Aldar joint venture firm announces 200 job losses

JOBS LOST: Aldar Laing O'Rourke is cutting 200 jobs amid the slowdown in the construction industry. (ITP Images)

Aldar Laing O’Rourke, a joint venture between Abu Dhabi’s largest property developer and a UK construction company, is cutting more than 200 jobs, the company has said.

The joint venture was established in 2006 to undertake the management and delivery of the Al Raha Beach development in Abu Dhabi, a mixed-use waterfront development stretching 11km which will become home to 120,000 residents.

“In an environment like this, you have to be lean and agile,” said Christopher Wilkinson, the company’s managing director in comments published by UAE daily The National on Friday.

“We’ve got plenty of work, but we don’t think we are going to have the dramatic growth we were expecting.”

The announcement comes as thousands of people working in the real estate and construction industries in Dubai have already been made redundant from high-profile companies including Nakheel and Damac.

Wilkinson told the paper that Aldar Laing O’Rourke employed about 1,900 people on its professional staff, including surveyors and engineers, from which the 200 jobs would be cut.

Wilkinson added the economic environment required closer attention to costs and a more deliberate approach.

“One of the things we are doing now is looking to give greater price certainty and getting more of the design done. We are not running at 150 miles per hour. We are running at 100 miles per hour.”

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READERS' COMMENTS

Staffing
Posted by A. R. S. Wilkinson, Abu Dhabi, UAE on Saturday 6 June 2009 at 13:55 UAE time


Interesting that the ALOR staffing has been cut and cut and no press statement has been made. Hundreds of letters have been issued and they have lost a lot of work in AD but still no statement as to why it all went wrong - someone at LOR IS responsible. The Motor World project and the work camps have now been stopped and much of Al Raha Beach is on hold - me thinks LOR will not be UAE for long!

Common
Posted by PG, AUH, UAE on Monday 26 January 2009 at 10:41 UAE time


"SMART" Strategies, forms of contract and the software are made for better performance and productivity and has it's own pros and cons as well!!!!!! But execution part is most important to get the best out of it.

Hence, nobody could run when shit hit the fan!!! coz, both are part of the blunder either Aldar or Laings two experienced heavy weights in the construction industry, to add to this there were few brand name consultants and internal auditors to streamline processes and ensure transparency in between.

It's quite easy to blame and raise eyebrows... hope things will calm down with lessons learned??? Coz damages are already made than expected!!!!!

More transparency and scrutiny will do better in this situation than changing processes and bringing in so called expert solutions to face the situation.

Online Collaboration System at Al Raha
Posted by MN on Friday 23 January 2009 at 13:15 UAE time


I would like to respond to the comment made by LH regarding the computer system imposed. Please note that the online collaboration system is not LOR's product. It is a corporate decision from ALDAR to use the system, which they were using in all their other developments. LOR has nothing to do with it, but to implement it in Al Raha as the Project Manager.

ALOR
Posted by LH, Dubai, UAE on Sunday 11 January 2009 at 11:42 UAE time

Interesting comment James but I am not convinced that the use of the NEC form of contract is necessarily the problem in this case. I work for one of Aldar Laing O'Roukes tier one contractors so I am able to comment on this issue from a reasonably qualified perspective.

The NEC form is a widely used form, although admittedly not widely used in the GCC, and is generally seen as being a good and equitable form for large projects. There can be no doubt that, when implemented well, the NEC form works well for client, contractor and entire supply chain. The question is, was it implemented well in this instance?

To answer that question you cannot just look at the position of the market right now - you have to consider the position at the time the work commenced. Those were the heady days at the height of the boom when contractors held (or at least believed they held) all of the aces. Getting contractors to fix a reasonable tender and to mobilise quickly was difficult to say the least. To get around this issue the target cost element of the contract was omitted and option E was used. This gave full cost reimbursement to the contractors so the risk to them was mitigated somewhat (although the onus still stayed with the contractor to prove that the cost was allowable). Was this a mistake? I, personally, do not think it was. Where the mistakes were made, in my humble opinion, was with the laissez-faire approach taken by some contractors in deciding what was allowable and what was not allowable cost. Remember, these were the rarefied days at the top of the market - people were too busy thinking of the next mega-project to be too bothered about the amount of money a contractor was spending!

A prime example of this was the imposing of a specific (and expensive) computer system on all contractors regardless of the system that individual contractors were using. Obviously the contractors did not want to pay for this system, the hardware to run it, the networking and other associated costs and the training for it - they already had a system or systems and were happy with their own - but Laing O'Rouke insisted. So the contractors were forced to buy this system but the costs were all reimbursable at cost plus profit! Why would they not buy it - they were making money out of the imposed requirement. Laing O'Rourke did not care either - it was not their money and they were on a percentage fee so the higher the costs the more they would be paid - they may even have received royalties from the software company that supplied the system. The people that suffered, and indeed are suffering, are Aldar (their shareholders and, possibly, the people investing at Al Raha).

This is one of many examples of where things could have been better controlled at this project but, again, I would remind you that the times we live in today are different from the times the project started.

In summary I would defend the use of the NEC form at Al Raha Beach - I find it more difficult to defend the management of it.

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