Abu Dhabi is set to replace Dubai as the UAE’s strongest construction market after a string of contract awards during the first two months of 2013.
With one month still to go before the end of the first quarter, Abu Dhabi has awarded $1.5bn of construction and infrastructure contract, nearly double the $767m of awards that were made during the fourth quarter of last year.
By contrast, the value of awards so far this year in Dubai has fallen when compared to the fourth quarter of last year. During January and February Dubai awarded $948m of contracts, and in the fourth quarter of 2012 it awarded $1.2bn – nearly $500m more than was awarded in Abu Dhabi.
Abu Dhabi’s improved performance was driven by two major contract awards. The first was the award of the main construction contract to build the long-delayed Louvre Abu Dhabi museum on Saadiyat Island in January. The winning contractor was the joint venture of the local Arabtec, Spain’s Constructora San Jose and Oger Abu Dhabi. The main package, valued at AED2.4bn ($653m), involves the concrete structure and superstructure works, structural steel works, cladding and mechanical, electrical and plumbing works.
Arabtec was also the successful bidder for the contract to build the estimated AED1bn Fairmont Hotel and Serviced Apartments in mid-February. The local National Investment Corporation is developing the scheme that involves building a 39-storey tower housing with guestrooms, apartments and other hotel amenities.
More awards are expected in Abu Dhabi. India’s Larsen & Toubro is expected to win the airside works for the Midfield Terminal Building at Abu Dhabi International airport, and other major contract awards are expected for road works for the Department of Transport on the Mohammed bin Zayed road extension project and the Mafraq to Ghuweifat highway.
Dubai’s performance has been more tempered in comparison. The most high profile award was the estimated $272m contract to build The World’s largest ferris wheel that was secured by South Korea’s Hyundai Contracting and Netherlands-based Starneth Engineering from local developer Meraas Holding. The 210-metre tall attracting will be built at the new Bluewaters island development off the Dubai coast.
Some major contracts, such as the Dubai Mall expansion and the creek extension works are currently being tendered, so the market is expected to perform better later in the year as these deals are awarded.