Face to Face:Vafa Valapour, UWI

Face to Face:Vafa Valapour, UWI

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Few would deny that international expertise has benefitted the GCC’s construction sector, but this observation is fast becoming an industry cliché. Granted, multinational construction outfits continue to add significant value to this region – as is the case in any other – but the Gulf has also succeeded in cultivating its own pool of local talent.

Although not widely publicised, skills and knowledge gained in the GCC are being leveraged to facilitate development in other regions. United World Infrastructure (UWI), for example, which has offices in Dubai and Washington DC, has spent more than a decade investing in, designing, building, and operating new communities in frontier markets around the world.

A principal at UWI, Vafa Valapour has lived in the UAE for the past 18 years. He spends much of his time globetrotting, exploring fresh geographies that could complement his company’s future activities, and supporting those in which UWI is already facilitating development.

“Today, the majority of people live in cities,” Valapour begins. “According to United Nations (UN) estimates, an additional 1.2 billion people will move to cities during the next 15 years, and this level of urbanisation poses a host of challenges. Within this context, my colleagues and I focus on the infrastructure that these people are going to need. What are the problems that cities will face, in terms of technical issues, over-population, and stress on infrastructure?

“UWI invests in proprietary capital, in collaboration with other private and public sector companies. We oversee that investment, and we have the capability to develop urban plans and manage city services.”

UWI is a privately owned corporation, but it has a clear and vested interest in the long-term success of the cities that it develops. Valapour explains: “When it comes to the financial components of infrastructure development, the first people to whom UWI is beholden are the residents of our communities. Certainly, as you’re developing a new city, your primary consideration is whether residents will use its infrastructure.

“Secondly, it is important to identify the right partners at an early stage. A whole generation of investors participate in projects of this magnitude. These may include sovereign wealth funds, private sector offices, multinational corporations, and so on. No city can be built by one investor.

“Finally, one must consider the small- and medium-sized enterprises (SMEs) that are present in the market; these are the local businesses that need to participate and become rooted in the community.”

Essentially, to serve the communities in which it invests – and to remain financially viable – UWI must take a long-term approach to development.

“Wherever the location, we must overcome the challenges of change,” says Valapour. “At the beginning, we investigate what infrastructure roll-out will look like in a particular area. Once that infrastructure has been developed, we look at the jobs that it can support; the catalysts that can be brought in. We must also consider these communities from a policy perspective. How do we serve the wellbeing of residents through infrastructure? What are the requirements of the communities’ families? What do the children want?”

As for target markets, Valapour and his team look to identify those that strike the right balance between the value that UWI can add for the local community, and the longer-term returns on its investment.

“We focus on what are known as frontier markets,” Valapour tells Construction Week. “These are areas in which there is significant growth, both in terms of economic capacity and population. They are also the cities with the largest need for new infrastructure.”

So what constitutes a typical project for UWI? Valapour says that the answer to this question depends entirely on context.

“Whether it’s an extension of an existing settlement, or a new site in an undeveloped location, UWI develops cities,” he explains. “From there, depending on the context, these cities will take their own unique shapes.”

UWI’s current portfolio contains two cities, at different stages of development, that serve to illustrate the importance of context: Medini Iskandar, Malaysia; and Kumasi, Ghana.

Created through a public-private partnership (PPP) between UWI and Iskandar Investment Berhad (IIB) – and majority owned by the Malaysian government’s sovereign wealth fund, Khazanah Nasional Berhad (KNB) – development of Medini Iskandar began in 2007. Today, the 930ha city boasts infrastructure to meet the needs of 400,000 citizens, and substantial entertainment and leisure facilities such as Legoland Malaysia and Pinewood Studios.

Kumasi, meanwhile, which was officially launched earlier this year, is still in the planning stage. Ultimately, the Ghanaian city will operate as a mixed-use living, working, and leisure destination – with an inland port, central commercial hub, trading village, residential village, and warehousing component for the local mining industry – capable of meeting regional demand for logistics services. It will also feature one of the largest bazaars in Sub-Saharan Africa.

“We started studying the feasibility of Kumasi around a year ago,” Valapour recalls. “At present, we are working to finalise the master plan for the area. Ground breaking is expected to take place in 2017.

“The infrastructure outlay for the entire city will be completed simultaneously,” he continues. “It should take between three and four years to complete.”

Throughout the course of UWI’s 12-year history, the UAE – and Dubai, specifically – has offered a valuable model for the development of new communities.

“My colleagues and I have witnessed several generations of growth within this city,” says Valapour. “Dubai has afforded us the opportunity to see how a living city can grow, and the different components that are required to achieve this. Multiple nationalities have come together and are working at all levels of society; Dubai has educated us in how to create an environment of inclusion.”

Valapour concedes that the factors that have contributed to Dubai’s success cannot be universally replicated. Instead, it is a matter of identifying elements that are applicable to the frontier markets in which UWI is operating.

“These communities are very disparate, so they entail different considerations,” he explains. “There aren’t many cities that are as globally well-positioned as Dubai. It would be unfeasible to replicate its success wholesale around the world.

“But there are tremendous lessons that can be taken from Dubai, one being the speed of decision-making. For instance, the bureaucracies of some countries can hamper the roll-out of infrastructure. An openness to foreign direct investment (FDI) and PPPs: these are lessons that transfer, and they are applicable to a broad range of markets. But will a particular free zone or cluster translate directly from Dubai to a different continent? Not necessarily.”

Despite the global reach of its operations, only 25 people operate from UWI’s Dubai office. Each of the organisation’s under-development communities has its own in-situ support team, while legal matters are dealt with at the firm’s Washington DC headquarters. Of course, an undertaking such as the development of an entire city cannot be taken lightly, so Valapour and his team must take care not to overstretch.

“Given the size of our operation at present, we can comfortably handle two to three under-development communities, and one or two in the city-management stage,” he explains. “In total, we can support four to five cities in total at any one time.”

So how frequently does UWI have to decline the invitations of interested governments?

“Unfortunately, more often than not,” Valapour replies. “Sometimes it’s heart breaking, because we can make an impact but the financials just don’t make sense. In other instances, the financials may make sense in the short term, but there’s just not a good enough reason to [develop in that area]. UWI is not a short-term investor.”

That said, when the right opportunities come along, Valapour wants to be in a position to say yes. Consequently, he is now exploring the possibility of expanding UWI to serve greater numbers of communities.

“We are in the process of looking at how we can serve larger numbers of people moving into urban areas,” he reveals. “We take very seriously the number of people who will be coming into urbanised environments globally; 1.2 billion by 2030 is a significant number. Now, given that municipal budgets cannot, on their own, handle this increase, we need to look at ways in which the public sector and the private sector can come together to address the needs of these people.”

Valapour concludes: “That’s what we’re investigating in terms of UWI’s growth path for the next five years. How can we go from handling three or four cities to a substantially larger number? We intend to have a voice in the development of the next generation of cities, whether that’s in planning, funding, or the management of required services.”