Following on from our previous article, ‘Navigating cost pressures on KSA projects’ where we explored the unique challenges that should be considered by estimators when addressing the unique cost pressures associated with currently developed giga-projects, in this article we look at the challenges presented by the locations of these monumental projects in the Kingdom.
Giga-projects on the surface are essentially extremely large construction or civil engineering projects, but still present the same traditional questions and challenges to the cost estimator. This includes: site access, internal site constraints, local availability of utilities (such as power, water and waste removal), availability and staff transportation, labour and the materials both to the site and within the site to their final location on the project.
What is unique to most giga-projects is not just their scale, but also their location. This requires greater exploration and consideration of these traditional challenges, as well as a better understanding of the impact and challenges of the project on the wider area and infrastructure, as well as potential additional constraints of the site itself.
In the following article, we shall examine the challenges of location in terms of the suitability of existing infrastructure, existing facilities, logistics, geographical constraints, limitations of site topography and scale, as well as market pressures.
Definition of Locations:
Projects that are at a considerable distance from existing established cities and infrastructure.
Remote island locations where labour and resources need to be shipped daily, or in remote extreme terrains with no existing roads access.
Extremely limited, or no existing road networks, difficult transportation terrains and considerable distances from existing infrastructure, such as mountainous regions.
Projects planned within existing built-up urban environments, which can cause potential significant disruption to those existing environments, and where constraints may be placed on the project as a result.
Suitability of existing infrastructure
The location of projects can sometimes pose unique challenges with respect to simply getting to the site, not to mention the provision of water and power, as well as the transportation of goods and labour power to the site. In itself, this is nothing new, as many road, rail and power projects have faced and overcome similar issues in the past. What is unique in the context of the giga-project is again the scale of these requirements, with particular reference to the potential volume of project/construction traffic required for roads, as well as the location and availability of power, water and sewage treatment facilities.
More often than not, the existing infrastructure is either insufficient to meet these demands or in exceptional cases, non-existent. The location of the project can exacerbate the issue, dependent on whether it is just its remoteness, an off-shore location, or one at high altitude. Equally, as stated above, some giga-projects are located within existing urban areas, however, due to the scale of the project, these throw up their own unique challenges and pressures on their surroundings.
These factors are explored further below.
Remote Locations
Remote locations traditionally have little or no existing infrastructure. This challenge in itself is nothing new, however, it is the magnitude and time scale of the project that needs to be considered in the context of what is available. For this challenge the estimator should raise the following questions:
Where will materials and labour be transported from or to?
What road infrastructure is available?
Are there new roads planned or any under construction that could be utilised, or have we to consider the construction of temporary roads as part of our bid or estimate?
What size of goods are to be transported? What number of vehicle movements are required over the duration of the contract?
Can these be minimised by the use of alternative transportation strategies, such as air freight or the construction of temporary airports or ports (if the project is located near a body of water or the sea)?
With regards to the utilities for the works, similar issues are faced, however, these can be addressed more readily through the use of generator farms for power, temporary sewage treatment plants or sewage storage tanks, temporary water tanks and using tankers to supply water and remove waste water. However, this adds to the possible congestion on the available road networks and care should be considered as to the space constraints that exist within the proximity to the site.
Offshore Locations
Leading on from the remoteness factor, some projects may have the added constraint of being located offshore. An example of this being the development of an existing island, up to the construction reclamation of an entirely new island. Although island construction is not unique, what is different in this context is that these are possibly being ‘activated’ for the first time, hence there may be no facilities available nearby to be utilised, or where these do exist, they are not suitable for the demands to be placed on them by the planned large-scale construction.
For such projects, the constraints and questions explored in the remote location section still apply, however, these introduce an entirely new dimension when having to consider transportation over water, and also possibly understanding tighter space constraints with respect to the nature and size of the final location. Some additional considerations to be captured within the bid or estimate then may be as follows:
Is there any plan to construct a port or ferry terminal nearby, if so will this be available for use during construction?
Where is the nearest usable access point from the mainland and how easily is this reached by the existing road network?
Would permission be granted to construct a bridge or temporary port at this location?
How far off shore is the island, can a temporary bridge be constructed or would this not be permitted for environmental reasons, inclement weather patterns, or is this simply not feasible due to the distance from shore?
Can goods be transported by water from the nearest commercial port directly to the island or temporary harbour facility?
Is there space for temporary generator farms on the island, or do these need to be located on the mainland and a subsea cable installed temporarily to provide power?
How will water be provided to the island both potable and for the work?
How will waste water and sewage be managed, is there space to locate temporary treatment and storage facilities?
Is there space for material and plant storage, or should temporary barge platforms be considered?
What types of marine vessels are required and should these be purchased outright or chartered from local entities, if available?
