Surbana Jurong open to strategic alliances

Singapore

HOMEGROWN urbanisation consultancy Surbana Jurong may be pitting itself against large multinational engineering competitors as it guns for mega projects globally and although it now has the scale and technical expertise to clinch big jobs, it is also open to working with those players through strategic alliances.

"Competition is steep because the big boys are big. But in my own assessment, we can be as good as any of them - in terms of technical skills, in terms of scale now," said group chairman Liew Mun Leong in a recent interview with The Business Times.

"We can also have strategic alliances with some of them to bid for big jobs and we are in discussions with some major players."

The growth areas identified by the company, such as healthcare, aviation and underground developments, require strong domain knowledge. Strategic alliances enable it to acquire such knowledge quickly.

Mr Liew stressed that the group needs to "take advantage of the timing" as Asia undergoes massive urbanisation and a flurry of development activities to build cities and infrastructure occur in this part of the world.

Freshly minted from the merger of Surbana International Consultants Holdings and Jurong International Holdings, Surbana Jurong harnesses technical experience that the two companies have accumulated over the past 50 years across projects including township planning, the development of ports and airports, and reclamation works.

Its recent acquisition of Singapore engineering company KTP Consultants and China's design firm Sinosun Architects & Engineering Co Ltd immediately doubled its reach in China from nine to 16 cities, ramped up its staff strength by a quarter to over 4,000 and deepened its technical capabilities.

However, it remains on the lookout for more merger and acquisition targets in order to reach 6,000 in staff strength and to double its annual consultancy fees from S$500 million to between S$1 billion and S$1.5 billion within the next three to five years.

"To do infrastructure, we need scale. Many of these big projects are done by the big multinationals," said Mr Liew. "There are hardly any in Asia-Pacific. We are now positioning ourselves to take this role of being a big MNC that can handle big urbanisation and infrastructure programmes."

The top five international engineering companies - WorleyParsons, Jacobs, Fluor Corp, Aecom and Fugro NV - each command annual design revenues above US$3 billion from projects outside their home countries, according to a 2014 ranking by Engineering News-Record (ENR) magazine.

"We are far behind and we want to catch up," Mr Liew said.

"The market is at our doorstep in Asia, using our showcase projects," he added, referring to Singapore's Changi Airport, the Jurong Rock Cavern and the now-under-construction Tuas mega port.

Surbana Jurong recently completed and handed over the final masterplan for the capital of the Indian state of Andhra Pradesh, Amaravati, which will be one of the largest infrastructure projects in India.

Several other projects are underway. The group is providing design and engineering review and project management consultancy services for the US$800 million expansion of Ibrahim Nasir International Airport in the Maldives and developing a masterplan for Myanmar's i-Land Industrial Park, a 400-acre new development in Bago City.

The company's staff profile is increasingly reflective of its global footprint, Mr Liew pointed out. It now employs people from 40 nationalities spread across 26 offices in 207 cities worldwide. Over 1,400 of its staff are engineers and architects.

Mr Liew said Surbana Jurong is keen to deepen its expertise in architecture and design. With healthcare facilities still in shortage in some parts of Asia, the group hopes to work with players with design expertise in healthcare.

Surbana Jurong is also recruiting engineers from overseas such as Europe and Australia for niche skills in aviation engineering and underground engineering.

The development of underground space could be the next big wave in land-scarce Singapore, Mr Liew pointed out.

As a prelude of things to come, the government passed two Bill amendments in March to facilitate long-term planning of the use and development of underground space and provide greater clarity on underground ownership. The amendment to the State Lands Act clarifies that surface landowners own space up to 30 metres below a level known as the Singapore height datum that is pegged to the mean historical sea level, while the amendment to the Land Acquisition Act allows for the acquisition of a specific stratum of space to facilitate the development of public projects.

"We can do a lot underground. Singapore island is two-thirds granite, so it has to take off," Mr Liew said. "In 1992, I talked about this already, but nobody listened to me."

Mr Liew and his team have lately made several study visits to Helsinki and Tokyo. He observed that carparks, water and materials storage, water treatment plants, containers, flood alleviation systems, stadiums, and even swimming pools can be built underground.

In June, Singapore's water agency PUB said it is looking into the technical and economic feasibility of using underground space for water drainage and storage through a two-year study.

According to Mr Liew, Surbana Jurong now possesses crucial engineering expertise. Many engineers who were involved in the Jurong Rock Cavern, South-east Asia's first underground oil storage facility, are now part of Surbana Jurong while some of its experienced hires also came from top global engineering firms.

But he stressed that it is important that the dice not be loaded against Singapore companies when they compete for jobs here against international firms. He recalled how there were reservations within the government in the 1970s about whether the Public Works Department of Singapore (PWD) - seen as only having experience in building drains, sewers, roads, bus-stops, government offices and schools - was able to handle the large-scale development of Changi Airport within a tight time-frame. Mr Liew was then a young engineer at PWD.

But a feasibility study led by three top civil servants concluded that the project could be implemented. Changi Airport's first terminal became operational exactly on target on July 1, 1981.

"We did it, and we did it on time," Mr Liew said. "We proved that local talent can do it."

READ MORE: Salary review for engineers at Surbana Jurong, CAG