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Sat 23 Feb 2008 04:00 AM

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Bit of a boring job, but somebody has to do it

Construction Week talks to Dutco Balfour Beatty about the challenges it is facing in the marketplace.

Construction Week talks to Dutco Balfour Beatty about the challenges it is facing in the marketplace.

One of the biggest construction companies in the UAE, the Emirati-British joint venture of Dutco Balfour Beatty was formally incorporated in 1984, following the completion of the US $4 billion (AED14.7 billion) Jebel Ali Port project for the government of Dubai.

Although largely absent from the bored piling market since 1996, the group has a long history in the field, both locally and internationally and, in 2003, it re-established its bored piling operations, and formed a new division to handle all foundations and ground engineering activities.

The new division focuses on three key business areas; foundation works, lateral support works (excavation retaining structures), ground treatment and improvement, and aims to offer various engineering products to international standards.

Derek King, divisional manager for the piling and ground engineering division of Dutco Balfour Beatty said that the operation carries out a range of works including piling, shoring, dewatering, grafting and an extensive range of ground improvement functions such as vibro-compaction, stone columns and surface high-energy impact compaction.

"We're working on all of these activities at the moment," said King.

"We're working on shoring work in Al Barsha, piling work in Ras Al Khaimah, piling work in Abu Dhabi and Dubai Festival City, along with shoring work in Dubai Festival City.

"We're also working on piling and shoring in Dubai Sports City, Dubai Silicon Oasis, and the Palms Deira and Jumeirah.

"We were doing the sea wall work on the creek extension and we've worked on the creek extension around Business Bay, but we don't have any current work in Business Bay. But we do have current work in Festival City, which is at the top end of the creek."

The budget for the company for the year 2008 is approximately $32.7 million.

On-site health and safety is a big issue for most construction companies in the UAE, especially for piling and groundwork companies who require skilled personnel on-site due to the specialised tasks that have to be performed.

This factor is not only a challenge for publicly-listed companies in terms of the actual costs involved in the event of a health and safety breach, but also due to pressure from shareholders.

"Health and safety is a challenge primarily," said King.

"Being an international contractor, we eventually report back to Balfour Beatty in the UK, which is a public company with shareholders involved.

Being a very long-term local company, Dutco has a fairly high profile in the local market so we've got shareholders who are very aware of the fact that they are trading in a public domain and health and safety is without doubt one of the biggest challenges we face.

"You've got different nationalities, so people come from different health and safety environmental cultures."

"And with those different nationalities you've got different languages, so you have communication issues."

"Besides that, there is a very low level of awareness and culture of health and safety here in the UAE when compared to the UK or US markets."

"Obviously, managers don't want to find themselves in breach of health and safety."

"We show concern for our workforce. We accommodate them very well, we transport them well, we clothe them well, we treat them well and we pay them on time - as is expected of an international contractor."
King also explained that retaining staff has become a challenge in the industry with people switching companies for better wages.

"Of course, finding and retaining staff is a challenge. Again, on the lower level we do treat people a little better."

"We are able to offer them a very good career. We're not just about piling. We're about ground improvement, foundations and other work as well."

"I think all our staff has been made offers from time to time, but we offer people careers not just jobs."

"We also like to tell people that the straight salary is not the be-all and end-all of things; there are also other things to be considered. But yes, there is a degree of poaching."

Reiterating the need for a change in the way things are done in the construction industry, King brought to light the lack of ‘cost plus' contracts in the market and a dearth of construction machinery.

"There is no ‘contracts plus' adjustment mechanism in this part of the world so you take one huge financial risk in passing work as the cost of work is inflating continuously," added King.

On the machinery side of things, there is a lead time for the procurement of machinery but after that if one has a reasonable five-year plan agreed with their shareholders, then you should be able to procure in accordance with that plan.

"We are tied up with Balfour Beatty who owns one of the biggest UK piling contractors called Stent. So if the worst comes to the worst, we can just use plant from them, in which case it's only three or four weeks away by boat.

"But you never really have four to six weeks when working on a project to find machinery."

"We're very mindful of over-trading or taking on too much work and not being able to do it properly or on time. So we've been getting a lot of repeat business on the quality of work and meeting programs."

Many contractors in the local market have declined to take on work because of there being an abundance of projects coupled with a lack of resources.

"We select the work we do on the basis of the client, sometimes the engineer."

"The type of work obviously depends on the conditions of the contract."

"And then there are times when you have two potential opportunities, but you have to select one of the two based on resources," he added.

"In terms of value, we're turning down about a third of the enquires at the moment.

"We are just a division of a bigger group so we don't have the constraints that other piling contractors have."

"We have a massive plant field with a lot of equipment."

"We don't just turn down work because we're over-busy, there are other factors involved, such as the financial risk. The other reasons are principally resource-driven."

"Some documents we receive are poorly put together. Some projects are also technically and commercially risky, and in this market we don't need to take on such risks."

"The risk profiles here are usually higher than the UK, and the UK shareholders are very aware of that."

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