Setting up in Singapore - Q&A with Charles Feild, Black & Veatch

What services will the Hydropower Centre of Excellence in Singapore offer? How many people work there?

We are concentrating and developing specialist hydropower resources in Singapore so we can work in a variety of ways and at any stage of a hydropower project's development around the region. These resources will work with what amounts to a pool of more than 1500 Black & Veatch professionals located in Asia alone.

At Black & Veatch we work on all aspects of a project lifecycle: from working closely with banks and developers in Asia; carrying out due diligence and pre-feasibility studies; right through to delivering power plants through lump-sum EPC contracts. We are an engineering-led EPC contractor, and bring the full suite of engineering disciplines to bear on a hydropower project: civil; structural; electrical; mechanical; geotechnical and power delivery. In practical terms, this means developers are able to take advantage of our comprehensive experience to get more realistic cost and schedule assessments.

The scalability and full-service local capability is critical, particularly in southeast Asia. For example, the next phase of hydropower site development is by its nature going to be more challenging than the first phase. We think developers, and developers' financers in particular, will demand more accurate assessment on the cost and delivery impacts of actual site conditions and physical characteristics, as well as the local construction and regulatory environment. So, the ability to draw on local knowledge from our business as well as the full suite of engineering specialists creates a compelling offering during both the pre-construction and construction stages of any hydropower project.

As we have just opened the new Centre of Excellence, our specialised resources based in Singapore will grow over time as the business venture gathers speed. It will be an organic development and will also create opportunities for our Asian-based professional to develop this expertise over time too.

Why was Singapore chosen as a location? Do you have any other centres globally?

There are many advantages to pooling our specialised resources in Singapore. Geographically, it's right in the heart of Southeast Asia and new hydropower development is being examined closely in multiple countries; we're particularly targeting Indonesia, Malaysia, Myanmar and the Philippines. We also have a mature and successful base in Singapore, having worked on projects here since as far back as 1922, and its common practice in our business for engineers based in one location to be integrated on teams in other locations - this just means our clients get access to the best and most appropriate expertise for their project.

One reason, which I think is perhaps often overlooked, is around project finance. Our management consulting business for Asia is headquartered in Singapore and works with banks and financial institutions in the region too. Being in Singapore allows us to work closely with this critical community as well.

We have used the Centre of Excellence model successfully before in locations where we concentrate and develop specialist engineering resources.

What projects are you working on in the Southeast Asia region?

Black & Veatch is well-established and growing in Southeast Asia working on many EPC and professional services projects in water, power generation and gas processing. Today, we're actively developing some of Singapore's iconic water infrastructure, large-scale power projects in Indonesia, Malaysia and the Philippines, and also working in Singapore with Keppel and Golar to convert what will be the first-of-its-kind floating liquefaction vessel.

Even though we've just set-up our hydropower business in Singapore, we are already in advance discussions with a number of developers in the region as well as engaging on some early-stage work for a confidential client.

Have you set up any partnerships with local companies?

Yes, at this time we do have a partnership in place with a local engineering company and are in discussions with several others. We continue to meet local players and are always open to understanding how we could team up with a local company or procure local equipment that would ultimately benefit our clients and our projects as a whole.

What do you see as the growth areas with regards to hydropower in the region?

We will see a greater focus on small and mid-scale hydropower in the region. We will also see developers looking at alternative hydropower development sites like run-of-the-river plants. Depending on loan-agency financing, we may see opportunities for mini-hydro projects emerge at remote locations in the region to aid and boost economic development for poorer communities.

Is there scope for pumped storage development?

Yes, where such a solution is of strategic value to a region or country. In fact, several pumped storage hydropower projects are presently being evaluated by various entities. I think, however, the focus of the development in many regions, particularly by the privately financed market, will be on small and mid-scale hydropower development that will be less capital intensive and will realise returns on investments faster than pumped storage schemes.

It's certainly an area we will monitor closely though because of our relationships with private developers and energy utilities in the region.

Will the company work on both large and small hydro?

Yes, given the current hydropower market in Southeast Asia, and as mentioned earlier, scalability and full-service local capability is critical.

What opportunities are there for refurbishment work?

There are, of course, opportunities here. Many hydropower projects have been in place for quite some time, and extending their useful life through refurbishment and possibly upgrade can be a very attractive alternative to construction of new energy facilities. However, simply put, Southeast Asia needs significantly more electricity as it's one of the fastest-growing regions in the world, dependent on oil imports and facing potential future natural gas supply shortages. Hydropower is emerging as a viable option with many governments aiming to increase generation capacity in the region. This is where electric utilities' primary focus lies - new capacity.

What challenges are there to working in the hydro industry in this region?

One of the main challenges surrounds the diversity of capabilities and interests in the hydropower industry in Southeast Asia. The region is diverse in terms of culture, language, regulation and geography. In addition, within the hydropower sector itself, there are a number of interests from other Asian or international countries that are also in operation - financing, contractors, equipment suppliers, construction companies and so on. This creates a complex environment.

In addition, and perhaps connected to a degree, is project financing. Developers need to make sure that they have accurate cost assessments and fully understand the local environment and risks involved. This means taking into consideration contractor and construction practices, supply chain issues and opportunities as well as the physical characteristics of the sites themselves.

Does the company have plans for further centres of excellence?

At present, we're focusing on growing hydropower capabilities in Asia beyond our established business in North America. Black & Veatch is growing around the world and we are increasingly seeing opportunities as a company to expand further into Africa, South America, India and the Middle East. Over time, as our business grows in these territories, we may see opportunities to develop specialised resources centres to support hydropower development.