Face to face: Pierre Sironval, Six Construct
Pierre Sironval details Six Construct’s current portfolio of GCC megaprojects, and outlines the contractor’s ambition to play an even greater role in financing future developments across the region
When it comes to megaprojects, Six Construct ranks among the Gulf’s biggest hitters. The wholly owned Middle East subsidiary of Belgium’s Besix Group has built some of the most ambitious developments in the region. This is especially true in the UAE, where contractors with comparable project portfolios are few and far between.
As managing director of Six Construct, Pierre Sironval is responsible for reshaping vast swathes of the Middle East. In its 2016 financial year, the contractor recorded regional revenue of $1.08bn (AED3.95bn), and Sironval expects 2017 to remain “quite steady” with a total income of approximately $1bn (3.67bn). While this may sound optimistic, particularly in the current economic climate, his team had already secured $1.05bn (AED3.86bn) worth of contracts by the end of April.
Commenting on Six Construct’s recent financial performance, Sironval elaborates: “We encountered certain challenges in 2015, which were linked to some of our operations in Saudi Arabia. Last year, we managed to overcome those challenges, and this resulted in heights that were quite unprecedented, both in terms of revenue and profitability. Today, approximately 60% of Six Construct’s GCC work is conducted in the UAE, our main focusses being Dubai and Abu Dhabi.”
These “unprecedented heights” have been facilitated in no small part by a spate of high-profile project deliveries. Between June 2016 and May 2017 in the UAE, Six Construct completed contracts such as Deira Island’s quay wall and access bridge, and a very large crude carrier (VLCC) jetty in Fujairah.
“Last year, we were also very glad to witness the formal opening of Abu Dhabi National Oil Company’s (ADNOC) new headquarters, a project we’d been working on for several years,” says Sironval. “And of course, in November, we enjoyed the opening of Dubai Water Canal, which was quite a challenge. We like challenges.”
Describing his team’s work on Dubai Water Canal as “quite a challenge” would suggest that Six Construct’s MD is also a fan of understatement. The waterway, which was the largest project to complete in the UAE last year, represents one of the most ambitious developments ever undertaken in the emirate. In fact, so big was the $1.1bn (AED3.7bn) megaproject that its completion had to be confirmed by satellite photography.
Not content to rest on its laurels, Six Construct is pushing ahead with an array of large-scale developments in the Emirates and beyond. In Q4 2016, for example, the contractor was enlisted to help develop a liquefied natural gas (LNG) import facility in Bahrain, once the project had reached a financial close on a concession agreement.
“We are executing [Bahrain LNG] as the engineering, procurement, and construction (EPC) contractor, in conjunction with South Korea-based main contractor, GS Engineering & Construction (GS E&C),” Sironval explains. “We commenced work on the development at the end of last year, and we expect the plant to become operational in 2018.”
Meanwhile in the sultanate, Six Construct is supporting the Port of Duqm’s expansion. Sironval elaborates: “At the beginning of the year, after several months of tendering and negotiations, we were awarded [a contract for the] port’s extension. We are building a large marine terminal for the port, and we expect to start casting the [project’s] first blocks this summer.”
Despite contract wins in the wider region, the UAE looks set to account for the lion’s share of Six Construct’s GCC business for the foreseeable future. The contractor’s ongoing projects in the Emirates include the Phase 2 expansion of Jebel Ali Sewage Treatment Plant (JASTP), event infrastructure works for Expo 2020 Dubai, and The Royal Atlantis Resort & Residences on Palm Jumeirah.
Sironval’s team is building the latter on behalf of Kerzner International Resorts, as part of a joint venture (JV) with Ssangyong Engineering & Construction (Ssangyong E&C). The $1.4bn (AED5.14bn), 46-storey development – which will operate as a sister hotel to Atlantis, The Palm – will boast almost 800 guest rooms and more than 230 serviced apartments upon completion.
“The Royal Atlantis is progressing a little slower than expected because of some adjustments to the design,” Sironval reveals. “These adjustments have been conducted over the past year in close collaboration with the client. At the moment, we are [completing] the ground floor, and we have also started work on the project’s six towers. The vertical shafts are moving, and we are closing the basement, which is huge. We still expect The Royal Atlantis to [complete and open] somewhere in 2019.”
