fmME Interview: Sultan AlKhuraissi, RCJY, KSA
Sultan AlKhuraissi, O&M general manager at Royal Commission for Jubail and Yanbu, talks to fmME about the need for internationalisation, and the scope for PPP investments, in Saudi Arabia’s FM sector
The growth prospects of Saudi Arabia’s FM market have received sufficient reportage since consulting firm Credo announced in 2015 that the kingdom’s sector would be worth $29.1bn by 2017. So, fmME’s conversation with Sultan AlKhuraissi instead charts out a route map to capitalise on these opportunities.
As the general manager for operation and maintenance (O&M) at Royal Commission for Jubail and Yanbu (RCJY), AlKhuraissi has some advice to offer. In his current post, which he’s held since June 2014, AlKhuraissi heads five departments – covering buildings, roads, landscaping and irrigation, general utilities, and sanitation – that deliver O&M and asset management services on a city-wide scale across Jubail Industrial City and Ras Alkhair City.
Indeed, AlKhuraissi’s is an extremely busy job, and the RCJY general manager expects it to get busier as Saudi’s FM market implements its modernisation plans, especially as the country looks to diversify beyond oil-led growth.
Speaking to fmME on the sidelines of Middle East Facility Management Association’s (MEFMA) Confex 2017, AlKhuraissi points out the regional FM sector’s shifting trends, and how these will shape the Saudi industry in the near future: “I can see how good FM workshops are now getting; speakers and experts now highlight integrated systems and their benefits. The attention is on existing facilities.
“As per the International Infrastructure Management Manual (2015), existing building stock represents 98% of total real estate globally, with new facilities accounting for 2% per annum.
“This will shed more attention on the role of FM and asset management,” he adds.
AlKhuraissi says he believes this trend will be accompanied by an expansion of the definition of FM’s remit, with activities such as landscaping and utility maintenance now gaining greater value within FM programmes.
“I think this [shift of perception] has been happening for a while now,” he explains.
“The industry is now more alert about how these components fit into FM. I remember, when I joined RCJY 15 years ago, engineering was seen as a predominantly construction-centric principle, and maintenance was seen as a secondary job. But of course, it isn’t really like that. When we talk about FM, we’re referring to [a facility’s] finance, business, management, and technical aspects – individually and together.
“Earlier today [at MEFMA Confex 2017], one of the panellists mentioned client happiness. I think that’s a transformation – to go from the ‘customer satisfaction’ approach to focusing on ‘client happiness’. Nobody can take care of these issues better than FM, and there is growing recognition that this is the industry we should focus on and give more attention to.”
A significant contributor to raising FM’s profile in Saudi Arabia, AlKhuraissi explains, will be increased foreign investment in the sector.
Certainly, Saudi will look beyond just the FM sector to invite foreign investors in the years to come, and its government has rolled out programmes that promise change is on the way. Most notable among these is the National Transformation Plan (NTP), approved and finalised in June 2016. NTP is a part of Saudi Vision 2030, which was unveiled last April by Deputy Crown Prince HH Mohammad bin Salman bin Abdulaziz Al Saud, chairman of the Council of Economic and Development Affairs.
Designed primarily as a response to receding oil prices, Saudi Vision 2030 embodies a government eager to expand the kingdom’s strengths and commercial offering on the global stage. In fact, the same public sector that Saudi Vision 2030 hopes to decentralise over the next 13 years could also, it appears, simultaneously encourage development within the kingdom’s private sector.
In response to fmME’s query about government-led initiatives to boost private sector-representation in Saudi FM, the RCJY general manager says: “There’s still a need for international companies to enter the market.
“With Vision 2030, there’s a change in business and procurement strategies, and the focus is on accepting international expertise in different sectors, including FM. There’s a greater understanding that we need to mix local practices with international experience.”
In addition, AlKhuraissi says, a framework along the lines of the public-private partnership (PPP) model may also be introduced to further investment in Saudi’s FM sector.
