By CW staff
The volume of work planned for Qatar in the next ten year is unprecedented. Can it be done?
Key figures from QPM, EC Harris, Hyder Consulting, KEO International Consultants and Qatar Rail debate the challenges and opportunities facing Qatar’s 2022 World Cup build-up.
Speaking at the recent Construction Week Infrastructure Qatar conference in Doha, KEO International Consultants corporate sustainability director Holley Chant explained the context behind Qatar’s current construction push: “The Qatar National Vision (QNV) 2030 frequently references the fact that the conversion of hydrocarbon assets is being used to build new infrastructure, and particularly world-class infrastructure. So in terms of the accelerated spending of petroleum assets here, a lot of weight has been given to the fact that the country will not achieve its non-petroleum diversification without excellence in infrastructure.”
The QNV 2030 is predicated on human, social, economic and environmental development. Chant pointed out that “these themes are fairly universal if you look at 2030 plans, whether it is Dubai or Abu Dhabi. The challenge is always the pole between these pillars. How do you achieve the speed of economic development required by 2030 without compromising the environment? How do you enhance human and social development in an environment that sometimes makes the human scale seem insignificant?”
Chant said a key question was “the challenge of constructing new infrastructure in the required timeframe, and keeping to budget.” QPM senior project manager James Hamilton concurred: “Very often the pressure is time over everything else. There is an incentive, it seems, to try and speed things up, without sometimes thinking about what needs to be done right from the start. What Qatar is doing now, very wisely, is taking that step backwards right at the beginning to get things right, which quite often never happens. Qatar is following the right strategy, and that is going to pay dividends in the future.”
Hamilton said a main focus going forward will be the particular procurement strategy that is adopted. Chant said that “a front-loaded integrated design process is really critical for success, and Qatar is demonstrating that it has accepted that.” EC Harris head of transportation: Middle East Tim Risbridger pointed out that “the volume of work planned for Qatar is unprecedented anywhere else in the world.”
This would have a knock-on effect, he said. “There is going to be difficulties around delivering materials to site, and getting the expertise and labour resources. If you take Dubai as an example, where there is a huge demand and a fight for resources, you get hyper-inflation. There is a sort of micro economic situation happening, which is unique, even in a world economy which is in recession in most parts certainly. Indeed even in China we are seeing signs now that there might be a recession. I do believe we are going to see some forms of local hyper-inflation, so prioritising is going to be key, and making sure everybody is not doing the same projects at the same time. If that happens, you are going to have huge congestion in the streets, you are going to have hyper-inflation from a cost perspective, and you are going to have all the problems around resources and logistics,” warned Risdbridger.
Chant said these are legitimate issues that will affect the sustainability of the World Cup build-up. Hyder Consulting country manager Maher Chatila said: “Right now in Qatar they are more open to different procurement methods. Ashghal, for example, over the last two years has been debating different methodologies internally.” He said it was essential for the clients, project managers and consultants to work “hand in hand in deciding, in partnership, to bring about the speedy delivery of projects that are badly needed.” Chatila cautioned that such an approach was not a ‘magic bullet’ for every project.
Chant asked what would happen if a particular procurement strategy failed. “We all have to confront these situations. How do you get a project back on track, from either side of the table, whether you are a contractor, consultant or client?” Qatar Rail deputy CEO Geoff Mee said the first factor was to determine exactly what is required.
“I think there is a realisation within Qatar that you cannot just let the market decide everything that is going to be done or made. There needs to be a clear prioritisation for that which is required to meet the QNV 2030. We should keep our eye on the prize, which is not the World Cup. The World Cup is a milestone on the way to where we are trying to get the nation to, which is to be self-sustaining by 2030. However, you have to be clear about the priorities, and that you probably cannot do some of the things that would be nice to do in the timescale.
“So before you get into hyper-inflation, you actually want to cap that first, and say I do not want to build that because I know the supply chain cannot cope. You then need to be thinking about things like how do I ensure I do not get that massive rampant inflation by agglomerating some of your procurement needs. We know we are going to need an awful quantity of concrete. Now how are you going to manage that within an environment where there is only a limited capacity within the country, and that a lot of the material comes in from outside? I believe that, with a coordinated procurement process, we can resolve most of these issues.
“At the same time I am very cognisant of the fact that actually producing all the facilities for the World Cup in 2023 will be a bit of a waste of time. There is no second prize, and time is always is the master. You have to manage what you are going to be able to deliver to match the timescale, rather than say we are going to do everything. So there is a huge amount of work to be done in terms of value engineering and being very clear what the objective is, before procurement commences,” said Mee.
