Skeletons on the skyline
Partially-completed buildings a stark reminder of economic misfortune
Steven Hunt, regional head of construction and engineering at Al Tamimi, said recently: “It only takes a look at the skyline of Dubai to realise the extent of the problems that lie ahead. There is a significant number of partially-completed buildings, most of which you see no obvious sign of construction activity on.”
It is important that the construction industry, in tandem with the legal profession and other interested parties, address this issue, especially as such stalled projects are being seen as a symbol of Dubai’s recent economic woes.
“Developers will be under some pressure to resume projects, and inevitably some of these skeletons that are blots on our landscape will never see completion,” said Hunt.
Having said that, it could be a bit late in the day for some developers to be looking at the structural integrity of stalled projects if they have neglected to do so up to this point in time.
Hunt offers some blunt advice for this situation: “The construction risk associated with continuing and completing these projects is probably too great, and they might as well think about demolishing and starting from scratch.”
You could hear a pin drop in the room when Hunt said those words. A lot of people in the construction industry have been talking about this issue ad hoc, but this was the first time I personally had heard anyone of any standing giving such stark advice.
Surely it would be hugely detrimental to the image of the construction industry, and Dubai itself, if it embarked on deconstruction?
At the end of the day, of course, it all revolves around money. Developers faced the initial problem of persuading contractors to come onboard and assume the legal risks associated with such projects.
Other entities such as the relevant local authority will have to get involved in terms of approving the re-engagement of the contractor. This will be necessary in authorising the recommencement of the construction works. Reports will have to be obtained from developers about the structural integrity of such projects.
Developers themselves will have to splash extra cash on site inspections and even redesign, especially if the building’s end use is to be changed. They will need to spend extra on insurance and local authority permits, and perhaps most significantly, the cost of remedying the defects of deteriorated building works.
“I think that with the construction market as it is now, which is pretty flat, my suspicion is there are contractors out there who are probably keen to take on this work at the right price,” said Hunt.
Should developers throw money at stalled projects in this climate? These are difficult and emotive issues that elicit a wide range of responses from the construction industry, for which such projects are essentially its lifeblood. Whatever happens here in Dubai will provide valuable lessons for the construction industry in the rest of the region.