Taking flight: Experts discuss the GCC’s largest aviation projects
Construction experts speak to James Morgan about the current crop of GCC aviation projects, and consider whether the region is doing enough to cement its position as a global air-transport hub
Aviation is big business in the GCC. The region’s geographic location makes it an ideal transport hub for air passengers and cargo travelling between the West and the East. Moreover, as Gulf countries continue to diversify their economies away from traditional oil and gas revenues, tourism – be it for leisure, business, medical, or religious purposes – represents an ever-increasing regional focus.
While all of these factors spell good news for the GCC’s finances, member states will only be able to capitalise if their infrastructure-related investments keep pace with rising demand. Of course, policy-makers are acutely aware of this necessity, which is why the Gulf is home to some of the most ambitious aviation projects on the planet.
But the development of airports equipped to handle tens of millions of passengers per year is by no means simple. Whether new-build or expansion initiatives, these multibillion-dollar megaprojects require staggering numbers of stakeholders to come together and perform at the highest level in order to get off the ground.
TAV is a company used to working in this high-pressure environment. The Turkey-based airport development, management, and construction group operates across the spectrum of aviation, from financing and design to construction and operations. At the time of writing, TAV companies are active at 76 airports around the world.
The group’s building division, TAV Construction, has completed multibillion-dollar airport contracts in three of the GCC’s six capital cities: Doha, Muscat, and Riyadh. Impressively, the contractor is currently working on aviation megaprojects in two others: Abu Dhabi and Manama. It’s hardly surprising, therefore, to learn that Ümit Kazak, managing director of TAV Construction, views the region as “the backbone of our overseas operations”.
In 2003, the group opened a Dubai office to monitor GCC airport developments. Its first major Gulf aviation project was the Passenger Terminal Complex at Qatar’s Hamad International Airport, a contract that was completed in conjunction with joint-venture (JV) partner, Taisei.
In 2009, TAV Construction won the airside and landside infrastructure package, referred to as MC-1, for Muscat International Airport in Oman. The firm entered Saudi Arabia in 2012 with two awards: Saudi Airlines’ maintenance, repair, and overhaul (MRO) facility at King Abdulaziz International Airport in Jeddah; and the expansion of Madinah’s Prince Mohammad Bin Abdulaziz International Airport, the region’s first public-private partnership (PPP) aviation project.
Commenting on the latter, Kazak elaborates: “Developed together with our JV partner, Al-Arrab Contracting, at an investment of $1.2bn (SAR4.5bn), Prince Mohammad Bin Abdulaziz International Airport has become a benchmark for the current privatisation drive in Saudi Arabia, under the kingdom’s wise leadership and National Transformation Plan (NTP).”
Following its success in the Holy City of Madinah, TAV and Al-Arrab scooped the design-and-build (D&B) contract for Terminal 5 of King Khaled International Airport in Riyadh. More recently, the contractor has been selected to develop and operate airports in Yanbu, Qassim, and Ha’il.
In the UAE, TAV is working alongside JV partners Consolidated Contractors Company (CCC) and Arabtec on Abu Dhabi International Airport’s Midfield Terminal Complex (MTC).
“Midfield Terminal Building (MTB), [a key component of the MTC programme,] will become the largest building in Abu Dhabi, and one of the region’s most architecturally impressive structures,” says Kazak. “A monumental example for terminals of the future, it will have 700,000m2 of internal space and piers that will accommodate up to 65 aircraft at a time – including eight Airbus A380s.”
TAV Construction and Arabtec are also delivering the main works package of Bahrain International Airport’s Airport Modernization Program. This contract covers the construction of a 250,000m2 terminal building, car parking facilities, airside infrastructure works, and a central utilities complex.
Turkey is clearly a propitious environment for construction companies looking to grow their operations in the GCC’s aviation sector. Since 2003, TAV’s compatriot AE Arma-Elektropanç has cemented its position as a leading mechanical, electrical, and plumbing (MEP) sub-contractor within the segment.
Burak Kizilhan, a board member of AE Arma-Elektropanç, explains: “We were recently awarded the MEP and fire systems package for Al Maktoum International Airport’s Passenger Terminal Building (PTB) expansion programme. We will deliver a range of MEP sourcing, contracting, execution, and testing commissioning works for the PTB project [in Dubai].
“AE Arma-Elektropanç is committed to the successful delivery of the current contract, and is looking forward to pricing the next phase of Al Maktoum International Airport,” Kizilhan continues. “We are in a promising position, with an [impressive pool of expertise] and aviation-related experience at an international level. For example, we are also undertaking MEP works on Russia’s Moscow Domodedovo Airport, one of the largest [under-construction] aviation projects in Europe.”
Aviation projects require intensive preparation and close monitoring throughout the development lifecycle. To this end, Faithful+Gould offers a broad selection of related consultancy services in the Gulf, including programme, project, commercial, and cost management; project controls; and expert scheduling and construction planning.
