Gold and Platinum rating”.

    In fact, the UAE has the fourth-largest stock of LEED-certified buildings outside the US at 3.1 million sq. meters. UAE also has the distinction of having the fourth-largest number of LEED-accredited construction professionals worldwide. Sunanda Swain, a leading Dubai-based green buildings expert says that, “Presently, the UAE has total cumulative gross square meters (GSM) of LEED- certified and registered spaces of 53.44 million and the total number of LEED-certified and registered projects are 910 (in comparison to 710 by June 2014)”. She adds, “In Abu Dhabi, over 700,000 square meters of real estate are certified by the Urban Planning Council under Estidama sustainability standards.”

    DEWA launches ‘Green Dubai’ sustainability initiatives

The Dubai Electricity and Water Authority (DEWA) has announced ‘Green Dubai’, comprising three initiatives designed to make Dubai the smartest, happiest and most sustainable city in the world. DEWA says the move empowers customers to make sustainable decisions that contribute to protecting the environment and natural resources.

Shams Dubai, which encourages building owners to install photovoltaic solar panels and connect them to DEWA’s grid, is part of Green Dubai. According to the utility company, over 1,145 buildings have already been connected and contribute nearly 50MW of energy.

The ‘Green Charger’ initiative is also part of Green Dubai and will see the installation of Electric Vehicle (EV) charging stations. To date, DEWA has installed over 100 Green Chargers across the city and aims to grow the number to 200 stations by the end of this year. To encourage its customers to use eco-friendly electric vehicles, DEWA is providing free charging for electric cars registered in the Green Charger initiative until the end of 2019.

“Green Dubai aims to empower customers to adopt a conscious and responsible lifestyle through the sensible use of electricity and water. This supports the Demand Side Management Strategy to reduce electricity and water use by 30% by 2030, generating clean solar energy, and encouraging the use of eco-friendly electric vehicles,” said Saeed Mohammed Al Tayer, MD and chief executive of DEWA.

‘High Water Usage Alert’ is the third initiative under Green Dubai and aims to help customers identify leaks in their water connections and curb wastage. The system sends notifications to customers if there are unusual increases in consumption according to DEWA, which helps the customer to check and repair leaks with the help of a specialised technician.

“Environmental work requires concerted efforts to achieve a balance between development and the environment, to protect the rights of future generations to enjoy a clean, healthy, and safe environment,” Al Tayer added.

End.

Sources:

How Green Buildings Can Reduce Your Carbon Footprint

https://www.grandviewresearch.com/press-release/global-green-building-materials-markethttps://gulfnews.com/gn-focus/special-reports/big-5/eco-friendly-construction-the-present-not-the-future-1.1097871

http://www.asiagreenbuildings.com/wp-content/uploads/2015/11/green-crain-e1446536779731.jpg

http://www.sustainablebuild.co.uk/ecofriendlyconstruction.html

https://irp-cdn.multiscreensite.com/aa33a071/dms3rep/multi/cellulose%201-775×321-775×321.jpg

https://www.businessinsider.com/dubai-sustainable-city-uae-2018-1 

DEWA launches ‘Green Dubai’ sustainability initiatives

 

News July

Potains in land reclamation project

Three Potain MD top-slewing tower cranes are helping to construct 18 reinforced concrete caissons that are required as part of the design and construction of the new Portier Cove eco-neighbourhood in Monaco.Started in 2016, Portier Cove is a €1.36bn plan that will see six hectares of land reclaimed from the sea, upon which 60,000 sqm of housing, an extension of the Grimaldi Forum and a coastal promenade will be built.

French company Bouygues Travaux Publics has been contracted to build the foundations of the offshore extension, including 18 reinforced concrete structures that will act as underwater struts. Known as caissons, these hollow, cylindrical chambers are being made in the Marseille-Fos Port in France before being towed to Monaco where they will be positioned and reinforced by infill.

To create the 10,000t, 26m-high structures, the contractor is renting a vast proportion of the French port, including a 10,000m2 caisson precasting zone, as well as a 32,000m2 area of water, where a floating dock is positioned. A first in France, this 56m-long, 50m-wide and 27m-tall floating dock will make it possible to assemble the caissons before they are delivered to Monaco.

It is here that three Potain top-slewing tower cranes are working over a period of 24 months: two brand new Potain MD 569s to help construct the caissons themselves and one MD 560 B for general supply of the shipyard from the harbour dock.

