Managing the UAE boom in a bust

"The UAE, the Arab world's second largest economy, has enjoyed seven consecutive years of growth in excess of 2.5% and doubled its economy in a decade," Said Pat Lawless, Chief Executive Officer of ESR Technology. "But - as with all nations that have exhibited such phenomenal growth - we are now confronted with a period of reflection and consolidation.

"An extraordinary period of economic growth for the Arabian Gulf countries is coinciding with one of the most significant downturns in the global economy, presenting challenges that must be addressed,"

he added.

Lawless says: "It is no secret that the region's airspace is congested and that this problem will be exacerbated by the construction of new airports, the growing number of air movements in the Gulf region and Asia and dated technical systems."

Aircraft entering congested airspace must frequently circle in holding patterns for lengthy periods of time waiting for landing slots, he explains. "An Airbus 330 - in a typical landing configuration - burns in the region of 5,000 kilogrammes per hour of aviation fuel," he added. "So having to hold for any significant period of time introduces added cost to a flight, not to mention the impact on the environment.

"There is, therefore, an urgent need for UAE authorities to engage in detailed strategic planning if the region's ambitions are to be fully realised. The drivers of congested airspace extend beyond the UAE's borders so collaboration on a global scale is a prerequisite for the UAE becoming the international hub it justifiably aspires to be."

ESR Technology was previously the engineering, safety and risk division of AEA Technology - formed from the commercial arm of the United Kingdom Atomic Energy and Lawless praises the UAE government's plans to evaluate civil nuclear power set out in an "excellent" White Paper, Policy of the United Arab Emirates on the Evaluation and Potential Development of Peaceful Nuclear Energy.

He points out that the policy is built on six pillars that include a commitment to "...the highest standards of safety and security...", and to approaching a "....peaceful domestic nuclear power programme in a manner that best ensures long-term sustainability...."

Lawless adds: "This is deeply encouraging. But it is worth stressing the key role that the Nuclear Regulator will need to play if the otherwise excellent aspirations are to be met. The Nuclear Regulator will need to enforce robust licensing and regulation to ensure that safety requirements are met during the design and construction, operation and maintenance, and decommissioning phases."

The challenge will be exacerbated by the intention to draw on more than one global civil nuclear power to provide solutions, Lawless adds. "Key issues will include the extent to which designs meet the safety requirements and ensuring construction will be implemented in accordance with the design requirements. Further, the Nuclear Regulator will also need to ensure that proper emergency planning arrangements are in place and - crucially - tested."

The current volatility in oil prices and its impact on the UAE's oil and gas industry highlights another challenge, according to Lawless - the central role that asset integrity management must play in the development of strategies to deal with the current economic downturn.

"Recently, we at ESR Technology have noted a high demand for our asset integrity services," he said. "To put the issue in context in the Gulf region, there are around 1,000 projects to extend the life of existing oil, gas and petrochemical plant and facilities worth a massive combined total of nearly $950bn.

"More recently we have noted a tendency for some companies to delay, slow down or, in a few cases, cancel existing projects to address short term financial needs. We believe this is a trend across the industry and while understanding what is driving the need for such measures, we strongly suggest that such measures are at best false economies.

"Doing less or nothing at all, with assets that are deteriorating, is not a strategy for success and will lead to failure, loss of production, and in some cases - to loss of life."