Prior to 1974 anyone in CH2M could go anywhere if they had signed a contract. We learned later that a signed contract was only a part of the puzzle.
I went to Japan for Toray to promote AWT and our ammonia stripping process for Lake Biwa (the Lake Tahoe of Japan) projects. We learned that the only thing they wanted was our technology and a black box solution and that hai meant only I hear you and I may or may not agree. I also learned that you could not take all the work back to CVO. We need a local office or partner to do the basics and in the local language and customs.
In the late ’60s Jim Howland developed Consul, an Argentina joint venture company with a local engineering firm. We received a number of good projects that could be done jointly by the local partner firm and CVO. The work was paid in local currency. Inflation was skyrocketing in Argentina. We agreed to contracts that were worthless when we completed the project. Lesson learned: know how you will be paid. Jim Howland and the CH2M board gave the company to our local partner. The local partner did well in the following years and may still exist.
Ralph Roderick had a very good contact in Venezuela and learned of a project he thought we could win. Many of us got passports to go to Caracas for a waste treatment project. CVO was energized but our wives felt left out. We did not get the project but I carried that passport in the early overseas efforts. Lesson learned: employees were very excited about overseas work and to include the family.
Holly Cornell, now in Seattle had an employee with strong contacts in Pakistan. Pakistan needed a country-wide plan for grain storage and distribution. Holly and a local firm submitted a winning proposal. CH2M successfully completed the work and had the opportunity for other work there. “CVO, we have a problem.” We were paid in local currency that could not be taken out of the country. Lesson learned: “how do you get paid.” After International was formed we (maybe Gus Pantazi), through my friend Oregon Governor Vic Atiyeh, sold rugs to Atiyeh Bros. to get our earnings out of Pakistan. We also purchased airline tickets in Pakistan for business travel. For at least 10 years Vydra and I had a Pakistani rug in our office to remind us to ask how you get the fee back to CVO. During this time Fred Harem, Bill Watters, etc. developed the Trinidad work. But it was not part of International until late in the project cycle. Independently, Flowmatcher and Microfloc were also active. Black Crow & Eidsness (BC&E) was active in South America.
In 1974 CH2M HILL formed the International District patterned after our U.S. operations. Canada was to remain a part of the SEA operation. CVO was to independently continue the Trinidad work. The purpose of the start up International operation was to learn how to work overseas, do projects, make a profit and become known as an international firm. We were to do it slowly and not disrupt our expansion across the U.S. to the East Coast. BC&E was yet to come.
Harlan Moyer reminded us that California was the 5th largest world-wide economy and that what we were doing was a boondoggle. Many agreed with him. I therefore buried it in PDX with lower financial impact. Our goal was to identify countries where we could work in language, culture, ability to pay and find a trusted local partner. Our first efforts were the Far East, Middle East and Africa. At the time we felt that selling work in Europe, Australia, etc. was like “carrying coal to Newcastle”.
We established two strategies: identify the target countries and win USAID assignments. USAID contracts were competed in the U.S. and paid in U.S. dollars. Target countries required cold calls to whomever. We got to Iran because of Jim Howland’s L.A. friend and eventually signed a contract for over $1 million of design engineering projects in irrigation and water resources, contingent on the Shah remaining in power. He fell and so did our contract. Many U.S. firms lost millions in Iran. CH2M HILL lost a local bank account of $2,000.
USAID became our best client. In the late ’70s we won a number of indefinite quantities contracts for water resource engineering. The work was in Africa and the Far East. Over a 6-year period we did work in Chad, Nigeria, Sri Lanka, the Philippines and other countries. Through this contract we won a major contract in Sri Lanka for irrigation work. The project was partly completed when civil war broke out and we moved out. Over 20-30 people gained international experience (Anne Merryfield, Bob Charley, etc) through USAID work. This was helpful in later proposals in Saudi Arabia and Egypt. Lesson learned: we could work successfully overseas and our employees loved it. Many firms hired outside for overseas projects. CH2M HILL decided to grow our own which had a major impact in future work in Saudi Arabia and Egypt.
