Special Report: Jeddah Infrastructure Conference

Transport, utilities and the contracting sector in Saudi’s second city

L-R: Conference chair Sameer Daoud (Hyder), Mohammad Bajba (Idea Polysilicon), Adel Jemah (Hill International).
L-R: Conference chair Sameer Daoud (Hyder), Mohammad Bajba (Idea Polysilicon), Adel Jemah (Hill International).
The audience watches panel members put forward their arguments.
The audience watches panel members put forward their arguments.
Talal Samarkandi says there are 40,000 dispute cases.
Talal Samarkandi says there are 40,000 dispute cases.
Mike Chihoski says KAEC's 63mn m2 Industrial Valley will be developed in one go.
Mike Chihoski says KAEC's 63mn m2 Industrial Valley will be developed in one go.
L-R: Sameer Daoud, Hicham Hassouni, Peter Pardoe.
L-R: Sameer Daoud, Hicham Hassouni, Peter Pardoe.

Planes,trains and automobiles

The fast-growing city of Jeddah is already working on some major upgrades to its infrastructure, including a huge new airport. But as guests at Construction Week’s Jeddah Infrastructure Conference discovered, there is much more to be done.

Jeddah is a fast-growing city whose infrastructure needs are huge. The city’s population more than trebled between 1970 and 2010 – from 1mn to 3.2mn.

The city, which is the Kingdom’s second-largest, currently has a population of around 3.8mn, which swells to 4.5mn if wider metropolitan areas are included.

However, with around one-third of Saudi Arabia’s population estimated to be under 30, it is expected to grow to 6.2mn within 20 years.

This places all manner of pressure on existing infrastructure – from water and sewerage networks (see p.20), to roads and housing, as well as providing an impetus for projects such as the proposed $12bn integrated transport network for the city, featuring a mix of commuter trains, a metro, tramways, water taxis and a bus network.

Delivering all of this alongside improvements to existing infrastructure was the topic of the first panel debate that took place at the Construction Week Jeddah Infrastructure Conference 2014 at the city’s Crowne Plaza hotel on 24 March.

Following introductions from conference chair Sameer Daoud of Hyder Consulting and from the city’s deputy mayor for projects, Eng. Abdullah Mohammed Al-Qarni, Adel Jemah of Hill International, argued that the state of the city’s jammed roads was one that needed addressing.

“There is obviously a lack of public transportation which is creating a lot of traffic jams, because everybody has to use his car or a taxi.”

He added that there were some “short-term solutions” to the problem, such as removing bottlenecks at certain parts of the city – most notably near King Abdulaziz University at the south eastern section of the circular road.

He also believes that traffic to schools – a major contributor to jams in the morning peak hours – could be better organised.

“If an introduction of a catchment area is introduced – like in the West, where the student cannot be accepted at a school unless he has a proof of address that he lives in that area – this would solve the problem of people travelling from the north to the south and the east to the west. A lot of traffic jams will be avoided.

“We know that a lot of work has been done and a lot is going to be completed in the forthcoming years.

“But for citizens of Jeddah, the only thing that will help is a better road network and more public transport.”

Mohammad S. Bajba, a board member of the Saudi Council of Engineers and CEO of Idea Polysilicon, argues that Jeddah needs to know what its most pressing needs are and work up an execution plan for dealing with them in order of priority.

“Maybe we need everything. But can we do it all? No.

“If you have a sick person, who has a heart attack, a kidney problem and he has blood pressure, you have to say, do we fix the heart first or do we go to the kidney? The community of Jeddah have a role to set the priorities.”

He argues that workshops are set up involving government and all other stakeholders including consultants, contractors and the people who use the city’s services in order to deliver improvements.

Jemah, who has worked on projects across the Middle East before returning to Hill International two years ago to oversee the huge Jabal Omar project at Makkah, agreed. He said: “Jeddah deserves better infrastructure than it has at the moment and we as architects, engineers, planners and managers, we have a duty to improve it.”

Daoud, an infrastructure specialist at Hyder, pointed out that his firm’s joint venture with El Khereiji Consulting has been working in partnership with Jeddah Municipality on developing roads and infrastructure for around two years.

“I have to admit to being a little closer on the ground, and I can tell you that between Jeddah Municipality, the National Water Company and other local authorities there has been massive work that has been put together to analyse existing conditions – the actual needs that the city of Jeddah has and what we need to do for the future,” he said.

“There have been a lot of projects – I’m talking about hundreds that have been initiated in the last year or so, just related to infrastructure.”

Bajba argued that the roles that project owners play on managing developments is vital, alongside the involvement of Saudi engineers and the freedom they are given.

He said there are stories of success, failure and apathy related to projects led by Saudis, but argued that the difference was the culture of the organisation that owns the project and the level of engagement it allows engineers to take.

