CONSTRUCTION

With contractors
reporting a
drop-off in
tendering activity
in Dubai, long-
term project
plans offer
comfort to the
emirate’s
construction
sector

Focus turns to post-Expo projects

C
ontractors working in Dubai
have long expected a drop-
off in new work opportuni-
ties as the opening of Expo
2020 nears.
The theory is that as October 2020 ap-
Colin Foreman proaches, developers will not start work
on new projects as they will not be ready
Follow ‘@MEEDColin’
on Twitter and stay for the Expo. After a solid year of awards
informed on the in 2018, this appears to be becoming a
latest in the region’s reality in 2019, with major contracting
construction industry
companies saying there has been a signifi-
cant decline in the volume of new tenders
issued by clients in Dubai.
While some major projects are still
being tendered, notably the substructure
for the West Terminal and Concourse 1 at
Al-Maktoum International airport, this is
concerning for the construction sector’s
long-term fortunes, especially as projects
continue to be completed.
With less work on the horizon, contrac-
tors will be expecting reduced revenues
and, as a result, will cut costs by shed-
ding resources. Given that construction
activity accounts for up to 30 per cent
of Dubai’s economy, this will be a major
macro challenge.
Dubai is making moves to provide clar-
ity on what projects will follow the Expo.
The latest came on 7 January when UAE
Vice President, Prime Minister and Ruler
of Dubai Sheikh Mohammed bin Rashid
al-Maktoum approved an expansion to
Dubai International Financial Centre that
will triple its size with new office, retail,
residential and creative space.
While projects such as these will not be
tendered immediately, they give comfort
to the construction sector as it ponders
its long-term future.
Colin Foreman

MEED Business Review / 71

 Business Outlook

UAE
MEED online
EXCLUSIVE: Kuwait
moves airport project
Dubai approves plans to
management bids
deadline. Read more at
www.meed.com/
triple size of financial centre
kuwait-airport-
project-management
Expansion will be delivered in phases on a new
parcel of land next to the existing DIFC area

U
AE Vice-President, Prime
Minister and Ruler of
Dubai Sheikh Mohammed
bin Rashid al-Maktoum
has approved plans to
triple the scale of Dubai International
Financial Centre (DIFC).
Based on renderings released by the
government, the expansion, known
as DIFC 2.0, will be located across
from the existing DIFC area on land
in Zabeel that is currently a racetrack
for horses.
The project will be delivered in
phases. Once complete it will add about
1.2 million square metres (sq m) of
space to DIFC. That space will comprise
590,000 sq m of office space; 240,000
sq m of creative space; 140,000 sq m of
residences; 120,000 sq m of retail; and
65,000 sq m for leisure.
There will also be a 37,000 sq m
financial campus, 23,000 sq m of hospi-
tality and 325,000 sq m of car parking.
In a statement, the government said
the new development will provide an
international focal point for FinTech
and innovation. It added that there are
currently more than 22,000 profession-
als working across 2,000 companies
in the district.
Colin Foreman

UAE

Roads & Transport Authority

STATUS OF RTA
tenders Deira road bridge
PROJECTS Dubai’s Roads & Transport Authority
% has invited companies to bid for a
contract to build the next section of the
Shindagha corridor scheme. The con-
tract, known as 2D, involves building an
elevated flyover with precast concrete
$49.1bn segments in the Deira Corniche area
close to the Hyatt Regency hotel.
Prospective bidders include:
■ Al-Naboodah Contracting Company
(local)
Complete 37.4 ■ Bel Hasa Six Construct (local/Bel-
Execution 18.1 gium)
Pre-execution 31.9 ■ China State Construction Engineering
On hold 2.2 Corporation (China)
Cancelled 10.4
■ DBB Contracting (local)
Source: MEED Projects ■ Gunal Mapa (Turkey)
■ Wade Adams (local)
■ SaliniImpregilo (Italy)
The new bridges are part of the larger
Shindagha corridor scheme that will
overhaul the road network in Deira and
Bur Dubai.
US firm Parsons is the consultant.
Junction overhaul
Construction work started on the
scheme in 2016 when Wade Adams
was awarded the contract to overhaul
Sana junction in the Karama area. Wade
Adams Contracting was awarded anoth-
er contract in mid-2018 to build road
access bridges to Deira Islands.
Colin Foreman

72 \ MEED Business Review

LIBYA

Oil company seeks Short-term dominates

contractors for offices Saudi construction
A nervous private sector means Riyadh
The $600m
will directly develop projects itself
project will

