MIDDLE EAST

PROPERTY & CONSTRUCTION HANDBOOK 2010/2011

MIDDLE EAST
PROPERTY & CONSTRUCTION HANDBOOK 2010/2011

Middle East Offices

Abu Dhabi, UAE abudhabioffice@davislangdon.com +971 2 444 2040 Beirut, Lebanon beirutoffice@davislangdon.com +961 1 780 111 Doha, Qatar dohaoffice@davislangdon.com +974 4458 0150 Dubai, UAE dubaioffice@davislangdon.com +971 4 423 3690 Manama, Bahrain bahrainoffice@davislangdon.com +973 17 588 796 Riyadh, KSA riyadhoffice@davislangdon.com +966 1 463 2625 Cairo, Egypt (North Africa) cairooffice@davislangdon.com +974 5581 7035 / +44 7740 922 931
1

1 DAVIS LANGDON An AECOM company Global presence Rich Middle East history Industry awards 3 3 4 4

2 GLOBAL CONSTRUCTION CONSULTANTS The bigger picture Sector specialists Cohesive solutions Thought leaders 7 7 7 8

3 ECONOMIC ROUND UP Country statistics 2009 Economic trends and outlook Construction inflation trends and outlook 11 12 17

4 ARTICLES Spotlight on Syria Grand Prix racing on track in the Middle East Property service charges and the Dubai Strata law High speed rail high risk, high cost, high rewards Adding value through sustainability management Case study King Abdulaziz Centre for World Culture Regional integration and potential for religious tourism sector Building information modelling cost and value drivers for integrated working Bridging the gap the demand for social infrastucture 23 27 31 35 40 45 50 55 58

Public private partnership (PPPs) Development management creating a viable scheme

61 66

5 REFERENCE ARTICLES Procurement routes Middle East forms of contract Building regulations and compliance 73 76 80

6 REFERENCE DATA Exchange rates International building cost comparison Regional building cost comparison Mechanical and electrical cost comparison Major measured unit rates Major material prices Labour costs Building services standards Measurement formulae - two dimensional figures Measurement formulae - three dimensional figures Weights and measures 89 90 92 94 96 98 100 101 104 105 107

7 DIRECTORY OF OFFICES Middle East International DEGW 111 114 124

FOREWORD
Welcome to the fifth edition of our Middle East Property and Construction Industry Handbook. I hope you will enjoy this years selection of articles, reference information and cost data. During my travels around the region, I receive so many kind comments with regard to the handbook and how it adds value to individuals and organisations. It is therefore a pleasure to continue to support you with this new edition. This year we consider recovery in the Middle East following the 2008/09 economic downturn, as well as construction trends and opportunities. Overall we feel the outlook for the region is positive with the drive to invest in education, health and affordable housing expected to provide ample construction opportunity over the coming years. The necessity for social infrastructure is discussed in Bridging the gap the demand for social infrastructure, while developments in transport infrastructure are considered in High speed rail: high risk, high cost, high rewards. Other highlights include a focus on Syria as an important emerging market and the prospects for religious tourism as a sector in the Middle East. Last year I noted the news of our merger with DEGW. This year brings another exciting change which marks the start of a new chapter in the evolution of Davis Langdon. In August 2010 it was announced that we are joining AECOM, a leading provider of professional technical and management support services. In partnership with AECOM we will be well positioned to deliver our front-end cost and project management and consultancy services as part of a complete end-to-end offer. This will allow us to better serve our global customers while presenting new long-term growth opportunities for our people. In the Middle East the transaction brings a combined cost and project management team of 750, enabling us to expand our presence in countries such as Saudi Arabia, Kuwait, Jordan and Oman. The combined AECOM team across the region is some 3,500 offering just about every professional service associated with the construction industry. We hope you find the handbook of interest, assistance and value to you and your projects and developments across the region. As with previous years, we are seeking your feedback to support our drive for continuous improvement in everything that we do. Kevin Sims, Vice President Davis Langdon, An AECOM Company
4

DAVIS LANGDON

1
DAVIS LANGDON
An AECOM company
In 2010 Davis Langdon joined AECOM, a leading provider of professional technical and management support services for government and commercial clients around the world. AECOM has been a publicly traded company on the New York Stock Exchange (NYSE: ACM) since 2007. Listed on the Fortune 500 as one of Americas largest publicly traded companies, AECOM has over 50,000 talented professionals including architects, engineers, designers, planners, scientists and management professionals who serve clients in more than 100 countries around the world. Since AECOM was launched as an independent company in 1990, the firm has grown and diversified through corporate expansion and acquisition activities that have significantly broadened the companys business lines and geographic reach. In partnership with AECOM, Davis Langdon is positioned to deliver consultancy services as part of a complete endto-end offer, while Davis Langdons strong cost and project management capabilities bolster AECOMs growing portfolio of construction management services.

Global presence
Davis Langdon is a global business line within the AECOM organisation. With over 3,000 people in over 75 offices worldwide, Davis Langdon can support long-term business needs from both a local and global perspective. We have offices in the following regions: Middle East Bahrain, Lebanon, Qatar, Saudi Arabia, United Arab Emirates and Egypt (North Africa) Africa Botswana, Mozambique, Nigeria and South Africa Australia & New Zealand Adelaide, Auckland, Brisbane, Cairns, Canberra, Christchurch, Darwin, Hobart, Melbourne, Perth, Sydney and Townsville UK & Europe England, France, Germany, Holland, Ireland, Italy, Scotland, Spain, Turkey and Wales

1
USA Boston, Honolulu, New York, Philadelphia, Sacramento, San Francisco, Santa Monica, Seattle and Washington DC Asia (In collaboration with the independent firm of Davis Langdon & Seah) Brunei, China, Hong Kong, India, Indonesia, Japan, Kazakhstan, Malaysia, Pakistan, Philippines, Singapore, South Korea, Thailand and Vietnam

Rich Middle East history

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

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

Davis Langdon
Building Project / Construction Manager of the Year 2004 World Architecture Top International Cost Consultant 17 years in succession Building Consultant / Surveyor of the Year 1995, 1996, 2000, 2001, 2003, 2006, 2007, 2008 & 2009 Times 100 Best Companies to Work For 2005, 2006, 2007, 2008 & 2009

AECOM
Engineering News-Record AECOM is ranked No 1 on the magazines list of the top 500 design firms Newsweek AECOM featured in Newsweeks list of the Greenest Big Companies in the US
4

GLOBAL CONSTRUCTION CONSULTANTS

2
GLOBAL CONSTRUCTION CONSULTANTS
Davis Langdon has always seen itself as a forward-thinking organisation and has developed a wide range of technical expertise around the development of land, infrastructure and buildings. More recently, ambition has pushed us to think harder about the context in which we give our advice. We believe there are too many consultants who view a problem as a technical issue, and therefore provide a technical solution. In many cases this is simply giving the client the expected, but such advice can have limited value.

The bigger picture

If we were to analyse situations where our advice has been most effective, it is in the creative application of our knowledge and experience. While our roots are in technical delivery, our clients value the fact that our offer always contains a strategic component. Our ability to think big means we focus on the successful delivery of the project in hand, whilst also appreciating our clients goals and objectives from a broader perspective. Our engagement with the bigger picture enables us to operate beyond project level and support long-term business strategies. It is this approach which makes us the leading construction consultancy we are today.

Sector specialists
Where appropriate we structure ourselves around our clients sectors, to maintain a detailed understanding of the dynamics influencing their different markets. Simply put, clients have access to individuals who are experts in their specific field. Our ability to offer specialists and not generalists adds real value and sets us apart from our competitors.

Cohesive solutions
We can support the challenges and opportunities our clients face throughout the life cycle of a development, from business and investment strategy at organisational level right through to operational efficiency of the final built product.

2
Our core services of program management, project management and cost management are augmented by a comprehensive range of specialist services which complement what we do at the core, reduce risk and add value. We combine and tailor our services to support project and business needs. The services we offer include: Program Management Project Management Cost Management Specialist Services Development Management Mixed-use Masterplanning Design Management Specification Consulting Business Solutions Value Risk Consulting Due Diligence Facilities Management Sustainability Management We focus on identifying issues and encouraging our people to find innovative solutions. This approach allows our clients to assemble a business case which is well considered, properly priced and has measurable outcomes. Our people are our greatest asset and investing in them is at the heart of our business. Through our recruitment and development programmes we harness a range of knowledge and skills to ensure our clients are working with the best people for their projects. In addition to our project delivery teams we employ management consultants, economists and financial specialists.

Thought leaders
Our ability to think and act smarter has made us respected market commentators and thought leaders in our practice area. The Middle East construction market is diverse and brings unique challenges. With peerless technical databases and a significant research department we are uniquely placed to act quickly and decisively to support our clients.

ECONOMIC ROUND UP

10

Country statistics 2009

Kuwait 17,820 Kuwait 3.5 111.3 -2.7 4.6 38,304 11,395 1.8 2.0 4.7 3.4 2.8 8.2 4.2 2.2 3.5 7,098 6,714 14,226 25,110 4.7 4.4 9.5 83,841 17,865 7.2 7.1 -4.9 9.0 3.4 8.6 33.6 53.4 83.9 3.9 3.0 1.2 20.4 52.5 4.0 5.5 4,887 1,659 3.4 1.8 2.5 Beirut Muscat Doha Damascus 10,230 212,460 11,437 184,050 83,600 Abu Dhabi 4.9 230.0 -0.7 3.7 36,537 23,742 9.0 20.7 1.0 Lebanon Oman Qatar Syria UAE

Bahrain

Egypt

Jordan

Saudi Arabia

Land Area, km2

665

995,450

91,971

2,149,690

Capital City

Manama

Cairo

Amman

Riyadh

Population, million

1.0

76.7

6.0

25.5

GDP, US$, billion

20.2

188.0

22.9

369.7

Real GDP Growth, %

2.9

4.7

2.8

0.1

Real GDP Growth, 2010-15 pa forecast

4.6

5.8

5.0

4.3

GDP/Capita (PPP), US$

27,068

6,123

5,620

23,221

Consumer Spending/Capita, US$

8,969

1,727

2,848

5,211

Construction Output, % of GDP*

7.0

5.0

5.0

5.0

Value of Construction Output*, US$, billion

1.4

9.4

1.1

21.0

Consumer Price Inflation, %

2.8

16.2

-0.7

4.2

*estimate only, excludes real estate 2009 data unless stated otherwise Source: IMF and various national statistics offices

11

3
ECONOMIC TRENDS AND OUTLOOK
Global economy
The 2008/09 global economic downturn has been exceptionally severe and construction has seen a sharper collapse than other sectors. Optimism about the economic recovery at the beginning of 2010 has by mid-year turned to fears of a double dip, amid questions about the underlying health of the global economy. Concerns about a renewed global recession are probably overstated, but recovery will be uneven and sluggish in places. Growth in advanced economies is likely to remain below pre-crisis levels, as high levels of public debt, unemployment and constrained bank lending challenge a full recovery. The pace of recent strong growth in big emerging countries, such as China, is likely to slow as they tackle rising inflation and possible asset bubbles. Overall, however, growth should still be robust. The global construction boom came to an abrupt halt in late 2008, as the credit crisis caused projects around the world to be cancelled or put on hold. Public investment in infrastructure sustained the industry in many countries, including the US, Europe, China and the Middle East, but did not fully offset the slack in private construction. No significant recovery in private demand is expected until 2011/12, although when it arrives it is likely to be relatively strong. The global construction industry was worth US$7.5 trillion in 2009. According to latest forecasts, the market will grow to US$12.7 trillion by 2020, with the emerging markets share rising from 35 per cent in 2005 to 55 per cent by the end of this decade. Asia, Latin America and the Middle East will be the main construction growth areas, with infrastructure as the main beneficiary of increased investment.

Middle East economy

The Middle Easts economic prospects are improving, but global weaknesses pose a risk for the region, due to the potential impact on trade and exports, currency volatility and tighter credit conditions. A renewed fall in oil prices would reduce revenues, capital flows and investor confidence.

12

3
Overall, however, the outlook for the Middle East is positive. Three key factors will support growth: 1. Higher commodity prices and external demand will boost revenues and exports. 2. Government investment programmes, especially in infrastructure, will boost domestic demand. 3. Stabilisation of the financial sector will free up capital for businesses and investments.

Country outlook
In line with global trends, the recovery in the Middle East will differ among countries, depending on initial conditions and the intensity of the crisis last year. In countries where private sector credit has decelerated the most, a recovery to normal growth rates will take time. Qatar is set to remain the strongest performer, due to the expansion of gas production and large infrastructure investments. These are all publicly financed and therefore little affected by tight credit markets. Saudi Arabias economic fundamentals also appear strong in terms of market size, population growth, public finances, private sector sophistication and improvements in business environment. Egypt has been one of the most resilient economies in the region and the outlook is positive, barring any major political shocks. The countrys economic potential is huge and investor perceptions remain very favourable. The Lebanese economy is enjoying a boom at the moment, especially in Beirut. As long as Lebanon remains a favourite destination for foreign capital, in particular from other Middle Eastern countries, the pace of current growth is likely to be sustained. Bahrain has been hit hard by the financial crisis. The government has much less financial muscle than its neighbours, so the stimulus package has been relatively small. Similar to Bahrain, Omans public finances are less robust, but its economy is more diversified, supporting a growing private sector. As a trade-dependent economy, Jordan is acutely vulnerable to any changes in the external environment. At the same time, investor interest has grown over the past years, a trend which should continue to support growth, particularly in the tourism sector. Syria should continue to see firm economic growth, as the effects of market liberalisation and a rising middle class increase domestic demand and investor interest.

13

3
Kuwait and the UAE are held back by fragile financial sectors and property markets. The UAEs fiscal position, or rather Abu Dhabis, is in principle as strong as Qatars, but has been overshadowed by Dubais problems. The private sector has been hit hard, limiting economic growth this year.

Construction trends and opportunities

Construction, especially real estate, slowed across the region last year, due to investor risk aversion and tighter lending terms. Banks will remain cautious and riskier private projects will struggle to raise finance until the market fully recovers. State-backed transport and social infrastructure schemes, however, are expected to progress, which is encouraging for the industry. Looking further ahead, construction prospects remain solid. Investment will be driven by petrodollar revenues, demographic pressures, efforts to diversify economies, and built-up demand from historic under-investment in key sectors. Growth prospects for Middle East construction markets
High Egypt Qatar

Saudi Arabia Syria Kuwait Growth Jordan Oman Lebanon UAE

Bahrain Low 0% 2% 4% 6% 8% 10%

Construction % of GDP Size of bubbles relates to construction market size Source: IMF, Samba, BMI, EFG Hermes

14

3
Value of construction in Middle East countries
35 30 25 Value, US$ billion 20 15 10 5 0 Lebanon Bahrain UAE Egypt Kuwait Syria Jordan Saudi Arabia Qatar Oman 2009 estimated 2014 forecast

Source: Davis Langdon, BMI

The largest construction markets in the Middle East are Saudi Arabia and the UAE. Saudi Arabia is judged to have the most favourable construction prospects in the region, due to high levels of liquidity and strong demographic fundamentals. Its population of 25 million is growing at 2.5 per cent per annum and is expected to double in one generation. Saudi Arabias 2010 budget, at US$144 billion, is the largest in history. Government effort to increase private investment has led to developers and construction companies entering the market to gain a share of the growing industry. According to the government there are plans for infrastructure projects totalling US$400 billion in the next five years. This represents substantial opportunities, even if not all projects come to fruition. Construction in the UAE is driven by Abu Dhabi, where the governments investment programme should keep contractors busy, despite the slow progress of contract awards. Construction growth in Egypt and Kuwait is expected to outpace other countries in the region. The Kuwaiti parliament has this year announced a four-year economic development plan worth US$104 billion. The plan includes the development of a new business hub called Silk City, construction of a new container port, a 25km causeway, a new metro system and upgrades to rail infrastructure.
15

3
Egypt, the most populous country in the Middle East, has become a popular investment destination. Its construction and real estate sector is unique, driven by favourable demographics, which together with decades of under-supply of crucial infrastructure development has produced considerable pentup demand. The government is trying to increase private participation in the economy and is implementing a large Public Private Partnership (PPP) programme. Prospects for construction, particularly infrastructure, housing and tourism, are judged to be good, with demographic pressure creating the need for future investments. Qatars construction sector has seen strong growth in recent years and many infrastructure, tourism, commercial and residential projects are recently completed or underway. Whilst real estate investment has now slowed considerably, infrastructure remains strong. Qatars construction growth is expected to remain firm. On the back of recent political stability, Lebanon is attracting increasing investments. Strong demand from Lebanese living abroad, and rising incomes, combined with lower interest rates and an easing in credit conditions, have led to a surge in the domestic real estate market. Apart from real estate, growth areas for construction include infrastructure re-construction and investments in the tourism sector. Foreign investors are also rushing into Syria. Historic underinvestment and population pressures have created a shortage of supply in crucial infrastructure and real estate, and pent-up demand is rising. Jordans construction and real estate markets are benefiting from increased investor interest. To boost growth, Jordan is implementing several major infrastructure projects, some of which are financed by PPPs. Overall, the regional drive to invest in education, health and affordable housing is expected to provide ample construction opportunities over the coming years. Other sectors that are expected to see strong construction growth are energy, water and wastewater, as well as transport infrastructure. Once project finance becomes easier to obtain and investor confidence returns, commercial developments should rebound, particularly in markets where population growth demands increased investment.