“We have success stories with projects being managed by local teams where they managed to save almost 25% of the allocated budget. I’m not talking about tens of millions. I’m talking about projects of $1bn-2bn,” he argued.

“Government agencies, local companies, contractors, engineering offices... they really need to look to success stories and copy them.”

A fare approach

Planning Jeddah’s $12bn integrated transport network will be a major challenge. Convincing people to use it could well be another.

Anyone who spends much time in the city centre of Jeddah knows that traffic congestion is an issue that urgently needs to be addressed.

As Jeddah Metro Company’s CEO Ibrahim Kutubkhana recently revealed, the city’s roads are rapidly heading towards saturation point. Already, more than a quarter of Jeddah roads are at saturation, and this is expected to increase to 60% by 2019.

Little wonder, then, that a decree by the Kingdom’s government, which was passed in March last year, paved the way for such a comprehensive new integrated transport plan.

The plan has a budget of around $12bn (SR45bn) and has to be delivered by 2020. It includes a 152km-long metro network with 92 stations, a 93km commuter rail project encircling the city’s outer boundaries, a 48km-long tramway along its Red Sea coast, 94km of ferries and water taxis, and a new city bus network.

This will also be integrated with the Haramain High Speed Rail line which, when complete in 2016, will take some pressure off Jeddah’s roads by connecting directly to a newly-built terminal at King Abdulaziz International Airport to the Holy Cities of Makkah and Madinah, and to the King Abdullah Economic City mega-project.

Graeme Bampton, regional director for rail at Faithful + Gould, said that Haramain has “a few interesting characteristics”.

“In terms of the passenger patronage, the system would appear to be reasonably full for very short periods of time.

“The challenge will be to ensure that passenger growth is maintained, and the integration to other projects in the Kingdom – the Land Bridge to Riyadh and over to the Eastern Province.”

Terry Smith, a senior vice-president at consultancy firm Arcanico, said that it was important to make sure that the metro systems in each city are also served by a bus rapid transit system between areas not covered by light rail.

He worked on the development for the bus system for the new Riyadh Metro, which requires 1,600 buses tying the stations together. Feeder buses through local neighbourhoods and to outlying areas are also required if people are to make use of the system.

In Riyadh, he said that one well-known developer is currently spending “millions of dollars” snapping up land in areas around mainline stations.

“Much like the US, Saudi Arabia is in love with cars,” said Smith. “It’s going to be a very difficult component to try to get people to take the train and leave their car at home.

“These billions of dollars of investment by government and various ministries. If the population – citizens and expats – don’t buy into it, it becomes worthless. And that would be a disaster because (of) the amount of effort, ingenuity, brainpower and execution that is taking place. If nobody uses it, or uses it effectively, it would be a catastrophe.”

Paul Sparrow, an associate who specialises in rail at Hyder Consulting, said that selling the network was one of the two main obstacles that those building the new rail lines will have to overcome.

“It’s implementation and the usual project issues that you have, but don’t forget the sell. These things have to work.

“The first step we have to be aware of is who is using these networks.”

The other major issue that project planners have to contend with is land acquisition and on ensuring that the routes chosen are the most suitable.

“A lot of the rail networks here are classed as greenfield. Often, I think the routes are defined by whose land you can actually get hold of rather than the right place where the rail network should be.”

Battle royal

Saudi Arabia’s contracts market all too often still focuses on conflict rather than conciliation.

Talam Samarkandi, CEO of Jeddah-based consultancy Architectural Lines, has a statistic that proves his thesis that the relationship between clients, consultants and contractors in the Kingdom is “not good”.

“There are so many disputes. We have more than 40,000 cases in the courts. I’m just talking about disputes in the contracting fields.

“We have more than 4,000 government projects that are not completed or stopped due to lack of good relations between the parties,” he argues.

There are many theories as to how it could best be solved. Dr Hadi H Kobiessy, who runs Medaad Project Management, unsurprisingly thinks that those who work in his discipline play a key role.

“Being a professional, he can always balance the relationship between the contractor, client and the consultant. Nothing is perfect but at the end of the day if you don’t have this professional body that could balance the relationship, any project may have cost overruns or delays.”

Martin Weallans, country director for Faithful + Gould, says that although there has been a recognition on major public sector projects in the Kingdom in recent years of the benefits of project managers “I’ve yet to see that in the private sector”.

“In part, it’s happening. But when you look at all of the work going on in the Kingdom, there is a huge raft of development in my view that is still being commenced and developed in the old-fashioned way. I’m not degrading local consultants and contractors, but some of them are slow to recognise the benefit of processes and procedures. The contracting route isn’t quite as clear, or as appropriate, as it could be.”

