Contractors in Dubai hope that Saudi projects are more sustainable. Local companies will take the majority of the available work.
Contractors in Dubai have been spoilt over the past five years. Mega projects were launched on a monthly basis and major contract awards were made each week. There was so much work that managers even used to boast that filling order books was easy.

Those days have gone. Real estate projects have dried up. Government authorities have come to realise that if their planned developments will probably never be built, they do not need to build access roads and sewers either. Many of Dubai’s supposedly safe infrastructure projects will start to slowly fade away.

As contractors realise that Dubai just does not have the projects any more, companies are looking elsewhere for work.

Abu Dhabi is the obvious answer, and tender lists now include Dubai-based companies that until recently showed little interest in working in the UAE capital.

Doha is another option, but like Abu Dhabi, the volume of work available is limited. Both markets serve more than 1 million people each, and their populations are also growing more slowly than expected.

Saudi Arabia is different. It already has 23 million people who need more homes and the schools, hospitals and roads that come with them. Contractors hope that Saudi Arabia’s projects are more sustainable and will survive the economic downturn.

There is certainly a lot of work to be done, but will it fill the Dubai contractors’ empty order books? The answer is no. Private development in Saudi Arabia – like in the rest of the world – has slowed as banks and investors get cold feet.

But there is some good news. The government is moving ahead with a raft of projects, and although Saudi companies will take the majority of the work, there will be opportunities for Dubai-based firms. However, compared with the mega projects that were on offer in Dubai, the pickings in Saudi Arabia will be slim indeed.

Author: Colin Foreman. Gulf Bureau Chief
Dubai