Face-to-face: Jason Morris, AECOM
As projects fast-track and deadlines loom, CWQ asks major consultancy Aecom how it manages project time lines realistically against a backdrop of challenges
As projects fast-track and deadlines loom, CWQ asks major consultancy Aecom how it manages project time lines realistically against a backdrop of challenges.
In the intervening years after the global financial crisis (GFC), countries around the world slowly regained their balance, assessed the damage and started to look ahead at rebuilding shattered economies. Then the drop in oil price plummeted the globe into further chaos. This uncertainty continues to impact on the oil-dependent region of the Gulf, with countries striving to put diversification policies in place, moving economies away from their dependence on hydrocarbons.
Jason Morris is vice president for Construction Services in international consultancy Aecom, Qatar, with more than a decade of hands-on in-country experience to draw on. CWQ asked for his observations around Qatar’s present economic climate and how Aecom is managing to maintain in the changing landscape.
Morris is of the opinion that historically Qatar has come through challenging economic times relatively well and he expands on this observation: “Qatar has enjoyed a period of growth and prosperity on the back of a strong hydrocarbon sector and significant investment in infrastructure spending associated with the FIFA 2022 World Cup and the Qatar 2030 Vision,” he shares and highlights: “Between 2008 and 2013 Qatar recorded a double digit Compound Annual Growth Rate (CAGR), higher than the UAE and even Saudi Arabia over the same period, even taking into account the effects of the GFC which caused significant turbulence to the construction sector, especially for private investors.”
Morris assures that there is little cause for concern however: “In my opinion, Qatar is well positioned to withstand the current global pressure on oil prices. This is in large partly due to the wisdom of strong macroeconomic fundamentals being adopted in Qatar over the preceding years, including importantly, a relatively low breakeven oil price. The country therefore, has low levels of public debt and although oil receipts must be impacting on liquidity and credit, the sovereign wealth funds, state-owned energy company surpluses and working capital in domestic banks are a reason for continued confidence.”
He points out that Aecom targets diverse sectors of the industry including roads and highways, aviation, rail, ports and marine, oil and gas, power, sports and leisure, health, education, hospitality, real estate and defence. “From a Construction Services point of view I have narrowed this focus considerably and we are currently particularly active in sports, ports and marine, real estate and defence, all of which have carried on largely as per my expectations during this current period of uncertainty.”
Over the short to medium term he sees the private sector becoming more involved in the hospitality segment as well as real estate development along the transport corridors and hubs that are currently under construction: “Again, the private sector can have a huge role to play in the success of this. Where we really excel as Construction Services is our ability to develop and implement plans that allow our clients to deliver within demanding timescales that allow them to reduce payback periods and increase return on investment. We focus on the overall business goal and that allows us to provide solutions that are not based solely around capital cost investment.”
While he is obviously confident of Qatar’s construction sector nonetheless, he says that on the back of the FIFA 2022 World Cup and beyond, to the implementation of the 2030 Vision, the economic uncertainty caused by a low oil price has meant that reviews of overall spend and ranking of the various projects that encompass either of the programs, has impacted on delivery dates. “This will undoubtedly mean that a number of projects will need to adopt fast track delivery structures,” he comments.
Issues specific to Qatar
As the immovable deadlines loom, fast-tracking projects has almost become the norm, whereby permanent works are commenced ahead of final design, resulting in both running simultaneously with the aim to reduce the overall duration of the design and construct process. That’s the plan, but it isn’t necessarily how it pans out as fast-tacking has repercussions of its own.
Fast-tracking isn’t as simple as bringing a deadline forward. In Qatar there is a top-heavy approval structure in place that requires consideration, compounded by a general regionalised wariness. Morris expands, “The challenge in Qatar for adopting a fast track approach is that often, especially in public works, the approvals processes that have been adopted do not promote this approach. The traditional relationship between employer and contractor can be adversarial and there is little trust placed in each other.
“Anecdotally we are aware of a number of late payments across the construction sector. In my experience late payments lead to the immediate effect on a project of it slowing down and ultimately coming to a halt.” The result is further breakdown in working relations between the various parties and a successful project outcome is threatened as the impact is felt along the supply chain.
