Irishman who built his fortune in Dubai

Tom Barry co-founded Dubai builder Arabtec, and made a fortune helping to create the world’s tallest building, writes John Reynolds

DUN Laoghaire man Tom Barry went to Dubai in the late 1970s and spent the following 30 years there building skyscrapers, houses and oil and gas installations. Arabtec, the company he co-founded, employed 62,000 people and was worth over €1bn at the top of its game. It also built the Burj Khalifa, the tallest building in the world, in a joint venture with two other companies. “My wife and friends call it ‘Tom’s tower,’” he laughs.

The business would also make a fortune in the tens of millions for himself and co-founder Riad Kamal, a Palestinian-Jordanian who he met while working for one of “McAlpine’s Fusiliers” for British construction giant Robert McAlpine.

It helped that he had inherited engineering genes from his father, who initially worked for various Irish local authorities.

“My father then started his own consultancy, JB Barry. My elder brother, also an engineer, worked there too. But after graduating from UCD in civil engineering in 1969, I wanted to get a British chartered engineering qualification so that I could work abroad and on big construction projects, rather than as a consultant engineer,” says the tanned and gregarious 70-year-old.

It proved to be a good career move. Starting off as a site engineer with McAlpines, he worked in various British cities as a section engineer, then chief engineer, working on a steel plant, roads, bridges, then offices and shopping centres as a chartered engineer.

Meeting Riad – also recently qualified – was then pivotal. He had decided to return to the Middle East to establish a construction company in Dubai, a city which was on the verge of a building boom fuelled by oil money, and asked him if he wanted to join him.

When they arrived in 1976, it was nothing like the skyscraper-filled, fast-paced and futuristic metropolis of today.

Setting up the business so it could begin work proved to be a challenge in itself. “The Dubai authorities didn’t make it easy. There were layers of bureaucracy,” Barry says.

“The government was only beginning to develop the city and other infrastructure, but the construction techniques were out of date, the work ethic among staff and standards were poor. There were logistical headaches too; getting materials when and where they were needed was a constant challenge, and the general pace of life and work could be frustratingly slow.”

By 1979, Arabtec was trying to win ambitious projects that it believed would put the company on the map. A 17-storey office building at Dubai Creek – built in a joint venture with a German partner – was the tallest building in the country at the time.

Barry project managed commercial buildings in Abu Dhabi and Muscat, as well as apartment buildings using an innovative technique called tunnel-form, where concrete structures that are pre-cast at the ends and the front are clad with finishes and insulation, and then services are quickly built in. They later adapted it to build thousands of villas in the 1990s and 2000s.

“We’d aimed to build a company that improved standards, using British standards and building techniques, rather than the poorer Eastern ones that had prevailed here. We hoped to be able to compete with bigger firms like Balfour Beatty, Costain and Taylor Woodrow.”

He rose through the ranks to become general manager. But a recession in 1987 tested his and Riad’s mettle. “For quite a while it looked as though we’d go under. I feared I’d lose my livelihood.”

One major project, building hangars and a maintenance complex for the Emirates airline at Dubai Airport, fortunately led to more work there. “I met one of the company presidents. The pressure was on. I persuaded them that even though we were a relatively small company, we could do the job. It was a make-or-break meeting. It meant so much when we got it.

“The quality of our work got recognised by US giant Bechtel, which was involved in the airport development, and that meant we were allowed to tender for some larger airport work.

“We then diversified into work on offshore oil and gas installations in Abu Dhabi, requiring a service barge and other contracted barges to take food and materials out every day. That 24/7 logistics management operation was essential.”

Arabtec continued expanding through the 1990s and into the early 2000s, having gained a reputation for delivering high-quality buildings on time. The first skyscraper it built was a 55-storey residential project. Others followed, including a cluster of them next to the beach at Jumeirah Beach Residence, a couple of which became hotels; there were office blocks and apartment buildings too.

