UAE's infrastructure growth seen at 3.3% in 2010


By Andy Sambidge

The UAE’s infrastructure construction industry is predicted to grow by 3.3 percent in 2010, fuelled by Abu Dhabi which is set to spend $15bn over the next three years on projects.

PROJECT WORK: Infrastructure construction work in the UAE is predicted to grow by 3.3 percent in 2010. (Getty Images)
PROJECT WORK: Infrastructure construction work in the UAE is predicted to grow by 3.3 percent in 2010. (Getty Images)

Business Monitor International said it had cut its growth assessment for the country’s infrastructure sector amid concerns over Dubai’s debt crisis.

In BMI’s Q210 UAE Infrastructure Report, it revised its forecast for industry value real growth for 2010 to 3.3 percent from a previous forecast of 5.5 percent.

“As such, we forecast that industry value will reach AED79.6bn ($21.67bn). This growth will be fuelled by and large Abu Dhabi, and to a lesser extent transport infrastructure projects in Dubai such as the Green Line metro project, the Al-Maktoum International Airport and the expansion of Dubai Airport,” the report said.

BMI added that it had some concerns about Dubai following reports in January of a payment dispute with contractors working on the metro project.

“The resumption of work on the metro removes the immediate shadow of uncertainty this incident had cast over the viability of Dubai’s transport infrastructure investments,” BMI said.

“Though the delay was not large enough to have seriously disrupted the project’s timetable, it did put in to question the government’s ability to finance its ambitious investment
plans,” it added.

In January, Mattar al Tayyer, chairman of Dubai’s Roads & Transport Authority, said Dubai could spend about $3bn in transport infrastructure projects in 2010, adding that the emirate had no issue paying its contractors.

“Investing in infrastructure is the driving force for the economy,” he said.

In November last year, Abu Dhabi said it was planning to spend $15bn on infrastructure projects over the next three years to cater for the city’s rising population.

The UAE’s economy minister Sultan bin Saeed al-Mansouri said investments in Abu Dhabi infrastructure, property and manufacturing were expected to reach about $1 trillion in the medium term.

In February, Australian construction firm Leighton Holdings Limited said its Middle East construction interests “remained at high levels” despite the debt issues in Dubai.