Chant said “all participants need to be willing to constantly reassess and reevaluate. It is critical to do this while keeping an eye on the procurement issues that come up in such a heated environment.” Related to this is the issue of budgeting, and the fact that lump-sum procurement methods may be too inflexible.
“Certainly in the longer time, partnering can be developed,” stressed Hamilton. “It is about having a mature supply chain willing to work in that environment, which is perhaps more important than the political leadership driving that process.” Chant said this related to the issue of “localising processes, procedures and partnerships that work in the greater world to the local culture. It has not worked here because we do not have a mature supply chain. Is there an approach to produce a result that allows success? If we look at the QNV 2030, part of economic development means creating a supply chain capable of delivering that.”
Mee pointed out that there was a slim chance of moving from FIDIC to NEC type contracts “in one bound.” However, there is a growing realization among contractors, consultants and suppliers that “partnering and risk-sharing has got to be beneficial – anyone can build a cheap railway that does not work. That is not the aim here. The aim is to build world-class infrastructure. In order to do that, you have to make sure it is safe, reliable and of a sufficiently high quality to attract users.”
Hamilton stressed: “What we have to try and avoid is moving towards a litigious society, which quite often happens when there is such a marked increase in construction activity. This collaborative way of working is a cultural shift that starts with the client; the consultants and contractors also have to be aware of what goes into the contract right from the beginning, so it does not have a knock-on effect and result in increased pressure on the programme further down the line.” Contractors and consultants also have to take into consideration “how to make the life of Qataris really better during those years. We have to put them, along with partnership and innovation, at the top of everything we do.”
Mee said “there needs to be a lot more openness” from the client’s perspective. “We set out right from the beginning with the rail project to have industry awareness days. I was immensely pleased at the response we got from all over the world, and from local Qatari companies. There is little doubt that we have started something with that. The openness that was displayed has been repeated in all meetings we have had up to now. We want to keep that dialogue going.
“Importantly, the need for knowledge transfer is absolutely vital. In Qatar, there is actually about 3m of railway track at the exhibition hall, and that is all there is. There is absolutely no indigenous skills base to draw on in Qatar that is not inherently expatriate, and that has got to change. We have got to have an industry that is capable of being self-sustainable and managed by Qataris with the necessary railway engineering skills. We will be taking steps over the next few years to encourage graduates to come to us to be trained as railway engineers and operators, and with specialist skills that go with transport planning. Without that knowledge transfer, this will always be an expatriate sector, as in Dubai where the operation of the metro was outsourced. I do not want that to happen in Qatar. I want this to be an industry that people are proud of and that says Qatar is moving forward in a self-sustainable way.
“It is good to that a lot of the contracts we are now seeing in the Middle East have a provision for knowledge sharing and for local training. If you want to meet those sustainability goals, then there has to be a local capability. In the global world we live in now there will always be a need for international expertise in a supporting role, but that is not a local issue. I think that will be the signature of a more mature market; education is the single most important element in terms of Qatar achieving what it has set out to do.”
Once again this raises the issue of budgetary and timeframe constraints. “All of us who have lived in the GCC have experienced the chaos that can result from such a surge of development,” said Chant. “How do you remember the human scale in something that is so obviously beyond the human scale?”
Hamilton said that ‘joined up’ thinking was critical in this regard, “because without that we will still carry on with the mentality that projects happen in isolation. I think where we are heading towards is a programme management approach whereby a lot of these projects come under the umbrella of an organisation empowered to actually deliver on a vision basis. Once that starts to happen, you will see the attendant logistics issue be resolved as well. That is absolutely key. If it is not happening, we will have to seriously interrogate the systems we have in place.”
This would require collaboration and cooperation between the government and the private sector, said Chant. “I think there is close dialogue between Ashghal and the rail sector because we are all trying to dig up the same piece of road. One thing we do not want to do is dig up a road and put in a brand new sewer or water line, and then the next month come and dig it up again because we want to put the railway in, and then again as it is part of the road-building programme, as that would be insane.
“It has got to be a centralised programme. I would also say that you cannot expect to spend the best part of $100bn on the ground in Qatar in ten years without some disruption. The trick is to minimise it. What we do not want is a complete free-for-all where everybody is trying to do their own thing. It has to be coordinated and prioritised within the specific timescale.”