Abu Dhabi: a falcon's view

Many contractors have shifted focus to Abu Dhabi, as the flow of construction work in the UAE capital has progressed with confidence. CW looks at the prospects across the emirate as it goes public with its development plans.

Speaking to Construction Week at the launch of the Nation Towers project in Abu Dhabi ealier this month, Arabtec CEO Riad Kamal said:“Construction is a cyclical activity, a supply and demand equation.We are going through a cycle where the activity has declined, but I’m hoping we will come out of that by the end of this year – there’s certainly more work in Abu Dhabi.”

A telling comment from the boss of the UAE’s largest construction conglomerate. Abu Dhabi has fared better than most GCC states in the face of the construction slowdown. A controlled approach to development has paved the way for the flow of construction contracts to continue unabated.

This was most clearly expressed by the approach of the Government of Abu Dhabi at Cityscape in April. A raft of public sector projects were announced, which will bring with them much needed work for GCC contractors.

Further, the emirate has repeatedly indicated its commitment to sustainable development, which itself spells construction opportunities. The Abu Dhabi surface transport master plan, a vital facet of the push towards sustainability, is set to be rolled out over the next two decades.

And the ongoing Masdar City project, which former UK prime minister Tony Blair called a “clarion call of progress” at February’s Future Energy Summit in Abu Dhabi, is a further sign of the government’s sustainability commitment, and its will to maintain its place in the global energy pecking-order.

The emirate is already blessed with a generous helping of natural resources, in the forms of oil and natural gas, with the substantial income from each being ploughed back into development projects in order to diversify the economy of the emirate, which spells further work for the construction industry.

With Abu Dhabi looking to secure its place on the international stage of sustainable development, CW looks at each of the emirate’s three regions.

Abu Dhabi City
The Capital City District was announced at this year’s Cityscape Abu Dhabi, billed as a “once-in-a-lifetime opportunity” to create a modern Arab city. Work is scheduled to start on the 49km² site on the edge of Abu Dhabi City in 2012 which, once completed, will serve as the government and economic centre of the UAE.

Close to Abu Dhabi International Airport and Mohammed bin Zayed City, it will be a sustainable, mixed-use city for 370,000 residents, along with federal government buildings, universities, hospitals and embassies.
 

The Al Faleh project was also announced at Cityscape Abu Dhabi. It will include 5000 new homes for middle-income
UAE families, worth US $2.6 billion (AED9.4 billion).
 

Aldar Properties, one of the emirate’s largest real estate developers, is overseeing construction of the fully government-funded project.

Work also continues to flow in the private sector. International Capital Trading, a privately funded developer, is overseeing the $436 million Nation Towers project on the Abu Dhabi corniche, which last month was awarded to a joint venture between Dubai-based Arabtec Construction and Abu Dhabi-based National Projects and Construction.

The flow of work does not end there. “We are also short listed for another two projects in Abu Dhabi valued at $817 million,” Arabtec boss Kamal revealed. Announcements on the projects are expected soon.

So how is the city achieving its success? Much is due to the attractive investment climate that the government has been able to create.

“Abu Dhabi has already put forward and communicated its own initiatives,” said Victory Heights general manager and Arcapita investment director Yasser Abdulla.

Al Gharbia
Also known as the western region of Abu Dhabi, Al Gharbia is the engine room, not of Abu Dhabi, but of the nation. It sits upon 10% of the world’s proven oil reserves and 4% of its natural gas. It is the fourth largest oil exporter in the world by volume, shipping over 2.3 million barrels per day.

The region generates 40% of the Emirate’s gross domestic product. The Urban Planning Council (UPC), the supreme planning body for the Abu Dhabi emirate, has big plans for Al Gharbia.

Plan Al Gharbia 2030, jointly organised by the UPC, the Western Region Development Council, and the Western Region Municipality, is in the production process.

“Settlements anticipating significant growth will be the first to undertake detailed physical framework plans,” the UPC’s preliminary Plan Al Gharbia 2030 report said.

The region is home to seven major settlements, and basic plans have been drawn up for each. The regional capital, Madinat Zayed, is home to 29,000 people. Proposed projects for the city include a major residential development, a solar power facility and a number of government and civil defence projects.

The settlement of Mirfa, home to just 15,000 people, will also provide many opportunities to the construction sector. It went on to highlight a number of pipeline projects, including sports centres, a maritime centre, a grand mosque, a police department, a nitrogen plant and a hotel expansion project.

Al Ain
Plans for Al Ain, the eastern region, are at a more advanced point. Contracts will be rolled out under the plan as of the fourth quarter of this year, beginning with the construction of villas and basic infrastructure. See construction week magazine for a detailed look at Plan Al Ain 2030.

Outlook
The government’s long-term economic diversification plans are resulting today in construction contracts, and work is measured against the factors of supply and demand to maintain sustainable growth and avoid over-development.

US-based project management firm Hill International has been operating in Abu Dhabi for 25 years, and was project manager on the city’s recently completed Grand Mosque. Chairman and CEO Irvin Richter remains positive. “Countries in this region are more resilient than others,” he said. “Abu Dhabi has withstood the downturn well.”

Last year, Richter said, a third of the firm’s global business was done in the Mena region. Yet he remains realistic. “I think it’s going to be a tough year for the Middle East,” he said. “I’d be looking at 10% to 15% growth for us in the region for this year.”

Projections of growth in the middle of a global construction downturn say much for the region. Projects are in the process of being awarded today, and there are many more around the corner. As the UAE national capital, Abu Dhabi is leading the way forward. If you haven’t done so already, it is time to jump aboard.