UAE resurgence boosts Gulf projects market

25 April 2011

Real-estate developers’ commitment to drive projects forward raises Gulf index for first time in two months

Contract awards

Biggest contract: $1.05bn

Awarded to South Korea’s Hanwha to build the Yanbu 2 power and water plant in Saudi Arabia.

$3.41bn: Value of major contract awards

6: Number of contracts awarded

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The total value of projects planned or under way in the Gulf increased for the first time in almost two months. The change is mainly attributed to real-estate developers in the UAE attempting to move ahead with large projects put on hold during the recession.

The total value of projects planned or under way in the Gulf rose by 0.7 per cent to $2.5 trillion for the week up until 26 April.

Project updates
 Project NameProject Status
UAEGhantoot Green CityDesign
UAEDubai Waterfront: Veneto District VillasConstruction
IraqFourth Oil & Gas Licensing RoundPlanned
UAEHassyan IPPPrequalified
OmanAluminium Rolling MillConstruction
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The $15bn Ghantoot Green City mixed-use scheme in Abu Dhabi has rejoined the projects index after the developer announced it was in talks with planning authorities about proceeding with the 60-square-kilometre project. This resulted in the UAE’s projects index increasing by 2.5 per cent.

Kuwait was the only other GCC state to record a significant rise in the value of projects planned or underway. The state’s index rose by 0.3 per cent as it launched new projects worth $1.1bn.

Despite an overall increase in the Gulf projects index, the current political unrest is still having an impact on the region’s markets.

Upcoming tender deadlines
 ClientContractSubmission date
UAEEtihad Rail CompanyCivil engineering work18 May
Qatar                  Public Works Authrity (Ashghal)Lusail Expressway 23 May
Saudi ArabiaGeneral Authority of Civil AviationMedina Airport5 Jun
KuwaitHealth MinistryAl-Amiri hospital7 Jun
UAEAbu Dhabi Airport CompanyMidfield Terminal10 Jul
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The continuing uncertainty in Bahrain resulted in its projects index falling by 0.2 per cent. The total value of projects planned or under way in the kingdom has fallen from $80.6bn on the 1 March to $66.7bn as a result of uncertainty in the market.

Oman, which has also been affected by protests, recorded a 0.2 per cent drop in its projects market as a $200m solar power project was put on hold.

Outside the GCC, Iraq’s projects market recorded a 0.7 per cent increase, as a $2.5bn energy project was added to the index. Iraq maintains its position as the region’s fastest growing market with a 23 per cent year-on-year increase.

As a result of continued uncertainty in the market, the Gulf’s index is down by 13.5 per cent on the same period last year.

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