But the road construction project was also one of the most difficult and dangerous of its kind: Its price included four workers killed and four injured in an avalanche, one missing in a flash flood.
This spectacular mountain highway presently meanders 58 kilometers through steep, congested peaks. It draws its name from a road-town 27 kilometers north of Abaha City, atop the 500-kilometer-long Tihama Escarpment.
In the distant ages, a rapid geological uplift along the Red Sea resulted in the spectacular 3,000-meter-high range now called the Tihama. From the dawn of village civilization, these mountains had divided the increasingly important population concentrations of the highland from the villages and agricultural areas in the valleys.
But now a road reaches from them, descending to Wadi Tayah, and finally ending at Muhayii, an important road-junction town, where it serves as a vital new link in the Saudi transport system, connecting the Jeddah-Taif-Abaha road with the Jedda-Jezan coastal road—an important contributor to the economic development of the southwestern region.
The new highway is a veritable contemporary museum of construction techniques and road aspects, incorporating 13 tunnels and 32 bridges, all of the former and two-thirds of the latter on its 9-mile upper section, where the highway plunges 2,600 feet from a beginning elevation of about 6,600 feet.
The tunnels, some of which are 2,000 feet long, were finished off via a new Austrian method-spraying the newly exposed rock with concrete, and allowing that to settle into a self-supporting arch.
For the bridges, self-climbing tower cranes were used to erect their octagonal piers, columns as high as 215 feet—a height corresponding to a 22-story city building.
The construction, which took five years to complete, came in at a total contract value of US$110 million. And when it did, it won additional international recognition for quality control for an already reputed "heavy duty" contractor-the Retired Servicemen Engineering Agency (RSEA or Ret-Ser) of the Republic of China.
In addition to a similar road construction project, the 14-kilometer Dillah Descent Highway, RSEA has also completed two contracts in connection with the Saudi Ahmise Air Base engineering project, covering eight main works-1) a special vehicle repair shed, 2) a flight control tower and hangars, 3) a sewage treatment plant, 4) airport access roads, 5) the airport runway and approaches, 6) an aircraft engine test stand, 7) security fencing, and 8) security lighting-for a total contract value of US$70,600,000. The finished facilities were handed over at the appointed time last year to the Saudi Air Force.
Present RSEA projects include the Jubail Industrial Park, UPM-faculty & staff housing, an electronics institute project, residential units for the Al-Jubail Fertilizer Company, and the Al-Hasa Sewage Pumping Station.
So far, Saudi Arabia has been RSEA's largest market for the export of technology and labor skills, for a combined contract value of US$1.43 billion over the past 13 years.
Indonesia, RSEA's second largest market, has provided an aggregate contract value of US$279 millions for over 500 kilometers of road, a bridge, a reservoir, and a steel milling plant.
RSEA began extending its antenna into the international market in 1960, when it undertook various construction projects in Vietnam, Thailand, Indonesia, Singapore, Guam, Saudi Arabia, Jordan, Diego Garcia Island, Malaysia, and Bahrein.
RSEA now bids for construction projects in many other countries, and recently opened new working offices in Egypt in the wake of its successful US$40-million bid for the 5.3-kilometer Rosella Shore protection project. Currently, RSEA has branch offices or international representatives in the United States, Indonesia, Saudi Arabia, Singapore, Jordan, Malaysia, Thailand, Guam, and Bahrein.
In the past 26 years, RSEA has completed 5,496 different overseas projects, including 3,827 kilometers of roads, 336 bridges (totaling 50,328 meters in length), 268 harbor projects, 171 dredging projects, 269 hydraulic projects, 599 building projects, 19 airfield projects, 314 foundation projects, 68 electric power projects, 115 sanitary projects, and 593 others.
According to an evaluation by the authoritative U.S. construction weekly, Engineering News-Record, RSEA ranks 78th among the 250 largest contractors around the world.