The two MD 569 tower cranes – erected at heights of 45m and 59m – are positioned on the water on floating platforms known as pilotis. This presented a challenge for Bouygues, as not only are the pilotis required to support the cranes when lifting heavy loads, such as 25t reinforcement cages, they also need to remain secure when battling the sea and the notoriously strong winds of the region.

The contractor worked with Manitowoc’s tower crane Lift Solutions team to find the answer. The team developed several pylon compositions specific to the site, combining different types of masts and chassis to increase the height and safety of the cranes. It also provided adapted load charts to account for piloti movement possibilities in all weather conditions.

Work on the caissons began in 2017 and is due for completion in 2019. Once complete, they will be towed to Monaco where they are run aground to form the foundations of the offshore extension. They will then be ballasted with sea water and weighted with quarry material. Each finished, construction caisson façade has been specially designed to accommodate sea flora and fauna. Once the caisson belt has been of the reclamation ground begins. The entire Portier Cove project is scheduled for completion in 2025.

Emaar to build Middle East’s biggest Chinatown in Dubai

Dubai’s leading developer said the Chinese-style urban district will occupy a central location in its 6km² mixed-use waterfront development, Dubai Creek Harbour, which will boast the Dubai Creek Tower superstructure. The retail precinct will have mix of restaurants, local and international fashion brands designed to appeal to Chinese tourists. 

To further support efforts to encourage wealthy Chinese shoppers to the emirate, Emaar has opened offices in Beijing, Shanghai and Guangzhou to promote tourism, education, and investment in the UAE. Emaar’s announcement came on the eve of Chinese President Xi Jinping’s state visit to the UAE, where he is expected to drum up support for two-way trade and investment. “The visit of Chinese President Xi Jinping to the UAE is historic and will further strengthen UAE-China relations, underpinned by initiatives such as the UAE-China Week announced by HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai,” the chairman of Emaar Properties, Mohamed Alabbar, said.” “The development of the new Chinese retail and lifestyle district at Dubai Creek Harbour – as well as Emaar’s expansion into China, both in property and hospitality – highlight our commitment to the country, and our focus on contributing to the strength and success of UAE-China relations,” he added. Bilateral trade between China and the UAE has gone up in recent years, rising from $46.3bn (AED170bn) in 2016 to $53.3bn (AED195bn) in 2017. And Chinese tourists are prominent visitors to Dubai as well, with recent statistics indicating a year-on-year increase in the number of travelers from China between 1 January and 31 May, 2018.” Separately, Emaar this week issued a statement following reports it may sell non-core assets worth up to $1.4bn (AED5.1bn). In response to this claim, Emaar said it was “continuously exploring various options as part of its strategy to streamline its business to generate significant value”

New Potain factory in India

Manitowoc has opened a new Potain tower crane factory in the Indian city of Chakan, which lies outside Pune, with production beginning in first-quarter 2018. This facility replaces the company’s previous factory in Pune, which opened back in 2007. With a smaller land area as well as new equipment and lean processes, Manitowoc said the new facility produces Potain MCT 85 and MC 125 cranes more efficiently.

David Semple, Manitowoc’s senior vice president for the Middle East and India, said: “We are focused on developing and executing lean strategies to improve efficiency, profitability, and value for our stakeholders. Our customers will benefit from the faster delivery times and enhanced quality of this new facility while our employees can feel proud to work at one of the most advanced tower crane factories in Asia. Potain has long been a market-leader in India and we want to ensure that continues, so opening this factory is an important step.”  

With a production area of 9,760 sqm, the new factory’s manufacturing footprint has been reduced by one-third compared to its previous facility but has been designed for the same level of production output. Among the upgrades in equipment at the facility are a new paint shop and shot blasting machine cells.

The facility layout delivers other productivity improvements. Most notably, the time to transport materials from the assembly area to the finished goods yard is reduced by 68%. There are other significant savings in material transport from the steel yard, supplier yard and fabrication area.

Time savings are not limited to onsite operations either. Although still in the Pune area, the new factory sits some 45km from the old location, in the city’s industrial belt of Chakan. Being situated in Chakan offers better connectivity to national highways, speeding customer deliveries within India. In addition, the new facility is closer to Mumbai from where Potain cranes are shipped to export markets.