Iran was becoming a very “iffy” situation and we looked elsewhere. Dick Ivey had a good friend, Dr. Nohad Toulan, who introduced us to Effat Monsour. Effat had very strong contacts in Saudi Arabia and Egypt. He was recommended by Dr. Toulan and others. Together we won the Eastern Province Contract (Dhahran, Al Khobar and Damman) in Saudi Arabia. At that time a million-dollar contract with an office staff of 20-30 in Damman. Nofal Kashrawi joined us for the project. Effat Monsour was designated project manager. CH2M HILL agreed to a joint venture company with Monsour for a share of all Middle East projects. Otto Vydra agreed to be deputy project director and Gus Pantazi joined the team as office administrator (he carried a brief case full of local currency) to pay local bills, cash only. All was in place for a great project except Effat Monsour went “off the deep end” and became an unpleasant project manager. Otto and Nofal called for help.
Toulan and I came to Damman. I reviewed the situation with Effat, Nofal and Otto. He presented our concerns to Effat Monsour, but he refused to consider complaints or management corrections needed. I fired Effat. (Cornell or Howland knew this might happen). The project was in jeopardy. Dr. Nohad Toulan and Nofal Kasrawi were well respected by the Saudi prince in charge of the work. We met with the prince and explained why Monsour was leaving the project and that Nofal Kasrawi would be project director. Dr. Nohad Touland supported Nofal and pledged his support. Otto Vydra was our rock and continued as assistant Project Director. The Saudi team completed the project with high marks and won many more projects including work in the Holy City of Medina.
The Mansour saga continued. When he returned to PDX he sued CH2M for millions based on his joint CH2M HILL Mideast planned company. A very tense time. Dr. Nohad Toulan rose to our defense. Vydra and Kasrawi may also have testified. The judge ruled in our favor. Effat later died in a flight to Egypt from NYC when an Egyptian TWA pilot crashed the plane into the Atlantic. CH2M HILL dodged a million-dollar bullet, but I remain sad. Monsour and I should have done better. The stars of the Damman project were Nofal Kasrawi, Otto Vydra, Gus Pantazi and a dedicated staff. Lesson learned: we could operate a 20-40 person office in a foreign country and we were better off to use dedicated CH2M HILL staff and resources.
Before we leave the early Saudi Arabia period I would like to remember Ed Worth. In the late ’70s we competed and won a project, ten dams to hold flash floods in the arid areas. Ed won the work through his expertise and ability to work with local people. We lost the work to a stronger politico. I was convinced that we could have won future projects with Ed.
An early word about getting work overseas. Jim Howland said “if you don’t want to see comments in the CVO Gazette don’t do it.” Many jobs came with local expense. Increase your fees and kick back 25-50 percent to local officials. We said “NO” and struggled but did a little better each year without kickback or whatever. Egypt was a target country from the start. The first USAID proposal was a grain distribution study. Holly Cornell helped, but we lost. We then proposed on a planning study for Sadat City with I.M. Pei. Dick Ivey was excited but we lost. We then joined Black and Veatch (B&V) and a British firm to form AMBRIC and proposed on a preliminary wastewater study for Cairo and Alexandria, USAID projects, but we again lost. Lots of local politics. After six years of effort in Egypt we had good local partners and were respected by Egyptian officials and USAID.
After the early years, the success of International may have been somewhat a mixed bag. We did not have mega projects and the bottom line may have been marginal. Twenty to 30 projects were completed. We had successfully worked in over 10 countries. Over 50 permanent staff had worked on International projects. In the late ’70s major USAID projects were being discussed for predesign and design of the Cairo, Alexandria and Canal Cities wastewater improvements. We had a good Egyptian partner and were well respected by USAID-Cairo. CH2M HILL had previously teamed with B&V for the study phase but lost to Camp Dresser & McKee (CDM) and their strong local partner. For the next phase B&V dumped CH2M HILL and joined CDM. Metcalf & Eddy (M&E) contacted us about forming a team to win the Alexandria project. We knew M&E overseas mainly from our joint efforts in China when Gene Suhr and Ralph Peterson were involved. (The team may have come from a joint-venture effort for the Metro-Portland Solid Waste Study.
