Meinhardt is one of the world's few multidisciplinary and truly integrated engineering, infrastructure and project consultancy firms. In this interview, Omar Shahzad discusses the company’s activities in Singapore and across the globe, and its plans to expand in the US.
The ASEAN Development Bank estimates about a hundred sixty-four billion dollars a year is needed in infrastructure spending just to maintain the current growth rate. How can ASEAN come up with sustainable solution to finance restriction when it comes to infrastructure connectivity?
All the economies in the region are moving towards infrastructure connectivity. The fact of the matter is that PPP is still a relatively small percentage as of now in terms of the overall infrastructure spending and that's why infrastructure spending is not rising as quickly as the governments would like them. Obviously, governments on their own are constrained for capital. Although, there's no reason why infrastructure spending cannot be enhanced through private participation. Firstly, this part of the world is viewed attractively by investors. There's so much money parked in here by financial institutions of all types like pension funds, venture capital funds, infrastructure funds and of course, sovereign wealth funds who are very active in this part of the world. Considering that infrastructure projects can generate a stable long-term return, it is an attractive investment.
ASEAN is in the middle of a pro trade region, however the only international players interested in ASEAN now seems to be Singapore or very government linked agencies from Japan or from China and South Korea. What is missing in this side of the world for more American firms, more German firms to be willing to really compete for those PPPs in the region?
I think it requires more awareness and success stories. As you get more of them, they will attract companies from far and away to explore those options, it's a matter of time initially as in anywhere else. First, it's usually the neighboring countries that are excited about it and who partner local companies and set it up. You have Japan and China who are so hungry and have so much capacity to invest at low rates. For the likes of the United States, their return hurdles may be a lot higher. While these Japanese and Chinese companies probably need to fill up their capacity with projects and once they become busier, then it becomes attractive for the companies to come.
When it comes to infrastructure in Singapore, the government is investing heavily in some big projects. Meinhardt is deeply rooted in infrastructure projects in Singapore. What are the main drivers behind Singapore's success given that it was very limited resources to start with, and how has Meinhardt been involved?
In the case of Singapore, all of these infrastructure assets are well-planned, seamlessly connected with each other and they function very well. Singapore is rated as perhaps the world's most expensive city, but it has consistently ranked in the top 3 over the last five years in world competitiveness. That's primarily down to the fact that it has good infrastructure which runs well, is well-managed and well-maintained. This is a key driver of Singapore’s success and competitiveness.
As engineers and designers, we have a big role to play, working with government agencies to design and plan these assets: economical design and optimized maintenance and life cycle costs. That’s really the role of an engineering firm — it starts from the design phase and extends to the construction phase. Supervising the construction to make sure whatever you have designed is implemented and attend to teething problems during the first two years during the defects liability period. This is an area where engineering firms like us would be heavily involved. As far as Meinhardt is concerned, we have been fortunate to be part of many projects. If you look at Singapore’s Mass Rapid Transits (MRT) network, there's not any major MRT line where Meinhardt has not been involved in some capacity.
If you look at Singapore’s Deep Tunnel Sewerage System (DTSS), we have done about 37.7 kilometres of the DTSS tunnels and a track record of a total length of more than 136 kilometers. We have done many water and wastewater projects, treatment plant sand transmission networks. At Changi Airport Terminal, one upgrading was a project where our engineers completely modernized the existing terminal without shutting it down, in 180 phases, block by block, we put in a new roof without shutting down the airport. Many of the buildings around Marina Bay are also designed by us and it's very complicated because of Singapore's land condition. First, it's soft clay and our underground is incredibly busy. We have a deep tunnel sewerage system and many MRT lines, so erecting buildings in those conditions is very tough. You cannot have any vibrations or any slightest movements, you have to protect the site very well. Sites and spaces are scarce, we need to maximize the limited space to get our work done. These are factors that a good engineering firm needs to take care of.
Meinhardt’s uniqueness is that it positions itself as a one-stop shop. We’ve read about your involvement in KAFD in Saudi Arabia for example. How much of a competitive advantage is it to have the expertise to really take the full spectrum of engineering consultancy into your own hands?
King Abdullah Financial District is a very ambitious project. It was, at one time, the world's largest real estate development and was supposed to be a fast-track project. Saudi Arabia decided to award this project primarily to local contractors and at that point in time, the client also felt that the local contractors didn't have the capacity to undertake the sort of quality that the client was expecting. They appointed us to do that for them, to interface with the contractors like the Saudi Bin Ladin Group or Saudi Oger and work with them to raise the quality of their construction. We brought in a team of experts from various Meinhardt Group offices, placed them in Saudi Arabian to work on this prominent project. That was when we decided to diversify our operations in the Middle East; away from Dubai and expand into Qatar and Saudi Arabia.
Could you share your journey into Africa, which brings its own unique set of challenges and opportunities, and how you've been able to collaborate with the Singaporean government (with Enterprise Singapore) to push forward the internalization of Meinhardt?
We saw Africa as a natural extension to our Middle East business. We were initially in all the Gulf countries, then we set up an office in North Africa in Egypt because a lot of our workforce in that part of the world are Egyptians. Egypt became our remote resource centre for our operations in the Gulf before we set up an office in Turkey. Turkey’s office was an acquisition because we thought Turkish contractors would give us a strong foothold into Central Asia and Africa.
