Mixed forecast for airport projects

Airport projects are continuing in spite of Covid-19, but the outlook for schemes under tender is now clouded with uncertainty

While Covid-19 has challenged the outlook for upcoming airport projects, the good news is airport construction projects that are already on site and at the execution stage are still proceeding.

“There has been disruption to construction work as we have had to introduce social distancing measures and medical screening for people working on site, but overall projects are proceeding largely as planned,” says an international contractor working on airport schemes in the region.

Significant sector

Airports account for a sizeable chunk of the regional construction market. According to projects tracker MEED Projects, there are $83bn of airport construction projects in the region, of which $16bn are at the execution phase, leaving $67bn in the planning, design and tender stages.

The largest projects under execution include work in Bahrain, Kuwait, Saudi Arabia, the UAE and the rest of the GCC.

At Bahrain International airport, a $1.1bn expansion is expected to open for business this year. Construction on the new terminal building has been ongoing for several years, with a joint venture of Dubai-based Arabtec Construction and Turkey’s TAV securing the contract to build the new terminal building in January 2016.

In Kuwait, a second terminal is being built at the international airport. The $4.3bn contract was awarded to Turkey’s Limak in 2016, with a target completion year of 2022.

Meanwhile, at Hamad International airport, a joint venture of local firm Midmac Contracting, Turkey’s TAV and Japan’s Taisei Corporation started construction on the expansion of the passenger terminal building in April this year.

The construction package includes the development of a 14-hectare terminal building connected to the existing terminal through concourse 3 with an axis, the central concourse building and early works.

A joint venture of Turkey’s Bahadir and the local UrbaCon Trading & Contracting and Tedeschia Construction Enterprises was awarded the western taxiway contract in late 2019. That package involves the construction of 39 aircraft stands.

The works are expected to be completed in May 2022, six months before the start of the Fifa World Cup.

Saudi airports

In Saudi Arabia, Riyadh’s King Khalid International airport is being upgraded. The SR2.2bn ($587m) renovation works contract for terminals 3 and 4 was awarded to a Turkish/local joint venture of IC Ictas and Al-Rashid Contracting in early 2017 and is expected to be completed in 2021.

Subsequent phases will entail redevelopment work for terminals 1 and 2.

Work is also due to start this year on smaller airports that will support the kingdom’s upcoming gigaprojects.

Earlier this year, The Red Sea Development Company received bids from contractors for the airside works for the Foster + Partners-designed airport serving its tourism development on the west coast of the kingdom. A tender for the landside works, including the terminal building, is expected later this year.

Another major airport project is the long-running Midfield terminal complex at the UAE’s Abu Dhabi International airport. The construction contract for the building was awarded in 2012 to a joint venture of Turkey’s TAV, Lebanon’s Consolidated Contractors Company and the local Arabtec Construction.

The project has been significantly delayed and costs have spiralled from the original contract value of AED11bn ($3bn).

The biggest upcoming project is Dubai’s Al-Maktoum International airport’s $33bn expansion

Bellwether schemes

The UAE is also home to two major airport projects that are at the tender stage, and the progress of those tenders over the next six months will signal whether governments in the region will remain committed to aviation and prepared to invest in additional infrastructure.

The largest future project is Al-Maktoum International airport’s $33bn expansion, for which early works have begun.

Dubai Aviation Engineering Projects (DAEP) awarded the enabling works contract for Concourse 1 and the West Terminal building and car parks to local firm Tristar in 2018. Like other projects at the execution phase, these works are continuing despite Covid-19.

DAEP is also in the final stages of evaluating bids from contractors for the estimated $2.7bn substructure contract for Concourse 1 and the West Terminal building. Although an award was expected imminently at the start of this year, the clouded outlook for aviation has delayed any contract signing.

Another scheme at the tender stage is the expansion of Sharjah International airport, with contractors vying for the main construction contract given a 17 May bid deadline by the client, Sharjah Airport Authority.

Worth about $400m, the development includes the construction of Concourse B, a connector link building, arrivals terminal buildings, a check-in lobby for Air Arabia, airline offices and a transit hotel.

10 June, 2020 | .By Colin Foreman