“The majority of cranes manufactured at this new factory will be shipped to customers in India,” said Semple. “But we will also serve neighbouring markets such as Sri Lanka, Bangladesh and Nepal. All of our customers will benefit from the faster deliveries and enhanced quality of Potain cranes in this region.”

GCC construction contract awards rebound in 2018

The total value of contract awards in the construction and transport sectors increased in the first half of this year, rising to $32bn from $27bn in second half of 2017, according to regional projects tracker MEED Projects. Despite the increase, the total for the first half of this year is still below the average of $40bn of construction and transport contract awards made on a half yearly basis since 2006, and well below the high of nearly $70bn of awards made in the first half of 2014.The strongest performing market in the first half of 2018 was the UAE with $15bn of awards followed by Saudi Arabia where there were $10bn of contracts let.While the UAE total is down slightly on the $16bn of contracts that were awarded in the second half of 2017, the total for Saudi Arabia is the strongest half since the first half of 2015 and suggest that the kingdom’s construction sector may finally be showing signs of recovery after three difficult years.The UAE has consistently been the strongest performing construction market in the region over the last five years as its more diversified economy has been better shielded from the full impact of lower oil prices.Supporting the Saudi recovery is the fact that the largest contract awards during the first half of this year have come from kingdom. The largest award is the $2.5bn award for the construction of the Mecca Gate housing development for Al-Balad al-Ameen. There were also major contract awards valued at over $1bn for building the Sharma complex on the northern Red Sea coast, and for the construction of a housing development for the National Guard.Future projects are also being tendered in the kingdom. The largest scheme is the proposed Salwa Channel that will be build close to the Qatari border. Others include the Avenues Mall in Riyadh, Ishbiliyah City Centre, and various housing complexes around the kingdom.There were no contract awards valued at over $1bn outside Saudi Arabia. The largest award outside the kingdom was the $533m deal for the construction of Aldar’s Water’s Edge residential development in the UAE.

End.

Sources

http://www.cranestodaymagazine.com/news/potains-in-land-reclamation-project-6273125/

http://www.constructionweekonline.com/article-49848-emaar-to-build-middle-easts-biggest-chinatown-in-dubai/

http://www.cranestodaymagazine.com/news/new-potain-factory-in-india-6262937/

GCC construction contract awards rebound in 2018

 

New Potain Tower Crane Works As Topless, Stores As Luffer

Earlier in May, we spoke about hydraulic tower cranes and the MCH 125. Today, we will touch upon the MRH 125 which was launched at Bauma in April earlier this year.

The MRH 125 can lift up to 8.8 U.S. tons, be equipped with up to 164′ of jib, and lift 2.2 U.S. tons at the tip of the longest jib. Its maximum freestanding height is 190′, and maximum line speed is 387 fpm with 50LVF20 hoist winch. The Topless design with several elements making up the slewing crane part reduce the standard size and weight to make transport, handling, and fitting easier.

As with all of its products Manitowoc has placed a strong emphasis on return on investment for Potain MRH 125 owners. The crane’s adaptable design suits it for congested urban job sites while also optimizing transport and assembly times. “The MRH 125 has an optimized transport cost for a luffing jib crane in its capacity class,” said Thiebault Le Besnerais, Manitowoc‘s global product director for tower cranes. “It can also be mounted on our standard 1.6 m (5’6″) or 2 m (6’6″) K-masts for better optimization for fleet owners, and it offers lower power consumption than traditional luffing jib cranes.”

The MRH 125 also uses the latest luffing technology of the VVH hydraulic luffing mechanism which allows complete hoisting of the jib in two minutes. VVH hydraulic luffing eliminates the need to install luffing rope during crane setup. The hoisting winch, maintenance derrick, and jib wind side plate also come pre-installed to save setup time. Plus, there is no need to adapt the wind-sail plate on site, regardless of jib length. Also, the cab can be attached to either side of the mast to suit project conditions.

The jib can be raised from horizontal to near vertical (88°) in just two minutes, and the compact counter jib measures just 23’ and connects easily during assembly.

The main features of the MRH 125 are as follows:

It’s the perfect crane for confined areas

  • Almost vertical luffing jib for minimum space requirement when working
  • Weathervaning radius optimized for each jib length, just 10 m for the 50 m jib, ideal for congested jobsites
  • Option to fit the cab on the left-or right-hand side of the jib according to jobsite needs and especially to allow installation of the crane as close to the building as possible.

