World-Class builder

by Gerhard Hope Monday, 21 November 2011

To get to AlJaber Engineering's office in Doha, one has to negotiate cordoned-off excavations and rickety pedestrian walkways and temporary bridges to even get near the building. Quite close by is the construction site of the New National Museum of Qatar, designed by French architect Jean Nouvel. This is a sign of the kind of transformation that Doha has embarked upon. "Come back in ten years' time and you will see a new city. I think it will start showing in five years, but it will look really good in ten, when you will see a drastic change. By the time the 2022 World Cup is played here, Doha will be a new city, and Qatar will be a new country," says MD Osama Hadid.

There is such a marked contrast between the older buildings of downtown Doha and the gleaming high-rise towers of West Bay that one wonders how much of the city's heritage will be sacrificed in the road leading to the World Cup. Hadid, however, is eminently realistic. He acknowledges that Doha itself is at least 15 years' behind the rest of the region in terms of essential infrastructure, and says the concept of ‘heritage' itself has to be seen in the context of modernity and progress.

"I would not really call it heritage buildings, because these were built mainly in the 1950s and 1960s, and the quality was not up to standard. I think there are a few spots that should be preserved, such as the palaces of the sheikhs and so on, but in general I do not feel bad that we have so much demolition, because it has to be done. Abu Dhabi did a similar thing in the 1990s when it knocked down every building less than 20 storeys, and that is why it now has a new city."

Interestingly, Qatar's development seems to have taken up the slack in the region's construction industry as it adapts to the rigours and constraints imposed by the downturn. "It is a good time to float projects because most will come below budget. Contractors are pretty hungry these days, and are moving aggressively. For the whole region, Qatar and Saudi Arabia are the promising markets. Saudi is a challenging market to work in; Qatar is still growing, so has potential for well-established companies, who will have an excellent chance here." However, increased competition brings with it its own set of challenges.

"The biggest challenge is the potential competition we will be seeing, and which we are seeing already. Qatar is an open market that provides numerous opportunities. However, serious technical evaluation of the bids and the capabilities of the bidders will, with time, ensure that only healthy and capable contractors will prevail. It will be a difficult period for maybe the next couple of years," says Hadid.

"What we hope will help us with this increased competition is the use of shortlisted contractors on some projects, together with a strict prequalification regime, and possibly even negotiated contracts when the World Cup momentum picks up. This will give strong companies an opportunity to show added value, rather than simply compete on price."

A related issue is preference for local contractors. "We certainly see an improvement in the tendency to favour local contractors," notes Hadid. "The sentiment that local contractors did not have capabilities to execute projects and were not trustworthy is starting to change. For critical projects completed, the outcome has been very satisfactory. These projects were completed to the highest quality, and they are now in use. This gave clients like Ashghal a lot more confidence in local contractors. We see a serious intention to use local contractors with specific capabilities in the [upcoming World Cup] mega projects."

The relationship between contractors and consultants has also changed. "In the past, contractor-consultant relationships were not expected to be friendly. Now it is certainly friendlier between contractors, engineering companies and project management companies in general, because we work together. It has opened up different ways of real cooperation and mutual benefits, which is good for the market. We will be seeing many design-and-build packages in the future, such as the Doha Metro and Doha Expressway. Value engineering is becoming a major tool in reducing costs, and you need strong engineering companies to support that," says Hadid.

AlJaber Engineering has consistently and confidently established its skills base and reference project list over the years. "I am a civil engineer. I am proud to say I completed all my schooling years in Qatar. Then I went to the US and graduated in 1981, so I have been in the construction business 30 years. I have only had two jobs in my career, one with a local company, for the first 14 years of my career, and then with my friend and partner, Mohammed Sultan Al Jaber, we started AlJaber Engineering on 1 January 1995," says Hadid.

"Many of my friends questioned my decision to enter the market at the time, but all along I had a plan for the future. I knew that Qatar had a lot of potential. I always believed that sooner or later this potential would be realised. From day one the vision was to build a company capable of handling large complex projects. So we entered into partnerships, consortia and joint ventures, naturally on a small scale in those days, but we were willing to work in any way to build our portfolio to gain experience and exposure.

"In the construction market, exposure is very important. It gives you an edge. We focused on technical capabilities, not just price. We focused on complex rather than simple projects so we could use our technical know-how and capabilities and also maximise profit. This strategy has worked. We have tackled a lot of very complex, risky projects, and we came out alive," Hadid says with a laugh. "Those projects were like stepping stones for our development."

As an example, Hadid cites a 54,000m2 warehouse that AlJaber Engineering built for Qatar Chemical Company (Q-Chem) in 1998. "This was the largest warehouse in Qatar in those days. We were a very small company. We managed to qualify for the project and complete it on time, and we managed to save the client substantially on his budget. That gave us exposure to the industrial market." Hadid also refers to AlJaber Engineering's involvement with the New Doha International Airport (NDIA). "We undertook the environmental clean-up of the project, which involved the excavation and haulage of about 8.5m cubic metres of solid waste.

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