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Why has the investment in infrastructure increased over the past 5 years in the GCC?

In the past few years GCC countries have seen significant investment going toward the infrastructure and almost every month, the news headlines consist of major projects being announced. In the report we are looking at the factors behind the growth in the infrastructure in the region and introduce some considerable projects.

According to a report by the International Monetary Fund (IMF), “The GCC economic model relies on oil as the main source of export and fiscal revenues (Figure 1). The government is the dominant force in the economy, receiving oil export revenues and in turn distributing them to citizens. A portion of these revenues is spent directly by the government and provided to citizens through transfers and public sector jobs; another portion is invested in infrastructure and real estate, education, and health; while the rest is saved, including in sovereign wealth funds (SWFs). Most GCC countries have long oil and/or gas production horizons and, consequently, have significant wealth underground as well as saved in SWFs or at the central bank”.

According to Global Finance, An infrastructure boom is taking place in the GCC. Most of the GCC countries have some kind of 30-year plan or vision to develop projects, as these oil-rich countries look to invest surplus funds in transport, utilities (power, water) and petrochemical infrastructure to keep pace with their rapidly growing economies and populations.

Before getting into the details, according to Invstopia, infrastructure is the term for the basic physical systems of a business or nation — transportation, communication, sewage, water and electric systems are all examples of infrastructure. These systems tend to be high-cost investments and are vital to a country’s economic development and prosperity.

Visions of the leaders

In the UAE, the government has a dedicated ministry specially for infrastructural development. According to Khaleej times, Energy, utilities and transportation sectors in the UAE will see massive growth in the next two decades as the government will pump Dh1.3 trillion in the development of these sectors, analysts said. Recently, Abu Dhabi National Oil Company (Adnoc) has announced plan to invest Dh165 billion in downstream sector. Also, the UAE is investing billions of dirhams in transportation sector such as Etihad Rail, Dubai Metro and Hyperloop.

According to Middle East Rail, $250 billion is expected to be invested in the Middle East on various railway projects over the next decade. This year alone, it’s estimated that spending on 162 regional projects to be over $86.7 billion.

In addition, billions of dirhams are currently being pumped into the development and expansion of Al Maktoum International Airport and Abu Dhabi Airport. In addtional, the metro line expansion for the Expo 2020 site where NFT has a dozen tower cranes installed, is another main infrastructure project. According to Strategy& report, other GCC governments are also investing significant amount to develop infrastructure. Saudi Arabia is likely to spend Dh4 trillion ($1.1 trillion) from 2019-2038, while the UAE is scheduled to invest $350 billion over a similar time frame. These large development schemes can allow local companies not just to substitute imports, but also to grow non-oil exports by enhancing their capabilities.

According to Strategy& report, GCC governments need to think logically about how they balance the need to localize manufacturing while pursuing sound economic policies. There are many capabilities that the region does not possess because of its small size and hence needs to import to build infrastructure. According to Emirates News Agency (WAM), earlier this year, the development journey of the UAE aims to place the country at the highest levels of global competitiveness, to provide the best in class quality of life to people and achieve their happiness, said His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. His comments came during his visit to The Sustainable City – the first net zero energy city in Dubai. He was accompanied by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai.

“Our vision is clear in terms of establishing sustainability’s pillars as a key component of our development journey, which is part of the national agenda. We are committed to sustainability, which is a top priority that we strive to implement taking into consideration environment conservation, and balance between economic and social development,” Sheikh Mohammed said.

Saudi Arabia and the increase in Foreign Direct Investment (FDI)

According to a report by CNBC, Saudi’s $500 billion mega-city NEOM is attracting ‘overwhelming’ interest from investors

With ambitious plans to transform its economy as part of the crown prince’s Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI).

With ambitious plans to transform its economy as part of the crown prince’s Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI) into the country as it embarks on a post-oil era and ambitious mega projects like the futuristic city of NEOM.

Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA), said foreign direct investment (FDI) was growing in Saudi Arabia. Official figures from the World Bank show FDI net inflows were $7.453 billion in 2016 while net outflows were $8.936 in the same year. Since then, however, Saudi Arabia’s Crown Prince Mohammed bin Salman has appeared to take the reigns on transforming the economy and society by introducing a raft of liberalizing reforms.

“We have seen a growth for foreign investment — about 50 percent comparing the first quarter this year to the same period last year. Also, the (FDI) inflows we have seen about 40 percent,” Al-Omar – governor of the Saudi Arabian General Investment Authority (SAGIA)- told CNBC as she hosted a session on the Saudi Arabian FDI landscape at the Gateway Gulf investment forum in Bahrain.

The project is estimated to take between 30 to 50 years to complete, however, with the first phase due by 2025.

“And the $500 billion, we’re not going to spend it all tomorrow and, quite frankly, a lot of it will come from private investments,” Kleinfeld (NEOM’s Chief Executive) said. “But what I’m seeing today is that the interest in partnering is overwhelming.”

Kleinfeld said that key concepts for NEOM, such as mobility around the city, were still being explored and there “there are gazillions of players that are willing to help and willing to invest in that,” he said. With the current wealth of the region, which have significant amounts in their Sovereign Wealth Funds (SWFs) and an increase in Foreign Direct Investment (FDI), the plans to improve the infrastructure in the region is well underway.

Fluctuations in the price of crude oil

Oil prices have been fluctuating in the past few years and based on most sources, the outlook doesn’t seem that the prices will increase significantly next year. As outlined in the graph below by Macrotrends website, the oil prices have decreased since 2014.This decrease in oil prices is another reason as to why, GCC countries have looked into diversifying their economies and lower their dependencies on oil and consequently investing in infrastructure.

More populations – the need for better infrastructure

The graph above by Worldometers website, clearly show the significant increase in the population of the UAE and just in less than 15 year the population has almost doubled. This amazing increase in population not only shows more job opportunities in the country but also a major need for a better infrastructure.

Economic diversification in the region

According to a report by the International Monetary Fund (IMF), the Gulf Cooperation Council (GCC) growth model has delivered strong economic and social outcomes over several decades. GCC economies rely on oil as the main source of export and fiscal revenues. Over the years, GCC governments have increased public sector employment and spending on infrastructure, health, and education. This has helped raise standards of living and support private sector activity, particularly in the non-tradables sector.

The current growth model has weaknesses, however, and increasing economic diversification is paramount. Greater diversification would reduce exposure to volatility and uncertainty in the global oil market, help create private sector jobs, increase productivity and sustainable growth, and establish the non-oil economy that will be needed in the future when oil revenues start to dwindle. A number of policies have been adopted to diversify the GCC economies and reduce their reliance on oil. A stable, low-inflation economic environment has been achieved, the business climate has been strengthened, education has been expanded, trade and foreign direct investment (FDI) has been liberalized, and the financial sector deepened. National development plans are being implemented with a view toward boosting the human capital of nationals, and developing new industries and services that can employ high-skilled labor. Nevertheless, to date these diversification strategies have yielded mix results. The share of non-hydrocarbons output in GDP has increased steadily but is highly correlated with oil prices, and progress with export diversification, a key ingredient to sustainable growth, has been more limited.

One of the key reasons as to the increase in the investment in infrastructure is to make sure the economic diversification plans can actually be achieved but of course as mentioned above, it has had its challenge as well.

In Summary

 With $1.2 trillion of roads, buildings and infrastructure projects planned across the GCC at the start of 2018, according to Research and Markets report, the region offers abundant opportunities for construction contractors, engineers, project managers and manufacturers. In the next two decades, according to Strategy& non-OECD states are projected to spend more than $57 trillion on infrastructure projects, compared to $34 trillion by OECD countries, it said. Historical under-investment in infrastructure, rapidly-growing populations, the emergence of the new Silk Road trading route between the MENA region and Asia and the need to diversify beyond oil and gas are all contributing to the need for heightened investment in infrastructure.

