Special Report: Construction - Contract awards raise hope in the Gulf

27 January 2010

The outlook for the region’s construction sector in 2010 looks mixed. The Gulf’s major economies, such as Saudi Arabia and Abu Dhabi, are surging out of the financial downturn, but $575bn worth of projects remain on hold across the GCC

In the former, a number of large construction projects are close to reaching the main contract award stage. In cash-rich Abu Dhabi, the government’s multi-billion-dollar tourism and real estate investment programme will keep contractors busy.

However, construction projects worth $575bn are currently on hold across the GCC – a legacy of the global financial crisis that gripped the region in late 2008 and spread panic among Gulf contractors.

More than 80 per cent of these projects are in the real estate sector, and a massive 92 per cent of those are in Dubai, where real estate firms are in limbo as they struggle to repay debts while completing projects that are already under construction. Dubai will not be ready to absorb any more new real estate developments for years to come.

Despite the emirate’s woes, with $299bn worth of Gulf construction contracts now at the bidding stage, 2010 looks more promising for the region’s construction firms than 2009. While a return to the heady days of the 2003‑08 boom is unlikely, this year will -provide a much stronger, steadier stream of contract awards for contractors.

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