Experts: Investing in Public Infrastructure is Very Vital During Economic Downturn

In light of the Arab Spring and seismic shifts in availability of global finance, Middle East governments are placing more emphasis on social infrastructure to create sustainable communities, job opportunities and comfortable living, industry experts say.

In a region comprising unequal distribution of wealth, now is the time for the Middle East to work collaboratively in order to survive the recent political and economic turmoil, the experts warn, while identifying rail and affordable housing as areas relatively ignored during the construction boom time at the end of the last decade.

In a white paper examining the current state of the infrastructure industry in the Middle East in light of major political upheaval, three industry experts reiterate the need for government to increase spending on social infrastructure projects in order to prevent the economy from shrinking, maintain job creation and capitalize on lower market prices.

Published by Informa Exhibitions, organizers of infrastructure ARABIA Summit running alongside WORLD ecoConstruct and Cityscape Abu Dhabi from 22-25 April, 2012 at the Abu Dhabi National Exhibition Centre, the report underlines the need to create sustainable workforces.

The experts call for construction industry professionals to increase their levels of pride and job satisfaction and to create a sense of legacy in a region which has produced buildings displaying feats of engineering such as the Burj Al Arab and Burj Khalifa.

Current infrastructure projects in the UAE such as the Step Tunnel, Masdar City, the new energy, power and desalination stations, the nuclear program and the number of transportation programs from roads and railways, port and airport expansions to bus stations and depots were highlighted as positive examples of ongoing government investment, as AMEinfo stated.

The white paper, ‘Building a sustainable framework for the Middle East’, is the result of a round table discussion attended by delegates who will be addressing next week’s infrastructure ARABIA Summit. Melanie Mingas, head of editorial at The Big Project, was the moderator.

“Countries across the globe are increasing public investment on needed infrastructure, even with the austerity measures many are enforcing, to boost employment and give a long-term stimulus to their economies,” said panelist Ivan Woods, Head of Project Finance Advisory, BDO Corporate Finance (Middle East) LLP.

Dr Ghassan Ziadet -Director of Infrastructure (UAE) and Regional Head of Bridges, Middle East and India at Atkins- calls for the implementation of GCC-wide working permits to reduce the amount of manpower leaving the region during political upheaval and economic downturns.

He said, “Moving to a regional work system would allow the skilled workers and labor to move freely between the GCC countries and thus maintain stability and create flexibility. The cycles in different countries don’t always happen at the same time. The suggestion of implementing a GCC-wide working permit could be expedited because otherwise, these projects will have constraints.”

In terms of opportunities in infrastructure in the Middle East, Dr Ziadat identified the creation of a rail network and believes the region was left behind in the railway transportation age.

“For sustainability in transportation, rail is the future. It is more sustainable in terms of carbon emissions but you need long term investment programs to achieve it.”

Woods added, “There are significant shortfalls in a number of areas. Affordable housing has not been made available in sufficient quantity and this has been recognized in Saudi Arabia, Bahrain and Oman.”

He points to countries like Kuwait and Egypt which have successfully utilized public-private partnerships (PPPs) to help vital infrastructure projects get off the ground.

“PPPs can be of great benefit, particularly to maximize the private sector’s involvement and added value. The challenges of implementing PPP properly, however, and ensuring value for money for the government and the wider public, must be addressed upfront.”

The white paper concludes that now is the time for the construction industry at large to take stock, evaluate and identify how it can work more efficiently and provide better quality service to the population and environment in the future.

Matthew Plumbridge, Consultant, Environment and Sustainability Planning, Department of Municipal Affairs (DMA), believes that by committing to a more sustainable workforce, the industry takes a step closer to engendering a sense of legacy in the region.

“Your building is your legacy,” he said. “We have to consider the quality of our work as the core in what we do and to have pride in every nut and bolt.”

With recent research valuing GCC infrastructure projects (including roads, bridges, rail, sewerage, wastewater and marine) at $408.8bn, construction companies are increasingly looking to obtain opportunities being provided to those with a commitment toward sustainable building practices.

WORLD ecoConstruct is a crucial collaboration between Abu Dhabi’s two leading building and construction events, CityBuild and Arabian Construction Week, and will take place to provide a crucial sourcing and knowledge platform for the billions of dollars committed to major projects within Abu Dhabi and the surrounding region.

Infrastructure Arabia and World ecoConstruct are set to attract more than 30,000 visitors and will be the centre of attention when industry heavyweights gather to learn how best to capitalize on innovative and sustainable construction later this month.

World ecoConstruct is supported by its Foundation Partner, the Department of Municipal Affairs, Sustainable Knowledge Partner Masdar City, Strategic Partner Emirates Green Building Council, Principal Sponsor Emirates Steel, Platinum Sponsor Rajhi Steel, and is endorsed by the UAE Business Council for Sustainable Development.