New Kuwait 2035 needs smart city-led contracts

The six-strong panel, moderated by Charles Lilley, partner at law firm Bryan Cave Leighton Paisner (BCLP), took to the stage to discuss all things related to the Kuwait National Development Plan. Commonly referred to as New Kuwait 2035, the programme seeks to increase the country’s revenue from $43.6bn ( KWD13.2bn) in 2017 to $164bn (KWD49.8bn) by 2035. With these figures in mind, the country’s leadership has placed great emphasis on the development of transport infrastructure, commercial buildings, industrial facilities, and renewable energy infrastructure.

The issue of technology as part of Kuwait’s New Vision 2035 was also discussed, particularly in the context of numerous planned high-profile smart city initiatives rolling out across the region, notably the planned $86bn (KWD26.1bn) Silk City mega-project. “Smart cities are no longer just something that is nice to have, but a requirement by default,” said Nabil Kobrosly, vice president of business development for Parsons’s built environment division in the Middle East and Africa. “In each and every project that we do, especially in construction design, provisions are made for smart city consultants or technology operators to be able to bring in their equipment.

End.

Sources

https://internationalbanker.com/finance/making-infrastructure-investment-more-attractive-to-private-capital/

https://www.investopedia.com/terms/i/infrastructure.asp

https://www.imf.org/external/pubs/ft/sdn/2014/sdn1412.pdf

https://www.khaleejtimes.com/business/economy/uae-to-invest-/dh13-trillion-in-/these-sectors

https://www.cnbc.com/2018/05/10/saudis-500-billion-mega-city-neom-is-attracting-overwhelming-interest-from-investors.html

http://wam.ae/en/details/1395302665808

https://www.gfmag.com/magazine/september-2013/gcc-infrastructure-investment

https://www.macrotrends.net/2516/wti-crude-oil-prices-10-year-daily-chart

http://www.worldometers.info/world-population/united-arab-emirates-population/

http://whatson.ae/dubai/2016/09/dubai-future-accelerators-programme/

http://www.mei.edu/publications/rise-gulf-investment-india-searching-complementarity-and-synergy

https://www.uae-embassy.org/news-media/uae-economic-diversification-efforts-continue-thrive

http://www.constructionweekonline.com/article-50521-leaders-kuwait-2018-new-kuwait-2035-needs-smart-city-led-contracts/

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Abu Dhabi’s “Ghadan 2021” Vision

The Middle East region is going through some economic changes and there has been massive projects revealed and announced by head of states. On September 16 Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed announced the budget and initial round of projects for the Ghadan (Tomorrow) 2021 strategy, a three-year plan designed to further reduce the emirate’s dependence on oil revenues.

Ghadan 21 – which means ‘tomorrow’ in English – is the banner name for a series of reforms aimed at stimulating investment, creating jobs, encouraging innovation and improving the overall quality of life for citizens. The plan will feature 50 initiatives focused on four areas – business and investment, society, knowledge and innovation, and lifestyle. According to Gulf News, A Dh50 billion three-year development accelerator programme for Abu Dhabi has been approved. The announcement was made on Twitter by His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces. Shaikh Mohammad said that the programme, dubbed Ghadan 21 (Arabic for Tomorrow), was approved during a meeting with members of the Abu Dhabi Executive Committee.

“We have approved a three-year, Dh50 billion budget for the Abu Dhabi Government Accelerators Program Ghadan 21. Dh20 billion will be allocated to the 2019 development package,” Shaikh Mohammad tweeted.

Approved on September 16 by His Highness Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the work on Ghadan 2021 (translated to Tomorrow 2021 in English) will commence from the beginning of 2019.

