Face to Face: Jim Stamatis and Thomas Topolski
Louis Berger's dynamic duo discuss plans for their ME operations
It’s been over a year since Louis Berger set up its Middle East headquarters in Abu Dhabi, the capital of the UAE. The move at the time was seen as essential.
Historically, operations had been run from the US-based consulting engineer’s international headquarters in Paris. This hadn’t prevented the firm from winning work in the region, with GCC projects including flagship schemes such as the Mafraq-Ghuweifat highway, Masdar headquarters, and the Sheikh Zayed Street Tunnel and Al Salam Street reconstruction.
However, the company felt a local office was required to better serve MENA and GCC clients and maximise growth opportunities in the region. Senior vice president Thomas Topolski was put in charge of its development.
Since it opened, Louis Berger has expanded both internally and externally. Staff numbers have doubled from approximately 400 to 800 and it has scooped some impressive contracts, including project management work on the Riyadh Metro.
Its rail portfolio alone now boasts some of the region’s major projects, with the Doha Metro in Qatar and the North-South Railway in Saudi Arabia already being worked on.
“The GCC right now happens to be the Silicon Valley of development projects,” says Topolski.
“We’ve got the best of the best working and competing in this market and the clients demand the best that you have, so we have got to be able to reach within the best of our organisation – bring them here – and also the best the world has to offer in terms of top-level talent to be able to compete and succeed.”
Topolski’s boss, Louis Berger International president Jim Stamatis, who is based in Paris but comes over for quarterly meetings, says the company expects to have well over 1,000 employees in the next 12 months just to deliver the work it already has in hand.
It has a project backlog in the MENA region of approximately $500m, with the overwhelming majority of this in the GCC.
“We’ve won as much work as we expected but the next phase of this is to broaden the client base and the service offering,” says Stamatis.
Both men have a clear idea of the additional areas they would like to push Louis Berger into this year and beyond. One of the objectives is to win more design and build work, an area considered a core strength. As such, negotiations have been taking place with different contractors over teaming up to bid for the 131km Abu Dhabi metro and light rail project. According to media reports, it will be split into three separate contracts that comprise civil works for above-ground structures, rail above ground and underground construction.
“There’s a lot more opportunities out there,” says Topolski. “There’s the Jeddah Metro, Makkah Metro, Dammam, and there’s going to be additional packages in Dubai. We’re tracking all of that plus one of our teams is bidding on the Oman national rail project – that’s still under evaluation.”
Stamatis adds Louis Berger is happy to either work side-by-side with a contractor or directly for the client, but design and build is certainly where he feels it has an edge.
“What we are trying to do is focus on the jobs where we can provide a significant ‘value-added’. Some of the design and build work and larger projects are going to want firms that have significant value to add to them,” he says. “Not only in terms of the materials they use, but also how they build it. So there’s not many firms out there that have that engineering capability.”
The pair are equally enthusiastic about the contingency power and energy sector. Stamatis’s eyes light up when he explains that Louis Berger will export its overseas capabilities to the Middle East. And to prove the point, he says it has started introducing photovoltaic and wind power as an added-value feature onto some of its current projects.
“Contingency power is a very big and important part of our company,” he says. “None of the GCC countries want to build up their internal energy supplies or power supplies to the peak that’s going to be needed as it’s only going to be used for a short time.
“So when you need tunnel boring machines and other facilities that are going to need peak power demands, that’s better done through contingency power as opposed to building your domestic delivery capabilities up to an unsustainable level.”
Topolski chips in by talking up aviation, water and wastewater, agriculture, buildings, leisure, and operations and maintenance as other areas of interest.
He says Louis Berger is close to sealing a major deal in Dubai in the buildings/tourism sector, but declined to elaborate on the details. It probably explains the firm’s eagerness to get a Dubai office up and running, though, with the final stages of registration now with the relevant authorities.
“We expect to have some work to begin to support the World Expo 2020 and we’ve begun bidding in Dubai,” he adds.
And in Oman, where Topolski says its approach to date has been “more opportunistic”, the firm is sorting out its registration through the US Free Trade Agreement.
“Oman could be a very big market for us but we don’t have anything going on there at the moment. But the thing is we don’t want to be in a race to the bottom. We don’t want to be where there are a lot of players and it’s really a low bid environment.”
With Louis Berger growing steadily in the region, Stamatis sees it becoming an even stronger focal point for the group over the coming years. Five years ago, the MENA accounted for approximately 5-6% of group revenues but has since shot up to 11-12% and, according to Stamatis, could rise to the ‘high teens’ in the next couple of years.
“For a $1bn company I’d say that’s a pretty significant amount and pretty significant growth. And that’s purely organic because we’re also going to be looking at some potential acquisitions,” he says.
“We made three acquisitions last year: two in operations and maintenance and one in engineering. We’re always looking for companies that fit our strategic plan, our vision and our values. For instance, we’re looking at an acquisition in Kuwait to solidify our presence there.”
Despite its comparatively small size, Kuwait has been – and continues to be – a happy hunting ground, especially in the highways sector. In terms of constructed value, Louis Berger is managing well over $2bn.
Since 2005 it has been providing design and supervision services for the upgrade of Jamal Abdul Nasser Street and Jahra Road, while since 2009 it has been offering study, design, construction supervision and maintenance services for section one of the North Road project. Last year it wrapped up design and construction supervision for the new Boubayan Sea Port, while recently it gained several new assignments: a traffic study for the Kuwait National Petroleum Company and management supervision of road maintenance for the Ministry of Public Works.
“Kuwait has been a very good market for us,” says Topolski “For a small country it is generating an awful lot of major infrastructure projects.”
Of Louis Berger’s existing projects, none come bigger than the Riyadh Metro. In a joint venture with Hill International, it was awarded a $265m contract by the Arriyadh Development Authority (ADA) to provide project management and construction management services for the project life cycle for Package 3, which consists of three of six lines. The $8bn project they will oversee for lines 4, 5 and 6 will contain 25 stations and is being delivered by a consortium including Spain’s FCC, Alstom, and Samsung C&T.
Stamatis says the strength and experience of the firm in rail and transit was key to it securing the contract, and it hopes to continue expanding upon its rail portfolio.
“We look forward to playing a key role, in partnership with ADA, to deliver a transportation system that will support continued economic growth of Saudi Arabia’s capital city by improving traffic congestion and connecting the citizens of Riyadh and the Kingdom with their visitors and guests,” he says.