High profile project announcements and frantic tendering have cast a fog over Dubais construction market that has conveniently hidden the fact that 2015 has been a bad year for contractors when it comes to securing new orders.
Unlike the meteorological version, Dubais project fog has been nice to look at. Renderings for new projects such as the new Atlantis Resort on the Palm Jumeirah, the One Zabeel tower at the World Trade Centre, and the Museum of the Future next to Emirates Towers all promise to put Dubai back on the global stage when it comes to delivering iconic projects.
Unlike 2014 when the leading contractors all secured new orders, falling property prices and lower oil prices have resulted in nervous clients that have been slow to commit to the capital expenditure plans and award construction deals. This is not an immediate problem for contractors that are still busy executing work secured in 2014, but as firms start planning for next year there will be concerns about the pipeline for 2016, and that will put extra emphasis on the hunt for new work.
There are signs that this will not be a futile exercise. Despite the summer traditionally being a slow period for contract awards, local developer Emaar Properties has awarded the estimated AED900m ($245m) contract to build the Hills development to Athens-based Consolidated Contractors Company (CCC).
The project, which involves building a common podium with six towers, is one of the largest construction contracts awards in Dubai this year. Construction companies will be hoping that the award demonstrates that the fog has lifted and clients now have the confidence to start awarding major contracts again.