MIDDLE EAST

CONSTRUCTION HANDBOOK 2013

MIDDLE EAST
CONSTRUCTION HANDBOOK 2013 Middle East ofces
Bahrain (Manama) bahrain@aecom.com +973 1 755 6452 Egypt (Cairo), North Africa cairoofce@aecom.com +202 2 750 8145 K.S.A. (Khobar) AAL.MiddleEast@aecom.com +966 3 849 4400 K.S.A. (Jeddah) AAL.MiddleEast@aecom.com +966 2 606 9170 K.S.A. (Riyadh) AAL.MiddleEast@aecom.com +966 11 200 8686 Kuwait (Kuwait City) kuwait@aecom.com +965 2 232 2999 Lebanon (Beirut) lebanon@aecom.com +961 1 780 111 Oman (Muscat) muscat@aecom.com +968 2 448 1664 Qatar (Doha) doha@aecom.com +974 4 407 9000 U.A.E. (Abu Dhabi) abudhabi@aecom.com +971 2 414 6000 U.A.E. (Dubai) dubai@aecom.com +971 4 439 1000

1 AECOM Global expertise ... local solutions Middle East history Industry awards 7 7 8

2 BUILDINGS + PLACES 3 ECONOMIC ROUND UP Global indicators Economic and construction overview Country statistics 2012 15 27 38 Game changer The bigger picture 11 11

4 ARTICLES Business drivers and the development cycle Sports sector Leisure sector Healthcare sector Education sector Asset management in the Middle East Sustainability a global understanding 41 43 55 63 73 83 87

5 REFERENCE ARTICLES Procurement routes Middle East forms of contract Building regulations and compliance 91 94 99

6 REFERENCE DATA Global Unite system International building cost comparison Regional building cost comparison Mechanical and electrical cost comparison Major measured unit rates Major material prices Labor costs Building services standards Exchange rates Measurement formulae two dimensional gures 109 112 114 116 118 120 122 123 126 127

Measurement formulae three dimensional gures 128 Weights and measures 130

7 DIRECTORY OF OFFICES Middle East North Africa Africa Americas Australia New Zealand Europe and U.K. 135 139 140 141 142 143

FOREWORD

Welcome to the seventh edition of the Middle East Construction Handbook. I hope that you will enjoy this years selection of articles, reference information and cost data. As you may know, AECOM provides over 60 professional services for projects of varying scope, budget, schedule and complexity. Increasingly, we are seeing the emergence of clients and projects that demand all of our services, brought together in an integrated way. Whether as a means to create innovative and sustainable buildings and places, drive cost efciencies, or both, we are in a unique position to respond positively to their demands. This year, consistent with 2012, we are seeing huge opportunities in the region that are being predominantly driven by the demands of Saudi Arabias increasing population and the preparation for major sporting events in Qatar. An increase in large, publicly-funded construction and transportation projects in the U.A.E. is also boosting the regions development spend. Overall drive to invest in education, health, sporting venues and leisure facilities remains strong and is expected to provide ample construction opportunity over the coming years. You can nd in-depth analysis of each of these market sectors in the Economic Round Up section of this handbook I hope you nd the handbook of interest, assistance and value to you, your projects and developments across the region. As with previous years, we are seeking feedback to support our drive for continuous improvement in everything that we do.

Anthony McCarter Regional Business Line Leader Buildings + Places, AECOM

AECOM

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AECOM
Global expertise ... local solutions
From road, rail, energy and water systems to enhancing environments and creating new buildings and communities, our vision is to make the world a better place. What differentiates us is our collaborative way of working globally and delivering locally. A trusted partner to our clients, we draw together teams of engineers, planners, architects, landscape architects, environmental specialists, economists, scientists, consultants, cost managers, construction managers, project managers and program managers all dedicated to nding the most innovative and appropriate solutions and improving the quality of life. Formed from many of the worlds nest engineering, design, construction, consulting, environmental, planning and government services companies, AECOMs technical expertise and creative excellence combine to provide fully integrated planning, design, engineering, environment, consulting, cost management, construction management, project management and program management capabilities to a broad range of markets. Listed as a Fortune 500 company, our 45,000 employees are based in more than 140 countries, enabling us to deliver global knowledge and expertise with an understanding of local cultures and needs. Our adaptable and exible approach to projects delivers consistency, longevity and high quality along with efciencies in cost and time.

Middle East
AECOM has a long and distinguished history in the Middle East. For more than 60 years, we have been working in the region to help create a brighter future. With more than 3,300 staff located across Bahrain, Egypt, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the United Arab Emirates, we use our unparalleled depth and breadth of resources and local knowledge to deliver and manage projects of any type or scale.

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Industry awards
The consistently high standard of professional service provided by AECOM is recognized throughout the construction industry, as evidenced by the following prestigious industry awards: Engineering News-Record AECOM is ranked No. 1 on the magazines list of the top 500 design rms

Ethisphere AECOM named one of the Worlds Most Ethical Companies in 2011, 2012 and 2013

Engineering and Information Technology Magazine AECOM named Best Diversity company in 2008, 2009, 2010, 2011 and 2012 by readers of Diversity/Careers in Engineering and Information Technology Magazine

BUILDINGS + PLACES

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BUILDINGS + PLACES
Buildings + places is one of four major market sectors that enhance our ability to provide a comprehensive and integrated offer to clients. Incorporating architecture, building engineering, design + planning and economics, and program, cost, consultancy, buildings + places brings together 10,000 talented people capable of delivering the most high-prole, most complex and most dynamic projects on the planet. Buildings + places operates in all market sectors and leads in our primary markets commercial, sports, leisure, healthcare, education and government and works closely with AECOMs other practices to deliver our services in end markets such as manufacturing, transportation, water, energy and industrial.

Game changer
AECOM aspires to be a game changer in the built environment. Our industry not only has signicant inefciencies, but its current fragmentation is a great barrier to innovation, a barrier to truly sustainable design for example. We can see this, and many of our clients are seeing this too. They are beginning to ask us what the answer is, what the new approach will be. AECOM is big enough and signicant enough to inuence a positive change in our professions. We focus on identifying issues and encouraging our people to nd innovative solutions. This approach allows our clients to assemble a business case that is well considered, technically advanced and sensitive to the local environment.

The bigger picture

In analyzing situations where our advice has been most effective, it is in the creative application of our knowledge and experience. While our roots are in technical delivery, our clients value the fact that our offer always contains a strategic component. Our ability to think big means we focus on the successful delivery of the project in hand, whilst also appreciating our clients goals and objectives from a broader perspective. Our engagement with the bigger picture enables us to operate beyond project level and support long-term business strategies. It is this approach which makes us the leading consultancy we are today.
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ECONOMIC ROUND UP

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GLOBAL INDICATORS
Mixed fortunes for global construction
Construction in many developed markets had another difcult year in 2012. In much of Europe, the combination of a weak private sector and government austerity measures have limited any demand growth for construction, while risk aversion and tighter capital control for banks have made credit harder to come by for projects. Public sector funding for infrastructure projects also remained limited in the U.S., while the private sector is recovering only very slowly. Meanwhile, reconstruction efforts in Japan have proved harder to realize than expected. Emerging markets generally continued to perform better. In Europe, Russia and Turkey were the outperformers. China showed signs of slowing in capital spending in 2012, but this highlighted opportunities elsewhere in the region, such as in Taiwan, Singapore or Hong Kong. The ow of project awards in the Middle East last year may have disappointed regional industry players, but the region still performed well compared to many other places around the world. Latin America as a whole has posted construction growth above the global average last year and this trend is expected to continue.

Outlook
Construction as a whole is expected to pick up in 2013, but the outlook for the industry remains mixed with greater recovery in some regions, while others will be slower to bounce back. Our global research examined these trends by talking to local industry decision-makers about where investment will be concentrated. The resulting Global Growth Index (depicted overleaf) encapsulates this sentiment and highlights the hotspots for growth in the medium term.

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16
Russia - US$117 Thailand - US$10 China - US$1,384 Hong Kong - US$5
63 54 17 62 94 58

Canada - US $134

Ireland - US $11 United Kingdom - US$182 Nordic - US$113

53

33

-30 33

Global Growth Index

35

26

Central Europe - US$793 United States - US $855 Philippines - US$26

86 63

74 Eastern Europe US$114 Turkey - US$81 64 Bahrain - US$2 United Arab 74 Emirates 50 US$36 13

72

76

Saudi Arabia - US$33 Qatar US$7

Vietnam - US$8 74 Malaysia - US$26

66

: Global Growth index US$ : Construction output 2012 estimates in US$ billion

*
Indonesia - US$86
4

India - US$142 Singapore - US$18

Sub-Saharan Africa - US$30

Australia - US$119
50

The Growth Index indicates the proportion of survey respondents anticipating construction growth in the medium term.

Source: AECOM Global Construction Sentiment Survey, 2012, Various National Accounts

The survey was not conducted in South America

New Zealand - US$10

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Middle East
Construction work in the Middle East will be driven by demand from shifting population demographics, several cash-rich governments pursuing infrastructure work and the regions global sporting events such as the 2022 FIFA World Cup in Qatar. The nancial strength of Saudi Arabia, Qatar and the U.A.E. will encourage publicly nanced projects. Our industry research shows that social infrastructure considered necessary to maintain social cohesion will be one of the biggest opportunities in the regional buildings market. Government and semigovernment entities are also focusing on energy and water security, as well as transport projects to improve the competitiveness of particular regions. The recent revival in the Dubai real estate market has raised expectations of a broader pick up in the private sector sentiment across the region and a gradual resumption of stalled projects. Key challenges for the Middle East construction industry in the medium term include an underdeveloped private banking sector, capacity pressures on labor and materials, and responding to imperatives toward greater resource efciency.
Middle East buildings market expected growth
High growth market Percent 90 80 70 60 50 40 30 20 Low growth market 10 0 Ofce Public Buildings Retail Mixed-use Existing Building Industrial Healthcare Education Tourism & Leisure Residential

Source: AECOM Global Construction Sentiment Survey, 2012

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Middle East projects planned or underway
1,400 1,200 US$ billion 1,000 800 600 400 200 0 The value of projects in Saudi Arabia has risen 29% since January 2009, while U.A.E. projects have dropped 51% in value from the 2009 peak.

Jul 09

Jul 10

Jul 11

Jul 12

Jan 09

Jan 10

Jan 11

Bahrain

Qatar

Iraq

Kuwait

Saudi Arabia

Jan 12

Oman

United Arab Emirates

Source: MEED Projects

U.S.
In 2012, the U.S. construction sector grew for the rst time after six consecutive years of decline, which had reduced industry capacity signicantly. Some spending has begun to lter its way through from the private sector into construction projects and there have been gains from rock-bottom levels in the residential sector. Private investment has increased in the power sector, including oil and gas facilities; spending in this sector was 31 percent higher in 2012 than the previous year and 57 percent above the ten-year average, according to the U.S. Census Bureau. Our industry research also indicates that more sustainable energy use is a top priority for the U.S. industrial sector.
U.S. construction
Value of construction put in place, annualized

Source: U.S. Census Bureau

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Jul 13

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In addition to energy sector activity, there are promising trends in other sectors such as manufacturing. Construction in this area increased during 2012 as older plants were replaced. Industries such as aerospace and agriculture, updated their plants to keep pace with new technologies. These investments were also driven by U.S. companies deciding to keep operations onshore due to currency uctuations and lower transportation and energy costs in the U.S.
American Society of Civil Engineers Score Card for U.S. Infrastructure Sector Aviation Bridges Dams Drinking Water Energy Navigable Waterways Rail Roads Solid Waste Transit 2005 D+ C D DD D CD C+ D+ 2009 D C D DD+ DCDC+ D

Wastewater DDIn contrast, the outlook for publicly nanced Overall D D Infrastructure projects remains weak, Score with the political scene Source: American Society of Civil deadlocked over spending Engineers, 2009 plans. Transport is set to bear the brunt of spending cuts, despite the passing of a US$105 billion surface transportation bill in July 2012. There is an urgent need for infrastructure improvements. In 2009, the American Society of Civil Engineers (ASCE) highlighted the poor existing state of U.S. infrastructure, assigning it a cumulative D grade dened as poor and arguing that this posed a threat to the continued competitiveness of the country.

Europe
Europes growth recovery continues to be limited by public sector austerity and private deleveraging, weak export markets and a relatively strong Euro, as well as growing concerns over a renewed escalation of country-specic vulnerabilities. Thus, while nancial conditions appear to have improved and risks have diminished, the fundamental problems of the Euro zone surrounding lack of growth drivers remain. An improvement in consumer and business condence is expected to translate into a gradual return of spending and investment growth over the course of 2013, with a more pronounced recovery pencilled in for 2014. Construction in the Euro zone and the wider EU is expected to contract this year, but modest growth is forecasted for 2014.
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Looking ahead, our industry research shows the emergence of an east-west and north-south divide across the broader European region, with the best prospects in Russia, Norway, Romania and Turkey. Germany, Switzerland, Denmark and Ukraine are also forecast to see growth, but at a much more moderate pace. Across Europe, the need to upgrade vital infrastructure, such as ageing or insufcient power generation, or transport links, is expected to drive renewed growth in the construction sector.
European building and infrastructure expected growth
High growth market Percent 100 80 60 40 20 0 Negative growth market -20 -40 United Kingdom Ireland Nordic Central There is a considerable eastwest divide in future workload expectations across Europe. East

Russia

Turkey

Note: Central Europe covers Germany, France, Austria, Switzerland, Netherlands and Belgium. Nordic Europe covers Norway, Sweden, Finland, and Denmark. Eastern Europe covers Poland, Romania, Czech Republic, Slovakia and Hungary.

Source: AECOM Global Construction Sentiment Survey, 2012

While local private sector activity is constrained by low condence and a lack of project nance, our industry research indicates that foreign investors still view cities such as London as a safe haven for long-term returns. Foreign entrants nd the East increasingly attractive, according to 51 percent of our industry participants, while only 32 percent see the West gaining ground.
European construction market value, 2012
300 250 EUR billion 200 150 100 50 Germany Denmark Portugal Hungary United Kingdom Switzerland Netherlands Belgium Sweden Czech Republic Slovak Republic Norway Poland Austria Finland Turkey Ireland France Russia Spain Italy 0

Source: Euroconstruct, National Accounts, AECOM

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European market appeal to foreign investors
100 Percent of survey respondent 80 60 40 20 0 -20 -40 Openness Decreasing Attractiveness Steady Openness Increasing Attractiveness Western Europe Eastern Europe

Source: AECOM Global Construction Sentiment Survey, 2012

Asia-Pacic
CHINA Despite the recent cuts in capital spending, Chinas capital expenditure plans are still signicant, dwarng all other emerging countries. At the same time, industry sources point to a rebound in residential and non-residential growth after a two-year slowdown. China is slowly seeing a shift away from an exportdriven economy to a domestic market more focused on knowledge-based industries. Their growing prominence is reected in the above average annual wage growth in sectors such as nance, retail and education over the last decade. These growing services and other industries will change the shape of Chinas cities, and will drive urban infrastructure requirements.
Largest investment regions
350 Investment, CNY billion 300 250 200 150 100 50 0 Shandong Value of investment 2012 annual growth 30 Annual growth, percent 25 20 15 10 5 0

Jiangsy

Liaoning

Henan

Guangdong

Hebei

Zhejiang

Source: National Bureau of Statistics, China

Sichuan

Hubei

Anhui

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Certain provinces of China are changing more rapidly than others; in the ve years leading up to 2011, Jiangsu, just north of Shanghai, saw the biggest leap in its urban population. In the same period, construction in this region more than doubled in value to meet the needs of this changing economy. In addition to the retail, residential and tourism sectors, our industry research pointed to considerable growth in road and rail, in particular in the south of the country. China has earmarked about US$85 billion for rail related projects in 2013 alone. Energy investments are particularly important in the Western regions of China Water will be an important focus in Hong Kong as it relies on mainland China for up to 80 percent of its supply and will be looking to other water security solutions in the future. Our industry survey showed that the openness of Chinas market was slowly increasing, but a signicant number of participants within our industry research believe that foreign entrants still struggle with local demands, particularly in understanding regulations and the culture.
Investment in xed assets
4,000 3,500 3,000 CNY billion 2,500 2,000 1,500 1,000 500 0 2010 2011 2012 20 19 Other xed investment Construction Total investment growth rate (annual) 25 24 23 22 21 Annual growth, percent

Source: National Bureau of Statistics, China

INDIA By 2030, India is expected to have 13 cities with populations of more than four million people and six megacities with populations greater than 10 million (McKinsey). Indias growing middle class expects more quality services, driving this is a younger aspiring population. This transformation will require greeneld infrastructure, as well as considerable investments in residential, healthcare and energy supplies, particularly in the northeast where more work will be required to raise infrastructure standards. However, Indias inadequate infrastructure is prohibiting the country to full its growth potential.
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India has set a massive target for doubling investments in infrastructure to INR 40.9 trillion (US$906 billion) during the Twelfth Plan period of 2012-2017. Almost a third of Indias infrastructure spending to 2017 is expected to be in the energy sector. Indian authorities estimate that commercial energy supplies will have to grow at an annual rate of 7 percent to service a growth domenstic product (GDP) growth of 9 percent. Our industry research shows that the attractiveness of the Indian market could be more promising than Chinas if the business environment improves. Steps are being taken to boost investor sentiment, for example, regulations have recently been announced to allow foreign investment in retail and aviation. However, whilst the Indian government is making some attempts to resolve the regulatory hurdles in the various sectors, it remains to be seen whether these reforms will be executed successfully. Other roadblocks are also plentiful, including nding local expertise to deliver projects and achieving a cost-effective mix of offshore and onsite resources. AUSTRALIA AND NEW ZEALAND While Australias economy has fared better than most other advanced economies in recent years, a contraction was witnessed in 2012, particularly in the construction industry. The outlook remains constrained in 2013, but projections for GDP growth to 2015 at an average of 3.2 percent per annum according to the International Monetary Fund (IMF) are still more promising than the average for advanced economies globally. However, this will depend on the size of investments in the resources sector and other sectors stepping in to contribute to growth. Uncertainty prior to the election in September 2013 may lead to investor hesitation, while others await greater surety in the labor market and a return of consumer condence. Average annual GDP growth
8 7 6 Percent 5 4 3 2 1 0 Developing Asia 2010 - 12 European Union 2013 - 15 U.S. Australia New Zealand The Association of Southeast Asian Nations (ASEAN) region, an important trade partner to Australia and New Zealand, is expected to generate at least 5.7% annual growth to 2015. Of the advanced economies, Australia and New Zealand are expected to average closer to 3% growth, compared to the average for other nations which is closer to 2%.

