Face to face: Thomas Stiegler, PORR Group
A construction company has brought its tunneling expertise to Qatar
Austrian contractor PORR may be risk-averse, but its 144-year history and its specialist tunnelling knowledge is paying dividends in the Middle East. Michael Fahy reports
When you work for a firm that has been around for 144 years, your approach to entering new markets will understandably be cautious. But as the man responsible for PORR Group’s international expansion, Thomas Stiegler, explains, this doesn’t mean that you can’t
The Austrian company already had around 50 staff in the region for a two-year period before landing two major deals on the Doha Metro project with its consortium partners HBK Contracting and Saudi Binladin Group, and is now gearing up operations in Qatar to deliver these.
“The history of the company is something very unique,” he tells Construction Week at PORR Group’s Doha office. “We have to be risk-averse in what we are doing – to survive into next century as well,” he adds.
This, he argues, is why the company has taken a specialist approach to expansion into the Middle East – focussing on “core competencies” in civils contracting like tunnelling, deep foundations and specialist bridge and highways work, rather than competing in the high-rise building market.
PORR Group achieved a turnover of $4bn (€2.9bn) in 2012 and employs around 10,000 staff, making it one of Austria’s biggest construction companies and a significant player in Europe.
Stiegler, who is an executive member of the group’s board, says that around 80% of its turnover has traditionally come from core markets in Austria, Germany, Switzerland, Poland and the Czech Republic.
Past projects have included huge tunnel boring projects through the Swiss Alps, major station and tunnel packages on Vienna’s Metro system and a variety of commercial, retail, hospitality and leisure projects in building contracting, from the Stray Bowar Shopping Center at Poznan in Poland through to a number of stadiums for the FIFA 2008 European Championships.
The company began making inroads into the Middle East market three years ago, and scored its first big success in August 2012 when a consortium it formed with Qatar-based HBK Contracting Co and Saudi Binladin Group won the $79m enabling works contract to pave the way for the first phase of construction for the Doha Metro.
This was followed in June this year with the $2.5bn (QR9bn) package to build the metro’s Green Line running from the centre of Doha out to Education City and the proposed new main train station – one of four major packages worth $8.2bn on Phase One announced by operator Qatar Railway Co.
Stiegler describes the win as “a real milestone for PORR” as it is the biggest order in the company’s history and has helped to build its project backlog increase to $6.2bn (€4.5bn).
However, it had clearly identified this project as a key target, setting up its regional base in Qatar and dedicated the necessary resources towards winning it.
“We have been preparing intensively for this tender for the last two years and spent millions of Qatar Rials in tender preparation,” says Stiegler. “We created a professional platform with a tender office in Doha with approximately 50 people and supporting teams in Vienna and Jeddah.”
It has its sights set on other markets – Oman, Saudi Arabia, the UAE and Turkey. It submitted bids for a number of the phase 2 packages on the Etihad Rail project, where tenders were submitted more than 12 months ago but no contract awards have yet been announced.
It is also targeting the Abu Dhabi metro project in the UAE and is clearly interested in the plethora of public transport schemes currently coming to the fore in Saudi Arabia – including the Makkah, Madinah and Jeddah metro schemes, but Stiegler has said it will choose its prospects carefully.
“Other cities have things in development, but let’s do it step-by-step. This is always my motto. I don’t want to get so much exposed. We will have to check on what we can really do and where our capacity is.”
This, despite its success in landing projects on the Doha Metro, appears to be its mantra – not to ‘bet the farm’ on any major project, no matter how enticing.
“The goal will not to be have a big increase of x amount (of turnover) every year. We are not this kind of company who has to grow by 200%.
“We feel comfortable in this niche business with our speciality that we can really be successful in the long run.”
Key to this is in finding the right partners with whom to develop consortiums, he argues. Stiegler, who has been with PORR for three years but has spent a total of 12 years working in construction in the Middle East, believes that one reason why some international firms tend to fail in the region is due to “arrogance” and an assumption that they know better than local contractors.
He said that a key reason for its Doha Metro win was the strength of its partner firms. Moreover, given that it is focussing on using its technology to leverage its presence in the market, it knows that it needs to team up with GCC firms that have a strong trackrecord in delivery.
“We have to have joint venture partners and we are very keen to look to local joint venture partners. In each country, we want to have a a local partner which brings us value-added,” he says.
“We are selective,” he adds. “If we say we are committed to a country or we are going into a country, we will stay in a country. With our partners it is the same.”
Enabling works on the Qatar Metro are set to conclude early next year, but excavation for the Green Line project has already begun under a five-year civils contract set to conclude in 2018. Stiegler said that it would have around 350 staff on the project, but that around 4,000 labourers would be used. In total, the consortium is building six stations and 16.6km of twin-bored underground tunnels.
“This is our core element. We are operating the tunnel drilling machines. It’s the first one in the GCC countries. It’s a challenge but not one we are unused to with our technology.”
PORR is also looking to promote the use of a Slab Track Austria system for use in the GCC’s railways. The system has been jointly developers with the Austrian Federal Railways operator, OBB, with whom it shares a patent.
The system is an alternative to traditional ballast that is largely made up from precast concrete frames produced under precise conditions offsite.
Stiegler says that its use is commonplace in France, Germany and Austria, and that it offers advantages in terms of its ease of use during track laying and in maintenance, with pieces of damaged track easily replaced. He also argues that it is more resistant to sand ingress.
“I don’t say that this is a system we have to use everywhere in the GCC. It’s really for high-speed and for long-distances. It is a standard tool in the Austrian and German markets to use for fast-track construction,” he adds.
Other than this, he is conscious of the need to focus on the delivery of Doha Metro for Qatar Railways before pursuing too many other opportunities.
“We really want to demonstrate to our clients that they chose the right consortium and that we really are coming up with a high-end product and a prime contractor for Qatar.
“With the next step, we will take the same approach,” he says, offering a very simple mission statement for its working methods in the region.
“Don’t go and try to do everything in the first year, and learn from your partners.”
This Austrian company was founded by Arthur Porr in 1869. It is headquartered in Austria, Vienna, but has a strong presence in Germany and Switzerland where it has been operating since the 1970s.
It later expanded into Central and Eastern Europe in the 1980s and then to South Eastern Europe at the start of the new millennium. It has been in the Middle East since 2009. The group has more than 520 companies in its portfolio.
It has completed many landmark projects. In civil engineering, it has worked on the major power plant, tunnel and rail projects including the A10 Tauern Tunne; in Salzburg, The Finne Tunnel at Herrengosserstedt in Germany and the Lötschberg Base Tunnel in Switzerland.
It has also completed power plants at Freudenau and Greifenstein on the Danube river in Austria, and mainline rail stations at Vienna in Austria and at Lehrter in Berlin, Germany.
In building construction, it completed three of the stadiums for the FIFA 2008 European Football Championships at Innsbruck (inset, below), Klagenfurt and Salzburg.
It also built the OPEC and United Nations headquarters in Vienna, the Intercontinental Hotel in Warsaw, the Eurovea International Trade Center in Bratislava, Slovakia and the reconstruction of Vienna’s Hofburg district.
Its 2012 accounts showed a turnover of $4bn. Some $2.7bn of this was earned in its home market, with the rest coming from international work. It also turned around its bottom line, making a $24.8m profit, compared with a $96.6m loss in 2011.