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Ten projects that will shape Dubai’s future

5 September 2023

 

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Dubai is back with major projects after several years of subdued activity following Expo 2020 and the Covid-19 pandemic.

Over the past year, plans have emerged for 10 projects across various sectors that will help shape the emirate’s development over the coming decade. 

Many of these projects have been planned for years. After stalling during the low-oil-price era of 2015-20, positive economic tailwinds mean many of these schemes are now being revisited by their owners and relaunched.

1. Tower at Creek Harbour

The most recent relaunch announcement came at the end of August, when Emaar Properties founder Mohammad Alabbar revealed plans to redesign and relaunch the Tower at Dubai Creek Harbour.

The design works are expected to be completed by the first quarter of 2024, and construction slated to begin in the second half of 2024.

Details of the redesigned tower have not been launched, but sources close to the project say it will be tall and feature high-end residential units. This reflects Dubai’s buoyant property market and will stand in sharp contrast to the original design that involved building a 1,000-metre-tall observation tower.

Construction on that project stalled in 2019 after work on the foundations was completed. Two bidders were competing for the estimated $5.5bn contract to build the tower. They were Beijing-based China State Construction Engineering Corporation and a joint venture of the local/Belgian Belhasa Six Construct and Tishman, which US-based Aecom owns.

Belhasa Six Construct completed the raft foundations for the tower in May 2018. France’s Soletanche Bachy finished the piling.

Spanish/Swiss architect and engineer Santiago Calatrava Valls was the main consultant on the project, with the local office of Aurecon, supported by the UK’s RMJM and Dubai-based DEC, acting as local engineer and architect of record. The project manager for the tower was US-based Parsons.

2. Dubai Metro Blue Line

The Dubai Creek Harbour development in Ras al-Khor will connect to Dubai’s Metro network via the planned Blue Line, which will serve as an extension to the existing Red and Green lines.

Dubai’s Roads & Transport Authority (RTA) is preparing to issue tender documents for the Blue Line.

The Green Line extension will commence from its current terminus at Creek station in the Jadaf area. It will cross over to the Dubai Creek Harbour development and continue through Ras al-Khor, International City, Dubai Silicon Oasis and Academic City, before concluding near the Desert Rose project. The line will have 11 stations.

The Red Line extension will connect its existing terminus in Rashidiya to Mirdif City Centre and continue through Mirdif and Warqaa, before joining the Green Line extension in International City.

The project was put on hold during the Covid-19 pandemic and reactivated in early 2022, when UK-based Atkins and Grimshaw, US-based Parsons and France’s Egis restarted design work.

The last metro project to be completed in Dubai was Route 2020, which connected the Red Line to the Dubai Expo site. The AED10.6bn ($2.9bn) contract to design and build the line was awarded to a consortium of Alstom, Spain’s Acciona and Turkiye’s Gulermak.

3. Deep Tunnels Portfolio

Another major infrastructure scheme is the Deep Tunnels Portfolio, which involves developing deep-gravity sewage tunnels and treatment plants across the emirate.

In August, Dubai Municipality began the process of appointing a project management consultant to oversee the scheme, which will be developed as a public-private partnership (PPP).

Two sets of deep tunnels will be constructed, terminating at two terminal pump stations at sewerage treatment plants (STPs) in Warsan and Jebel Ali. A conventional sewage and drainage collection system and STPs will be built in Hatta.

The scheme also includes recycled water distribution systems connected to the STPs.

Dubai’s Executive Council approved the project in June and said it would require an investment of about AED80bn ($22bn). It added that the project has been designed to serve the needs of the Dubai population for the next 100 years in alignment with the Dubai Economic Agenda D33 and Dubai Urban Plan 2040.

4. DWTC/Candy tower

Dubai World Trade Centre (DWTC) and UK-based Candy Capital have formed a joint venture to develop three towers in Dubai’s One Central commercial district.

The mixed-use towers will have two branded residences, two hotels and office space. The construction work involves building three towers. The two taller towers will be connected by a sky bridge containing one of the hotels.

Dubai-based Killa Design has been appointed as the architect for the project.

Candy Capital is a privately held family office established by British entrepreneur and businessman Nick Candy. His best-known property development is One Hyde Park in London, which he developed with his brother Christian. It comprises 86 apartments and three retail units and is considered one of the wealthiest residences in the world.

5. Al-Maktoum International airport

Dubai plans to restart the emirate’s largest construction project, the AED120bn ($33bn) expansion of Al-Maktoum International airport, also known as Dubai World Central (DWC). 

The expansion was officially launched in 2014. It involves building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year. An initial phase, which was due to be completed in 2030, aims to take the airport’s capacity to 130 million passengers a year.