He explains: “Based on Vision 2030, I think the government is aiming to go for PPPs [in the FM sector], and that could be a key area for the market to grow at competitive prices and with good quality.
“If we go for a business orientation based on public- and private-sector [collaboration], it will lead to a balance between FM demand and supply. This will be a big change that is good for us.”
AlKhuraissi says such a programme should ideally help the sector migrate from input-based models to output- and performance-contracts, with owners being given room to “regulate and macro-manage” FM services.
He adds: “The main driver [that could win contractors business] would have to be, for example, their experience and their understanding of our demands and customer needs.
“I think the government might focus on PPPs – or a similar model – to make space for businesspeople and their services, while also giving them a share [in the job] and motivation to excel. There’s a growing acceptance in Saudi about the need for FM, and the communication gap between international and local expertise should ideally be bridged by consultants.
“Here, organisations like MEFMA and International Facility Management Association (IFMA) can also have a positive impact,” AlKhuraissi adds.
“MEFMA held a workshop in Saudi last year which, I hear, was very well-attended. I think it shows that Saudi FM professionals are eager to learn and know more about the sector.”
While he agrees the kingdom’s FM sector is yet to reach the same maturity level as some of its counterparts, the RCJY is optimistic about the future.
“Both the size and [nascence] of Saudi Arabia’s FM sector should motivate foreign companies to enter the market,” AlKhuraissi notes.
“This is a golden opportunity for global companies, especially since the focus is now shifting towards existing assets. Maintaining them requires good FM infrastructure, which means it’s a win-win situation for international firms and the Saudi government, since both would benefit from working together.
“In terms of maturity, [Saudi Arabia’s FM market] is not the same as say, Dubai’s, which is very advanced. However, with new strategies such as Saudi Vision 2030, there is growing understanding of how we can better our existing facilities through city management, integrated FM (IFM), total FM (TFM), and asset management.
“This learning curve is starting to develop, and I think this is one of the drivers that will [lead] Saudi Arabia to be open [to] more FM companies.”
AlKhuraissi’s views also address an obstacle that has historically influenced Saudi’s attractiveness to foreign FM outfits. In July 2016, Ramzi Darwish, consultant for international corporate client services at Cluttons, told fmME that the “mentality in Saudi Arabia” would have to change if greater FM is to be encouraged in the market.
He added: “Developers or property owners in the kingdom wouldn’t normally consider getting an FM company on board, because they view it as an additional cost.
“It’s about the mentality in Saudi Arabia. The approach of property owners is to do work themselves rather than getting someone to do work on their behalf. The first step for FM companies in Saudi would be to educate the market about what FM entails, because for a lot of local owners, FM means just maintenance operations, such as taking care of air-conditioning and electricity.”
AlKhuraissi agrees that such a perception could hinder international investment in Saudi Arabia’s FM sector, “but this is a problem [only] if we assume the governments and stakeholders aren’t willing to change”, he points out.
He continues: “We’re willing to change and to accept new trends and technologies in FM. In fact, we’re also talking about partnerships in TFM. Now, the challenge is that the market should understand the benefit of receiving FM as a single package instead of appointing individual contractors for each service.”
AlKhuraissi says that private developers will drive a change in the sector: “For example, we don’t see many output-based contracts, key performance indicators (KPIs) or service level agreements (SLAs) yet, and it’s more input-based for now.
“However, there are owners that want their facilities to be world-class in quality, and they maintain their assets reasonably well. FM is the only way to achieve that, and developers are very smart – they know how to do it.”
At RCJY, AlKhuraissi’s team drives annual Net Promoter Score (NPS) surveys – first implemented in 2011 – as a measure of customer satisfaction and service levels. This customer-first mentality, AlKhuraissi is confident, is finding greater ground in the kingdom’s developer and building owner sector.
He adds: “It’s a golden opportunity to be in Saudi with interesting assets – including towers, malls, and schools – up for grabs in the market.
“The Saudi government is focusing on existing assets and companies that know how to apply FM expertise will succeed. I’m very optimistic about the future.”