The joint venture was known as COR-MET. Mike Kennedy, a new E-1, took a leading role in the work and established himself as a rising star in the PDX office and the firm.) We agreed that the Alexandria team would have two local Egyptian firms. Unfortunately the two firms neither liked nor respected each other. Each of them wanted to be the sole local firm involved. I spent a long week negotiating an Egyptian joint venture of the two firms that equally split their efforts as CH2M HILL/M&E equally split their efforts. Sid Lasswell, Gene Suhr, John Filbert and Dale Cannon stepped up and said we can win this project. They put the proposal together in CVO and SEA with very little help from M&E and none from their Egyptian counterpart. The CH2M HILL team provided an excellent proposal partly because of the 70s group’s commitment to “win a big one for International.”
In the selection process: “CVO we have a problem.” Our team is rated best by USAID- Cairo and the local Alexandria Sewerage Authority but the CDM local partner is appealing to the National Authority with lots of special gifts and favors. USAID and the Alexandria Sewerage Authority did not like CDM’s partner and called our local partners and me for help. I took the red eye from PDX to Washington, D.C. for meetings with USAID-WASH. Meetings with USAID-WASH went well. They telexed Dick Dangler at USAID-Cairo of their preference for the CH2M HILL / M&E team. I left that night for Cairo, having gone 48 hours without sleep. After a shower at the Shepherd Hotel, I met with Dick Dangler, USAID. He would approve our selection. He had problems with the CDM team but would support the Alexandria Sewerage Authority. Both local partners and I traveled to Alexandria and were well received by the chairman and local officials. At the time the chairman and the Alexandria governor were battling for their independence from Cairo. I returned to PDX and a few days later we were officially notified of our selection and invited ASAP to come to Cairo/Alexandria to negotiate the contract.
Usually it takes 6-12 months to negotiate a USAID contract in Egypt. I knew that Dick Dangler was a rising star in USAID and wanted to show that it could be done in less than a month. Called M&E and they didn’t believe we were on a fast track and sent their U.S.-Egyptian to join our team.
The CH2M HILL team was Gene Suhr, Mike Fisher and I. Gene Suhr was on a sail in the Puget Sound, but within 48 hours Mike and I met him at New York Kennedy for our flight to Cairo. How Gene got off his sailboat and why he appeared in full beard for our negotiations is another story that only Gene can tell.
Lots of stories about the negotiations, all probably true. We negotiated from 10a to 2p, and took the normal Egyptian afternoon break, returned at 6p to 9p returning to our hotel where we worked until midnight or later. This went on for 3 or 4 days. We were helped and hindered by live music playing in our hotel courtyard. We ended up with a marked up / locally typed copy of more than 100 pages. Gene Suhr recruited local boys in the market area to help us copy and collate 15 sets for signature. Mike Fisher gave me a crib-sheet for negotiating the fee, “best to no way.” In a hotel room “one on one.” Dick Dangler and I agreed on the fee. It was not at U.S. standards but was higher than any other USAID-Egypt project.
The next day while we were signing the contract and initialing all the pages, Gene Suhr, assisted language-wise by our personal Egyptian agent leased a villa that would be our future “guest house.” The previous tenant was CDM who folded their tent and moved farther out the Corniche. We had a happy return trip to the U.S. with contract in hand. M&E never really forgave us for the fast-track contract. The contract led to 10-15 years of extensions and many other Egyptian projects.
Tales to tell of our work in Alexandria but they need to come from Suhr, Filbert, Harem, Bealman and close to 100 CH2M HILL employees who worked on the project. M&E mainly used contract hires. The Alexandria project, USAID Independent Quantities Contracts in water resources, and our project in Saudi Arabia provided the foundation for future work overseas. Otto Vydra carried the torch for International after Alexandria and did very well.