In the UAE, Faithful+Gould has provided project management services for Abu Dhabi International Airport’s MTC; project and cost management for associated infrastructure works at Ras Al Khaimah International Airport; and cost and planning management services for the Etihad Airways Training Academy. In Oman, the consultancy delivered programme management services for Salalah International Airport’s new passenger and cargo terminals, and runway. Globally, the company has supported works at Heathrow Airport in the United Kingdom, Madrid-Barajas Airport in Spain, and San Francisco International Airport in the United States.
At present, Faithful+Gould is providing quantity surveying, and project and planning management services to Dubai Airports’ strategy and development team as part of the emirate’s airport framework initiative. Myles Finger, director of major projects at Faithful+Gould, elaborates: “We are [providing these services] on all property and infrastructure projects across both [Dubai International Airport and Al Maktoum International Airport] to manage and maximise their existing asset base, to achieve efficiencies, and to improve customer experience.”
A 92-strong team from Faithful+Gould is also providing cost, programme, and claims management services for the expansion of King Abdulaziz International Airport in Jeddah, Saudi Arabia. This project, Finger explains, is currently in its seventh year.
“Faithful+Gould is planning the control and coordination of multiple contractors, moving 25,000 workers onto the site,” he continues. “Working as an extension of the client’s team, we are responsible for construction planning and sequencing to ensure the project is delivered on time and to budget.”
With major aviation projects either recently completed or underway in all GCC member states, few would downplay the region’s ambitions within the sector. But are Gulf countries doing enough to cement their collective position as a global air-transport hub? TAV Construction’s Kazak certainly thinks they are.
“The GCC has already become a global hub for air passengers and cargo,” he argues. “Like Turkish Airlines, the big three of the Gulf – Emirates, Etihad, and Qatar Airways – are leading international players, heavily disrupting the equilibrium of the industry’s legacy carriers. These companies have redefined the sector with pioneering innovations, whether through the introduction of new aircraft or [services and facilities]. They are currently unrivalled.”
AE Arma-Elektropanç’s Kizilhan agrees, citing Dubai as a leading example of the region’s aviation-related success. He points out that the emirate’s location makes it ideal as both an easterly hub for Europe, and a westerly hub for Asia.
Faithful+Gould’s Finger comments: “More than two thirds of the world’s population live within an eight-hour flight of the GCC, and one third lives within four hours of the region. It’s difficult [to see how the Gulf could fail to] become the next global aviation hub – and that’s assuming it isn’t in this position already.
“In 2017, it is projected that global spending on airport construction projects will surpass $400bn. The GCC will account for a [significant] share of this figure, with more than $40bn of slated investments. Currently, the GCC incorporates 72% of the Middle East and North Africa (MENA) region’s total aviation projects. Within the Gulf, Saudi Arabia accounts for 46% of aviation-related spending, followed by the UAE (26%), and Kuwait (12%).
“No other country or region has [a comparable] expansion plan inlay,” Finger adds. “Even after the recent dip in oil prices, the GCC is continuing to pursue growth within the field of aviation.”
The general consensus, it seems, is that the GCC’s current crop of aviation projects is of sufficient magnitude to meet projected demand. But what industry trends are likely to arise in the years to come? TAV Construction’s Kazak expects the region to look to the private sector in order to fuel future expansion.
“Led by Saudi Arabia, growing airport privatisation represents a sustainable trend for the GCC’s aviation sector,” he explains. “Additionally, we understand that the region’s civil aviation authorities are considering the implementation of more liberal rules up in the sky, in a bid to address capacity constraints.”
Faithful+Gould’s Finger, who also predicts greater private sector involvement, says: “Due to lower oil prices, there has been a greater emphasis on the improvement of revenue streams [within the industry,] in case volatility returns to the [energy] market. As such, we expect to see more public-private ventures in the GCC aviation sector. PPP, for example, is a key directive in the kingdom, with privatisation and partnerships forming an important part of Saudi Vision 2030.”
AE Arma-Elektropanç’s Kizilhan, meanwhile, believes that the success of Gulf carriers within an international context is likely to encourage policy-makers to invest even more money into aviation in the longer term.
“With no snow to shovel off runways and no unions to strike, [the GCC – especially Dubai] – has swiftly emerged as a preferred air link for leisure, business, and commercial travel,” he notes. “This has allowed carriers such as Emirates, Etihad, and Qatar Airways to [gain customers] from Singapore Airlines and Cathay Pacific.
“Today, for instance, East Asia, Australia, and New Zealand represent Emirates’ largest market, accounting for 29% of the airline’s revenue in 2016. [If passenger numbers continue to grow,] we could witness a quantum leap in aviation-related megaprojects in the GCC,” he concludes.