With expansion came greater management challenges and the company gained an ISO9001 certification for quality management. “Getting it took a lot of hard work — the company worked 24/7, six days a week anyway — and so many changes in our procedures. We had to fight against the established, ingrained ways of doing things to improve how we worked. It was a real achievement for the company and all our staff to overcome that.”

Growing to tens of thousands of employees, Arabtec employed consultants to recommend the best company and management structure to adopt in order to manage the growth. All of those employees required a huge fleet of buses to transport them to and from work and teams of cleaners and other staff to look after their accommodation.

“Having come through the construction engineering ranks, I was fortunate in that the management seemed to come easily to me. I’d always got on with people.

“An open-door policy helped gain the loyalty of the staff and the respect of clients, consultants and architects. I’d make time to listen to people and their problems. To me that was the only way to work in what could be a tough business. Some small companies here in Dubai treated their employees terribly. I always tried to treat people how I’d like to be treated myself.”

By then, the company was working in Abu Dhabi, Qatar, Bahrain and Saudi Arabia. “We looked at expansion into Iraq, Iran, India and Pakistan, but on closer analysis we realised it took all our effort just to sustain the workload we had.”

At one point, the Sisk Group looked at forming a joint venture with Arabtec, but then the market slowed and it wasn’t to be.

On another occasion, Barry looked at a management buyout of the company, but his financial backer ended up pulling out. “That was a big disappointment. I’d been prepared to risk everything. I spoke to banks including HSBC, to look at funding it, but they didn’t come up with a valuation that Riad was happy with. Instead, he and I decided we would float the company.

“Arabtec was the first-ever construction business to list on the stock market here, in early 2005. The share price trebled overnight: 45pc of the company floated for 400m dirhams (about €80m). I sold my shares over the following years. The shares rocketed and the company would end up being worth over €1bn. We both did very well. We’d worked very hard to build the business, and it was nice that we were so well rewarded. We were very fortunate.”

By the time the 2008 global economic crash hit, a key client of the firm was state-owned developer Emaar. Building both Dubai’s record-breaking Burj Khalifa tower — in a five-year joint venture with Samsung and a Belgian firm, involving numerous engineering and logistical challenges — and the seven-star Emirates Palace hotel in Abu Dhabi for them won Arabtec considerable industry accolades.

Other projects were slowed or put on hold, payments were delayed, a lot of the labourers were laid off, but the business endured and the work on the Burj carried on. It wasn’t until the following year that Barry was appointed CEO of Arabtec Construction. Riad was CEO of Arabtec Holding, which by then had expanded with various construction-related subsidiaries. But there was one final hurdle waiting for them.

In 2009, BBC’s Panorama programme alleged that the company’s huge staff of Asian and Indian labourers lived in sub-standard accommodation, some of which had problems with overcrowding and drainage.

Riad strongly defended the company, emphasising the conditions weren’t the norm, services such as medical care were available and all the facilities regularly passed inspections by the Dubai authorities.

Was Barry ever concerned about his company’s use of so many migrant labourers? “Smaller companies were the worst offenders. The authorities recommended they adopt our standards. We paid our workers more than our rivals did, and about 10 times what they would get in their home countries. They agreed to their wages (starting at $225 a month for skilled and $177 for unskilled) and fair overtime pay before they came. We never felt uneasy about it,” he says.

Once the Burj tower was completed in 2010 — all 828 metres (2,717ft) of it — Abu Dhabi state firm Abaar took over Arabtec. By then it had 25,000 employees, and both he and Riad stepped down as CEOs, holding advisory roles for a short while afterwards. It was the right time to leave, Barry adds. “Completing the Burj capped all our success and defining moments really. I couldn’t have asked for more than that in terms of being able to have pride in our work.”

Does he miss any aspect of his working life? “I occasionally miss the excitement, the push to win a big contract; tendering for it, working hard on it and then waiting expectantly to see if you’ve won it, with a great sense of achievement when you did.”