Abu Dhabi sets tougher challenge for property construction firms

19 January 2010

Firms in Abu Dhabi will have to work harder to win contracts than they did in Dubai

One thing, at least, has become clear in 2010: if construction companies want to work on big projects in the UAE, they need to be looking to Abu Dhabi.

Following the multi-billion-dollar awards for oil and gas facilities and nuclear power plants in 2009, the emirate has not allowed the pace of contract tenders to let up.

State-owned bodies are currently inviting bids for multi-billion-dollar construction contracts on an airport terminal, two major hospitals, a football stadium and a 327-kilometre-long highway. Alongside those are consultancy contracts for a 350-kilometre metro system and a tram network for the capital, both of which will also cost billions of dollars to develop.

Such large-scale projects are nothing new for the Gulf, but they do mark something of a change for the UAE.

Abu Dhabi’s building boom is different from the one Dubai recently experienced – but which has now ended. The construction frenzy in the Dubai market was driven largely by real estate, as developers scrambled to build thousands of homes that investors had paid for in advance. In Abu Dhabi, real estate is taking a back seat, not least because there will be more than enough villas and apartments to meet demand by the end of 2010.

Instead, it is pursuing projects which are more technically demanding but, it hopes, more sustainable. It is far harder to build an underground metro or a 65,000-seat stadium with a retractable roof than it is to build yet another row of identikit villas, or another anonymous tower filled with apartments.

Abu Dhabihas the funds needed for such projects and it is prepared to spend them. For construction firms, that is good news, although proving they have the technical prowess to build them means most of them will have to work harder to win contracts than they did in Dubai in the past.

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