RSEA's total technology and labor exports over the last 20 years amount to NT$86.5 billion (about US$2.2 billion), with NT$10.9 billion (US$272.5 million) for 1985 alone, a 575-fold increase over the 1966 level of NT$20 million (US$500,000). At present, the RSEA workforce totals 13,972, of which 8,663 (62 percent) are veterans.
All this has come about despite the fact that it has, historically, never been easy for state-run enterprises of such magnitude to be self-sufficient. And in RSEA's case, particularly: It was burdened from its inception with a commitment to provide jobs for the ROC's retired servicemen, who had dedicated most of their lives to the survival of their embattled country.
Under construction, the elegant ROC National Opera theatrical complex on the grounds of the Chiang Kai-shek Memorial Hall.
This commitment reflects the late President Chiang Kai-shek's special concern for the veterans which, early on Nov. 1, 1954, resulted in the establishment of the ROC Vocational Assistance Commission for Retired Servicemen (VACRS) to administer an effective veterans assistance program covering medical care (including home care) and job placement and educational programs.
On May 1, 1956, RSEA itself was created as a "job-manufacturing" enterprise by VACRS, with an initial investment of NT$30 million (about US$750,000). Effective management has since been at the core of RSEA's transformation of an army of very likely liabilities—layman veterans—into a top asset: seasoned skilled and semi-skilled labor.
Thus, RSEA is far from being your ordinary freebooting global construction company. It is saddled with a major public-service obligation which can be efficiently carried out only if it effectively achieves its assigned competitive business missions. Through 30 years of effort toward such goals, RSEA has now developed from a modest, labor-intensive, domestic dredging contractor into a diversified, technology-intensive international construction firm with a capital of NT$4 billion (US$100 million), total assets of NT$30 billion (US$750 million), a net worth of NT$8 billion (US$200 million), and machinery and equipment of NT$15.7 billion (US$392.5 million).
RSEA's 65-year-old president, Yen Hsiao-chang, singles out the firm's concentration on organizational development programs and planning and control systems—and especially RSEA's "human resource development" training programs-as the heart blood of its success.
He expresses pride in the fact that RSEA began to use computers in 1969, and had developed its own integrated management information system (the "Project Accounting and Control System ") by 1975.
But the most important ingredient has been, and is, manpower development. "To speak productivity, it is 'men' who can turn it up or down," he said recently, in a speech to the Chinese American Engineers and Scientists Association of Southern California.
From its beginning, RSEA has stressed "caring" as a treatment guideline for its employees. In addition to government-sponsored labor and public service insurance programs, RSEA instituted benefits such as medical care, its Tse Yuan school allowance, birth and wedding allowances, and, perhaps most significant, an "Old Soldiers' Home" program. The medical care allowance extended coverage directly to dependents, according to Yen, based on a principle from Confucius' teaching: "That men must not regard as parents only their own parents, nor treat as children only their own children."
Indeed, Yen sees RSEA as a repository of responsibility and ethics, with team work and solidarity as the natural outcome. RSEA's people, he declares, consciously strive together on behalf of RSEA.
The essence of good personnel management, as Yen sees it, is expressed, in traditional Chinese philosophy, as respect for the basic value of man. Putting emphasis on human relations is what leadership is all about, he asserts.
"I can never forget what former VACRS Chairman (now ROC President) Chiang Ching-kuo told me when I took over this office on June 1, 1959," he added. "He said: 'Take good care of them (retired servicemen).' So I sought anything helpful to foster and enhance RSEA so it could provide for more job opportunities. "
RSEA'S success story has been a specific subject of academic inquiry. A case study, prepared by Professors D. Daryl Wyckoff and James J. Hill of the Harvard Business School, phases its development into a start-up period (1956-1966), a Tsengwen Dam construction period (1967-1973), and the major ROC infrastructure-Ten Construction Projects (1973-1979) and Twelve Construction Projects (1979-1984) - projects periods.
The first phase, according to the study, was a time of great upheaval and heroic effort to shape the company, with little financing available. This meant the company was even unable to purchase much-needed construction equipment. The only other assets (really potential liabilities) made available to the company were about 3,000 unskilled servicemen, plus a vague promise of contract work on 180 kilometers of the new East-West Cross-Island Highway.
