Face to face: Alan Talabani, Turner & Townsend
Alan Talabani, managing director of multidisciplinary consultancy, Turner & Townsend, talks about the UAE’s project appetite, growth prospects in Saudi Arabia, and how PPP contracts can succeed in the region
“Dubai has a habit of surprising you,” Alan Talabani, managing director for Turner & Townsend’s Middle East operations, tells Construction Week. “In the nine years I’ve been here, I’ve always been surprised by how the city progresses.”
The view from Talabani’s Downtown Dubai office supports this sentiment. As he explains, the number of towers and cranes in the neighbourhood has increased dramatically since Turner & Townsend – a provider of multidisciplinary construction management services – moved in four years ago.
Indeed, construction firms are busy across the UAE, perhaps most prominently in Dubai, where more than 25,000 buildings were under construction during the first three months of 2017. Furthermore, data released by Dubai Municipality (DM) in June revealed that 3,360 structures were completed in the emirate in Q1 2017. The authority’s building permits and systems section received 20,067 requests for new construction during the same period.
Within this context, it is hardly surprising that Talabani is optimistic about construction appetite in the UAE: “[The market] has surprised me with how resilient it’s been and how it’s been able to keep growing.
“There’s still enough attraction for new companies to [enter the market], but I hope they do it in a sustainable way. If theirs is a project that’s done in a proper, considered, and sustainable way – and one that will be seen to its conclusion – then the more we get of those, the better it is.”
In July, UK-headquartered Turner & Townsend announced turnover of $640m (GBP491m) for its most recent financial year, an increase over the $533m (GBP409m) figure recorded in 2015/16. The firm’s Middle East business has performed well during the past 12 months, resulting in a 42% revenue hike to $59.4m (GBP45.6m), and a 24% increase in profit.
Talabani, who recently celebrated 20 years with the company, was appointed to his current role in the second quarter of 2017, following the retirement of his predecessor, Mike Collings.
Talabani tells Construction Week that his immediate priority as Turner & Townsend’s new regional head is to sustain the outfit’s “strong business” in the Middle East: “My focus is just to make sure that we’re continuing to do the right thing, and doing it in a positive manner.
“I don’t think it’s necessarily about massive expansion plans, but more about controlled and sustainable growth in the market. A part of that is [to ensure] a continuation of where we are and what we’re doing, because when the market sort of toughens up a bit, you have to go with the core of what you do and who you do it with.
“Historically, 75% to 80% of our work is with repeat clients, and I imagine that proportion is likely to increase if things get more difficult – because then, you’re better off working with people that know you and trust you, rather than going out and knocking on new doors.”
Turner & Townsend’s regional project portfolio reveals a diverse selection of high-profile clients, public and private alike. For example, the company provided full project and cost management services for consumer goods giant Unilever’s $272m (AED1bn) personal care products manufacturing facility, which was inaugurated in Dubai last year.
Turner & Townsend is also providing project and cost management services – including the development and oversight of a delivery strategy – for the refurbishment programme underway at Dubai’s Atlantis, The Palm hotel. Moreover, the company is currently delivering cost estimating, scheduling, and risk management services for Abu Dhabi Airport Company’s Midfield Terminal Complex (MTC).
Turner & Townsend was also awarded a contract by Dubai Aviation Engineering Projects (DAEP) – the engineering arm of Dubai Aviation City Corporation – to provide cost management services for the expansion of Al Maktoum International Airport’s Passenger Terminal Building.
Outside the UAE, Turner & Townsend has worked on Saudi Arabia’s Jeddah Metro, where it was commissioned by architects Foster + Partners to deliver pre-contract cost and commercial services.
Indeed, Saudi Arabia is a key market for Talabani’s team, with the company expected to open an office in the kingdom later this year. He elaborates: “We have nearly finished the process of establishing our business in Saudi Arabia, which will be a big step for us.
“As a Middle Eastern business, you have to have a presence in Saudi Arabia. A lot of our clients have asked us to support them in Saudi, so that was part of the rationale [in] going there.”
While a shift in budgetary priorities has impacted the Saudi construction market, Talabani is optimistic about growth prospects in the kingdom: “I don’t think going into a new market under tougher conditions is a bad thing. Some companies enter a new market and think it’s easy [to operate there] but, when things start to get tough, those companies are the first to fall by the wayside. We take a long-term view of where we want to go, and where we want to be.”
The timing of Turner & Townsend’s decision to boost its activities in the kingdom could prove propitious for the company. Thanks to a privatisation drive underway in Saudi Arabia’s aviation sector, Turner & Townsend – with its enviable repertoire of both global and regional aviation projects – will likely find high demand for its services in the country.
In June, Saudi Arabia’s General Authority of Civil Aviation (GACA) signed contracts for the development and operations of five airports in the country. Meanwhile, a contract to develop and operate the new Taif International Airport was inked with Consolidated Contractors Company (CCC) and Munich Airport, in collaboration with Asyad Holding.
Privatised or not, Talabani is keen to explore aviation-related prospects for Turner & Townsend in the kingdom. Infrastructure is the company’s biggest sector in the Middle East, with aviation – as a sub-sector – at the forefront.
“We believe we have a very good story to tell in aviation,” he explains.
“At the end of the day, we’re a consultancy, so the people we have are our main asset – and I think we have some of the best aviation experts in the world supporting our projects here. So would [Saudi’s] aviation projects be a target? Absolutely.”
Talabani’s plans will also be buoyed by the advent of public-private partnerships (PPPs) in key Gulf markets, such as the UAE and Saudi Arabia. Guidelines to support the uptake of such deals have already been issued in both countries.
Notable PPP agreements signed so far include a deal to build a car park facility for the UAE’s Dubai Courts, announced in May 2016, and a contract overseen by the Saudi Arabian Ministry of Housing (MOH) for Riyadh’s East Gate project, revealed in April.
However, as Talabani explains, while PPP models are attractive for their promise of efficiency – and, perhaps, even funding – they must benefit the private sector to deliver holistic benefits: “There has to be something in return for the private sector. If people think PPP is just about getting someone else to pay for your asset, then that’s rather naive, and ultimately won’t work.
“There’s always a willingness [from] funders, contractors, and consortia to respond to PPP requests, but there has to be something in it for them – an appreciation of the risk that they’re willing to take, and a return for the investment they’re willing to make.”
In part, PPPs are being sought out in the Gulf due to the impact of reduced oil prices on traditional funding models. As Talabani explains, low crude values affect most industries in the Middle East, and are also “bound to affect people’s investment decisions”.
He adds: “This doesn’t mean there’s no work happening. Work is going on, but maybe not at the pace or scale that it was.
“But every negative has a positive, and the opportunity for us is that people are more cost-conscious, and more interested in scheme viabilities. That’s where our experience as cost consultants and commercial consultants can help make a scheme more affordable, and help [clients] look after [their] limited funds a lot better.”
Turner & Townsend’s project portfolio will likely include more high-profile names a year down the line, helped along, no doubt, by its new Saudi Arabian office.
Meanwhile, at the helm of the consultancy’s Middle East operation, Talabani has a straightforward strategy to ensure a sustainable future. He concludes: “We have enjoyed remarkable growth over the last five to six years, and we want to keep doing what we do best.
“Our plan is to grow more and employ more people. We aim to keep doing what we’re doing, but also have the required agility and flexibility to move with market conditions.”