Winning work in the Middle East
12-Nov-08
Erin Gill speaks to consultants with experience in the region
The economic boom may be over in Europe and North America, but in the Middle East the good times show little sign of coming to an end. The International Monetary Fund’s forecast for 2009 suggests a GDP growth rate for the region of 6.6%. One side effect of the Middle East’s strong economic growth is increasing demand for the services offered by environmental consultants.
As UK and European markets for environmental consultancy grow more uncertain, the Middle East’s appetite for environmental expertise is expanding rapidly, both in terms of the volume of work available and the type of services required. As a result, many of the big name international consultancies have placed the winning of Middle Eastern work at the top of their business development strategies.
A few environmental consultancies have operated in the Middle East for many years, often winning repeat work in one or two specific disciplines but rarely developing comprehensive, multidisciplinary businesses. This is now changing; while the range of services offered by environmental consultancies in the region remains narrower than in the UK, the scope of work is widening.
Historically, environmental due diligence has been a mainstay for consultancies taking on work in the Middle East, with such jobs often linked to the sale of oil and gas or manufacturing sites. For example, Environ has conducted environmental due diligence on the site of an oil refinery in Kuwait destroyed during the 1990 Gulf War.
Environmental impact assessment (EIA) and compliance auditing have also been available for some years, often commissioned to provide international bodies with information to inform funding decisions. “In the past, a lot of environmental work in the Middle East and North Africa was EIA work related to industrial sites. For instance, we completed an EIA for an industrial complex in Alexandria, Egypt and have done many EIAs for power stations,” explains Shane Larkin, regional environment manager for Parsons Brinckerhoff. Likewise, Bureau Veritas’s work in the region has been focused on industrial sites, particularly oil and gas installations.
Every once in a while a more significant piece of work would crop up, such as Atkins’ first job in the region. “Our work in the Middle East began with an environmental consulting job. Thirty-five years ago we were invited by the environment ministry of Oman to write the country’s environmental protection legislation,” says Richard Smith, Atkins' technical director for the Middle East.
Where once most consultancy work in the region was undertaken at the behest of multinational clients with higher environmental standards than the countries in which they were operating, a domestic market for environmental consultancy services is now developing. Although great variation remains within the client community, some well-informed clients are emerging and presenting environmental consultants with increasingly detailed and challenging demands. Gone are the days when, as Mr Smith recalls, “you would find there was a guy who would do everything. A bit of building, a bit of highways, and then you would discover he was also doing a bit of environmental work as well. It was a place for generalists, but that is changing.”
New types of work
‘Green building’ is the phrase on the lips of everyone involved in Middle Eastern environmental consultancy at the moment. Clients remain intent on building big, bold and brash, especially in the United Arab Emirates, but they are under increasing pressure from authorities to ensure that they also build green. This is particularly the case in flamboyant Dubai and its slightly more conservative neighbour Abu Dhabi.
Since January 2008, all new buildings in Dubai have had to meet standards that are based on the US Leadership in Energy and Environmental Design (LEED) system. All the major players in Dubai’s burgeoning environmental consultancy community are members of the Green Building Council, created after Dubai’s ruler Sheikh Mohammed issued his green building decree less than two years ago. A green building certification system is being developed in Abu Dhabi.
Brian Cullinane, Arup’s environment and sustainability business leader for the Gulf region, points to WWF's Living Planet report in 2006 as a significant factor in the decision by several leaders within the UAE to begin to confront the poor environmental performance of their built environment. “WWF presented calculations of the ecological footprints of different nations and the UAE was the worst. That hurt them, and it stung them into action,” says Mr Cullinane. “Emirati leaders are concerned about global rankings, reputation and people’s perceptions about what it’s like to live and work here.”
Master planning is another booming business for consultancies operating in the Middle East, with sustainability issues increasingly on the agenda. “There is a lot of focus on centralised and strategic economic planning in the region,” says Peter Sharratt, WSP Environment and Energy’s global director for sustainability and climate change. “Clients are open to dealing with environmental performance issues. There is a genuine commitment to do what is in the best interest.”