When he took over in 1959, Yen stressed organizational simplicity, using familiar armed service models. The workers were originally organized into 30 to 40-man platoons, which were linked into companies; and the companies were assembled into groups.
This style of organization proved highly satisfactory as long as RSEA's jobs were simple earth-moving projects. However, as more specialization and coordination were required, it proved inadequate, and Yen next organized the company into three sections—engineering, contracting, and purchasing—and instituted an ongoing program to increase the skills of the workers.
In the 1950s, construction work in Taiwan began to pick up in both the private and public sectors following the resumption of U.S. economic aid to the Republic of China. By the early 1960s, RSEA was successfully accomplishing a shirt from labor-intensive to more capital-intensive operations, thus positioning itself as a viable bidder for large, complex projects.
The next phase, according to the study, began in 1967 when the company undertook the large and complex Tseng-wen Dam project in southern Taiwan. Originally, the large earth-and-rock-filled dam project was to be tendered for bids from major international contractors, but Yen successfully fought to have the contract awarded to RSEA, a major breakthrough. The company now had its opportunity to progress from small projects (where it usually handled fragmented jobs of larger projects) to overall management of its first major construction effort.
The company quickly mobilized to perform the work, its first task being to find the necessary construction equipment. Yen dashed about the job sites of other companies buying, at distressed prices, surplus and abandoned equipment left from completed jobs.
The scale and importance of the Tsengwen Dam project led directly to another reorganization of the company, this time for more efficient management of the acquired equipment and larger work force. This was accomplished via a project office for the Tsengwen Dam that had its own functional departments reporting directly to it, as an ad hoc task force outside the regular RSEA organization. Its mission was straightforward: complete the Tsengwen Dam on schedule and within the budget.
Temporary Taipei landmarks—RSEA cement mixers for the underground rail project.
Then in November 1973, former Premier (now President) Chiang Ching-kuo announced the ROC government's determination to complete, in five years, 10 ambitious national construction projects: the Sun Yat-sen Memorial Freeway, the Chiang Kai-shek International Airport, the Taichung and Suao ports, the North Link Railway, railroad electrification, a Kaohsiung shipyard, an integrated steel mill, a petrochemical complex, and a nuclear power plant.
RSEA participated in eight of the ten projects, all of them large and complex, and far more demanding technically than anything previously handled by the company. This, says the study, was the beginning of another period of development for RSEA.
In the late 1970s, Taiwan experienced a general building boom. And as the 10 major projects were completed, 12 new national infrastructure projects were implemented, several of them, really, second or third-phase developments of earlier projects. Coupled with a heady private-sector construction boom in buildings and factories, they fostered the development of a vigorous domestic construction industry. And RSEA was in a favorable position to participate in this growth market.
Taipei's mammoth, cross-city underground railroad—the Peiping Road section,
RSEA's major domestic construction projects in 1986 include: the Feitsui Reservoir project, the US$59-million Taipei Underground Railway project, the South Link Railway project, the new 265-kilometer East-West Cross Island Highway, the Minghu Pumping-Storage Power-Generation project, the 1,535-meter-long and 28-meter-high Jenyitan Reservoir project, the Taichung Thermal Power Plant, the National Opera Theater, the Veterans General Hospital renovation project, and the Taipei Sanitary Sewage System project.
Hsieh Hung-chen, RSEA's chief secretary and one of Yen's top aides, admits that the firm's headlong rush to success has had its share of worries. And they never end, he says: The present world-wide construction recession, coupled with reduced earnings for the oil-producing nations in the Middle East, RSEA's major markets, is having serious impact at RSEA. And aggressive competition at low prices from South Korea and a number of vigorous local contractors is always at hand.
Nevertheless, Hsieh is unrestrainedly optimistic that RSEA will manage present problems, as it has past hurdles: "Thirty years is only a blink of the eye for an enterprise like this. As this old generation fades away, there are young generations to carryon. It is always a time for men to get things done."