Altogether, the development will cover an area of 56 square kilometres.

Progress on the project slipped as the region grappled with the impact of lower oil prices and Dubai focused on developing the Expo 2020 site. Tendering for work on the project then stalled with the onset of the Covid-19 pandemic in early 2020.

Firms were competing for the estimated $2.7bn substructure contract for Concourse 1 and the West Terminal building – the largest contract tendered for the project.

The contract covers the delivery of more than 1.7 million square metres of connected basement footprint, housing the people-mover tunnels, baggage handling systems, ground services road network and other back-of-house technical and support facilities.

6. Palm Jebel Ali

Dubai released details of the new masterplan for Palm Jebel Ali, an artificial island located south of Jebel Ali Freezone, in June.

Double the size of Palm Jumeirah, Palm Jebel Ali will have 110 kilometres of shoreline and extensive green spaces. The development will feature over 80 hotels and resorts and a diverse range of entertainment and leisure facilities.

It includes seven connected islands, catering to approximately 35,000 families. The development also emphasises sustainability, with 30 per cent of public facilities powered by renewable energy.

MEED reported in January that local developer Nakheel had approached contractors to complete the reclamation works for Palm Jebel Ali.

As with Palm Jumeirah, it is estimated that it could take around 20 years for Palm Jebel Ali to reach its full development potential. Nakheel has previously secured AED17bn ($4.6bn) in funding to expedite the development of various projects, including the Dubai Islands and other waterfront schemes.

The upcoming dredging contract for Palm Jebel Ali is anticipated to involve 5-6 million cubic metres of material, contributing to the completion of the man-made offshore island.

While reclamation work for Palm Jebel Ali is mostly finished, the project was put on hold in 2009. Nakheel had made some progress with infrastructure development, including the construction of bridges on the island by Samsung C+T.

7. The Oasis by Emaar

Another major masterplanned development was launched by Emaar Properties in June. The $20bn Oasis by Emaar covers a total land area of more than 9.4 million square metres, close to Dubai Investments Park. The project involves building over 7,000 residential units along with water canals, lakes and parks. It will also include the development of a 150,000 sq m retail area.

8. The Island

Another project that has been restarted in recent years is The Island, which Wasl is developing.

Located off the coast of Umm Suqeim, near the Jumeirah public beach, it is expected to feature 1,400 hotel rooms and apartments, in addition to retail, food and beverage and entertainment options. The 10.5-hectare island will include properties featuring the MGM, Bellagio and Aria hotel brands.

The developer is close to appointing a contractor to build the development after bids were submitted earlier this year.

Tender documents for the contract were previously issued in 2020, when the project was being delivered with a consultancy team led by South Africa’s Mirage.

Germany’s Kling Consult is now the project manager.

9. Al-Habtoor Tower

The $1bn Al-Habtoor Tower project is located at Al-Habtoor City, next to Dubai Water Canal, on a 7,500 sq m plot. The tower, which the developer describes as one of the largest buildings in the world, will have three basement levels, a seven-storey podium and 73 floors of residences. The built-up area will be 350,000 sq m.

Its construction is technically challenging because the tower will be built above an existing parking basement that serves the already completed buildings at Al-Habtoor City.

Al-Habtoor had the option of demolishing the basement. Instead, it decided to employ a top-down approach to the construction that involves piling down through the basement, while at the same time starting construction above ground.

The top-down approach is expected to reduce the construction time by about one year, meaning the tower will be completed in 1,000 days or roughly three years.

China Railway 18th Bureau Group was appointed as the main contractor in May.

10. Dubai Pearl

After two aborted attempts, development is expected to start again at the Dubai Pearl site, located north of Dubai Media City close to the Palm Jumeirah.

The structures erected for the previous project have been demolished this year. Dubai Holding, which now owns the land, has held a design competition and is in the final stages of selecting the winning architect.

Local project management firm North 25 is overseeing the design competition.

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Colin Foreman

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    The $5.3bn high-voltage direct current network project connecting the central, western and southern regions of Saudi Arabia was the single largest power contract awarded in Saudi Arabia in 2024.

    The UAE, meanwhile, has awarded three key power contracts this year, including for the Al-Ajban solar IPP, which was won by a team of France’s EDF and South Korea’s Korea Western Power Company (Kowepo), and for the Dhafra waste-to-energy project, which a team of Japan’s Marubeni Corporation, Japan Overseas Infrastructure Investment Corporation and Zurich-headquartered Hitachi Zosen Inova is developing.

