Contractors look overseas for work due to downturn at home
Five years ago, Spanish companies were small players in the regions construction sector. A few companies had made inroads, such as OHL on Sidra Medical Centre in Qatar, but that contract was the exception rather than the norm.
That all changed on 28 July when Spains FCC Construccion, as the leader of an international consortium, signed the contract to build Lines 4, 5 and 6 of the Riyadh Metro scheme.
The $7.82bn deal is the largest international construction contract ever secured by a Spanish company and is the culmination of a drive from Madrid to expand its international business in the wake of the financial problems in Spain and the broader Eurozone crisis.
The [economic] situation in Spain is not so good so we have had to push abroad, says Miguel Jurado, head of FCC Construccion. Today, we have 50 per cent of our work overseas, in the coming years it will be 70 per cent. The two main areas for us are Latin America and the Middle East.
FCC still wants more work in the Middle East. It is currently prequalified for a number of projects in the region. It is preparing to bid for Sheikh Khalifa Medical City in Abu Dhabi in joint venture with the local Commodore Contracting Company and the local Drake & Scull International. The closing date for the tender is 21 August. FCC formed an alliance with Commodore for UAE projects in 2011. The alliance is similar to an agreement the Spanish contract has with Petroserve for projects in Qatar as it gears up for footballs Fifa World Cup in 2022.
These new projects will add to FCCs existing orderbook. In Algeria, it won a $1.7bn contract to build a second railway line with local construction company ETRHB Haddad. The second railway line involves building a 66-kilometre track that will run from Tlemcen to Akkid Abbas, which is a town on the border with Morocco.
FCCs subsidiary company Aqualia is also working in the region. In 2011, it won a $37m contract with National Water Company (NWC) to manage water network leaks in Riyadh. Leakages are a major problem in Saudi Arabia because the cost of producing water is high.
In the UAE, Aqualia won a $100m contract in 2012 with Abu Dhabi Sewerage Services Company (ADSSC) to manage the sewage and water treatment system in Al-Ain to Aqualia and its joint venture partner the local Mechanical & Civil Engineering Contractors Company (Mace).
Click here for more details and images of development plans for the Riyadh metro
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