16

3
CONSTRUCTION INFLATION TRENDS AND OUTLOOK
Construction inflation has been one of the main challenges for the Middle East before and during the economic slowdown, and will continue to be an important factor for consideration in the region. Tender prices across much of the region fell between late 2008 and early 2009, due to lower input costs. Material prices saw a marked decline, but labour costs also reduced. In addition, deep discounting of management costs and margins, resulting from increased competition between contractors, also pushed down construction costs. However, since the start of 2010, global factors have put pressure on the price of some commodities and building materials. Construction input costs in the year ahead are likely to be volatile, with noticeable differences between countries in the region.

Inflation trends
General inflation in the Middle East eased markedly since 2009, due to the decline in global food and other commodity prices, weaker demand and lower imported inflation following the appreciation of the US dollar. Looking ahead, consumer price inflation in the GCC is expected to remain relatively stable in 2010/11, unless, for example, major shocks to food or rental prices occur. Bank lending will remain cautious and some real estate sectors, most notably in the UAE, Bahrain and Qatar, have undergone sharp corrections. In Lebanon, Syria and Egypt stronger economic growth, coupled with capacity constraints and higher energy prices, has already pushed up inflation during 2010, a trend that is expected to continue looking forward.

Construction costs
In contrast with domestic inflation, construction input costs edged up in the first quarter of 2010 as some materials prices rose. Changes to pricing systems within commodity markets, principally iron ore and steel, have caused steep price rises and increased volatility, although some of these increases reversed in the second quarter of the year. Commodity prices are expected to remain lower near-term, due to slower global growth in the second half of this year. However, in the medium-term the prospect of commodity strength, together with higher volatility, will pose a challenge for the Middle East.
17

3
Currently, no real supply chain issues exist in most of the Middle East due to lower demand and excess capacity, although there are regional variations due to the differing levels of construction activity in each country. Review and consolidation of programmes of work are evident in some parts of the region. Some clients have chosen to continue their capital programmes but at a slower pace. Others are pressing ahead, capitalising on the lower costs available in the market because of increased competition and lower input costs. Clients are able to source very competitive prices due to many contractors in the market chasing work. On the back of this, contractors are finding it difficult to absorb increases in input costs, having trimmed their labour costs, preliminaries, overheads and profit drastically since the beginning of 2009. Materials suppliers and plant providers are also eagerly looking for sales and are reducing prices accordingly.

Inflation outlook
Construction prices in the year ahead could be volatile, with prices on some schemes and some markets hardening while others continue to fall. This may result in tension between estimators having to reflect higher materials prices and directors trimming tenders to secure workload. An increase in the rate of inflation in the year ahead will be determined by factors which include: Demand for construction within the individual Middle East markets there are pockets of higher inflation in strong growth countries such as Qatar and Saudi Arabia. Demand for construction within the wider Middle East, including Egypt, the Levant and Iraq. Competition for migrant labour with other host countries and source countries. Availability of international joint venture partners and other sources of management resource, experienced in the delivery of complex, high quality projects. Demand for raw materials affecting global commodity prices. Demand for critical single-source materials and components. Whilst there is no immediate prospect of inflation returning to levels seen in the Middle East in 2007 and 2008, price hikes in base commodities, loss of capacity and a more rapid than expected bounce back in economic growth could be sowing the seeds for future bouts of substantial inflation. Price escalation at five per cent per annum is foreseeable over the next two to three years, in markets where activity remains strong.
18

3
Window of opportunity to buy contracts
Clients are successfully securing very competitive prices in the current window of opportunity. However, these price levels cannot be expected to be sustained over an extended period and they are unlikely to establish a new pricing floor. Future procurement of projects will take place in a market where prices will either be static or rising, placing greater emphasis on the risk to the contractor of future cost escalation. For projects procured in 2010, prices are being agreed and construction is being started while costs are stagnating. However deals are increasingly finalised at a point where the general market is forecast to turn. For projects procured in 2011, the expected outcome is that tender prices will rise faster as a project is being procured. The current markets turning point is difficult to predict with precision, but most downward pricing benefits are likely to have been secured.

Entry and exit prices

Given current market conditions, clients that are active in the market are making the most of this strong position and focusing on obtaining the lowest entry costs on their projects. Contractors are also more willing to accept a wider transfer of risk, through factors relating to cost, time or specification. However, whilst clients are able to secure deep discounts, this inevitably results in a greater incentive for contractors to recover additional payments on live projects. Most contracts include provision for compensation for changes, or other legal remedies. Sources of cost increase include scope change or risks that may not have been removed from the project. As a result, low entry prices rarely turn out to be low exit prices unless special measures are taken by the clients team to actively manage the outcome. Increasing the certainty of exit prices is dependent on ensuring the project can be built within the proposed budget and programme, and on minimising the opportunity for claims caused by change and information flow. For clients who successfully secure advantageous prices in the current market, investment in management processes and resources within the organisation and project team will provide further safeguards against cost and programme escalation during the construction phase. Further active considerations for management of programmes and projects include international procurement of materials and implementation of post contract change management mechanisms. Pre-contract cost planning can also be a key area for analysis and assessment of a projects commercial drivers and viability.
19

20

ARTICLES

4
4

21

22

4
SPOTLIGHT ON SYRIA
Syrias reappearance as a key regional force is gaining momentum with its economy opening and expanding. Historic under-investment and population pressures have created a shortage of supply in crucial infrastructure and real estate. Syria is increasingly attracting foreign investors and GCC developers, in particular, are rushing into the country to take advantage of its booming construction market.

Economic renaissance
For many decades Syrias centrally planned economy dominated its business environment. However, faced with oil reserves approaching depletion, large population pressures and low growth figures, the government has embarked upon economic reforms to diversify the economy and attract foreign investment. Relations with the European Union and the US are warming, and Syria is once again becoming a country with much to offer. Syria has long been a leading trading hub in the region. The capital Damascus is, together with Cairo and Baghdad, one of the most important ancient centres of Arab civilisation. Damascus, as the seat of the Umayyad Caliphate, was known for trade and culture, and many of the worlds greatest advancements, including modern agriculture, the alphabet and mathematics, are said to have originated within this cradle of civilisation. Some ten years have now passed since Bashar al-Assad became president and during this time he has made substantial headway in transforming Syria from a socialist to a social market economy. In 2005, the tenth Five Year Plan (2006 2010) was adopted, which highlighted expectations for the Syrian private sectors more prominent role in the economy. Syria has undertaken a number of reforms, with the goal of improving the business environment and increasing the share of the private sector in the economy. One of the first measures was the liberalisation of the banking and financial sector to improve access to credit. In 2006, new tax laws reduced corporate tax rates from 35 per cent to 28 per cent. Investment promotion law No. 8 (2007) allowed foreign investment in certain sectors, including 100 per cent foreign ownership and repatriation of profits. Other reforms to attract investment included a new commercial law (2007) and a company law (2008). Furthermore, the exchange rate has been unified and restrictions on access to foreign exchange have been significantly reduced. The Damascus stock exchange was reopened in 2009, having been closed for 40 years.
23

4
Economy of Syria as a percentage of GDP

Other 11% Finance & Insurance 6% Agriculture 19%

Transport & Communications 10%

Wholesale & Retail Trade 17%

Mining & Manufacturing 34%

Building & Construction 3%

Foreign direct investment has risen exponentially in the last few years, but Syria has a long way to go in terms of improving the investment climate. The reform process is still work in progress and challenges remain. The World Banks Doing Business 2010 report ranks Syria 143rd out of 183 economies for ease of doing business, while the World Economic Forums Global Competitiveness Report 2009/10 ranks Syria 94th out of 133 economies. According to the reports, operating costs in Syria are the highest in the Middle East, while businesses face a high level of bureaucracy and difficulty in accessing finance. The government still maintains tight control over the Syrian economy and further structural reforms are needed to encourage private investment and enhance competitiveness. Going forward, Syria faces a major challenge to achieve a sustainable growth rate, high enough to decrease unemployment and absorb the expanding labour force. Syrias population is increasing at 2.4 per cent per annum and nearly 60 per cent of the population is under the age of 20. In addition, some two million Iraqis are seeking refuge in the country, resulting in considerable pressure on basic infrastructure and the job market.
24

4
Growth areas
One big step is the renewal and upgrade of Syrias infrastructure: transport and logistics, industrial cities, education, health facilities and housing. Historic underinvestment in key sectors of infrastructure and real estate has created a shortage of supply. Coupled with high levels of population growth, this has fuelled large pent-up demand. Recognising the opportunity, foreign developers and construction companies, in particular from the Gulf, have converged on Syria in recent years, resulting in a number of large-scale projects underway or planned and a general rise in building standards. Projects include the Eighth Gate, Damascus Hills and the Ibn Hani Bay Resort. Syria is still a lower-middle income country, and measured in GDP per capita among the poorest in the region. However this masks the fact that there is a growing middle class and average incomes are rising, opening up opportunities in the housing and retail sectors. In particular the retail sector is witnessing a mini boom in urban Syria, with a flood of foreign brands and overseas investment entering the country. To accommodate increasing demand, foreign investors are looking to establish new retail spaces. The largest currently under construction is Majid Al Futtaim Properties Mall of Syria, located on the outskirts of Damascus and due to open in 2014. This development forms part of Khams Shamat tourist development, a mixed-use project expected to total some 1.5 million m2. The development of out-of-town retail spaces and the potential for further expansion in the retail sector are sizeable. Tourism is another key growth area, with Syria looking to establish itself as a cultural destination. Some of the biggest regional players, including Qatari Diar, Saudi Binladin Group and the Kharafi Group, have entered Syria with tourism projects. Syria is facing a large housing deficit and estimates put the number of homes needed to at least 687,000. Until now, developers have focused on the high-end market, but more residential units for lower and middle income families will be required in the future. Syrias government is stepping up public investment. The forthcoming 11th Five Year Plan is likely to put increased emphasis on infrastructure and energy. In particular, the government has recently pledged to spend some US$50 billion on capital investments until 2015. This includes power stations, enhancing the road network, plans for a metro system and new airport for Damascus, industrial cities and logistics centres.
25

4
Syria construction sector*
4.0 Value in US$, current market prices 3.5 3.0 2.5 2.0 1.5 1.0 0.5 2011 f 2012 f 2013 f 2014 f 2015 f 2005 2006 2007 2008 2009 2010 0.0 -5% -10% 10% 5% 0% Construction output, US$ current prices Construction growth real 20% Construction growth, % real 15%

Syria economy and construction indicators*

Market structure GDP, US$ nominal, 2009 GDP growth, real, 2009 GDP growth real, 2010-14 p.a. forecast Population, million GDP per capita (US$, PPP) Construction industry structure Construction industry, US$ nominal, 2009 Construction as % of GDP Real construction growth 2010-2014 p.a. 1.8bn 3.4% 7% est only 52.5bn 4% 5.5% 20.4 4,887

Unlike other countries in the region, the Syrian governments budget does not allow for a huge increase in building and infrastructure expenditure. Syria is therefore looking to bring in public private partnerships (PPPs) to deliver planned investments. The drafting of PPP-specific legislation and the establishment of regulatory institutions are being widely applauded, but issues remain regarding financing, risk sharing and arbitration. Syrias construction market is still relatively small in size, but is growing fast. It is far from being a mature market and challenges exist. Local construction firms, faced with an increase of large-scale projects, often do not have the capacity and experience to deliver proposed schemes. More experienced foreign developers, contractors and consultants would help to increase the efficiency of project delivery and aid capacity in the Syrian construction market. Whether all currently planned projects will be realised remains to be seen, but nevertheless it shows that there are ambitious plans for Syria in the years ahead.
*Source: Central Bank of Syria, IMF, Davis Langdon

26

4
GRAND PRIX RACING ON TRACK IN THE MIDDLE EAST
2009 saw the inaugural Formula 1 Etihad Airways Abu Dhabi Grand Prix firmly establish Abu Dhabi on the F1 calendar by hosting the first ever day-night race. In this article we consider the history of motor racing in the Middle East and the future for the sport in the region.

The need for speed

Whether road rallying, sprints, time trials or even speed hill climbs, for generations car fanatics have been able to get their racing fix at purpose built venues across the globe. Thanks to world-famous races such as the Monaco Grand Prix and the Le Mans 24 hour race, Europe has long been considered motor sports natural home. As a result many racing categories, teams and drivers are based on the continent, particularly in the UK, where they can benefit from the support of a variety of established organisations, facilities and events. However, times are changing and Europes position at the front of the grid is being challenged by Asian countries keen for the global exposure that comes with hosting a F1 Grand Prix, the pinnacle of motor sport. The past ten years have seen China, Malaysia and Singapore all join the F1 paddock by staging a race, with the Korean Grand Prix set to make its debut in October 2010. The Middle East has also demonstrated a need for speed and made its foray into the rich and expensive world of F1. Bahrain hosted its first race in April 2004, while the first Abu Dhabi Grand Prix took place in November 2009. Close neighbours Turkey have also staged a race since 2005. In each case, new state-of-the-art facilities have been designed and constructed in short periods, typically 16 to 20 months, to meet critical deadlines. The projects have been driven by a passion to hold a world sporting event. Each new venue has provided an opportunity to create a signature circuit, facilitating growth and development of the F1 franchise, while bringing substantial advertising, tourism and business opportunities for the host country. This shift in power from Europe, the traditional F1 powerhouse, to the Middle East and Asia shows no sign of stalling.
27

4
The 2011 F1 Championship will see India added as the twentieth venue and plans to expand the calendar to 25 races are being explored. Opportunities may exist for other Gulf countries to consider hosting races and constructing signature venues. F1 puts the greatest demands on facilities, leading to considerable capital costs to construct permanent venues in line with Federation Internationale de LAutomobile (FIA) Grade 1 circuit requirements. Some countries, like Australia, Singapore and Valencia, have opted to create temporary street circuits, with the streets of Monaco being, of course, the oldest and most famous. Permanent motor racing circuits in the Middle East
Country Circuit Bahrain KSA Turkey UAE UAE Qatar Bahrain International Circuit, Sakhir Reem International Circuit, Riyadh Istanbul Park Dubai Autodrome Yas Marina Circuit, Abu Dhabi Losail International Circuit, Doha Max Length 6.26 km 3.80 km 5.34 km 5.39 km 5.53 km 5.38 km FIA 1 3 1 2&3 1 2 Year 2004 2008 2005 2004 2009 2004 Grade* Opened

*FIA homologate each circuit and apply a grading system based upon track specification, driver and spectator facilities, all safety aspects and the suitability for different racing categories and events.

