Abu Dhabi Department of Economic Development (DED) reported the activities of contracting companies, consulting offices and engineers registration for the first quarter of this year. The reports follows the issuance in November 2010 of three new classification systems to regulate and framework their activities in Abu Dhabi in line with the development the Emirate is currently witnessing, especially that the construction sector is deemed to be of the key player in the GDP.
The statistic report by DED’s Office for Consultants and Contractors’ Classification and Engineers’ Registration for the first quarter of 2011 highlighted that the classified contracting companies in Abu Dhabi are 1995 compared to 1855 by end of 2010, registering 7.5% growth rate while classified engineering consulting offices are 1662 vs. 1582 by end of last year (5% growth rate).
Engineer Ahmed Abdul-Rahman Al Burkani, Director of the Contractors Classification Division, DED, stated that the new system has noticeably elevated the current performance of the sector, preparing it to address the technical, legal and admistrative changes of the forthcoming era that will experience on-going urban developments in various regions and cities of Abu Dhabi.
The DED’s report highlighted a 27% growth rate of the renewal transactions of Abu Dhabi classified and registered engineering consulting offices in the first quarter of this year, with 221 transactions registered compared to 174 during the same period of last year. In the same quarter, 134 classified contracting companies have their transaction renewed.
Al Burkani stressed that the steadily-growing number of renewed classified contracting companies following transformation from the old to the new classification system bears witness to the success of the system guidelines to address the needs and requirements of those companies whilst reflecting the clear need to update and optimize real estate working environment.
The report also registered two new classification transactions for engineering consulting offices, nine offices amended, and new specialties have been added as per the laws and regulations for 7 contracting companies operating in Abu Dhabi. The report also stated that 80 companies were classified for the first time in the first quarter, 26 companies promoted, and 13 other companies had their brand registered, added, or omitted.
Al Burkani highlighted that with the beginning of the new contractors and consultants systems in November last year, the owners of contracting companies and engineering consulting offices were well aware of the need to amend their status as per the guidelines of those systems and in line with their experiences, financial and technical capabilities. This was followed by issuing the general policies for each system and the mechanism to implement them in accordance with key conditions, norms and regulations.
“The continued growth of classified contracting companies in Abu Dhabi in the first quarter of this year in an indicator of the healthy and sound business atmosphere in Abu Dhabi, which reflects the success of Abu Dhabi’s Government to attract foreign companies and investments with an aim to attain the Economic Vision 2030 that sets Abu Dhabi amongst the top five governments in the world”, he said.
“The registered classified contracting companies and engineering offices have immensely participated in the last two years in promoting the role of the construction sector in the GDP, benefiting from the available privileges and facilities they have to optimize this sector and accomplish development projects”, Al Burakani explained.
The contractors’ classification transaction index for 2010 showed that 627 companies had renewed their licenses compared to 542 companies in 2009 (16% up) while the activites of adding, omitting, and amending of commercial brands registered 17% decrease in their activities (45 companies compared to 54 in 2009).
As per the system number (1) for 2009 issued by DED, the engineering consulting offices are classified according to their financial capabilities, the technical staff of engineers, and previous experiences. The system also allows the owner of a consulting office to possess more than one office, and the owner of a contracting company to have an engineering consulting office. The local investor can own an engineering consulting office but with certain rules.
The new system allows opinion engineers to open “opinion engineer office” specialized in a detailed engineering domain where they provide their consultancy to other engineering consulting offices and government entities as per need.
The new system number (2) for 2009 for contractors’ classification has taken into consideration changes taken place in the contracting sector since 1980 when Contractors’ Classification System number (4) for 1980 was issued. The new one focuses on increasing the allowed estimated value of the contractors, thereby opening a wider scope for them to participate in tenders and collect the value of accomplished projects by them.
According to this system, this classification applies to all contractors embarked on contracting activities classified by DED with the potential to classify contractors embarked on planning and construction projects as per the same norms used for contractors’ classification (financial status, the technical team and the previous experiences along with other administrative requirements.)
“DED is working to distribute a questionnaire amongst contracting companies and engineering offices to gauge challenges of transforming from the old system, given that the previous contractors’ system has barely changed except some organizing decisions that hardly match the huge urban development leaps Abu Dhabi experienced, especially in the last five years”, Al Burkani said.
“One of the key advantages of implementing the new system is encouraging all parties embarked in building and construction sectors to gain professional quality, health and safety certificates along with a vocational insurance to cover planning and implementation faults whilst raising the awareness of engineers of Abu Dhabi building code, Abu Dhabi Urban Planning Council development code, and Estidama”, he added.
“DED is keen to optimize engineering work quality with the issuing of engineers’ registration standards that encourage professional development of the technical cadres, ongoing follow up of updates of the sector by attending workshops, symposiums and sessions, as well as motivating locals to invest in the engineering consulting sector by allowing them to own an engineering office with no need to have an engineering degree but within set standards.
Al Burkani highlighted that one of the key benefits of this system is that it ensures fair distribution of projects amongst all classification categories, offering all contractors and consultants equal opportunities by setting the estimated value of accessible projects. The contractors and consultants’ commitment with such distribution is ensured through periodic and random inspections.
He also stressed that DED will be working in the coming period to reach an agreement with the authorized parties to set regulations that ensure fair distribution of parts of mega project amongst small companies whilst avoiding any confusion for classified and non-classified companies by these systems by allowing a grace period to amend their status in line with the new requirements which includes four years for contractors and two years for engineering consulting offices working in Abu Dhabi.
“DED has taken into account the opinions and suggestions voiced by customers which call for calculating the value of accomplished projects by the contractor or the consultant, thereby allowing a larger number of companies to upscale their ranking provided that the value of one project should not be less than the set one for each category”, he concluded.
The estimated value of projects that contractors are allowed to participate in went up, with the approximate value of contractors classified in the fifth categories grew 100%, from AED 5 to AED 10 million, while the financial capabilities of companies increased by 50% only. In addition, no amendments have come into existence with regards to the required engineers’ experience in each category except for the fifth one. DED has taken into account that non-classified companies will be affected once committed to this classification, and therefore introduced the sixth category for classification but with easy financial and technical conditions for small contracting companies.
According to the report, DED tackled the issue of time and customers’ complaint of delayed classification certificate approval which is connected to adjourning of classification committee by cancelling this committee and setting five working days to accomplish the classification application. In addition, a committee for contractors and consultants’ grievances has been established to consider grievance applications.
Some of the key benefits of the new systems is that it has opened the door for those who are interested in contracting and engineering consulting simultaneously in separate licenses provided that project owners are informed. This step will prepare local companies operating in planning and construction to compete with other companies.
With regards to administrational requirements and conditions included within the classifications standards, the report stated the contractor gaining of ISO 14001 Certificate will help them save energy, preserve natural resources, waste and pollution and will be in line with laws are environmental regulations.
As the report stipulates, such a procedure offers better corporate image, performance, and reputation, open more markets for exportation, limit costs incurred for pollution, waste, recycling and related costs of transportation, achieve better, cleaner and hazard-free working environment, whilst raising environmental awareness amongst employees and gain optimized internal processes, customer satisfaction and less checking and review measures.
According the report, the contractors’ gaining of safety and security certificate OHSAS 18001 will ensure less hazards and work interruption, prepare employees to better deal with all future hazards and legal requirements, limit the scope of penalties and lawsuits, and present the highest standards of health and safety systems at work.