Source: IMF

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New Zealand has seen growth below the annual average for advanced economies in recent years, but is forecast to achieve higher GDP growth by 2015. Much of this buoyancy will stem from developments undertaken to rebuild Canterbury and the growing signicance of foreign investment to the countrys recovery. Of growing importance to both nations is trade with Southeast Asia. Robust growth is expected across developing Asia from 2013 to 2015, such as in Indonesia (around 6.5 percent) and the Philippines (around 5 percent). Our construction industry research points to clear opportunities in the region Indonesia and the Philippines rated very highly in terms of growth expectations, alongside the powerhouse economies of India and China in the broader Asia region.

Africa
African infrastructure needs are attracting signicant interest from international investors, both private and public, seeking new opportunities and growing markets. China is one of the biggest sources for infrastructure nancing in the region (see page 25). While investment is owing into the region, several roadblocks still exist such as corruption, insufcient infrastructure, inefcient bureaucracies and an inadequate workforce. There is great potential, for example, in the resources sector with signicant oil and gas reserves in East Africa but regulatory and infrastructure gaps are currently hindering production.
Ease of doing business ranking by region
Country Ranking Harder to do Business 140 120 100 80 60 Easier to do Business 40 20 0 Organisation of Economic Co-operation and Development (OECD) High Income South America Middle East/ North America East Euro/ Central Asia South Asia Sub-Saharan Africa East Asia Sub-Saharan Africa is considered the hardest region to do business in, whereas South America and South Asia are considered easier places to do business.

Source: World Bank

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Our industry research shows that other challenges are holding local developers back in the buildings market, such as difculty in obtaining project funding or lack of government capability to deliver projects. However, as momentum builds, further residential and commercial development is having a knock-on effect in other sectors such as retail.
Chinese investment offers in Africa since 2010

ALGERIA EGYPT

MAURITANIA NIGER CHAD GUINEA SIERRA LEONE LIBERIA NIGERIA GHANA CAMEROON SOUTH SUDAN UGANDA DEMOCRATIC REPUBLIC OF THE CONGO ETHIOPIA SUDAN ERITREA DJIBOUTI

KENYA

UNITED REPUBLIC OF TANZANIA

ANGOLA ZAMBIA ZIMBABWE NAMIBIA MOZAMBIQUE MADAGASCAR

SOUTH AFRICA

Source: Stratfor

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South America
Economic growth in South America has been much stronger in recent years compared to the worlds advanced economies. The region has witnessed a massive increase in foreign investment and signicant growth in the resources and tourism sectors. The regions construction sectors are expected to continue to outperform many other countries over the next few years. Brazil and Argentina are by far the largest markets in the region, but others such as Chile and Peru are also buoyant construction markets. Chiles infrastructure investments are mainly delivered by private players, while Perus government is the main investor in the sector. Brazil is expected to step up investments near term, as the government delivers its second growth acceleration program (PAC II), which comes to a close in 2014 along with the preparations for the 2014 FIFA World Cup.
Foreign direct investment in regions change 2009 - 2011
Rising investment 500 400 300 Percent Change 2009 - 2011 200 100 0 -100 Falling investment -200 Europe Africa North America Central East and Middle South Asia Asia East Oceania South Amercia Size of bubble equals the total value of investments in 2011

Source: IMF

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While in many cases the domestic banking sectors are unable to support largescale infrastructure projects, South America has seen consistent growth in private investment assistance in developing infrastructure the value in 2011 was more than triple the level in 2003. The main destinations for these funds are Brazil, Argentina and Mexico, which are among the top ve destinations for private infrastructure investment, according to the World Bank. Institutions like the Andean Development Corporation (CAF), the Inter-American Development Bank (IADB) or the European development banks, such as the European Investment Bank, are important for providing funds in smaller countries and those with less access to international nancial markets, such as Ecuador and Venezuela. Public-private partnerships (PPPs) and concessions have also grown in the region, with many of the larger countries in the region planning further PPP/concession packages for 2013, while others are looking to use the model for the rst time. Financing constraints, regulatory and political issues are the main obstacles to investment in the region, though the magnitude varies greatly among countries.

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ECONOMIC AND CONSTRUCTION OVERVIEW
Expectations for the global economy turn positive
In many ways, 2012 turned out better than had been feared, with none of the worst case scenarios facing the global economy materializing namely a Eurozone breakup, hard economic landing in China, the U.S. toppling over the scal cliff, or a large-scale escalation of Middle East tensions. This has raised condence in the global outlook and expectations of rming economic activity have gathered pace since the turn of the year, despite the fact that 2013 started with many of the economic and political issues remaining unresolved.

Political issues and oil prices divide wealthy hydrocarbon exporters and poor importers
In the Middle East, political tension has become more of a constant than a variable, impacting economic performance and causing large swings in oil prices. The Arab uprisings have altered the regions political landscape, but it is too early to assess the long-term impact they will have on societies and economies The region began 2012 with a series of historic elections in the post-revolutionary states in North Africa.
MENA GDP growth forecast
12 10 Annual percent 8 6 4 2 0 2012e 2013-15f average p.a.

Saudi Arabia

Lebanon

U.A.E.

Source: IMF, National Statistics

However, expectations of smooth transitions were quickly squashed, as internal divisions stunned political progress, while the civil war in Syria escalated and tensions over Irans nuclear program mounted.

Bahrain

Kuwait

Qatar

Jordan

Oman

Iraq

Egypt

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Consequently, countries such as Egypt, Bahrain and Tunisia continue to seek political normality in 2013. Elsewhere in the Middle East, economic prospects are brighter than in many other regions. Countries with oil resources and stable governments are outperforming their counterparts, supported by robust non-oil gross domestic product (GDP) growth and larger external current account surpluses. The U.A.E., Oman, Qatar and Saudi Arabia all have set out expansionary budgets for 2013, which should continue to benet their construction markets.
Construction and transportation projects
(Anticipated) Project awards by status in GCC, Iraq and Lebanon
300 250 200 150 100 50 0 Progressed Cancelled/On hold

US$ billion

2009

2010

2011

2012

2013e

Source: MEED

The largest risks to regional performance stem from continued political uncertainty, including unresolved political issues in Egypt, succession in Saudi Arabia, ambiguity over Iran and spill-over from Syrias war. Other risks, including further deterioration of the global economy and volatile commodity prices, also loom large.

Investment growth and prospects

There have been major differences in the performance of Middle East construction industries over the past year, both in terms of location and sectors. A total of US$87 billion of construction and transportation projects were awarded across the Gulf Cooperation Council (GCC), Iraq and Lebanon in 2012, down from some US$106 billion in 2011. Economic uncertainty, geopolitical risks and oil price volatility, as well as bureaucratic delays, were the main contributors to this drop. In addition, governments continuing to review their strategies for implementing major development projects and investor hesitation in investing in (mega) projects weighed on the regional projects market in 2012. Against this background, construction in the region, both in the infrastructure
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and building sectors were heavily contested, with erce competition driving prices down. Nevertheless, our industry survey shows that many construction rms saw an increase in infrastructure and building work over the past year and the region performed better than many other markets around the globe. Infrastructure work was led by cash-rich governments pursuing ongoing spending commitments and gearing up for major global events, while building construction beneted from an upturn in general condence. This has led to a re-start of some projects that were previously on hold/have been stalled and a renewed appetite for expansion. This has particularly been evident in Dubai where building activity has been slow for a number of years now. Survey respondents reported that the increase in their building work over the past year has been mainly driven by specic company initiatives and their ability to build on existing client relationships. For 2013, government investment will remain the central pillar of construction activity in the Middle East. Indeed, considerable commitments by the cash-rich Saudi Arabian and Qatari governments to increase capital spending both related to internal demand pressures from a growing population, as in Saudi Arabia, or gearing up for staging major global events, such as in Qatar, are the main reasons for positive sentiment over future workload in the region. There are also signs that the Dubai real estate market is picking up and Abu Dhabi is progressing with public spending programs after a two-year hiatus. This is expected to result in increased demand for utilities, transport, housing and social infrastructure across the region.
Workload expectations over the next three years
Balance of respondents expecting a decrease/increase
Decreasing Increasing

Building

Infrastructure

Source: AECOM Global Construction Sentiment Survey, 2012

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According to our research, construction opportunities backed by real economic, social and global event needs are the dominant reasons that attract offshore investors/ businesses to the region. This is compounded by the fact that opportunities appear more limited elsewhere in the world, with investors seeking business in higher-return countries where internal capital is fueling spending on big-ticket public capital projects. A low-tax environment, relatively low regulatory restrictions and stability of countries are also cited as inducing businesses to invest.
Attractiveness and openness of the Middle East to offshore suppliers/service providers
Decreasing Attractiveness to offshore suppliers/ service providers Increasing

Factors making the Middle East attractive to offshore investors Market demand/ higher return country No/low taxes

Openness to offshore suppliers/service providers

Stability of country/ Openness to trade Low entry barriers Availability of internal capital

Source: AECOM Global Construction Sentiment Survey, 2012

Qatar, unsurprisingly, is seen as the major growth area over the next few years. Qatars infrastructure and construction growth is currently pausing to take a breath as the 10-year boom in large-scale gas-exporting infrastructure work comes to an end. Going forward, on the back of staging the FIFA 2022 World Cup, a large number of infrastructure and building projects have been announced, covering all modes of transport, as well as leisure and hospitality, commercial and t-out projects, to gear the nation up for the big event. In Saudi Arabia, the sharp drop in project awards in 2012 surprised most industry commentators, given the Kingdoms large spending commitments. According to Middle East Economic Digest (MEED) Projects, Saudi Arabia awarded construction and transportation projects worth just US$17 billion in 2012, compared to US$39 billion in 2011. Anecdotal evidence suggests that leadership changes at key ministries such as the Ministry of Interior meant that major spending decisions were delayed. With more than US$100 billion of construction and transportation projects in the pipeline due to be awarded in 2013, Saudi Arabia remains the regions largest market and expectations are that the ow of project awards will speed up this year. Social pressures have increased demand for built projects most vocally in Saudi Arabia given its relatively large
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population and the perception that supply appears to be well behind demand. Consequently, our research shows that the construction industry expects building work to outpace infrastructure projects in Saudi Arabia over the next years, with a signicant increase in healthcare and education-related works, as well as residential, in particular, affordable housing projects. Infrastructure work related to transport connections, as well as water and wastewater provisions are also expected to remain in focus. In particular, the western regions of Saudi Arabia are expected to benet from this, with the vast majority of those surveyed suggesting this will be the most active region in the years ahead. The U.A.E. awarded the most construction and transportation contracts in the region in 2012, totalling US$24.1 billion. Dubai awarded over US$12 billion of construction and transportation projects, compared to US$4.7 billion in 2011. Indeed, on the back of a strong performance of its services, logistics and trade sectors, increased optimism in the Dubai economy has resulted in growing condence in its real estate market, with expectations that the market will show further signs of a broad-based recovery this year.
Construction and transportation projects
Progressed projects only
120 100 80 60 40 20 0 2012 2013 anticipated

US$ billion

Bahrain

Iraq

Kuwait

Oman

U.A.E.

Qatar

Saudi Arabia

Source: MEED

Abu Dhabi awarded US$9.3 billion of projects in 2012, compared to US$18 billion in 2011. Encouragingly, the hiatus in Abu Dhabis government spending program since early 2010 appears to be coming to an end, with the government announcing a US$90 billion infrastructure spending program. While the increased market sentiment and the U.A.E.s leadership commitment to many large infrastructure projects in 2013 are welcome, an increase in construction work will continue to depend on available nancing and governments following through with their ambitious plans.
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Kuwaits project market continues to be hindered by political stalemate and uncertainty. In total, Kuwait awarded US$10 billion of construction and transportation deals in 2012, which includes the US$3.7-billion contract award for the Subiya causeway in October 2012. It is hoped that the project will give renewed impetus to other urban development projects in Kuwait City and Subiya. For 2013 and beyond, the performance of the Kuwaiti construction sector will depend on the progress of projects such as the governments hospitals program and the Kuwait metro. At the start of 2013, it was announced that four large projects, including the metro and rail schemes, are being reviewed by the Communications Ministry, leading to uncertainty about their implementation.
Key drivers of construction over the next three years Qatar 2022 FIFA World Cup Social pressure for infrastructure Oil and gas revenues Reconstruction of Libya and Iraq Inter-regional projects, such as rail and energy networks Key obstacles to construction over the next three years Regional political stability Slow ow of public spending Underdevelopment of private banking sector and fully-functioning capital markets limits private sector participation Delays and backlogs in tendering and construction phases due to amount of investment planned/underway Labor and material shortages raise the prospect of ination

As the Omani government pushes ahead with major infrastructure development plans, construction opportunities are expected to increase. Omans 2013 budget outlines capital projects worth US$10.6 billion for transport infrastructure, health and education, as well as water and wastewater projects. With currently US$32 billion of construction and transportation in the pipeline due to be awarded in 2013-14, the Sultanate could be an attractive market in the near term. There is a general view that to maintain political stability Bahrain needs to invest in social infrastructure, in particular housing, while at the same time, to keep up with its fast expanding peers, it needs to invest in transport and industrial infrastructure. However, limited public nances are unlikely to be able to deliver this, hence private investment and funding support from neighboring countries is needed. In 2011, Kuwait, Qatar, Saudi Arabia and the U.A.E. pledged US$10 billion to Bahrain over 10 years to offset the costs of social unrest and help fund needed development projects.
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The funds have started rolling in the second half of 2012 with the Bahraini government signing agreements with the Kuwait Arab Economic Development Fund and the Saudi Development Fund. The government signed its most recent agreement with the Abu Dhabi Development Fund in early 2013 and it is anticipated that a similar agreement will be signed with Qatari investment funds this year. The GCC funds are expected to focus on housing, electricity, water, infrastructure and social services projects.

Market pricing
Changes in tender price trends reect the adjustments to market and sector activity in the Middle East. Across the region, the pricing environment remains very competitive and client organizations continue to press for the best possible prices, often through negotiation. Consequently, consultants, contractors and their supply chains continue to see challenging trading conditions. Lower demand and excess capacity continue to be evident, although regional variations exist in view of the different levels of government expenditure, and also that of the private sector. Consequently, trends in tender prices over the past year have ranged from relative stability, to a gradual drift downwards to notable falls in those countries where industry volumes remained relatively low. Our industry survey shows that input cost ination in the region has been mainly driven by (raw) materials prices in 2012, most notably in Qatar and Saudi Arabia, where global price pressures have been compounded by rm local demand. The vast majority of these increases have been moderate. Energy and fuel costs are judged to have exerted upward pressure on construction costs in Saudi Arabia and the U.A.E. Looking ahead to the next twelve months, raw materials together with energy costs are expected to be the main drivers of construction costs in the region. Further ahead, survey participants expect a signicant increase in labor costs in Qatar on the back of strong workload increases.

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Tender prices and prot margins
Balance of respondents reporting an increase/decrease
60 40 Percent 20 0 no change Last 12 months Tender Prices Prot Margins 60 40 20 0 -20 -40 Next 12 months

-20 -40

U.A.E.

Qatar

Saudi Arabia

U.A.E.

Qatar

Saudi Arabia

Source: AECOM Global Construction Sentiment Survey, 2012

Contract awards in the pipeline suggest an upturn in industry activity this year, but the industry will adopt a waitand-see approach to whether these schemes materialize. Overall, our research shows that the industry expected to increase modestly this year with the exception in Saudi Arabia due to a moderate increase in tender prices on the back of a steady but slow recovery in the construction sector. Despite rm workload expectations, the majority of survey respondents expect tender prices to continue to ease in Saudi Arabia over the next twelve months, due to increasing competition and erce project cost cutting by clients. The construction industry across the region has consolidated signicantly in recent years, meaning that competition may have reduced with the effect that pricing is less aggressive than it otherwise may have been. However, in turn this has increased the possibility that prices could come under signicant pressure once largescale programs such as Qatars 2022 FIFA World Cup get underway in earnest, unless there is a marked increase in contracting and materials supply capacity. Increased condence and the psychology of pricing on the back of higher work volumes will see prices increase accordingly, though variation by market will remain.

Challenges for the regional project market

Our research shows that clients and delivery organizations cite various issues that are impacting project delivery. The main challenges are outlined below: Government nances: The oil-exporting Middle East countries are generally cash-rich, but to varying degrees. At the same time, governments must balance their
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expenditure against income, and for oil-exporting countries, income is determined by the global price of oil. Large swings in oil prices increases uncertainty over scal budgets, which could have impact on government spending. Capital spending is usually more vulnerable to spending cuts than current spending on front-line government services, such as public wages or benet transfers.
Factors limiting project nance Banking/capital market maturity Risk appetite/project feasibility Global nancial/banking crisis Change in banking regulation/requirements for project nance Regional political stability

Project nance needs diversication: Signicant uncertainty over the global economic outlook and tighter credit conditions has led to a retreat of lending to the project sectors and an increase in the cost of capital. In addition, foreign banks have also been cautious given recent experience of deep haircuts and restructuring in the region, which has reduced appetite for project nancing. On the back of this and given the nancial strength of the three main Middle East governments, namely Saudi Arabia, Qatar and the U.A.E. public-nanced projects continue to dominate. This trend is expected to continue. A more recent trend is that due to the scale of some projects, even those cash-rich governments in the region are looking to issue project bonds to fund key schemes, but the use of project bonds in the region is judged to be still in its infancy and a number of projects have taken a long time to structure a project bond that appeals to investors. In the longer term and with the development of regional capital markets, the role of Islamic debt nance (Sukuk) could play an increasingly important role. Procurement of projects: Procurement is a key concern for construction project delivery in the Middle East. Our research shows a general consensus that negotiated contract (private sector), construction management and design only/then construct only would deliver the best outcome for a project on the metrics of time, cost, risk and reputation. In contrast, guaranteed maximum price, and design and construct via a novated design would yield the least satisfactory results for all project participants. According to survey participants, negotiated contracts are only available in the private sector and require strong relationships of mutual trust, something that is generally

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lacking in the region. There is also a view that there is a lack of understanding of procurement processes and available options. In addition, the roles of contracting parties are often unclear when new or complex systems are introduced, with quality being compromised when the only incentive for the client and contractor is to reduce cost. Given the strong concerns over time, cost and quality of project delivery there are opportunities for improvement across the industry supply chain. Survey respondents feel that over the longer term, negotiated contracts and partnerships/alliances would provide more efciency and value for owners. What is needed for this to happen is an increase in the experience of working with local clients/ developers from the delivery side of the industry. Balancing cost and quality: Contractors and consultants also see unrealistic client expectations about cost and time, as well as fees as a major issue. In turn, clients are faced with the challenge of project teams not delivering projects within budgets and schedule. Quality of work has also been cited by clients as a major concern, which has partly been explained by poor project management in some parts of the industry. Bureaucracy and funding approvals: The delivery market cites onerous bureaucracy as a main challenge, which delays the approvals and permitting process and impacts client decision-making, which in turn affects contractors and consultants cash-ows, resourcing and workow certainty. Consultants and contractors have also indicated that client payment practices are a major concern for the delivery side of the industry. Whilst public budgets are generally in order, there appears to be a lack of committed funds in certain parts of governments in the region. The private sector is facing tighter lending conditions, which impacts investment decisions.
Effectiveness of procurement method
Poor Guaranteed Maximum Price Design and Construct via a novated design Managing Contractor Design and Construct Public-Private Partnership Program Management Partnership/Alliance Design only then construct only Construction Management Negotiated contract 0% 20% 40% 60% 80% 100% Satisfactory Excellent

Source: AECOM Global Construction Sentiment Survey, 2012

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Considerations for project success
Uncertainty increases the need for awareness and monitoring. Some of the key issues to ensure active management of projects include: Entry and exit prices: Lower prices can be an opportunity for clients but at the same time they introduce risk. Too much focus on achieving the lowest price should be counter-balanced by an acceptance that higher transaction costs in post-contract administration may follow. Risk transfer: A willingness by contractors to accept a wider transfer of risk in the hope of winning work will stretch business fundamentals. In short, incentives for contractors to maximize post-contract returns because of excessive risk transfer should be minimized. It is not only in hard nancial metrics where incorrect transfer of risk manifests itself project team morale can suffer and this in turn affects project performance and quality. Scenario planning: Uncertainty and volatility in markets require greater attention to the assessment and modeling of the nancial viability of developments. Risk management and removing sources of uncertainty: Design completion, supervision, nding the right people, procurement options and interface risks are all areas for consideration. Contractual provisions: With heightened risks related to the supply chains nancial standing, it is imperative to include contractual provisions that ensure the nancial stability of the supply chain. Security can be achieved through adequate warranties and performance guarantees.