It’s the fastest fitting of a luffing jib crane

  • One single counter-jib/jib foot package bringing together all of the connected hydraulic functions. No inter-jobsite dismantling/fitting, compact and transportable in one package
  • No installation of luffing rope thanks to an innovative hydraulic system: save fitting time compared to traditional luffing system and increased safety

Transport is Optimized

  • Only 4 containers or 4 trucks for transportation of the whole slewing crane part with a 50 m jib

Optimized return on investment

  • Luffing jib crane adapted to very tight urban jobsites
  • Economical transport, easy and adapted to the fitting sequences
  • Fitting/dismantling time reduced through a design combining the Topless concept with hydraulic luffing technology
  • Improved fitting safety

In conclusion,  the MRH 125 has all the advantages of traditional luffing jib cranes with the capacities of the topless cranes. This combination of the best of both worlds ensures outstanding operating performance and guarantees a positive return on investment. To view the datasheet or request a quote, visit:

https://www.nftcrane.com/en/content/hydraulic-cranes

First quarter improvement for Manitowoc

Manitowoc Crane, which also includes Grove mobile cranes and Potain tower cranes has posted first quarter revenues 8.3 percent higher at $418 million.
The increase was attributable to higher crane shipments in the Americas and European regions, coupled with pricing improvements, partly offset by unfavourable changes in exchange rates. The pre-tax loss increased from 6.1 million in the same quarter last year to $23.4 million this year, entirely due to a $25 million charge for early extinguishment of its debt, when it refinanced on more favourable terms in March. Without this the company would have been back in the black with a profit of $1.6 million. At the operating profit level it made $16.2 million compared to just $1.7 million last year. Full year revenues are now forecast to be three to seven percent higher at $1.9 to $1.97 billion.

Chief executive Barry Pennypacker said: “Manitowoc once again delivered a strong start to the year, delivering our eighth straight quarter of year over year adjusted EBITDA margin increase. The operating principles of The Manitowoc Way continue to produce improving financial results as we execute our strategy for profitable growth by delivering innovation and velocity in everything we do.”

“In March, we successfully refinanced our capital structure to further strengthen our balance sheet. This action increases liquidity, reduces interest expense and allows us more flexibility to deploy our capital in order to increase shareholder value.”

“Market conditions remain very competitive. We continue to focus on providing innovative products and services for customers as evidenced by positive customer reception to our six new cranes introduced at the bauma trade show in April. As a result of our first-quarter performance and our proven ability to execute on our strategy, we are raising our full-year guidance.”

Sources:

https://www.cranesy.com/new-potain-tower-crane-works-topless-stores-luffer/ 

https://www.manitowoccranes.com

https://www.vertikal.net/en/news/story/32996/first-quarter-improvement-for-manitowoc

Manitowoc showcases new Potain MRH 125 at Vertikal Days

Expo 2020 & the Construction industry – Is Expo the beginning or the end of the construction boom?

Projects worth $42.5bn (AED156bn) are being constructed across various UAE sectors for Expo 2020 Dubai, it has been revealed.

This headline alone, can turn many heads towards the importance of Expo 2020 and its impact on the construction sector. There have been many talks around Expo 2020 in recent years and there is barely anyone in the region who hasn’t heard about it.

In this article, we are discussing the value Expo 2020 in bringing to the region and more specifically to the construction industry. Before we get into any details, it is important to understand what Expo 2020 is and the impact other previous Expos have had on the economy of hosting countries.

What is Expo 2020?

According to Expo 2020 website, “Expo 2020 is a Universal Exposition to be hosted by Dubai in the United Arab Emirates, opening on October 20, 2020. The Bureau International des Expositions general assembly in Paris awarded Dubai as the host on November 27, 2013.”

Expos have been taking place since 1851 and according to Bureau International des Expositions “An Expo is a global event that aims at educating the public, sharing innovation, promoting progress and fostering cooperation. It is organized by a host country that invites other countries, companies, international organisations, the private sector, the civil society and the general public to participate. Due to the diversity of its participants, from top decision makers to children, Expos offer a multifaceted event where extraordinary exhibitions, diplomatic encounters, business meetings, public debates and live shows take place at the same time.” And based on their same publications, Expos are a unique event for the following reasons:

  • For the international community: Expo is a dialogue platform for progress and cooperation
  • For the general public: Expo is an educational and entertaining experience
  • For the host country: Expo is a tool for nation branding and development
  • For participants: Expo allows international outreach and economic opportunities

Based on the pints above and given Dubai’s current economic standpoint and its diverse business ecosystem, naturally it has become the home for Expo 2020.