Push for economic reform

According to The National, the plan has 50 initiatives to stimulate investment and job creation, including investment in the knowledge sector, the employment and education of Emiratis, and overall quality of life. It will slash red tape for businesses and build confidence in the emirate’s economy. Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, and Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, were among those present at the meeting. During the session, the Cabinet ratified an agreement on cultural exchange between the UAE and France, and an air transport agreement between the UAE and Belize, the UAE and the Marshall Islands and air services between the UAE and the Caribbean country of Grenada. Additionally, it approved agreements to promote and protect UAE investments with Kazakhstan and Costa Rica, and agreed that the Emirates join the 1997 Protocol of the International Convention for the Prevention of Air Pollution caused by ships.

Private sector – the key focus of business development in the Ghadan 2021 strategy

According to Oxford Business Group, Abu Dhabi has moved ahead with plans to bolster the emirate’s non-oil economy following the launch of a Dh50bn ($13.6bn) programme aimed at fast-tracking economic growth and social development. Key to the Ghadan initiative is the improvement of the emirate’s business environment, with a particular focus on facilitating greater private sector participation.

“To this end, the Abu Dhabi Executive Council – the body tasked with overseeing the programme – announced the establishment of a new business licence registration process, which should allow for the approval of 91% of commercial activities within five minutes. To support this, the Tajer licence, which allows operators to establish businesses without having a permanent office, has also been expanded to cover all nationalities and more than 1000 different commercial activities.

Meanwhile, in terms of financing, officials announced that a credit guarantee programme will be established before the end of the year. Under this initiative, banks are expected to offer small and medium-sized businesses Dh10bn ($2.7bn) in funding over the next three years. This was coupled with the announcement that a new public-private partnership (PPP) law would soon be issued, and the initial tranche of these PPPs will be tendered in the first quarter next year, with up to Dh3bn ($816.9m) worth of projects in housing, infrastructure, energy and health care on offer. On this note, the Ghadan strategy is expected to generate opportunities for a range of service providers, with the construction and materials supply sectors in particular set to benefit from the uptick in projects forecast over the coming three years”.

Additionally, the government is also moving to support domestic services and materials suppliers, looking to adopt by early next year a new content policy giving preference to local suppliers in state tenders.

Innovation, Research & Development

According to the same report, another key feature of the programme is the facilitation of Abu Dhabi’s knowledge economy through a series of developments promoting innovation and research and development (R&D).

“Key to meeting these goals is the establishment of a new tech incubator, expected to open by the end of the year.

On top of developing local expertise and start-ups through cooperation with the private sector, the committee said the incubator will serve to increase Abu Dhabi’s attractiveness as a destination for tech-sector talent, and support industry-based R&D efforts. In terms of education, officials announced plans to add some 30,000 places to the emirate’s school capacity over the period, to be made up of 15,000 new students in private schools by 2021 and 15,000 in existing state schools by next year”.

Reaction from the market leaders

Walid El-Hindi, chief executive officer of Abu Dhabi-based developer Imkan, also voiced his support for the development strategy.

“We are delighted to learn of the Tomorrow 2021 reforms, which represent a further step towards strong economic diversification in the UAE,” he said.

“Our leadership’s long history of strategic initiatives represents their vision to create a capital city with diverse and robust sectors that go far beyond oil. We believe this is a strong step towards stimulating  investment and further enhance the quality of life for Abu Dhabi’s residents and visitors.”

According to Weetas, the CEO of Al Dar Properties and Developments, one of the biggest Abu Dhabi-based developers, Talal Al Dhiyebi, commented on the strategy by saying that it reflects how the government seeks to accelerate the emirate’s economic growth and support its property market, adding that re-evaluating Abu Dhabi’s regulations and rules for infrastructure, residential and commercial projects is a significant step towards cutting the industry costs for both residents and investors.

Conclusion and summary: The reasons and the impact of this economic reform

According to a report by The National, this major initiative has been analyzed as following:

Why?Government officials were set a 90-day deadline to put economic reforms in motion as part of a Dh50 billion stimulus package over three years. The aim is to diversify Abu Dhabi beyond its reliance on oil income and cement its status as a growing world power.