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Kuwait 17,800 Kuwait 3.8 174.6 6.3 3.4 43,847 1.8** 2.8 14.1 2.9 6.6 2.0 6*** 3.5***** 8.2 3.0 15.0** 4.8** 15,884 28,512 102,769 3.9** 7.2 21.5 1.9 3.7 3.5 6.0 2.0 5.0 6.3 41.8 80.0 184.6 657.0 6.0 4.1 25,722 4.6** 24.5 63.6 4.6 4.0 3.2 1.8 28.8 Beirut Muscat Doha Riyadh 10,200 309,500 11,600 2,149,700 83,600 Abu Dhabi 5.5 361.9 4.0 3.2 48,992 10.5** 35.7***** 31.0 0.7 Lebanon Oman Qatar Saudi Arabia U.A.E.

COUNTRY STATISTICS 2012

Statistic

Bahrain

Egypt

Iraq

Jordan

Land Area, km2

800

995,500

434,300

88,800

Capital City

Manama

Cairo

Baghdad

Amman

Population, million

1.2

82.0

33.6

6.4

GDP, US$ billion

26.5

255.0

130.6

31.4

Real GDP Growth, %*

2.0

2.0

10.2

3.0

Real GDP Growth, 2013-2017 pa forecast

2.8

5.3

10.9

4.2

GDP/Capita (PPP), US$

28,182

6,557

4,620

6,044

Construction Output, % of GDP

6.0**

4.6**

4.7**

4.5**

Value of Construction Output*, US$ billion

1.8****

11.5****

8.8***

1.4

Project awards, US$ billion

0.9

n/a

26.2

1.8

Consumer Price Ination, %

2.8

7.2

5.6

4.8

*estimate only

**share in current GDP

***2010

****2011/12

*****2011

All data are 2012 data unless otherwise stated. Value of construction in Lebanon, Kuwait, U.A.E. is calculated based on the share of construction in GDP in 2009 applied to 2012 GDP gures.

Source: IMF, World Bank and various national statistics ofces.

ARTICLES

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BUSINESS DRIVERS AND THE DEVELOPMENT CYCLE
Transforming industry intelligence into effective development frameworks
The Middle East development market is driven by real economic and social demands that are unchangeable. At the same time, political instability and the regions integration with global markets has left it susceptible to regional and global shifts in demand and resources. This brings specic business challenges and opportunities for owners, developers and operators. The rst step in managing these challenges and realizing the opportunities is to understand the key business drivers in the development cycle. We regularly engage with our clients (owners, developers and operators) through our Key Account Management program. The program is an enterprise-wide best practice approach that focuses on fully understanding the business and project needs of our clients, successfully managing our client relationships and monitoring our clients success. It supports our commitment to our clients and communities of delivering solutions that enhance and sustain the worlds built, natural and social environments. The latest product of the program is a set of development frameworks for assets within the education, healthcare, leisure and sports sectors. Informed by our clients insights, these frameworks outline growth, revenue, cost and performance drivers that contribute to the success of developments within these sectors. The full customer activity cycle review provides owners, developers and operators with a discerning yet concise overview of key factors that affect their assets. Working together we transform our clients visions into protable, sustainable, community-focused and brand building projects.

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Holistic understanding of the business drivers and development cycle
Pre Client decides what to build and when

Growth drivers

Post Client is maintaining the asset

During Client is executing the project

Cost drivers

Revenue drivers

Client activity cycle

Key macro and micro factors to consider

Community focused

Performance indicators measuring business and project success

Profitable

Sustainable

Brand builder

Source: AECOM and Sandra Vandermerwe

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Sports sector
The excitement generated from watching or playing sports drives demand for sports-related facilities. Public and private investors see sports as a channel to enrich the lives of community members, raise a team, a city or a regions national and international prole, and use it as a catalyst for growth in other related sectors such as tourism, retail and healthcare. Sports facilities are also an important component of many urban regeneration programs, bringing investment and people back into previously derelict innercity areas. Sports facilities can take many forms, from small-scale community recreational centers and sporting facilities, to large open recreational areas such as golf courses and multi-billion dollar investments in arenas and stadiums used by professional league teams or needed to host mega events such as the Olympic Games or the FIFA World Cup. Sport facilities built for global events present a unique set of opportunities and challenges for the host country. Apart from spectator experience, they are seen and used within the context of environmental, economic and social sustainability, development and regeneration. Within the Middle East, Qatar is investing heavily in infrastructure and sport facilities ahead of the 2022 FIFA World Cup. The event will certainly help to raise Qatars international prole, accelerate growth within the country and encourage sporting involvement within the community. However, legacy planning is essential, as it will determine whether the initial investment has a positive and lasting impact on the country. One of the major issues facing the construction of sports facilities is the question of their funding and justication for their investment. This is due to large capital costs, almost certainly with substantial public investment, and often not justiable in a cost-benet analysis. The hosting of mega sporting events, which require major infrastructure investments by the public sector, raises questions concerning the multiplier effects of a agship project, its links and connections with the rest of the urban area or country, its social impact and its nancial consequences. This is particularly true for event-specic built facilities where, in addition to the huge expense of infrastructural outlay, there is a high risk of facilities not being used post-event.

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There is a trend to reduce traditional funding sources (i.e. taxes, grants, public funding) and to encourage the public sector to form partnerships with the private sector in providing services and facilities. This in turn has led to the development of a number of management and funding organizations within the private sector that are interested in partnering on facilities with revenue-generating potential.
Business and development drivers

Growth drivers what market conditions support sport developments?

Sports and leisure facilities have multiple growth drivers, including public (local and national) investment in communities and urban regeneration, university sports, sport franchises and professional teams facilities requirements, or private investors seeking revenues. What is notable is that all stakeholders are increasingly adopting a more comprehensive approach to the development of sporting facilities and major events, with the focus not just on the main event itself, but shifting towards a 365-day-ayear experience and improving local communities.

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Key growth drivers Government expenditure on community projects Urban regeneration Professional leagues Private investment in sporting sector Availability of credit Population growth/ urbanization Increase in disposable income Socio-political stability Key client insights All stakeholders are increasingly adopting a more comprehensive approach to sporting facilities ... shifting towards a 365-day-a-year experience and improving local communities. Despite attractiveness and pride associated with sporting facilities, return on investment remains the deciding factor. Opportunity cost of developing a sport facility is compared with other investments.

Public funders undertake sport facility developments for a variety of reasons, including to help communities live healthier lives; support local athletes; host national, regional or international events that would raise the city/countrys prole; attract tourists; and encourage inward investment. These facilities are often community (or even country) specic, and factors such as demographic prole, proximity to other service providers, potential growth, available resources, etc., make the type of investments very different with respect to needs and wants. Private investments follow the same pattern, but instead of focusing on cities or countries, they typically support the needs of communities of interest or professional league teams.

Mega-sporting events, such as the Olympic Games, Commonwealth Games, or World Cups are considered one-time opportunities for cities or countries to secure resources for infrastructure development and to achieve global exposure. Developed countries/cities are using multiple events of varying size and scale to increase tourism and urban regeneration, while emerging cities/ countries are using them as development catalysts and brand builders. Cities vigorously compete to host sporting mega-events as they perceive that doing so will enhance their image and stimulate their economies by attracting investment and consumer spending. Ultimately, the deciding factor in moving a sports project forward remains in its expected return on investment. Investors and developers compare the opportunity cost of developing a sport facility with other investments.

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Middle East Sports Sector
The two primary growth drivers within the Middle East sports sector are improving the health and living standards of local populations and achieving regional and international recognition. The Middle East has some of the highest obesity and diabetes prevalence rates in the world as a growing number of the regions populations live sedentary lifestyles and have unhealthy diets. These factors, in turn, contribute to higher healthcare costs and burden governments to meet the required healthcare demand. To help their populations lead healthier lifestyles, governments invest in sport facilities, including women exclusive facilities as women have the highest obesity numbers across the region. Private investments in the sector, particularly in the form of private sport clubs and gyms, have increased. Investors recognize the real demand for such facilities amongst communities plagued with unhealthy lifestyles but privileged with growing income levels.
Obesity prevalence in selected MENA countries
60 Males 50 40 Percent 30 20 10 0 Kuwait U.A.E. Saudi Arabia Egypt Bahrain Jordan Qatar Females In Kuwait, the female obesity prevalence level the highest in the region has reached 55.2% compared to 29.6% among the male population.

Source: World Health Organization

Diabetes prevalence in selected MENA countries

Diabetes prevalence rate Kuwait Saudi Arabia Qatar Bahain U.A.E. Egypt 24 23.4 23.3 22.4 18.9 16.6 World ranking 6 7 8 9 11 12

Source: International Diabetes Foundation, 2012 estimates

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Brand building is another key driver within the sector, particularly in the form of hosting regional and global events. To date, Qatar and the U.A.E. have been the key players, hosting the highest number of events annually.
Sport sector projects award by date and country
7 6 5 US$ billion 4 3 2 1 0 2010 - 2012 2013 - 2015 Bahrain Iraq Kuwait Lebanon Oman Qatar Saudi Arabia U.A.E. While Iraq awarded the most sports projects in 2010-2012 as it attempted to rebuild the countrys infrastructure, Qatar is expected to award the highest value of sports projects in 2013-2015 as it gears up for the 2022 FIFA World Cup.

Source: MEED

Revenue drivers what makes sports developments successful?

Revenue drivers Government support Private sector investments Capacity and space utilization (functional use and exibility) Ticket sales Advertising and signage Club boxes and concessions

Sports facilities face challenges on the nancial and commercial front, having to balance the need to maintain value for money in terms of ticket prices and rising expectations among the paying public.

The owners of sports facilities seek revenues from increasingly diversied income streams to justify capital Other rental opportunities expenditure. Revenues are not (schools, universities) only driven by demand for the Key client insights facility, effective utilization Revenue sources are of space, prices charged to increasingly becoming more diverse with the line between facility users and ticket sales, sports and entertainment but also include commercial becoming more blurred. sources, such as from retail The revenue characteristics or advertising. Sport and of the sector combined with entertainment events are the intangible benets driving the growth of the sector make increasingly being staged it suitable for public and together, i.e. Grand Prix events private partnerships. now involve concerts, aimed to raise the overall experience, increase the length of events and therefore the time people spend at the venue, which enhances commercial opportunities.
Commercial rental opportunities (retail, catering, hotel)

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The sports sector is typically known for having low prot margins and high capital investment due to the specicity of the built structures and low facility usage fees charged to end-users. Public sports facilities in particular report minimal prots if any, as most end-users expect them to be provided free of charge or for a nominal fee. Private facilities, on the other hand, are not expected to be free and can charge more than public facilities. However, given the price elasticity of demand, end-users will only pay up to the price they deem reasonable regardless of the uctuations in the facilitys utility or maintenance costs.
Global sports revenue
160,000 140,000 120,000 US$ million 100,000 80,000 60,000 40,000 20,000 0 2011e 2010e 2011e 2013f 2014f 2015f 2006 2007 2008 2009 Media Rights Gate revenues Merchandising Sponsorship

Source: PWC Outlook for Global Sports Market

Event-driven ticket sales are the prime income source for many sports facilities. It is difcult to achieve full utilization of stadiums or arenas, as often there are space restrictions or events dont sell out. Business plans must be based on cautious assessment of potential revenues and, as a result, it can be difcult to attract initial investment without public-sector funding. In addition to ticket sales, most sources of revenue, for example, merchandise and refreshments sales, are related to the size of the audience. Only a small proportion of income, typically related to box and season ticket sales, is xed. Operators are seeking to increase non-ticket-based incomes by enhancing the capacity and quality of retail and catering concessions and other facilities, thereby increasing the amount of time and money customers spend there Clients agree that these dening revenue characteristics of the sector combined with the intangible benets driving the growth of the sector make it suitable for public and private partnerships. Governments typically look for private investors to help cover construction and operational costs of the facility in return for favorable terms on property tax, subsidizing utilities and funding of surrounding infrastructure.

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This arrangement allows private investors to diversify their portfolio, undertake highly visible projects while minimizing operational project risk in the long-run.
Sports revenue by region
100 90 80 70 Percent 60 50 40 30 20 10 0 North America EMEA Asia Pacic Latin America Merchandising Media Rights Sponsorship Gate revenues

Source: PWC Outlook for Global Sports Market

Cost drivers what are typical investment and operating costs of sport facilities?
The end purpose and capacity of a sports facility determines the capital investment required to deliver the project. Iconic projects built for specic events will often require an investment premium that balances landmark architecture and specication with exible space design to provide use and revenue options after the event or sporting season. All typical operational costs, xed and variable, come into play during the life span of the project, however, the extent of their impact depends on the facility type and usage frequency. Owners and operators need to be particularly mindful of the end-users requirements and usage behavior to ensure demands are met without compromising operational efciency.

Performance indicators monitoring the success of a sport facility

Sports facility performance indicators represent a key element of the long-term success of the facility. Assets that are closely monitored for operational efciency, revenue generation, and quality maintenance and stakeholder satisfaction are more likely to be protable and survive market and economic shifts. Examples of key indicators are provided in the in-depth arena review section opposite.

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Taking a closer look at arena developments
Arenas are complex buildings that provide exible accommodation for a wide range of spectator sports, concerts, exhibitions and other events. Revenue generation within an arena is event driven. The more events are held in the arena, the higher the number of visitors, ticket sales or advertising opportunities. Utilizing an arena all year round is a challenge as sports competitions are seasonal. Many owners and developers attempt to address this issue by building multi-functional/exible facilities to diversify the events that can be held and improve the likelihood of having an arena occupied more often. In North America, owners and operators respond to the seasonality of sporting events by signing anchor/principal tenants to the facility. The renting fee does not cover all operational costs but ensures that the owner/operator receives a steady stream of revenue each year. In Europe and the Middle East, not all clubs own their stadiums, but pay annual rents to sports councils a model that is deemed to be less successful in these regions. As a result, the sports arena business model has been altered to focus primarily on entertainment events rather than sporting ones. This shift allows countries to build arenas that attract world attention and help secure hosting bids for international sporting events, but at the same time incorporate legacy planning by allowing spaces to be utilized for more common entertainment events such as concerts.
Simplied revenue model for an arena
$$ Act Rent and hire charges

$$

Promoter

$$

$$

Anchor tenant

$$

$$ Merchandising $$ Food & beverage Audience $$ Premium seating $$ Parking ? $$ ? Third party $$ Commercial rights Naming, sponsorship, advertising Venue

$$

Fixed costs

$$

Variable costs

Source: AECOM

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KPI 1: KPI 2: KPI 3: KPI 4: KPI 5: Total revenue revenue generated from services provided Revenue split by service provided, user and event Revenue development growth of revenue (%) split by service provided and user Occupancy rate of available rental spaces Number of attendees by event held (volume)

Furthermore, regardless of region, owners and operators can attract additional revenue through advertising or selling the naming rights of the facility. Capital costs can vary signicantly as there are many variables that inuence size and conguration. Selection of the main sporting event, capacity, exibility, tier conguration, size of main event and roof span/ complexity have a signicant impact on the design and costs, and need to be considered in detail at an early stage to ensure that an arena proposal is feasible from both operational and economic perspectives. Arena capacity is the principal cost driver, as the number of seats determines the size of the arena bowl, the extent of circulation and other facilities. Capacity has a major inuence on other factors such as footprint, clear roof span and tier conguration. The number of seating tiers required is determined by capacity and means of escape regulations. The size of the main event oor determines the capacity and design of the arena bowl. In general, the larger the main event oor, the larger and more costly the building, as the footprint, roof spans and the requirement for mobile seating increases.
Key client insight On a spectrum that measures the size and cost of constructing a sports facility, arenas more often than not will sit at the far right representing the biggest and most expensive investments within the sector, often due to their iconic designs that make them attractions in their own right.

Seating space allowance inuences the quality of a spectators experience of the arena. Standards should be as high as possible within the constraints of the budget. Seating space standards affect the size of the arena bowl, footprint, roof span and the cost of the seat itself. Roof span is also a signicant cost driver, as above a certain size there is a disproportionate increase in the weight and cost of the roof.

