Nakheel awards record amount of work

17 July 2008
Local developer enjoys busiest period in its history with $6.8bn worth of contracts awarded so far in 2008.

Local developer Nakheel has awarded more than AED25bn ($6.8bn) worth of contracts in Dubai already this year, according to research by MEED, marking the most active period in its history and raising confidence among observers that the boom in the emirate’s construction sector will continue.

The most recent award was made at the start of July for dredging and reclamation works on the Port Rashid redevelopment. The AED2.2bn contract was awarded to a joint venture of Belgium’s Dredging International and Royal Boskalis Westminster of the Netherlands.

Even by Dubai’s standards, Nakheel’s level of contract activity is unprecedented, according to contractors.

“Dubai is a very busy place, and other developers such as Emaar [Properties] have awarded a lot of work in the past, particularly on the Burj Dubai development, but the amount of work Nakheel now has dwarfs that,” says one contractor working for Nakheel.

Contractors expect the trend to continue as more major schemes move into the construction phase. Nakheel’s portfolio of projects gives it a large land bank that it can develop over the next 10-15 years, which should translate into a steady stream of contract awards.

“With projects such as Dubai Waterfront and the reclaimed islands, Nakheel’s land bank is massive and that is why you are seeing a lot of contractors now look to it as a long-term client,” says another Dubai-based contractor.

Although Nakheel’s name has become linked with reclamation work on artificial islands, the vast majority of its awards this year have been for building projects on its various developments. The most high-profile award was for the Trump International Hotel & Tower on the Palm Jumeirah.

The contract, which went to the local/South African joint venture of Al-Habtoor Engineering Enterprises and Murray & Roberts Contractors (Middle East), involves the construction of a 48-storey building straddling the Palm’s monorail system.

South Korea’s Samsung Corporation has won a contract to build the Village Centre, which will include a four-storey retail centre and two 42-storey residential towers, on the trunk of Palm Jumeirah.

Nakheel has also selected the Al-Habtoor/Murray & Roberts joint venture as the preferred contractor for the estimated AED5bn contract to build the Coral island development on The World. Negotiations are continuing on this project, which covers 20 connected islands that form the continent of North America.

Several other major building awards have been made. Athens-based Consolidated Contractors International Company and the local Al-Shafar General Contracting have both won packages on the Jumeirah Heights development in the Jebel Ali area.

Nakheel, like other developers such as Dubai Properties and Emaar, is also moving ahead with major villa developments.

Dubai Waterfront will be a major source of new work for contractors in the coming years. At the start of the year, Nakheel revealed plans to award AED12bn worth of construction contracts on the project in 2008.

An award is expected at the end of the summer for several major building packages, together with infrastructure contracts for a road network with four interchanges.

More awards are also expected on the Palm Jebel Ali, now part of the Waterfront development. Tenders are expected soon for the landmark bridge to connect the reclaimed island with the mainland. It involves the construction of a 450-metre-long bridge.

An award is also expected soon for two desalination and wastewater treatment concessions serving the Waterfront and Palm Jebel Ali.

The largest awards expected in the second half of this year are for the Dubai Promenade project on reclaimed land at Dubai Marina. The contracts involve the construction of a donut-shaped five-star hotel and commercial and residential towers.

Nakheel is also expected to launch its tall tower project later this year. With a planned height of 1,400 metres, the tower will be one of the largest projects in the world.

Table: Nakheel awards, 2008

ProjectContractorEstimated value (AEDm)Date awarded (all 2008)
Waterfront housingMammut Group500January
Waterfront bridgesSamsung Corporation250January
Waterfront quay wallDutco Balfour Beatty160January
Village CentreSamsung Corporation5,000March
Al-Furjan infrastructureKhansaheb Civil Engineering900April
Waterfront villasAl-Jaber Group2,000May
Jumeirah HeightsAl-Shafar General Contracting1,000May
Jumeirah HeightsConsolidated Contractors International Company1,000May
Al-Furjan VillasArabtec Construction3,000June
Trump International Hotel & TowerAl-Habtoor Engineering Enterprises; Murray & Roberts Contractors2,900June
Jumeirah Park VillasNurol Group1,000June
Al-Furjan VillasAl-Shafar Transport600July
Port Rashid dredgingRoyal Boskalis Westminster; Dredging International2,200July
Coral IslandAl-Habtoor; Murray & Roberts Contractors5,000In negotiations
Source: MEED

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