Dubai contract awards drop in 2018
Contractors and consultants say there are less new work opportunities when compared with previous years
The total value of contract awards in Dubai during 2018 is due to register a significant drop when compared with the total registered in 2017.
According to regional projects tracker MEED Projects, there were $23.8bn of contract awards in the emirate up until 17 December. With two weeks to go until the end of the year, this is about 22 per cent less than the $31bn of deals let in the full year of 2017.
The drop in awards also reflects the sentiment expressed by many contractors and consultants that Dubai has not produced as many new work opportunities as it has in the past.
While the total value of awards has dropped significantly, the value of projects being completed has remained consistent. Up until 17 December, there were $14.7bn of projects complete in Dubai, down almost $1bn on the $15.4bn total for 2017.
While the difference between work awarded and work completed remains positive, the data shows the market is not growing as strongly as the net gain of projects being added this year is reducing.
For sectors, the most active for awards this year is construction, with $14.4bn of deals signed. The second-most active is power, with $6.4bn of awards, followed by transport, with $1.5bn of contracts inked. Unlike other projects markets in the GCC, the oil and gas industry plays only a small role, with just $170m of contract awards in 2018.
While construction is the most active sector, the largest awards came from the power sector. The largest contract signed this year is worth $3.8bn and was won by China’s Shanghai Electric for the engineering, procurement and construction (EPC) of Dubai’s first concentrated solar power (CSP) project.
The contract was let by Saudi developer Acwa Power, which was awarded the main developer contract for the CSP project by state utility Dubai Electricity & Water Authority (Dewa) last year.
The second-largest deal was a build, operate and transfer (BOT) contract for a waste-to-energy plant, secured by a consortium led by Belgium’s Besix and Switzerland’s Hitachi Zosen Innova.
Dubai Municipality awarded the 30-year contract, which is expected to require $680m-plus of investment.
Away from the energy sector, the largest construction deal was an estimated $353m contract won by the local Alec to build exhibition space for Dubai World Trade Centre (DWTC) at the Expo 2020 site.
Known as the Co-Ex Campus, it has been designed to host events and performances as part of the Expo, which starts in October 2020.
For 2019, the largest contract that is currently being tendered and due to be awarded is the estimated AED10bn ($2.7bn) substructure contract for Concourse 1 and the West Terminal building at Al-Maktoum International airport.
Dubai Aviation Engineering Projects (DAEP) has set a 6 January tender closing date for the project. Leading local and international contractors are preparing to bid for the deal, which is a crucial part of the $33bn expansion planned for the airport, and a key source of new work for the construction sector over the coming decade.