WSP merges with Parsons Binckerhoff doubling ME operations

There is a well-worn maxim in business that companies either move forwards or backwards, but rarely stand still.
Middle East operations are continuing to contribute to the growth of the WSP business worldwide.

Its most recent quarterly results for the three months to September 30, 2014, show that its Middle East and Asia businesses witnessed the strongest growth, fuelling a 17.6% growth rate in its ‘Rest of the World’ segment – compared with growth of 12.3% in its US business.

For the first nine months of the year, revenues in the Rest of the World business climbed by around 28% to $17.4mn.

Director Greg Kane, who joined the business two years ago from rival practice Hyder says:“It’s a rapidly-growing business,” he said. “We’ve just finished our budgets for 2015 and we hope to reach similar levels of growth – independent of any acquisitions.

“We’re seeing a big upturn in the number of prospects coming into our business every week,” he says, adding that it is also managing to convert these into clients.

“At the moment, where we know a client has made a decision, our win ratio is about 40% of prospects that we bid on,” he states. Currently, the firm employs 716 people in the region, and Kane says that 269 of these have been added in 2014.

“We could add an awful lot more [but] the thing that we are trying to do here is not hire people just for the sake of hiring. We’re trying to hire quality people… making sure that we’re not just racing to win work and deliver it only to find that in six months there are problems we have to unwind.”

He stresses the importance of keeping its existing clients happy by stating that the firm generates 80% of its current workload in the region from 18 key clients.

“A huge volume of our work is repeat business and that, we hope, is clients who have confidence in our ability to deliver.”

The biggest thing to have happened to the WSP business over the 12 months is its $1.24bn acquistion of Parsons Brinckerhoff from contractor Balfour Beatty, where it saw off rival bids from private equity firms and fellow consultancy Atkins.

WSP’s global CEO Pierre Shoiry said when the deal was announced in September that he expected the merger “to create an industry leader, with the ability to deliver more expertise and services to our client base across the world”.

Kane says that with recent additions at WSP, he expects the combined business to have 1,500 staff in the region. Worldwide, WSP’s numbers will increase from 17,500 to 31,500.

“It’s a step change for the business,” says Kane. “It cements our place – we would like to think – in that first tier of leading global technical practices.”

He argues that the construction consultancy industry is witnessing the same wave of consolidation that the accountancy sector has been through over the past 20 years. Evidence of this can be seen from Aecom’s recent $6bn purchase of URS and Arcadis’s acquisition of Hyder Consulting.

“If we want to be considered for the biggest, most interesting and most challenging projects, clients need to have a certain degree of confidence that you are robust enough, that you’ve got the reach and the resource base to deliver.

“A couple of years ago, 5,000 people was a big business. Now, that’s not the case. Aecom/URS will be something like 90,000. Ourselves and Parsons Brinckerhoff will be 31,500.”

In terms of the Middle East, Kane admits there is “still some work to be done” around integration planning. The two firms will continue to operate as distinct brands for now, but leadership teams have begun to come together “in a more informal way” to discuss new projects or bidding for prospects . He says: “We can deliver large schemes in using resources from Europe, the UK, North America and Australia.”

Major Projects
Dubai Mall extension – WSP has completed the design stage for one of the centre’s main developments, the increase in capacity for Fashion Avenue and is now working on a second extension.

Mohammed bin Rashid Solar Park – the design by WSP included a 10% reduction in projected costs ensuring this renewables project for Dubai stayed in budget.

Orbital Highway Doha – This involves WSP working on 45km of super-expressways by=passing Doha and connecting the interior to a new port facility.

New York University Abu Dhabi – The campus for more than 2,500 students by WSP completed last year and involved an on-site people mover.

Architect’s View
Brain Johnson of Godwin Austen Johnson, number one on the MEA Power List paid a tribute to the work of the engineer: “What is clear nowadays is that the decline in the number of architects who are also trained as engineers means that architects are being invited to work much more closely with engineers. What is needed is a true symbiotic relationship.

“The key for an architect in encouraging or persuading an engineer to extend those limits lies in helping them to arrive at a different way of looking at the structural logic so that what initially appears to be unbuildable can be accomplished.”