The Middle Eastern construction economy is growing at a blistering pace.
Bernadette Redfern talks to UK companies about keeping up.
Fearing reprisals after the New York terrorist attacks of 11 September 2001, Middle Eastern investors scrambled to repatriate capital. Meanwhile, in the last five years oil and gas prices have been riding high. The Middle East is awash with cash. Everyone in construction is excited about the economic boom.
'The major driver [behind the present prosperity and resulting construction surge] was 9/11.
Up to $15 trillion has been repatriated. Investors were desperate to find places to put money in the Middle East and this really kickstarted the construction boom, alongside increasing oil and gas revenues, ' says Halcrow development director Jim Fyvie.
Of the UK's top 20 consultants, 16 are active in the Middle East.
Research conducted by NCEI shows that most activity is in the United Arab Emirates, specifically Dubai and Abu Dhabi.
Last year, construction in Dubai grew by 30% and there is no sign of slowing down. 'Dubai led the construction boom but Abu Dhabi is next, ' predicts Mouchel Parkman director Robin Penman. 'It is the most exciting place in the world at the moment.
They are planning to build 20 new industrial cities alone.'
At the moment consultant Mott MacDonald, whose first job in the region was the Aswan Dam in the 1920s, is turning over the most cash - $69.4M. Fees per head average $82,640. 'Our turnover is high because lots of our work is in the power industry, ' says Mott MacDonald group business development director Kevin Stovell. 'We work on power generation and transmission systems and often desalination plants and infrastructure alongside these. We probably engineered half the desalination plants in the Middle East.'
Despite the security fears that have delayed reconstruction in Iraq, consultants report that most of the Middle East is pretty stable. And following the removal of Saddam Hussein, countries such as Kuwait and Iran are exciting for UK businesses.
'Kuwait has really perked up and investment has started, ' says Fyvie.
With work in 13 Middle Eastern countries, Halcrow has the furthest reach of all of the UK consultants and it points to Bahrain, Saudi Arabia, Libya and Oman as high potential markets.
Of course the top 20 are not the only UK consultants working in the Gulf. WhitbyBird, High Point Rendel and Gifford are all active in the region and the wealth of work means that there is enough to keep consultants of all sizes very busy.
Consultants surveyed by NCEI have 5,419 staff in the Middle East. The biggest employers are Atkins (18.7% of total), Halcrow (17.6%), Hyder (17.5%) and Mott MacDonald (15.5%). All companies report a growing staff base, but most name resources and recruiting good quality staff as their biggest challenge (see feature, page 18).
Although work is spread across the Middle East, all companies are based in the United Arab Emirates, specifically Abu Dhabi or Dubai, where a massive 85% of the population is expatriate. It is no surprise that most staff within consultants in the Middle East are expat too. Engineers and support staff are drafted in from India, Pakistan, Egypt, Jordan, Syria, Sudan and South Africa, as well as from the UK.
The UK's top contractors - Balfour Beatty, Carillion and Costain - are all cashing in on the construction boom in the Middle East.
Between them they are turning over more than $1.78bn working in joint venture with other contractors in the region. They are also employing more than 3,000 staff.
'Our staff base is split two ways. Engineering and commercial staff are a mixture of Balfour Beatty secondees from the UK and other expatriate staff from South Africa, Jordan and Europe, ' says Balfour Beatty managing director for the region Brian Osbourne. 'The labour is chiey Indian or Pakistani and there are some Philippino staff too, ' he says.
'You have to remember that the indigenous population is really small so there simply is no local labour, ' he says.
The companies are all involved in a diverse range of projects and sectors, from Costain's oil, gas and process business in Abu Dhabi to Carillion's building and development joint venture with major client Al Futtaim.