What is the plan? Tomorrow 21 is a four-point plan to shape the economic future of the capital. The idea is to:

Stimulate business and investment, as well as promote economic development for the private sector and small businesses and support industry projects for the renewable energy sector.

Improve the lives of UAE nationals by launching new housing projects and providing quality education at an affordable cost.

Develop the knowledge sector by encouraging technology companies, supporting research and development centers, and training and developing talent and expertise.

Enhance the quality of life for all through improved cultural, sporting and transport initiatives

How will it affect jobs? The package will also include the creation of 10,000 new jobs for Emiratis in private and public sector over the next five years, while dual licenses will be available for companies in Abu Dhabi free zones to allow them to work outside free zones and bid for government tenders.

UAE leads Middle East countries by total hotel rooms in construction

The Middle East room construction total represented a 27.4% increase compared with October 2017 according to a report released by STR.

Rooms in construction in Africa, however, is down by 2.3% year over year.

The Middle East has a total of 423 hotels in the construction pipeline with 127, 177 keys which up by 27.4% compared to October 2017. Out of that, the region has 127 properties in final planning stage with 191 properties in the planning stage.

Africa has a total of 139 properties in construction with 65 of them on final planning stage and 121 in the planning phase.

UAE takes the lead spot among top MENA countries by rooms in constructions as of October 2018 with 54,371 keys making up 33.5% of the existing supply. Saudi Arabia takes second place with 48,224 rooms in construction but leads in terms of overall growth with the construction making up 51.4% of the existing supply as of October 2018.

Oman has 4,471 rooms in construction which tallies to 24.4% of the exiting supply while Egypt has 3,925 hotel rooms in construction which is 2.3% of the current supply.

Geda and Potain hoist partnership

Tower cranes from Potain will be fitted with the Geda Potain Cab-In internal mast crane operator hoist as part of a new supply agreement.

With more than 100,000 cranes sold and more than 60 models produced in France, Italy, Portugal and China, Potain has evolved since its early beginnings in 1928 into a world market leader.

The two traditional companies collaborated closely in the development of the Cab-In, exclusively for the Potain top slewing crane. It is based on the Geda 2 PK crane operator hoist that has been on the market for several years.

The new internal mast Cab-In enables a fast route to and from the cab. It fits inside all crane mast systems and is compatible with all Potain bases and drive frames. It also increases cost efficiency since the hoist remains permanently in the crane avoiding any additional transport costs and separate storage areas being required at the installation site.

The Cab-In is easily accessible and therefore easy to maintain and service. For additional safety Geda and Manitowoc have also developed a new, enclosed sliding landing level safety gate specifically for the hoist.

Johann Sailer, managing director of Geda, said, “Always with our eyes on the market, one of our ultimate objectives is to offer our customers tailor-made height access solutions. Our existing expertise in crane operator hoists along with the exclusive collaboration with Manitowoc, has enabled us to develop the Geda Potain Cab-In, a product that precisely reflects the customer’s requirements and which already meets the future legal regulations coming into force in France.”

The market launch of the Cab-In is planned for the end of 2018 but it already complies with French regulations, which from 2019 will make the installation of a crane operator hoist obligatory for every crane with a lifting height of 30m. The hoist also complies with regulations in the Netherlands and in Scandinavia.

Since the partnership Manitowoc and Geda have agreed a five-year deal for several hundred devices. Existing Potain cranes are to be retrofitted with the new hoist.

MEA smart city spending to double in next four years.

Annual technology spending by smart cities in the Middle Eastand Africa (MEA) region is expected to double from $1.3 billion to $2.7 billion in the next four years, according to KPMG’s ‘The Rise of Smart Cities – Digital Transformation in the Public Sector’ report.