Previous Expos and their impact on the economy of the host country

 In order to understand the value of Expo for Dubai and to forecast its impact on the construction sector, it is best to benchmark and look into previous Expos. The last Expo was held in Milan in 2015.

According to a report by Euler Hermes, ““In the short term, the positive momentum from Expo is expected to produce a value equal to +0.1% of the Italian GDP in 2015, concentrated in the third quarter,” said Ana Boata, European economist at Euler Hermes. “The expectation is a total GDP increase amounting to 0.7% in 2015 and to 1.1% in 2016, with the economic recovery speed remaining moderate”.

Apart from the positive effect on demand from abroad, the boost in domestic demand – after years of decline – is a positive sign. Consumer confidence levels are rising and durable goods purchases are again  increasing. The labor market is on the rise – with 295,000 new jobs- following an all-time-low in November 2014; the unemployment rate is expected to drop from 12.7% in 2014 to 12% in 2015, and further to 11% in 2016.

Many industries are benefiting from a positive Expo impact. Specifically, revenues from tourism-related sectors have increased, especially in Milan and the Lakes region. These higher revenues helped increase the turnover of companies in the service industry, with the highest peaks being registered by the wholesale and distribution sector (+4.2% YoY in the second quarter of 2015), hotels and catering (+2.9% YoY), transport-related sectors (+2.1% YoY) and commercial services (+1.3% YoY). Moreover, Expo encouraged the inflow of foreign direct investment (FDI) to a level of 6 billion euro between February and April, the highest quarterly figure achieved since the end of 2013”

Before Milan, the previous Expo was held at Shanghai in 2010, according to Gulf Business, “The Chinese city received around 73 million visitors in total, with numbers reaching 1.03 million in just one day (16 October, 2010), according to the BIE report, ‘Making an impact: The power of the World Expo’.

Six new subway lines were opened between 2008 and 2010 along with 4000 new taxis in the city. The revenue from the tourism sector rose 13 per cent year on year during the Spring festival to reach $332.7 million.

According to a Bloomberg report, the event may have generated tourism spending of more than 80 billion yuan ($13 billion) for Shanghai, and neighbouring cities along the Yangtze River.”

Just by looking at the previous 2 expos, it is quite evident that they have a positive impact on the construction sector and since Dubai’s economy is quite welcoming to the tourism industry, Expo 2020 is expected to attract a significant number of tourists and just during the Expo, it is expected to receive over 25 million people from all around the world.

Current construction work at Expo 2020

According to AMEinfo, “It’s the grandest of all shows and Dubai, host of the event, has not taken this responsibility lightly.

Route 2020 project with  tower cranes from NFT

When Dubai adopted its 2018 budget, spending $15.5 billion or some 20% more than 2017, it worried more about securing funds to host Expo 2020, than adding on a deficit of $1.7 billion.

The investment value of the Expo is estimated at 25 billion dirhams (Nearly $7bn).

Dubai’s budget sees more than 20% of it allocated to infrastructure spending, an increase of more than 40% from 2017.” Of course, the site of the Expo 2020 has been given significance budget by the government and over 100 countries are participating in constructing eye-catching and impressive pavilions for their countries to

attract investment. According to Arabian Business, New Zealand has committed $53 million to design, construct, operate and promote its presence at the six-month event.

According to Construction Global, “US$42.5bn of construct projects are currently underway in Dubai, UAE – designed for the nation’s Expo 2020.

The top 10 of the project amount to $32.7bn, accounting for almost 77% of the total, according to a BNC Network report.

The infrastructure and energy industries are constructing $17.4bn worth of projects, whilst housing construction comprises of $13.2bn of the total.

The BNC Construction Intelligence report claims that hospitality projects – such as hotels and theme parks – are costing $11bn.

The renovations being made on Phase One of the Al Maktoum International Airport are worth $8bn.”

Expo2020’s impact on the construction industry

According to Khaleej Times, “Preparations in the run-up to Expo 2020 are proving to be a catalyst for the UAE construction industry. The rise in oil prices is also beneficial for contractors since regional governments are beginning to restart old projects or invest in new infrastructure development.

However, contractors are not insulated from challenges – they face smaller margins, more competition in project bids, delayed payments and rise in the cost of doing business. There is also concern about the extent of project awards after all the Expo contracts have been let.

