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The Middle East Beginnings

The Middle East Beginnings
Contributed by Otto Vydra

Saudi Arabia

Our Middle East involvement began in 1975 in Saudi Arabia with the largest CH2M HILL overseas project at that time. Until then our foreign experience consisted only of a quite significant water resource job in Trinidad (Fred Harem, Bill Watters) and the notorious first, also water-related, project in Pakistan where we collected our fees in rugs.

The Saudi project was a Master and Implementation Plan for the Eastern Province, including the cities of Dammam, Al Khobar, and Dhahran. The $6.5-million job included a large component of direct expenses for setting up, furnishing, and operating an office for 35 staff, housing for expatriates (some with families), purchasing cars, travel and the like. The contract included a 20 percent advance payment to cover the mobilization investment and expenses. It was brought to us by Effat Mansour, an Arab-American urban planner with good contacts in Saudi.

Because our experience in larger scale regional and urban planning in the U.S. was limited to a prize-winning Portland Downtown Development Plan and nothing abroad, it was a bold step for Les Wierson, a newly appointed president of CH2M HILL International, to sign this lump sum contract located in a totally unknown area, even considering Mr. Mansour's assurances of "not to worry."

All professional and support staff were new hires except for Gus Pantazi, the project administrative manager, and I, the chief engineer and deputy project manager. We all reported to a new hire who acted as project manager. Unfortunately that gentleman thought that he had an agreement with CH2M HILL to be a "part owner" of the project with a claim to share in potential profits. When the firm denied the existence of such an understanding, he threatened to resign and take the job with him. Holly Cornell and Les stood their ground and fired him before he could resign. A telex--no e-mail then--was sent to me to take over as a pro tem P.M. and to name a planner to take over the role later. My choice, which turned out to be a good one, was Nofal Kasrawi, Ph.D., an experienced Syrian-American urban planner.

The erstwhile project manager's threat was not taken lightly; at a hastily arranged meeting in Riyadh with the Deputy Minister of Urban and Regional Affairs representing our client, Les and I were relieved to be assured that the Saudi government considered only CH2M HILL as its contractual party and the dispute with a former employee was an internal issue of the firm. (The lawsuit against the company was later dismissed.)

We then rented some apartments for arriving professional staff to live in and work from until an office could be found and furnished. Instead of a space in a building as we naively expected, we were shown a piece of desert outside Dammam as a site for our future office. No power, no water, no phone cable--just a lot of sand. When driving around I noticed a nice, possibly prefab, office structure and was told that it came from Finland and was delivered "turnkey." A call to the Finnish company in Vaasa (not a simple thing to call then; waiting in line for about 2 hours in the post office, pay a little baksheesh, and maybe get connected) resulted in essentially negotiated delivery of a similar structure for occupancy in 12 weeks. As the Saudi ports were hopelessly jammed, the office elements plus diesel-electric aggregates and even a full water tank were trucked in almost 4,000 miles from Finland through Soviet Union, Turkey, and Iraq. Once the Finns were done we took care of infrastructure connections, completed hiring of the local support staff, and began to work for earnest.

A difficult client, travel and visa restrictions, communication problems, oppressive heat, an impossible local partner, and a team consisting of 10 different nationalities were challenges indeed but really not unexpected. What we were not ready for was our total inability to wrestle out of the client our contracted 20 percent advance and other progress payments. Not surprisingly, CH2M HILL home office was losing patience with the job that was quickly becoming an unending drain on company's resources. The amount due to us was already more than $1.5 million and our potential withdrawal was in the air.

Gus Pantazi, who finally arrived after being held up by visa problems, contacted fellow Greeks working in Dammam on a related project to find out how they were getting paid. They referred us to a Palestinian fellow reputedly well connected at the client's financial department. The man required, among other things, following two items: a Power of Attorney and a brown paper bag containing a small percentage of the amount due to us in used 50 riyal bills. After consulting with Les and Mike Fisher, Gus and I prepared the requested document with appropriate gold corporate seals and got the cash. The next day I delivered the goods to a gentleman unknown to me in a side alley in Riyadh and waited for his return in a lobby of a local hotel. Needless to say, a few prayers were said and thoughts about the first adage of Murphy's Law were not easy to dismiss.

However, in a few hours the Palestinian appeared, gave me a check for the full amount, toasted CH2M HILL with a glass of apple juice and left. We continued to use his services and a few years later I had nice visit with him in Amman, Jordan, where he owned a small chain of supermarkets.

This Saudi project eventually turned out to be a great professional accomplishment and did not so bad financially. It led to a great deal of profitable work in that country and in the Middle East in general. Besides those above-named it is appropriate to mention Prof. Nohad Toulan, the author of the City of Mecca Development Plan, who served as our senior consultant, and his brother Hossam, a senior planner on the project, and Ahmed Hizawi as other principal contributors to our Saudi success.

Egypt

A few years later in Alexandria, Egypt, we avoided a substantial financial loss and a major retreat from our hard-earned positions by a pretty thin margin. The large multi-year USAID-financed wastewater collection and treatment design and CM project for the city, our first in Egypt, was competed for and contracted as a home-country-administered job. We were in a joint venture with Metcalf & Eddy. The Egyptian Ministry of Housing responsible for approving our work and for effecting progress payments was well-known as a slow-moving, procrastinating bureaucracy but it turned out to be much worse than expected. We were over a year into the project and were owed about a year in payments for large expatriate staff, home-office support, and substantial mobilization and running expenses. Again, words about "either fishing or cutting bait" were heard from the home office, and justifiably so.

The only solution we saw was to somehow persuade the undersecretary of the U.S. Department of State responsible for the USAID operation to change the contract to a "USAID-direct" one, pay us the arrears, and assign to the USAID Cairo office the work-progress and the payment-approval authority. From an accounting and administration angle not such a big deal. Politically, however, it was not so easy; it went against the American policy of giving the aid-receiving country an increased authority.

Dick Corrigan, CH2M HILL political advisor in Washington, D.C., thought that he might have a solution. He asked us to prepare a brief "that would tell a senator totally ignorant of the issue all essentials about the job and what we proposed, in no more than 5 minutes of speed-reading"-- a pretty tall order for us engineers. At this point I was project JV Board Chair. A few days later I was called by Dick in Alexandria to present our case at Senator Lugar's office in Washington next day by 3:30 PM. This was an occasion to use the Concorde at the JV expense as it was the only way to make the meeting. It went well and resulted in "let's see what can be done" parting statement.

About a week later we were called to the Ministry of Housing in Cairo where Minister Ebeid announced his decision that for the time being it would be more practical to request the USAID Cairo office to take over the contract administration from his Ministry and "do we agree?" We managed to keep straight face and "reluctantly" agreed. Thus through a fast and nimble action of CH2M HILL management team (our JV partner did nothing) we secured that job, the company's future in Egypt and in the Middle East for years to come.