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Laing tackles culture shock in former USSR

News; Uzbekistan; Upgrading three local airports would seem a straightforward job for an experienced John Laing team. But working in Uzbekistan in a joint venture with a Turkish contractor and a Japanese designer introduced complications beyond expectatio

Nothing is easy in Uzbekistan. Nine years after the former Soviet state gained independence, its people struggle against an economy in turmoil and a climate where rain is scarce and the temperaturefluctuates between 40degreesC in summer and -30degreesC in winter.

Currency restrictions make inward investment hard and imported goods expensive. While Uzbeks can now see and hear the outside world, the price of freedom is the inability to afford to go there.

Last week's celebration to mark the completion of a £28M project to upgrade three local airports to international standards was therefore particularly important for the nation. The grand opening of Urgench airport followed the completion of work at Samarkand and Bukhara earlier in the year.

As the deputy prime minister explained: 'Our airports are vital. They are the main gateways to our country.'

For John Laing International's team in Uzbekistan, the event was also significant. This difficult job had been pulled in on time, against the odds. It also gave the company the opportunity to develop high level relationships, strengthening its position in the competition to win the next airport upgrade job in the capital Tashkent.

'There is certainly lots of work to do here,' says JLI managing director Brian Emerton. 'The problem is that there is no funding for the work at the moment.'

Laing started the airport job in July 1998 on the back of a previous joint venture with Turkish contractor Alarko in Tashkent to build the new British American Tobacco cigarette factory. This work gave the small JLI management team an excellent grounding to secure the airport project.

Japan's Marubeni had been working on the airport designs for some time before the design and construct job started on site. With the client, Uzbekistan national airport company Havo Yullari, it had secured funding via the Japanese OECF overseas development fund.

The test has been to mesh the vastly different cultures of the client, designer, contractor and project manager, all within an environment that is difficult for overseas firms .

'The lack of currency convertibility makes it very hard to do business here. Until they sort this out it will remain very hard for firms to come and work here,' says Emerton.

JLI was fortunate on this job that 90% of its earnings were paid offshore in Japanese Yen. However, this left 10% paid in the local Cym currency which could not be converted into dollars or sterling or taken out of the country.

'Everything has to be completely auditable and backed up by the paperwork,' explains project QS David McKenzie. 'Dollar deals with local firms are not possible. Whether the work is in the contract or an agreed extra, if you have not got all the correct paperwork, you simply will not be paid.'

This former Soviet republic's obsession with paperwork and bureaucracy permeates life in Uzbekistan. Whether you are trying to build an airport or buy an air ticket, the layers of red tape are there to be cut through.

'Value engineering on the project has been very difficult because of the amount of paperwork that it generates,' says McKenzie. 'The Uzbeki attitude is 'we have funding for this design' - any changes must be justified to explain why they are necessary.'

But cultural differences were not just limited to those with the client. Within the joint venture problems came to a head a year ago and it became clear that if the work was to finish on time changes had to be made. The team was restructured with JLI's Bob Shepperd as project director.

'Joint venture jobs are always difficult,' says Shepperd, 'but this one has been particularly difficult to make work'.

Apart from the relationships and language barriers, the biggest difficulty on the project was getting things to site. Almost everything had to be imported from Europe via Turkey, and transportation and reliability of delivery was a constant challenge.

This became particularly acute after the earthquake in Turkey last year when almost the entire haulage industry was soaked up by the relief effort.

'Never quite knowing what was going to arrive and when introduced substantial problems,' he explains. 'At Urgench this was particularly acute as it is the furthest from our base in Tashkent.'

Ultimately, however, Shepperd is pleased with the way this difficult job went. 'Making things happen all comes down to personalities,' he says. 'We have had problems but people have had to say 'how do we make this work?'.'

'Anything can happen here and at any time,' Shepperd explains. 'There is huge exposure to risk. Regulations can change at any time without warning but claims are not an option. You have just got to find solutions to make things work.'

Laing's team had to adapt to the local cultural climate.

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