All these unique challenges should be considered and addressed in order to avoid any unwelcome surprises later on in the project lifecycle.
High Altitude Locations
As well as being remote, some of the current giga-projects have a further constraint of altitude. These projects are being developed in mountainous regions where there are other factors that require detailed consideration, in addition to those being just remote projects. Again, this is nothing new to the industry, as development in mountainous regions has been a fact of life around the globe; from Colorado to the Alps. These areas have the advantage of a more historic developed infrastructure to assist their development, in terms of road, air, vernacular or funicular railways, and even cable cars to provide additional or complimentary solutions to the transport of people, goods and materials to the project site.
In the case of remote projects where these facilities are not available or where there is even no existing road network, we can look to other sectors of the construction industry where similar challenges are faced on a regular basis, such as power transmission, major pipelines and even power plant or mine construction. In these sectors, to overcome these logistical challenges temporary roads can be constructed, however, this is not always desirable due to either environmental concerns. In the case of power transmission, for a series of sites that are required for short construction durations, helicopters can be used to deliver materials either directly to the area of construction or to central staging areas. Here the material can then be delivered over a short distance overland to the place of final assembly over a temporary haul road. Although given the shear scale of a giga-project, such solutions may be acceptable for isolated activities, however, as a more widespread solution, road or temporary rail would offer a more economic alternative.
In addition to transportation, another key factor is the provision of power, water and the removal of waste and sewage from the site location. Although temporary solutions such as storage tanks, STPs and generator farms exist, there is the added problem of the topography as there may not be enough space on the suitable areas to locate these on the site. These may have to be located some distance from the site, leading to the need for larger pumps and more generators to provide higher voltages to overcome voltage drops over distance, and the need for more access roads to be provided to reach them for operation and maintenance.
A final consideration is the possibility of a higher frequency of inclement weather, as exposure to high winds and lower temperatures occurs at altitude. This means that the effect of weather events on productivity should be considered within the bid or estimate. The added considerations to examine when estimating or bidding for such projects can be summarised in the points below:
Availability and capacity of current road networks - Is there a road network in existence and can these support the volume of traffic that will be required to service the site?
Surrounding topography - If additional roads are required, can these be constructed easily or are there plans to construct new roads to the site that would be available during construction?
Environmental constraints - Are there any environmental concerns that would be an obstacle to the construction of additional temporary or permanent roads to assist in construction?
Would alternative means of transporting goods, labour power and materials to the site, such as rail, cable or helicopter be an economic consideration to use should the construction of roads be problematic?
How can power and water be provided for the construction process if suitable space is limited? Could the provision of permanent utility infrastructure be constructed first and used during construction?
If the permanent utility infrastructure cannot be completed during the early phases of construction, what other solutions are available?
What are the prevalent and seasonal weather conditions and how can the construction be sequenced to minimise the impact of inclement weather events?
For the above, it can be observed that more consideration should be taken for the techniques to be used and the sequencing of construction activities. Through careful consideration, the cost impact of the unique constraints on the project could be minimised.
Existing Urban Locations
Not all of the currently planned portfolio of giga-projects are in undeveloped or remote locations, there are some that are to be developed within or near the confines of existing urban areas. In these situations, the estimator could be forgiven for assuming that the unique cost pressures associated with the giga-project would be relieved to the point of no material commercial impact. However, to make such an assumption would be unwise, as the secret is in the name, it’s a giga-project.
The challenges that will be faced in these locations are a direct consequence of the scale of the overall project. Although existing infrastructure, in terms of roads and utilities, are more readily available due to the scale and sometimes plot geometry, as well as location within the greater ‘giga plot’, there are still likely to be unique problems encountered.
A primary amongst these is the volume of traffic that will be required to service construction. Although there is most likely an existing road network, there will be significant additional disruption and volume on these roads, and several of these may require to be closed or diverted over the duration of the development of the giga-project portfolio. An added complication is possibly a greater need to liaise with authorities and other stakeholders than would be usually required for more remote locations. This is to ensure that oversized loads and any necessary diversions can be coordinated in a timely manner. Additionally, some existing roads may be removed during construction as a requirement of other projects within the wider portfolio during development.
Another constraint would be the availability of access to the site, these can, and most likely will, change over the duration of the project, hence why special consideration should be taken here when assessing the impact of logistics on the cost of the estimate or bid. As well as the external logistic concerns, the nature of these urban giga-project developments may be further complicated by the construction of large-scale developments in close proximity to one another. This will put more pressure on access and available space for laydown areas, site establishments and temporary utility compounds.