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From a design element, the bowl form, comfort standards, circulation provision, auditorium exibility, special suite/luxury areas, back-of-house space and front-of-house accommodation plans need to be reviewed and evaluated carefully as they will directly impact revenue streams and operational costs. Changing any of these components after construction can be very costly. Most arenas are U-shaped, with one end left open, providing space for an end stage for concert events. Concerts generally attract the largest audiences and it is therefore not economic to provide xed seating across the free end of the bowl. The requirement for exible seating is driven by the combination of events for which the arena is designed. Moveable seating costs signicantly more than xed seating and also reduces the amount of storage space available below the bowl. The loss of this space, together with the need for storage space for retractable seating, may result in a requirement either for a larger bowl footprint or extra space outside the bowl. Storage requirements for seating and track are extensive and may result in a further requirement for ancillary accommodation beyond the perimeter of the facility. The key areas that need to be addressed in the design of the building services installation refer to health and safety and environmental conditions, i.e. re detection or air conditioning in the arena space, which should have in-built exibility to adjust to different densities of occupation and uses. The nature of the event determines the quality, levels, direction, color and brightness of lighting required, which should all be adjustable. Driven by spectators quality expectations and demand for a wide range of services, technological requirements and integrated communication technologies (ICT) have become integral parts of any arena. Television, radio channels and websites all play a role in promoting and broadcasting an event and marketing an arena. Acoustic, visual and transmitting technologies all need to be able to accommodate media requirements. If arenas are built to host entertainment events and concerts, a higher level of technological specication and acoustic buffering is required. In the masterplanning stage, integrating the building into existing transport routes and urban axes decreases project cost by reducing the need to build connecting infrastructure.
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Additional event costs Organizers/ushers Security Total operational costs Food and beverages ICT and other event support equipment Cleaning staff Maintenance Utilities Daily costs Utility Maintenance Administration/ stafng

Key operational costs for arenas include maintenance and utility costs. Regardless of whether the facility is in use and generating revenue, the facility still needs to be cleaned, serviced and utilities would typically represent 30-60 percent of the total operational cost. Many owners and operators have adopted the use of preventative maintenance measures and use energy efcient utilities to reduce operational costs.

Back-of-house facilities in arenas include television and press facilities, function rooms and VIP areas, as well as changing areas, and catering and administration facilities. The design of back-of-house space can have a signicant effect on the quality and cost of operating the arena. Stafng and administrative costs further impact operational costs all year round. On event nights, however, additional costs are absorbed to deliver the event, including casual staff and equipment, food and beverages, retail outlets, additional security, maintenance, ICT and cleaning staff. Staff costs can potentially be reduced by higher levels of initial investment in the mechanization of installations in the arena, such as moveable seating or the insulated oor and perimeter barriers of an ice rink. Increased mechanization also helps to reduce the down-time involved in changing the conguration of an arena thus resulting in increased revenues. Disposal cost of sports facilities is usually limited to refurbishment or demolition as the facilities are purpose built and would require substantial investment to convert into another kind of asset.
KPI 6: KPI 7: KPI 8: KPI 9: KPI 10: Operating cost per service, user and event Operating expense ratio operating expense/gross operating income Employee retention rate Repeat business volume of business/revenue generated from returning facility users and event organizers Employee retention rate

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Other sports thought leadership publications produced by AECOM: Assessing the Opportunities of Venue Regeneration opportunities in venue regeneration. More than a Game overview of developments within the sports sector. Revitalising an Urban Asset a review of successful examples in facility renewal and revitalization. Portlands New Pitch case study on the renovating of the JELD-WEN Field. The Rise and Rise of the Temporary Transformers provides options and examples of successful legacy planning. Please email me.business.intelligence@aecom.com for your copy.

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Leisure sector
Leisure is an important sector within any economy as it helps to attract domestic and international consumers, diversifying the income pool of a country. As well as its direct economic impact, which reects spending on travel and tourism by residents and non-residents, and spending by governments on related services directly linked to visitors, such as cultural, such as museums, or recreational attractions, such as national parks, the industry has signicant indirect and induced impacts. The indirect revenue drivers include capital investment spending by all sectors directly involved in the industry, such as transport, restaurants and leisure facilities for specic tourism use. Induced contributions relate to other supply chain effects.
Business and development drivers

Growth drivers what market conditions support leisure development?

Demand within the sector is typically highly elastic. In a healthy economy, consumers are likely to spend on recreational and leisure activities, while in less afuent economic times, leisure-related expenses are the rst to disappear from a consumers list of regular expenses. In addition, political events and/or natural disasters have the ability to impact the sector performance. In general, leisure-related construction increases when three factors occur concurrently. Firstly, operating fundamentals are strong, driven by consumer demand (and business demand, i.e. in the hotel sector), measured by performance indicators, such as ticket sales, food and beverage (F&B) sales and occupancy levels. Demand growth will attract the attention of developers, lenders, operator chains and management companies.

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Secondly, credit is readily available for new construction projects. Thirdly, our clients Income growth/ urbanization have particularly expressed Consumer spend that construction of new leisure facilities increases Corporate/business travel in the absence of attractive Meetings, Incentives, Conferences and refurbishment or asset Exhibitions (MICE) sector transformation opportunities. Growth of tourism sector In markets with tighter credit Credit conditions conditions and an uncertain Socio-political stability demand outlook, lenders are more likely to provide acquisition Key client insight or renancing loans for operating Construction of new facilities with a proven net leisure facilities increases in the absence of attractive operating income history than refurbishment or asset construction nancing for new transformation opportunities. Lenders are more likely projects. In addition, if market to provide acquisition or conditions are such that facilities renancing loans for operating are selling for below replacement facilities with proven net operating income history than cost, some investors may seek to construction nancing of acquire these assets at favorable new projects. prices and improve their value with renovations, refurbishment and repositioning strategies rather than pursue new construction.
Key growth drivers Economic activity

Middle East Leisure Market

The leisure sector in the Key client insight Middle East is primarily Governments focus on raising driven by the determination its national prole through international advertising, of individual countries organizing national festivals to diversify their revenue and hosting international streams, as well as religious events help attract leisure investors and consumers alike. tourism. Countries like Egypt, Lebanon and Jordan have long invested and beneted from foreign investments in the leisure sector as they have rich histories and natural attractions. The Gulf Cooperating Council (GCC) countries, although relatively lacking in natural attractions, have focused on creating manmade attractions to appeal to regional and international tourists. The regions geographical location at the cross roads between the East and the West, make it easily accessible to tourists from all around the world. Major airport expansions already undertaken or planned in

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many cities across the region will only help increase accessibility and boost regional and international tourism.
Top Middle East countries by international visitors, 2012 estimates
40 35 30 Visitors in millions 25 20 15 10 5 0 Casablanca Abu Dhabi Dubai Cairo Amman Riyadh Tunis Dubai is the top destination for international visitors and visitor spend in the region. Cairos long-standing reputation as a top international tourist destination is being challenged by political instability.

Source: MasterCard, AECOM

The leisure sector is a key development sector within most countries. However, elements such as political stability, government wealth and rising incomes have become essential growth drivers. Performance and success of the private sector will largely depend on political stability and credit availability.
Middle East top destination cities by international visitor spend, 2012 estimates
40 35 30 US$ million 25 20 15 10 5 0 Casablanca Abu Dhabi Dubai Cairo Amman Beirut Tunis 25 20 15 10 5 0 -5 -10 Percent

2010

2011

2012

% Growth 2011 and 2012

Source: MasterCard, AECOM

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Leisure sector projects by award date and country
70, 000 60, 000 US$ billion 50, 000 40, 000 30, 000 20, 000 10, 000 Bahrain Iraq Kuwait Lebanon Oman Qatar Saudi Arabia U.A.E. 2010-2012 2013-2015

Source: MEED

Revenue drivers what makes leisure developments successful?

Revenue drivers Capturing and creating endmarket demands Capacity and space utilization (functional use and exibility) Effective pricing Key client insight Secondary services provided in hotels such as spas, restaurants and sport facilities have become major contributors to the facilitys top line.

Economic challenges, increased competition, rising costs, and ever changing consumer taste characterize the leisure industry. Revenues within the leisure sector depend on the ability of owners and operators to attract consumers and retailers by creating a demand for their services.

Owners and operators must maintain a rm understanding of current and future consumer needs, behaviors and preferences to continuously develop products and services that meet consumer and retailer demand. Customer loyalty and brand awareness is a major focus as the leisure industry seeks new opportunities to build market share. Their ability to attract multiple end-markets, individuals and businesses helps reduce project risk through revenue diversication. This is done through optimizing capacity and functionality of built spaces incorporating services that have varying demand cycles. Clients have noted that there is a growing trend towards secondary services provided in hotels such as spas, restaurants and sport facilities which have become major contributors to the facilities top line.

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Typical demand generators are location and infrastructure, corporate headquarters, ofces and industrial parks, MICE activity, natural attractions or sporting events. These demands impact performance indicators such as ticket sales, room revenues or food and beverages revenues. Leisure services prices need to reect value of leisure and recreational experiences delivered. Revenue forecasts for leisure facilities in the subject market area are essential in determining the feasibility of a proposed facility or the value of an existing one.

Cost drivers what are typical investment and operating costs of leisure facilities?
Leisure-related facilities have certain characteristics a 24/hour schedule (hotels), diverse types of spaces, a large number of special services that the operators supply to guests, which affect capital costs, and operating costs alike. In addition, client and consumer expectations for modern facilities and latest equipment can result in high design specication and technology cost of leisure facilities. These costs need to be reviewed closely to ensure that they are in line with current consumer demands and forecasted changes within the market.

Performance indicators monitoring the success of a facility

The necessity of performance indicators in the leisure sector is not unique compared to other sectors. However, the need is magnied considering rising consumer expectations and mounting operational costs. Owners and operators need to closely monitor their assets competitiveness and operational and nancial efciency to ensure they remain protable in a highly elastic market. Examples of key indicators are provided in the in-depth hotel review section overleaf.

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Taking a closer look at the hotels and resorts sub-sector
Revenue streams in a full service hotel or resort facility are dominated by room sales, on average representing 64 percent of revenue generated. However, full service hotels tend to benet from revenue generated from other value added services, particularly food and beverages sales which make up 30 percent of revenue generated.
Revenue breakdown
100 Cancellation Fee Rentals and Other Income Other Operated Departments Telecommunications Food and Beverage Rooms 0 Revenue

KPI 1: Occupancy rate KPI 2: Revenue per available room (RevPAR) KPI 3: Total revenue per available room (TrevPAR) KPI 4: Conference and banqueting revenue per available sqm (RevPAM)

80

60 Percent

40

20

Source: Smith Travel Research (STR Global)

Within the investment cost category, construction costs make up over 50 percent of the capital cost investment per room, regardless of hotel type. Land costs are also similar across the board, averaging around 13 percent. More variation is typically expected within the development costs and furniture, xtures and equipment categories as they are highly dependent on hotel type and target audience more sophisticated hotels and resorts would need to satisfy more rened client demands.
Average investment cost breakdown for hotels and resorts
100 Pre-opening and working capital FF&E Percent 60 Site improvement and building construction 40 Development and soft costs 20 Land 0 % of total project cost

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Source: JLC Hospitality Consulting, HVS International

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Hotel INvestment Tool (HINT) is a unique interactive tool created by AECOMs cost and economics experts to allow clients to balance investment with potential income. For more details check aecom.com/HINT or contact, hint@aecom.com

Operational cost is another main development success factor to consider. To effectively forecast and manage operational costs of a hotel, our clients have emphasized the importance of differentiating between operational cost types and their main drivers. Fixed operating costs such as stafng and administrative costs impact the whole spectrum of hotel and resort developments and are expected to remain almost constant throughout an operational year. Administrative and general costs, including stafng, typically make up about 45 percent of the total xed cost of the facility. Management fees add another 16 percent on average. Together administrative and management costs make up more than 60 percent of a hotels xed operational cost, making performance indicators such as employee retention and turnover important statistics to monitor.
Breakdown of xed operating costs
100 Reserve for Capital Replacement 80 Property Taxes 60 Percent Management Fees Insurance Franchise Fees (Royalty) 20 Administrative & General

40

Fixed operating cost

Source: Smith Travel Research (STR Global)

Breakdown of variable operating costs

100 Utility costs 80 Telecommunications Rooms Property Operations & Maintenance 40 Other Operations Depts & Rentals Marketing 20 Food & Beverage

Percent

60

0 Variable operating cost

Source: Smith Travel Research (STR Global)

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Operational variable costs, however, will depend greatly on capacity utilization and the ability of hotel owners and operators in creating economies of scale. Variable operating costs typically include utility costs (HVAC, water and energy costs), food and beverages, rooms, telecommunications and marketing. Maintenance, repair and replacement costs are also variable costs and are inuenced by age of property and equipment, use of a preventive maintenance system, quality of initial facilities and equipment, and legislative/health and safety requirements. On average, food and beverage costs tend to exceed any other variable cost category, representing 37 percent of the total variable cost. Room costs are the second highest representing 30 percent.
KPI 5: KPI 6: KPI 7: KPI 8: Gross operating prot per available room (GOPPAR) Operating expense ratio operating expense/gross operating income Employee retention rate Repeat business volume of business/revenue generated from returning facility users and event organizers

An important factor to note within operational costs is that variable operational costs typically outweigh xed costs. In our sample study, variable costs represented 75 percent of the total operational costs. Below is a comparison of major factors contributing to project success: investment, revenue and operating costs.
Comparison of typical annual revenue and operating costs

Annual revenue Annual variable operating cost Annual xed operating cost

Source: JLC Hospitality Consulting, HVS International, Smith Travel Research (STR Global)

Other leisure thought leadership publications produced by AECOM: Quality Time trends across leisure and culture developments, including hotels, theme parks and cultural buildings The Planning Destination incorporating sustainability into the business of travel and preserving the environments and cultures of tourist destinations. Ensuring sustainability drives all stages of resort planning. Theme Index 2011 annual report on the top theme parks throughout the world and global and local trends. The report is compiled by AECOMs economics team in conjunction with the Themed Entertainment Association. Please email me.business.intelligence@aecom.com for your copy.

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Healthcare sector
The healthcare sector is undergoing dramatic changes in customer behavior, market dynamics and the regulatory framework, making the way healthcare is delivered ever more complex. Consumer-driven health, in which informed individuals demand greater choice and have more control over their healthcare spending, together with pressure to deliver the highest possible quality of care at the lowest possible cost, is driving the most dramatic shift in the industry. Healthcare providers have to re-evaluate products to meet increased demand and new business models to stay competitive. Healthcare facilities are diverse, ranging from hospitals, clinics and nursing homes, to high-tech diagnostic and research centers. By embracing the new competitive landscape, healthcare funders and providers will nd new opportunities in both existing and new markets.
Business and development drivers

Growth drivers what market conditions support healthcare developments?

Demand for healthcare provision is rising globally. In developed countries, demand is driven by changing demographics and epidemiological trends (ageing populations and chronic care needs) while in many developing countries the surging demand for more services is due to rising populations and income growth together with diseases of prosperity, such as obesity and diabetes.
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Healthcare services demands can be met through different channels, primarily public, Government reforms and expenditure on healthcare private or charitable. Although Socio-political stability demand for healthcare services is universal, objectives for Population growth/ demographic change/ undertaking healthcare urbanization provision varies by provider. Rising income Governments invest in healthcare to improve living Key client insight standards of their populations, The sector shift towards patient-centric healthcare private investors focus delivery in many countries has on prots and charitable encouraged the growth of new market participants. organizations are assumed to support community or funders objectives, including religious and political. Cost pressure on governments to deliver health services for their population is leading to an increase in public and private sector partnerships, creating a global market for the private and charitable sector and helping governments provide sustainable healthcare for their citizens.
Key growth drivers Economic activity

In addition, clients have indicated that the sector shift towards patient-centric healthcare delivery in many countries has encouraged growth of new market participants from industries such as travel and tourism, retail, information technology, telecommunications and health/wellness spas.

Middle East Healthcare Market

Regulatory and funding reforms, together with increasing demand for healthcare services due to population and income growth, as well as an increase in lifestyle diseases, mean that the Middle East healthcare market is undergoing signicant changes and major development.
Key client insight The proliferation of healthcare facilities built in the Middle East in association or partnership with the international healthcare industry heavy weights is driven by the need to build consumer condence in local capabilities. Brand and reputation are key challenges that healthcare providers in the region need to overcome.

With many governments planning further expansion of the sector, they are seeking increased private sector participation to ll gaps in services provision and infrastructure.

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Healthcare demand drivers
Qatar, the Kingdom of Saudi Arabia and Egypt have the highest forecast growth in healthcare spending per capita between 2012-2017. Egypt, Iraq and the Kingdom of Saudi Arabia have the strongest projected population increase.

Saudi Arabia

Size of bubble: Population growth (2012 to 2020f, absolute number in million)

MENA GDP and healthcare expenditure

Source: IMF, World Bank, AECOM

Supported by large budget surpluses, Gulf Cooperation Council (GCC) governments are making investments to support healthcare provision and bring the industry up to international standards in terms of bed capacity and the quality of healthcare services. Promoting the industry to private players is a priority for all GCC governments, as it is clearly stated in their strategic and development plans.
Healthcare project awards
US$10.9 billion worth of health contracts across 95 projects are known to have been awarded in 2011-12, the majority of which were in 2012. 127 projects worth US$22.5 billion are currently under construction. Saudi Arabia 62 schemes worth US$21.3 billion are currently in the pipeline to be awarded between 2013 and 2016.

Source: MEED (As of February 2013)

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Revenue drivers what makes healthcare developments successful?
Revenue drivers Capturing target market needs and creating suitable healthcare products Capacity and space utilization (functional use and exibility) Intensity of non-built assets Effective pricing Key client insight Healthcare facility revenue streams do not solely depend on providing good medical services but are increasingly more dependent on the ability of owners and operators to capture patient demand differences and to create appropriate products.

The eld of medicine is both complex and dynamic. The emergence of new diagnostic procedures, progress in surgical and non-surgical treatment methods and consumer awareness on the variety of available treatment options, add to the complexity of the healthcare sectors dynamics. This is creating the dual challenge for healthcare providers having to keep up with a rapidly changing environment and to generate higher levels of customer loyalty.

Many patients today no longer seek medical attention solely at their local healthcare facility, but also seek second and third medical opinions from other local, regional or even international healthcare providers. This diversity in population needs is further compounded by differences in their income levels allowing for greater variability within the healthcare sector. As a result, healthcare facility owners and operators are nding that their revenue streams do not solely depend on providing good medical services but are increasingly more dependent on their ability to capture patient demand differences and to create appropriate products. On the other spectrum of consumer-driven health is the increasing professionalization of medical care processes for an increasing number of illnesses and procedures, in which physicians and other providers are accepting and using more standardized protocols and guidelines for treating their patients. These trends are the key drivers of overall spending in healthcare and are placing signicant operational challenges on providers to improve their healthcare revenue generation. The revenues of a hospital depend partly on how many patients it can attract from its catchment area, its clinical expertise and its administrative qualities, such as facilities and process efciencies.

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Key client insight Success of a healthcare facility can be improved by creating multi-functional spaces ... e.g. by building facilities that can be rented to private consultants or physicians, you diversify your income pool and help raise your facilitys prole indirectly.

The success of a healthcare facility can be improved by creating multi-functional spaces that allow for a great level of operational exibility, e.g. operating theaters and diagnostic machines available for rent to private consultants and physicians.

Medical procedure fees need to ever more reect the value of the healthcare procedures/experiences delivered.

Cost drivers what are typical investment and operating costs of healthcare facilities?
Key client insight In the Middle East, resourcing is a key element in the success of any healthcare facility. Lack of local and regional resources increases a facilitys dependency on foreign labor, which in turn increases operational costs associated with high staff turnover rates.

Cost control has been on the healthcare agenda for a long time, but demand surge and scal constraints have given the subject new urgency, favoring investment in new ways of delivering care.

Healthcare providers are facing extreme pressures to deliver greater value higher quality care at a lower cost giving a focus on integrated care, capital costs, property management, streamlining administrative costs and accounting for the lifecycle cost of the facility. Future-proong further adds to a facilitys investment costs as owners and operators are increasingly becoming more aware of the need to create exible spaces that can continue to operate efciently to cope with changes in industry, patient or technology requirements.

Performance indicators monitoring the success of a facility

Performance indicators evaluate asset and service data helping owners and operators estimate the quality of services, operational effectiveness, patient and employee satisfaction as well as the nancial health of a facility or asset. As a result of professionalization of the healthcare sector and regulatory requirements imposed by healthcare authorities and certication bodies, measuring and monitoring performance indicators has become almost mandatory. Examples of key performance indicators (KPIs) are provided in the hospital in-depth review section opposite.
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Taking a closer look at hospital developments
Revenue sources for hospitals differ by hospital type. The revenues of public and private hospitals are primarily generated from insurance companies whether public or private companies with small segments coming from self-funded individuals. In countries where health insurance is not yet the norm, individuals are generally expected to self-fund their hospital visits. Sources of revenue might be different (who pays the bill) between public and private hospitals, but the services generating the revenues are almost constant. Clients noted that medical and patient services typically accounted for over 95 percent of a hospitals income. Other incomes usually generated from space rentals within a hospital facility, such as coffee shops and gift and ower shops, are small compared to the overall revenue.
Revenue by funding source

Source: Australian Government Productivity Commission Report

Hospital design and resourcing is inuenced by increased consumer demand, demographic changes and advancements in medicine. Best practice guidance for most hospital facilities today requires heavy capital investments in design and technology. New hospital facilities need to accommodate advancements in patient and physician behavioral research and be equipped with a high element of medical technology equipment.

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KPI 1: KPI 2: KPI 3: KPI 4: KPI 5: Total operating revenue revenue generated from services provided Revenue split by patient and diagnosis related group (DRG) Revenue development growth of revenue (%) split by patient and diagnosis related group (DRG) Number of patients seen (volume) Number of occupied hospital beds (volume)

Excluding medical equipment and furnishings, services typically represents the largest segment of construction cost, accounting for 44 percent of the cost for district general hospitals in the Middle East. This reects the high element of mechanical, electrical and plumbing works that need to be incorporated into a hospitals design.
Construction cost breakdown for a district general hospital*

*Breakdown excludes external works and services; tenant t-out; ttings, furnishings and equipment (FF&E); professional fees
Source: AECOM

Medical equipment and furnishings also represent a substantial portion of the overall development cost. Teaching hospitals incorporating a high element of research and experimental medicine need more sophisticated medical equipment compared to other hospital types. Such hospitals can have medical equipment and furnishing costs that represent over 50 percent of a hospitals overall capital cost. Construction costs for iconic/landmark hospitals are generally higher than for typical district general hospitals. Unlike teaching hospitals, where capital cost increases are driven by medical equipment, higher costs for iconic hospitals are due to detailed architectural design, landscaping or furnishings.

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Construction cost per bed by hospital size

Source: AECOM

Construction costs increase with the size of a hospital but there are two key elements to note. First, operational efciency of equipment and technology does not depend on hospital size as much as other requirements, i.e. bigger receptions and waiting areas to accommodate larger number of patients. Secondly, capacity utilization typically increases as hospital size increases. Up to a certain size, commonly 500 beds, the construction cost per bed decreases as the hospital size increases, due to economies of scale and optimizing the use of support equipment and facilities. Construction costs for larger hospitals with more beds tend to increase again as support facilities need to be larger and construction premiums associated with specialist consultants and contractor fees are added. Land acquisition cost trends are case specic and depend on government support/subsidies, location and hospital size. Regardless of hospital ownership type (public or private) and location, xed operational costs within a hospital typically outweigh variable operational costs.
Typical breakdown of operational expense

Fixed cost Variable cost

Source: AECOM Analysis of ve hospitals MHA, AGPC, Overlake Hospital FS, Cook Country Hospital FS

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Despite the fact that hospitals today have a high element of technological structures that require maintenance and drive up utility costs, variable operational costs usually make up less than 40 percent of a facilities total operational costs. Fixed operational costs covering staff salaries and benets make up over 55 percent of the total operational costs. Hospital supplies are the most signicant segment of variable operational costs for a hospital. Supplies correlate directly with patient treatment demands and requirements. Outsourced labor, including support nurses and personal care nurses, also make up a signicant segment of variable operational cost.
Fixed operational costs
100 90 80 70 60 50 40 30 20 10 0 Average Employee benets Salaries and wages Administrative costs + insurance Average Maintenance Purchased services (incl. non-payroll staff) Supplies Utilities

Variable operational costs

Source: AECOM Analysis of ve hospitals MHA, AGPC, Overlake Hospital FS, Cook Country Hospital FS

Capital expenditure (CAPEX) needs have to be evaluated regularly as the growth and success of the facility depends on its ability to keep up with growing consumer demands and medical technology advancements. CAPEX requirements are divided into three categories land, building and equipment. Land acquisition expenditures are undertaken least frequently and are part of longterm strategic growth plans. Building and equipment are more regular and can be expended on an annual basis, representing about 2.5 percent and 15 percent respectively of their original costs.

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Finally, refurbishment and demolition are the two main disposal cost options for a healthcare facility. Built structures tend to be highly specic and seldom provide opportunities for conversion to other uses. It should be noted that both disposal options, either refurbishment or demolition, of hospitals are expensive compared to other built structures. This is due to the high level of technology upgrades typically needed during the refurbishment process and the demolition premium resulting from complex processes involved in the safe disposal of medical and hazardous waste.
KPI 6: KPI 7: KPI 8: KPI 9: KPI 10: KPI 11: KPI 12: KPI 13: KPI 14: KPI 15: Operating cost per patient and DRG Operating expense ratio operating expense/gross operating income Case mix index average DRG weight for a hospitals entire patient intake (benchmark tool) Medical staff retention rate All staff retention rate Medical staff training needs Non-medical training needs Patient satisfaction by DRG Mortality rate by DRG Complications occurrence rate by DRG

Other healthcare thought leadership publications produced by AECOM: Fords Model T Solving the Healthcare Crisis applying Henry Fords systemization model to healthcare. Building Vitality a look at AECOMs holistic approach to healthcare project delivery. Please email me.business.intelligence@aecom.com for your copy.

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Education sector
Education is the single largest expenditure for many governments, as investment in human capital is not only benecial for individuals, but also to society at large as it helps to create conditions that could lead to increased economic growth prospects, productivity and technological development and adoption. Growth in education is seen as an important contributor to social mobility and the convergence in incomes, as well as a host of non-economic benets, such as lower crime, better health and more informed citizens. The balance of public and private funding of education is an important policy issue in many countries, particularly in those segments where full or nearly full public funding is less common, for example tertiary education. As more people participate in a wider range of educational programs offered by an increasing number of different providers, governments seek to attract private participants, forging new partnerships to mobilize the necessary resources and to share the costs and benets. As a result, public funding increasingly provides only part of the investment in education, while the role of the private sector is becoming more important. Globalization, integration of economies, high mobility of consumers and growing demand for product innovation intensies demand for educational facilities in specic regions, with many governments competing to attract students. Schools, community colleges, vocational schools, colleges, universities and research centers all facilitate the knowledge acquisition and utilization process.
Business and development drivers

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Growth drivers what market conditions support education developments?
Key growth drivers Economic activity Government reforms and expenditure on education Availability of credit Population growth/ urbanization Rising income Socio-political stability

Demographic trends, income growth, awareness about the quality of education, government spending and private sector participation are the main drivers for education demand.

Within the sector there are two main segments, public Key client insight and private education. While The growth of expatriate the former is primarily driven populations in the Middle East by government spending and has helped boost the private education sector considerably. development commitment, the latter is driven by the Rising income levels of local availability of a good business populations and increased appreciation of education has case strong population promoted the growth of local demand and availability of students in private schools funding for ventures. Public across the Middle East. educational facilities are primarily nanced through government grants and hence, health of the governments balance sheets will heavily dictate the size and advancement of the sector. Private schools are mostly privately funded and, in addition to investor or alumni support, student tuition fees make up a signicant portion of the schools revenue.

Middle East Education Sector

The Middle East is Key client insight characterized by a young, In the GCC, an international rapidly growing population school requires upfront investment of US$50-100 and a high rate of million, therefore building urbanization. These factors, new educational facilities is primarily undertaken by combined with rising net worth individuals or income levels and increased high entities with strong integration with world balance sheets. markets, make the region a high demand area for educational developments. Educational developments sit high on government agendas and public spending is expected to grow as countries try to improve their economic standing by developing local skills and capabilities.
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MENA selected countries populations by age bracket
Egypt, Kuwait, Oman and the Kingdom of Saudi Arabia have the youngest populations overall with more than 40% of their populations under 25. Overall, GCC countries have the highest urbanization levels in the region with urbanization levels in Kuwait and Qatar already estimated to have reached 100%.

Source: CIA Fact Book

The regions positive economic activity further promotes the migration of expatriate workers and their families. This not only creates additional demand for education facilities, but further encourages a higher level of diversication within the sector, with many foreign governments and private investors seeking to develop facilities that better meet demand.
Growth in number of students by segment, GCC CAGR (%) 2011-2016f
Total number of students expected to rise from 10.2 million in 2011 to 11.6 million in 2016, at a CAGR of 2.7% Saudi Arabia (84%) and the U.A.E. (11%) account for 95% of students in the GCC

Source: Alpen Capital

Within the Gulf Cooperating Council (GCC) countries there has also been a high proliferation of public and private investments in post-secondary institutes and tertiary educational facilities as investors recognize the populations growing awareness of the value of education. Enrollments by foreign students, in particular from other Arab countries and Asia, have been steadily increasing in the higher education segment, mainly due to access to higher quality education and job opportunities after studies.

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Share in number of schools, GCC

Total number of schools in 2016f: 51,450 Number of schools CAGR 2011-2016f: 1.6% Share of private schools in 2016f: 20%

Source: Alpen Capital

Education sector projects by award date and country

Kuwait and the Kingdom of Saudi Arabia are expected to award the most education projects between 2013 and 2015. For Saudi Arabia these include two mega projects, Emaars Education Zone valued at US$4 billion and Al Mals Prince Abdulaziz bin Mosaed Economic City valued at US$1.2 billion.

Source: MEED

Revenue drivers what makes educational developments successful?

Revenue drivers Government support Gifts and grants Auxiliary enterprises Private sector investments Tuition fees

Revenue drivers differ considerably by type of school, for example public, private nonprot, or private-for-prot.

Public educational facilities are heavily funded by Capacity and space governments and hence their utilization (functional use revenue streams depend and exibility) more on their ability to attract more government funds rather than simply the number of students enrolled. A government sees an educational facility as a multi-faceted investment, an opportunity to build a productive workforce for the future, create jobs, improve communal ties in a neighborhood and reduce crime within a community. Governmental support for

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public educational facilities is Key client insight inuenced by the number of In the GCC, school tuition is the main revenue source for students the facility serves, private schools. the students socio-economic backgrounds and the need The GCC private education for additional non-teaching market is highly fragmented consisting of standalone services, such as counselling, schools owned by individual health services and extrainvestors, this provides opportunities for existing curricular activities. An operators to consolidate and educational facility can secure develop economies of scale. more governmental funds by showing how valuable it is to the community it serves. Revenue streams of private facilities are more diverse. Grants and contributions from public and private investors make up a signicant portion of the revenue but so do tuition fees. A private educational facility can increase its revenue by raising its tuition fees. However, the need to reect services provided to the consumers, while tuition fees increase may be restricted by the government to a certain extent. In general, return on investment in education depends on the agent involved in the investment, namely individual participants (those undertaking education), funders (agencies making a nancial commitment), providers (institutions/ organizations delivering the service), and government/ taxpayers/society (agency mandating that the service be funded and provided). Investment will only take place when at least one of these investors gains a sufciently high rate of return.

Cost drivers what are typical investment and operating costs of educational facilities?
The design of an educational facility and information communication technology (ICT) solutions it encompasses are key cost drivers in terms of delivering value for money and a balanced distribution of the expenditure. Although this impact is most signicant during construction, it is not conned to the initial capital cost; affecting the operational lifecycle cost of the facility. The ability of the owners and developers to balance current construction designs and budgets with future requirements of the education community is needed to ensure long-term success and sustainability of the project. Multi-functional exible spaces are typically used to future-proof against evolving teaching and learning styles.

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Performance indicators monitoring the success of an educational facility
Dynamic changes to end-market knowledge and skill requirements, and variations in source and size of revenue streams add to the complexity of variables to be incorporated into an educational facilitys business model. Key performance indicators need to be identied to help owners and operators evaluate asset operational and nancial health, gauging operational effectiveness, quality levels, satisfaction of stakeholders and returns on investment. Examples of key indicators are provided in the schools indepth review section overleaf.

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Taking a closer look at school developments
School revenue streams depend on the type of school and governmental support available. The revenue streams of public schools come primarily from government funds, with a small proportion of revenues generated from alternative sources such as sponsorships, donations or student tuition fees. Private school revenues are more diverse. In countries where education is heavily subsidized, governments contribute signicantly to private education. For example, in Germany government support accounts for almost 90 percent of the revenue. In the U.K., U.S. and the Middle East however, private school revenue funds are predominantly dependent on tuition fees paid by the parents. The interaction between key development drivers such as availability of funding, source of operational revenue, facilities to be provided and segment of the education market targeted, dictates the type of school to be built and the size of capital investment needed to deliver the project. Schools built with limited project budgets, that depend on private tuition fees for revenue typically sit at the bottom of the construction cost per student spectrum. Such private/budget schools are able to reduce construction costs by focusing on infrastructure needed for teaching purposes and reducing if not eliminating optional non-teaching support and student life enrichment facilities. Public school construction costs per student are typically higher than private/budget schools and show limited inter-group variation. This is a result of schools being built to similar specication/facility requirements and being dependent on government funding to cover building and operational costs.
KPI 1: KPI 2: KPI 3: KPI 4: KPI 5: KPI 6: Total revenue revenue generated from services provided and external funding/grants Total revenue per enrolled student Total operating revenue revenue generated from services provided Operating revenue per enrolled student Revenue development growth of revenue (%) split by type and number of students Number of enrolled students (volume)

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Private schools built under international standards, supported by private investor funding and high tuition fees can afford higher construction costs associated with providing a higher level of internal nishing and additional facilities covering a wider construction area. Additional cost saving measures can be taken by creating multi-functional spaces and by increasing student density, such as lowering the space to student ratio.
Private school revenue by source

Source: OECD, PISA 2009 Database

Public school revenue by source

Source: OECD, PISA 2009 Database

Operational costs of schools are unique in that regardless of school type (public/private) it is generally accepted that xed operational costs will always outweigh variable operational costs. Staff wages and benets represent the majority of xed operational costs in a school understandably since schools are part of the service sector. Therefore factors such as teachers pay and qualications, class size and studentteacher ratios signicantly impact a facilitys bottom line.

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Other key determinants of operational cost include educational level and facilities provided. Around the world, operating expenditures per student of postsecondary schools are higher than for elementary or secondary schools. Among the primary reasons for this difference are the higher educational qualications of teaching and administrative staff in post-secondary education facilities, earning them higher salaries.
Construction cost per student by school type

Source: AECOM

Utility and maintenance costs for schools also vary by level of specication within the facility. Schools with auditoriums, swimming pools and other student life enrichment facilities have to bare additional utility, maintenance and repair charges. The asset lifecycle for a school can end in multiple ways. Schools share the most basic infrastructure requirements with other commercial or public assets, hence disposal options include asset conversion, refurbishment or demolition.
Breakdown of total operating expenditure

Source: AECOM

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KPI 7: KPI 8: KPI 9: KPI 10: KPI 11: KPI 12: KPI 13: KPI 14: KPI 15: KPI 16: KPI 17: Operating cost per student Operating expense ratio operating expense/gross operating income Central administrative expenditure as percent of total expenditure Student to teacher retention ratio Student retention rate Teaching staff retention rate All staff retention rate Teaching staff training needs Non-teaching training needs Student satisfaction Employee satisfaction

Other education publications produced by AECOM: Success how to make the worlds best higher education campuses even better Education space design innovative solutions for building refurbishment Please email me.business.intelligence@aecom.com for your copy.

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ASSET MANAGEMENT IN THE MIDDLE EAST
Objectives and drivers of asset management
Asset management provides an overarching, multidisciplinary and enterprise-wide perspective on the optimal long-term management of physical assets, allowing organizations to achieve their economic, social, environmental and cultural objectives. The Institute of Asset Management denes asset management as the systematic and coordinated activities and practices through which an organization optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles for the purpose of achieving its organizational strategic plan.
Asset management layers

To date, asset management in the Middle East is used interchangeably with facilities management and is generally not adopted as a management process.
Source: AECOM Construction Industry Survey, 2012

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Our industry survey revealed that there are number of drivers for organizations to adopt an enterprise-wide asset management process, including:
Regulatory Industry regulators are increasingly demanding that organizations have better knowledge of and take a longer view on system conditions Provides a clearly documented strategy for managing assets from design to disposal at the end of useful life Allows for making informed decisions to meet organizational objectives Allows for optimal resource allocation Operational cost Provides enhanced control over capital and operational expenditure Minimizes lifecycle costs Allows for more meaningful nancial reporting Provides clearly calculated levels of asset service, reliability and long-term funding requirements Allows for effective identication and management of asset-related risks Guarantees improved economic and social returns on infrastructure investments Sustainability Regulators, operators and end users are increasingly demanding a longer-term, viable approach to assets Allows for setting performance measures and performance targets Ensures service reliability Ensures satised and informed customers Meets the needs of a growing market

Organizational excellence

Asset performance Competition

Asset management in the Middle East

Over the past decade, the Middle East has been one of the fastest growing construction markets globally. Consequently, research shows that physical assets in the Middle East could increase by US$1.6 trillion between 2005 and 2015, taking the stock of physical assets in the region to nearly US$200 trillion in 2015. With built assets now entering their rst replacement cycle, greater focus will need to be placed on long-term objectives, not only in design and construction, but also in property management and maintenance to meet long-term organizational needs.
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Global stock of physical assets

Sub-Saharan Africa MENA South Asia Europe & Central Asia Latam & Caribbean East Asia & Pacic 0 5 10 Percentage growth of physical assets 2000 - 2005 by region
East Asia & Pacic 52% South Asia 43% MENA 22% Sub-Saharan Africa 21% 15 Latam & Caribbean 10% Europe & Central 2%

US$, trillion

Source: World Bank, IMF, AECOM estimate

Developers, operators and investors in the Middle East are increasingly acknowledging the competitive advantage and benets of adopting a systematic and coordinated approach to total asset management. However, there are a number of challenges. In particular, there is currently a substantial gap in the systematic management of built assets in the region. This is partially due to the lack of regulatory drivers that enforce the implementation of asset management, but also due to a number of market and organizational challenges.

