Dubai Expo boost for Abu Dhabi construction

19 December 2013

UAE-wide feel-good factor means long-waited decisions are now being made

The UAE-wide feel-good factor following Dubai’s successful bid to host the 2020 World Expo is having a positive effect on Abu Dhabi’s construction market.

Since the end of November, there has been a spike in construction contract awards and tendering activity in the emirate, as decisions are made on projects that have been subjected to a series of delays in recent years following a strategic review of capital projects in the emirate in 2011.

The most recent award is the estimated AED500m ($136m) contract secured by the local/Lebanese Arabian Construction Company (ACC) for the construction of the Sheikh Khalifa bin Zayed al-Nahyan mosque in Al-Ain, in the emirate of Abu Dhabi.

The scheme was first revealed in late 2010 and early 2011, and contractors were invited to express interest in the piling and shoring package. The project was subsequently delayed by a review of major projects that slowed the pace of development in Abu Dhabi until late last year. The client is Abu Dhabi’s Department of Presidential Affairs.

The Sheikh Khalifa mosque award follows the appointment of a contractor on another major Al-Ain building project.

In early December, the local Arabtec Construction and Spain’s Constructora San Jose won as the main contract for the the New Al-Ain hospital. The contract, which is valued at AED4.4bn involves building a 719-bed hospital. The client is Abu Dhabi General Services Company (Musanada). Abu Dhabi Health Services Company (Seha) will manage the facility once the construction has been completed.

Another Al-Ain construction contract award is expected by the end of this year for the Advanced Military Maintenance Repair and Overhaul Centre (Ammroc) at the Nibras al-Ain Aersopace Park.

The local Al-Fara’a General Contracting is the frontrunner for the estimated $350m design-and-build contract. The client, Abu Dhabi’s Mubadala Aerospace, says construction work on the project is planned to start in January, and it is in final negotiations with a contractor to build the project without confirming the identity of the selected firm.

Closer to Abu Dhabi city, Musanada awarded two contracts in early December totalling AED2.138bn for the construction of the new highway connecting Dubai and Abu Dhabi.

Ghantoot Transport & General Contracting Establishment has won the estimated AED1.297bn contract for the first 34-kilometre-long section of the highway. The contract to build the second 28km section of highway was awarded to a joint venture of Tristar Engineering & Construction and Italy’s Salini Costruttori.

Two other major contracts could be signed in the New Year. In November, Abu Dhabi’s Tourism Development & Investment Company (TDIC) received bids for the contract to build the Zayed National Museum on Saadiyat Island, and following the recent rush of awards, the bidders now expect an award to be made in early 2014. Contractors are also waiting for an award early next year for the construction of Sheikh Khalifa Medical City, which includes a 838-bed hospital.

TDIC has also invited prequalified contracting groups to collect tender documents for the contract to build the Guggenheim museum on Saadiyat Island, which should be awarded in 2014.

Tendering is also expected to start in the first half of next year for the Abu Dhabi metro and light rail projects. Companies are currently forming consortiums to bid for the construction work. The teams include major international and local contractors looking to secure work on the two urban rail projects, which will both be the largest schemes in the UAE capital over the coming decade.

With Emaar Properties, Nakheel, Meraas, Jumeirah Group, Dubai World Trade Centre and the Roads and Transport  Authority (RTA) all tendering major projects in Dubai, there will be concerns that the heightened activity could lead to rising costs, even though the market still has a long way to go before it returns to its 2008 peak.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications