The appliance of science when it comes to alliance

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DOUBLE TEAM: Aldar was among the first developers to form a partnership, teaming up with Laing O'Rourke for the Al Raha project. (ITP/Valeriano Handumon)

Angela Giuffrida takes a look at the trend of construction companies to form partnerships, and the pros and cons of this approach.

In the last year or so, joint ventures among construction firms in the UAE have gathered prominence.

The alliances have come in a number of different guises: property developers have tied-up with contractors, subcontractors and suppliers; local contractors with international contractors, and project managers with masterdevelopers.

The partnerships have either targeted one-off projects or are based on a shared consensus of longer-term strategies, with the ultimate aim being to find a solution to the combined problems of capacity constraints, tight construction schedules and meeting the demand for mega-projects.

Aldar Properties was among the first developers to move away from the adversarial 'them and us' approach with its contractors through partnering.

The company teamed up with UK contractor Laing O'Rourke in late 2006 for the execution of its Al Raha Beach project in Abu Dhabi.

Since then, it has formed partnerships with other contractors, developers and subcontractors for the delivery of its project portfolio in Abu Dhabi, which is currently valued at US $60 billion (AED220 billion).

Among its partners are contractor Belhasa Six Construct (Besix), developers Zabeel Investments and Investment Holdings and district cooling firm Tabreed.

Aldar's CEO, Ronald Barrott, has advocated the joint venture strategy since joining the company in 2005.

"The way forward is to integrate with the contractor at the earliest possible stage," he said. "To leave the contractor to just build is, quite frankly, an historic way of going about construction. Our partnerships enable us to integrate design and construction to get the building finished."

One example of a major local/international partnership is last September's merger between Al Habtoor Engineering and Australia's largest construction firm Leighton Holding. The merger led to the creation of a new entity, Al Habtoor Leighton Group.

Shortly before the companies came together, Leighton had been eyeing alliances in the Middle East as a way of expanding its portfolio of projects in the region, while Al Habtoor was looking at ways of growing its business.

"Al Habtoor and Leighton complement each other," said Chris Gordon, general manager, corporate affairs and strategy, Al Habtoor Leighton Group. "Leighton provided a broad range of different capabilities - particularly in large-scale infrastructure - as well as extensive international experience."

Gordon added: "Leighton was looking to consolidate its presence in this region, and Al Habtoor's unrivalled track record in major building work made it the ideal partner."

Al Habtoor Leighton aims to generate $3.2 billion in revenue in 2008.

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