“There is a large amount of current activity but concerns remain about the volume of works after 2020. Meed Projects estimate that around 30 per cent of the $3.8 billion in construction contracts for the Expo have already been let, with another 60 per cent in the final procurement stage and expected to be let during 2018. The volume of new projects awarded across the UAE is expected to decline in 2019 and 2020,” says Alan Baker, JLL national director, project and development services – Mena.Sentiment in the UAE’s construction sector is optimistic as the region prepares for Expo 2020. According to Avin Gidwani, CEO of BNC Network: “As the demand for hotel rooms, housing and the need to expand infrastructure increases, one can see activity in a number of construction sites across Dubai. Crude price that is currently hovering over $60 per barrel, up from $40 to $50 a few months ago, is going to lift investor sentiment and will encourage the government and the private sector to invest in new projects or start held-over projects.”

Conclusion

According to a major law firm, Al Tamimi & Co.” If Dubai and the UAE can learn from the experience of previous Expo’s, it could move the country into a different level internationally and allow it to serve a wider community than what it is currently catering for. Potential areas of expansion include the areas of trade, manufacturing and service industries, including tourism.”

And According to The National, “The value of the UAE’s construction industry is set to increase to Dh181 billion next year from about Dh162bn this year, the company said. BMI Research also predicts growth of more than 6 per cent for the following three years as Dubai ramps up spending ahead of Expo 2020, but a fall-off of 2 to 3 per cent a year after 2020.

It said that Dubai’s planned projects in real estate and energy are “progressing well”, but said that Abu Dhabi had been more exposed to the downturn in commodities as government and private sector spending were more reliant on the oil and gas market.”

So what happens after Expo 2020?

According to a report by CNN, “Dubbed “District 2020,” the area which the expo occupies in Dubai South will undergo extensive redevelopments before reopening in October 2021 — not long after the expo closes in April that year.”

Some buildings will remain unchanged, including the Santiago Calatrava-designed UAE National Pavilion, modeled on the wings of a falcon. Others will be transformed on the inside: The Sustainability Pavilion, for instance, will live on as a center for child and scientific education. The Dubai World Trade Center Conference and Exhibition Center will also remain once the expo closes.

Over 80% of the 200 hectare site will be retained according to documents released as part of the announcement, and planners hope District 2020 will more than double in size to become a city in its own right.

“District 2020 will continue to carry forward Expo 2020’s mission of connecting people,” says Marjan Faraidooni, an official specializing in Expo 2020 legacy.

Undoubtedly, expos have significant impact on the overall economy of a country across different sectors, given that expos are quite reliant on construction, it will have a direct positive impact on the construction industry.

End.

Sources:

http://www.arabianbusiness.com/uae/politics-economics/377586-expo-2020-dubai-on-track-to-create-global-destination

https://www.expo2020dubai.com/en/expo-2020-dubai#what-is-an-expo

https://www.bie-paris.org/site/en/expos/about-expos/what-is-an-expo

https://www.khaleejtimes.com/business/Expo-2020-to-drive-construction-boom-in-UAE

https://www.thenational.ae/business/property/dubai-s-expo-2020-infrastructure-spending-to-boost-uae-construction-sector-1.162370

https://ameinfo.com/construction-real-estate/commercial/uae-budget-2018-expo-2020/

https://www.constructionglobal.com/major-projects/construction-projects-dubais-expo-2020-initiative-reach-425bn

https://www.thenational.ae/uae/environment/solar-trees-and-reused-material-in-green-design-of-expo-2020-site-1.695345

http://www.arabianbusiness.com/politics-economics/395603-first-look-new-zealands-53m-expo2020-pavilion

https://edition.cnn.com/style/article/dubai-expo-2020-legacy-plan/index.html

http://gulfbusiness.com/what-can-dubai-learn-from-shanghais-expo-2010/

The Construction Industry during Ramadan

The holy month of Ramadan is just a few days away and this year, fasting may exceed thirteen hours a day in the UAE.

In the GCC, during the holy month, many consumer brands offer significant promotions and discounts; this is not merely due to creating an incentive for consumers, but rather it stems from acts of good will. This year the month of Ramadan coincides with the beginning of summer and the start of the summer vacations for many of the schools. The question is how does that affect the construction industry and what to expect in Ramadan this year?

