The $6bn contract involves building 37 towers
The local Arabtec Construction has signed an agreement for the largest construction contract in the UAE. The AED22bn ($6bn) deal involves the design and build of 37 towers across Dubai and Abu Dhabi for Abu Dhabi-based Aabar Investments.
In Abu Dhabi the towers include: nine mixed-use buildings at the City of Lights development on Reem Island, 14 other towers in various locations in Abu Dhabi, and a Hard Rock Hotel on Abu Dhabi corniche.
In Dubai the contract involves building six hotel and service apartment buildings together with two staff accommodation blocks in the Jadaf area close to the Culture Village development on the banks of the creek. The hotels will be managed by Hilton, Swiss Hotel, Park Inn and Fraser Suites.
|Top 5 UAE construction contracts|
|Project||Value ($bn)||Contractor||Date of award|
|Aabar Towers||6||Arabtec Construction||Feb-14|
|Abu Dhabi airport: Midfield Terminal||3||CCC/TAV/Arabtec joint venture||Jun-12|
|Mohammed bin Rashid housing programme||2.7||Arabtec Construction||Jan-06|
|Gate Towers||1.7||Arabian Construction Company||Apr-08|
|Marsa al-Khor||1.7||Al-Futtaim Carillion||Apr-07|
|CCC=Consolidated Contractors Company. Sources: MEED; MEED Projects|
The contract, which calls for construction work to start in the first quarter of this year and complete before 2020, is the largest construction contract ever awarded in the UAE. It surpasses the estimated AED10.55bn deal for the construction of the Midfield Terminal Building at Abu Dhabi International airport that was signed in mid-2012. Arabtec is one of the three consortium members that signed that contract. The largest ever UAE award came from the power sector in 2009 when a South Korean consortium secured the contract to build nuclear power plants in Abu Dhabi.
Arabtec has now won more than AED28bn of new work this year taking its backlog to close to AED60bn. In early January it won a AED2.59bn ($706m) contract to build a mixed-use development on Abu Dhabis Reem Island, and in mid-January it secured a AED5.7bn ($1.55bn) contract for construction of Jordans first themed tourist destination, the Red Sea Astrarium.
To facilitate further growth, Arabtec Constructions parent company Arabtec Holding, is planning to start listing new companies.
The plans, which will start to be implemented in 2015, involve listing its construction subsidiary, Arabtec Construction, so that it can merge and partner with local players, strengthen its presence in markets outside the UAE, and become the regions largest construction company.
I have five or six IPOs [planned]. This is the new business plan, Arabtec Holding managing director and CEO Hasan Ismaik tells MEED. I will IPO these companies to grow more and to merge, because I cannot merge with Arabtec Holding.
The location of the first IPOs in 2015 and 2016 has not been finalised. There are various options available on international markets such as London, New York and Hong Kong, as well as on regional bourses where Arabtec is already operating as a construction company.
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