A further complication may be the need to service or upgrade the services to the plots. This could mean that utilities for other plots may require to cross the site, requiring the contractor to allow access to third party contractors to complete their works during construction. Although this is a common situation in most urban projects, again it is the scale in these instances which can make these challenges unique, as the number and capacity of these services may be considerable and may constrain access to large areas of the site during the construction duration. Such instances need to be considered within any bid or estimate in order to avoid budgetary issues later on.
Finally, the location of the site within any greater ‘giga plot’ may introduce other constraints. If located centrally within the greater plot, care should be taken to allow for the constraints posed by the changing nature of internal site haul roads. An additional consideration will be the interfaces of your particular project with that of the surrounding projects, such as services and utility infrastructure to be shared with adjacent developments, as well as common physical elements such as foundations, walls or roadways. When estimating or bidding for giga-projects in these locations, consideration should be given to the following and due allowance made within the cost:
Current road network and any possible changes that may be required.
Authorities and other stakeholders to be engaged in respect of road diversions, utilities and accesses to the site. Also, potential constraints that may be imposed, as example, with respect to deliveries only being allowed at certain, often inconvenient, times of the day.
Location of your plot within the greater plot - what interface requirements need to be considered with respect to adjacent developments within the plot and access to your plot.
Timing and progress of other developments within the overall ‘giga plot’ and what impact will this have on the access and activities on your plot.
Capacity of existing surrounding infrastructure and utility networks. Will this be sufficient to accommodate the planned giga-project?
Although these constraints are commonplace for most urban developments, all of the above need to be considered under the lens of the sheer scale of the overall activity over the wider project.
Existing Facilities and Infrastructure
In most normal reasonably scaled developments, the availability and capacity of existing facilities and infrastructure is usually not a concern, with the exception of some infrastructure projects that can traditionally be in remote locations. However, the pressure that these put on existing infrastructure and facilities, such as ports, airports, road networks and available accommodation, are not as extreme or pronounced as the potential pressures that some of the giga-projects currently planned will exert. In addition to this, the giga-projects will have a pronounced impact on the available labour market as well. As a result, care should be taken to understand these impacts in the context of the project, as there could be hidden consequences in terms of cost that should be considered within any estimate or bid.
As explained in the previous sections, the challenges thrown up by giga-projects are not new. It is simply that the location, scale and planned duration of these projects have a greater impact on the surrounding area and burden on existing facilities and infrastructure that demand closer examination than other smaller projects. With greater volumes of material, labour and plant required it would be imprudent not to study their impact more closely, with an example approach as outlined below.
Initially, the outline programme should be reviewed alongside the proposed design, in order to understand the types of construction to be adopted, the types of goods, plant and materials that are to be brought to site, as well as the levels of staff and labour required at each stage over the project duration. Studies should then be undertaken to categorise materials, plant and labour into those available locally, nationally and those that have to be sourced from abroad, and the timing and cost impact of such.
As a further consideration, it should be established what other projects of a similar scale are planned in the region of the project, as well as the forecasted commencement and completion dates. These other developments may put added pressure on the ports, airports, towns and other facilities required to service this project, putting further demand on the municipal and statutory authorities that are required to be engaged. With this, if there is an overall ‘Programme Development Schedule’ for the region, it may be worth making the necessary enquiries and getting a copy, if at all possible.
Impact of Supply of Materials and Plant
Once the above reviews have been completed, the team would then be required to avail themselves of the possible supply routes available for materials and plant. For those materials and items of plant to be imported nearby, ports and airports should be reviewed in terms of their current workload and handling capacity. It could be that these will not be sufficient to handle the types and volumes of imported components required. This would result in more distant facilities having to be considered (or new temporary or permanent facilities constructed), not to mention the greater risk of loss or damage through their exposure to greater haulage distances on roads that may already be unsuitable for use as major transport routes. With respect to locally or nationally supplied materials, these can also throw up issues as the main manufacturing centres could be a significant distance from the site, and in some cases, could require to be shipped or airfreighted, in addition to those sourced internationally. An added complication is that in the case of modular or pre-assembled units where damage occurs in transportation or there are issues with incompatibilities between the module size and site dimensions, there may be no manufacturing facilities nearby or nationally where these can be rectified. This could result in the units having to be shipped back to the manufacturer or scrapped entirely with a long wait required for any replacement.
A further consideration would be the availability of government services in the region, not least statutory undertakers, municipality inspectors, as well as customs and excise. Should new or temporary air or sea ports be required, these official services also need to be considered and their availability determined.
In the case of plant, it may well be that certain specialist items are not available in the local market or even nationally. This could result in these having to be sourced internationally. It could also be that the local and national markets do not have the capacity to service the project requirements, resulting in additional plant also being brought in from overseas. Again, these items will have to be transported to site and assembled as well, adding more pressure to the existing transportation networks.
