Dubai has not been a good market for contractors since the end of 2008. As property prices fell and real-estate companies ran out of funds, billions of dollars-worth of projects have been put on hold, virtually no new work has been awarded and thousands of people have lost their jobs.
Almost three years later, the market is beginning to show the first tentative signs of a modest recovery. In late July, Dubai Health Authority invited contractors to bids by 28 August for the contract to build Al-Jalila Children’s Speciality Hospital. The project, which has been tendered before, has attracted the interest of some of the most active contracting companies in Dubai before the market crashed.
Similarly, government-controlled Wasl Asset Management Group has invited contractors to bid by 11 September for the contract to build an extension to the Meridien hotel in the Garhoud area close to Dubai International airport. Again this project has attracted interest from the leading contractors in the emirate, although those preparing to bid expect the competition to be fierce.
The optimism is measured though. In recent years, clients in Abu Dhabi have grown fond of issuing tender documents, receiving bids and then not award any contracts – and Dubai is following in its neighbour’s footsteps.
Companies are also cautious because they are still dealing with the legacy of the slowdown in Dubai. One major local contractor has reduced its workforce from more than 40,000 men to less than 17,000 in just two years, and warns that the market should not expect too much. Although he admits that if projects are being tendered, it shows that some people are starting to consider investing again. For contractors it at least shows the market is starting to move in the right direction.