Success factors for asset management

A number of asset management disciplines are often procured and implemented as separate services as opposed to an encompassing multi-disciplinary service. As a result of these trends, the true value of asset management as a strategic, organization-wide endeavor is not realized. In order for the organization in the Middle East to successfully implement a true asset management approach, a number of success factors must be put in place.

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Market drivers will include regulatory requirements that support the implementation of asset management, as well as the consolidation of elements that fall under asset management as one service, which may be enforced with the market entry of true asset management service providers. These are also likely to drive the systematic and coordinated implementation of asset management in the region. On the organizational side, organizations need to be willing to invest time and funds into the systematic and coordinated implementation of asset management, which includes, for example, linking asset management to decision making, overcoming resistance to change and building up databases and inventories of assets.

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SUSTAINABILITY A GLOBAL UNDERSTANDING
According to our global industry survey, the importance of sustainability principles varies among construction industry participants in different parts of the world. The research examined perceptions of sustainability and the practical application of sustainability principles on projects in the respective regions. Developed and developing countries alike generally place emphasis on environmental issues, such as managing impacts on scarce resources, as well as social and cultural considerations. However, in some cases there is a clear discord between participants understanding of sustainability and the level of consideration these principles were given on projects in their eld.
A vision of sustainability economic, environmental and social priorities
High Economic Priority North America Australia Europe New Zealand Middle East Sub-Sahara Africa SE Asia China

Low Social Priority

High Social Priority

India

Low Economic Priority Low Environmental Priority High Environmental Priority

Source: AECOM Global Construction Sentiment Survey, 2012

Economic concerns are paramount for North American respondents, as sustainability considerations are dened by their long-term cost benets and efciency gains. In Europe, social issues are not as prominent. The focus is on the long-term efciencies of an asset, energy consumption and renewable generation. In Asia-Pacic there is a strong focus on social principles particularly in China. In the developed countries of the region, such as Australia, great importance is placed on a long-term, cost-benet approach to project delivery, including the whole-of-life costs for an asset as imperative to sustainable practices.
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Generally, the construction industry in the Middle East believes that environmental sustainability issues are given high consideration on construction projects in the region. However, the picture is more mixed when looking closer at the industry, with more than a fth of those surveyed arguing that environmental sustainability is given low priority in the region. Cultural issues are given more consideration than social consideration, which ranks relatively low on the agenda. The main topics associated with sustainability in the Middle East are energy efciency and renewable energy, and life-cycle management of assets. Sustainable development is expected to progress in the region, with many countries already having established environmental authorities to develop policies and regulations. Others have already started implementing progressive programs, like the Estidama initiative in Abu Dhabi and the Green Building decree in Dubai, that require all developments to meet certain sustainability criteria. The Middle East construction industry has a more conservative view of the amount of attention paid to sustainability on projects than other regions, pointing to opportunities for greater efforts as the industry believes that there is some way to go before full consideration of sustainability on projects is achieved.

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PROCUREMENT ROUTES
All clients expect buildings to be delivered on time and budget, with an agreed level of quality, and with the risk rightly managed by their professional and contracting team. But which other multi-million or, in terms of the Middle East, multi-billion dollar business goes from having no staff or expenditure for the nal delivery of a unique product as quickly as the construction industry? This is why the right procurement process, systems and approach are imperative. To use an analogy, a new car model at US$50,000 has enormous planning, renement and design occurring very early in the development process, the cost of which is in excess of the individual car. In the construction industry, we dont have the luxury of rolling out thousands of the same product, which is why it is important we all learn from past experience and seek to understand and dene what made a project successful. In doing this, we come to understand which procurement methods should be followed and why it is important to consider the structure and process for delivery from the start. AECOM has developed strategies for the delivery of buildings that we know work, successfully delivering hundreds of projects over our long history. New and existing developers have the opportunity to learn from this knowledge and maximize the value of their time, cost and quality mix, while adhering to a process that increases the likelihood of their building being successfully procured by their team. Studies conducted with our key clients who regularly undertake development work have shown that buildings can be delivered for 12-15 percent less cost when procured correctly, with no impact on quality or time. Buildings are more likely to be on time and meet clients expectations when procured correctly. So what is the right procurement approach for your building? Which funding strategy, funding partner, team behaviors, attitudes, communication channels, budget and program delivers the best approach and how can we best combine these to lead our clients to ultimate success?

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Project Management
AECOM offers important advice to help determine the right procurement approach, adding the most value throughout the building process. This understanding of our clients time, cost and quality requirements maximizes the value we can offer. Some of the procurement strategies followed in the industry are listed below, but the real challenge is mixing the right approach for the needs of an individual client. Traditional Lump Sum: Design is completed by the clients consultants before contractors tender for and then carry out the construction. The contractor commits to a lump sum price and a completion date prior to appointment. The contractor assumes responsibility for all nancial and program risks for carrying out the building works, while the client takes responsibility and accepts the risk for the quality of the design and the design teams performance. Accelerated Traditional: As above, but procured in the market place before being fully designed (normally 80-85 per cent designed), leaving simple elements of the building to be procured once the contractor has been appointed. It is important to understand the way in which a client procures the remaining elements of work with a contractor under this approach and to design out those areas that carry inherent risk early in the process. It may also involve the procurement of an early works package for enabling and/or piling works. Two-Stage: A contractor is invited to become part of the project team in the initial stage, usually by way of a preconstruction fee. They design and procure the project on behalf of the client, until such time that a second stage lump sum offer can be agreed, which should be before construction begins on site. An understanding of the original appointment and the subsequent framework under which the second stage is agreed are the important aspects of this approach, as well as working with transparency and trust preventing an early commitment to a full scheme that a client cannot afford. Design and Build: Detailed design and construction are undertaken by a single contractor in return for a lump sum price. Where a concept design is prepared by a design team employed directly by the client before the contractor is appointed (as is normally the case), the strategy is called develop and construct.

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The contractor commits to a lump sum price, for completion of the design and the construction and to a completion date, prior to their appointment. The contractor can either use the clients design team to complete the design or use his own team. With design and build, it is important to design out or specify in detail those parts of the building the client wants to see perform a particular function or provide a particular visual impact. Management Contract: Design by the clients consultants generally overlaps with the construction. A management contractor is appointed early to tender and commission elements of work progressively by trade or package contracts. The contracts are between the management contractor and the trade contractors, rather than between the client and sub-contractors. The management contractor in theory assumes responsibility for the nancial (and program) risks for the works, but in reality this is normally diluted by the terms of the contract so their liability is similar to that of a construction manager. Design, Manage and Construct: Similar to the management contract, the contractor is also responsible for the production of the detailed design or for managing the detailed design process. Private Finance: A detailed and complicated form of procurement used predominantly for public services when the private sector feels it is advantageous to design, build, nance and operate a particular service or building type. It is becoming more popular in the Middle East as a way to limit public sector spending while meeting the demands of a growing population. AECOM has been involved with private nance for over 20 years. We have successfully completed many projects worldwide and use this global knowledge to benet clients locally. Engineer, Procure and Construct: This form of procurement places risk in the right hands and offers solutions to clients engineering requirements from those specialized to meet the performance requirements set by a client team. Many of the large utility companies procure work in this way, bringing high levels of certainty from the supply chain, which helps to achieve business-critical benets over the long term.

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MIDDLE EAST FORMS OF CONTRACT
This article considers the different forms of contract used in construction across the region.

Bahrain
Government work in Bahrain is undertaken using a bespoke suite of contract forms that were issued in 2009. Private developers predominantly use the current International Federation of Consulting Engineers (FIDIC) Conditions of Contract for Construction, the 1999 edition of the red book, which is well understood in the local market but often heavily amended for specic use. Most of the work completed in Bahrain is under a traditional lump sum form of contract, where the design is completed upfront and a price agreed with a contractor before work begins on site. However, many of the new developments are looking at faster procurement routes to adapt to market difculties that are prevalent within the Middle East. Progress is slow as Bahrain has a limited number of contractors with the capacity and capability to undertake large-scale projects. Historically it has been difcult for new contractors to enter the Bahrain market. Design and Build, and Two-Stage procurement strategies are in use across Bahrain but are not considered to be the industry norm. As more international private developers have started working in Bahrain with time constraints as their main driver, the market has adjusted to accommodate this demand. Design and Build contracts, however, are not routine. This is largely due to the Committee for Organizing Engineering Professional Practice (COEPP) restrictions on contractors undertaking in-house design which necessitates the novation of the clients architect or a subconsultant appointment.

Kingdom of Saudi Arabia

Construction contracts in the private sector are generally based on Fdration Internationale Des IngnieursConseils (FIDIC) forms of contract and are amended to suit the particular conditions for each project. Employers prefer lump sum versus re-measured contracts and normally exercise great control in the administration of the construction process by imposing various restrictions
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on the engineers (consultant) authorities under the contract. All contracts are subject to Saudi laws where Islamic Sharia is the prime source of legislation. Litigation and arbitration are both available for resolution of disputes in the private sector. Within the public sector, however, construction contracts are based on the Standard Conditions for Public Works, which are amended to suit particular projects. These conditions are generally based on those given in the fourth edition of the FIDIC Conditions of Contract for Works of Civil Engineering Construction, the FIDIC 4 red book, but with greater control given to the employer for the administration of the contract. All public work contracts are given on a re-measured basis and are subject to the Saudi Government Tendering and Procurement Regulations, as issued by Royal Decree M/58 dated 4.7.1427 AH. Disputes are referred to the Grievance Board and will not be dealt with under arbitration, unless a Special Council of Ministers Resolution is issued.

Lebanon
Construction contracts in Lebanon are generally based upon the FIDIC forms of contract. Some largescale developers in Lebanon, as well as the Lebanese Government, have promoted the development and use of bespoke forms of contract, tailored to each client. Such contracts generally use the FIDIC 4 red book form as a basis, amended to a greater or lesser degree depending upon the risk prole of each client. In the public sector, all works are procured on a remeasurement basis. The private sector, however, uses either xed-price lump sum or re-measured contracts. It is worth noting that there is no standard method of measurement of building works for Lebanon and the RICS Principles of Measurement (International) for Works of Construction (POMI) is widely used. Design and Build contracts are not yet popular in Lebanon. Both arbitration and litigation methods are available for dispute resolutions in the private and public sectors.

Oman
Public works in Oman are undertaken using a bespoke government contract known as the Standard Documents for Building and Civil Engineering Works, fourth edition, 1999 (Standard Documents). The document is based on early
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FIDIC contracts with the fourth edition containing only minor changes from the previous third edition, 1981. The most important change is that the contract is now printed in Arabic. The Ministry of Legal Affairs is in the process of preparing a new edition but its release date is yet to be announced. The Standard Documents facilitate both a re-measurement and lump sum contract dependant on choice of clauses, and is based upon a fully completed design, specication and bill of quantities. The RICS Principles of Measurement (International) are the most widely used method of measurement. Infrastructure projects have their own method of measurement, as detailed within the Ministry of Transport and Communications document, Highway Design Standards. Oman Tender Board laws require all government projects to utilize the Standard Documents on every project, without amendment. The only current exception to this law is the new Muscat International Airport project which has been procured and awarded using a series of heavily amended FIDIC yellow book design and build contracts. In addition, the Tender Board facilitates all government tenders centrally through the tender board process. Only the Royal Ofce and Royal Court of Affairs projects are exempt from this process, although they do go through a similar internal tender process. Standard Documents are commonly used by private sector clients in the local market, particularly for small-tomedium sized contracts. Private clients tend to prefer the third edition as this is written in English, but varies only in a minor way from the Arabic fourth edition preferred by the government ministries. International and private sector clients with large project contracts, worth more than US$150 million, commonly use an amended version of the FIDIC red book. While some of the larger integrated tourism developments have used a Design-Build form of contract, Design and Build as a procurement route is not routinely used.

Qatar
In Qatar, the most common forms for building works are those issued by the Public Works departments through the Ministry of Municipal Affairs and Agriculture (MMAA) and the Qatar Petroleum Company (QP).
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These are lump sum contracts, generally using bills of quantities or specications and drawings. These contracts are onerous and slanted towards the client, but are usually administered in a reasonable manner. In the private sector, similar contractual arrangements are adopted. However, there are now some construction projects being undertaken using cost plus or Design and Build arrangements, although these are usually for smaller scale tting out or highly specialist works. The last 12 months has seen an increase in the number of FIDIC-based contracts being implemented for both private and key public sector clients. In addition, in some very long duration contracts, the government is beginning to introduce a price adjustment mechanism to allow compensation for uctuations in market prices. Before any contract is awarded, there are commonly a number of rounds of negotiation, during which the price and other contractual terms can be modied to respond to a reduction in contract price.

United Arab Emirates (U.A.E.)

Construction contracts in the U.A.E. are predominantly based upon the FIDIC forms of contract. The growing number of large-scale developers and major repeat clients in the region has led to the development of bespoke forms of contract, tailored to each individual client. Such contracts generally use the FIDIC 4 red book form as a basis, amended to a greater or lesser degree depending upon the risk prole of each client. This also applies to works procured by the Dubai Municipality. The Abu Dhabi Municipality, however, bases its contract on a modied FIDIC 3 form, taken from the third edition of the FIDIC Conditions of Contract for Works of Civil Engineering Construction. Contracts based on the 1999 red book are now starting to be used in the U.A.E., but in general the market remains rmly rooted in the FIDIC 4 form. Civil works contracts within the U.A.E. are mostly procured on a re-measurable basis, whereas building works will generally be based on a xed-price lump sum.

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However, there are exceptions. More and more clients are procuring projects using a fast-track approach and will therefore incorporate a re-measurable element, reecting those parts of the design which are incomplete at the tender stage. Design and Build contracts are used on some major projects, but this procurement route is not yet commonplace. The increasing tendency for clients to demand a fast-track approach to projects does require a greater design input from the contractor, but this requirement is not always formalized in the contract wording itself.

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BUILDING REGULATIONS AND COMPLIANCE
This article outlines the procedures for obtaining building permission across the region.

Bahrain
Procuring a Municipal Building Permit in Bahrain is done through a three stage process. Stage 1: Seeking the Preliminary Building Permit This is preliminary permission sought from the Municipality of Bahrain. To complete the application it is generally sufcient to include simple outline plans, cross-sections to indicate overall heights and an area statement. The main authorities involved at this stage are the municipality, the Physical Planning Directorate and the Roads Directorate. Stage 2: Informing the Various Directorates This should be done in writing to the town and Village Planning Directorate, Roads Directorate, the Civil Defence and Fire Services Directorate, the Electricity Distribution Directorate (EDD), EDD Damage Protection and Control Unit, the Sanitary Engineering Operations and Maintenance Directorate, the Water Distribution Directorate and Batelco. The initial contact should be made through the Central Planning Ofce (CPO) of the Ministry of Works. Copies of the title deeds must be submitted at this stage. All relevant information and documentation is given to each of the above directorates, until the nal building permit is in hand. Stage 3: Obtaining the Final Municipal Building Permit This is the third and last stage and is processed through each of the directorates in a specic sequence. The initial contact should be made through the municipality. All documents, drawings and municipality forms must be completed and submitted together with the appropriate fees for each directorate.

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Municipal charges must be paid for the following elements: Site sign board Insurance on the site sign board Insurance for Construction Contract (refundable) Fee for occupying road If the Environmental Affairs Department is involved in the process, they will charge a reviewing fee.

Kingdom of Saudi Arabia

Obtaining a building permit in the Kingdom of Saudi Arabia varies from region to region, however, they tend to follow the same basic principles. The various procedures and approvals from the main municipality, the branch municipality and the Fire Department need to be obtained. Obtaining these approvals typically takes between three to four months depending on the nature and size of the building/project. The following is a general outline of the steps needed to obtain a building permit. Stage 1: Obtaining letter from the Main Municipality A letter from the owner is submitted to the main Riyadh Municipality, along with a copy of the land deed. The municipality checks the master plan of the area to ensure the suitability of the plot for the construction of a building. The municipality then writes a letter to the branch municipality of the area where the plot is located. This process takes ve days and does not incur a charge. Stage 2: Obtaining Preliminary Location Permit from Branch Municipality The owner submits a copy of the letter obtained previously from the main municipality to the branch municipality, requesting an inspection of the plot to ensure that the plot length, width and total area are as indicated on the deed. The branch municipality then issues an approval to use the land. This process takes ve days and does not incur a charge. Stage 3: Obtaining approval from the Fire Department The branch municipality writes to the Fire Department, or Civil Defence, to obtain its approval of the plan submitted by the owner for the re-alarm and re-ghting systems.
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The Fire Department approves these plans and sends them back to the municipality. This process takes ten days and does not incur a charge. Stage 4: Obtaining a Final Building Permit The branch municipality issues a building permit and sends it to the main municipality for approval, which is given dependent on the nature of the building. The owner can collect the permit from the main municipality after one to three months. The cost of this permit is SAR 1,200.

Lebanon
Obtaining a building permit in Lebanon requires various procedures and approvals from the Order of Engineers and Architects, the Urban Planning (Development) Department, statutory authorities and the local municipality. The time needed to obtain these approvals is typically between six to twelve months. In general, the procedures and documents required for obtaining a building permit are the same throughout Lebanon, except for the cities of Beirut and Tripoli where the Urban Development Department is located within the individual municipality. The following is a general outline of the steps needed to obtain a building permit: Stage 1: Obtaining Ifadat Takhteet Wa Tasneef To obtain this, the following documents must be submitted to the Urban Planning (Development) Department: Real Estate Registry (Ifedeh Ikarieh) from the Real Estate Department in each Mohafaza Ofcial Land Survey (Kharitet Masaha) from the Cadastre Department Receipt Wasel Takhteet Wa Irtifak from the municipality Stage 2: Appointing a registered civil engineer or an architect from the Order of Engineers and Architects to nish the permit le The engineer must submit the following documents: Three copies of the contract agreement between the owner and the appointed engineer Four copies of the preliminary design drawings

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A written undertaking from the appointed engineer to submit the execution drawings A contract with other engineers involved in the project Following no objection from the Order of Engineers and Architects, the appointed engineer or the owner must pay them the building permit fees to enable them to present the building permit le to the Urban Planning (Development) Department. Stage 3: Appointing a chartered land surveyor to prepare a topographic drawing of the land The appointed chartered land surveyor must prepare a topographic drawing of the land illustrating the different levels of the plot and register this at the Syndicate of Land Surveyors. Stage 4: Submitting the building permit le to the Order of Engineers and Architects for their approval The appointed engineer must submit an application that includes a copy of the building permit le for power connection to Electricit du Liban (EDL) and for other statutory authorities depending on the region in which the building is located. Stage 5: Study of building permit le Submit and register the full building permit le to the Urban Planning (Development) Department. They will inspect the property and plans to ensure they conform to construction laws and regulations and then issue clearance for the building permit. The Urban Planning (Development) Department calculates the building permit taxes depending on the area of the building and the region in which this building is located. On approval by the Urban Planning (Development) Department, part of the calculated building taxes need to be paid to the Order of Engineers and Architects. The building permit le is withdrawn from the Urban Planning (Development) Department and registered at the municipality. On approval of the building permit by the Mayor, the owner shall pay the building permit taxes to the municipality and the Ministry of Finance.

