By Elizabeth Broomhall
Oger Abu Dhabi GM Richard Chammas talks to Elizabeth Broomhall about plans for growth and what he thinks of Qatar’s World Cup win.
For many construction firms, 2009 was the end. The end of the boom period, the end of an era and, in many cases, the end of a business.
For Oger Abu Dhabi (OAD), 2009 was just the beginning. Not only was the new emirates’ branch of construction giant, Saudi Oger just starting to kick off with some of Abu Dhabi’s most iconic projects, but it was also establishing its new facilities management (FM) division in an attempt to mirror the success of its parent firm in Saudi Arabia.
Unfortunately, entering the market so late did mean that OAD missed out on the UAE’s boom period, which showed the first signs of decline at the end of 2008. But for general manager Richard Chammas, this was not the worst luck in the world – and, if anything, it prevented the company suffering the effects of the recession, which claimed the profits of hundreds of contractors.
“The downturn did not really affect us much. OAD had enough volume to carry it through. The biggest challenge has been to successfully deliver projects, since we had a lot of new staff here who needed to understand the market, as well as how we do business. Whenever you set up a new business unit in a new country, you always have challenges.”
Having been with OAD for more than two years, Chammas has certainly seen the branch through some of its toughest times since being established, making a number of difficult decisions. “One difficult decision,” he says, “is deciding whether to let somebody go. We try not to [dismiss] people, but ultimately if you have to streamline your business, you do have to make some difficult decisions.”
Of course, Chammas has also been at the forefront of the company’s successes. The first was the company’s initial big win – an AED36 million contract to build the Imperial College London Diabetes Centre in Abu Dhabi, completed in 2006. This year, highlights include having completed the UAE University in Al Ain and the Abu Dhabi Financial Centre in Sowwah Square, both of which are currently in the handover stage. The university project, worth AED 1.24 billion, involved constructing 26 buildings (a total built-up area of 245,200 m2), whilst the financial centre was an EPC project worth AED 5.7 billion, consisting of four towers, a stock exchange building and two five-level car parks (amounting to a total built-up area of 490,000 m2).
Thus, despite all the challenges and abrupt ending to the boom period, Chammas and the rest of the OAD team remain optimistic about the future. “We did not retrench during the crisis, and we managed to maintain a 200-person office. The truth is that, despite everything, we believe in Abu Dhabi as a market. It may be changing focus, but we are confident that it is strong.”
As it happens, executives are similarly confident when it comes to the firm’s ability to win projects. Given the success of Saudi Oger and Oger International, this is hardly surprising. “We are quite picky about the types of project we target,” explains Chammas. “We are not bidding for every single development, just the bold and iconic projects – the ones that really reflect the company’s vision.
“Although we are still a relatively young company, we have the support of Saudi Oger in construction and FM, and in engineering we can call on expertise from Oger International. Saudi Oger particularly has an extremely impressive portfolio of projects, and we are aiming to build the same kind of portfolio, both in terms of quality and diversity, here in the UAE.”
Hence why, Chammas explains, the firm is now seeking work on civil infrastructure projects. “In Abu Dhabi, we have started with the building sector. Now, we are stepping into civil infrastructure, imitating Saudi Oger. So we intend to bid for work on things like district cooling projects, roads, bridges and utilities projects.”
Asked about which projects his company is currently bidding on, Chammas is keen not to disclose too much. “We have submitted a tender for the Louvre and for a number of other Abu Dhabi-based projects, but I would rather not say which ones at this stage. We did also bid for the Presidential Palace.” Whether or not the firm has a good chance of winning these projects is also not something Chammas can answer with any confidence. “The market is very competitive at the moment; there are a lot of companies trying to win work. We have a strong team in place which is very capable, but whether we win a contract or not is ultimately the client’s decision.”
Seemingly, the firm’s FM division is also being proactive. “We have now started tendering for FM contracts in Abu Dhabi. We have not offered FM services to our existing or past projects because when we started we did not have this division; it has only been going for about a year and a half. On every project we bid for now though, we mention it. It is in every pre-qualification tender.”
He adds that this offering is important, not just as an additional revenue stream, but in allowing the firm to stand out from the crowd. “The good thing about Oger is that we can see a project through its entire lifecycle, and not every company can do that. The maintenance services we provide are important because it means there is continuity after a project is finished, and the FM team can also be involved in the design stage.
“Their knowledge is different from the engineering knowledge. They can come and tell the designers what works and what does not, how it will affect the lifecycle, and the cost of each system from a maintenance perspective, because ultimately the cost of construction is just a fraction of the total cost of a development; the FM costs are considerably high.”
As for geography, the firm will for now be focusing on the UAE exclusively, with its establishment already part of the wider Oger geographical expansion plan. That said, Chammas says it has not ruled out the possibility of serving other markets from the Abu Dhabi office.
The burning question, of course, is whether or not the company will bid for projects in Qatar. “First of all, let me just extend congratulations to the whole of Qatar, the Arab world and the Middle East for such a win. It is going to be a very challenging endeavour to do what they need to do in the coming ten years. As for whether or not we will bid, it is still too early to tell. We might, and we certainly have the backbone to handle the work, but ultimately it is up to the share holders. Everyone is very excited about it at the moment, but it is still too early to think about projects yet.”
Also interesting is Chammas’ view of how Qatar’s successful bid to host the 2022 FIFA World Cup will affect the region as a whole. According to him, the affect will most certainly be a positive one. “It will have a positive impact on the region because a lot of the construction companies that are present in Qatar are also present in the Emirates. So ultimately Qatar will be drawing on the resources of the entire Middle East. The growth in Qatar is going to be anywhere between 15% and 20%, and all companies in this part of the world are going to benefit from it in some way, shape or form.”
Separate, but potentially more important, are issues such as environment, health and safety and, crucially, OAD’s policy on these things. In Dubai and Abu Dhabi in particular there is a clear trend towards improving safety standards and building more sustainably, with a clampdown on those ignoring the law. Only recently, a contractor and subcontractor overseeing construction of a tower in Dubai where two workers fell to their deaths were detained and questioned by police. Thus, as a reputable, Abu Dhabi-focused contractor, OAD cannot afford to ignore these issues. Chammas claims to be extremely safety-focused. “At the Financial Centre we have had 35-million man hours without lost time due to accident or injury, and we want to continue with this. This is not something you do once, it is continuous.”
On that note, he explains how he thinks things could improve further. “Safety needs to be a culture, not a priority, because priorities can change,” he says. “It has to become entrenched in the way people think and the way they do business. And it is not just the responsibility of the safety officer, it is down to everyone. He adds: “I always ask my team: ‘Would you want your son to work on this project site? If there is any doubt, it means we definitely do not have a safe environment for our staff.”
On sustainability, Chammas is just as committed, but believes a zero-emissions industry is slightly too ambitious. In his view, the sector needs to set itself some achievable milestones to reduce its carbon footprint. He is also of the strong opinion that the client should lead the way – these companies and individuals having overall control of the project.
Which brings Chammas to 2011. The next few years, it seems, are going to be among the most important for the company as it seeks to establish its business divisions and make its presence more widely known across the region. “We will be focusing on maintaining the team and expanding into new areas, especially civils and infrastructure, like Saudi Oger.
“Challenge-wise, the biggest will be getting new business. We have the presence and the ability to tackle any size projects; we just need to be in a position to compete and deliver. We are very competitive, and we now understand the market very well. Now it is simply about securing a new work for 2011 and beyond.”