A substantial proportion of WSP’s work in the Middle East and North Africa focuses on master planning , including a sustainable master plan for the east coast of the Dead Sea, a master plan for a new urban development in the Jordanian capital Amman, plus master plans for three regional centres in Libya. “The Middle East leads the world in the art of city building – the ambition now is to build sustainably,” enthuses Mr Sharratt. Other consultancies are also involved in master planning projects, including Environ, which is working on plans for a new industrial city in Saudi Arabia.
However, all these pale in comparison to Masdar, the Middle Eastern urban development project that has gripped everyone’s imagination. Masdar is both an energy company with global investment interests and a new city, to be built close to Abu Dhabi airport. With a focus on alternative energy and urban sustainability, Masdar shows that some clients in the Middle East are ready to raise their game.
Although there remain developers interested solely in building flashy homes and sky-high offices, leaving others to run along behind and cobble together infrastructure, some developers are beginning to become more involved in the wider aspects of urban development. “Some recognise that utilities could act as long-term revenue streams for them, and they are increasingly interested in water and waste infrastructure opportunities,” explains Arup’s Brian Cullinane. “For example, we’re working on a feasibility study for a waste-to-energy plant for a major Dubai developer.”
The biggest driver behind the growing maturity of Middle Eastern clients is an increasing emphasis on environmental policy and regulation by the region's political leaders and their agencies. Not surprisingly this is welcomed by consultants, including Bureau Veritas’s environment and health team leader, Assem Ibrahim: “Most Middle Eastern states are introducing environmental legislation and this produces more work for consultants, work that goes beyond the oil and gas sector. Client attitudes are moving forward and awareness is growing. Implementation is mixed and varies from project to project, but there is an increasing focus on keeping up with international best practice”.
With a greater focus on policy and regulation, there are opportunities for consultants to help set the environmental agenda. In this field, WSP Energy and Environment appears to be leading the pack. “There is work in the Middle East at the strategic level and we aim to win it,” says WSP’s Peter Sharratt. “Management and planning consultants are moving in but they don’t always have the environmental sustainability and technical skills needed to develop comprehensive strategies. We wrote Saudi Arabia’s environmental regulatory policy and we recently completed a training programme for the country’s environmental inspectors.”
Challenging environment
With so many consultancies rushing to win work in the Middle East, those who have been operating in the region for some time have a few words of warning. For a start, be ready to work at lightning pace. Project timescales are dizzying in comparison to typical timescales for European and North American projects. This is partially because there is no procedure for appealing against planning decisions in most states, but it is also linked to the speedy growth of the region’s economy.
Another challenge for consultants used to working in Europe is the importance of developing relationships with potential clients before winning work. Middle Eastern clients tend to hire firms they know. “It’s all about relationships here,” says Parsons Brinckerhoff’s Shane Larkin. “I can submit a hundred proposals and get nowhere, but if I have developed relationships with potential clients I can submit five proposals and attract work.” The importance of developing personal relationships, combined with the head-spinning timescale of the work once it is won, adds up to long hours.
There is also the issue of respect for the region's traditions and the need to get to know the region and its highly diverse client base. WSP’s Peter Sharratt warns consultants against thinking they can swan into the Middle East for a few years, recycle ideas that have worked in other parts of the world, and swan out. “To be successful in the Middle East you have to be committed to being here for the long term and you need to bring the world’s best thinking to your work,” he says. Consultants also “need to think about how to use the world’s best thinking in ways that will help Middle Eastern clients develop a meaningful Arabic urban identity”.
There is a lot of money and a lot of work in the Middle East for environmental consultants but it will not be won by those who are only able to import designs originally created for Texas or Australia or who do not take the time to get to know the market. The region is a fast-moving, exciting and profitable market – but that does not mean it is an easy one.
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