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Stage 6: Obtaining the building permit The applicant collects the building permit from the municipality. The appointed engineer is allowed to apply at the Order of Engineers and Architects for a letter of commencement of works following the submission of the execution le.

Oman
The following is a general outline of the procedure for obtaining a building permit in the Sultanate of Oman but there are many further obligations and procedures to be completed within each of the stages. It is generally the responsibility of the lead consultant to obtain the building permit, although all applications must be signed off and submitted by locally registered consultants. Stage 1: Submitting concept design/master plan stage application The applicant submits a concept design/master plan application to the Ministry of Housing Directorate General of Planning for approval of the proposed usage. At the same time, utility requirements are identied and indicated to the relevant utility providers. If the project is tourism related, further approvals are required from the Ministry of Tourism and the Supreme Committee for Town Planning. Stage 2: Obtaining No Objection Certicates (NOCs) No Objection Certicates are obtained from various governmental and municipal departments, including, the Royal Oman Police; Security Department; Trafc Department; Civil Defence; Ministry of Environment; Municipality Road Department; Ministry of Transport and Communications; Civil Aviation; and many more projectspecic ministry departments, such as the Ministry of Education if the project is a school or university. Stage 3: Submitting a building permit application The full building permit application, including all NOCs, is submitted to the relevant municipality or statutory authority.

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Stage 4: Obtaining building occupancy certicate Upon completion of the building works, it is the responsibility of the construction contractor or lead consultant to obtain the occupancy permit. This is achieved by having the building permit signed off, effectively closing it out. To obtain this closure, the contractor must obtain certicates and signatures from various government departments, including Civil Defence, Food and Hygiene, etc., prior to presenting these to the municipality or statutory authority for nal approval.

Qatar
Compared with many countries, the planning and building approval process in Qatar is relatively clear and structured. Land ownership, other than by Qatari nationals and the state, is still extremely limited. The key process in securing development rights is obtaining a land title or pin number since without it all other permits and applications cannot commence. Once the land is secured, the project master plan is submitted for approval to the Planning Department and local municipality ofces. Stage 1: Design Control Stage 1 (DC1) Approval General overviews and strategies for the utilities and primary infrastructure are submitted to the relevant utility companies for comment. During this process each department generally issues a series of reference numbers which are then used as the le number for all future submissions. The culmination of this round of submissions is the DC1 approval. Stage 2: Design Control Stage 2 (DC2) Approval As the design develops, a second round of submissions is made to the same utility departments for nal approval. In addition, a submission is made to the Civil Defence department who review the re and life safety aspects of the project. Depending upon the scale and nature of the project, separate trafc studies may be required and these would be submitted to the Road Affairs Department for approval.

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Stage 3: Building Permit Once the DC2 approval is secured a further set of standard forms are circulated with a consolidated set of documents for nal signing and approval. These documents constitute the building permit. As a general guide, the whole process usually takes at least 80 days, depending upon the quality of the submission. However, in practice it often takes much longer due to comments from different departments and progressive design revisions. During the whole process, it is generally not advisable to revise or modify any submission as it may delay the approval process. All submissions have to be either bilingual or in Arabic and endorsed by locally registered and approved design companies. International companies cannot make these submissions by themselves. There are some parts of Qatar that are exempt from the building permit approval process, but these are generally related to the oil and gas production facilities. Recently a number of revisions have been made to the design standards of buildings, in particular high-rise structures. These address issues such as re safety, refuge areas, the use of lifts in the event of re and the nature and extent of faade glazing. All t-out projects are being brought under the control of the regulatory departments, in particular Civil Defence, and all such works are now required to be submitted for approval prior to commencement. This submission must be made by a registered local consultant and failure to do this can signicantly delay the approval and permitting process.

United Arab Emirates (U.A.E.)

The following is a general outline of the procedure for obtaining a building permit in the U.A.E. However, there are many further obligations and procedures to be completed within each of the stages. Building permit application stage 3, for example, requires no less than 15 different forms, documents and separate approvals to be submitted as part of the application.

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It is the responsibility of the construction contractor or lead consultant, to obtain the building permit, although all applications must be signed by locally registered consultants. Stage 1: Submitting preliminary application The applicant submits a preliminary application to the relevant municipality or statutory authority and pays a deposit. Stage 2: Obtaining No Objection Certicates (NOCs) No Objection Certicates (NOCs) are obtained from various governmental and municipal departments, including Civil Defence; Fire Department; Drainage; Communication; Water and Electricity; Civil Aviation; Oil and Gas; Coastal and Military. Stage 3: Submitting a building permit application The full building permit application, including all NOCs, is submitted to the relevant municipality or statutory authority. Stage 4: Obtaining a building permit On approval, the applicant collects the building permit and applies for a demarcation certicate. Stage 5: Obtaining a building occupancy certicate Upon completion of the building works, it is the responsibility of the construction contractor or lead consultant to obtain the occupancy permit. This is achieved by having the building permit signed off, effectively closing it out. To obtain this closure, the contractor must obtain certicates and signatures from various government and quasi-government departments, including Civil Defence, Food and Hygiene, and the Criminal Investigation Department prior to presenting these to the municipality or statutory authority for nal approval. It should be noted that although process requirements are fairly similar for free zones in Dubai, certain entities replace others. For example, the Dubai Municipality will be replaced with Trakhees and Civil Defence will be replaced with the Environment, Health and Safety Department. AECOMs project management team is experienced in the procedures for obtaining building permits across the region and are able to oversee this process.
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GLOBAL UNITE SYSTEM
Collaboration Drives Global Knowledge for Local Projects
Capturing and storing data from cost plans gives project teams the knowledge to deliver better project outcomes and minimise project budget risks. Project developers increasingly need to capture and benchmark cost and design parameters on projects, requiring them to manage vast amounts of data. Our response to capturing this data and ensuring it is presented in a way that is relevant to individual projects is Global Unite, a tool we have developed to drive evidencebased decision making. By comparing active projects, these performance indicators go beyond cost and have the potential to inuence decisions through information-led design. Parameters that dene a buildings effectiveness or efciency can be analysed instantly against local or global standards, allowing clients to make informed design decisions consistent with worlds best practice. Insights gathered by accessing the Global Unite tool have the capacity not only to improve project outcomes for our clients but also to build knowledge and support the advancement of our industry.

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Measurement

01 02

The latest measurement software allows direct measurement from the design teams electronic drawings (2D or 3D). Accurate cost advice can be provided faster than before and by collaborating with the design team, parameters can be set to maximise the potential cost savings.

Cost

Quantities and costs are measured and compared against the Global Unite benchmark system. When the design is incomplete, Global Unite provides condence through an extensive evidence-base.

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Global Data Warehouse

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Design and cost data from over 10,000 benchmarked projects centrally stored and globally accessible*. Automated process that captures all projects by cost management stage. All historic costs adjusted by location and time to suit your project.
*Increasing daily with every completed cost plan globally.

2.5 Cost Plan External Wall : Floor Ratio 2.0 1.5 1.0 0.5 0 University, NSW, 0.98 Best Fit

5.000

10,000

15,000

20,000

Floor Area (m2)

Benchmarking and Analytics

04
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Compare cost and design attributes against local or worlds best practice to better inform project decisions.

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Kuala Lumpur, Malaysia Mumbai, India Bangkok, Thailand Joburg, South Africa New York, U.S.A. London, U.K. 515 1,165 1,045 650 1,010 1,470 550 1,225 1,460 4,900 4,100 415 875 840 4,000 3,330 4,950 6,930 825 1,210 995 550 985 590 1,035 495 790 1,100 1,420 1,100 4,250 4,800 3,350 2,950** 3,600** 2,200 480 570 670 435 630 N/A 380 530 1,250 2,000 1,490 2,540 1,625 2,485 1,580 2,760 1,410 1,980 1,690 2,230 2,400 5,030 2,610 5,100

International Building Cost Comparison (US$/m) Q4 2012

Building Type

Sydney, Australia

Hong Kong

Beijing, China

Singapore

RESIDENTIAL

Average Multi Unit High Rise

2,850

2,320

685

1,800

Luxury Unit High Rise

3,280

2,560

1,050

3,100

Individual Prestige Houses

3,420

3,990

810#

3,000

COMMERCIAL/RETAIL

Average Standard Ofces High Rise

3,180

2,340

975

2,400

Pretige Ofces High Rise

3,600

2,840

1,300#

2,800

Major Shopping Center

2,540

N/A

1,080

3,200

INDUSTRIAL

Light Duty Factory

680

1,340

N/A

1,600

Heavy Duty Factory

860

1,460

N/A

1,700

HOTEL (including FF&E)

3 Star/Budget

3,280

2,880

1,205*

3,100*

5 Star/Luxury

4,550

4,010

1,950*

4,500*

Building Type 1,760 1,480 2,345 2,670 N/A N/A

Sydney, Australia

Hong Kong

Beijing, China

Singapore

Kuala Lumpur, Malaysia

Mumbai, India

Bangkok, Thailand

Joburg, South Africa

New York, U.S.A.

London, U.K.

Resort Style

4,130

N/A

N/A

4,500*

OTHER 780 N/A 320 RM 3.14 54.58 31.58 INR THB 530 N/A 760 ZAR 8.93 1,080 690 N/A 1,110 310 215 370 410 1,000 6,800 3,900 USD 1.00 650 4,400 2,010 GBP 0.62

Multi Storey Car Park

890

1,000

N/A

District Hospital

4,070

3,500

N/A

Primary & Secondary Schools SGD 1.22

1,710

1,700

N/A

1,400

EXCHANGE RATES

AUD

HKD

CNY

US$1.00 (as of 1 November 2012)

0.95

7.98

6.46

Excluded: external works and services; tenant t-out; ttings, furnishings and equipment (FF&E); professional fees; land acquisition costs; nancing costs; Value Added Tax (VAT) or similar, where applicable. # Rate includes parking and minimal external works * Rate includes FF&E ** Up to 12 storeys

113

114
Doha, Qatar Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E. 1,500 2,100 1,900 1,700 1,690 1,600 N/A 1,300 N/A 1,360 1,700 1,250 1,800 2,050 1,250 1,230 1,280 1,170 N/A N/A 1,300 1,500 1,770 1,350 970 1,100 620 700 780 910 610 890 2,050 3,350 1,800 2,620 1,820 2,925 1,900 2,800

Regional Building Cost Comparison (US$/m) Q4 2012

Building Type

Beirut, Lebanon

Riyadh, KSA

RESIDENTIAL

Average Multi Unit High Rise

1,200

1,500

Luxury Unit High Rise

1,700

1,800

Individual Prestige Houses

2,100

1,600

COMMERCIAL/RETAIL

Average Standard Ofces High Rise

1,250

1,500

Prestige Ofces High Rise

1,600

2,000

Major Shopping Center (CBD)

1,300

1,300

INDUSTRIAL

Light Duty Factory

750

700

Heavy Duty Factory

1,000

900

HOTEL (including FF&E)

3 Star/Budget

1,700

1,700

5 Star/Luxury

3,000

2,650

Building Type 3,750 3,200 2,665 3,400

Beirut, Lebanon

Riyadh, KSA

Doha, Qatar

Manama, Bahrain

Muscat, Oman

Abu Dhabi, U.A.E.

Resort Style

N/A

3,200

OTHER 760 3,590 1,250 QAR 3.64 0.37 BHD OMR 0.38 1,510 1,235 2,450 2,340 620 650 820 3,158 1,430 AED 3.67

Multi Storey Car Park

600

600

District Hospital

2,700

2,000

Primary & Secondary Schools

N/A

1,100

EXCHANGE RATES

LBP

SAR

US$1.00 (as of 1 November 2012)

1,507

3.75

Excluded: external works and services; tenant t-out; ttings, furnishings and equipment (FF&E); professional fees; land acquisition costs; nancing costs; Value Added Tax (VAT) or similar, where applicable.

115

116
Doha, Qatar Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E. 365 530 730 N/A 440 N/A 410 540 480 720 325 420 670 N/A N/A N/A 325 450 580 520 290 335 350 400 310 420 360 480 495 1,050 580 870 N/A N/A 410 820

Mechanical & Electrical Cost Comparison (US$/m2) Q4 2012

Building Type

Beirut, Lebanon

Riyadh, KSA

RESIDENTIAL

Average Multi Unit High Rise

343

406

Luxury Unit High Rise

437

510

COMMERCIAL/RETAIL

Average Standard Ofces High Rise

343

416

Prestige Ofces High Rise

416

478

Major Shopping Center (CBD)

348

426

INDUSTRIAL

Light Duty Factory

229

312

Heavy Duty Factory

296

416

HOTEL (including FF&E)

3 Star/Budget

276

416

5 Star/Luxury

676

728

Building Type 1,150 1,000 940 880

Beirut, Lebanon

Riyadh, KSA

Doha, Qatar

Manama, Bahrain

Muscat, Oman

Abu Dhabi, U.A.E.

Resort Style

754

832

OTHER 225 N/A N/A QAR 3.64 0.37 BHD OMR 0.38 N/A N/A N/A N/A 120 135 130 N/A N/A AED 3.67

Multi Storey Car Park

130

156

District Hospital

N/A

N/A

Primary & Secondary Schools

N/A

N/A

EXCHANGE RATES

LBP

SAR

US$1.00 (as of 1 November 2012)

1,507

3.75

Excluded: incoming service utility lines and connections; site distribution networks; associated builders work; and Value Added Tax (VAT) or similar, where applicable.

117

118
Doha, Qatar 11 13 13 125 130 130 32 40 200 1.2 4 4 30 4 4 40 1.4 185 44 20 205 1.2 3 3 30 44 20 150 135 150 135 99 100 19 15 189 1 2 3 22 140 128 92 30 13.5 11 15 8 7 12 7 4 5 14 11 108 117 117 29 29 173 1 2.9 2.9 22 Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E.

Major Measured Unit Rates (US$) Q4 2012

Description

Unit

Beirut, Lebanon

Riyadh, K.S.A.

Basement Excavation

15

Foundation Excavation

16

Imported Structural Fill

35

Concrete in Pad Footings (25 megapascals (Mpa)

125

Concrete in Walls (32 megapascals (Mpa)

135

Concrete in Slabs (32 megapascals (Mpa)

125

Formwork to Slab Softs (under 5 meters (m) high)

20

Formwork to Side and Softs of Beams

23

Precast Wall Panel Architectural with Sand Blast Finish

200

Reinforcement in Beams

kg

1.1

Structural Steel in Beams

kg

3.5

Structural Steel in Trusses

kg

3.5

Hollow Concrete Block Partition (200 millimeters (mm) thick)

30

Description 440 255 220 273 230

Unit
Doha, Qatar Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E.

Beirut, Lebanon

Riyadh, K.S.A.

Aluminium Framed Window (6.5millimeters (mm) clear glass commercial quality) 615 51 35 8 35 160 60 75 39 200 160 70 53 5 8 36 48 35 4 24 98 56 95 52 60 600 535 540 540 39 35 7 36 163 51

250

Aluminium Curtain Wall System (including structural system)

700

Average Quality Steel Stud Partition (with single layer plasterboard each side)

50

Suspended Mineral Fibre Ceiling

32

Paint on Plasterboard Walls

10

Ceramic Tiles to Walls

35

Average Quality Marble Paving on Screed

130

Anti Static Carpet Tiles to Ofce and Admin Areas

65

These rates (US$) are indicative and represent competitively tendered prices for average specication works of the type described. Location factors should be applied to address geographic variations in each country. The rates are exclusive of contractors preliminaries (site establishment, scaffolding, hoisting etc) and Value Added Tax (VAT) or similar, where applicable.

119

120
Doha, Qatar Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E. 88 78 80 80 82 85 95 92 66 61 12 25 20 13 12 14 34 25 15 18 75 70 60 94 99 105 100 90 80 79 74 63 68 59 49 690 690 900 850 800 800 725 725 680 740

Major Material Prices (US$) Q4 2012

Description

Unit

Beirut, Lebanon

Riyadh, K.S.A.

ORDINARY PORTLAND CEMENT

In Bags

Tn

103

In Bulk

Tn

94

SAND

Sand for concreting

22

AGGREGATE

19millimeters (mm) thick Aggregate

17

READY MIXED CONCRETE

Grade 50 Ordinary Portland cement (OPC)

97

Grade 40 Ordinary Portland cement (OPC)

88

Grade 20 Ordinary Portland cement (OPC)

74

REINFORCING STEEL

High Tensile

Tn

660

Mild Steel

Tn

690

Description

Unit
Doha, Qatar Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E.

Beirut, Lebanon

Riyadh, K.S.A.

HOLLOW CONCRETE BLOCKWORK 7 9 10 20 9 9 18 7 6 7

100 millimeters (mm) thick

200 millimeters (mm) thick

STRUCTURAL STEELWORK 1,540 1,300 1,470 1,090

Mild Steel Grade 50 to BS 4360

Tn

1,500

1,400

TIMBER 732 432 775 395 1175 790 769 454 885 443

Hardwood Meranti

1,600

Softwood

550

FUEL
0.07 0.16 0.25 0.27 0.27 0.27 0.38 0.31 0.89 0.47

Diesel

Litre

0.85

Petrol Premium 95

Litre

1.14

These cost rates (US$) are indicative and represent supply-only costs of the materials listed. Location factors should be applied to address geographic variations in each country. The rates are exclusive of Value Added Tax (VAT) or similar, where applicable.

121

122
Doha, Qatar 40 40 44 44 27 66 66 50 55 55 90 7,000 14,000 87 132 5,250 11,130 75 59 75 84 46 27 54 54 36 48 48 68 4,020 11,400 50 40 58 48 58 40 29 40 29 29 31 31 20 59 54 41 44 46 74 5,600 11,200 Manama, Bahrain Muscat, Oman Abu Dhabi, U.A.E.

