Related Articles

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  Dubai budgets to increase construction spending by 18%

  30 October 2024

  Dubai has announced its budget for 2025 with a 9% increase in government spending, which includes an extra $1.6bn allocated for construction and infrastructure when compared to the approved budget for 2024.

  Of the AED86.26bn of planned spending, 46%, or AED39bn ($10.6bn) will be allocated for construction and infrastructure schemes. “These projects encompass roads, tunnels, bridges, transportation systems, sewage stations, parks, renewable energy facilities, and the rainwater drainage network development plan. This also includes the recently announced Al Maktoum Airport development project and other initiatives supporting quality of life and promoting smart and sustainable transportation strategies in Dubai,” the emirate’s finance department said in a statement.

  The spending on construction and infrastructure planned for 2025 is 18% more than the AED33.2bn allocated for 2024.

  Increasing construction spending will help the emirate overcome some of its most pressing infrastructure challenges. Traffic has developed into a major issue for many residents and businesses in Dubai, and over the past year, the emirate’s Roads & Transport Authority (RTA) has pressed ahead with a series of road projects aimed at alleviating congestion. The most recent road project to be announced is the AED696m upgrade to Trade Centre Roundabout in Dubai.

  Metro plans

  A new metro line is also planned. In October, contracting consortiums submitted bids for the contract to complete a new Blue Line that will form part of the Dubai Metro network. The lowest-priced base offer received for the contract was valued at AED22.3bn. The project was given a budget of AED18bn when approved by the government in late 2023.

  Another infrastructure concern is maintaining Dubai’s status as a leading global aviation hub. Dubai International Airport is operating at close to capacity, and with no room to add to its two existing runways, a major new airport project is planned at Al Maktoum International Airport. Designs for that project, valued at $35bn, were approved by the government in April and all operations at Dubai International airport are scheduled to move there within 10 years. Tendering for major construction contracts is expected to start in 2025.

  Another pressing infrastructure concern is drainage. Widespread flooding in April this year exposed many shortcomings of the emirate’s infrastructure. In June, the government approved a AED30bn project known as Tasreef, which will enhance the capacity of Dubai’s rainwater drainage system by 700%, covering all areas of the emirate.

  The emirate’s sewage system will also be upgraded with the $22bn Dubai Strategic Sewerage Tunnels (DSST) projects. This project will be delivered as a public-private partnership. Potential investors submitted their statements of qualifications (SOQs) in late October.

  Spending approval

  The 2025 budget was approved by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai on 29 October.

  The estimated expenditure for 2025 is a 9% increase on the AED79.1bn of spending that was budgeted for 2024 in November 2023. As well as expenditure of AED86.26bn for 2025, revenues are projected to be AED97.66bn. The budget also includes a general reserve of AED5bn.

  The 2025 budget also allocated 30% of government expenditures to the social development sector. This encompasses health, education, scientific research, housing, and support for needy families, women, and children. It also includes investments in youth and sports, and care for the elderly, retirees, and people of determination.

  The security, justice, and safety sector will receive 18% of total expenditures. The emirate has also allocated 6% of spending to support the public services sector, government excellence, creativity, innovation, and scientific research.

  The 2025 budget is part of the three-year budget cycle for 2025-2027 which was also approved by Sheikh Mohammed. It has a total expenditure of AED272 billion and a total revenue of AED302 billion. It is the largest in the emirate’s history.

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  Colin Foreman
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  Dubai receives $22bn tunnels investor prequalifications

  30 October 2024

  

   

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  Potential investors have submitted their statements of qualifications (SoQs) for a contract to develop and operate various packages of the $22bn Dubai Strategic Sewerage Tunnels (DSST) project.

  MEED understands that the project client, the Dubai Municipality, received SoQs from over a dozen companies, including several prequalified as engineering, procurement and construction (EPC) contractors for the project’s first four packages.

  According to industry sources, the companies that are keen to prequalify as investors or sponsors of the planned public-private partnership (PPP) project include:

  • Abrdn Investcorp Infrastructure Investments Manager (UK)
  • Besix (Belgium)
  • China Railway Construction Corporation (CRCC)
  • China Railway Engineering Group (CREG)
  • China State Construction Engineering Corporation (China)
  • Itochu (Japan)
  • Plenary (Australia)
  • Samsung C&T (South Korea)
  • Vision Invest (Saudi Arabia)
  • WeBuild (Italy)

  The project client and its consultants held a consortium match-making event for prospective contractors and sponsors or investors in Dubai on 7 October.

  MEED previously reported that the bidders for the six PPP packages would be prequalified consortiums comprised of sponsors or investors; EPC contractors; and operations and maintenance contractors.

  The overall project will require a capital expenditure of about AED30bn ($8bn), while the whole-life cost over the full concession terms of the entire project is estimated to reach AED80bn.

  The investor prequalification process for the scheme comes after the client prequalified EPC contractors that can partner with the developers or investors to bid for the contracts.

  MEED understands that packages J1 and W will be tendered together as separate contracts first, followed by J2 and J3, with the requests for proposals to be issued sequentially, staggered about six to 12 months apart.

  Dubai Municipality is expected to invite prequalified companies to submit bids for the contracts to develop the first two packages of the DSST project in the fourth quarter of 2024.

  DSST packages

  Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered as PPP packages with concession periods lasting between 25 and 35 years.

  The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres (km), and the links will extend 10km. 

  The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have a link stretching 46km.

  W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

  J3, the fourth package, comprises 129km of links.

  J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (TLT) components of the overall project.