What the Rules say

The number of working hours are reduced during Ramadan and there is a mid-day break rule in the UAE as well that makes sure construction firms offer more off-hours for the on-site workers. Indeed, during the three months of summer (June to September), workers have a three hour break typically from 12:30PM to 3PM. Companies must post clear information about work hours for staff while shelters must be provided out of the sun. Any firms found to have staff working during the designated break time would be fined Dh5,000 per worker up to a maximum of Dh50,000. During Ramadan, Muslim workers who are fasting finish their working day by 1pm and return to their accommodation.

As for evening works and according to Abu Dhabi City Municipality, heavy work is not allowed after 7pm but light work could be carried out anytime. According to Abu Dhabi’s Environment Health and Safety Management System, any activity resulting in excess noise that can have an adverse impact on the peace of a neighborhood should be undertaken only between 7am and 8pm on working days, and between 9am and 7pm on weekends and public holidays.

In this report, we are looking into the impact of Ramadan on the construction sector and explore ways on how to capitalize on the firms’ resources during the holy month.

Traveling during Ramadan and its impact on the construction sector

 In the UAE, there are over 200 nationalities currently living in the country and according to a report by AMEinfo “People tend to spend more money on travelling during Ramadan, especially during the last week of fasting where they dramatically spike. The report mentions that nearly 85% purchase their travel tickets online, travel agent or comparison site, and also via the airline app. This factor, even though it may seem to be irrelevant to the construction sector, has a direct impact on the market. Many of the senior management and decision makers in the construction industry travel and it this means lots of new contracts are going to be pushed back.

Productivity in the construction sector during Ramadan

According to a report by Construction Week, “it has become apparent that the level of productivity during the summer and Ramadan periods has been on a steady decline, year after year. So far, I have had only one client who suggested that they would pick up an assignment after Ramadan.This year has witnessed a larger number of companies implementing strategic measures to ensure they are both stronger and leaner to avoid the slowing down of their business”

Therefore, many firms in the construction sector can take advantage of the slowdown in Ramadan to restructure their workforce to maximize efficiency in their current and upcoming projects and further analyze the cost structure of the projects.

Tips for maximizing productivity during Ramadan for construction firms

There are various ways firms can look into making the most from the reduced working hours and the slowdown in the holy month of Ramadan. According to a report by Arabian Business, here are some of the best ways:

  • Prioritize your activities and focus on key points of strength

As mentioned earlier, the working hours are reduced across all industries. “Most construction companies in the Middle East see a drop in field hours, owing to labor policies that prohibit shifts of more than eight hours, both during the day and at night. Then there’s the midday break rule to consider. In the UAE, for example, laborers are not permitted to work in direct sunlight during the hours of 12:30 and 15:00, from mid-June until mid-September.” Effective planning to make sure that contractors can make the most of it this reduced timing is an important factor to ensure to get the most out of the reduced timing; therefore, construction companies need to create a new workflow for maximum outcome.

  • Workforce development

Educating and training of the workforce for any industry is an ongoing process, the challenge that many firms face is the allocation of the right time for these types of activities. Since Ramadan is falling during a very hot time of the year, construction companies can hold courses in shaded and air-conditioned areas for their staff. In addition, and as explained during NFT and Potain’s Safety First Campaign, there are many ways to stay protected from the heat. Laborers should work in the shade as much as possible or at night, drink plenty of water after Iftar, wear lightweight, light colored and loose-fitting clothes and use fans to improve air flow.

  • Focus on corporate social responsibility (CSR programs)

“Productivity is not just about how much progress is achieved on site. Effective corporate social responsibility (CSR) initiatives have far-reaching ramifications for the community at large, your workforce, and ultimately, your company’s bottom line.” The holy month of Ramadan is a month of giving and during this spiritual month, therefore, there is more incentive for CSR initiatives. The question is how would affect the productivity? CSR initiates are directly correlated to staff morale and happiness at work which in return will have a very positive impact on productivity of a construction firm. Many firms in the UAE host Iftars for their staff and their families which also create a family culture in a firm.

  • Strategy and experimenting

Ramadan and summer months in the GCC are a perfect time to re-evaluate and analyze the current annual strategies and action plans. “Are there any onsite processes that could be tweaked? Are there any technologies that you’ve been meaning to trial? Are there any issues or disputes that you’ve been intending to resolve?” or  How will we move forward towards Q4? These are just some of the experimentation that can be explored during this month. “This period of the year is also ideal for ‘big picture’ thinking. Reflect on how you and your colleagues collaborate, not just within your company but also with other stakeholders. Could lines of communication be strengthened? Is there room for improvement within your procurement process?”

