Face to Face: Ramez Al Khayyat, UrbaCon
Design-and-build is key to a successful World Cup in Qatar: contractor
UrbaCon Trading & Contracting LLC (UCC) MD Ramez Al Khayyat tells CWQ that design-and-build is one of the keys to Qatar’s successful delivery of the 2022 World Cup
Many construction industry experts and commentators have remarked on the slow pace of tender awards in Qatar’s 2022 World Cup build-up. However, one local contractor has proved that Qatar does indeed have the capability to get things done.
That contractor is one of the sister companies of UrbaCon Trading and Contracting (UCC), which completed the Lekhwiya Sports Complex design-and-build project in 18 months.
The achievement is particularly significant in that Lekhwiya will serve as a benchmark for future World Cup facilities.
UCC MD Ramez Al Khayyat is adamant that design-and-build is the best way for Qatar to achieve its 2022 World Cup goals.
“When we started we said we should be different in the market, we wanted to build our infrastructure very strong, so what we did was establish a company to do the design and build all together, so we are able to do a project from A-Z.
There is no need for the client to have any headache in coordinating suppliers, contractors or consultants on projects; he will be working with one company only.
We have the ability to do the design management; we do not do the design ourselves. And we hire the best consultants and architects from around the world.”
Design-and-build is particularly suited to the 2022 World Cup build-up, asserts Al Khayyat.
“Especially with fast-track, as most of the projects are now. When the client comes to you to do something, he just wants the project to be done.
If you give the contractor the design-and-build contract, he will be able to start the project immediately. Starting the project in parallel with the design – this is most important.”
“Also, this is to the benefit of the owner and client as well, because he will be unaffected by inflation, price escalation and all those issues.
If you wait two to three years for the design to be finalised before commencing construction, and if the inflation rate is 5% to 10% a year, then he will be paying 25% to 30% more if he waited until the design was finished … So it is better from the beginning to start the project and construction immediately.
And actually this is how we work on most of our projects; all the tenders we have participated in, with different clients, have been design-and-build tenders,” says Al Khayyat.
“And we are proud, of course, of our achievements with the design-and-build contracts. We did that in a very short time. For example, for Lekhwiya Sports Complex, we achieved this project in 18 months. We did it, it is finished, it is ready and the client can use it, all in 18 months.”
Such has been the success of the design-and-build approach that, in the short space of three years, UCC has completed seven major projects, as well as making a name for itself in Qatar’s construction industry.
Experts and commentators have also remarked that the influx of international companies into Qatar in anticipation of 2022 is bad news for local companies; Al Khayyat begs to differ though.
“I do not think it is going to make it difficult for the local contractors. We know that international contractors cannot work in this market alone, especially with the government stipulating that the Qatari contractor should have 51% of any tender.
International companies, when they come in, they do not participate in the labour acquisition, resourcing, the services and all these issues; they outsource this local expertise and essentially only carry out construction management.
“They have an expertise in a certain type of construction, and they give this expertise to the local contractors.
It is not competition actually, as they have to work with the local contractors; otherwise they will not be competitive enough, and the project also will not be successful, because the local contractor has the necessary infrastructure,” says Al Khayyat.
This is not to say that Qatar’s construction industry is without its challenges.
One aspect that needs careful consideration on the part of government is staggering the World Cup tenders to prevent any bottlenecks and subsequent inflationary issues.
“If they only award all the tenders at the end, that would be a problem, especially in terms of inflation, because the demand for building materials will be very high and it will affect the construction cost.
And it might at some time hurt the contractor himself, because you will price the project today, and then after one or two months, the prices will have increased.
“There are a lot of projects to be tendered, and if those are floated gradually, it will be much better than them all being awarded at the end, which will affect the client, contractor and stakeholders.” Al Khayyat points to Qatar’s successful hosting of the Asian Games in 2006.
“They learnt very good lessons, so I think [the inflationary pressure] will not happen again. They are putting all the projects gradually out to tender, and I think it is going to be successful.”
UCC executive director Moutaz Al Khayyat says it is important for Qatari contractors to have all their resources and infrastructure in place in order to be able to cope with the anticipated World Cup project pipeline.
“When we started UCC, we first worked on our infrastructure. We built up our infrastructure to be very strong in terms of everything related to construction. We are very proud of what we have achieved. We have labour camps that can accommodate up to 40,000 workers.”
A particular achievement of UCC, and a strong differentiator from the competition, is the creation of a Workshop Department within the company.
“This Workshop Department has different sectors, from shuttering to plastering and joinery, which we deal with like sub-contractors, because one of the challenges we have found is the availability, capability and quality of sub-contractors.”
Al Khayyat explains that each section is dealt with “like an army. You have 12 skilled labourers; they have three charge hands; and they have foremen. When we move from site to site, we do not move people, we move teams.
This is the most important issue, and we are really proud of what we have achieved with the Workshop Department.”
Such an approach gives UCC the flexibility and adaptability to tackle a range of projects simultaneously, which is key to Qatar delivering a successful 2022 World Cup.
“If you move just the labour, in order for them to get to know their leader, it is going to take time, and you will not get the same quality. We have adopted this type of organisational structure in order to ensure the level of quality we require.
It is much better and easier for the workers themselves, rather than going to and fro from site to site. I think this is also necessary in terms of the future with all the big projects that will need to be done; you have to take the longer view.”
As a result of this approach, UCC has grown to encompass nine sister companies, says Al Khayyat, ranging from the largest landscaping contractor in Qatar to marble and stone and joinery factories.
“If you rely on local sub-contractors, it is going to be a problem. Meantime we are doing 65% of the work ourselves and the other 35% is sub-contracted. We are very selective in choosing sub-contractors.” An example of UCC’s attention to detail is that it employs 500 Moroccans skilled in detailed, speciality finishing work, particularly for high-end projects.
Al Khayyat maintains that, contrary to many views, sourcing unskilled labour is not a problem in Qatar.
“International contractors have to work with local contractors, because they have the labour, so it is not a big issue. While unskilled labour is not an issue, skilled labour is becoming more of an issue, because new international contractors coming to the market bring in labour from outside, and these workers have to be tried out on projects beforehand.”
Looking to the future, Al Khayyat confirms that UCC is looking to expand throughout the region.
“Yes, of course we are looking to expand outside of Qatar. At the moment we are very busy and have enough work to do in Qatar, but still we have a special development team working outside Qatar.”
At the same time, Al Khayyat points out that “the construction industry is the most difficult industry in the world. It is not the same as any other type of business; it is really different. But at the same time it is very exciting.
This is a family business, established by my father in Syria in 1983, so we lived with construction in the family, we went to project sites with him to see what he was doing; that is what gave us not only the understanding of it, but also our love for it.”
Al Khayyat sees exciting times ahead for Qatar not only in the lead-up to 2022, but up to 2030 and even beyond that.
“It is even beyond the National Vision 2030. As you know, the goal of Qatar is to have 80% of its GDP from non-oil sources, which means a lot of construction and infrastructure in multiple business sectors.”
He adds that many of the projects on the go now “have never been done in the world before … and are really different. So it is bringing more and more to the country, and giving contractors experience they can transfer to Qatar. Even international contractors are doing work they have never done before.”