Abu Dhabi Department of Economic Development has monitored the transaction of contracting companies, consultant offices, and engineers register for 2010 following the issue of three new classification systems in Abu Dhabi with an aim to reorganize and restructure the profession of contractors, consultants and engineers to comply with the developments Abu Dhabi is witnessing, especially with the construction sector deemed to be one of the most dynamic sectors in the growth of GDP.
The contractors, consultants and engineers register transaction index highlights a 8.2% growth rate in contactors transaction procedure transaction in 2010, reaching 1184 transaction compared to 1094 in 2009. A need has become clear to promote the classification of contracting companies into 97 compared to 44 companies in 2009.
Engineer Ahmed Abdul Rahman Al Burkani, Acting Manager of Contractors Classification Directorate, DED, stated that the new system of contracting companies’ classification optimized the performance of the sector, preparing it to the technical, legal and procedure transformations in the upcoming period which is deemed to witness huge urban developments in various areas and cities of Abu Dhabi.
The index showed that there are more than 1855 classified contracting companies in Abu Dhabi in 2010 compared to 1767 in 2009, posting a growth rate of 4.7%. In 2010 new 415 contracting companies have been registered.
The transactions of engineering consultation offices for 2010 indicated 1582 registered offices compared to 1352 in 2009, registering 14.5% growth. Last year 134 consulting offices were registered for the first time, and 81 offices added new specialities compared to 59 offices in 2009.
“The growth of Abu Dhabi-registered contracting companies in 2010 bears witness to the economic progress and sound economic environment in the Emirate, thereby highlighting the success of Abu Dhabi’s Government to attract companies and investments to achieve Vision 2030 that aims to put Abu Dhabi amongst world’s top five governments.
The report stated that the DED-registered contracting companies and engineering consultation offices will immensely participated in boosting the role of construction and real estate sectors in the GDP in the coming years, given the package of facilities and motives the Government is offering to keep the momentum of development projects in the Emirate.
Al Burkani adds, “The transaction of engineering consulting offices in Abu Dhabi, which has seen 141 offices legally amended in 2010 compared to 53 offices in 2009 with a growth rate of 166%, clearly reflects that these offices are moving towards more active role of their business in the Emirate.”
“At the outset of the new contractors’ classification system in November 2010, many contracting companies and consulting offices have been active to comprehend the need to amend their status as per the laws guidelines, allowing them to be classified in accordance with their expertise, and financial and technical capacities as per set standards” he added.
The DED contractors’ classification transaction indicates that 627 contracting companies were renewed in 2010 compared to 542 in 2009, posting 16% growth rate. Addition, omission, and commercial name amendment transactions decreased 17% with 45 companies in 2010 compared to 54 in 2009.
Mr. Ahmed Al Burkani, the Acting Manager of Contractor Classification Directorate, explained that the high growth of the renewal process for contacting companies licenses following the adopting of a new classification systems is a clear index of how the guidelines of this system comply with the needs and requirements of these companies whilst reflecting a dominant need to promote and better business environment within the real estate sector.
“Since the end of last year, the DED has endevoured to implement contractors’ classification system and issue consultants’ classification system following a study it has conducted as well as visiting some countries to get feedbacks and proposals and see best practices to be discussed and studies through workshops and meetings with decision makers”, he added.
As per Law no (1) for 2009 issued by the DED with regards to engineering office classification, these offices are categorized according to their financial capabilities, technical staff, and previous experience. The owner of the consulting office is allowed to have more than one office. Likewise, the owner of a contracting company is allowed to have an engineering consultation office. The National investor can have an engineering consulting office as per some set standards and conditions.
The new system empowers opinion engineers to open “opinion engineer office” to be specialized in a very detailed engineering issue and to provide their consulting expertise in this discipline to other engineering consulting offices and government and private entities as per need.
The new system no (2) for 2009 to for contractors’ classification has taken into consideration developments of contracting sectors since 1980 when contractors’ classification no (4) for 1980 was issued until now. The system focused on increasing of the approximate value the contractor can uphold to empower them a larger scope to participate in tenders and possibly assess the values of complete projects.
As per the system, this classification applies to all contractors who practice contacting activities classified by the DED, with the ability to classify contractors who implement design and construction projects as per the same standards adopted for contractors’ classification (financial status, technical staff operating at design and construction contractors, previous work experience).
With regards to system no (3) to certify engineers, it will be launched for the first time in Abu Dhabi, where engineers operating in the Emirate and keen to registered in the DED’s register will be tested. When implemented, the system will require all contracting companies and engineering consulting offices to appoint engineers registered by the DED’s Engineers’ Certification Section.
In accordance with item no (11) of the Law no (2) of 2009 establishing the DED, which authorized HE the Chairman to issue necessary laws and regulation to classify contractors, engineering consulting offices, and engineer’s register, and in order to achieve one of the priorities of the DED’s strategic plan to expand the establishments’ base to be a dynamic economic force and create a better competitive environment with a dominant role to the private sector, the three systems and regulation to classify contractors and engineering consulting offices were issued and implemented since 22 November 2010. They came as a result of three years of research, studies and benchmarking, undergoing several phases of preparations.