“In the longer term, suppliers realise that the cost of working capital tied up in major programs becomes significant and this is then included in tender rates which adds inflationary pressure to the construction industry and ultimately employers paying more,” he observes.
He adds that historically this has been countered by new players entering the market and, whilst this potentially combats inflation he notes: “I fear that this is non-sustainable as experience leaves the market, barriers to new entrants are increasing, and major contractors employ their capital where return is highest.” Added to this are a multitude of issues specific to Qatar and the wider GCC. Nonetheless Morris is pragmatic and observes: “Many of the technical challenges that are faced in the Middle East are similar or the same to those encountered all over the world; incorporating change successfully and efficiently; attracting the right personnel and of course the challenges of maintaining budgets within agreed levels.” In among the challenges, in his view, there are three specific to the area: health and safety, talent acquisition and client relations.
Starting with health and safety, the executive reminds that Qatar “was starting from a base of zero” and there is still a long way yet to go. Nevertheless Morris notes that the issues around the subject are now well entrenched in the industry and on the agenda of every major program, with clients ignoring this at their peril. “Any client wishing to deliver world class results cannot afford to ignore this” he cautions. “I am particularly proud that Aecom is a leading force in this and to date not only are all of our own staff in Qatar able (and expected) to participate in health and safety training but that we have also exported our START program to clients, contractors and other consultants across the industry,” he explains with obvious pride.
On the talent front he notes that Qatar will be in direct competition for available resources now that the UAE is “once again on the road to recovery in the construction sector”. Morris sees the lure of Dubai creating competition for available talent who are generally in two minds about relocating to Qatar, compounded by the laborious documentation and registration requirements which are reducing the available talent pool. “This in turn will undoubtedly lead to employers in Qatar having to offer higher remuneration than that in the UAE,” he ponders.
The creation of a symbiotic business relationship is a goal of any organisation as this leads to increased performance and outcome for all concerned. Morris comments: “It is pleasing that over the last ten years there are employers in the industry that recognise this, but in the large part, the industry in Qatar and the wider GCC remains highly transactional. This presents a real opportunity in the current economic environment for clients who are willing to look at different ways of creating relationships with their supply chains,” he adds.
The importance of supply chains cannot be overlooked and, to this construction leader’s mind, too much emphasis it placed on the influence of cost. “If I could change just one thing in the sector it would be the importance of cost as the deciding factor in employers selecting their supply chain. It is my firm opinion, and a number of studies exist that shape this, that choosing the best solution on offer, with less focus on the initial capital cost or fee offered, will drive a better ultimate outcome; whether this is measured in return on investment, functionality, life-cycle cost or almost any metric – including in many instances, out-turn capital cost of construction,” he stresses.
Aecom’s website assures: ‘Connecting expertise across services, markets, and geographies to deliver transformative outcomes.’ Asked to elaborate on the idea of connecting expertise to ensure that the best teams are delivering complex projects, Morris grins and says with enthusiasm: “My favourite thing about working at Aecom is the ability to connect to teams and individuals worldwide who are the very best in their chosen field. The organisation is so large and still a relative newcomer to multinational status that it is a constant source of pride that, should I need advice on a particular situational challenge during a project or to find out best practice technical detail concerning an environmental solution, that expertise exists within Aecom.”
He explains that a collaborative approach is ingrained in the company’s culture and adds: “The aim to improve everyday performance by building diverse teams that connect our expertise globally to create innovative solutions is incremental and, in an industry that is highly competitive this is a true differentiator to all of our peers.”
This global approach undoubtedly benefits its client base, with its blue chip clients among the converted.
The smaller companies however, are a little more challenging and he notes: “Smaller organisations sometimes struggle with this concept but by continually demonstrating the advantages and increasing quality of us adopting this approach they are soon won over, especially if this leads to financial and time efficiencies during delivery.”
In closing Morris observes: “So far in 2016, I have witnessed – and fully expect in 2017 – that the government will continue to press ahead with the major infrastructure and social welfare projects considered crucial to Qatar’s long term development.
“I expect that the current review of major programs will lead to some projects being cancelled or deferred indefinitely or a strategic rethink about what will constitute the final permanent fabric of the country.”