Addressing the Digital Saudi 2030 conference in Riyadh, Dr Samer Abdallah, head of digital, KPMG Al Fozan & Partners in Saudi Arabia, revealed that Riyadh and Dubai are the top spenders when it comes to the development of smart cities.

“Given the Saudi government’s move to embrace digital transformation in alignment with Vision 2030 and the National Transformation Program 2020, information technology (IT) spending in the kingdom is slated to grow by at least 14 per cent each year,” he added.

Global smart city spending is set to accelerate from $81 billion in 2018 to $158 billion by 2022, Dr.  Abdallah said, citing data from International Data Corporation.

The critical success factors of digital transformation of a city include an individual strategy, a holistic approach, and technology partners. This entails, however, several challenges such as cyber risk, technology gap, funding gap, and skills gap, which need to be appropriately addressed.

r. Abdallah advised assembling a dedicated cross-functional transformation team; describing the future vision of a smart city and deriving the related digital transformation projects; selecting appropriate technologies and detailing the business cases; identifying suitable partners among tech providers and co-investors, and executing consistently under one governance, and allowing for agile project delivery as the model to building a smart city.

In another presentation on ‘The Race to the Cloud: Present and the future of cloud platforms in fuelling Artificial Intelligence’, Dr. Abdallah said: “As Saudi Arabia makes great strides to build a sophisticated digital infrastructure under its Vision 2030, cloud computing will be a catalyst for digital transformation.”

Cloud computing will play a key role in promoting Artificial Intelligence (AI), and Machine Learning (ML) as these technologies are adopted across the broader business spectrum, he said, emphasising that companies will increasingly use AI-based cyber defence systems to detect and fend off any cyber-attacks.

Dr Abdallah pointed out that data analytics is becoming increasingly important tool for businesses, particularly Business Intelligence, as modern business problems require the analysis of large and complex combinations of data sources and sophisticated data models.

When The National was launched in 2008, the UAE was best known for spectacular building projects: an indoor ski slope, and islands shaped like continents and palms.

The rate of construction was so remarkable that an urban myth was told of a Keralite crane operator named Babu Sassi, whose crane on the Burj Dubai was so tall that he lived in the cab at the top.

At the time it was widely reported that Dubai was home to a quarter of the world’s 125,000 cranes. (It was actually no more than 2 per cent.)

Building and infrastructure would transform the landscape and social fabric of the country over the next decade in a manner made more astonishing by the backdrop of the 2008 global financial crisis and the Arab uprisings.

Boom time: a decade when the cranes ruled the UAE’s skies 

When The National was launched in 2008, the UAE was best known for spectacular building projects: an indoor ski slope, and islands shaped like continents and palms.

The rate of construction was so remarkable that an urban myth was told of a Keralite crane operator named Babu Sassi, whose crane on the Burj Dubai was so tall that he lived in the cab at the top.

At the time it was widely reported that Dubai was home to a quarter of the world’s 125,000 cranes. (It was actually no more than 2 per cent.)

Building and infrastructure would transform the landscape and social fabric of the country over the next decade in a manner made more astonishing by the backdrop of the 2008 global financial crisis and the Arab uprisings.

The month The National was launched the Burj Dubai, as it was then known, reached level 160 and became the world’s tallest man-made structure. But within a few months, the effects of the 2008 global financial crisis hit.

Major infrastructure projects including the 52-kilometre Metro, enabled the city to withstand the effects of the crisis, says Dr Yasser Elsheshtawy, an architect, historian and former professor of architecture at the UAE University. It would open a year later in September, 2009.

“It is as if the city’s central nervous system is starting to shoot signals to previously detached limbs,” National reporter Hugh Naylor wrote at the time.

A 14.5km tramline followed in 2014, connecting Sheikh Zayed Road with the Marina and Palm Jumeirah, and even now construction continues with a 15km extension to the emirate’s next big project – Dubai 2020 Expo.

