|Dubai's contract awards value drop significantly in 2018
|UAE - 2018 December 26
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 USD 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 pct less than the USD 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 USD 14.7bln of projects complete in Dubai, down almost USD 1bln on the USD 15.4bln 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 USD 14.4bln of deals signed. The second-most active is power, with USD 6.4bln of awards, followed by transport, with USD 1.5bln of contracts inked. Unlike other projects markets in the GCC, the oil and gas industry plays only a small role, with just USD 170mln 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 USD 3.8bln 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.
Away from the energy sector, the largest construction deal was an estimated USD 353mln contract won by the local Alec to build exhibition space for Dubai World Trade Centre (DWTC) at the Expo 2020 site.
For 2019, the largest contract that is currently being tendered and due to be awarded is the estimated AED10bln (USD 2.7bln) 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 USD 33bln expansion planned for the airport, and a key source of new work for the construction sector over the coming decade.