International contractors are increasingly losing out to UAE-based firms in bids to construct high-rise towers, with Dubai-based companies in particular able to use their experience in their domestic market to win contracts overseas.
The award to Dubai-based Arabtec Construction of the AED10bn ($2.7bn) contract to build the Okhta Centre in St Petersburg in Russia is the clearest sign yet that the UAE is now at the forefront of a key area of the global construction industry.
Further overseas deals are expected as clients in markets around the world approach UAE contractors with a track record in this area. “We are being solicited globally for our high-rise experience,” says one contractor working on high-rise projects in Dubai.
The centrepiece of the St Petersburg project is a 400-metre tower that will be the tallest in Europe.
Unable to rely on local firms, the client, Gazprom Neft, approached companies from Europe, the Far East and the Middle East.
Arabtec was able to see off the competition by drawing on its experience on high-rise projects such as the Burj Dubai, which at more than 800 metres will be the world’s tallest building once completed. It is working on several other high-rise structures in Dubai, including the 350-metre D1 Tower at Culture village and the 310-metre Ocean Heights tower at Dubai Marina.
When the deal was announced, Riad Kamal, chief executive officer of Arabtec, stressed the importance of the company’s experience in securing the contract.
“We are certain that this selection has been done on the basis of our extensive experience and successful record of implementation of similar projects,” he said.
Arabtec is one of several local firms working on super high-rise projects in the UAE. Two towers in excess of 400 metres tall are under construction, and more than a dozen projects that will top 300 metres.
Traditionally, the market relied on international experience for such projects, but the majority of high-rise schemes are now being built by local and regional contractors (see table). “We have fallen out of the tower business over the past few years,” says one international contractor. “We are starting to look at the sector again, but the competition is much stronger than it was.”
The local/Lebanese Arabian Construction Company (ACC) currently has the greatest number of high-rise projects. It is working on four towers of at least 345 metres, including the 414-metre Princess Tower.
The local Dubai Civil Engineering (DCE) is working on two towers over 345 metres, and an even larger number of contractors are working on projects in the 250-330-metre range.
Despite the attraction of expanding overseas, there is likely to be plenty of further work in Dubai. At Business Bay, construction is expected to start by the end of 2008 on the 501-metre Burj al-Alam, and Nakheel is finalising plans for a tower that is understood to be 1,050 metres tall.
“We now tell clients we have as much high-rise experience as anyone else in the world,” says one contractor. “So why choose to go with an international? Some clients still prefer internationals, but as companies like Arabtec start to work on projects overseas, I expect this mindset to change.”
Table: Tall tower projects awarded to UAE firms
|Burj Dubai||800+||Arabtec Construction, Samsung Corporation (Korea), Bel Hasa Six Construct (local/Belgium)|
|Princess Tower||410||Arabian Construction Company (local/Lebanon)|
|23 Marina||395||Dubai Civil Engineering|
|Central Market||382||Arabian Construction Company|
|Sky Tower||380||Arabian Construction Company|
|Elite Residences||380||Arabian Construction Company|
|Al-Mas||360||Arabian Construction Company, Taisei Corporation (Japan)|
|D1 Tower||350||Arabtec Construction|
|Torch||345||Dubai Civil Engineering|