Six of the best: projects to keep an eye on

David Ingham , February 8th, 2010

Although many freehold residential projects across the region are ‘on hold’, regional governments are continuing to commit money to infrastructure and other public projects.

Saudi Arabia, for example, has allocated a reported US $36.5 billion of its US $144 billion (SR 540 billion) 2010 budget to education, including construction work on new institutions and premises already under construction. US $3.17 billion has been set aside for construction of 6400 kilometres of roads.

In Dubai, where many freehold residential projects remain in limbo, the Road & Transport Authority has allocated US $2 billion for project development. The money will cover around 129 jobs, 13 of which will be new.

In Kuwait, the government has proposed an ambitious US $125 billion five year spending bill. Amongst the plans awaiting funding are Silk City, a new town whose blueprint includes the world’s tallest tower; a new container harbour and 25km causeway; a railway and metro system; and Project Kuwait, a complete overhaul of oil production infrastructure.

The bill still requires a second reading in the country’s parliament, which has a history of opposing the government.

The bottom line is that work is still out there, but it may be in a different place and different in nature to what has gone before. Here, we look at six ‘mega’ projects that are active and handing out contracts, or are set to begin picking up steam.

1 Abu Dhabi International Airport
Developer: Abu Dhabi Airports Company
Description: The Abu Dhabi International Airport expansion will increase the airport’s capacity to 20 million passengers per annum. Work on the expansion of the airport began in 2005 and is scheduled to finish by 2015.

The centrepiece of the project is the Midfield Terminal Complex, which will serve as the base of operations for Etihad Airways, the national carrier of the UAE. The terminal will sit between two operational runways. The opening of the terminal is scheduled for early 2015.

In January 2010, the Supervision Committee for the Expansion of the Abu Dhabi International Airport invited contractors to ‘express interest’ in the main Midfield Terminal Building package. Pre-conditions for expressions of interest included annual turnover of US $5 billion and ‘successful completion’ of five similar projects in the last ten years, two of which must be worth more than US $1 billion.

Several construction tenders are listed as pending, including ‘Airport wide Utilities & Infrastructure’ and ‘Police Fixed Wing Apron’. Pending design tenders cover maintenance facilities, a cargo campus and duty free facilities.

2 Princess Noura bint Abdulrahman University for Women
Developer: Ministry of Finance and Ministry of Higher Education
Description: The university will cover a reported 8 million m² and will have a total built up area of around 3 million m². It will have administration and faculty buildings, a 700-bed student hospital, laboratories, research centres and residential buildings. It will also have its own light railway system.

Saudi Oger was awarded the first and most valuable construction package worth SR12.5 billion; Saudi Binladin Group and El-Seif Engineering & Contracting won subsequent packages valued at SR10 billion and SR8 billion respectively. The contracts cover the majority of construction on site, including low-rise faculty buildings, infrastructure and associated works.

A fourth package, valued at SR1.5 billion, covering an 11-km monorail network to link the facilities, was awarded to a consortium led by Saudi Binladin Group and Ansaldo STS and AnsaldoBreda, part of Italy’s Finmeccanica Group.

Saudi Binladin Group has awarded Vision Electro Mechanical Company an SR1.31 billion (US $349mn) MEP sub-contract.

Next: Haramain High Speed Railway Project and South of Shamkha

3 Haramain High Speed Railway Project
Developer: Saudi Railways Organisation
Description: Five companies were given until the end of January this year to submit their technical proposals for Phase 2 of the Haramain High Speed Railway Project linking Makkah and Medinah. The shortlisted companies were Saudi Binladin Consortium (German); Al Rajhi Consortium (French); Al Shoula Consortium (Spanish); Badr Consortium (Korean) and CSR Consortium (Chinese).

This package covers the construction of tracks, signals, communications infrastructure and the operational control centre. It also includes the procurement and maintenance of trains and maintenance of all infrastructure for 12 years.

In February 2010, Saudi Railways Organisation is due to release tender documents for the construction of stations along the 450 km line. This tender forms part of Phase 1 Package 2; Fosters and Buro Happold has designed the stations.

Phase 1 Package 1, which covers civil works along the 450km route, was awarded to the Al Rajhi Alliance in 2009.

4 South of Shamkha
Developer: Abu Dhabi Centre for Housing and Service Facilities Development
Description: South Shamkha is an AED 10 billion ‘new town’ that will contain around 10,000 villas for nationals as well as parks, retail & entertainment facilities and public services. Spread across a reported 43 km² and located around 50km from Abu Dhabi city, it will house up to 200,000 people.

KEO drew up the project masterplan and Idroesse is the project management company. Ground preparation work at South Shamkha is already underway, with Tristar Contracting and Bin Nawi Contracting known to be involved.

Infrastructure tenders are currently in the market and bids are likely to be evaluated before the end of this quarter. Infrastructure work will include the construction of main and internal neighbourhood roads, street lighting and signals, drainage systems, sewage networks and telecommunications infrastructure.

It is still unclear whether Abu Dhabi Centre for Housing and Service Facilities Development will hand over ready-to-build plots to Emirati owners, or will provide finished units.

Although South of Shamkha is the largest single social housing project in the works in the UAE, others are underway and planned. A total of 17,000 houses will be built at more than 20 locations across the country over the next five years.

Next: Saadiyat Island and Pan-UAE Railway

5 Saadiyat Island
Developer: Tourism Development & Investment Company
Description: Tourism Development & Investment Company (TDIC) is overseeing the transformation of Saadiyat, an island off the coast of Abu Dhabi, into an international cultural destination. The development is made up of seven components and includes Guggenheim and Louvre museums, a golf course, a marina and residential areas.

In January this year, master-developer TDIC sought expressions of interest for a number of different jobs on Saadiyat Island. These included enabling works in the marina, a piling job for the Guggenheim Museum and a luxury villa construction contract at the golf course.

Approved bidder lists for these jobs will be drawn up and bids invited in the next few months. One more job that will definitely be coming up later this year is the main construction contract for the Frank Gehry-designed golf clubhouse. The 18,000 m² property will be design-led, include hotel rooms and restaurants, and has been designed to meet Abu Dhabi’s ‘Estidama’ sustainability guidelines.

6 Pan-UAE Railway
Developer: Etihad (Union) Railway
Description: The timeframe for this one is still be firmed up, but there is no doubt that the will to build a pan-UAE railway is there. Etihad Union Railway was created last year with a brief to build a national railway with around 1100 km of track with an estimated development budget of AED 25-30 billion.

It will connect the principal centres of population and industry in the country and will link into the planned GCC railway network. The railway will run at speeds of between 80 and 120 kilometers per hour for freight transport, and between 160 and 200 kilometers per hour for passenger transport.

The railway will connect Ghuwaifat on the KSA border with towns in the East on the borders of Oman. Inland areas such as Madinat Zayed and Liwa will be connected on the basis of economic need. The company is talking to Adnoc about carrying granulated sulphur from the Shah and Habshan oil and gas fields to the Ruwais petrochemicals complex.

A combination of government funds, bank loans and bonds will pay for the construction of the railway. In public statements, the end of 2010 has been given as the date for the first tenders to be floated.