Tripoli and the regions early days of racing

The Middle Easts arrival into motor sports mainstream should not come as a shock. Local events of all kinds have been organised since the earliest introduction of motor cars. The sport has an interesting history in the region, with FIA Middle East rally championship celebrating its 25th anniversary in 2010. The period 1925 to 1940, often referred to as the golden age of motor racing, saw state funded teams from Italy and Germany and amateurs from nations such as France, Great Britain and Belgium compete in Grand Prix and Voiturette races in the then Italian governed Tripolitania. The original street race advanced in the early 1930s to a purpose built 13km track around a lake at Mellaha. Facilities included an observation tower, a permanent grandstand to hold 10,000 spectators and state-of-the-art race control technology such as starting lights and photo-electric timing. It soon became the worlds fastest track, demonstrating the prowess of Italian racing cars. Average speeds over a single
28

4
lap reached 215 kph, not dissimilar to the benchmark for new circuits of the current era. While the famous names of Bugatti, Alfa Romeo and Maserati won the early races, Germanys Mercedes-Benz and Auto Union dominated for most of the 1930s.

Putting some values on F1

Looking at the figures surrounding F1, it is not surprising that the Middle East might want to build on its history in the sport and host more races. Each team spends up to US$250 million per season running two cars and employing several hundred people to attend to the cars at race meetings and behind the scenes. While live audiences are typically in the range of 50,000 to 150,000 spectators, it is estimated that over 500 million people in over 100 countries watch a F1 race remotely. The cumulative audience for a whole season is approaching tens of billions. With annual revenues from commercial rights, sponsorship, the teams and circuits totalling in excess of US$4 billion, it is estimated that F1 races are the largest individual revenue-producing events in the world. Following an increase in race hosting fees, most host countries no longer aim to make a profit from the event itself, instead seeing it as a marketing exercise and an opportunity to put a region on the sporting map.

Looking ahead
While F1, with its large following, is considered to be the pinnacle of the sport, there are many other racing categories that are essential to support it. In addition, a new permanent facility cannot rely on just one F1 weekend per year. As the Middle East embraces the sport and invests in it, the region also needs to nurture and promote local championships and feeder series to develop their own talent. The new Formula Gulf single-seater racing series in the UAE, exclusive to GCC nationals in 2010/11, is one example. Initiatives such as this will require the development of locally based technical expertise, therefore bringing further investment. Karting is also an essential way to discover and develop young talent - a number of accredited karting tracks are being developed around the Gulf. With excellent circuits now in place in Bahrain, Dubai, Abu Dhabi and Qatar, the region is in a strong position to collaborate and develop a local series to attract other world racing categories, particularly from Europe, to take part either out of season or with a round as part of their existing championship.
29

4
Plans for new circuits in the Middle East will strengthen the regions interest in the sport itself as well as in F1 events. New circuits have the opportunity to analyse what makes the best for both drivers and spectators and create a unique draw on the traditional European foothold, just like Tripoli must have had in the 1930s.

Our sector expertise

Davis Langdons sports and venues specialist group offers an international team who have been involved in the delivery of a number of high profile global sporting events. These include recent and future Commonwealth and Olympic Games and football and cricket World Cups. Our motor sport experience includes new F1 pits and paddock facilities at Silverstone Circuit in the UK, Yas Marina Circuit in Abu Dhabi, masterplanning for new circuit facilities in Brazil and Iceland, F1 team technology and heritage centres in the UK for McLaren and Mercedes-Benz, and karting@bahrain, a new CIK homologated karting venue adjacent to Bahrain International Circuit and part of the overall @bahrain masterplan development.

30

4
PROPERTY SERVICE CHARGES AND THE DUBAI STRATA LAW
The issue of service charges in multi-occupancy buildings has attracted a great deal of press coverage in Dubai in recent years. Many occupiers have faced significant increases in their service charges, with developers providing little justification or detail. The Dubai Strata Law seeks to address this issue and to give individual owners of jointly owned property greater clarity over the ownership and upkeep of shared areas within their development.

Dubai Law 27/2007: The Strata Law

Law No.27 of 2007 Concerning the Ownership of Jointly Owned Properties in the Emirate of Dubai was decreed in 2007 and enacted in April 2010 when the required guidelines on its implementation were published by the Dubai Real Estate Regulation Authority (RERA). Known as the Strata Law, the law applies to all new and existing property developments that are made up of a series of individually owned properties with shared common areas. This includes apartment blocks, commercial units and masterplanned communities. Key requirements of the Strata Law: Jointly owned properties and their ownership details must be registered with the Dubai Land Department. The registration must include a Site Plan, a Master Community Declaration and a constitution for an Owners Association. Together, these documents provide details of all the units and any common areas, the terms and conditions governing the operation of the common areas and the rules and regulations governing the Owners Association. The law clarifies the legal position regarding the ownership and upkeep of common areas and the developers legal obligations on the sale of units. The law requires a greater level of transparency in the calculation and management of service charges. Existing developments have been given a six-month grace period to implement the requirements of the law.

31

4
The Owners Association
For each development, an Owners Association made up of representatives of the individual owners must be set up to take responsibility for the management, operation and maintenance of the jointly owned property or common areas. The Owners Association may choose to delegate some or all of its powers to a third party such as a Strata Management Company. It may also enter into direct contracts for the supply of goods and services such as maintenance, landscaping, cleaning and utilities. Each unit owner is required to pay the Owners Association an annual service charge, which is typically calculated on the basis of the size of the unit as a proportion of the total size of the development (net of the common areas).

About service charges

Service charges are the fees charged to unit owners to cover the cost of the management, operation, maintenance and repair of the common areas within the development, such as shared gardens, swimming pools, parking areas, waste rooms, entrances and circulation areas. Operation and maintenance of the common plant serving the development is also included within the charge. Calculation of service charges is subject to guidelines published by RERA. Proposed service charge levels for a development must also be approved by RERA prior to implementation. A typical service charge make-up would include some or all of the following: Maintenance costs for common areas and facilities including: Planned cyclical maintenance; Reactive (breakdown) maintenance; Major renewals / replacement works. Operation of shared amenities (pools, gardens, gyms and car parks). Utilities consumption costs for common areas (gas, electricity, water and sewerage). Air conditioning costs (communal areas and district cooling charges). Common area cleaning costs. Security costs. Concierge and other shared services provided to occupants. Insurances (buildings and liability). Management costs, including legal and accountancy costs.
32

4
Typical make-up of service charge for residential developments
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Apartment block

Gated villa community

High-rise tower block

Maintenance, cleaning and security Effluent water for landscaping Operation of shared facilities Contingency

Utility costs for common areas Management costs and insurances Major repairs sinking fund contribution

Treatment of major renewals costs

Whilst most cost elements of the service charge will remain relatively consistent from year to year (before inflation adjustments), the costs of major renewal and replacement works typically start low and build up over the life of the building as assets such as the air conditioning plant reach the end of their life. Rather than ignoring these costs in the early years, it is good financial practice to include an annual sum in the service charge which is transferred into a maintenance reserve or sinking fund for future replacement works. In this way, owners are shielded from a significant variance in these costs from one year to the next.
33

4
What the Strata Law means in practice
By establishing Owners Associations, the Strata Law gives property owners a much greater level of control over the management and upkeep of the common areas within their development and of the associated service charges. Where previously developers set service charge levels and let maintenance contracts (often to in-house facilities management companies set up specifically for this purpose), now Owners Associations have the freedom to select their own service providers and to replace providers that perform badly. The introduction of competition into the selection process will ensure that future service charges are both transparent and competitively priced. The Strata Law also addresses the growing problem of owners defaulting on payment of their annual service charge fee, which has resulted in essential maintenance not being carried out at some developments. Unlike developers, Owners Associations will have direct legal powers including the use of enforcement notices to recover service charge arrears. In extreme cases this could lead to the forced sale of the defaulting unit.

Beyond Dubai
Although the Strata Law currently only applies to multiownership developments within Dubai, neighbouring regions are known to be considering adoption of similar regulations. In anticipation, leading developers are already starting to put the appropriate mechanisms in place.

How Davis Langdon can help

Davis Langdons Facilities Management consultancy team has considerable experience in the development of service charge cost models and in the procurement of facilities management service providers. At the design stages we work with design teams to minimise future running costs and provide developers with commercial advantage in a highly competitive market. Our facilities management and life cycle cost models reflect international best practice and underpin the development of robust, auditable service charge models. Our facilities management procurement expertise helps clients secure the right service providers at the right price and within a robust performance management framework.
34

4
HIGH SPEED RAIL HIGH RISK, HIGH COST, HIGH REWARDS
Choices relating to public transit are choices about a city or regions future. Increased demand on transportation in the Middle East has traditionally been reflected in increased highway construction, which seldom represents a sustainable long-term solution. More roads encourage more cars and increased congestion results in reduced mobility of the population and, more importantly, the workforce. Negative cycle caused by restricted transport systems

Limited transport systems

Limited mobility

Limited workforce and patronage

Global trend towards mass transit at speed

Parts of the Middle East are now recognising this negative cycle and, like many other economies and cities across the world, are investing heavily in urban mass transit or high speed rail networks. The region is starting to understand the high risk, high cost and high reward stakes of these developments.

35

4
Key investment considerations
A number of key investment considerations should be carefully addressed in order to ensure success at a strategic level: Politics, policy and public framework: rail projects are often high profile and can be exposed to political entrepreneur syndrome, where benefits can be distorted to secure public accreditation for political gain. That said, public endorsement and governmental or municipal backing is essential for successful delivery of such projects. Complexity: rail projects are significantly more capital and technology intense than projects in other transport sectors. High speed rail or metro rail transit links involve proven technologies but entail greater exposure to systems integration, civil engineering structures and construction considerations. The complexity of these interface risks must be carefully assessed and managed through robust project controls, procurement and proving processes. Demand: demand justification and patronage projections will always play a significant role in the viability assessment of any proposed scheme. It is, however, equally important to ensure that the inherent or future design capacity of schemes can cope. The attractiveness of rail over other transport methods remains strong, and, when cultural acceptance or commercial necessity fully kicks in, patronage numbers could see a dramatic increase.

Major cost drivers to delivering high speed rail in the region

As with any large scale infrastructure project there are a number of key influencers on the out turn cost of a scheme, but some specific to the region include: Land, terrain, topography and climate: the inherent construction conditions in the Middle East provide a number of major challenges. Granular desert soils provide stability issues for some long intercity routes, whilst suburban coastal zones encounter high water tables. Other major considerations include flooding on the alluvial planes, sabkha zones, aggressive salty ground and wind blown sands. Technology: despite the regions desire for innovative technology deployment on its networks, this brings with it significant risk of failure. Proven technologies provide an inherent resilience and robustness which will be attractive to investors, operators and ultimately passengers.

36

4
Flexibility: the ability to run heavy freight trains on high speed lines, as is the current intention for much of the proposed GCC rail network, increases the cost of construction considerably. Interoperability: the line may be required to accommodate access from different types of rolling stock from the various constituent members of the GCC, and this opportunity comes at a capital cost premium.

Evaluation of the benefits of high speed rail

Making the case for high speed rail can be compelling when measured by the improvements in social mobility. However, when interrogated from a purely financial return basis, often the case becomes a much harder sell: The latest expensive toys?: the commissioning of infrastructure assets within the Middle East is enjoying a much more considered approach of late and avoiding the bravado-inspired boom in building construction that was witnessed in previous years. The requirement for each procuring authority to deliver ever better products and attain best in world will generate an ever increasing drive to be at the forefront of design, technology and delivery. Cost benefit analysis: seldom will a straightforward cost benefit analysis of a prospective high speed rail or metro rail transit scheme justify in its own right the huge initial capital investment and ongoing operational costs required to deliver an effective, operational scheme. To reject such schemes on this basis fails to acknowledge the broader economic impact they can generate. Hidden benefits: research recently undertaken by the Martin Prosperity Institute at the University of Toronto identifies two key attributes that a modern transportation network can bring to the wider economic prosperity. Firstly, and as mentioned above, mobility not only expands the size of the job market to workers but also the labour pool to employers. This expansion of the catchment area for quality resources should improve productivity, whilst also providing greater flexibility for workers to embrace alternative working patterns, such as part-time or remote working and the ability to seek opportunities across multiple labour markets. Secondly, the benefits of other infrastructure assets are increased across a wider city region. Connections to a major international airport or cultural destination building, for example, would see greater patronage of these facilities, allowing them to be developed on a greater scale and improving their long-term viability.
37

4
Benefits of high speed rail
Labour pool for employers Employment market for workers Benefits of infrastructure

EXPANDED

REDUCED

Congestion

Travel time

Pollution

Source: Martin Prosperity Institute 2010

The future
In summary, a modern, efficient public transport system will soon be regarded as a municipal utility and as fundamental to sustaining modern cities as power and water. The systems ability to promote greater proximity and accessibility to national and local markets for employment, residence, leisure and learning will provide the high reward imperative to overcome the challenges of cost and risk.

38

4
Our transport and infrastructure expertise
Davis Langdons transport and infrastructure group is a truly global collective who specialise in providing world-class advice to clients focused on large scale transport or infrastructure investment, improvement or acquisition. We share knowledge and resource globally to deliver complex and challenging projects. Our breadth of experience covers all aspects of civil engineering, structures, tunnels, bridges, roads, heavy and light rail systems. We work closely with developers, land-owners and regeneration agencies in connection with transportation provision and interfaces of major regeneration and mixed-use developments in the inner cities. Current and recent examples of this include the Haramain High Speed Rail Link programme in Saudi Arabia; the US$1.5 billion East London Line; the Milwaukie Light Rail system in Portland, Oregon; the Singapore Mass Rapid Transit and advice on the rail and highways implications for major regeneration quarters such as Kings Cross Central and Cricklewood, London. Advice has also been given in connection with the UK eco-town proposals, delivering demanding design and sustainability standards including a variety of transport and travel options to promote alternatives to car journeys.

39

4
ADDING VALUE THROUGH INTEGRATED SUSTAINABILITY MANAGEMENT
The meteoric rise of the sustainability agenda in recent years does not show any signs of diminishing. In fact the agenda is gaining momentum in the Middle East through fundamental drivers that include introduction of new legislation, climate change targets, energy and water concerns and corporate social responsibility. In terms of construction, local administrations are driving the agenda with iconic projects such as Masdar, the zero carbon zero waste city in the UAE, and the LEED Platinum rated King Abdullah University of Science and Technology in Saudi Arabia. Furthermore, regulatory and legislation developments have led to the introduction of environmental rating systems such as the soon to be mandatory Estidama Pearl Rating System in Abu Dhabi and the Qatar Sustainability Assessment System (QSAS). These top-down actions are coupled with private initiatives by companies and developers who have been forced to re-evaluate their drivers by challenging market conditions. Such re-evaluation from the bottom up is helping the sustainability agenda become part of the mainstream.

Traditional approach to sustainability management

The Middle East has conventionally focused on temporal drivers in the area of project delivery. Added to this has been a tendency to introduce sustainability objectives in the latter stages of design or even after construction has commenced. This late introduction has meant the opportunity to explore more straightforward sustainability objectives has often been missed. Simple design responses, for example, have frequently been overlooked due to higher cost solutions being the only achievable option in the timeframe available. This late establishment of sustainability objectives has often been coupled with an ill-defined agenda or sustainability strategy, open to different interpretations by the project team. As with any element or feature added to a project late in the day, this retro-fitting of sustainability has been found to add
40

4
The opportunity to introduce sustainability objectives in a cost effective manner reduces as the project programme progresses
Opportunity to integrate sustainability objectives

Cost of change

Project programme

significant cost. As a result, sustainability has been seen as the green ogre, often causing design confusion and having its real value tempered.