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    2025 outlook

    The Mena power projects pipeline remains robust, with over $45bn-worth of contracts under bid evaluation and another $50bn in the prequalification stage as of late 2024, according to MEED Projects.

    Saudi Arabia is likely to remain dominant, particularly if SPPC and the PIF activate a plan by the Energy Ministry to procure 20,000MW of renewable energy capacity annually until it reaches its target for renewables to account for half of its energy production mix by 2030.

    Morocco has the second-largest power projects pipeline thanks to several planned schemes to export clean energy and green hydrogen to Europe. Notably, the tender is under way for the country’s first two solar PV plus battery energy storage system (bess) projects, Noor Midelt 2 and 3.

    Abu Dhabi also maintains a substantial renewables and gas-fired generation project pipeline. It has several upcoming IPPs with a total combined capacity of over 7,000MW, of which more than 6,000MW is in the tendering stage.

    While the procurement process for Saudi Arabia’s first nuclear power plant in Duwaiheen has been delayed, the UAE has plans to procure the next phase of its nuclear power plant project in Barakah.

    Green industrial development in steel and aluminium, as is being undertaken in the UAE, is a driver for ongoing clean energy capacity buildout, notes Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy.

    Egypt, Iran, Kuwait and Iraq have the next largest power projects pipelines. The key drivers in each state vary, with populous countries Egypt and Iran seeking to develop integrated green hydrogen hubs and nuclear power capacity, respectively, while Kuwait remains a promising market with extended plans to procure both conventional and renewable energy capacity to address peak demand.

    There are indications that Iraq’s first utility-scale solar PV scheme – a 1GW project being developed by France’s TotalEnergies – will head into the construction stage in the coming months, along with other similar projects for which preliminary agreements were signed by Iraqi authorities in 2021-22.

    Oman is actively pursuing renewable energy capacity, with the state offtaker having tendered the contracts for two wind IPPs in September 2024.

    In Oman and Qatar, the main downstream companies, Petroleum Development Oman and QatarEnergy, are developing renewable energy capacity as a means of mitigating their greenhouse gas emissions, as well as to support their respective government’s net-zero targets.

    In November, Bahrain started the procurement process for its fourth independent water and power project (IWPP) in Sitra, which replaced the previously planned Al-Dur IWPP 3 scheme.

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    SEC affiliate National Grid Saudi Arabia has awarded EPC contracts for several bess packages to local firm Algihaz this year. In August, it tendered a contract for the construction of a further 2,500MW of energy storage capacity. 

    In parallel, the procurement process is under way for the first independent bess packages in Saudi Arabia and Abu Dhabi, with other utilities expected to follow suit in procuring bess using an IPP model. Bess will boost grid flexibility and spinning reserves in the face of increased renewable energy capacity and demand.

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    The Middle East’s projects market in 2024 has been fuelled by the same heady cocktail of favourable oil prices, continued investment into oil and gas projects, government infrastructure spending, the energy transition, real estate investment and economic diversification that propelled the total value of awards in 2023 to record levels.

    By the end of October 2024, there were $262bn of contract awards across the Middle East and North Africa (Mena) region, according to regional projects tracker MEED Projects. By the end of the year, the 2024 total may top the $290bn recorded in 2023. 

    While economic diversification is a priority for governments across the region, oil and gas remains a key sector for project awards. The three largest contract awards in 2024 were from the sector.

    The top-ranked contract by value was a $20bn deal awarded to Iranian companies Petropars, Oil Industries Engineering & Construction, Khatam Al-Anbiya Construction Headquarters and Mapna Group for the South Pars gas field pressure-boosting project in Iran by Pars Oil & Gas Company.

    Next was the $8bn deal won by China’s Hualu Engineering Technology Company for delivering the Al-Faw refinery in Iraq for Southern Refineries Company.

    The third-largest award was a $5.5bn contract won by a joint venture of France’s Technip Energies, Japan’s JGC Corporation and the UAE’s NMDC Group for the Ruwais low-carbon liquefied natural gas terminal project by Abu Dhabi National Oil Company (Adnoc).

    These contract awards mean that the oil and gas sector accounted for 32% of the $262bn total that was recorded in the Mena region by the end of October 2024.

    Breaking down the sector into oil and gas separately reveals a telling trend. Oil accounts for 12% of awards, while gas accounts for 20%. These numbers reflect the growing importance of gas as a transition fuel that is cleaner and more environmentally friendly than oil, but still provides the dependable energy that many renewable alternatives still do not offer. 

    Strong performances

    Construction is the second-largest sector after oil and gas, accounting for 23% of awards. Its significance has dropped in 2024 compared to 2023, when it accounted for 32% of contract awards. 

