Interviews

Mott MacDonald’s David Cox on funding, carbon reduction and the impact of new tech

The company’s MD chats with Middle East Consultant about how his firm has adapted to regional challenges and built stronger relationships with clients through a focus on delivering value

David Cox

Mott MacDonald is a veteran of the Middle East with a vast portfolio of iconic projects and an impressive roster of clients. The company’s history in the region began in the early 1900s, when Sir Murdoch MacDonald – one of the company’s founders – was involved in developing irrigation systems in the Nile Basin. The company’s regional presence has grown since those early days, and it is now in seven countries, with five principal offices and about 1,500 staff.

In the UAE alone, the company has worked on projects such as Masdar City, Abu Dhabi’s Surface Transport Master Plan, the Um Al Nar power and desalination plants, phase one of the Dubai Marina, the Palm Jumeirah Monorail, and the Emirates Float Glass Plant, to name a few. The company is also working on the UAE’s first nuclear project, the Braka Power Plant in Abu Dhabi.

Today, despite the liquidity crunch brought on by lower oil prices, the consultancy has a healthy pipeline of projects, and it believes that Middle East countries will get back on track in terms of investing in infrastructure and other important country assets.

“The market is adjusting to the new normal oil price, and in the next two years we are likely to see increased commitment to infrastructure and key nation-building assets across the region. Already, a significant amount of consultant time is being delivered around advising on the best and most efficient ways to deliver vital infrastructure, and we are very proud to be part of that,” comments David Cox, managing director at Mott MacDonald.

He elaborates: “In terms of delivery on the ground, this is likely to materialise in 2018. Partly through necessity, this will include increased private sector participation in terms of financing and procurement, and we believe that this will improve discipline and value at the sharp end of delivery.”

The consultancy expects the UAE and Qatar to ramp up their focus on infrastructure and development in the near future, in support of Expo 2020 and the 2022 World Cup respectively. “Qatar and the UAE are focused on event-oriented programmes, and these are now getting fully into construction mode. This is helping to drive the market, whilst the commercial sector, in terms of new schemes, has quietened down.”

Focus

To keep pace with rapid changes in the region, the company is focusing on its internal structure and processes. “The ability to be agile in how we deploy expertise will be a key part of our future, as the region continues to change at a far quicker pace than other parts of the developed world.”

Last year, the company launched a new selective focus strategy that began with focusing on itself, to ensure that it had the resources to execute projects in core countries with key clients. The company says this focus enabled it to grow its business in the region despite difficult conditions. Mott MacDonald also launched a new brand identity in 2016, and says it embodies focus, approaching opportunities and connected thinking.

Cox believes the private sector has to adapt to new market conditions in the same way that regional governments have had to, to attract new investment. “The private sector has to change rapidly too. We’ve strengthened our strategy and client proposition, so that we are delivering enhanced benefits to our clients and the societies we work in. Going forward, I see a few key themes being increasingly important in all that we do with our clients: funding, project cost and carbon reduction, and the impact of technology.”

Prevalent themes

Mott MacDonald has plenty of experience in terms of alternative financing. The company has worked in Kuwait and Bahrain, and says both countries now have a mature way of procuring investment. Cox says that one of the drivers for investment is “predictability of the pipeline”, and that this is not present in all countries in the region at present.

“The need to ensure value for money, plus the fact that internationally recognised PPP procurement structures don’t align exactly with the reality of many of the local arrangements, means that the challenges are unique and demand a local presence supported by global experience, which is what we have. The urgency of the need for delivery of long-awaited infrastructure in Saudi Arabia has also created what now must arguably be the largest PPP market in the region. Our positioning as the market leader in PPP technical advice is key in this territory.”

Lower oil prices have had a major negative impact on regional budgets, but they have also pushed governments and decision-makers to further explore alternative funding and technological innovation. Cox elaborates: “Studies show that the use of technology will save significant costs in both the CAPEX and OPEX phases of the finished asset. We are now able to automate elements of a design to produce information at a pace not thought possible a few years ago. Clients are keen to reap the benefits, but until all links of the supply chain are at the same stage of technological maturity, we won’t see the returns fully materialise.”

One other avenue that Mott MacDonald expects to take off in the region in coming years is carbon reduction and management. Cox believes it will have a major impact on bottom lines and the environment, and will provide a solid pipeline of work for his consultancy.

“We’ve launched our Carbon Management Portal, the first BIM-enabled carbon calculator, which can help clients cut costs and spearhead innovation. It provides essential information at the planning and design stages, where savings can be made, and can also be used across sectors. The portal is populated with data that already supports optioneering in all markets, with datasets continually refined and tailored to our key regions worldwide. We also have plans to launch it in the Middle East to serve regional clients, and we are very excited at the opportunities that it will bring not only to our clients but also the communities as a whole.”

Cox says that by using the portal, his firm was able to plan a roadmap for a regional client up to 2030, and reduce its use of carbon by 38-56%. In doing so, the consultancy enabled the client to realise OPEX savings in excess of $381m. Cox is of the opinion that although work like this is only occasional today, it will become business as usual in the next two years.

The environment is a big part of Mott MacDonald’s focus, according to Cox. The consultancy adopted an innovative approach to the Dubai Creek Harbour development, after learning from international developments in the US, to deliver what it says will be the best in Dubai.

Cox concludes, “We’re committed to building a better community for all, and we think that this will ultimately also help us build healthier relationships with clients. We remain committed to the region, and this is backed up by a future commitment to remain present in the Middle East, as one of our core territories of operation.”

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