Our approach to sustainability management

The Middle East climatic and environmental conditions require a dedicated and tailored response that will promote sustainable design and construction practices. Davis Langdon demonstrates sophistication among peers by providing an integrated response that allows sustainability management to link the disciplines of project, cost and facilities management. We apply a value-based approach to direct the project towards a more environmentally sustainable and socially responsible path. As inefficiency and ineffectiveness imply waste, our approach aims to identify the most efficient path at the earliest possible stage. At masterplan design stage, we investigate whether traffic and transport, bulk infrastructure or community facilities provisions could be rationalised to achieve savings in terms of land area and ultimately costs. During the specification process we advise on green procurement and on the embodied carbon content of materials and processes. On commencement of construction we work with the contractor to facilitate on-site waste management and reduce environmental impacts associated with construction waste collection, transport and disposal. Once the development is in operation we manage the surveying of commercial properties to gather data on energy and water consumption and through detailed analysis establish reduction targets.
41

4
Measures such as these will help minimise scope or specification stripping further down the line, when savings are looked for through the use of value engineering. This value-based driver results in a variety of benefits including resource conservation, reduced energy loads, cheaper operating costs and improved quality of life as projects are designed, constructed and operated in more environmentally sensitive and energy efficient ways. This highlights the benefits of value-based sustainability over exclusively design-based approaches. As an integrated service, Davis Langdons sustainability management helps to add value to projects
Green procurement LEED assessment Estidama Pearl rating system

Embodied energy

Specification consulting

Design management Cost management

Facilities management

Sustainability management

Life cycle costing

OPEX reduction

Cost benefit analysis

Design rationalisation

Value-based approach
Challenging market conditions have ensured that, more than ever, companies need their assets to be efficient and productive. Sustainability management can include tools that inform the decision-making process and ultimately the efficiency within a project. These tools, including cost benefit analysis and life-cycle cost analysis, encourage proper planning and design practices. Such measures can be introduced at an early design stage without impacting project appearance and integrity, and at little or no extra cost.
42

4
In this way, sustainability becomes the boundary between efficient and inefficient systems and processes. Just one inefficient system can have significant operational and financial consequences, indicating that the introduction of a structured sustainability management strategy at an early stage helps add value and improve returns. Factors that influence this approach, such as client direction, regulatory compliance and industry current practice, need to be considered. Sustainability management aligns a projects sustainability objectives with cost benefit and life-cycle cost analysis to direct the project towards the most efficient outcome. This is especially true for key objectives relating to energy, water and waste. In terms of energy, the priority should be to reduce demand. This can involve passive measures, such as optimal site selection and orientation, which significantly impact load requirements without major cost outlay. Energy reduction measures that affect the building appearance, such as solar shading or reduced glazing ratios, can then be considered before the more expensive options of renewable technologies are investigated. This approach affects the cost, project and facilities management of projects directly. A value-based approach can be applied to the energy efficiency objectives within a project and translated to other key elements such as waste and water
Cost impact COST IMPACT Building form and orientation Exposed mass Reduced air leakage ACTIVE Lighting controls (electrics) Water efficiency (plumbing) Energy efficiency (HVAC) RENEWABLE ENERGY Absorption chillers Solar hot water heaters Photovoltaics Return on investment

43

4
Davis Langdon applies a logical approach to sustainability that allows the service to be provided in isolation or, as described above, as an integrated offering alongside other services. The inter-disciplinary sustainability management service is focused on the needs of policy makers, developers, investors and operators in various fields. We think laterally and aim to operate efficiently to support the projects environmental and social goals. We bring vision, structure and direction to planning, development, design, construction and operation. Through this value-based approach, Davis Langdons sustainability management service helps maximise the return on investment while driving environmental, social and quality management throughout the life of a project.

44

4
CASE STUDY KING ABDULAzIz CENTRE FOR WORLD CULTURE
Project background
King Abdulaziz Centre for World Culture is a ground breaking cultural centre being developed by Saudi Aramco in Dhahran, Saudi Arabia. Built on the site of well number seven, Saudi Aramcos first commercially viable oil well, to mark the 75th anniversary of the Kingdoms national oil company, this is a landmark project. The centre is unprecedented in its vision, multi-functionality and revolutionary design. Saudi Aramcos vision is to build a leading-edge educational and cultural institution which inspires passion for learning, creativity, and cross-cultural engagement. This is a significant project in the Kingdom and a global venue in its own right, contributing to public life and to Arabian Gulf architecture.

Function and design

Through its impressive multi-functionality, the centre will provide learning experiences for all ages and cultures. These knowledge opportunities will honour Arab heritage, connect Saudis to their culture and bring world cultures to the Kingdom. The centre will house an exhibition hall, a museum, an auditorium, a public library, a life-long learning centre, a childrens education centre, a cinema and a mosque. With all facilities delivered to a world class standard, the centre will provide a memorable setting for showcasing the Kingdoms development and achievements, as well as attracting internationally renowned exhibits and performances.

45

4
Following architectural competition, the design contract was awarded to Snhetta, international architects based in Norway, renowned for designing cultural institutions such as the Bibliotheca Alexandria in Egypt. The centres stainless steel-clad design resembles a group of five pebbles located in the desert. The auditorium, keystone, tower, library and exhibition hall are arranged in different pebbles, each grouped around a central plaza which is home to the source - a physical representation of well number seven. The overall design represents a bridge between the Kingdoms cultural tradition and its future. Saudi Aramco has enlisted support from a range of experts with proven track records in the cultural sector. Davis Langdon is delighted to be part of the centres project team. The scale of the project, combined with the degree of responsibility accepted by lead consultant Snhetta, has necessitated investment in robust project management processes and resources. Much of this support has been provided by our design management, specification consulting and cost management specialists. Together with engineers Buro Happold, Davis Langdon was selected to work with Snhetta before the competition process and actually contributed to the competition submission. Our cost management team, for example, provided the competition budget estimate. Throughout the design process, members of the Davis Langdon project team have made a value added contribution, providing a cohesive solution to help Saudi Aramco achieve their vision. Our services comprised three main elements: Design management Specification consulting Cost management

Design management
Design management coordinates the efforts of large and diverse design teams as they progressively work towards realisation of the design concept. This helps designers optimise their use of resources, identifying and addressing programme constraint at an early stage. Davis Langdon coordinated and interfaced the projects different buildings and systems, and also managed the activities of teams working in different locations and time zones. We provided focused, high-value support, enabling the designers to concentrate on their core competences. The principal services delivered through design management include:

46

4
Management of deliverables Project process administration Project communication Challenges addressed: Managing project complexity by sequencing and inter-relating all the different strands of design work. For example, centre-wide design activities such as the cladding solution or communications systems could be readily coordinated with sub-projects such as the mosques or library. Helping the team to respond effectively to the dynamism of the brief through the use of tools, some specially developed by Davis Langdon. These include design webs which provide a useful visual summary of progress on design packages and design route maps a flow chart issued to design package leaders which clarifies the brief and expected outcomes. Coordinating a global design team consisting of over 250 people, based in over 10 different locations around the world. Formal design tools and electronic communication were an important part of the design project managers toolkit. Davis Langdon facilitated information exchange using a project information extranet, for example. An example design web
Design report Statutory submissions
100% 80%

Site plans

Diagrams

60% 40% 20%

Site sections

Models

Floor plans

Building statistics report Outline specifation Building sections

Elevations

Building sections

Current target Actual

Design webs are used to illustrate design progress in a simple graphical format. They track actual progress against target progress for each key deliverable.

47

4
Specification consulting
Architectural specifications are a vital document written on behalf of the architect and engineer which, when read in conjunction with the drawings, translate the design information into tangible materials and products that can then be procured and constructed on site. Davis Langdons specification consultants demonstrate considerable skill in: Providing an objective view of risks associated with buildability and lifetime performance of design proposals. Teasing out detailed design information, identifying problems and challenging solutions from a risk and value perspective. Recognising technical issues and constraints so that optimum design solutions are delivered. Understanding local standards and interpreting the appropriate use of national, international or local standards. Assisting in the effective allocation of design responsibility and risk to specialist contractors. Applying accumulated practice-wide knowledge captured using a global project database. Using web based specification production tools to ensure efficiency. Challenges addressed: Facilitating the resolution of technically complex design issues in a cost effective manner through the provision of performance specifications for certain elements of the building. Reflecting the recognised local specification format, standards, codes and regulations. The project required a US format document based on Construction Specifications Institute (CSI) structure, containing a mix of US, international, Saudi Arabian and Saudi Aramco standards and codes. Including complex sustainability requirements. Incorporating an innovative approach to specialist contractor engagement into the selected procurement method.

Cost management
Davis Langdon brought new ideas to the project, including innovative standards of measurement, and demonstrated how these could interface with the clients requirements for reporting at different stages of the project. We actively contributed to the development of design solutions by advising on cost drivers affecting design options, and by
48

4
providing a fully documented explanation of the basis for option selection. Working as an integrated member of the Snhetta project team and closely with Saudi Aramcos project management and estimating teams, we delivered solutions which met key requirements for accountability and responsiveness to the design process. Challenges addressed: Benchmarking iconic buildings which have few precedents anywhere in the world through a combination of data obtained from Davis Langdons global project database and open-source data. Achieving accurate detailed measurement from limited design information through a highly meticulous approach to cost planning. Producing structured estimate data through the adoption of a standard method of measurement. Resolving market testing issues, where many items and materials were bespoke, through collaboration with Davis Langdons global cost management teams. Our close working relationship with the design team enabled us to capture the detail of the scheme at each stage of the project, right up to the 90% design stage, providing the client with confidence in the cost outcome.

Conclusion
As well as specific technical skill sets, our consultants made a personal contribution to a high performance team and have played a significant role in facilitating common working practices across the project team. A good example of our wider contribution has been our advocacy, through the waiver process, of different ways of working, such as performance specification, which support the team in their realisation of the project vision. Success on the project to date has been the result of a common vision and shared enthusiasm, which Saudi Aramco has supported in the project team from day one. The project team has channelled their diverse skills, expertise and experience through a managed process to create a landmark design that will house cultural firsts and benefit generations to come. The project teams ability to adapt solutions and processes to meet the project circumstances and the needs of key stakeholders has been another key element in ensuring that the original competition-winning vision of Snhetta is realised as a project that properly marks the significance of well number seven in the unfolding history of the Kingdom of Saudi Arabia.
49

4
REGIONAL INTREGRATION AND POTENTIAL FOR RELIGIOUS TOURISM SECTOR
The Middle East has a strategic place in the global economy largely due to its plentiful oil reserves. The regions significance as a cultural hub of the Muslim world, however, also plays an important role. Holy cities and cultural and scholastic centres are a major draw, and exploring related growth opportunities is fundamental for ensuring long-term economic advancement of the region.

Economic diversification
Over the past decade, the majority of countries in the region have made the strategic decision to diversify their economies. Reforms are improving the business environment and large investments in infrastructure are increasing competitiveness. Economic integration and cooperation between Arab countries is growing, creating opportunities in intra-regional trade, investment and tourism. Religious tourism is a bond which unites the region and poses further opportunity for diversification. There are believed to be approximately 1.8 billion Muslims worldwide, equating to 25 per cent of the global population. Some three billion people across the globe have religious and cultural roots in the Middle East. The World Tourism Organization currently values the fast-growing religious tourism sector at US$18 billion per annum, with 300 to 350 million tourists visiting destinations for religious reasons. The relative decline in international travel costs and rising incomes, in the Middle East and elsewhere, will be the main drivers for increasing religious and cultural tourism in the Middle East in the years ahead. To capture the potential demand for religious tourism, infrastructure improvements will be significant. Pilgrimages are no longer the sole driver of the market and tourists are increasingly seeking high quality travel experiences. Investment needs to be focused on relieving the existing transport infrastructure and other capacity constraints. Countries in the region have recognised this and embarked on large-scale tourism and related investment plans.

50

4
Activities in Saudi Arabia
The largest religious tourism market in the region is Saudi Arabia, home to two of Islams holiest cities, Makkah and Madinah. Visiting Makkah and Madinah for either Hajj or Umrah is a highlight for most Muslims. Total visitors for Hajj and Umrah have increased from 5.3 million to 7.7 million over the past five years. The religious tourism industry in Saudi Arabia generates an estimated US$7 billion annually, with the market expected to grow rapidly in the years ahead. There are a number of major initiatives underway to alleviate infrastructure constraints and enable the holy cities to accommodate a larger number of visitors. The Center of Research Excellence in Hajj and Omrah estimates that the planned investments will increase the potential number of pilgrims to around 13.8 million by Hijri Year 1440 (2019). To increase connectivity, Saudi Arabia has announced plans to allocate US$100 billion to transport infrastructure over the next ten years. Transportation initiatives include the building / upgrading of the King Abdulaziz International Airport in Jeddah, the Haramain High Speed Railway and stations between Makkah and Madinah, Madinah Airport, the King Abdullah Economic City Seaport in Jeddah and the Makkah monorail which links the centre of Makkah with the holy sites at Mina, Arafat and Muzdalifah. Increasing pilgrim numbers will provide significant opportunities for investment in hotels and other tourism related facilities throughout the country.

Initiatives elsewhere
Egypt, Syria and Jordan are all exploiting their Muslim heritage and historic sites. Cairo and Damascus are among the most important ancient centres of Arab civilisation, and their numerous holy sites are already attracting thousands of visitors each year. In Syria, large-scale developments in the main cities and on the Mediterranean coast are a big draw to capture increasing tourism revenues. Jordan is also a huge growth market, targeting tourism revenues of US$2.4 billion per annum by 2010, a 60 per cent increase on 2007. Lebanon has a diverse faith profile and religious tourism opportunities are expected to grow. Iraq is emerging as an important player in the religious tourism sector. The potential for reconstruction of numerous holy places, historic monuments and cultural sites is vast. Places of religious significance, such as Najaf and Karbala, already attract millions of pilgrims annually. Najaf is visited by some eight million pilgrims a year and transport improvements,
51

4
including a new airport, are expected to boost annual visitor numbers to 20 million. Other important religious and cultural sites in Iraq could be developed, such as Baghdad, Samarra or Kufa. However for Iraq to fully realise the potential of religious tourism, investment in adequate transport and hospitality facilities is urgently needed. Some infrastructure projects are underway, including a planned monorail for Baghdad, but the market remains largely untapped. In the wider region, Iran has begun to invest in religious tourism, with places like Qum, Mashhad and Rayy receiving increasing attention. Morocco is richly endowed with Sufi mausoleums and shrines of holy figures, attracting millions of visitors. Realising the strategic importance of religious tourism, the Moroccan government is pursuing a number of projects to attract more tourists to its religious sites and festivals. Fes, home to many Sufi mausoleums, together with Mekns and Moulay Idriss are among the must see attractions for cultural tourists.

Muslim Distribution

Source: Penn State, www.worldreligions.psu.edu

52

4
Cultural and religious tourism has also accelerated strongly in Tunisia, particularly in the holy town of Kairouan, a Muslim cultural capital and UNESCO World Heritage site. As well as holy cities, other significant Muslim destinations include intellectual, cultural and spiritual centres, such as Timbuktu, Samarkand or Bukhara. The UAE will serve as an important feeder destination, benefiting from mass pilgrimages to Saudi Arabia, Iraq and other holy centres.

Challenges to development
Ambitious tourism plans remain a challenge and a number of factors continue to impede the development of religious tourism in the Middle East. These include political conditions in some countries, insufficient lodging facilities and the lack of an integrated transport system between the Mashreq and Maghreb countries.

Sunni Shia

53

4
The proposed GCC rail link would greatly improve intra-regional connectivity, cutting costs and reducing travel time. Plans envisage a GCC network consisting of two lines: one to connect the GCC countries and Qatar via a bridge, and a second to join Kuwait, Saudi Arabia, the UAE and Oman. The wider vision extends the network to Jordan and Syria, linking the Gulf with Europe and Asia via Turkey. An efficient regional railway would substantially change the transportation of both passengers and goods and potentially open up further opportunities in the tourism sector.

The future
The tourism industry already plays an important role in the growth and employment levels of the regional economies. Once implemented, infrastructure development and lodging plans across the region will help the sector achieve the recognition it deserves given its importance to the economy. In terms of economic development, this will help to reduce regional inequalities and social disparities. The development of the religious and cultural tourism market opens an abundance of opportunities for the Middle East construction sector.

