YES, ICON

UAE, Dubai 2014 | REAL ESTATE & CONSTRUCTION | VIP INTERVIEW

TBY talks to Khaldoun Rashid Tabari, Vice-Chairman & CEO of Drake & Scull International, on the company's most iconic work, projects in Saudi Arabia, and the meaning of green construction applications.

In light of your role in the UAE's construction sector, what have been the milestones since your establishment?

There are two major projects I consider some of our most important contributions to the Emirates' skyline: the Jumeirah Beach hotel, by W.S. Atkins, and the district cooling plant at the Jumeirah Beach Residences, which is a 60,000-ton facility. I'd say these are the two most iconic, but our portfolio includes many other remarkable projects. From a corporate perspective, Drake & Scull International (DSI) has undergone a tremendous transformation since the early days. We were primarily a mechanical, electrical, and plumbing (MEP) contractor in the early days but, since then, we've established multiple discipline integrated business streamlines in the form of Drake & Scull Construction (general contracting), Drake & Scull Engineering (MEP, water, and power), Drake & Scull Rail, Drake & Scull Oil & Gas, Drake & Scull Development (infrastructure), and Passavant Energy & Environment (water and wastewater treatment, waste-to-energy conversion). We launched a very successful IPO to drive our regional expansion efforts, which was ranked among the top-20 IPOs globally in that quarter in 2008. We listed on the Dubai Financial Market and were oversubscribed 101 times. As a publicly listed company, we had to introduce a corporate culture that is now oriented toward generating value for our shareholders. The IPO and the listing proved vital in expanding our presence into key markets like Saudi Arabia, Kuwait, Qatar, Oman, Egypt, Algeria, Jordan, Europe, Thailand, India, and Iraq. Our project backlog has grown to around AED12.2 billion, and our workforce today stands at over 25,000 strong, as our global footprint spans Europe, the MENA region, and Asia.

Is there a specific project—not only in the UAE, but all over the world—that you recall as the most ambitious and challenging?

We've worked on several prestigious, high-profile projects around the world in the last five decades. Besides the Jumeirah Beach Residences and the Jumeirah Beach Hotel, we've worked on iconic landmarks like the Kuwait State Audit Bureau Headquarters, the King Abdullah University of Science and Technology (KAUST), the Information and Technology Communications Complex (ITCC), and the Royal Amwaj Resorts and Spa. The one I'd like to highlight is under construction right now. Currently, the most prestigious and challenging project we're undertaking is called the King Abdullah Petroleum Studies and Research Center (KAPSARC). Drake & Scull Construction was chosen to carry out the complete general contracting (civil works) for this project. The architect is Zaha Hadid, who designed the bridge between Dubai and Abu Dhabi. She also designed the Beijing center and the Olympic Village in London. KAPSARC is going to be iconic, and will probably be the most important landmark in Saudi Arabia. It is a LEED Platinum project that will cost in excess of SAR3 billion, and we hope to complete it very soon.

“We've worked on several prestigious, high-profile projects around the world in the last five decades."

What hurdles have been overcome to make the project a reality?

The biggest hurdle faced by the industry, and not just us, is a change to the labor laws that restricted the flow of expatriate workers into Saudi Arabia. This was a bold step by Saudi Arabia to boost the employment of Saudi Arabian nationals in the private economy. We all knew this was coming, but, no matter how prepared we were, the announcement was made quite abruptly. We were caught shorthanded. We basically had to bring in people from wherever we could to try and get the job done. We currently have about 7,800 people on site. The project is quite challenging, and it has a futuristic look. This building will probably stand for another 50 years as the building of the century in Saudi Arabia. If you watched the Olympic Games in Beijing and saw the stadium, it looked extraordinary, and this is miles ahead of that.

What characteristics allowed you to become a leading player in the construction sector after the crisis?

The crisis that hit the real estate sector was a huge setback for the industry. But in good times or bad, the values in any business are the same; you hang on to your good workers and take care of them. You also have to work with very low margins in times of crisis. And the complexity of this crisis was not only financial, but also led to a scarcity of work. The margins were not there, the collections were not there, and so the difficulties were enormous. However, we are out of it. We have not yet seen it in our bottom lines. That will come, however, as the construction sector follows market trends. What set DSI apart from our competitors was our strategy to diversify into new areas of business and, at the same time, vertically integrate these disciplines to offer our clients a one-stop solution to manage all aspects of a project, from the design stage to post-completion handover. Having multiple DSI teams on site working with the same work approach and standards and speaking the same language proved to be a huge benefit to our clients. And we've always operated with a quality-oriented, cost-conscious approach, which has earned us the trust of our clients. Our rich legacy and experience of delivering a wide range of projects all around the world dates back all the way to 1881, when Drake & Scull began its existence. The history and knowledge gained by generations of DSI employees has been passed down over the years, and is something that only a few companies can offer in our industry.

You find the relationship with your customers and partners fundamental to conducting business. Why is this factor so important in the real estate and construction sector?

You have to look at it from two different perspectives. We always like to have repeat business. Anybody is willing to try you out once and, if they don't find you suitable, they don't come back to you. Repeat business is a good indicator that your mechanisms and policies are working properly. On the engineering side, DSI has had enormous repeat business, and this is where we are leading the market. It is very important to also be extremely competitive, but at the same time to make sure you have the right quality and offering. It is not as simple as saying you take care of your client; they have to come back to you. You also have to make sure that you are always competitive. Construction is like bread and butter; if you don't get it from this store, you'll get it from another store. You have to be extremely competitive, and at the same time take care of your clients.

Which major projects you are expecting to complete outside the UAE, and on which specific areas will you be focusing in the medium term?

DSI's focus has been the UAE and Saudi Arabia for some time now. Things are vibrant there. First, you have to operate in the countries where your expertise is higher. We need to move machinery and people. To deliver and be successful, you have to have a keen logistics setup. When it comes to Saudi Arabia, we know the market, we have the labor, and we have the power, so that's why we are there. However, our ambitions are limitless. The company joined the stock market six years ago, and companies like ours, hopefully, will last for other 50 years. We have high expectations from the rail business, particularly in the Middle East, where we are currently working on the passenger movement system in Dubai's airports. The oil and gas business is also very lucrative and holds tremendous potential for DSI. We are already working on oil fields in Iraq, and we recently announced a massive oil terminal project in Egypt. We are also quite active in emerging high-growth markets like Algeria and India, where we're working on large-scale, mixed-use developments and water treatment plants. We are in the embryonic stage and things are poised to take off and the company should expand even further in the future.

What green initiatives are you working on?

We have a strong commitment to the environment, and have an environment policy that focuses on reducing the consumption of resources and maximizing the recycling of old resources. In terms of our projects, we have worked on solar energy plants in India and we also built the first waste-to-energy plant in the Middle East at Saida, Lebanon. Our water treatment business recycles wastewater and sludge to reuse for agricultural purposes. We have worked on several LEED Platinum and LEED Silver projects in the Middle East. Green stands for so many things. In the end, it is all about us and our actions and what we do. You can live a green life, or a normal life, and the same applies to construction. Green is a gimmicky word right now. Governments talk about green, contractors talk about green, and developers talk about green to attract attention. But what is green really? Saving energy is green, and so is preserving resources for the future. The same thing is true of construction. What materials are you using for building? If you can use materials that actually reduce the consumption of electricity, that is green. You can put plants in, and not only for aesthetics, but also for oxygen. At times, however, economic reasons keep you from implementing such things. You end up doing the cheapest thing rather than the right thing. In that respect, it is a challenge for governments to subsidize industries that need a green edge.

© The Business Year - June 2014