UAE leapfrogs Saudi as Middle East's biggest construction market

The UAE has overtaken Saudi Arabia as the biggest construction market in the Middle East for the first time since 2008, with US$16.2 billion of contracts awarded last year.

??The UAE's total spending on construction contracts was 4 per cent higher last year than the Saudi total. Pawan Singh / The National
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The UAE has overtaken Saudi Arabia as the biggest construction market in the Middle East for the first time since 2008 with US$16.2 billion of contracts awarded last year.

According to the accountancy firm Deloitte, the Emirates' total spending on construction contracts was 4 per cent higher last year than the Saudi total, which reached $15.6bn - the first time in the past four years that the country has not topped the ranking.

Major infrastructure contracts awarded last year in the UAE include the Dh11.75bn contract to build the Midfield Terminal Building project at Abu Dhabi International Airport, which was won by a consortium including Consolidated Construction Company, TAV and Arabtec Construction as a backlog of contracts delayed by the global financial crisis was finally awarded.

In Saudi Arabia the largest construction deal awarded in 2012 was to expand the Masjid Al-Haram mosque in Mecca. This will increase the capacity of the mosque from 600,000 to 1 million worshippers at an estimated cost of $1.5bn.

"The expectation with this data was that Saudi Arabia would top the list in terms of the value of contracts awarded but in the end that just wasn't the case for 2012," said Cynthia Corby, an audit partner at Deloitte and leader of its construction industry group for the Middle East.

"Many of the major contracts there have not yet been awarded or were awarded in 2013. Meanwhile in the UAE 2012 saw a backlog of contracts delayed by the financial crisis finally awarded."

Qatar was the third most active GCC construction market, with $10.4bn worth of contracts awarded. Ahead of the 2022 Fifa World Cup, Qatar's total infrastructure spending is expected to reach $150bn.

Kuwait was the fourth most active construction market last year, with $8bn worth of deals awarded, Deloitte said. The largest of these was the long-awaited $2.6bn deal to build the Subiya Causeway, a 37- kilometre structure across the Bay of Kuwait, which was awarded to a consortium led by Hyundai last October. Transport construction accounts for 76 per cent of total construction spending in the country.

The news came as the US engineering group Bechtel announced it was setting up a Global Centre of Engineering Excellence of about 100 engineers specialising in rail, marine and other infrastructure design as part of its attempt to cash in on the growing rail and other infrastructure projects set to be built in the region.

The company is currently bidding to work on the second phase of Etihad Rail and putting together bids to work on the Abu Dhabi Metro and the Riyadh Metro in Saudi Arabia.

The centre will draw together civil engineering specialists from around the world to support all Bechtel's rail and marine projects globally. A first group of 35 specialists already employed by Bechtel will start work at the centre this summer.

"This area is an area of boom when it comes to the rail and infrastructure business," Amjad Bangash, the managing director for Bechtel's rail business said yesterday. "We think our rail business in this area alone is projected to grow at about 16 per cent over the coming few years compared with globally, where it is growing at around 9 per cent."