54

4
BUILDING INFORMATION MODELLING COST AND VALUE DRIVERS FOR INTEGRATED WORKING
Despite the economic downturn affecting markets in the Middle East region, many large projects are proceeding through design and construction. Clients in the region are influenced by best practice from markets such as the US and are encouraging their project teams to adopt Building Information Modelling (BIM) as the information platform for design and construction. Rapid growth in uptake in the US and other markets is increasing the number of designers, constructors and clients with direct experience of the benefits of BIM. Savings of 8 to 10 per cent of construction cost are reported on projects using BIM during the pre-construction and construction phases. BIM is often thought of as a design tool like Computer-Aided Design (CAD). In reality the difference that BIM introduces is founded on a set of shared, structured information. Once created, this information can be used by many parties involved in the design, construction and operation of a built asset. The richer and more integrated the BIM, the greater the potential benefit. Many applications can currently be run using a BIM, including design drafting and analysis, clash detection and construction sequence simulation. Once a building is operational, the BIM model can also be used as the basis for the operation and maintenance documentation, updated as the building is adapted and refurbished over its lifetime. Potential uses for a project BIM include: Checking projects for regulatory compliance. 3D visualisation, facilitating the clients better understanding of intricate design. Supporting complex analysis through the ready exchange of information between different software suites. Coordinating design work of different disciplines including clash detection. Producing capital and whole life cost estimates. Scheduling and simulating construction sequences, materials take-off, etc. Providing a full record of the project in an updateable format for operations, maintenance and future adaptation.
55

4
In reality, on many projects, BIM-based practice is often introduced by a single party, such as the architect or construction manager, to afford specific benefits, for instance 3D visualisation, clash detection or construction sequencing. Because of a single partys specific motivation to use BIM, the requirements for the model are not usually specified up-front to meet the needs of all parties involved in the project. Quite often, for example, information will be circulated between parties as conventional drawings rather than as the re-usable and extensible model. This not only wastes time and resource by causing duplicated effort, but also limits the future potential for downstream users to benefit from a BIM model. Some clients have recognised BIMs potential to drive wider benefits into their projects by requiring a minimum level of BIM modelling on their projects. In the US, the General Services Administration (GSA) has made significant use of its position in the market place as a major client to drive wider adoption of BIM and to encourage the development of BIM competencies within its designer and contractor suppliers. However, steps also need to be taken to develop the industrys capability to take full advantage of BIMs potential. Areas where capability needs to be developed and where blockages to progress need to be addressed include: Modelling standards so that BIM models are built consistently and to a good quality. Information exchange standards such as Industry Foundation Classes (IFCs) to support easy informationsharing both inside and outside the mode. Technical infrastructure, such as bandwidth, to enable easy transfer of data. Legal and commercial infrastructure including contracts which clarify issues around ownership of data residing in the model. Support resources including training and object libraries, to enable projects to be set up quickly and effectively. These capabilities are not present in the Middle East market, so BIM clients will initially find themselves in the position of innovators, as standards are developed to meet market needs. In recognition of the differing levels of development in markets, UK-based BIM experts, Mark Bew and Mervyn Richards, have developed a maturity model which is widely adopted by industry. The BIM maturity model shows how users can move from use of uncoordinated CAD drawings through various levels of technology and information-sharing, to reach the
56

4
BIM maturity model
Level 0 Level 1 Level 2 Level 3
Life cycle Management Data

2D

3D ISO BIM

CAD Drawings, lines arcs text etc

CPIC AVANTI BS 1192: 2007 User Guides CPIC, Avanti, BSI

AIM SIM FIM BSIM BRIM

Maturity

iBIM

Processes

Models, objects, collaboration

Integrated interoperable data

Source: Bew and Richards 2008

ultimate objective of an integrated BIM based on agreed information exchange standards. Each stage in maturity represents an opportunity to increase the effectiveness of information exchange and re-use. The model helps to explain why the development of BIM competence is so important in accelerating the realisation of BIMs business benefits.

Davis Langdons role in BIM

Davis Langdon is neither a designer nor a contractor, so we do not create our own BIM models. However we have a keen interest in the use of BIM for sharing useable information. Teams in the UK, Australia and Asia are actively engaged in the development of our BIM-related capability, in connection with both cost management and construction scheduling. Davis Langdon is a long-term investor, alongside construction software developer Causeway, in the development of specialist measurement software, CADMeasure, which automates many manual aspects of the cost management service. We have recently completed development of BIM-compatible software which not only interrogates the BIM model database, but which also creates automated links between the BIM model and the clients cost plan. At this stage in the evolution of commercial and contractual models, we think this is the optimum position for a cost and project manager to hold commercially sensitive data. However, as clients engage more actively with BIM and applications and datasets mature, there will undoubtedly be opportunities to merge more project information into an integrated BIM and drive further benefits into the creation and ownership of the built asset.
57

4
BRIDGING THE GAP THE DEMAND FOR SOCIAL INFRASTRUCTURE
The overall picture
GDP in the MENA region is planned to grow at an annual average rate of 4 per cent (World Bank) / 4.2 per cent (IMF) in 2010 with some countries experiencing double-digit growth projections. The region comprises an unusually large proportion of indigenous young people, representing up to 50 per cent of the population in some countries. Add in long-term growth projections, and it is clear that sustainable development of the region will be affected by substantial pressure on social infrastructure both historic and new. Take the Middle East healthcare market. This is expected to be worth some US$60 billion by 2025 as the need for investment in services and facilities increases. It is the only region in the world that faces such a rapid increase in demand and this growth is creating new opportunities for construction and consulting companies, financial, banking and private equity sectors, as well as medical equipment suppliers and the pharmaceutical sector in particular. Large tenders continue to come from the main regional healthcare market, Saudi Arabia, which is now joined by newcomers such as Libya, which is attempting to catch up. The focus is concentrated on cardio-vascular, diabetes, accident and emergency, long-term care and other priority areas where investors and joint venture partners can find untapped potential. Heart disease, diabetes and cancer are the main forms of chronic disease in the MENA region. In the UAE one in five adults has diabetes and treatment of that illness alone absorbs approximately 40 per cent of the nations overall healthcare expenditure (Gulf News, 11 November 2007). The wellness tourism markets are flourishing, particularly in the UAE, Lebanon, Jordan and Egypt. Substantial resources and expertise are directed towards state-of-the-art facilities. Lebanon, one of the smaller markets, is planning three new hospitals, and upgrading services within the private sector that accounts for 90 per cent of hospital expenditure. As part of Saudi Arabias 2010 budget, US$36.7 billion is being ploughed into education, including the construction of 1,200 new schools, with more than 3,000 new school
58

4
buildings already being developed. In terms of health and social services, Saudi Arabia has the largest healthcare sector in the Middle East. The 2010 budget is set at US$16.3 billion or 11.3 per cent of total spending - an overall increase of 51 per cent on the 2009 budget. In addition to modernising the current healthcare system, this budget provision also provides for up to 92 new hospitals.

Building confidence in the pipeline

This substantial pipeline of development places pressure on all areas, from government policy, planning and regulation through to actual construction, operation and management of these assets. With a number of private sector operators being enticed to the region to provide these services, the legacy and sustainability of these service provisions, for both local and expatriate populations, is a significant challenge and risk. In the current economic climate, governments are seeking foreign and private investors, through privatisation policies and legislation, to share in the development and operation of these facilities. There is a clear need for a Middle East Public Private Partnership (PPP) model to suit this pent-up demand and legal advisory and other services will need to be offered in a manner appropriate for the regions culture and market. A fundamental challenge for government ministries and departments, therefore, is to attract investment to these projects and provide transparency and consistency of approach. Coordinated and considered masterplanning of the social infrastructure network will provide a clear framework and rational programme for development. As countries develop their own systems, knowledge and experience, inter-departmental relations will improve and provide the foundation on which to ensure a fully integrated approach between civil and social infrastructure in support of commercial and private sector developments. Such visionary plans already anticipate these requirements, but, with projected demand placing pressure on these institutions to act and deliver now, the risk of short-term gain leading to medium to long-term challenges is high. The development of an integrated model of education, healthcare provision and pharmaceutical industry is a clear and simple solution to ensuring the long-term viability and sustainability of healthcare developments, whilst also supporting diversification from a predominantly hydrocarbon based economy. Such models are in evidence in other
59

4
developed markets which MENA countries seek to emulate. This strategy will not be realised in the short-term, though the growing evidence of structured plans provides confidence in the planning and delivery of world-class healthcare and educational facilities within the MENA region. The question is always asked where will the demand come from? The market fundamentals remain. The diversification of the economy into other industries, sectors and services will require population growth, education at all levels and a welfare system that secures the long-term health of the population. The development of sustainable world-class cities within the MENA region will demand corresponding world-class health and education facilities. The reconstruction and development of Iraq, Kuwait, Libya and Egypt, where civil infrastructure projects are already underway to provide the land on which to grow population and commerce, provide testament to the regions ambitions.

Davis Langdon expertise

Within our sector structure we have nurtured healthcare and education specialists who have worked on a broad range of social infrastructure projects across the world. Our network of global offices and emphasis on collaboration enables us to bring world class expertise to clients in the region who are looking to establish the best quality treatment on offer and educational environments where all things are possible. Current and recent examples of our social infrastructure work include Cleveland Clinic Abu Dhabi, Sidra Medical & Research Centre in Qatar, British College Abu Dhabi and GEMS American Academy in Abu Dhabi. Overseas Davis Langdon engagements include Nuffield and BUPA Framework Agreements in the UK, Johns Hopkins Hospital in the US, Marlowe Academy in the UK and the University of Cape Town in South Africa.

60

4
PUBLIC PRIVATE PARTNERSHIPS (PPPs)
Are PPPs suffering in the current climate?
Project finance and PPPs are flourishing throughout the MENA region, from Morocco to Oman. Indeed, contrary to the many fears expressed following the Lehman collapse in the third quarter of 2008 and during the first six months of 2009, the project finance market has not dried up completely. With MENA governments seeking to ensure the continued development of their civil and social infrastructure programmes, capital for funding vast development programmes, even in these wealthy economies, is a challenge. The challenge is acute, due to global commodity prices starting to rise and increased demand for certain raw materials, such as concrete and steel, which are explicit in these developments. Projects are also increasing in scale and scope, thus pushing costs up.

MENAs appetite and pipeline

Historically, the MENA region has embraced third party investment through its oil and gas sectors as well as telecoms, water treatment, desalination and energy projects. However, the regions economic and political visions are demanding increased transportation, healthcare and educational facilities, which require capital in order to sustain the expected economic and population growth. Within the GCC alone, current and active projects total US$1.3 trillion in civil engineering, US$375 billion in telecoms and US$217 billion in power and water utilities. Finance ministers, acutely aware of their responsibilities, are ensuring that oil and gas production is throttled to balance export revenues with import costs, and are adjusting their budgets in line with oil prices. The impact of reduced global consumption caused by the global economic downturn has necessitated clear and prudent strategy for infrastructure development plans.

61

4
MENA sectorised PPP pipeline
Water & Waste Water X O O X X X X X O X O X O X O X X X X X O X X X X X X X X X O X O O X X O X Urban Development Industrial / Energy Education Tourism / Leisure

Airports

Railway O O X

Health

Bahrain Egypt Jordan Saudi Arabia Kuwait Libya Morocco Oman Qatar Syria Tunisia UAE X X X X O

O O O O X O X O X X X X X

X O

O PPP discussion ongoing X Projects in procurement X Other economic infrastructure related activity Source: Davis Langdon, based on country sourced data

Model development and sophistication

The development of the PPP option within the MENA region has not progressed as rapidly as other developed economies such as the UK, Canada and Australia. The line between public and private, for example, is not always clearly defined. Additionally, the required legal and regulatory framework does not always exist. The recent implementation of privatisation measures with supporting legislation, now provides partially for this. The MENA region currently has a number of governments at different stages of framework

62

Roads O O

Ports

4
development. The World Bank (July 2007) reported that some MENA countries have made significant progress in establishing PPP Institutional Frameworks, whilst others lag behind. Bahrain, Egypt, Qatar and the UAE have established PPP Units that publish specific details of project pipelines. This provides confidence to the finance markets and tendering consortia. Compared to other countries, these countries have already established or reformed their procurement and tendering regulations to provide for a PPP procurement approach, providing a proven track record. The first MENA project financing of 2009 did not close until the end of June, when GDF Suez and Gulf Investment Corporation signed the US$1.6 billion financing of the Al Dur Independent Water and Power Project (IWPP) in Bahrain. This success established several trends that have been followed in subsequent projects, reflecting the economic environment. PPP infrastructure projects are long-term revenue generating assets. To avoid having to charge excessive tariffs in their early years, these projects require finance that amortises over the asset life. However, as the banks have reduced liquidity and are experiencing regulatory pressure to avoid long-term commitments without matched funding, the tenors of PPP bank loans have been forced to shorten within a four to ten year range. Al Dur finances a 25-year concession with loan duration of only eight years. This is known as a hard mini-perm structure. Even with the introduction of a cash sweep, dedicating all available cash flow to debt service, there will be a need to refinance 80 per cent of the debt at loan maturity. A hard mini-perm was also used in Abu Dhabis (Mubadala) successful financing of Zayed University (US$1.2 billion), which was the last deal to close in December 2009. This was a ten-year club deal, of which only one third will have been amortised by maturity, leaving the rest to be refinanced. Some PPP structures use a soft mini-perm variation, in which there may be a long-term legal debt maturity, but the loan terms or tariff structure strongly encourages early refinancing. Indeed, significantly higher debt margins have been yet another consequence of the financial crisis. Abu Dhabis Shuweihat 2 IWPP, which closed in October 2009, has a 22-year debt of US$2.2 billion, but at post-crisis debt margins with a pre-crisis tariff. This encourages the owners, if they are to gain their target return on investment, to refinance when lower margins once more become available.

63

4
Bridging the funding gap
Export Credit Agencies (ECAs) are increasingly filling the funding void in billion dollar projects. This comes at a time when the crisis has caused a number of international project finance banks to withdraw from the market and when local banks are challenged to fund in US dollars. This is resulting in significant interest from the East (Singapore, Korea and China). Saudi Arabias US$1.9 billion, 20-year Rabigh Independent Power Project (IPP) financing in July 2009 had 25 per cent of its debt benefiting from Korean ECA cover. Furthermore, almost two thirds of Jordans second IPP financing, the US$340 million, 18-year debt for Al Qatrana which closed in November 2009, also involved the Korean ECA. These examples illustrate the rise of competitive Far Eastern EPC contractors in the Middle East, including the non-PPP award of the MENAs first nuclear power plant project to a Korean consortium, KEPCO. The financing gap is filled not only by ECAs. Half (US$1.1billion) of the Shuweihat 2 IWPP was funded by the Japanese governments Overseas Investment Loans, following the addition of a Japanese company to the investing consortium. Local bank participation is also encouraged by increasing the use of local currency finance into the deal. Islamic finance has also come to be considered an obvious source of additional financing for PPPs in the MENA region. A key distinction of Islamic law is that it prohibits the payment of interest on loans and deposits. Consequently, banks and other lenders have designed various products and investment vehicles in which Sharia compliant funders share in the reward and risk of the owner, effectively becoming equity partners rather than lenders.

How to ensure success

Following these trends, the region should see more projects funded through a PPP route. Abu Dhabi will look to secure the regions first motorway project, the Mafraq to Gweifat Highway which is the Department of Transports pathfinder project, and Bahrain will finalise the 27-year build-own-operate Muharraq sewage treatment concession. Egypt will finance the New Cairo waste water concession and has desalination, toll road and hospital projects, similar to the UKs Private Finance Initiative (PFI) programme, in the pipeline. Jordans Aqaba Gateway concession represents the port sector, while new entrants taking the typical PPP first steps in the power sector include Syria and Yemen.

64

4
With competition for capital rising within the MENA region, government and ministries need to ensure that their social and civil infrastructure programmes are attractive to both the private sector and financial institutions. How will this be achieved? Creating the environment for success involves five key areas: Effective procurement Project realisation Government guarantee Favourable economic conditions Available finance market For those areas that owners and sponsors can control and influence, ensuring transparency, good governance and efficient organisational structures will reduce or mitigate inherent risks and provide confidence to investors. To ensure risk is allocated and shared, and commitment and responsibility are achieved between both government and private sectors, an appropriate and favourable legal framework (standard if possible) must be in place and robust project technical feasibility studies undertaken. Consequently, strong private consortia will tender and secure the work, minimising the construction risk component that concerns many investors. The attractiveness and competitiveness of the project will be enhanced through instigating good practice at all stages of the whole life of the service and / or asset.

Davis Langdon expertise

Davis Langdon provides technical advice in relation to the PPP / PFI process. Our philosophy of sharing knowledge enhances our offering to all parties involved in PPP / PFI transactions including government sponsors, funders and special purpose vehicles. Insights gained from working with one party help identify challenges to be met by another. Determining potential conflicts between the segments in advance affords resolution before they become deal stoppers, while recognising shared goals strengthens relationships between the parties in the agreement. In addition, employing shared resources and specialist advisors across the PPP / PFI sector ensures knowledge transfer which benefits our clients. We are a key ingredient in ensuring your PPP / PFI transaction is a success.