The report states that one of the implementation phases was to distribute questionnaires amongst contracting companies and engineering offices and to get their feedbacks, given that the previous contractors’ classification system issued in 1980 has not changed, just minor amendments that do not cope with the huge transformations Abu Dhabi has been witnessing in the last five years. Besides, there was no system to classify engineering consulting office in the Emirate; DED used to register those offices since 1973 as per a law issued by the Executive Council then. This means that updating and issuing of those systems is inevitable to cope with the huge urban development Abu Dhabi is witnessing.
The report highlights that benchmarking and comparison phase has been implemented with other regional and international countries such as Singapore, Canada, the UK, KSA, Qatar, Jordan. A team from DED paid official visits to those countries to see firsthand rules and laws implemented to regulated contacting and engineering consulting sectors while exchanging and sharing knowledge on updates both regional and internationally in this respect. Following these visits and after contractors, consultants, and government and semi government entities were surveyed for their feedbacks, the DED put forwards a suitable draft for the three systems.
The report highlights that the DED, following its study of the overseas experiences, moved to get the feedback of customers and related parties by hosting six speicialized workshops where all stakeholders participated to oversee and discuss systems and regulations draft and come up with close points of view, and then provide suitable amendment to for all concerned parties. This practice comes in line with the DED’s belief in the strong need that all concerned parties should be present in the issue of regulations. Besides, the report states that presenting laws and regulations draft to technical and legal committees aimed to provide technical programmes deemed important to achieve active implementation.
Engineer Ahmed Al Burkani, Acting Manager of Contractors’ Classification Directorate, DED, said, “One of the key benefits of implementing these systems is motivating all parties of construction and contracting sectors to gain quality, health, and vocation safety certificates, along with vocational insurance to cover design and implementation faults. Engineers need to raise their awareness of building codes and urban planning and Estidama codes.”
“The DED is keen to escalade the quality of engineering work by having engineers’ register standards that help drive ongoing professional progress of engineers and follow up all progresses in the sector by attending specialized courses and workshop. Besides, such standards encourage the nationals to invest in engineering consulting sector and the locals can own an engineering office with no need for an engineering background, but all within set standards”, he added.
Al Burkani stated that one of the key features of these systems is that they have guaranteed a fair distribution of projects on all classification categories in order to ensure equal opportunities for all contractors and consultants by defining the approximate values of projects and then making sure that contractors and consultants abide by this distribution through periodic visits of inspectors.
The report of Contractors Classification Directorate will be working towards achieving an agreement with implementation parties to set standards that ensure fair distribution of some parts mega projects on small companies. The DED has taken into consideration not to confuse classified and non-classified companies by these systems by allowing them to amend their status in line with the new requirements of four years for contractors and two years for engineering consulting offices operating in the Emirate.
As per Engineer Ahmed Al Burkani, all feedbacks and suggestions by customers have taken into consideration counting the value of complete projects by the contactor or the consultant. This step helps many companies to promote to a better category provided that the value of any project is no less than the value set for each category. “The approximate value of projects that contactors can participate in increased. We can see for example that the approximate value for the contractor classified in category no (5) went up from AED 5 million into AED 10 million, registering 100% growth compared to 50% increase of the companies’ financial capabilities.”
“No amendment on the required years of experience for engineers has been made, except the fifth category. The DED took into consideration unclassified companies which can be affected once abided by classification, and came up with category no (6) for classification with possible financial and technical condition within the limits of small contracting companies”, he added.
The report shows that the DED has tackled time and customers’ complaints of delayed classification certificate issue owing to the some procedures related to classification committee. The committee was cancelled and five working days have been set as a period to complete classification procedure once all required documents are full. A committee for to review and study the contractors’ complaints have been set up.
One of the key features of new systems is to allow all parties keen to work in contracting and engineering consulting concurrently to get separate licenses provided that project owners are allowed. This will help local companies in design and construction sectors to compete with specialized companies in this domain.
With regards to administration requirements and conditions added to classification standards, the report explains that the contractor’s gaining the ISO 14001 Certificate will help in the long run lower the consumption of energy and natural resources, limit pollution, and comply with environmental laws and regulations.
Al Burkani adds, “This procedure allows the contractor an opportunity to have a better image and performance, gains them international brand recognition, strengthens their competitive advantages locally and internationally, while lowering down costs associated with waste and pollution rates. Besides, it will establish a better and pollution-free working environment, raise awareness of employees, boost internal operations, increase customers’ satisfaction, and decrease review and auditing operations.”
With regard to contractor’s gaining of OHSAS 18001 Certificate, the report states it will limit incidents and hazards that stop work, prepare staff to actively deal with any future risks, comply with legal requirements, bring down penalties and possible sues, and show a higher levels of understanding health and safety onsite system by staff.
The Contractors’ Classification Directorate report shows that the new systems have put a greater role for accounting system in the classification, given its huge importance to help contracting companies, especially the small ones often exposed to risks associated with market fluctuation and changes. The report also highlights the need to direct contracting companies to gradually move towards resorting to well-qualified staff capable to deal with market changes. This move helps guarantee rights and protect financial resources of companies, lower risk and financial crisis potentials that might challenge the future of those companies and their sustainability in the market.
The report stresses that the new systems are flexible enough to tackle and deal with changes and transformations that take place periodically in line with the need of each phase the region is experiencing.