In Dubai South, Sironval’s team is conducting deep infrastructure works for the Expo 2020 site, as part of a JV with Egypt-headquartered Orascom Construction. The contract, which was awarded in late 2016, includes irrigation and sewerage, pipes and cabling, roads, electrical and water utilities, and ducting for telecommunications.
With so many stakeholders operating simultaneously, one might expect a project like Expo 2020 Dubai to represent a major logistical challenge for Six Construct. For the time being, however, Sironval says that activities at the exhibition site are “running smoothly”.
“For the moment, it is still okay,” he explains. “We are expecting more challenges in the coming months as more people start to work on the project but, for now, we are one of only a limited number of contractors onsite. [Moreover,] we are collaborating closely with [other stakeholders]. I am personally meeting with all other contractors on a two-monthly basis in a bid to ensure that proper coordination is taking place. This gives us all a comprehensive overview of project progress.”
While arguably less glamorous than its contracts on The Royal Atlantis and Expo 2020 Dubai’s exhibition site, Six Construct’s work on Phase 2 of JASTP – a project that it is undertaking as part of a JV with Larsen & Toubro (L&T) – looks set to play a critical role in securing the long-term sustainability of Dubai’s utility infrastructure.
Designed and supervised by Aecom, the Phase 2 expansion will see JASTP’s treatment capacity increase by 375,000m3 per day, equivalent to the amount of wastewater generated by 1.35 million people. The contract forms part of Dubai Municipality’s (DM) broader strategy to boost the plant’s capacity from its current 350,000m3 to 1,050,000m3 per day.
“The JASTP expansion is a big job,” explains Sironval. “It will more than double the capacity of the sewage treatment plant. We expect to complete this contract within a 30-month window, so Phase 2 should enter its commissioning stage by the end of 2018.
“As we will take responsibility for the plant’s performance once Phase 2 is complete, we spent time conducting an extensive review of the design at the outset. Together with Aecom, we conducted a joint review of the design, and we are now busy with the civil works. The majority of procurement activities are underway, and we expect to commence mechanical and electrical works by the end of this year.”
In an effort to capitalise on the momentum gained from its work on JASTP’s Phase 2, Six Construct is now bidding on several DM contracts connected to the emirate’s storm-water and sewer tunnels.
“I believe that Dubai’s other large treatment plant, near to Mirdif, has now reached maximum capacity,” says Sironval. “In the future, therefore, DM may look to shift the majority of its sewage treatment activities to Jebel Ali, which is a little bit more remote [while being closer to Dubai South. Furthermore,] there is a need for Dubai to [extend] its drainage network, especially within the vicinity of the Expo 2020 site and Al Maktoum International Airport.
“As such, Six Construct is [bidding on] several DM projects linked to the storm-water [drainage system] in that part of town. For the moment, these contracts are in their tendering stages,” he tells Construction Week.
Large-scale infrastructure projects like these are in keeping with Six Construct’s longer-term strategy to increase its involvement within the fields of project finance, and operations and maintenance (O&M). As Sironval explains, Besix Group has experience of coordinating alternative project finance and procurement models in Europe, and has already begun to leverage this expertise in the Gulf.
“Export financing and public-private partnerships (PPPs) are [models] that Besix Group regularly employs in Europe, so we decided to bring [this expertise to the GCC] to see whether similar methods could help our clients in this region,” he says. “As a contractor, our aim is to add value to our clients’ operations. We have strong capabilities in the design and build (D&B), and EPC segments, but we are working to [offer] a broader supply chain to our customers. Six Construct has the capacity to provide an A-to-Z of services, with involvement in the concept stage, the establishment of financial models, the identification of financial partners, right through to delivery and O&M.”
Indeed, Sironval’s team has been instrumental in developing and operating infrastructure in Ajman and Abu Dhabi as part of concession agreements.
“Besix is working alongside Ajman Municipality to operate the emirate’s sewage treatment system,” he elaborates. “We built the treatment plant, we are extending the network, and we are operating and maintaining the facilities. Our group is involved in a similar scheme in Abu Dhabi, working together with local authorities to [extend facilities] in Al Wathba. Besix puts equity into these projects, and it develops them in close collaboration with [the public sector].”
Commenting on the advantages of employing such strategies elsewhere in the GCC, Sironval concludes: “Six Construct’s service offering is not limited to D&B or EPC products. What’s more, clients in this region are becoming more receptive to [alternative models,] especially in light of the low oil price. Private partners can help governments [to compensate for] low market liquidity.”