Risk Assessment

due to Proposed Termination of

Existing Contract & Retender

IBIS Hotel @ Sharjah

By:
(Subsidiary of Action Group Holdings Co. (KSCC), Kuwait

Current Site Conditions

-Secant Piling Completed.
-Site Excavated down to -4 meter.
-Total Excavation depth required is
13 meter.
-Drilling rig mobilized for first layer
of two layers of horizontal anchors.
-Dewatering in progress.

Neighboring Buildings:
-Residential Tower G+15
(Foundation Design Known).
-Residential Bldg. G+7
(Foundation Design & Level not
Known).
Photos on 27 Jan. 2009

Current Site Conditions

Photos on 27 Jan. 2009

Site Conditions
Before Dewatering

Photos on 30 Dec. 2009

Sample Shoring Collapse Accidents

In Dubai
08 February, 2007
OMG! Another Construction Misha
p
What used to be part of the
promenade that made for a pleasant
stroll along the Dubai Marina was
breached when the excavation wall at
the site of the Infinity tower gave way-noon yesterday. (Photo from
Skyscrapercity.com forum.)
No one was injured but the Gulf News
account suggests the 100 workers on
site had to scramble to safety. The
large excavation pit has now become a
virtual extension of the Marina. Such
accidents are not uncommon, reports
one forum contributor. Even so, they
surely result from either poor designs
or poor workmanshipmm

Sample Shoring Collapse Accidents

In Dubai
13 December, 2007
D1 flood
"The construction site of Dubais luxury
residential tower D1 flooded this week
after a sea wall collapsed.
The construction is located in Dubais
Creek cultural and artistic district, built
directly at the waterfront.
An eyewitness said: Looking at the
crane it seems as though the site is
about 30 feet under water.
It is believed that nobody was hurt.
A similar incident took place in February
this year when the site of the Infinity
Tower in Dubais Marina was inundated.
A burst wall was also cause of the
incident then. Consequently, the project
had to be put on hold.

Sample Article
ArabianBusiness
Inspections ramp up piling safety
by Christopher Sell
on Saturday, 12 May 2007 Groundworks
contractors were invited to a conference
last August, at which the measures were
explained.
Dubai Municipality is clamping down on
piling and shoring regulations issued over
the last year.
The move comes in the wake of the
shoring collapse at Infinity Tower in Dubai
Marina in February.
Circular 131, which stipulates a third
party review for properties and Circular
141, which focuses on shoring works,
were introduced 12 and six months ago,
respectively.

Sample Study

Sample Study

Sample Study

Risk Assessment
1- Introduction:
Due to the special site condition; the site is
defiantly classified as High Risk site.
The main concern is the Safety of the site and
Neighboring lives and properties.
Our risk is even higher than the above accidents
sample due to the additional surcharge (weight)
of the neighboring buildings.
Decision should be taken mainly on Technical
and Contractual bases; Commercial concerns
comes last.

Risk Assessment
2- Transfer of Liabilities:
It is essential in a High Risk case to insure that
liabilities are clearly identified.
Terminating the contract shall lead to liabilities lost
among current and future parties. And there is no
clear example in the industry for someone mastered
such a process successfully in a high risk situation as
ours where there is no default from the contractor.
Even if new contractor gave an undertaking to take
liabilities, it is not enough, his insurance company in
case of an accident and a claim for loss of life or
properties will wash their hands and will find a way
easily to escape any claim and blame it on old
parties, inadequate design and our contractual setup.

Risk Assessment
3- Professional Indemnity, CAR &
other Insurances:
If we are to change the site set-up we
have to involve insurance companies for
the current and future parties.
We have to insure that we have a
continuous uninterrupted or overlapping
of coverage for the design liabilities
covered by the Professional Indemnity
insurance of the consultant and the
piling specialized sub-contractor.

Risk Assessment
4- Secant Pilling Works:
The secant piling works not completed;
it is a must for the current specialized
piling subcontractor to complete the
works; two levels anchoring remains.
That means that the new contractor to
be nominated and sub-contract is
amicably transferred (Novated) with the
same conditions, uninterrupted from the
old to the new main contractor.

Risk Assessment
5- Building Permit & Authority Issues:
To enable the new contractor to draw a new building
permit; the existing contractor has to return the
existing building permit and issue a (waiver) Release
letter such a letter will not be certainly issued by the
contractor before we settle all claims to the him.
That means we have to pay an inflated claim in full
or go into a dispute which will put a freeze on the
project until resolved.
In case of a prolonged dispute; this will lead to
another technical problem; which is the Integrity of
the piles will be lost and no party shall take the
liability of reusing the secant piles; as stated formally
by the consultant.

Risk Assessment
6- AOR (Architect of Record) Authority &
Responsibility:
We have to refrain from giving any technical or
contractual instruction in breach of the authorities
and responsibilities given by the local regulations t
the Project Architect.
We have to refrain from giving any technical or
contractual instructions against any written
recommendations by the AOR.
We can express our intention to the AOR for
terminating, suspension or re-negotiating the
commercial terms of the contract and follow his
recommendation for the mechanism in each case to
avoid transferring any liabilities to us or undermine
our legal and contractual position.

Risk Assessment
7- Urgency:
We are currently in a week legal and contractual
position due to our default of payment.
This could transfer liabilities on us in the future
incase of an accident , due to the suspension of
works which could cause undermining of
neighboring buildings by soil migration or other
types of soil failure caused over a period of time.
Note that soil in general is a natural substance
and deep underground soil and it is behavior
could be estimated to a certain extend.
Risks in dealing with such issues is beyond High
Risk, it comes under Un-Acceptable Risk

Risk Assessment
8- Main Stakeholders & Accor/IBIS
Expectations and Image:
Any disputes, claims or accidents particularly if
publicized will undermine the Image and
Integrity of the Main Stakeholders and the
Operator Accor/IBIS and will have a bad effect
on our reputation with regards to our capability
for running a Safe and Efficient developments.
Which could undermine our long term
relationship as a preferred partner.
Claims & Disputes could spill over beyond the
boundaries of UAE due to the involvement of
multinational entities and insurance companies.

Risk Assessment
9- Recommendation:
Option (1): Continue with Development:
Dont Change the contractual set-up.
Negotiate with the existing contractor, waiving all claims and
new contract price.
End our current default of payment situation urgently to avoid
undermining our position further.

Option (2): Cancel the project completely.:

Stop all works and backfill the site to municipality acceptance.

Amicably settle all claims by the contractor and other parties.
Close the building permit.
Terminate all contracts.
Strike the expenses incurred from the books and show as loses.
In the future if we need to develop the plot. It shall be on a
completely new design to deal with the existing (unusable) piles
with a reduced capacity of the plot.