It may be that the construction of new infrastructure has already been considered and could already be underway, however, if this is not the case, due allowance should be made in any bid or estimate.
Impact of Labour Supply
Due to the remoteness of many giga-projects, the provision of staff and labour presents its own issues. There may be a shortage of available housing near the location of the works, with the nearest towns and cities having insufficienthotels or lodgings to cater for the numbers of people required.
In addition, these could be several hours drive away from the site, which is not desirable and can add to already long working days in remote locations. There could be additional complications as well, especially in the case of where the works are located offshore. It poses questions such as; can these camps be installed on the island or would transportation of staff and labour from the mainland have to be considered? In these instances, the chartering of accommodation platforms or cruise ships might be an economic alternative to having facilities on the mainland. This then results in the requirement for more, and much larger, labour camps to provide housing, messing and recreational facilities for the site.
Another added pressure would be the availability of suitable land to construct these facilities near the site. It may be that the employer has such facilities that could be used by the contractor, however, this should be thoroughly researched, and the cost impact considered within the estimate or bid.
Proximity of Industrial Centres and Facilities
Another consideration for the more remote giga-projects will be the availability of manufacturing facilities and industrial areas. Most of these will not be in close proximity to the site and those that are will likely not have the capacity or range of technical services required. Even those located within urban areas may still face some issues withthe capacity available of these facilities and not being able to cope with the additional demands of such projects.
In all instances, the availability, range of available services and capacity should be investigated and due allowance made for providing temporary factories, workshops and batching plants to make up the shortfall in available capacity.Other consideration should also be given to the site and project power, water, waste and sewage demand loads, as mentioned in the previous sections. The sufficiency and availability of these utilities should be assessed and temporary provision made to address any shortfall in available capacity.
Site Topography and Geographical Constraints
In the previous sections, the surrounding environment has been a main focus, with this topic being touched upon in a broader sense, however, the prevalent and existing conditions within the confines of the actual site, as in all projects, have their influence as well. The existing site conditions may restrict the possible locations available for the installation of site offices, welfare, stores, workshops, batching plants, laydown/storage and waste storage areas, generator farms, water storage and treatment plants, as well as introduce difficulties in the citing and transportation of plant and materials from place of storage to the work fronts where these are required. Labour is required to be housed and transported to and from work fronts. There may also be strict environmental concerns that limit the use of any temporary excavation of the site. In addition to these issues, the sequencing and execution of the works themselves may also restrict the plausible areas available for these temporary facilities.
These constraints may require some facilities to be located outside the site, in adjacent plots or areas, if these are available. Failing that, other solutions may have to be investigated. In the case of off-shore developments the use of barges or floating platforms could be considered, albeit assuming that there are no stringent environmental restrictions on the use of these in proximity to corals or areas of particular marine flora and fauna.
Transportation around site may also be an issue, either due to the location, number and/or magnitude of open work fronts, as well as the complexity of the design. For example, there may be a series of large excavations which prevent the installation of more direct haul roads to a workfront, which may then mean that the concrete may go off if delivered by truck. Equally, the removal of spoil from excavations may prove difficult or impossible using conventional methods, hence, the consideration of use of conveyors or overhead cable bucket lifts may be required to facilitate this. In addition, the final structure or asset may also be in a hard to reach location, such as the base of a cliff below the main site. Such instances again require careful consideration.
Again, these considerations may all have an impact on the final estimate or bid. As guidance, we can look to the civil engineering and infrastructure sectors. They may be more familiar with these challenges than traditional building works, as they acknowledge that the scale and complexity of some projects will require non-standard solutions to both manufacture and then place the finished works in the required location.
Impact on the Global Construction Economy and Supply Chain
The impact of the giga-projects planned as part of the Saudi Arabia 2030 Vision is already being felt within the construction economy. The vast scale and complexity of these developments, coupled with their ambitious delivery timelines, has already started to exert pressure on the global construction market. An example of this is the current sharp escalations in the prices of basic materials, such as steel and cement. The demand for suitably skilled and experienced professionals and labour has exerted its own pressures. As more of the giga-projects leave the planning and design phases and move into the delivery phase, there will be more inflationary pressures exerted on the global market until the supply chain can react to meet the increasing global demand, which includes the giga-project demand. The effect of the Saudi Arabian giga-projects will be felt in other geographies, as a high demand for materials may lead to material shortages, which in turn will lead to increased prices and inflation in other regions.
Until the supply chain can adapt, lead times will increase for long lead items and there may be shortages of plant and labour as well. This will again lead to increased costs in terms of hire rates and salaries. To allow for this the early procurement of long lead items will have to be considered, along with the possibility of the bulk buying of materials such as cement, steel, timber and electrical cable, however, the giga-project strategy for such options remains to be seen.