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Firms fight to scratch below the surface
Competition for contracts in the UAE ground engineering sector is intense. Upwards of 25 firms fight for piling, shoring and dewatering works on jobs that can take two weeks, two years, and more. At present, the major players include Swissboring, Middle East Foundations, Dutch Foundation, Zetas, STFA - which is linked to contractor Al Habtoor - and German firms Bauer and Zublin.
Reinhard Steinle, general manager, Zublin Ground and Civil Engineering, says that working in a such an intense, time-driven market is difficult.
"In my opinion, clients here are mostly interested in the price, and secondly, the time schedule. If a local company comes in and says that a project will take three months, and then we say that it will take three and a half months, then a client will go for the other company."
But Shad Asif Khan, general manager - Gulf, Keller Grundbau, a geotechnical contractor, says that contracts are not necessarily driven by the lowest bid and shortest schedule. "It depends on your availability; people want you to start immediately, so if you are available then you are better equipped to dictate your price. It is competitive, but you may get the edge if you are available."
Another challenge that firms face is the variation of international standards on projects, which can also add further complications when sourcing materials.
"In Germany, we have the European standards, which says that we have to meet certain specifications. But the consultants here may have different specifications - British, American, European - depending on the project. It means that the type of concrete, for example, may vary between tenders, which is challenging for us, and it's difficult to handle" says Steinle.
"In Germany, you can rely on subcontractors and suppliers to provide a certain standard of material, but here you have to get approval by the engineer for every piece of steel that comes on site; even if the quality of the steel meets the specifications. We are wasting time and playing around - sometimes we can wait five or 10 days just to get approval for a piece of steel."
Steinle adds that he would like to see one standard applied across the whole country: "Whether it be the American, British or European standard for the whole country. It should be law.
"Secondly, as long as a material is approved and certificated by suppliers to ISO 9001, for example, then as a contractor, we would not have to get approval for every item. There needs to be certification of suppliers across the board in order to speed up the process."
Zublin, which opened a Dubai office in 2004, is currently working on three projects in the city. Located in Al Barsha, the contractor is executing the complete building pits - shoring, excavation, dewatering and foundation piles - for the Novotel and Ibis Hotel, and a site for Tecom.
Its international civil engineering division also picked up the US $184 million (AED671 million) contract in joint venture with UAE-based Saif Bin Darwish last month to build the 10-lane Saadiyat Bridge highway in Abu Dhabi.
As its Dubai operation is relatively new to the region - the firm has had a general contracting division in Abu Dhabi since 1974 - Steinle questions how much of an impact Zublin's German reputation for quality and standards has enabled it to get a foothold into the market.
"It is a different story," says Steinle. "If you compare machine suppliers, for example Liebherr, Mercedes and BMW. They produce a product according to German standards and then they deliver the product against money.
"But we as a German construction company are dealing in the local market, according to the local specifications, and working with local people.
"We have to work in the same way that all of the construction companies are working here - actually it's not a big advantage for a German company coming to this market that they are German - they have to do the job well and are faced with the same level of competition."
But although Steinle believes that firms start off on an equal footing, Khan says that, over time, a company can set itself apart from the rest by developing its portfolio of equipment and expertise.
"If you look at giants like Bauer they have a massive workforce - but steady growth is important, you cannot just come up over night; you need a large amount of equipment, people and the money coming back to you. So it takes time to establish," he says.
"You have to be careful that you can balance this with experienced staff to handle the equipment."
As well as a large-scale contracting operation, Bauer has also set up a local sales operation - Bauer Equipment Gulf - which enables the company to provide specialist equipment to the market, but also maintain its ability to work on multiple, large-scale jobs.
According to Peter F Hammer, managing director, Bauer Equipment Gulf, the company's 30-year relationship with the UAE has given it unique insight into keeping potential clients onside.
"It is very important to respect people and, in particular, the culture of the UAE. Good performances for customers can only be achieved when there is a skilled and motivated workforce, and good working relationships are established."
He adds: "We want to be different from our competitors; for example, we provide additional information and support through our English/Arabic website."
And the building of reputations is what Keller relies on.
The company believes it has a monopoly on the ground improvement and deep soil treatment market in the region, but is considering re-entering the local piling market. "In the deep soil treatment market, we have the largest number of vibrators, which we manufacture ourselves. This makes it easier to be available.
All we have to do is get the support equipment and we can start," says Khan.
"Our other line of business is piling, and there are tonnes of companies here doing that. In the UAE it's so tough, we don't really do piling work at present. But we want to enter into the piling business again, as we used to do it.
"In order to do this it is Keller's name that we will capitalise on. In the Gulf, Keller is so well known - it has a good name."
In a market where the competition for contracts is fierce, German contractors are having mixed success. The likes of Bauer and Keller, which have had a presence in Dubai for a number of years, have built up a local reputation.
But for Zublin, being a newcomer has not yet given it a chance to prove its technical prowess.
However, as Khan concludes, German firms coming to the region may see success in the long term: "In general, German technology is trusted and has proved itself over the years."
In a market where piling contractors face tough competition for contracts, one company offers an alternative method of ground engineering.
Shad Asif Khan from Keller Grundbau outlines how the process of deep soil treatment can be applied to sites across the region.
“When you have a soil that cannot deliver the required bearing capacity and cannot sustain the foundation loads or the acceptable settlement tolerance, that is where we come in.
“With shallow depths – up to 3m – you can handle it by conventional methods, but as soon as you go beyond that, you have to start thinking about dewatering, excavation, materials and compaction.
“Without doing any dewatering or excavation – we just go in with a poker vibrator, which can go down to 50m, then you can start compacting this ground from the bottom to the top. If you have good, clean sand then you can compact the ground, but the moment you have some impurities, mud for example, then you have to replace these with coarse aggregate (2.5-10cm in size). It is a regular alternative to piling and can offer up to 20-30% savings,” he says.
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