  J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period of 25-35 years.

  J3 will be procured under a design-build-finance model with a concession period of 25-35 years. Once completed, Dubai Municipality will operate J3, unlike the first three packages, which are planned to be operated and maintained by the winning PPP contractors.  

  The project’s remaining two packages entail expanding and upgrading the Jebel Ali and Warsan sewage treatment plants.

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  Jennifer Aguinaldo
• 
  Chinese firm wins facade work on world’s tallest tower

  30 October 2024

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  Saudi Binladin Group (SBG) has awarded Beijing-headquartered Jangho Group a facade works contract on what will be the world’s tallest tower – the 1,000-metre-plus Jeddah Tower in Saudi Arabia.

  Jangho Group will provide engineering design and technical services for the project’s structural glass and adhesive curtain walls.

  The announcement comes after the client, Jeddah Economic Company (JEC), signed an estimated SR8bn ($2.1bn) contract with SBG to resume construction work on the project.

  When completed, Jeddah Tower will be more than 172 metres taller than the 828-metre-tall Burj Khalifa, the world’s tallest building since 2009.

  Jeddah Tower’s superstructure is about one-third complete, with 63 floors out of a total of 157. SBG was the main contractor on the project in the early and mid-2010s. Germany’s Bauer completed the tower’s piling work.

  The architect is US-based Adrian Smith & Gordon Gill, and the engineering consultant is Lebanon’s Dar Al-Handasah (Shair & Partners).

  Jeddah Tower is the centrepiece of the Jeddah Economic City development. The project’s first phase, which includes the main tower, covers an area of 1.5 million square metres.

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  Yasir Iqbal
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  TotalEnergies $11bn hydrogen project starts pre-feed

  30 October 2024

  

   

  France’s TotalEnergies has started the pre-front-end engineering and design (feed) for its planned $11bn integrated project to produce green hydrogen and ammonia in Morocco, according to a company spokesperson.

  TotalEnergies signed the joint development agreement with the relevant authorities and ministers in Morocco on 28 October, during French President Emmanuel Macron’s visit to the North African state.

  It was previously reported that the planned integrated facility would be located in Guelmim-Oued Noun in southern Morocco.

  TotalEnergies’ chairman and CEO, Patrick Pouyanne, signed the agreement for the local production of green hydrogen and ammonia in the presence of Morocco’s King Mohammed VI and Macron.

  The counterparties included Morocco’s Energy Minister, Leila Benali; Economy and Finance Minister, Nadia Fattah; Interior Minister, Abdelouafi Laftit; and Minister Delegate in charge of Investment, Karim Zidane.

  It is understood that the project will require the development of 10GW of solar and wind energy and a land area of 187,000 hectares.

  It was reported that Morocco’s Unified Regional Investment Commission had approved the project’s launch in November 2022.

  The other agreements signed during Macron’s visit to Morocco cover financial cooperation in the rail, forestry, aviation, logistics and energy sectors, with a particular focus on decarbonisation and energy transition.

  TotalEnergies has been exploring green hydrogen and other related projects in the Middle East and North Africa region.

  In August, the Courbevoie-headquartered firm and Abu Dhabi Future Energy Company (Masdar) signed an agreement to assess the viability of developing a commercial green hydrogen-to-methanol-to-sustainable aviation fuel (saf) project.

  It is also among the early investors in UK-based Xlinks First, which aims to deliver the $18bn Morocco-UK power interconnector project. TotalEnergies acquired a minority stake in the company following an investment of $25.4m announced in November last year.

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  Jennifer Aguinaldo
• 
  Decarbonising steel is hard to resist

  29 October 2024

  Commentary
  Jennifer Aguinaldo
  Energy & technology editor

  A pilot green hydrogen plant supplying a small amount of colourless gas that will be used to extract iron from iron ore – a key steelmaking step – is not a big deal, especially given the multibillion-dollar industrial and petrochemicals investments that this region has grown accustomed to over the past decades.  

  The project can be seen as a just one element of Abu Dhabi's multi-pronged strategy to decarbonise large swathes of its economy, given that the client for this project, the newly rebranded Emsteel, holds a 60% share in the local steel industry and exports products to about 70 countries.    

  The global steel industry accounts for about 7% of annual greenhouse gas (GHG) emissions.

  On one hand, it will take a lot more than a few electrolysers to produce hydrogen that will be used to further decarbonise Emsteel's production and operations; on the other, a small first step is required to make a future big leap given the enormity and urgency of the challenge, and the vast investment it requires.

  Specific details are sparse regarding the pilot plant and the future timeline to scale hydrogen production at Emsteel's manufacturing complex in Abu Dhabi.

  However, as the executives of Emsteel and its hydrogen partner, Abu Dhabi Future Energy Company (Masdar), have said, the completion of the pilot project is a vital first step towards producing certifiable green steel, which is expected to enjoy brisk demand as pressures to decarbonise sectors such as construction increase across the globe.

  As it is, Emsteel's credentials include being the world's first steelmaker to capture part of its carbon dioxide emissions, thanks to Abu Dhabi National Oil Company's (Adnoc) Al-Reyadah carbon capture, utilisation and storage facility. This has enabled the company to operate with "45% less carbon intensity than the global average". Its utilisation of clean energy also rose above 80% last year.

  Today, from the vantage point of the stakeholders, the specific details of the pilot project matter less than what it signifies, which is that Abu Dhabi intends to become a major green steel producer, and that it can transform a hard-to-abate sector into a hard to resist one.

  

   

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  Jennifer Aguinaldo