Terry Smith of Acanico believes that software tools like Building Information Modelling (BIM) or Infrastructure Modelling packages play their part in ensuring project teams all share the same information and collaborate effectively.

He said: “I like repeat business and I get that because I deliver. The only way I can deliver successfully is to get inside the client’s head. I have to understand where he’s coming from, what his programme is about and what his ideas are, so that he is happy all of the time.”

City of gold

The advantages offered by the new port at King Abdullah Economic City are speeding up development of its huge industrial zone.

Having spent the past 12 months redeveloping the masterplan for the King Abdullah Economic City mega-project, Mike Chihoski knows what the city’s key assets are.

The chief operating officer of Emaar The Economic City – the body responsible for delivering the city – says that 25% of all of the trade that is shipped around the world currently passes through the Red Sea.

“There’s a huge opportunity to capture this,” he said.

“Today, most of that traffic goes around to Dubai, adding five days to transport. 70% of the goods that go into the port of Dubai then move on truck back into Saudi Arabia. It’s a very inefficient system and part of that is due to the challenges of the port of Jeddah.”

Jeddah’s port is currently so full that there is little capacity to even carry out maintenance, he argues. Besides, it has 1mn ft2, compared to the 14mn ft2 facility being created at KAEC that will be capable of handling the world’s biggest container vessels. The first phase is already open, giving it the capability to process 1mn TEU, but when built out it will be one of the top five ports in the world and will have a capacity for 20mn TEU.

The other major asset is the new Haramain High Speed Rail Link, which connects the city directly to Jeddah, Makkah and Madinah, linking the city to 8.5mn people in an hour.

The new masterplan, which was recently approved by the authority that oversees the city’s development, switches the city’s downtown core to a site next to the Haramain station. It also improves deliverability by phasing construction into four, five-year sections and provides more accurate costings.

“The reality is you cannot know how long it will take to build something like this. So we assume 20 years to construct the city, recognising that, depending on demand, that timeframe may expand or contract.”

The cost of developing KAEC’s infrastructure alone has been put at around $33bn (SR127bn).

“It’s a major investment. Therefore we need to make sure that we phase it to meet demand, we don’t build too soon and too late.”

It is currently in the second year of the first five-year masterplan, and already Chihoski said that a decision has been taken to speed up delivery of the Industrial Valley which, at 63mn m2, makes up one-third of the entire city area of 189m2.

“Because of the port, we’re now projected to sell out Industrial Valley within five years.”

A few major tenants have already built plants and started to move in. Mars is producing its first chocolate bars in the Kingdom and Pfizer is well underway with construction of its pharmaceutical plant. Jaguar Land Rover is also looking to build its plant in the Kingdom there.

Work is ongoing at Bayt La Sun – a mixed-use community on the coast where the first hotel is already operational, and two out of four new coast residential towers are opened. The second two will complete by the summer, while a small 50-villa residential compound has completed. KAEC has also signed a deal with US-based Bapson College to open a university area.

At a nearby coastal communities district – the city’s biggest residential site – some 5,000 villas are under construction and will be delivered by the end of 2015.

“One of the key changes we have made to our strategy is we will develop 30% of every area before we sell it. Nobody wants to be the first one in a neighbourhood, so we’re going to build at least 30% to get some critical mass.”

In terms of infrastructure, he said that the city’s roads would have a grid way system, with a major expressway just outside its borders. Although no train or metro system will be required for some time, a bus service will be operational and routes will be created on roads to allow for rights of way for any future metro or tram system.

Green guests

Energy-efficient buildings should be a greater priority for the construction sector.

Saudi Arabia needs to catch-up with international practices in terms of the sustainbility of its buildings, according to Hyder Consulting’s director of property services, Peter Pardoe.

In a session on incorporating energy efficiency standards into new buildings, Pardoe said the industry had a role to play in making sure that this happens.

“Part of our job is to enlighten engineers and architects within Saudi Arabia. It isn’t something that hasn’t been done before. In fact, it’s been done successfully in other parts of the world. It was painful in places, but it is now making a big difference.”

Pardoe said that property owners faced higher cost in the short-term to build sustainably, but argued that even over the medium term it can pay dividends.

“Sustainable building makes sense for people who own and maintain their buildings for a very long time. The trick is to get developers to understand that there are benefits to this even if they only hold on to their buildings for five years.”

Hicham Hassouni, senior development manager for hotel chain giant Accor, argued that the lack of sustainable building codes in the Kingdom shouldn't be used as an excuse not to develop sustainable buildings.

He pointed to a Tripadvisor survey which found that 81% of its database expressed an interest in environmental issues.

“In the long run. there is a benefit to cost-friendly businesses,” he said.

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