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Sun 20 Feb 2011 12:00 AM

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Venture forth

Ramsay Abbassi explains the appeal of complex projects and how Murray & Roberts has become a popular company for collaboration.

Venture forth

The shift in construction activity towards infrastructure in
the UAE leaves one major international contractor particularly well placed.
With a broad range of projects completed that has had a direct benefit for
Dubai and Abu Dhabi, Murray & Roberts has gained a lot of ground in the
market – with most of the other GCC countries in its sights for expansion.

Ramsay Abbassi has been at the helm of the South African
company’s regional construction operations for almost 13 of the 20 years he has
been in Abu Dhabi.

He has seen economic cycles, a building boom and steep
correction, an increasingly international marketplace alongside the
time-honoured principles of working on the right projects and selecting the
right people for best delivery.

Accessing markets the Murray & Roberts way includes the
strategic position of its Abu Dhabi office:
close to Maqta Bridge
on the edge of the city, giving clients and counterparties an easy route when
coming from Dubai, or quick access for the team
to Dubai, where
the company’s regional head office is located.

“Our last location was on the Corniche before the bridge
opened, and most of our work was actually off-island, so there were problems
going in and out of town,” Abbassi says in the sunlit villa office. The speed
of the UAE capital’s development and its links to surrounding islands has been
transformational in the last decade, though Abbassi adds the emirate is just at
the start, and may need to extend its 2030 economic development target.

“I think 2030 is looking more realistically at being 2040 or
2045, but they have the plans and the vision, and they know what they want to
go towards,” he says.

The slowed rate of construction since 2008 might also be a
factor in the schedule of building and infrastructure projects alike, and
Abbassi has an original turn of phrase to describe the adjustments that may
need to be made to reflect today’s demand and financing facilities.

“A lot of the developments were done on a seven-star level,
when the reality is now that the money is not in the market so they have to see
the viability and reassess the projects to be four-or five star.” Though the
company delivered the Burj Al Arab in Dubai in
1999, one of more than 30 projects completed in a joint venture with Al Habtoor
Engineering, Murray & Roberts’ portfolio is dominated by infrastructure
work, with a strong emphasis towards Abu
Dhabi. This has been key to Murray & Roberts’
regional success as the real-estate market in Dubai – heavily weighted towards private
sector-led commercial ventures and an incomparable property boom –
deteriorated.

By contrast, he points out, Abu Dhabi National Oil Company
is developing its infrastructure and venturing into renewable energy, school
and universities are under construction, and healthcare projects such as the
Cleveland Clinic gain momentum.

It is all part of the drive to make the UAE more ‘self-sufficient’,
with all the necessary social resources available to its people. But Abu Dhabi has certainly not been immune to the wider
financial crisis, he says, and the halt to Aldar Properties’ development on Yas Island
is an indicator of this. For Murray & Roberts, it seems, the more complex
the project, the better, though it must also suit other internal criteria.

“The philosophy is not necessarily to chase volume – it is
to chase projects that are complex, are iconic, where we add value, whereby we
are not hunting a pack of people. This is more selective tendering. That is why
we are in the airport and infrastructure work. Otherwise you are just bidding
against 20 countries, and we will not do that,” he said.

Its portfolio of finished and current projects in this vein
is among the most impressive for a foreign company: Dubai
International Airport’s
Terminal 3 and Concourse 2, the Etihad Terminal in Abu
Dhabi International Airport, Sheikh
Zayed University,
World Trade
Centre Towers
and the Sorbonne University. “Government owned, or quasi
government types of business,” as he calls them, have been a significant source
of projects and revenue as the company suffered losses from private sector
clients in Dubai.

While growing its reputation as a contractor in the region,
Murray & Roberts has also been a useful partner. The company’s
long-standing link with Al Habtoor Engineering – now firmly Al Habtoor Leighton
– is one of the most remarkable joint ventures in the region, and the backbone
of many of the respective companies’ biggest projects, including the $820
contract for the design and construction of the Zayed University campus in Abu
Dhabi. The two companies started working together in 1994, when Murray &
Roberts first entered the region, and sought a local firm that had an
established network of service and material suppliers. The combined resources
enhanced the ability to place the right person from either company in the right
area of each project, he says.

The company has also worked in joint ventures with other big
firms, such as Consolidated Contractors International Company, for the Khalifa
Stadium in Qatar for the
2006 Asian Games, and with Nass Contracting for all bridge work on Bahrain’s
sprawling mixed-use development, Durrat Al Bahrain.

Last year the company worked with Saudi Oger in KSA, a
market that is attractive to Abbassi due to the scale of its own infrastructure
plans. The two companies submitted a tender to design and build Jeddah’s
airport, and they are working on two projects in the Kingdom. Abbassi emphasises that joint ventures only work when the
two companies essentially act as one and can be fully complementary.

“You must not have an attitude of ‘us and them’. If you do,
it is a recipe for failure. We generally work on a 50-50 share of risk ... JVs
in the past fail when you have two massive organisations that do the same
thing, have got nothing to offer to each other and then it just becomes that,”
he says, pressing two fists together to indicate a clash. “It becomes
opposites, and the JV fails.

“We have been lucky, I suppose, in that sense. [With Al
Habtoor Leighton] we have shared a common understanding. We are almost one
organisation.” Now for perhaps the biggest issue facing contractors big and
small in the region: getting paid.

Abbassi points to the statements reported in the media by
Arabtec, Al Habtoor Leighton and Al Jaber relating to chasing mounting invoices
as an indicator of how critical the situation has become in the aftermath of a
severe market downturn and a freeze in bank lending to developers.

The company’s structure and focus on state-backed
infrastructure projects has left Murray & Roberts relatively insulated from
the problems of outstanding payments, says Abbassi. “The only mouths we have to
feed are [those of] our management,” he explains.

“Compared to a lot of people, we are a small unit, we can
adjust quite quickly. We do not have enormous amount of labour or plants, which
can be a huge drain. So that is a nice part of our business philosophy here.”

Nevertheless, the company has reduced its staff by about 25%
since 2008, leaving it with around 300 employees regionally. The effect will
hopefully leave the company “leaner and meaner” and even more competitive when
up against rivals tendering for fewer projects that have also sought to boost
efficiency, he says.

Saudi
Arabia is a country in which the company is
still learning, he says, though the scale of its plans is irresistible.
“Whatever Abu Dhabi is doing, Saudi Arabia is
doing fivefold,” he says in reference to the country’s infrastructure spending.
“Healthcare there will be enormous, and also airports will be enormous. They
are building up tremendously so, yes ... the opportunities are great.”

But it presents a number of challenges; not only is it a new
market, but the different social environment makes it less appealing for some
members of the company. “It is difficult for people with families as it is a
different place,” he says. “You almost have to recruit from within ofrom people
who have been in that area for some time,” says Abbassi.

After a tough year in which he says the company became “very
good at bidding”, he seems determined to define further success without any
superstitious overtones as to his 13th year in the job.

The strongest firms will survive, he says, and allows
himself some optimism as to the resurgence in the market. “It has started
slowly. I think the winds of change are with us; it is starting now to go
forward.”

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