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Abu Dhabi makes major construction investments

25 April 2024

Latest news from Abu Dhabi's construction and transport sectors:

> Hassan Allam and Siemens confirm Hafeet Rail award
> Contractors win Oman-Etihad Rail packages
> Alpha Dhabi sells stake in construction subsidiary to ADQ
> Abu Dhabi to launch Al Fahid island this year
> Abu Dhabi approves $953m housing project for nationals
> Contractor starts Bloom Casares package construction
> Abu Dhabi launches Hudayriyat Island residences

 

Abu Dhabi is making significant investments in its construction sector. This was demonstrated in March, when the Abu Dhabi Executive Council (Adec) approved a budget of AED66bn ($18bn) for the development of 144 projects in the emirate. This includes projects in the areas of housing, education, human capital, tourism and natural resources.

This investment follows on from a strong performance in 2023, when Abu Dhabi awarded contracts worth over $12bn in the construction and transport sector, according to regional projects tracker MEED Projects. This was 14% higher than the value of contracts awarded in 2022.

Abu Dhabi also boasts a pipeline of $41bn-worth of projects in the construction and transport sector, of which $17bn-worth are in the bidding stage, promising significant opportunities for contractors in the short to medium term.

Imminent projects include the UAE-Oman rail scheme, the high-speed rail link connecting Abu Dhabi and Dubai, and the real estate developments on the Ramhan and Al Fahid islands.

Construction boom

Construction is the biggest single sector in Abu Dhabi after oil and gas, and large-scale residential developments planned by both the government and private investors are the backbone of the sector.

In early February, Abu Dhabi-based private real estate developer Aldar Properties said that it will invest AED5bn ($1.4bn) in developing new commercial assets at Yas Island, Saadiyat Island and Al Maryah Island, which will be delivered in phases between 2025 and 2027.

Aldar is also preparing to launch the Al Fahid Island project this year. In February, the developer paid AED2.5bn ($680m) for a 4 million square metre land bank on the island to build a new waterfront development.

Aldar has also awarded two contracts worth over AED7bn for the development of the Saadiyat Lagoons project. It awarded an estimated AED3bn ($820m) contract to the local contractor Innovo for package three and a AED4.1bn ($1.2bn) contract for packages two and four of the development to a team of local contractors Trojan Construction Group and Arabian Construction Company.

Project developer Q Properties also awarded a AED584m ($159m) contract late last year to the local Trojan General Contracting for the development of phase one of the Reem Hills scheme in Abu Dhabi.

In late March, Adec also approved a new housing development known as the Yas Canal residential project. Worth AED3.5bn ($953m), the scheme will be built on an area of 1.8 square kilometres at Al Raha Beach and will offer housing for UAE nationals.

Transport links

In recent months, Abu Dhabi has made strides in the development of its transport sector.

The emirate’s most advanced transport scheme is the UAE-Oman rail network. In January, Oman-Etihad Rail Company received bids for three civil works packages for the project that will link the two countries.

Etihad Rail is also preparing to start construction on the UAE’s high-speed rail project and has asked contractors to express interest in the early works for the line connecting Abu Dhabi and Dubai. The client is expected to launch prequalification for the project by the end of Q2 2024.

Meanwhile, contractors have started work on the first phase of Abu Dhabi’s long-awaited light rail transit system. Phase one includes constructing a tram link connecting Electra Street, Al Maryah Island and Al Reem Island.

Etihad Rail is also making progress on its AED50bn ($13.6bn) integrated cargo and passenger transport system running across the UAE, which was announced in late 2021. The scheme comprises three projects, the first of which is a freight rail component. The second project, covering passenger services, will connect 11 cities in the UAE, from Al Sila to Fujairah. The third project covers integrated transport services and will establish an innovation centre to incorporate smart transportation solutions into the overall plan.

MEED's April 2024 special report on the UAE includes:

> COMMENT: Non-oil activity underpins UAE economy
> GVT & ECONOMY: Non-oil activity underpins UAE economy
> BANKING: UAE banks seize the moment
> UPSTREAM: Adnoc oil and gas project spending sees steep uptick
> DOWNSTREAM: UAE builds its downstream and chemical sectors
> POWER: UAE marks successful power project deliveries
> WATER: Dubai tunnels project dominates UAE pipeline
> DUBAI CONSTRUCTION: Dubai real estate boosts construction sector
> ABU DHABI CONSTRUCTION: Abu Dhabi makes major construction investments

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Yasir Iqbal

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