65

4
DEVELOPMENT MANAGEMENT CREATING A VIABLE SCHEME
The construction development process is complex and involves thousands of interrelated risks and issues. Development management deals with the coordination and management of the whole property development process, in line with agreed stakeholder objectives which are defined at the outset. The process defines the development use or land enhancement idea for profit or socio economic benefit. The success of this lengthy process depends on the development managers skill and ability to assess and guide the project as it progresses and changes over time. Development management considers the performance of a project when measured against key drivers. Key drivers will vary from project to project but examples common to all projects include finance, team, risk, cost, time, quality and design. The projects performance will guide decisions relating to how the investors can achieve their desired returns or whether other stakeholders could be interested in participating, such as a hotel operator or retailer for example. Currently we are experiencing a challenging market where revenues have declined and purchasers, tenants and retailers demonstrate more caution before committing. Their concerns include the developers commitment to the project, the quality of the planning phase, the consideration of risk, finance and exit, and the timely completion of necessary infrastructure to ensure target opening dates are met. The development manager addresses these concerns on behalf of the stakeholders before heavy spending occurs, enabling them to benefit from a full understanding of all factors affecting the financial performance of the project. The process of development management is often too closely linked to the performance of the development appraisal itself, without considering broader issues which may actually support the viability of a project. These include socio economic conditions, external influences, the effort of the team, availability of finance and the borrowing criteria. Whilst the appraisal is the most significant part of the process, the way in which the process is informed is very important, as is the way in which the development manager guides the wider team through the stages.

66

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

Starting with the end in mind

If the fundamentals are covered at the outset of a project, this creates a strong foothold for developing a viable scheme. These include assembling the professional team, developing a high level master programme, obtaining a cost model of construction rates on a gross floor area basis (developed as the design and appraisal progresses), commissioning a market study and establishing revenue streams. To continue on the right track the following should be considered throughout the development process: Market demand and revenue streams - where are these coming from and who is the target market? Establishing the best product / asset mix. Operational and management structure for the asset life. Establishing key performance indicators (KPIs) for the development. Internal rates of return, discounted cash flow, net present value, yields and debt equity ratios should all be determined at the outset. KPIs will vary, depending on the performance of each asset and the revenue and construction inputs. Finance and funding strategy engage with institutions, explore latest lending costs and arrangement fees and identify which institutions are lending and investing in this type of asset. Construction methodology - how will the asset be procured and constructed? Sustainability in design and operational costs. Developing a phasing and delivery programme which has realistic durations and income generation dates.
67

4
Generating a letting and sales programme and a date that delivers the product to the market, thereby meeting the projected absorption rates. Establishing the legal costs associated with the development, including the setting up of special purpose vehicles or specific investment options. Cost driven design that is viable for the project focusing on what the project can afford. Capital values establishing the true revenues and occupancy levels in order to ascertain the capital value. Running a range to test sensitivities of the development. Development strategy - develop and hold or develop and exit (three, five, seven or ten years). Establishing management companies for long-term operation. Setting in motion any pre-let activity in line with the long-term leasing strategy.

Developing the appraisal

The demand for property does not automatically exist. Before embarking on a project, an initial understanding of market demand is essential. Market research determines the initial mix and asset uses for office, retail, residential or mixed-use properties. Market research also defines the end users requirements which form the basis of the development process, informing areas, quality standards and achievable revenues. Considerable skill lies in using this information to deliver the right product at the right cost and at the right time with an emphasis on: Developing a project that will support economic growth and diversification potential. Taking account of social and cultural responsibilities and not purely commercial gains. Identifying potential social economic impacts job creation and community enhancement opportunities. Stimulating long-term investment and growth into the area. Interconnectivity and a correctly positioned product that complements the existing or proposed wider developments. Identifying utilities and transport strategies early, setting in motion the implementation to meet the proposed phasing plan. Achieving cost-effective design, procurement and construction. Establishing the status of other third party developments, thereby identifying competitors.
68

4
Development considerations the development manager coordinates and manages the interface between these activities during the development process

Development Appraisal Key performance indicators Internal rates of return Loan to value CAP rates Utilities Strategy Existing and future negotiations

Design Masterplan Market Studies Revenues Market demand Escalation Varying asset uses

Marketing Strategy / Branding Strategy

Land Acquisition Site ownership Affection plan

Professional Team Fee and structure

Leasing Strategy

DEVELOPMENT MANAGEMENT CORE DELIVERABLES

Construction Costs

Legal Contracts Appointments Construction SPV structures

Development Briefing

Stakeholders Wider developments Who are the competition? Planning authority Funder Tenants Local Planning Related issues and processes

Finance / Funding Strategy Lenders loan to value requirements Equity (cash and land) Pre-lets and covenant strengths Dividend payments Utilities Concessions Strategy

Programme Master development Design Construction Testing and commissioning Handover

69

4
Davis Langdons expertise
Davis Langdon has strong global relationships at all levels of the development supply chain, from financiers through to contractors and subsequently the end users. This enables us to provide a holistic solution to development from business strategy through to operation of the final built product, an approach which has not yet been seen in the Middle East market. Our aim is to agree KPIs with clients which align with the fundamental success criteria for a particular project or programme, and form a business partner culture where we guide, inform and support to ensure the right decisions are made at the right time and by the right people. With lowering returns across the region and a drive for quality from the end user, developers need to plan carefully before committing. Tight funding means they also need to understand the funding criteria required to support development, while acknowledging that a feasibility report is only theory until actually delivered to the end user. We specialise in every commercial aspect of development be it time, cost or quality related, helping to set and inform the feasibility through our vast experience of delivery. We bring global relationships with joint venture partners and funders to the table and align their investment criteria with client KPIs where possible. Our robust teams work alongside business partners every step of the way, from the initial idea, through finance, delivery and operation to ensure the delivery of viable schemes.

70

REFERENCE ARTICLES

72

5
PROCUREMENT ROUTES
Most clients and construction professionals can name at least one project that was not delivered to budget, time or the quality levels expected. All clients expect buildings to be on time and budget with an agreed level of quality, with the risk rightly managed by their professional and contracting team. But which other multi million or, in terms of the Middle East, multi billion dollar business goes from having no staff or expenditure to the final delivery of a unique product as quickly as the construction industry? This is why the right procurement process, systems and approach are imperative. To use an analogy, a new model of car at US$50,000 has enormous planning, refinement and design occurring very early in the development process, the cost of which is way in excess of the individual car. In the construction industry, we dont have the luxury of rolling out thousands of the same product, which is why it is important we all learn from the past and seek to understand and define what made a project successful. In doing this, we come to understand which procurement methods should be followed and why it is important to consider the structure and process for delivery from the start. Davis Langdon has developed strategies for the delivery of buildings that we know work, successfully delivering hundreds of projects over our long history. New and existing developers have the opportunity to learn from this knowledge and maximise the value from their time, cost and quality mix, whilst adhering to a process that increases the likelihood of their building being successfully procured by their team involved. Studies conducted with our key clients who regularly undertake development work, have shown that buildings can be delivered for 12-15% less cost when procured correctly with no impact on quality or time. Buildings are more likely to be on time and meet clients expectations when procured correctly. So what is the right procurement approach for your building? Which funding strategy, funding partner, team behaviours, attitudes, communication channels, budget and programme delivers the best approach and how can we best combine these to lead our clients to ultimate success?

73

5
Project Management
Davis Langdon offers important early advice to help determine the right procurement approach, adding the most value throughout the building process. This considered understanding of our clients time, cost and quality requirements maximises the value we can offer. Some of the procurement strategies followed in the industry are listed below, but the real challenge is mixing the right approach for an individual clients needs:

Traditional Lump Sum: design by the clients consultants is completed before contractors tender for and then carry out the construction. The contractor commits to a lump sum price and a completion date prior to appointment. The contractor assumes responsibility for the financial and programme risks for the carrying out of the building works, whilst the client takes responsibility and accepts the risk for the quality of the design and the design teams performance. Accelerated Traditional: as above, but procured in the market place before being fully designed (normally 80-85% designed), leaving more simple elements of the building to be procured once the contractor has been appointed. It is important to understand the way in which a client procures the remaining elements of work with a contractor under this approach and to design out those areas that carry inherent risk early in the process. It may also involve the procurement of an early works package for enabling and / or piling works. Two Stage: a contractor is invited to become part of the project team in the initial stage, usually by way of a preconstruction fee. They design and procure the project on behalf of the client, until such time that a second stage lump sum offer can be agreed, which should be before construction begins on site. An understanding of the original appointment and the subsequent framework under which the second stage is agreed are the important aspects of this approach, as well as working with transparency and trust to prevent an early commitment to a full scheme that a client cannot afford. Design and Build: detailed design and construction are both undertaken by a single contractor in return for a lump sum price. Where a concept design is prepared by a design team employed directly by the client before the contractor is appointed (as is normally the case), the strategy is called develop and construct. The contractor commits to a lump sum price for completion of the design and the construction to a completion date, prior to his appointment. The contractor can either use the clients

74

5
design team to complete the design or use his own team. With design and build it is important to design out or specify in detail those parts of the building the client wants to see perform a particular function or provide a certain visual impact.

Management Contract: design by the clients consultants generally overlaps with the construction. A management contractor is appointed early to tender and let elements of work progressively by trade or package contracts. The contracts are between the management contractor and the trade contractors, rather than between the client and sub-contractors. The management contractor in theory assumes responsibility for the financial (and programme) risks for the works, but in reality this is normally diluted by the terms of the contract so his liability is similar to that of a construction manager. Design, Manage and Construct: similar to the management contract, with the contractor also being responsible for the production of the detailed design or for managing the detailed design process. Private Finance: a detailed and complicated form of procurement used predominantly for public services when the private sector feels it is advantageous to design, build, finance and operate a particular service or building type. It is becoming more popular in the Middle East as a way to limit public sector spending whilst meeting the demands of a growing population. Davis Langdon has been involved with private finance for over 20 years, successfully completing many projects worldwide and using this global knowledge to benefit clients locally. Engineer, Procure and Construct: this form of procurement places risk in the right hands and offers solutions to clients engineering requirements from those specialised to meet the performance requirements set by a client team. Many of the large utility companies procure work in this way, bringing high levels of certainty from the supply chain which helps to achieve business critical benefits over the long-term.

75

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

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

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

76

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

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

Saudi Arabia
Construction contracts in the private sector are generally based on FIDIC forms of contract and are amended to suit the particular conditions for each project. Employers prefer lump sum versus re-measured contracts and normally exercise great control in the administration of the construction process by imposing various restrictions on the engineers (consultant) authorities under the contract.
77

5
All contracts are subject to Saudi laws where Islamic Sharia is the prime source of legislation. Litigation and arbitration are both available for resolution of disputes in the private sector. Within the public sector, however, construction contracts are based on the Standard Conditions for Public Works, which are amended to suit particular projects. These conditions are generally based on those given in the 4th edition of the FIDIC Conditions of Contract for Works of Civil Engineering Construction, the FIDIC 4 red book, but with greater control given to the employer for the administration of the contract. All public work contracts are let on re-measured basis and subject to the Saudi Government Tendering and Procurement Regulations, as issued by Royal Decree M/58 dated 4.7.1427 AH. Disputes are referred to the Grievance Board and will not be dealt with under arbitration, unless a Special Council of Ministers Resolution is issued.

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

78

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

79

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

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

80

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

Lebanon
Obtaining a Building Permit in Lebanon requires various procedures and approvals from the Order of Engineers and Architects, the Urban Planning (Development) Department, statutory authorities and the Local Municipality. The time needed to obtain these approvals is typically between six and twelve months. In general, the procedures and documents required for obtaining a Building Permit are the same throughout Lebanon, except for the cities of Beirut and Tripoli where the Urban Development Department is located within the individual Municipality. The following is a general outline of the steps needed to obtain a Building Permit: Stage 1: Obtaining Ifadat Takhteet Wa Tasneef The following documents must be submitted to the Urban Planning (Development) Department: 1. Real Estate Registry (Ifedeh Ikarieh) from the Real Estate Department in each Mohafaza. 2. Official Land Survey (Kharitet Masaha) from the Cadastre Department. 3. Receipt Wasel Takhteet Wa Irtifak from the Municipality. Stage 2: Appointing a registered civil engineer or an architect from the Order of Engineers and Architects to finish the Permit file The engineer must submit the following documents: 1. Three copies of the Contract Agreement between the owner and the appointed engineer. 2. Four copies of the preliminary design drawings. 3. A written undertaking from the appointed engineer to submit the execution drawings. 4. A contract with other engineers involved in the project. Following no objection from the Order of Engineers and Architects, the appointed engineer or the owner must pay them the Building Permit fees to enable them to present the Building Permit file to the Urban Planning (Development) Department.
81

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

82

5
Qatar
Compared with many countries, the planning and building approval process in Qatar is relatively clear and structured. Land ownership, other than by Qatari nationals and the state, is still extremely limited. The key process in securing development rights is obtaining a land title or pin number; since without it all other permits and applications cannot be commenced. Once the land is secured, the project masterplan is submitted for approval to the Planning Department and local Municipality offices. Stage 1: DC1 Approval General overviews and strategies for the utilities and primary infrastructure are submitted to the relevant utility companies for comment. During this process each department usually issues a series of reference numbers which are then used as the file number for all future submissions. The culmination of this round of submissions is the DC1 approval. Stage 2: DC2 Approval As the design develops, a second round of submissions is made to the same utility departments for final approval. In addition, a submission is made to the Civil Defence department who review the fire and life safety aspects of the project. Depending upon the scale and nature of the project, separate traffic studies may be required and these would be submitted to the Road Affairs Department for approval. Stage 3: Building Permit Once the DC2 approval is secured a further set of standard forms are circulated with a consolidated set of documents for final signing and approval. These documents constitute the Building Permit. As a general guide the whole process usually takes at least 80 days, depending upon the quality of the submission, although in practice if often takes much longer due to comments from different departments and progressive design revisions. During the whole of this process, it is not advisable to revise or modify any submission as it may delay the approval process. All submissions have to be either in Arabic or bilingual and endorsed by locally registered and approved design companies. International companies cannot make these submissions by themselves.
83

5
There are some parts of Qatar which are exempt from the Building Permit approval process, but these are generally related to the oil and gas production facilities. Recently a number of revisions have been made to the design standards of buildings, in particular high rise structures. These address issues such as fire safety, refuge areas, the use of lifts in the event of fire, and the nature and extent of faade glazing. All fit-out projects are being brought under the control of the regulatory departments, in particular Civil Defence, and all such works are now required to be submitted for approval prior to commencement. This submission must be made by a registered local consultant and failure to do this can significantly delay the approval and permitting process.

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

84

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

UAE
The following is a general outline of the procedure for obtaining a Building Permit in the UAE, but there are many further obligations and procedures to be completed within each of the stages. Building Permit application Stage 3, for example, requires no less than 15 different forms, documents and separate approvals to be submitted as part of the application. It is the responsibility of the construction contractor or lead consultant to obtain the Building Permit, although all applications must be signed by locally registered consultants. Stage 1: Submitting Preliminary Application The applicant submits a preliminary application to the relevant Municipality or statutory authority and pays a deposit. Stage 2: Obtaining No Objection Certificates No Objection Certificates (NOCs) are obtained from various governmental and municipal departments including Civil Defence, Fire Department, Drainage, Communication, Water and Electricity, Civil Aviation, Oil and Gas, Coastal and Military. Stage 3: Submitting Building Permit Application The full Building Permit application, including all NOCs, is submitted to the relevant Municipality or statutory authority. Stage 4: Obtaining Building Permit On approval, the applicant collects the Building Permit and applies for a Demarcation Certificate.