In Africa, we made several study trips and we thought East Africa may be a good starting point. We were fortunate to come across a developer who was building the tallest tower in Africa who trusted us thanks to our track record and the Singapore brand name. Our standard procedures are that we set up an office, and we acquired a company in Kenya which also has operations in Rwanda. Then we put up a team in Kenya which had the expertise to build skyscrapers.
We work with Enterprise Singapore quite closely. We share our business opportunities with them and they give us their inputs. Sometimes, they may have leads, sometimes we do, and we work on them together. When the lead is good we put up a Singapore consortium team around this because the opportunity is more than just engineering. As I shared earlier, the biggest thing is the Singapore’s brand name, wherever I've been in the world, it's really well respected. I went to Africa the first time about five years ago and I was expecting to hear questions like “Singapore, where is it? Is it part of Japan or China?” But everyone I met there knew Lee Kuan Yew. “Third world to first world”, everyone had read his books. When I took a taxi, even the taxi driver knows Singapore. He said: “We know Singapore, both our countries gained independence at the same time and we really admire how far you guys have progressed and we still have a long way to go.” Singapore as a brand name is powerful and not just in Asia.
Now talking about internalization, you have an office in New York. What are the synergies that are ongoing with the US both in terms of partnerships and projects for the Meinhardt Group?
We are looking at expanding into the US in a bigger way. We're looking at acquisitions in the US and we're very optimistic. The construction market is huge, second only to China. The scale of projects, the complexity of projects is quite high so those are projects that we think we'd like to be involved in. Seeing the quality of talent that you get in the US makes it an attractive spot. Some of the world's most famous architects are still US-based, some of whom are working in Singapore. We currently work with US architects and the New York base we have facilitates the work, even as we are looking at leveraging the good relationships we have with big American construction companies.
Whichever company we acquire in the US will probably have some sort of remote resource setup in Mexico or even in Latin America. The Americas is generally a region which we think, thanks to President Donald Trump's infrastructure vision, will have a lot of potential. We're also looking at Europe. About several months back, we set up an office in Malta to complement what we have in the UK. We have an office in Turkey and we've just secured some projects in Germany. If you want to be considered a global company, you cannot miss the US and Western Europe.
Green technologies and smart-building are an answer to rapid urbanization and to transform into a Smart-Nation. How do you incorporate those green and smart technologies?
We have been quite successful in doing innovative projects even in developing markets, for example the first green building in India was designed by us and the first platinum rated green building in Philippines as well. We’ve done a lot of these projects which are groundbreaking, that's where value comes from someone like us who would do something which has never been done in that location.
We have been instilling that drive in our people. We work very closely with the client to understand what is it that they want and sometimes this gets underappreciated because everyone's so busy at cranking things out. The most amount of attention we give is at the start. First, understand what the client-brief is, and then bring our experience to the client. We share the feasible options with them and try to integrate our design with technologies. We have a fantastic network of partnerships with different technology companies— the big boys, the smaller companies, and the niche companies.
With this partnership, we try to incorporate the design that those technologies can be introduced three or five years later. Or the client may say, I want to do something simple for phase one. We try to educate the client on what makes sense and we may say “getting a platinum-rated building may not be in your interest because the costs will be higher, but you can incorporate elements of this to achieve the savings and the benefits”.
We always focus on what our clients want to achieve. Once the parameters of the design are ready, the brief is fairly straightforward. We just need to ensure it runs according to the schedule. Usually the only complication thereafter is when the client changes the brief due to market conditions, i.e. change a residential to an office building. Those are the main hurdles but after that it's smooth sailing till the next step, i.e. during the construction phase. My job as Group CEO is to make sure that we put the right team in place but, as far as innovation is concerned, we looked at two or three different things. One is integration with technologies. The other is how do we construct quickly? If you go for a fast-track construction method, is that doable? What kind of savings will we get? What is the opportunity cost? For example, usually for fast-track projects, the flexibility to change the building layout is less. We lay out the different options for our clients to choose the type of benefits before we implement them. That's really the real benefit of having an engineering firm as it can come up with good designs and innovative ideas.
We also work closely with architects and sometimes, the client chooses very iconic architects like Fosters or Zaha Hadid. Their works through the nice renderings will impress the client but as engineers, we have to make it work and put it into reality. Instead of sharing what can or cannot be done. We work with the architect and inform the clients on the possible savings with the recommended minor design tweaks. We usually help our clients achieve huge cost savings. These are things that an engineer will look at – the practicality of the design and making it buildable.
Singapore’s One Raffles Quay was a premium office building in 2001. It consists of a tall tower and a shorter tower by an American architect Kohn Pedersen Fox. He wanted the two buildings to face each other. Due to the poor ground conditions of Singapore’s downtown, it was difficult to build it. Moreover, there was an MRT line underneath it. Our engineers came up with an innovative solution, i.e. to tilt this building in order to be perpendicular to the underground MRT line. In making this perpendicular, the amount of excavation would be reduced and instead of fortifying the basement, we introduced steel trusses and fortified it on the fifth and sixth level. In this scenario, we pleased both the architect and client. The building was architecturally pleasing, and we helped the client save $25 million dollars as the initial design required much foundation work. Moreover, it is a better view as opposed to two towers looking directly into each other. These are things we come up with over and above what’s new in technology. And to be honest, this has been successful for Meinhardt. It is really the good and innovative solutions that we come up with over and over again as we pay most attention at the front end of the design.