Other business strategies can be revisited such as corporate communications plans, workflow plans after the month of Ramadan, all of which could have a direct impact on the productivity of a construction firm.

The Verdict

During the holy month of Ramadan many industries in the B2B sector slowdown and the construction industry is not immune to this factor; however, it does not mean that firms can’t benefit from this slowdown. Firms can look into re-strategizing and re-planning for the year as the market is expected to significantly pick up in Q4 of this year and as we approach EXPO 2020.

According to a report published on Dubai Public Policy Research Center, “However, studies show that the economies of Muslim-majority countries do not simply slow down during Ramadan; rather, their economies change. As these countries grow their role in the global economy, they are more likely to find ways to mitigate the domestic economic effects of Ramadan to ensure competitiveness in the global marketplace. For example, instead of reducing working hours during Ramadan in Malaysia and Indonesia, some companies employ policies which adjust working hours so that all employees start and end their workdays earlier. In Saudi Arabia, where many staff in the financial services sector are non-Muslims, the government allows only Muslims to limit their working hours during Ramadan. Although in perhaps a more inclusive manner, this motif is similarly seen in the UAE, where global companies such as Emirates Airlines effect a popular ‘culture swap’.

Abu Dhabi: Aldar acquires AED3.7bn worth assets from TDIC

Abu Dhabi-based developer, Aldar Properties, reached an agreement with Tourism Development & Investment Company (TDIC) to acquire a portfolio of prime real estate assets worth AED3.7bn,in one of the largest real estate acquisitions in the country’s history.

Aldar has acquired assets located in key destinations, with a focus on Saadiyat Island. This comprises of 14 operating assets within various sectors ranging from hospitality, retail, residential, education, and infrastructure, in addition to a selection of prime strategic land plots and projects under development on Saadiyat Island.

Talal Al Dhiyebi, CEO of Aldar Properties, commented: “Acquiring assets on Saadiyat Island presents Aldar with an unprecedented opportunity to add significant value to its portfolio. The opening of the Louvre Abu Dhabi has demonstrated the government’s commitment to make Saadiyat Island one of the most sought-after destinations in the world. We believe this landmark acquisition will further advance Abu Dhabi’s real estate sector and accelerate the development of Saadiyat Island, taking it to the next level. This is a very exciting time for the market, and as its leading player, we’re well placed to take advantage, with the injection of these new assets representing a strong addition to our impressive portfolio.”

With long stretches of prime beach, and with beachfront hotels, as well as high-quality beach villas and apartments, Saadiyat Island has for some time been the destination of choice for many discerning residents and visitors.

The value of Saadiyat Island was more recently reinforced by the opening last year of the Louvre Abu Dhabi, to much international acclaim; and with Saadiyat Island’s cultural district to be extended further through the development in the coming years of the Zayed National Museum and Guggenheim Abu Dhabi, the growth opportunities on offer are very clear.

The acquisition of TDIC’s operating assets will thus enhance Aldar’s high-quality asset management business with an additional stream of recurring revenue in line with its growth investment plan.  The acquisition of the land and projects under development will form part of Aldar’s development destination strategy. The acquisition will immediately positively contribute to the performance of both the development and asset management business in 2018 and beyond.

The operating assets being acquired include Eastern Mangroves complex, Saadiyat Island district cooling assets, Cranleigh School Abu Dhabi, Westin Golf & Spa and other community retail and leisure assets, and will deliver an incremental net operating income of approximately AED120mn to Aldar’s Asset Management portfolio on an annualized basis.

The gross development value of the projects under development on Saadiyat Island is AED2.5bn. The land being acquired is located on Saadiyat Island, is infrastructure enabled and includes approximately 1.1 million sqm gross floor area.

The acquisition is expected to fully complete by end of June 2018 and it is subject to fulfillment of certain conditions.

End,

 

Sources:

 https://ameinfo.com/media/digital/retailers-tips-ramadan-digital-marketing/

http://www.arabianbusiness.com/five-ways-maximise-productivity-during-ramadan-597406.html

http://www.constructionweekonline.com/article-49192-gulf-construction-should-prioritise-job-vacancies-during-ramadan-2018/

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http://www.cbnme.com/news/aldar-acquires-assets-tdic/