    In terms of value, there were $68bn of contract awards in 2024 until the end of October. If the same pace is maintained during November and December, the 2024 total is expected to be about $81bn, which falls short of the 2023 total of $97bn. 

    While the total value of contract awards may have dropped, there was the largest construction contract award on record in 2024 – a $4.7bn deal secured by Italian contractor WeBuild for the construction of three dams for the Trojena mountain resort at Saudi Arabia’s Neom gigaproject. 

    The power sector accounted for 18% of the total awards during the period, the largest of which was the $5.3bn contract won by Saudi Arabia’s Alfanar Projects and China Electric Power Equipment & Technology Company for the 7,000MW Saudi Central, Western and Southern Regions high-voltage direct current overhead transmission lines project being developed by Saudi Electricity Company.

    When analysed by country, Saudi Arabia and the UAE dominate the market, and together they account for over 60% of contract awards across the region in 2024 up to the end of October. 

    As the region’s largest economy, it is unsurprising that Saudi Arabia accounts for the largest share, with 38.6%, followed by the UAE, which had 22%. The next most significant country was Iran, which came in a distant third with 8% of contract awards. 

    The outsized contribution of Saudi Arabia and the UAE reflects the relative economic stability found in the GCC compared to other countries in the region that are grappling with the impact of conflict and other associated financial pressures. 

    Looking beyond the contract awards numbers, the biggest project announcement in 2024 came in April, when Abu Dhabi investment vehicle ADQ released details of plans to invest $35bn in Egypt. The plans involve ADQ acquiring the development rights for Ras El-Hekma, a planned new city on Egypt’s northern Mediterranean coast, for $24bn. 

    The development has been billed as having the potential to attract over $150bn in investment.

    In October, ADQ appointed its subsidiary Modon Holding as the master developer for Ras El-Hekma. Modon will act as the master developer for the entire development, which covers more than 170 square kilometres (sq km). 

    Modon will develop the first phase, which covers 50 sq km, and the remaining 120 sq km will delivered with private developers.

    Key partners for delivering the project have already been found. For construction, Modon has signed a framework agreement with Egyptian firm Orascom Construction to serve as the primary contractor for the project’s first phase. 

    Modon also signed a deal with Abu Dhabi National Energy Company (Taqa) for developing, financing and operating greenfield utility infrastructure projects, water desalination projects, electricity transmission and distribution projects and wastewater projects at the Ras El-Hekma development.

    While economic diversification is a priority for governments across the region, oil and gas remains a key sector for project awards

    Future prospects

    Looking ahead, the performance of the projects market in 2025 will depend  on the favourable macroeconomic conditions remaining in the GCC, which if the other four members of the six-nation bloc are added, accounted for nearly 72% of the Mena region’s total contract awards during the first 10 months of 2024. 

    The key metric to watch in 2025 will be the oil price. In mid-November, the price of Brent Crude was $72 a barrel, which is below what many in the region, including Saudi Arabia, require if they are to maintain their project spending plans. 

    The outlook for oil prices is uncertain and after oil producers’ group Opec cut its global demand growth forecasts for both 2024 and 2025 for the fourth time, highlighting economic weakness in China, India and other regions, there are concerns prices will dip in 2025. 

    The election of Donald Trump as US president adds to those concerns. He has promised to “drill, baby, drill”, and a sharp uptick in output from the US could cause oil prices to soften further.

    Trump is also a protectionist and has said ‘tariff’ is his favourite word. Most of his new tariffs are expected to be aimed at China, which could mean that Chinese companies look to other markets that remain open to them, including the Middle East.

    The appeal is clear to see. Chinese contractors already command a dominant position in the region – particularly in North Africa and Iraq – and Chinese companies will find great appeal in affluent markets such as Saudi Arabia and the UAE, which can offer large-scale project opportunities.

    The other metric that will drive the projects market in 2025 is real estate. In the UAE, much of the ongoing development work is supported by the buoyant property market, particularly in Dubai, which has grown strongly throughout 2024. 

    According to a report by data and analytics company Reidin, property sales in the UAE reached AED46.52bn ($12.7bn) in October 2024, marking a 55% year-on-year increase. Demand also remains robust, with 19,500 transactions recorded in October, reflecting a 72% rise compared to the same period in 2023. 

    Looking ahead to 2025, Reidin says that the outlook remains optimistic as sustained demand, rising property values and steady inventory turnover are all expected to continue driving growth. 

    While the forecast supports a positive outlook for construction in the UAE, those who have seen Dubai’s property market collapse before will be keenly watching the data in 2025.

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    Colin Foreman
  • Egypt 2025 country profile and databank

    25 December 2024

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    MEED Editorial