Local contractors set for boom to continue

Construction Week talks to a selection of the region’s contracting companies to find out how 2003 panned out and what 2004 is likely to hold in store.

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By  Eudore Chand Published  January 14, 2004

|~|cwk_13_jan04_200w.jpg|~|Local contractors will be busy in 2004 with projects coming up all over the region.|~|A lot of contractors have got bad memories of 2002. In comparison 2003 appears to have provided some relief as grandiose public and private projects have driven the local market.

To sustain the meteoric growth of the past 12 months, local contractors must expand their operations. Many are drawing up plans to expand their sphere of influence into other Gulf countries, in particular Qatar, Kuwait and Saudi Arabia.

Others are determined to break into previous ‘closed’ accounts in the high end of the market. Either way, contractors are facing up to the realities of competing in an client driven, cutthroat market.

Construction Week talks to a selection of the region’s contracting companies to find out how 2003 panned out and what 2004 is likely to hold in store.

Sarath Dabare, chief quantity surveyor, Group 3 Engineers Contractors, Abu Dhabi.
“Business has gone up for us in the last year, especially in Abu Dhabi. There’s almost too much construction work in Abu Dhabi now. It’s become very like Dubai in that respect. Last year was a pretty bad year for us but it really picked up in 2003 and we’re hoping to double what we’ve done this year in 2004.

The start of 2003 was bad in Abu Dhabi and businesses were forced to quote very low because there were no projects and everyone was scrambling around trying to grab whatever was available.

I expect it to pick up in 2004 considerably. We did a lot of reinforcement work during 2003. There was demand for this type of work because of the war in Iraq. People were scared and felt that their insurance would go up so they got the work done.

Other than that, ceramic tiling work was popular in 2003. We are currently in the process of tendering for [lots of] projects for next year.”

Fefder Hussein, construction clerk, Rashid General Constructing, Dubai.
“We restarted the business again in 2003, having shut it down previously. But the last year was good and business is going very well. [We] have been non-stop over the past year and [are] currently involved in three or four separate villa development projects.

We are hoping to increase and expand our business in 2004 to include some carpentry and demolition work. We are also aiming to [get] involved with other construction developments besides villas and to build other types of buildings.

Big buildings is where the money is and that’s one of our key aims for next year. We have tendered for many large project and we’re waiting to see what comes from that.

Sohaib Wasif, general manager, Habib Rafiq Civil Contractors, Abu Dhabi.
“This year [2003] was good because we got quite a few projects and we got better rates than last year. [Currently,] we’re working on little projects so that we can get [larger] projects in the future. We expect opportunities to come up for us next year.

2003 was a year of consolidation for us. Now having got ourselves balanced we’re ready to take a big jump next year. We have got ourselves registered properly with ADNOC [group of companies] and we’re looking to develop one particularly big project with [them.] I hope we’re one of their preferred contractors.

2003 was good from the point of view that before there was a depression and now there is a period of sustained growth coming up. We see a bright future. There should be a big boom in the region for the next four or five years and in Dubai especially, but it could be different in Abu Dhabi [where there] are still a lot of things that need to be [built] in the coming years.

Abu Dhabi is behind Dubai, [but I] feel that in another five or six years [the construction industry in Abu Dhabi] can make great strides and can catch up to Dubai.

Last year we were working on power and water desalination plant projects and we did about 24 buildings and we are aiming to increase that in 2004.

We have an office [in Qatar] but we don’t have a great deal of work there as yet. We are waiting to see what happens with our tenders for now. However, we have two contracts for two power plants in Saudi Arabia and a project building a hospital in Yemen for next year so things are looking good at the moment.

We’re expecting things to take off in Sudan over the next year also but we have tendered a lot so we will have to wait and see for now.”

Hassan Tabaja, technical manager, Gulf Eagle Contracting, Abu Dhabi.
“Our business increased by between 15 to 20% during 2003. Part of that is to do with the fact that we have been working with a big ‘defence related’ government client, but [also] our volume of projects increased significantly.

We have increased our budget for the regional sector and that has made a big difference. We won more tenders in 2003. [For instance,] we usually win between 10 and 15 tenders but this year we won more than 20. I think that reflects the boom within commercial and private sectors. I expect the next five years to be very good for construction in the UAE. Our main projects in 2003 involved industrial warehousing, workshops, aircraft hangers and accommodation blocks, so it’s varied.

I think 2004 will be a very busy year for us because we have already won tenders and expect to win even more but the industry is getting more competitive because more companies are coming into the market. The projects we are getting are bigger ones now, usually worth between Dh10 and 20 million.”

Saghier Hussein, finance manager, Yousuf & Aman Contracting, Dubai.
“We’ve been in the construction market for the last 30 years… we’re carrying out work valued at around Dhs 35 million per year. 2003 was better for us than 2002 and our business volume is up by around 15%.

In terms of the industry in the whole in Dubai, things are moving and improving very quickly. I believe the boom will last up until the end of 2004 in Dubai. We have been doing multi-storey buildings, luxury villas and mosques. There will be a lot of business for us up until the end of 2004.

This is what we have predicted and this is what we expect to happen. We are busy submitting our tenders to various consultants and at the moment we seem to be submitting one every week for projects in Dubai. We recently won a tender to build eight villas in Jumeirah, so we’re happy about that and hoping for more in the coming weeks.”

Suleka Grewal, sales manager, Abu Khamis Contractors, Ras Al Khaimah.
“This has been an exciting year for us. Business has probably doubled in the last year and we have taken on more staff. There are plenty of new projects in the region now and there seems to be enough business for all.

We have different villa contracts around the UAE but mainly in Dubai. Dubai is still growing and I see the boom in the industry continuing and lasting for the next few years at least.
Abu Dhabi is taking off and there is quite a bit of activity in Qatar too. The whole region is on the up in terms of the construction industry at the moment.”||**||

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