Bri­tish en­gi­neer­ing con­sul­tan­cies up­beat on Mid­dle East de­spite Car­il­lion col­lapse

Surge in Saudi Ara­bia in­fra­struc­ture spend­ing at­tracts ma­jor UK firms

Arab News - - BUSINESS - BILL FISHLOCK

The col­lapse of Bri­tish builder Car­il­lion, which had also run into trou­ble on some of its re­gional con­tracts, has also cast a pall over the in­dus­try.

But with global growth pick­ing up and the am­bi­tious Saudi Na­tional Trans­for­ma­tion Pro­gram 2020 tak­ing shape, some of the larger UK ad­vi­sory firms see brighter prospects for their busi­nesses in the re­gion.

“I think it’s an im­prov­ing pic­ture,” said Chris Sey­mour, Mid­dle East man­ag­ing director of UK-based en­gi­neer­ing con­sul­tancy Mott MacDon­ald, which em­ploys 1,300 peo­ple in the re­gion and has five of­fices in­clud­ing Abu Dhabi, Dubai and Jed­dah.

He de­scribes the mar­ket for en­gi­neer­ing con­sul­tancy ser­vices in the Mid­dle East as com­pet­i­tive but sta­ble and said it has ad­justed to an oil price in the $40-60 range as a “new norm.”

The re­cently re­leased Saudi bud­get with its heavy em­pha­sis on in­fra­struc­ture spend­ing is a par­tic­u­larly pos­i­tive sign for a sec­tor that was hit hard by the sharp de­cline of oil prices in 2014.

“They will need more tech­ni­cal ad­vice and it should mean good op­por­tu­ni­ties as the plans ma­te­ri­al­ize and we should see an in­crease in busi­ness,” he said.

His firm is now in the early stages of work­ing on pub­lic pri­vate part­ner­ships which may re­sult in more work later this year.

MacDon­ald is look­ing at schemes in the en­ergy, health care, wa­ter and trans­port sec­tors in Saudi Ara­bia.

Atkins, the UK-based con­sul­tancy which also op­er­ates world­wide, last week pointed to in­creas­ing ac­tiv­ity in the Saudi Ara­bian mar­ket when it ap­pointed Lee Mor­ris as its new head of ar­chi­tec­ture in its Mid­dle East and Africa re­gion. The firm, which is now part of Mon­treal-based SNC-Lavalin, sees its in­ter­na­tional de­sign and ar­chi­tec­tural of­fer­ing as “more im­por­tant than ever.”

Simon Moon, Atkins’ CEO for the Mid­dle East and Africa, said: “Dur­ing this time of change in the re­gion, fresh and in­no­va­tive ap­proaches to de­sign are es­sen­tial.”

Atkins em­ploys around 2,000 staff in the Gulf with of­fices in Saudi Ara­bia, the UAE, Qatar, Bahrain, Kuwait and Oman and has mas­ter­planned the King Ab­dul Aziz Road de­vel­op­ment in the King­dom over the past eight years.

Last sum­mer, Atkins was se­lected by the US Army Corps of Engi­neers Mid­dle East District to sup­port in­fra­struc­ture im­prove­ment pro­grams for the Gulf Co­op­er­a­tion Coun­cil coali­tion of coun­tries. In Septem­ber, Atkins also won an ad­vi­sory ser­vices con­tract from the state-owned Na­tional Wa­ter Com­pany as part of a con­sor­tium to pro­vide sus­tain­able san­i­ta­tion ser­vices in Saudi Ara­bia.

One source of en­cour­age­ment for con­sul­tancy firms seek­ing work in the re­gion was the ap­point­ment early last year of the US con­trac­tor Bech­tel Corp. to run a new over­sight of­fice to help the Saudi gov­ern­ment set up and run its new Na­tional Project Man­age­ment Or­ga­ni­za­tion.

The firm has worked on mega-projects in the King­dom for 70 years and is cur­rently de­vel­op­ing two of six lines on the $20 bil­lion (SR74.9 bil­lion) Riyadh Metro project.

Nel­son Ogun­shakin, CEO of the UK in­dus­try body the As­so­ci­a­tion for Con­sul­tancy & En­gi­neer­ing, said his mem­bers have seen some pick-up in the mar­ket over the past year.

“There is more in­ter­est but peo­ple are cau­tiously op­ti­mistic,” he said. “We say please look but tread care­fully and make sure you address some con­cerns — on ar­eas such as pro­cure­ment trans­parency, health and safety and pay­ment terms — in your due dili­gence.”

Saudi Ara­bia’s am­bi­tious plans for new cities, uni­ver­si­ties and hos­pi­tals as it seeks to re­duce its de­pen­dency on petroleum rev­enue make it the most promis­ing mar­ket for UK firms.

LON­DON: UK con­sult­ing en­gi­neer­ing firms have faced leaner times in the Mid­dle East in re­cent years as the lower oil price has squeezed the funds avail­able to gov­ern­ments for new de­vel­op­ment in the re­gion.

Bri­tish con­struc­tion con­sul­tan­cies are en­cour­aged by the in­crease in ma­jor in­fra­struc­ture projects in the King­dom such as the Riyadh Metro. (Reuters)

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