85

5
Stage 5: Obtaining Building Occupancy Certificate Upon completion of the building works, it is the responsibility of the construction contractor or lead consultant to obtain the Occupancy Permit. This is achieved by having the Building Permit signed off, effectively closing it out. To obtain this closure the contractor must obtain certificates and signatures from various government and quasi-government departments, including Civil Defence, Food and Hygiene, CID, etc, prior to presenting these to the Municipality or statutory authority for final approval. Davis Langdons Project Management team are experienced in the procedures for obtaining Building Permits across the region and are able to oversee this process.

86

REFERENCE DATA

87

88

Exchange Rates
Half Year 2010 Average 1519.4 5.59 0.71 47.27 3.76 0.29 3.65 0.38 3.67 0.39 3.50 - 3.67 0.36 - 0.38 3.65 - 3.67 0.37 - 0.39 0.27 - 0.31 3.69 - 3.77 44.4 - 46.5 0.70 - 0.71 5.32 - 5.70 1447.2 - 1511.7 1512.1 5.74 0.71 48.25 3.76 0.29 3.64 0.38 3.67 0.39 Range 1/7/2010

Local currency to US$ 1.00

2009

Average

Range

Lebanese Pound

1524.3

1432.2 - 1543.4

Egyptian Pound

5.60

5.24 - 5.75

Jordanian Dinar

0.71

0.69 - 0.71

Syrian Pound

47.46

44.4 - 47.2

Saudi Riyal

3.75

3.73 - 3.75

Kuwaiti Dinar

0.29

0.27 - 0.30

Qatari Riyal

3.65

3.51 - 3.66

Bahraini Dinar

0.38

0.36 - 0.38

UAE Dirham

3.67

3.66 - 3.68

Omani Rial

0.39

0.37 - 0.39

Source: Oanda.com

89

90
Singapore Manila, Philippines Hong Kong Beijing, China Sydney, Australia Joburg, South Africa 1800 1475 2375 2450 645 1075 550 1550 545 440 870 395 995 2050 660 770 2550 640 2220 2990 725 975 790 1670 485 1920 630 1750 455 1670 640 710 890 1050 370 410 1690 1765 1835 785 690 550 1880 1900 1930 630 685 770 1500 1850 2250 630 700 820 1910 2050 790 1020 2375 2430 945 1080 2200 2350 1010 1070

International Building Cost Comparison (US$/m) 2Q 2010

Building Type

London, UK

New York, USA

Los Angeles, USA

RESIDENTIAL

Multi Unit Low Rise

1900

2250

2250

Medium Quality High Rise

2650

3700

3450

High Quality Low Rise

3050

4000

3600

High Quality High Rise

3500

4200

4000

Podium Car Parking

n/a

1900

1550

Basement Car Parking

1175

2200

2000

COMMERCIAL (shell & core only)

Average Standard Offices

- Low Rise

1500

1900

1700

- Medium Rise

2100

2400

2300

- High Rise

3075

2900

2800

High Standard Offices

- Medium Rise

2900

2700

2100

- High Rise

3800

3100

2300

INDUSTRIAL 935 1155 n/a 790 1480 600 1400 640 445 1160 n/a 700 430 400 1070 515 550 380

Light Industrial

775

1000

1000

Heavy Industrial

1375

1800

1600

Attached Offices

1450

1600

1300

HOTEL (including FF&E) 2270 3060 3060 1800 n/a n/a 1500 3100 1660 3080 2990 1165 2440 1010 2000 1080 2890 2380

3 Star Budget

1825

2250

2100

5 Star / Luxury

3300

4700

4500

5 Star / Resort

n/a

n/a

4500

HEALTH (excluding FF&E and medical equipment) 2195 n/a 1050 2890 1210 2350 n/a 990 2000 2450 1450 1180

District Medical Centre

3000

4800

4900

District Hospital

3575

6000

6900

RETAIL (shell & core with public areas finished) 2195 1980 SGD 1.39 PHP 45.50 700 890 2065 2445 HKD 7.80 940 1095 CNY 6.83 1150 1550 AUD 1.17 740 970 ZAR 7.60

District Centre

n/a

1500

1500

Regional Shopping Mall

2100

1700

1600

EXCHANGE RATES

GBP

USD

USD

Mid Year 2010 US$ 1.00

0.68

1.00

1.00

91

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

92
Riyadh, KSA Doha, Qatar Manama, Bahrain Abu Dhabi, UAE 480 1200 1350 1350 1650 600 800 620 655 660 800 1900 1650 1500 1325 1370 1325 1050 1260 690 530 950 1220 1360 1630 1900 730 950 1000 1150 1250 960 1370 1780 1000 1125 1200 1000 1230 1500 1200 1370 1200 1550

Regional Building Cost Comparison (US$/m) 2Q 2010

Building Type

Beirut, Lebanon

RESIDENTIAL

Affordable Housing

540

Medium Quality Villa Compound

1100

Medium Quality High Rise

1200

High Quality Low Rise Apartments

1350

High Quality High Rise

1600

Podium Car Parking

n/a

Basement Car Parking

650

COMMERCIAL (shell & core only)

Average Standard Offices

- Low Rise

950

- Medium Rise

1150

- High Rise

1250

High Standard Offices

- Medium Rise

1200

- High Rise 2250 2465 n/a 2500

1450

1450

2000

1325

1750

- Super High Rise

n/a

INDUSTRIAL 650 850 950 1100 860 990 740 890 660 660 880 1015

Light Industrial

750

Heavy Industrial

975

Attached Offices

1000

HOTEL (including FF&E) 1600 2650 2950 3560 3250 2055 1920 2700 3300 1910 3130 3410

3 Star Budget

1575

5 Star / Luxury

2500

5 Star / Resort

2750

HEALTH (excluding FF&E and medical equipment) 2700 3425 2500 3290

District General Hospital

3500

RETAIL (shell & core with public areas finished) 1175 1340 1220 1395 1280 1465 1400 1565

District Centre

1120

Regional Shopping Mall

1275

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

93

94
Riyadh, KSA Doha, Qatar Manama, Bahrain Abu Dhabi, UAE 310 390 410 490 150 165 245 300 205 120 530 730 415 680 365 440 315 340 280 410 450 540 130 240 330 340 400 430 365 320 320 340 n/a 360 410 450 400 460 575 635 590 670 550 580

Mechanical & Electrical Cost Comparison (US$/m2) 2Q 2010

Building Type

Beirut, Lebanon

RESIDENTIAL

Medium Quality Villa Compound

290

Medium Quality High Rise

330

High Quality Low Rise Aparts

355

High Quality High Rise

420

Podium Car Parking

125

Basement Car Parking

155

COMMERICAL (shell & core only)

Average Standard Offices

- Low Rise

285

- Medium Rise

310

- High Rise

330

High Standard Offices

- Medium Rise

355

- High Rise

400

INDUSTRIAL 300 400 350 320 410 305 400 480 440 270 350 360

Light Industrial

220

Heavy Industrial

285

Attached Offices

310

HOTEL (including FF&E) 400 700 800 1035 1000 975 870 450 580 410 820 880

3 Star Budget

265

5 Star / Luxury

650

5 Star / Resort

725

HEALTH (excluding FF&E and medical equipment) n/a 1085 1250 1170

District General Hospital

n/a

RETAIL (shell & core with public areas finished) 410 475 425 325 420 470 520 550

District Centre

335

Regional Shopping Mall

410

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

95

96
Riyadh, KSA 10 12 12 110 120 120 30 30 200 1.2 3 3 30 440 205 1.34 4.38 4.38 33 233 25 25 192 192 185 172 20 20 212 1.02 2.5 2.65 30 225 187 154 24 16 20 7 18 19 130 145 137 39 38 140 1.1 2.1 2.1 37 502 17 5.5 5 Doha, Qatar Manama, Bahrain Abu Dhabi, UAE 13 15 25 110 120 115 20 25 175 1 3.25 3.25 27 250

Major Measured Unit Rates (US$ 2Q 2010)

Description

Unit

Beirut, Lebanon

Basement Excavation

Foundation Excavation

Imported Structural Fill

Concrete in Pad Footings (25mpa)

Concrete in Walls (32mpa)

Concrete in Slabs (32mpa)

Formwork to Slab Soffits (under 5m high)

Formwork to Side and Soffits of Beams

Precast Wall Panel Architectural with Sand Blast Finish

Reinforcement in Beams

kg

Structural Steel in Beams

kg

Structural Steel in Trusses

kg

Hollow Concrete Block Partition (200mm thick)

Aluminium Framed Window (6.5mm clear glass commercial quality)

Aluminium Curtain Wall System (including structural system) 50 30 8 30 125 45 60 55 160 151 160 40 35 36 50 8 6 8 35 25 29 51 55 53 50 43 4 36 150 48

600

615

493

370

600

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

Suspended Mineral Fibre Ceiling

Paint on Plasterboard Walls

Ceramic Tiles to Walls

Average Quality Marble Paving on Screed

Anti Static Carpet Tiles to Office and Admin Areas

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

97

98
Doha, Qatar Manama, Bahrain Abu Dhabi, UAE 88 78 82 90 95 106 74 70 12 20 21 9 14 24 24 14 75 70 60 91 97 110 110 102 92 87 74 70 690 690 812 812 730 700 790 763

Major Material Prices (US$ 2Q 2010)

Description

Unit

Beirut, Lebanon

Riyadh, KSA

ORDINARY PORTLAND CEMENT

In Bags

Tn

96

In Bulk

Tn

87

SAND

Sand for concreting

20

AGGREGATE

19mm Aggregate

17

READY MIXED CONCRETE

Grade 50 (OPC)

94

Grade 40 (OPC)

86

Grade 20 (OPC)

71

REINFORCING STEEL

High Tensile

Tn

600

Mild Steel

Tn

600

HOLLOW CONCRETE BLOCKWORK 7 9 11 21 11 10 18.5 9

100mm thick

3.5

200mm thick

6.5

STRUCTURAL STEELWORK 1400 1370 1200 1100

Mild Steel Grade 50 to BS 4360

Tn

1500

TIMBER 732 432 822 400 1370 800 700 400

Hardwool Meranti

1230

Softwood

520

FUEL 0.17 0.25 0.22 0.19 0.27 0.27 0.71 0.41

Diesel

Litre

0.68

Petrol Premium 95

Litre

1.04

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

99

100
Riyadh, KSA 45 45 42 45 30 55 55 42 50 50 80 5000 11000 80 6165 11000 50 50 45 60 60 80 71 51 65 76 120 5000 10600 25 42 38 45 38 50 35 53 30 30 30 24 48 61 54 39 48 77 5200 11000 35 26 30 Doha, Qatar Manama, Bahrain Abu Dhabi , UAE

Labour Costs (US$ 2Q 2010)

Description

Unit

Beirut, Lebanon

Concretor

Day

25

Steel Bender

Day

25

Carpenter

Day

30

Mason

Day

30

General Labourer

Day

20

Crane Operator

Day

45

Heavy Machinery Operator

Day

40

Dump Truck Driver

Day

30

Plumber

Day

30

Electrician

Day

30

Foreman

Day

120

Site Engineer

Month

4000

Construction Manager

Month

8000

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

Building Services Standards

UAE Specification* 75 - 80% 1:10 - 1:15/m 1:7/m Single sex 1 person to 12m using 70/30 (*) Single sex 1 person to 12m using 70/30 (*) 1:7 - 1:12/m 1:10 - 1:14/m 70 - 80% 80 - 85% 1:12 - 1:14/m 1:7/m Single sex 1 person to 14m using 60/60 (*) Qatar Specification Lebanon Specification

Subject

BCO (UK) Specification 2009

Bahrain Specification

Net:Gross Ratio (Typical)

80 - 85%

70 - 80%

Occupancy Standards - Typical

1:8 - 1:13/m

1:10 - 1:14/m

Occupancy Standards - Dealer

None stated

1:7 - 1:12/m

Occupancy Standards - Toilets (*) male/female ratio based on 120% population Fan coil units, VAV, downflow units Fan coil units, VAV, VAV with re-heat, DX, constant volume, plate heat exchangers

Single sex 1 person to 12m using 60/60 (*)

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

Form of Air Conditioning

Fan coil units, VRV/VRF, VAV, displacement, chilled ceiling/beam, natural or mixed mode ventilation 22o, +/- 2o

Fan coil units, VAV, DX, constant volume

Fan coil units, VAV, displacement, chilled ceiling/beam

Heating and Air Conditioning Internal Criteria (degree centigrade) 12 - 16 litres (*) 3 - 10 (*)

24o, +/- 2o (Summer) 22o, +/- 2o (Winter)

22o, +/- 1o

22o, +/- 2o

22o, +/- 2o

Fresh Air Supplies (*) litres per second per person

12 - 16 litres (*)

10 litres (*)

12 - 16 litres (*) 10 (*)

12 - 16 litres (*) None stated

Ventilation - WCs (Extract) (*) air changes per hour

None stated

12 (*)

101

102
UAE Specification 12 w/m 15 w/m 45 w/m 25 w/m 25% area NR 30 - 35 NR 40 - 45 12 w/m 25 w/m 800 or 1,600 w per person 25 w/m 25% area NR 30 - 35 NR 40 12 - 15 w/m 30 - 40 w/m None stated None stated None stated None stated 15 w/m 12 w/m None stated 25 w/m 25% area NR 35 - 38 NR 40 - 45 12 w/m 15 - 25 w/m None stated 20 - 25 w/m 20 - 25% area 12 - 15 w/m 12 w/m Qatar Specification Lebanon Specification

Subject

BCO (UK) Specification 2009

Bahrain Specification

Internal Heat Gains Lighting Load

12 w/m

15 w/m

Internal Heat Gains - Equipment Load (Typical)

None stated

25 w/m

Internal Heat Gains - Equipment Load (Dealer)

None stated

60 - 215 w/m

Supplementary Cooling Allowance (e.o/% area)

25 w/m 25% area

None stated

Acoustics - Offices

NR 35 - 40

NR 35

Acoustics - Common Areas

NR 40 - 45

NR 40

Primary Power - Lighting

12 w/m

15 w/m

Primary Power - Typical

15 - 25 w/m

35 w/m

Primary Power - Dealer

None stated

400, 800 or 1,500 w per desk

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

20 - 25 w/m 20 - 25% area

None stated

Subject 350 - 500 lux, uniformity ratio 0.8 250 lux 200 lux 150 lux 500 lux 300 - 500 lux, uniformity ratio 0.8

BCO (UK) Specification 2009

Bahrain Specification

UAE Specification

Qatar Specification

Lebanon Specification

Lighting - Office

300 - 500 lux, uniformity ratio 0.7

400 - 500 lux

Lighting - Stairs/Circulation

200 - 270 lux

Lighting - WCs

215 lux

Lighting - Plantrooms

215 lux

Passenger Lifts Capacity and Waiting Times

80% loading with 25 second waiting interval, handling 15% in 5 minutes. Population density 1:12

80% loading with 80% loading with 80% loading with 80% loading with 30 second waiting 30 second waiting 35 second waiting 35 second waiting interval, handling interval, handling interval, handling interval, handling 15% in 5 minutes. 15% in 5 minutes. 15% in 5 minutes. capacity of 11% to 17% in 5 minutes. Population density 1:14 Population density 1:14 Population density 1:14 Population density 1:12

*Specific to the emirate of Abu Dhabi. Excludes implications of new building code regulations for the emirate due to come into effect in 2011

103

6
Measurement Formulae - Two Dimensional Figures
Figure Square Diagram Area Perimeter

Rectangle Triangle

Circle

Parallelogram

Trapezium

Ellipse

Hexagon

Octagon

Sector of circle

Segment of circle Bellmouth

104

6
Measurement Formulae - Three Dimensional Figures
Figure Cube Diagram Surface Area Volume

Cuboid / rectangular block Prism / triangular block

Cylinder

Sphere

Segment of sphere

Pyramid

(a + b) l + ab

105

6
Measurement Formulae - Three Dimensional Figures
Figure Frustrum of a pyramid Diagram Surface Area Perimeter

Cone

Frustrum of a cone

106

6
WEIGHTS AND MEASURES
Metric Measures and Equivalents
Length 1 millimetre (mm) 1 centimetre (cm) 1 metre (m) 1 kilometre (km) Area 1 sq cm (cm2) 1 sq metre (m )
2

