If all goes to plan, Abu Dhabi will award an estimated AED10.6bn ($2.9bn) contract to a consortium led by Turkey’s TAV Construction by the end of June.

The deal, which covers building the new midfield terminal at Abu Dhabi International airport, will be the largest construction contract ever awarded in the UAE. This is no mean feat in a market that is renowned around the world for ambitious megaprojects.

While the award will be a major event for Abu Dhabi, since the emirate needs a modern terminal for its carrier Etihad Airways, it will also demonstrate that Turkish contractors can compete for the largest schemes the region has to offer and, more importantly, can win them.

Turkish companies enjoy sharing a common culture and history with most of the Middle Eastern countries

Yusuf Akcayoglu, TAV Construction

Over the past five years, Turkish firms have secured more than $17bn-worth of contracts on some of the largest construction schemes in the GCC. The deals include the $2.1bn contract secured by Yapi Merkazi for work on the Haramain High-Speed Rail Network in Saudi Arabia, STFA’s $870m contract for work at Oman’s Duqm port, and Baytur’s $800m contract for work at King Khalid University in Saudi Arabia.

TAV success in the Gulf

TAV has already enjoyed considerable success in the GCC construction sector. The firm has been a dominant player in airport construction contracts over the past year, picking up the maintenance hangars at Jeddah airport and the upgrade of Medina airport. These successes join two other major projects the company is still working on: New Doha International Airport and Muscat International airport.

According to regional projects tracker MEED Projects, there have been $37.6bn-worth of airport construction contracts awarded across the region since the start of 2007. TAV tendered for $16bn of them and secured just over $4bn-worth of work, a value that will be increased by more than half again with the award of the midfield terminal.

“There is no doubt the Middle East is the prime market for TAV Construction and our focus has always been there since our first overseas job, the Emirates’ hangars in Dubai in 2004,” says Yusuf Akcayoglu, Gulf regional director of TAV Construction.

Although TAV is a relative newcomer to the region, the Middle East is not a new market for Turkish firms. Their modern history in the region can be traced back to the 1970s, when contractors began to focus on international projects. The former Soviet Union was the primary focus, but the markets of Saudi Arabia and Libya were also developed, and over time Turkish contractors established a strong presence in these countries. Baytur, for example, began working in Libya in 1979, and in Saudi Arabia in the early 1980s.

For Turkish contractors the regional market is a great opportunity to showcase their work globally

Yusuf Akcayoglu, TAV Construction

In the Middle East, Turkish firms can leverage longstanding cultural ties to their advantage. “Turkish companies enjoy sharing a common culture and history with most of these Middle Eastern countries,” says Akcayoglu. “This cultural similarity, accompanied by the geographical proximity is a competitive advantage for Turkish contractors as both sides can understand each other despite not speaking the same language. Had they talked the same language, the volume of work would have been even greater.”

Since those early days in the late 1970s and early 1980s, the regional construction market has grown significantly. The growth has been most acute in the GCC, where hydrocarbon-rich governments are seeking to establish themselves as a new link between the East and the West by building new ports, airports, financial centres and tourist destinations.

Straddling Europe and Asia, contractors from Turkey understand this geographical dynamic better than most. Many have been keen to look for work in the Middle East and most have been successful over the past five years.

The Middle East: A vibrant market

The Middle East market is more vibrant than other parts of the world due to the economic focus shifting towards the East, driven by China and India. Middle East countries are benefiting from this global shift due to the advantage of their geographical location. Regional governments are making long-term investments, especially in large infrastructure projects and real estate, to position themselves for this shift.

As the migration of work has gathered momentum, the influence of Turkish firms in the region has grown. Since 2007, companies from Turkey have steadily been winning more contracts. Unlike their South Korean counterparts that have dominated the energy and power projects markets, Turkish firms have concentrated more on government-backed infrastructure schemes, which have continued to move ahead with the financial backing of hydrocarbon-rich governments, despite the global economic downturn.

In 2011, Turkish contracting companies had a bumper year. They secured more than $6bn-worth of contract awards across the region, almost triple the value of the work they were awarded in 2010. This year, that performance looks set to be repeated. So far in 2012, Turkish firms have won $2.4bn in contract awards. If TAV’s $2.9bn deal for the midfield terminal is added to that, the number reaches $5.3bn, just $700m off 2011’s total.

Since the start of 2007, seven Turkish firms have won contracts totalling more than $1bn. TAV has been the most successful, with $4.3bn-worth of awards, followed by Yapi Merkazi with $2.9bn-worth of awards. Other companies that secured more than $1bn during the five-year period are Tekfen, Baytur, STFA, Mapa and Yuksel. Enka missed out on crossing the billion-dollar mark with $999m-worth of awards.

Highly competitive

Turkish contractors have had to work hard for their successes, and competitors and consultants working in the region say they can be very aggressive when it comes to pricing new work. “I have dealt with a few tenders that have been won by Turkish firms,” says a Dubai-based cost consultant. “Their pricing was very competitive, which made them tough to compete with.”

For bidding firms, it is worth taking risks for the opportunity to work on world-class projects in the region. “For Turkish contractors the regional market is a great opportunity to showcase their work globally,” says Akcayoglu. “The winning and realising of projects under fierce competition and where world-class practice is encouraged, accompanied by tremendous quality and health and safety requirements, offers them the chance to become players in the global industry.”

Turkish contractors should continue to do well in the future. Their focus will be on GCC countries for the short-to-medium term, as political instability stunts the progress of schemes in the Levant and North Africa. That must change with time, and once stability returns to markets such as Libya, Turkish firms will be keen to re-establish and strengthen their ties with the rest of the region.