Abu Dhabi’s construction sector has been given a boost after Crown Prince Sheikh Mohamed bin Zayed al-Nahyan approved a AED50bn ($13.6bn) economic stimulus package and ordered the settlement of payments to private sector suppliers.
The stimulus package will aim to accelerate economic growth over the next three years and comprises a set of initiatives covering infrastructure and legislative projects, as well as SMEs, and industrial and social projects. The Executive Committee of the Abu Dhabi Executive Council will prepare a detailed execution plan for the stimulus package within 90 days.
For payments, Sheikh Mohamed has given directives to accelerate payments to suppliers from the private sector. The instructions include the formation of a special committee, headed by the Executive Office and the Department of Finance, to oversee all relevant and related procedures.
The value of construction and infrastructure contracts awarded in Abu Dhabi has declined significantly in recent years. According to data from regional projects tracker MEED Projects, after peaking at $68bn annually following the award of the contract to build and operate the Barakah nuclear plant, the value of awards slumped to $7bn in 2016, before making a slight recovery to $12bn in 2017.
Like the rest of the region, payments are also an ongoing challenge for contractors. While contracted payments may still be made, contractors say that getting claims approved and paid is becoming increasingly challenging.