= 0.0394 in = 10 mm = 100 cm = 1000 m = 100 mm2 = 10 000 cm = 10 000 m2 = 100 ha

2

= 0.3937 in = 1.0936 yd = 0.6214 mile = 0.1550 in2 = 1.1960 yd2 = 2.4711 acres = 0.3861 mile2 = 0.0610 in3

1 hectare (ha) 1 sq km (km2) Capacity / Volume 1 cu cm (cm3) 1 cu decimetre (dm3) 1 cu metre (m3) 1 litre (litre) 1 hectolitre (hl) Mass (Weight) 1 milligram (mg) 1 gram (g) 1 kilogram (kg) 1 tonne (t)

= 1000 cm3 = 1000 dm3 = 1 dm3 = 100 litre

= 0.0353 ft3 = 1.3080 yd3 = 1.76 pt = 21.997 gal = 0.0154 grain

= 1000 mg = 1000 g = 1000 kg

= 0.0353 oz = 2.2046 lb = 0.9842 ton

USA Measures and Equivalents

USA Dry Measure Equivalents 1 pint = 0.9689 UK pint = 0.5506 litre

USA Liquid Measure Equivalents

1 fluid ounce 1 pint (16 fl oz) 1 gallon = 1.0408 UK fl oz = 0.8327 UK pt = 0.8327 UK gal = 29.574 ml = 0.4723 litre = 3.7854 litre

107

6
Imperial Measures and Equivalents
Length 1 inch (in) 1 foot (ft) 1 yard (yd) 1 mile 1 int. nautical mile Area 1 sq inch (in2) 1 sq foot (ft2) 1 sq yard (yd2) 1 acre 1 sq mile (mile2) Capacity / Volume 1 cu inch (in3) 1 cu foot (ft )
3

= 2.54 cm = 12 in = 3 ft = 1760 yd = 2025.4 yd = 0.3048 m = 0.9144 m = 1.6093 km = 1.853 km = 6.4516 cm2 = 144 in2 = 9 ft2 = 4840 yd2 = 640 acres = 0.0929 m2 = 0.8361 m2 = 4046.9 m2 = 2.59 km2 = 16.387 cm3 = 1728 in = 20 fl oz = 8 pt = 437.5 grains = 16 oz = 14 lb = 112 lb = 20 cwt F = (9/5 C) + 32
3

= 0.0283 m3 = 28.413 ml = 0.5683 litre = 4.5461 litre = 28.35 g = 0.4536 kg = 6.3503 kg = 50.802 kg = 1.016 t

1 fluid ounce (fl oz) 1 pint (pt) 1 gallon (gal) Mass (Weight) 1 ounce (oz) 1 pound (lb) 1 stone 1 hundredweight (cwt) 1 ton C = 5/9 (F 32)

Temperature Conversion

108

DIRECTORY OF OFFICES

109

110

7
MIDDLE EAST
Bahrain Davis Langdon Al Saffar House Unit 22B, Building No 1042 Block 436, Road 3621 Seef District PO Box 640 Manama Kingdom of Bahrain T: +973 17 588 796 F: +973 17 581 288 General: bahrainoffice@davislangdon.com Contact: Donn OShaughnessy E: donn.oshaughnessy@davislangdon.com Lebanon Davis Langdon Ist Floor, Chatilla Building Australia Street Rawche, Shouran PO Box 13-5422 Beirut Lebanon T: +961 1 780 111 F: +961 1 809 045 General: beirutoffice@davislangdon.com Contact: Muhyiddin Itani E: dll.mi@cyberia.net.lb Qatar Davis Langdon Salwa Commercial Complex Building 1st Floor Behind Al Seal Building Salwa Road PO Box 3206 Doha State of Qatar T: +974 4458 0150 F: +974 4469 7905 General: dohaoffice@davislangdon.com Contact: Steven Humphrey E: steven.humphrey@davislangdon.com
111

7
Saudi Arabia Davis Langdon Medical Consultants Building Office No 19, 3rd floor Dhabab Street PO Box 65371 Riyadh 11556 Kingdom of Saudi Arabia T: +966 1 463 2625 F: +966 1 463 2625 General: riyadhoffice@davislangdon.com Contact: Nick Schumann E: nick.schumann@davislangdon.com United Arab Emirates Davis Langdon Villa 213/3 25th Street Mushrif PO Box 113971 Abu Dhabi United Arab Emirates T: +971 2 444 2040 F: +971 2 444 2039 General: abudhabioffice@davislangdon.com Davis Langdon Level 7, Building C/P 54 Dubai Healthcare City PO Box 7856 Dubai United Arab Emirates T: +971 4 423 3690 F: +971 4 423 3691 General: dubaioffice@davislangdon.com Contact: Steven Coates E: steven.coates@davislangdon.com

112

7
North Africa
Egypt Davis Langdon Ground Floor, Corner Road 23/El Sharifa Dina Street Building 13, Maadi Helwan Egypt T: +974 5581 7035 (Kevin Sims) T: +44 7740 922 931 (Chris du Toit) General: cairooffice@davislangdon.com Contact: Kevin Sims / Chris du Toit E: kevin.sims@davislangdon.com / chris.dutoit@davislangdon.com

113

7
ASIA
(In collaboration with the independent firm of Davis Langdon & Seah) Brunei Davis Langdon & Seah Juruukur Bahan Utama-DLS 25, BT Complex, Kg. Jaya Setia Mukim Berakas A Bandar Seri Begawan BB2713 Negara Brunei Darussalam T: +673 2 332 833 F: +673 2 332 933 General: dlsbsb@dls.com.bn Contact: Justin Teoh / Shafie Yusof Also at: Kuala Belait China Davis Langdon & Seah Hong Kong Limited Davis Langdon & Seah China Limited DLS Management Limited DLS Specifications China Limited 2101 Leighton Centre 77 Leighton Road Hong Kong, China T: +852 2830 3500 F: +852 2576 0416 General: dlshk@dlshk.com Contact: Joseph Lee Also at: Beijing, Chengdu, Chongqing, Foshan, Guangzhou, Macau, Shanghai, Shenyang, Shenzhen, Tianjin and Wuhan India Davis Langdon & Seah Consulting India Pvt Ltd 3rd Floor, Raheja Chancery Building # 133 Brigade Road Bangalore 560 025, India T: +91 80 4123 9141 F: +91 80 4123 8922 General: dlsindia@dls.com.in Contact: Lorimer Doig Also at: Chennai, Delhi, Hyderabad and Mumbai

114

7
Indonesia PT Davis Langdon & Seah Indonesia Level 18, Ratu Plaza Office Tower Jalan Jenderal Sudiman 9 Jakarta 10270, Indonesia PO Box 3587 / JKP 10035 T: +62 21 739 7550 F: +62 21 739 7846 General: dlsjkt@dls.co.id Contact: Peter Robinson / Jim Pollock / Stephen Osborne / Ir. Haelly Hamid Also at: Bali and Surabaya Japan Davis Langdon & Seah Japan Limited 5F Akasaka Kowa Building 2-8-16 Akasaka Minato-ku Tokyo 107-0052, Japan T: +81 3 6459 1277 F: +81 3 6459 1278 General: info@dlsjapan.com Contact: John Critchley Kazakhstan Davis Langdon & Seah Kazakhstan LLC Trade Center Koktem 170 Valikhanova Almaty 050059 Republic of Kazakhstan T: +7 727 264 1952 F: +7 727 264 6675 General: dlskz@dlskz.com Contact: Victor Stanger

115

7
Malaysia Davis Langdon & Seah (Malaysia) SDN BHD 2 Jalan PJU 5/15 Kota Damansara 47810 Petaling Jaya Selangor Darul Ehsan Malaysia T: +60 3 6156 9000 F: +60 3 6157 8660 General: info@dlsjubm.com.my Contact: Loo Ming Chee / Ong See Lian / Karim Ali / Justin Teoh / Mohamad Faiz Awang / Nur Aziz Abu Bakar / Syed Mahadzir Also at: Johor Bahru, Kota Kinabalu and Penang Pakistan Davis Langdon & Seah Pakistan (Private) Limited 18 C, Nishat Commercial Lane 4 Khayaban-e-Bukhari Phase 6, D.H.A. Karachi Karachi 75500, Pakistan T: +9221 531 3159-60 F: +9221 531 3187 General: info@dls.com.pk Contact: Nur Aziz Abu Bakar / Lien Chee Kun Philippines Davis Langdon & Seah Philippines Inc 4th Floor, Kings Court 1 2129 Pasong Tamo Makati City 1231 Manila, Philippines T: +63 2 811 2971 F: +63 2 811 2071 General: manila@dls.com.ph Contact: Alan Hearn Singapore Davis Langdon & Seah Singapore PTE Ltd 1 Magazine Road 05-01 Central Mall 059567 Singapore T: +65 6222 3888 F: +65 6224 7089 General: dlssp3@dls.com.sg Contact: Jim Pollock

116

7
South Korea Davis Langdon & Seah Korea Co Ltd 429 G-Five Central Plaza 1685-8 Seocho 4-Dong Seocho-Gu, Seoul Korea 137-882 T: +82 2 543 3888 F: +82 2 543 3898 General: dlsk@dlskorea.com Contact: Victor Stanger Thailand Davis Langdon & Seah LECE (Thailand) Co Ltd 10th Floor, Kian Gwan 2 Building 140/1 Wireless Road Lumpini, Patumwan Bangkok 10330, Thailand T: +66 2 253 7390 F: +66 2 253 4977 General: general@dls.co.th Contact: Leong Choong Peng Vietnam Davis Langdon & Seah Vietnam Co Ltd Hanoi Branch Office 706 7th Floor North Star Building 4 Da Tuong Street Hoan Kiem District Hanoi, Vietnam T: +844 3942 7525 F: +844 3942 7526 General: dlsvietnam@dls.com.sg Contact: Mark Olive Also at: Ho Chi Minh City

117

7
AfrIcA
Botswana Davis Langdon Suite 9, Acts House Plot 20260 Samedupe Road Broadhurst Industrial Gaborone Botswana Mailing address: PO Box 201855 Gaborone Botswana T: +267 390 0711 F: +267 395 7550 General: ccmi.botswana@info.bw Contact: Fred Selolwane Mozambique Davis Langdon Rua D Estvo de Ataide No 38/48 Sommerschield 1 Maputo Mozambique T: +258 21 490 696/7 F: +258 21 490 699 General: admin@davislangdon.co.mz Contact: Charle Viljoen Nigeria Davis Langdon Tillyard 4th Floor, 241 Igbosere Road Lagos Nigeria Mailing address: PO Box 2167 Lagos Nigeria T: +234 263 6358 F: +234 263 2961 Contact: John Tuffrey E: john.tuffrey@tillyardnigeria.com

118

7
South Africa Davis Langdon 3rd Floor, MPF House Sunnyside Office Park 32 Princess of Wales Terrace Parktown, Johannesburg South Africa Mailing Address: PO Box 1642 Houghton, 2041 T: +27 11 544 1800 F: +27 11 642 2289 General: info@davislangdon.co.za Contact: Indresen Pillay Also at: Bloemfontein, Cape Town, Durban, George, Klerksdorp, Nelspruit, Pietermaritzburg, Port Elizabeth, Port Shepstone, Pretoria, Richards Bay, Stellenbosch and Vanderbijlpark

119

7
AUSTrALIA & NEW ZEALAND
Australia Davis Langdon Level 20, 350 Queen Street Melbourne Victoria 3000 Australia T: +61 3 9933 8800 F: +61 3 9933 8801 General: melb@davislangdon.com.au Contact: Bob Hunt Also at: Adelaide, Brisbane, Cairns, Canberra, Darwin, Hobart, Perth, Sydney and Townsville New Zealand Davis Langdon Level 10, Citigroup Centre 23 Customs Street East Auckland 1010 New Zealand Mailing Address: PO Box 935 Shortland St Auckland 1140 New Zealand T: +64 9 379 9903 F: +64 9 309 9814 General: auck@davislangdon.co.nz Contact: Chris Sutherland Also at: Christchurch and Wellington

120

7
EUrOPE
Germany Davis Langdon Heimeranstr. 37 80339 Munich Germany T: +49 89 452 33 83-0 F: +49 89 452 33 83-99 Contact: Mario Michaelis E: mario.michaelis@davislangdon.com Ireland Davis Langdon PKS 24 Lower Hatch Street Dublin 2, Ireland T: +353 1 676 3671 F: +353 1 676 3672 General: dlpks@dlpks.ie Contact: Norman Craig Also at: Cork, Galway and Limerick Spain Davis Langdon C/Serrano 98. Esc. 2-2 Piso Madrid 28006 Spain T: +34 91 431 02 90 F: +34 91 576 92 21 Contact: Jon Blasby E: jon.blasby@davislangdon.com

121

7
United Kingdom Davis Langdon LLP Davis Langdon Banking Tax & Finance Davis Langdon Engineering Services Davis Langdon Schumann Smith MidCity Place 71 High Holborn London WC1V 6QS United Kingdom T: +44 20 7061 7000 F: +44 20 7061 7061 Contact: Richard Baldwin E: richard.baldwin@davislangdon.com Also at: Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Maidstone, Manchester, Norwich, Oxford, Peterborough, Plymouth and Southampton

122

7
UNITED STATES Of AMErIcA
United States of America Davis Langdon 301 Arizona Avenue Suite 301 Santa Monica California 90401 USA T: +1 310 393 9411 F: +1 310 393 7493 Contact: Nicholas Butcher E: nbutcher@davislangdon.us Also at: Boston, Honolulu, New York, Philadelphia, Sacramento, San Francisco, Seattle and Washington DC

123

7
DEGW OffIcES
Australia DEGW Level 6, Johnsons Building 36 Grosvenor Street Sydney 2000 Australia T: +61 2 9259 8900 F: +61 2 9259 8901 Contact: Steve Coster E: scoster@degw.com Also at: Melbourne France DEGW 43 Rue Bobillot 75013 Paris France T: +33 1 45 89 38 39 F: +33 1 45 88 70 04 Contact: Philippe Meurice E: pmeurice@degw.fr Germany DEGW Heimeranstr. 37 80339 Munich Germany T: +49 89 452 33 83-0 F: +49 89 452 33 83-99 Contact: Claudia Hamm-Bastow / Axel Praus E: chamm@degw.com / apraus@degw.com

124

7
Italy DEGW Via Lombardini, 22 20143 Milano Italy T: +39 02 541 01 343 F: +39 02 599 02 213 Contact: Franco Guidi E: fguidi@degw.com Netherlands DEGW Herengracht 124-128 1015 BT Amsterdam Netherlands T: +31 6 5364 8131 Contact: Salla Lardot E: slardot@degw.com Spain DEGW C/Serrano 98. Esc. 2-2 Piso Madrid 28006 Spain T: +34 91 431 02 90 F: +34 91 576 92 21 Contact: Juan Carredano E: jcarredano@degw.com Singapore DEGW 74 Telok Ayer Street #03-01 Telok Ayer House Far East Square Singapore 048462 T: +65 6536 4477 F: +65 6438 4466 Contact: Susan Lim E: slim@degw.com

125

7
Turkey DEGW Levent Loft Bykdere Caddesi 201 Kat: 1/16 Levent Istanbul Turkey T: +90 212 284 66 61 F: +90 212 284 66 71 Contact: Ekrem Parmaksiz E: ekrem@degw.com United Kingdom DEGW MidCity Place 71 Holborn London WC1V 6QS United Kingdom T: +44 207 061 7777 F: +44 207 061 7005 Contact: Philip Tidd E: ptidd@degw.com Also at: Glasgow United States of America DEGW 100 Broadway, 14th Floor New York, 10005 USA T: +1 212 290 1601 F: +1 212 290 1619 Contact: Andrew Laing E: alaing@degw.com Also at: San Francisco

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

126

7
NOTES
................................................................................................................................................................................................... ....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

..................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

127

7
NOTES
................................................................................................................................................................................................... ....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

...................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

..................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

....................................................................................................................................................................................................

128

Davis Langdon makes no representation, express or implied, with regard to the accuracy of the information contained in this publication and cannot accept legal responsibility or liability for errors or omissions that may be made. Davis Langdon recommends that professional advice is sought prior to acting upon information included in this publication.

www.davislangdon.com www.aecom.com

US$30.00
4DL20444 (10/10) | Designed in-house by Business Development
Printed on recycled paper