S
include audi Arabia’s con-
buildings for struction market
the National faces a difficult
Oil Company 2019 as short-term
and the uncertainty takes prece-
Ministry of dence over confidence in
Oil & Gas the long-term future.
Construction compa-
nies and suppliers are
becoming increasingly
desperate for new work
as major ongoing pro-
jects – such as the Riyadh
Libya’s National Oil Company (NOC) has invited firms to
prequalify for the design and build of its estimated $600m
Metro – are completed.
While many new pro-
Benghazi Business District. jects are planned, they
The deadline for submitted prequalification documents are not moving quickly
is the end of January and NOC expects to complete the enough into the construc-
prequalification process in February.
The project involves the construction of seven buildings
tion phase. This is largely
because Riyadh has spent
with a total built-up area of about 130,000 square metres the past three years
(sq m) built on a 60,000 sq m site in the Juliana Area rethinking how projects
of Benghazi. are delivered.
The centrepiece of the project will be a headquarters The first part of this
building known as the Diamond for NOC that will have a process has involved
built-up area of 30,000 sq m. setting up programme
There will also be buildings for the Ministry of Oil & management offices at
Gas, Brega Marketing Company and a branch of Central government entities to
Bank of Libya, as well as office space for international oversee capital expend-
oil companies. iture projects. This will
support the second part
Additional elements of the kingdom’s strategy,
Other facilities include a convention centre, a 250-room which is to use the private
hotel, a health centre and a mall, as well as a large cov- sector to deliver projects.
ered square with restaurants, cafes and shops, car parks The challenge is
and outdoor spaces. Construction is expected to take convincing the private
24 months to complete. sector to move ahead with
Italy’s Artelia is the consultant. projects. In late 2018,
Libya’s project market has slowed following the fall of many companies were
Muammar Gaddafi in 2011. According to regional pro- preoccupied with the
jects tracker MEED Projects, the majority of the country’s news headlines and grew
$2.4bn of projects are on hold. increasingly uncertain
Colin Foreman
about the Saudi econo-
my’s short-term outlook.
Consultants working
on early planning and
feasibility studies in the
kingdom say most pro-
posed projects are being
put on hold as companies
wait to see how the mar-
ket develops over the next
one or two years.
$551bn
Construction projects
planned in the kingdom
$12bn
Construction contracts
awarded in 2018
With the private sector
likely to remain nervous,
the government and its re-
lated companies will start
developing projects them-
selves. Contractors are
already being approached
to fast-track projects,
with little programme
management oversight or
PPP involvement.
Revisiting old ways of
delivering projects will
give construction firms
new work opportunities,
but is a departure from
what has been planned in
recent years.
Colin Foreman

MEED Business Review / 73

 Business Outlook

SAUDI ARABIA FURTHER READING

Seven announces location of Read more

first entertainment destination

construction news
on www.meed.com/
construction
The Public Investment Fund subsidiary has projects that
are expected to serve 50 million visitors a year by 2030 Contract for Dubai’s
Uptown tower awarded

S
Dubai Multi Commodi-
audi Entertainment Ven- more than 22,000 direct jobs, and con- ties Centre has award-
tures Company (Seven), a tribute SR8bn ($2.1bn) to the kingdom’s ed the local/Belgian
wholly owned subsidiary of GDP by 2030. Belhasa Six Construct
the Public Investment Fund the contract to build
(PIF), says it will launch its Cinema deal a mixed-use high-rise
first entertainment destination in Riyadh The company has an agreement with tower at its Uptown
on the Eastern Ring Road at the intersec- US-based AMC to operate cinemas in the Dubai development.
tion with King Abdullah Road. kingdom. Seven and AMC expect to open
The project will be developed on about 30-40 cinemas in 15 cities across Saudi SIAC wins contracts
100,000 square metres of land and will Arabia over the next five years, and 50- for new Egypt capital
include a variety of entertainment spac- 100 cinemas in approximately 25 Saudi Local SIAC Construc-
es, including cinemas and areas for live cities by 2030. Seven appointed former tion has won two deals
shows, sports facilities, and green and Walt Disney Company executive Bill for buildings in Egypt’s
open areas. There will also be restau- Ernest as its CEO last year. new capital city. The
rants and cafes. PIF is also planning an entertainment first is for the Central
Seven was established by PIF in De- city on the outskirts of Riyadh in the Library, and the second
cember 2017 and has a range of projects Qiddiya area. Last year it entered into an is for a bank adminis-
planned across the kingdom. PIF says it agreement with the US’ Six Flags to build trative building.
expects Seven’s projects to serve more a theme park within the development.
than 50 million visitors a year, provide Colin Foreman Egypt receives
tramline design bids
Egypt’s National
SAUDI ARABIA Authority for Tunnels
has received bids for
Rail deal focuses on feasibility study the design and super-
vision works contract
The memorandum of understanding specify the scope of the MoU reached for the rehabilitation
(MoU) signed in October by Saudi between SAR and CCECC. of the Raml tramway
Railway Company (SAR) and China The October announcement came a few in Alexandria.
Civil Engineering Construction Com- months after SAR officials told a con-
pany (CCECC) to implement the Saudi ference in Dubai that the tender for the Chinese firm mobilises
Landbridge project first involves under- scheme, which was to be procured as a for maritime project
taking a financial feasibility study for public-private partnership, was due to be China’s Sepco is mobi-
the $10bn rail scheme. issued in the last quarter of 2018. lising teams to execute
According to sources familiar with the The Saudi Landbridge will link Jeddah three packages for the
project, the deal does not yet include the on the Red Sea with the capital Riyadh. King Salman Internation-
design, build and operation phases of the Italian engineering design firm Italferr al Complex for Maritime
railway scheme. and its local partner Arabian Consulting Industries & Services
The official Saudi Press Agency (SPA) Engineering Centre completed the design facility in Saudi Arabia’s
said in October that the value of the for the Saudi Landbridge project in 2017. Ras al-Khair region.
railway project is $10.6bn. SPA did not Jennifer Aguinaldo

74 \ MEED Business Review