Face to Face: Robert Hamilton Mitchell, TJEG
Ted Jacob Engineering principal on split with RMJM & targets for 2014
It was an eventful 2013 for Ted Jacob Engineering Group (TJEG) in Dubai to say the least. After entering the Middle East with the acquisition of the Dubai-based structural engineering arm of architectural practice RMJM in 2012, it had to find its feet fast, as its US operation had largely been focused on the healthcare market.
“The first six months were fascinating,” says Robert Hamilton Mitchell, a Dubai-based principal at TJEG, who previously worked for RMJM for 24 years. “You talk to everyone you know. Nobody is just sitting there with an RFP (Request for Proposal) for you to bid. In the healthcare industry, Ted Jacob is instantly recognised. But building up the brand awareness and identity did take longer than I had anticipated.”
The year also saw the fracturing of relations with RMJM, with both sides now locked in a legal dispute over alleged late payments. When the TJEG buy-out occurred, part of the sale and purchase agreement terms was that both firms would collaborate on projects over a period of time on a non-exclusive basis.
CW understands that TJEG and RMJM worked side-by-side on about eight projects in total. However, their involvement with each other ended nearly five months ago on the W Hotel project on Dubai’s Palm Jumeirah, which is still to be constructed.
“Initially, our momentum was driven by the fact that there were existing contracts [with RMJM]. We are now RMJM-free,” says Mitchell. “It will be resolved in legal channels.”
RMJM has gone through something of a turbulent period. Scottish construction magnate Sir Fraser Morrison bought a 56% stake in the company in 2006 but after a period of rapid expansion in the Middle East and Hong Kong, it struggled in the ensuing financial crisis.
In October 2012, three RMJM businesses – RMJM Limited, RMJM London Limited and RMJM Scotland Limited – were placed into joint receivership, with debts of around $26.2m (£16m) owed to Sir Fraser, as he had previously bought the company’s bank debt from RBS Group in 2011. Around $63m (£38.6m) was also owed to unsecured creditors, according to filings lodged at UK Companies House by joint receivers Blair Nimmo and Gary Fraser of KPMG.
The companies were acquired by RMJM Architecture, which was later sold to an investment firm known as Duthus Investments, which is also run by Sir Fraser Morrison and his son. It was reportedly sold in a deal worth a reported $18m (£11m), which wiped off $19.7m (£12m) of company debts owed to Sir Fraser.
The restructuring also saw RMJM close its former HQ in Scotland, and in August last year the firm announced that it was moving its base to Abu Dhabi by merging the remainder of its European business into its international business.
Legal issues with RMJM have put a strain on Ted Jacobs’ cashflow, but Mitchell says the business is profitable.
“Cashflow is always an issue and you factor that into any business. If everyone paid up on the dates given in the consultancy agreements for the next six months, I’d be very happy indeed.”
In addition, TJEG Dubai has undergone its own internal restructuring. Mitchell says the reorganisation was deliberate and necessary. Staffing levels were cut from approximately 180 that existed following the sales and purchase agreement to around 80 – split almost equally between technical designers and post-contract workers.
The downgrade has largely come from the departure of post-contract staff, but Mitchell insists this is normal as some staff move one when contracts come to an end.
Around three-and-a-half months ago, a staffing shake-up resulted in 17 people being put up for redundancy and 12 eventually leaving. On top of this, two senior principals also exited, resulting in Mitchell sharing managerial duties with a counterpart.
Part of the rationale behind streamlining the workforce was to allow its associate MEP firm in Beirut, Pierre Dammous & Partners (PDP), to take on some of its work.
“That is a deliberate policy,” says Mitchell. “We have tried to bring together the organisations and thus because they have a slightly lower cost base it helps us to be more competitive to involve them at an appropriate time in a project.”
With these changes, he believes TJEG is in a better position to win work. Regionally, Dubai provides the design resources for its offices in Abu Dhabi, Bahrain and Doha, while TJEG also has a registration in Ebril, Kurdistan.
“We’ve had a very thorough examination of our entrails,” says Mitchell. “We’re in good shape and we’ll grow from this.”
But even though he’s optimistic about the future, he will not allow himself to think more than six months ahead. Apparently, this is quite normal.
“We have an order book that sustains the present staffing level for at least six months. Even in 2004,’5,’6,’7, you never saw much more than six months ahead anyway.
“There’s just a sense now that there’s more activity in Dubai, we’re getting better known, and there’s a great buzz and optimism in the office.”
For 2014, there will be no let-up in its plan to widen its reputation. TJEG would certainly like to do more work in the UAE, especially in Abu Dhabi, and also increase its GCC footprint. In the wider Middle East, Iraq and Libya are on the radar.
“There’s always a nervousness about working in those places and I wouldn’t build a business dependant on those but the people that live there deserve a much higher quality of life and governments I think recognise this and are going to spend money – I think initially in infrastructure, healthcare and education.
“That’s very much in line with the kind of things that we do.”
Within the UAE, TJEG is busy working as lead consultant on the Ducab factory in Taweelah and on a twin tower project for Wasl Properties in Dubai Healthcare City.
Most recently, it was appointed lead consultant by Dubai Electricity and Water Authority (DEWA) for a LEED Platinum solar innovation centre at the Sheikh Mohammed bin Rashid Al Maktoum Solar Park, which will be an interactive museum, education and display centre.
In Saudi Arabia, TJEG is doing structural engineering and MEP for a hotel in Jeddah, designed by Godwin Austen Johnson, which is at the schematic design stage. Elsewhere in the Kingdom, it is working as a sub-consultant for Perkins and Will on another hotel in Riyadh.
For ‘out of territory’ places like Saudi Arabia, design is done in Dubai and a locally-based architect and engineer of record provides the construction administration and supervisory services.
Further afield, TJEG has just scooped the engineering design of the ‘National Club’ in Khartoum, Sudan – a sports and recreation facility on the banks of the Nile. The local architect is TEKNO Consultancy, for whom it is also providing MEP engineering services for two residential apartment buildings in the Musheirab district. It is also providing concept design and peer review services for PDP on the Abuja Convention Centre in Nigeria.
At the same time, Mitchell says there are a number of “hot prospects” that could further swell TJEG’s order book. Nor is it beyond reason to think that in time a healthcare capability could be added to the Dubai office to capture the burgeoning market.
“We are definitely optimistic about the future and with the highly motivated and skilled team we have there is no reason why we can’t continue to grow in the region.”