GREAT RESULTS

Dubai 2016 | REAL ESTATE & CONSTRUCTION | VIP INTERVIEW

TBY talks to Yu Tao, President & CEO of China State Construction Engineering Corporation (Middle East), on the challenges relating to current projects in the Gulf region, and prospects for the coming year.

What CECEC achievements do you feel most proud of at the moment?

We have many achievements in many different areas. First, the company keeps on growing; as a top contractor, we have our core business in the construction and infrastructure sector, and in both sectors we aim for the biggest projects in the region. One example is the Kuwait Airport terminal tender, which is probably the biggest single building project in the Middle East or even in the world. In the infrastructure sector we are challenging for the Etihad railway, which really requires a lot of muscle. This is a very good indicator of our strength. Whether we win the project or not is another issue, but at least we know that we are up for the challenge. We are present in three other main areas, one of which is steel structures. We have overcome a lot of difficulties at the Midfield Terminal Building (MTB) at the Abu Dhabi International Airport. The steel structure there was probably one of the most challenging in the world and, together with the effort of the client and consultant, we are now reaching the final stage and will be taking off the supports as the steel structure takes shape. After working hard for years, we are finally seeing great results. Our effort and our commitment was appreciated by the client. Also, at the airport, we are working as the specialist on the MEP works. We are doing well and I am feeling quite positive about our achievements and our hard work over the years. Another sector we are doing well in is the investment sector. We are talking about investing together with existing partners and trying to provide project finance for quite a lot of other potential business partners.

How would you assess the development of the Dubai Viceroy Hotel project?

The project was designed and run by our partner SKAI Holding. We have a joint venture with SKAI Holding, which is a minority shareholder. We believe this is very interesting and the perfect arrangement for us to join hands and align our interests. SKAI Holding has great experience of the local market, and it understands the appetite of the buyers. The project so far is six months ahead of schedule, which is very difficult to achieve, but we challenge ourselves to keep up the progress, and as a result today, we are ahead of schedule. This is a great achievement that has been possible due to a joint effort between the client, the consultant, and our team and sub-contractor suppliers. In the financial hub we are also doing very well and we have just recently finished syndication, which is a reflection of trust that the financial sector has in us. Quite a few major banks in the world joined this syndication, which includes ICBC, Bank of China, and quite a few other Chinese banks like Minsheng Bank. With the successful closure of the project financing, all our development is well supported financially so we can now focus on the construction and try to finish as early as we can.

What can you tell us about the status of the Sheikh Zayed Road flyover?

We have two current projects on the Sheikh Zayed Road. One is the access to the Dubai Park, which is not a big project but is very challenging because the client has only given us 14 months to finish. We are doing well so far and need to spend even more effort to finish the project on time. We are looking at maybe a one-year timeframe. Our team is working day and night and trying to keep up with our program. In relation to the flyover, we have recently commenced the 2.5km bridge between the second and third bridges. This is a sizable interchange to improve the traffic on both sides. The project started in 3Q2015 and we would like to continue with the same kind of commitment to our most respectable client out here, and be sure that we finish the project within the given timeframe with the highest standards possible.

Akoya Artesia Tower is the third cooperation you have undertaken with Damac. What factors have led to such a trust relationship with Damac?

Damac is becoming a more mature company, so it is good to extend our collaboration with them, given that we understand each other's strengths. We do have our weaknesses, but with our long-term relationship and understanding, we can take on the challenge together. Generally the project is doing well and is on track.

What would you consider to be the biggest challenges in the real estate and construction sector in Dubai?

The main challenges come from different angles; challenges pertaining to the complexity of a project and technical challenges such as those related to the Abu Dhabi Airport project. On one hand, clients often lack experience, while on the other, consultants are not always sure how to address complexities on the technical side. As specialists we try to cope with demanding programs, so the key is commitment. The clients have commitments themselves, which is why we like to work on government projects as they have made the budgets available and their priority is getting the project finished as quickly as possible. I am glad that when we encountered huge challenges with the Abu Dhabi International Airport project, we had such good clients and consultants, which allowed us to work out a solution together. Another key factor is trust. No matter who you are working with, nobody is perfect and we all sometimes make mistakes as human beings. Without the trust from our clients and partners, we can easily lose a relationship. It is crucial that all parties have confidence and trust for mistakes to be addressed and corrected. The third factor is that, as a contractor, you have to be confident that all your projects will be carried out to completion. To have this confidence, you have to align the strengths around you with your contractors, suppliers, and clients to become the driver in the project.

CSCEC ranks 37th in Fortune Global 500 for 2015, thanks to revenue of $129.89 billion. What are your expectations for growth here on out?

I anticipate that we will increase our contract value by 40% and our revenue value will increase by 30% to 40% in 2015 over 2014. That is why we have been extremely busy, to ensure that we can organize ourselves in an even more efficient way to remain as competitive in the market as possible and provide the best service to our clients. We are lucky that we have great support from our HQ both financially and technically and also for resources. We are getting a large number of management staff not just from Beijing but also from our sister companies in overseas operations. We do not feel that we necessarily have a shortage of management staff but we need to naturally increase our workforce.