Abu Dhabi regained its position as the most active market for new construction and infrastructure contract awards during the second quarter of 2012. In the first quarter of the year, the UAE’s largest emirate was outperformed by neighbouring Dubai, which was experiencing a mild resurgence in contract awards.

Abu Dhabi awarded contracts totalling $4.12bn in the second quarter, its best three months since the first quarter of 2011. It was also a more than sixfold increase on the $673m of contracts that were awarded in Abu Dhabi during the previous quarter.  

The largest contract awarded in Abu Dhabi was the $2.87bn deal secured by the consortium of Turkey’s TAV, Athens-based Consolidated Contractors Company (CCC), and the local Arabtec Construction for the midfield terminal building at Abu Dhabi International airport.

Without the midfield award, the emirate awarded $1.25bn of contract awards, which is still more than the total of $1.17bn awarded by clients in Dubai, the UAE’s second most active market.

The largest contract award in Dubai was the estimated $190m contract secured by the joint venture of Japan’s Toa and France Soletanche Bachy for the construction of Terminal 3 at Jebel Ali port, as the emirate continues to invest in upgrading its existing transport infrastructure.

Dubai’s performance will be a disappointment for contractors, who were hoping that the growth achieved in the first quarter would provide the foundation for an even stronger second quarter. Although analysts still report that rentals and property prices are rising, clients in the emirate are still wrestling with debt issues and are unable to move ahead with projects and fully capitalise on the improving sentiment in the real estate sector.

Despite their changing fortunes over the first half of the year, Abu Dhabi and Dubai dominate the UAE’s construction and infrastructure sector. Combined, the two emirates accounted for 83 per cent of awards in the UAE, with almost 60 per cent in Abu Dhabi and 24 per cent in Dubai during the second quarter. Despite Abu Dhabi’s weaker performance in the first quarter, the two emirates accounted for 89 per cent of the UAE total in the first quarter.

For the other emirates, Fujairah was the best performing emirate during the second quarter with $578m of awards. Sharjah has been the best performing market so far this year. In the second quarter, it awarded $521m of contracts, more than double the $228m awarded in the first quarter. Fujairah outperformed Sharjah in the second quarter with $578m of awards,

The other three emirates of Ajman, Ras al-Khaimah and Umm al-Quwain have been slow for new contract awards this year, with only $210m of awards, and only Ajman awarding a deal valued at more than $100m.

The northern emirates had been expected to be strong markets for contractors in the future as the federal government develops projects in remote areas serving local populations.