Labor Costs (US$) Q4 2012

Description

Unit

Beirut, Lebanon

Riyadh, K.S.A.

Concreter

Day

28

45

Steel Bender

Day

28

50

Carpenter

Day

37

50

Mason

Day

32

50

General Laborer

Day

20

25

Crane Operator

Day

60

25

Heavy Machinery Operator

Day

55

65

Dump Truck Driver

Day

32

55

Plumber

Day

35

70

Electrician

Day

35

65

Foreman

Day

110

90

Site Engineer

Month

4,200

5,000

Construction Manager

Month

8,500

13,000

These rates (US$) are indicative and represent an all-in unit cost for each of the disciplines listed. Included: wages, salaries and other remunerations prescribed by local labor legislation, average allowances for costs of employment, recruitment, visas/permits, paid leave, travel, accommodation, health and welfare. Excluded: overtime working, contractor mark-up for overheads and prot, VAT (Value Added Tax) or similar, where applicable. These cost rates should not be misinterpreted as contractors daywork rates.

Building Services Standards

U.A.E. Specication* 75 - 80% 1:10 - 1:15/m 1:7/m Single sex 1 person to 12m using 70/30 male/ female ratio based on 120% population Fan Coil Units, VAV, VAV with Re-Heat, DX, Constant Volume, plate heat exchangers 22oC, +/- 2oC 12 - 16 liters per second per person 10 Air Changes per Hour Single sex 1 person to 12m using 70/30 male/ female ratio based on 120% population Fan Coil Units, VAV, Downow Units 1:7 - 1:12/m 1:7/m 1:10 - 1:14/m 1:10 - 1:15/m 70 - 80% 70 - 80% Qatar Specication Oman Specication Lebanon Specication 80 - 85% 1:12 - 1:14/m 1:7/m Single sex 1 person to 14m using 60/60 male/ female ratio based on 120% population Fan Coil Units, VAV, Displacement, Chilled Ceiling/Beam

Subject

BCO (U.K.) Specication 2009

Bahrain Specication

Net : Gross Ratio (Typical)

80 - 85%

70 - 80%

Occupancy Standards Typical

1:8 - 1:13/m

1:10 - 1:14/m

Occupancy Standards Dealer

none stated

1:7 - 1:12/m

Occupancy Standards Toilets

Single sex 1 person to 12m using 60/60 male/ female ratio based on 120% population Fan Coil Units, VAV, Downow Units

Single sex 1 person to 12m using 70/30 male/ female ratio based on 120% population

Single sex 1 person to 12m using 70/30 male/ female ratio based on 120% population

Form of Air Conditioning

Fan Coil Units, VRV/ VRF, VAV, Displacement, Chilled Ceiling/Beam, Natural or mixed mode ventilation 22oC, +/- 2oC

Fan Coil Units, VAV, DX, Constant Volume

Heating and Air Conditioning Internal Criteria

24oC, +/- 2oC (Summer) 22oC, +/- 2oC (Winter)

22oC, +/- 1oC

22oC, +/- 2oC 12 - 16 liters per second per person 10 Air Changes per Hour

22oC, +/- 2oC 12 - 16 liters per second per person none stated

Fresh Air Supplies

12 - 16 liters per second per person

10 liters per second per person

12 - 16 liters per second per person

Ventilation WCs (Extract)

none stated

12 Air Changes per Hour

3 - 10 Air Changes per Hour

123

124
U.A.E. Specication* 12 W/m 15 W/m 45 W/m 25 W/m to 25% area NR 30 - 35 NR 40 - 45 12 W/m 25 W/m 30 - 40 W/m none none 12 - 15 W/m NR 40 NR 30 - 35 none none stated NR 30 - 35 NR 40 12 - 15 W/m 25 - 30 W/m none stated none stated none none stated 15 W/m 15 W/m 12 - 15 W/m 12 W/m 12 W/m 12 W/m none 25W/m, 25% area NR 35 - 38 NR 40 - 45 12 W/m 15 - 25 W/m none 20 - 25 W/m, 20 - 25% area Qatar Specication Oman Specication Lebanon Specication 25 W/m to 25%area

Subject

BCO (U.K.) Specication 2009

Bahrain Specication

Internal Heat Gains Lighting load

12 W/m

15 W/m

Internal Heat Gains Equipment load (Typical)

none stated

25 W/m

Internal Heat Gains Equipment load (Dealer)

none stated

60 - 215 W/m

Supplementary cooling allowance (e.o./% area)

25W/m, 25% area

none

Acoustics Ofces

NR 35 - 40

NR 35

Acoustics Common Areas

NR 40 - 45

NR 40

Primary Power Lighting

12 W/m

15 W/m

Primary Power Typical

15 - 25 W/m

35 W/m

Primary Power Dealer

none

400, 800 or 1,500W per desk

800 or 1,600W/person

Primary Power Upgrade (e/o power/ % area)

20 - 25 W/m, 20 - 25% area

none

Subject 500lux 250lux 200lux 150lux 80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14 215lux 80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14 215lux 200 - 270lux 400 - 500lux, Uniformity Ratio 0.8

BCO (U.K.) Specication 2009 U.A.E. Specication* Qatar Specication Oman Specication

Bahrain Specication

Lebanon Specication 300 - 500lux, Uniformity Ratio 0.8

Lighting Ofce

300 - 500lux, Uniformity Ratio 0.7

400 - 500lux

350 - 500lux, Uniformity Ratio 0.8

Lighting Stairs/Circulation

200 - 270lux

Lighting WCs

215lux

Lighting Plantrooms

215lux

Passenger lifts Capacity and waiting times

80% loading with 25 second waiting interval, handling 15% in 5 minutes. Population density 1:12

80% loading with 35 second waiting interval, handling capacity of 11% to 17% in 5 minutes. Population density 1:12

80% loading with 35 second waiting interval, handling 15% in 5 minutes. Population density 1:14

80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14

* Specic to the Emirate of Abu Dhabi (differing standards in the seven Emirates). Excludes implications of new building code regulations for the Emirate that came into effect at the beginning of the 2011.

125

126
2011 High 1,499 6.16 0.708 xed 0.282 xed xed xed xed 1,165 0.276 xed xed xed xed 1,158 xed 0.706 5.92 1,491 -0.3 2.0 0.0 xed 1.3 xed xed xed xed -0.7 Average 2012 vs 2011 Percent

Exchange Rates

Local currency to US$1.00

Latest

2012

End March 2013

Average

Low

Lebanese Pound

1,486

1,487

1,471

Egyptian Pound

6.74

6.03

5.98

Jordanian Dinar

0.706

0.706

0.705

Saudi Riyal

3.75

xed

xed

Kuwait Dinar

0.284

0.280

0.277

Qatari Riyal

3.63

xed

xed

Bahraini Dinar

0.374

xed

xed

U.A.E. Dirham

3.67

xed

xed

Omani Rial

0.384

xed

xed

Iraqi Dinar

1,147

1,151

1,128

Source: Oanda.com

6
Measurement Formulae Two Dimensional Figures
Figure Square Diagram Area a Perimeter 4a

Rectangle Triangle

ab ch

2(a + b) a+b+c

Circle

r d where 2r = d

2 r d

Parallelogram

ah

2(a + b)

Trapezium

h (a + b)

a+b+ c+d

Ellipse

Approximately ab

(a + b)

Hexagon

2.6 x a

Octagon

4.83 x a

Sector of circle

rb or q r 360 q r note b = angle 360 S-T where S = area of sector T = area of triangle 3 x r 14

Segment of circle Bellmouth

127

6
Measurement Formulae Three Dimensional Figures
Figure Cube Diagram Surface Area 6a Volume a

Cuboid/ rectangular block Prism/ triangular block

2(ab + ac + bc)

abc

bd + hc + dc + ad

hcd

Cylinder

2 rh + 2r dh + d

rh dh

Sphere

4r

4/3r

Segment of sphere

2Rh

1 6

1 3

/ h (3r + h) / h (3R - H)

Pyramid

(a + b) l + ab

1 3

/ abh

Frustum of a pyramid

l (a+b+c+d) + (ab+cd) [regular gure only]

h/3(ab + cd + abcd)

128

Figure Cone

Diagram

Surface Area rl + r dh + d

Perimeter
1 3 1 12

/ r h / dh

Frustrum of a cone

+ R + h (R+r)

1 3

/ (R + Rr + r)

129

6
Weights and Measures Metric Measures and Equivalents
Length 1 millimeter (mm) 1 centimeter (cm) 1 meter (m) 1 kilometer (km) Area 1 square centimeter (cm2) 1 square meter (m2) 1 hectare (ha) 1 square kilometer (km2) Capacity/Volume 1 cubic centimeter (cm3) 1 cubic decimeter (dm3) 1 cubic meter (m3) 1 liter (liter) 1 hectoliter (hl) Mass (Weight) 1 milligram (mg) 1 gram (g) 1 kilogram (kg) 1 tonne (t) = 1000 mg = 1000 g = 1000 kg = 0.0154 grain = 0.0353 oz = 2.2046 lb = 0.9842 ton = 1 cm3 = 1000 cm3 = 1000 dm3 = 1 dm3 = 100 liter = 0.0610 in3 = 0.0353 ft3 = 1.3080 yd3 = 1.76 pt = 21.997 gal = 100 mm2 = 10 000 cm2 = 10 000 m2 = 100 ha = 0.1550 in2 = 1.1960 yd2 = 2.4711 acres = 0.3861 mile2 = 1 mm = 10 mm = 100 cm = 1000 m = 0.0394 in = 0.3937 in = 1.0936 yd = 0.6214 mile

U.S.A. Measures and Equivalents

USA Dry Measure Equivalents 1 pint = 0.9689 UK pint = 0.5506 liter

U.S.A. Liquid Measure Equivalents

1 uid ounce 1 pint (16 oz) 1 gallon = 1.0408 UK oz = 0.8327 UK pt = 0.8327 UK gal = 29.574 ml = 0.4723 liter = 3.7854 liter

130

6
Imperial Measures and Equivalents
Length 1 inch (in) 1 foot (ft) 1 yard (yd) 1 mile 1 int. nautical mile Area 1 square inch (in2) 1 square foot (ft2) 1 square yard (yd2) 1 acre 1 sq mile (mile2) Capacity/Volume 1 cubic inch (in3) 1 cubic foot (ft3) 1 pint (pt) 1 gallon (gal) Mass (Weight) 1 ounce (oz) 1 pound (lb) 1 stone 1 hundredweight (cwt) 1 ton Temperature Conversion C = 5/9 (F 32) F = (9/5 C) + 32 = 437.5 grains = 16 oz = 14 lb = 112 lb = 20 cwt = 28.35 g = 0.4536 kg = 6.3503 kg = 50.802 kg = 1.016 tonne = 1728 in3 = 20 oz = 8 pt 1 uid ounce ( oz) = 16.387 cm3 = 0.0283 m3 = 28.413 ml = 0.5683 litre = 4.5461 litre = 144 in2 = 9 ft2 = 4840 yd2 = 640 acres = 6.4516 cm2 = 0.0929 m2 = 0.8361 m2 = 4046.9 m2 = 2.59 km2 = 12 in = 3 ft = 1760 yd = 2025.4 yd = 2.54 cm = 0.3048 m = 0.9144 m = 1.6093 km = 1.853 km

131

132

Page Left Intentionally Blank

DIRECTORY OF OFFICES

133

134

7
MIDDLE EAST
Kingdom of Bahrain
AECOM Al Saffar House Unit 22, Building No. 1042 Block 436, Road 3621 Seef District PO Box 21271 Manama Kingdom of Bahrain T: +973 17 556 452 F: +973 17 556 457 Ofce E: bahrain@aecom.com Contact: Clarke Morton-Shepherd E: clarke.morton-shepherd@aecom.com

Kingdom of Saudi Arabia (Al Khobar)

AECOM Arabia Ltd Al Khereji Business Centre, Level 1 King Faisal Road, Bandariyah District PO Box 1272 Al Khobar 31952 Kingdom of Saudi Arabia T: +966 3 849 4400 F: +966 3 849 4411/8494422 Ofce E: AAL.MiddleEast@aecom.com Contact: Fawzi Al-Malki E: Fawzi.Al-Malki@aecom.com

Kingdom of Saudi Arabia (Jeddah)

AECOM Arabia Ltd 7th Floor, Bin Sulaiman Center Al Rawdah Street PO Box 15362 Jeddah 21444 Kingdom of Saudi Arabia T: +966 2 606 9170 Ofce E: AAL.MiddleEast@aecom.com Contact: Andy Ritchie E: andy.ritchie@aecom.com

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Kingdom of Saudi Arabia (Riyadh)
AECOM Arabia Ltd 4th Floor, Tower 4 Tatweer Building King Fahad Road PO Box 58006, Riyadh 11594 Kingdom of Saudi Arabia T: + 966 11 200 8686 F: + 966 11 200 8787 Ofce E: AAL.MiddleEast@aecom.com Contact: Andy Ritchie E: andy.ritchie@davislangdon.com

Kuwait
AECOM PO Box 29927 Safat 13160 Kuwait T: +965 2 23 22 999 F: +965 2 23 22 990 Ofce E: kuwait@aecom.com Contact: Adam Ralph E: adam.ralph@aecom.com

Lebanon
Davis Langdon, An AECOM Company Floor 1, Chatilla Building Australia Street Rawche, Shouran PO Box 13-5422 Beirut Lebanon T: +961 1 780 111 F: +961 1 809 045 Ofce E: lebanon@aecom.com Contact: Muhyiddin Itani E: muhyiddin.itani@aecom.com

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Oman
AECOM PO Box 434 Al Khuwair, Postal Code 133 Muscat Oman T: +968 2448 1664 F: +968 2448 9491 Ofce E: muscat@aecom.com Contact: Chris Beasley E: chris.beasley@aecom.com

Qatar
AECOM 4th Floor, The Pearl Building Airport Road, Umm Ghuwalina PO Box 6650 Doha Qatar T: +974 4407 9000 F: +974 4437 6782 Ofce E: doha@aecom.com Contact: Jason Kroll E: jason.kroll@aecom.com

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7
United Arab Emirates (Abu Dhabi)
AECOM Al Jazira Sports & Cultural Club Muroor Road, 4th Street PO Box 43266 Abu Dhabi United Arab Emirates T: +971 2 414 6000 F: +971 2 414 6001 Ofce E: abudhabi@aecom.com Contact: Stephen Gee E: stephen.gee@aecom.com

United Arab Emirates (Dubai)

AECOM UBora Tower, Level 43 PO Box 51028 Business Bay Dubai United Arab Emirates T: +971 4 439 1000 F: +971 4 439 1001 Ofce E: dubai@aecom.com Contact: Mark Prior E: mark.prior@aecom.com

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NORTH AFRICA
Egypt
Davis Langdon, An AECOM Company Ground Floor, Corner Road 23 / El Sharifa Dina Street Building 13 Maadi Cairo Egypt T: +20 2 2750 8145 F: +20 2 2750 8146 Contact: Aly Omar E: aly.omar@davislangdon.com

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AFRICA
Botswana
Davis Langdon, An AECOM Company Plot 127, Unit 10 Kgale Court Gaborone International Finance Park Gaborone Botswana T: +267 390 0711 Ofce E: admin@davislangdon.co.bw Contact: Fred Selolwane E: fred.selolwane@aecom.com

Mozambique
Davis Langdon, An AECOM Company Rua de Argelia, 453 Maputo Mozambique T: +258 21 498 797 Ofce E: admin@davislangdon.co.mz Contact: Elton Olivier E: elton.olivier@davislangdon.co.mz

South Africa
Davis Langdon, An AECOM Company 2nd Floor Citibank Plaza Building 145 West Street Sandton, Johannesburg 2196 South Africa T: +27 (0) 11 666 2000 Ofce E: africa@aecom.com Contact: Indresen Pillay E: indresen.pillay@aecom.com Also at: Cape Town, Durban, George, Pietermaritzburg, Port Elizabeth and Stellenbosch

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7
AMERICAS
U.S.A.
Davis Langdon, An AECOM Company 515 South Flower Street 8th Floor Los Angeles California 90071 USA T: +1 213 593 8100 F: +1 213 593 8178 Contact: Nicholas Butcher E: nbutcher@davislangdon.us Also at: Boston, Honolulu, Houston, New York, Philadelphia, Sacramento, San Francisco, Seattle and Washington, D.C.

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AUSTRALIA NEW ZEALAND
Australia
AECOM Level 21, 420 George Street Sydney, NSW 2000 Australia T: +61 2 8934 0000 F: +61 2 8934 0001 Ofce E: sydney@aecom.com Contact: Alan Baker E: alan.baker@aecom.com Also at: Adelaide, Brisbane, Cairns, Canberra, Darwin, Hobart, Perth, Sydney and Townsville

New Zealand
Davis Langdon, An AECOM Company Level 2, AECOM House 8 Mahuhu Crescent Auckland 1010 New Zealand Mailing Address: PO Box 4241 Shortland Street Auckland 1140 New Zealand T: +64 9 379 9903 F: +64 9 309 9814 Ofce E: auckland@aecom.com Contact: Trevor Hipkins E: trevor.hipkins@aecom.com Also at: Christchurch and Wellington

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EUROPE & U.K.
Central Eastern Europe
AECOM 68-72 Strata Polona 2nd Floor Bucharest Romania T: +40 (0)21 316 11 63 F: +40 (0)21 316 11 68 Contact: Carlos Glvez E: carlos.galvez@aecom.com Also at: Bulgaria, Czech Republic, Estonia, Latvia, Poland and Ukraine

Western Europe
Davis Langdon, An AECOM Company Calle Serrano 98 2nd Floor 28006 Madrid Spain T: +34 91 431 0290 F: +34 91 576 9211 Contact: Jon Blasby E: jon.blasby@davislangdon.com Also at: France, Germany, Greece, Italy and The Netherlands

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Ireland
Davis Langdon, An AECOM Company 24 Lower Hatch Street Dublin 2 Ireland T: +353 1 676 3671 F: +353 1 676 3672 Ofce E: ireland@davislangdon.com Contact: Paul Mitchell E: paul.mitchell@davislangdon.com Also at: Cork, Galway and Limerick

United Kingdom
AECOM MidCity Place 71 High Holborn London WC1V 6QS United Kingdom T: +44 20 7061 7000 F: +44 20 7061 7061 Contact: Steve Waltho E: steve.waltho@aecom.com Also at: Aberdeen, Belfast, Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Exeter, Glasgow, Leeds, Liverpool, Maidstone, Manchester, Newcastle, Norwich, Oxford, Peterborough, Plymouth, Southampton and York

Full contact information is available on our global website www.aecom.com.

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