Facilitating Pakistan’s Infrastructure Development
Australian export case study
Over the past 40 years, the Snowy Mountains Engineering Corporation (SMEC) has provided consulting services in engineering, project management, environmental science and development activities on many major infrastructure projects.
According to Ahsam Arshad, SMEC's Regional Manager for Pakistan and Afghanistan. “With diverse experience in designing, building and managing infrastructure projects, he says the basic challenge for SMEC is to understand each client’s requirements and deliver projects to earn their confidence”
“We leverage our reputation, local knowledge and geographic footprint by investing in local operations and training local talent,” says Arshad
How SMEC has grown in Pakistan
SMEC has operated in Pakistan since 1971. The firm’s first job was the Karachi Power Expansion and Transmission Project, where it provided a senior engineer to the Asian Development Bank to assist in evaluation studies
In 1991, SMEC won the right to design, review and supervise construction of the 339km Lahore–Islamabad Motorway, Pakistan’s first motorway. This was a landmark achievement, which established new standards in road construction in Pakistan.
Since then, SMEC has maintained a continuous presence in Pakistan and in 1995 established an office in Islamabad.
In 2007, SMEC acquired Engineering General Consultants (EGC), a local consultancy firm that had
worked with SMEC in Pakistan. In 2009, SMEC acquired Clough Engineering and Integrated Solutions Pakistan (CEIS), an oil and gas consultancy. Both companies now function as SMEC subsidiaries.
SMEC initially focussed on transport projects, but in recent years has diversified into other sectors, such as hydropower, irrigation, geotechnics, mining, and social development. SMEC now has offices in both Islamabad and Lahore.
Maintaining a regional focus
Arshad describes SMEC’s time in Pakistan as “mixed”, particularly since the firm’s business is so project driven.
To overcome some of the problems, SMEC has focussed on building the capacity of its local and regional staff. This regional structure, where SMEC delegates sufficient authority to regional managers to promote the SMEC business, is one of the reasons for SMEC’s success.
“There have been some lean periods, but overall the experience has been positive and the SMEC business in Pakistan is strong,” Arshad says.
“Our operations are very much regionalised. Once we decide to expand our footprint into a new region, our success is dependent upon setting up a strong local establishment. It is not practical to just move in and out when required.”
Showing its Pakistani partners and clients that it is willing to build a permanent local presence, and develop long-term relationships, continues to help SMEC expand its business.
Negotiating the business risks
Working with private and public sector organisations, SMEC has had to navigate the often-perilous path of conflict in Pakistan.
“Security is a major concern for foreigners, especially for those who are unfamiliar with the country,” Arshad says. “However, having been in Pakistan for the last 20 years, SMEC has learned how to deal with different situations, and we take precautions to not work in high-risk areas.
“Also, we mostly work on donor-funded, public-sector projects where the procurement procedures are crystal clear and cannot be manipulated, so there is no room for corruption. “The process is very transparent and it is reviewed at a number of levels, including a donor review, before they decide what projects to fund.”
SMEC knows how to work with government departments and agencies, understands local working conditions, and appreciates Pakistan’s cultural environment.
“Our business is project driven, so most of our interaction with government officials is at the project level where our counterparts are generally technical people,” says Arshad.
“This makes it easier to communicate and to understand each other’s point of view and to resolve any issues.
Over time, we have experienced many such situations, and have learned to exercise caution in bidding for projects where we expect problems.”
The possibilities of Pakistan
SMEC has a number of transport, hydropower, irrigation, energy, water supply, and mining projects in the pipeline, and the firm takes a positive view on the Pakistani economy.
“For a number of reasons, mainly governance, security and power generation, the economy has not done well in the last five years and GDP growth has been hovering around 3 per cent,” says Arshad.
“The new government that came into power in June 2013 has a special focus on achieving 5% plus growth rates.”
Pakistan remains an emerging economy and as such, an emerging market for Australian companies. SMEC has been able to benefit from the amicable relationship Australia shares with Pakistan, with common ground in cricket, agriculture, AusAID projects during natural disasters such as earthquakes, and Pakistani students studying in Australia.
Despite the delicate security situation, Arshad believes there is much potential in Pakistan, especially in energy, mining, and consultancy services. He is an unashamed advocate for Pakistan’s future. “Setting aside the general world perception of this region, Australian companies should come to Pakistan with an open mind, meet the people, see the country, and explore the opportunities. Your perception will change.”
Download the PDF version: Facilitating Pakistan’s Infrastructure Development (229KB)
Produced by the Australian Trade Commission (Austrade). You may reproduce the text without prior permission, though attribution of the source is appreciated. Please note that copyright restrictions do apply to all photographic images and permission must be obtained before reproduction.
For further information, case studies and news visit: www.austrade.gov.au/mediacentre or contact the Austrade Corporate Communications Unit Media-Helpline@austrade.gov.au.