The city is undergoing a renewed inward focus, Dr Elsheshtawy says, with projects such as the new creekside retail area of Marsa Al Seef. After a proliferation of malls, Dubai is now tending towards pedestrian-friendly, open-air retail outlets.

“In many ways the past 10 years have witnessed a maturation of the real estate market and a closer focus on livability – walkable areas, outdoor places for social interaction and mixed-use developments,” Dr Elsheshtawy says.

“A proliferation of cultural projects moves the urban development paradigm away from a profit-making paradigm.

“While admirable in many ways, there is a clear tendency towards focusing on the higher-end of the market, and the immediate impact and relation to the existing city is sometimes not studied carefully.”

Abu Dhabi

In 2008, Abu Dhabi’s Urban Planning Council began to implement Plan 2030, starting the capital’s transformation from an island city to a city of islands.

When The National was launched, there were two crossings into the city – the Maqta and Mussaffah bridges. But there were plans for 32 more connecting the main island with Reem, Maryah, Yas and Saadiyat islands.

The 10-lane, 1.4km Sheikh Khalifa bridge to Saadiyat opened in October 2009, just before the first Formula One GP on Yas Island. It connected the Corniche to Saadiyat Island, Yas and the E11.

The mainland satellites of Khalifa City, Mohammed bin Zayed City and Mussaffah were linked to the Corniche by the 2010 opening of the 800-metre Sheikh Zayed Bridge, designed by celebrated British-Iraqi architect Zaha Hadid.

In late 2012, the much-anticipated, Dh5 billion Salam Street expressway, later to be renamed after the Founding Father, Sheikh Zayed, was completed after more than five years of construction.

Meanwhile, 80 metres underground, the Dh5.7bn Strategic Tunnel Enhancement Programme was under way. With 91km of sewers, it is one of the longest gravity-driven wastewater tunnels in the world.

Changes were not without growing pains. In its early years, The National reported extensively on the effects of the Salam Street tunnel building and another infrastructural innovation – paid parking. The Mawaqif paid parking scheme was introduced in October 2009. As parking lots were plotted out, drivers spent evenings circling for hours.

“It wasn’t ever intended to be a revenue-generating operation. It was a way to get all these cars off the streets,” says Dr Jane Bristol-Rhys, an associate professor of anthropology at Zayed University.

In the Western Region, later renamed Al Dhafra, life improved with the upgrade of the 327km Mafraq-Ghweifat motorway to the Saudi border.

In 2014, the region launched the country’s first railway and commercial operations began on the 264km line from the Shah oil and gasfields to Ruwais port. Plans for a trans-Gulf passenger line were held.

Running in the opposite direction, from sea to desert, is a water pipeline to the 21 billion litre underground reservoir in the Liwa desert near the Empty Quarter. The Dh1.6bn project, finished in January, is the world’s largest reserve of high-quality desalinated water.

End.

Sources:

http://www.constructionweekonline.com/article-50278-property-developers-hail-abu-dhabis-5bn-ghadan-2021-strategy/https://oxfordbusinessgroup.com/news/launch-diversification-strategy-pushes-abu-dhabi-towards-development-goalshttp://english.alarabiya.net/en/News/gulf/2018/09/16/Abu-Dhabi-crown-prince-reveals-Tomorrow-2021-plan-to-push-economic-reform-.htmlhttps://www.thenational.ae/uae/government/tomorrow-2021-new-drive-to-develop-start-up-businesses-in-abu-dhabi-unveiled-1.773753https://www.stlucianewsonline.com/discontinuation-of-private-sector-essential-services/https://distributed.com/news/how-blockchain-innovation-can-help-cost-efficiency-construction-industry/https://www.thenational.ae/uae/government/the-uae-explained-what-are-the-new-plans-for-the-economy-and-why-1.771143https://gulfnews.com/uae/government/dh50-billion-development-plan-announced-for-abu-dhabi-1.2278929https://www.weetas.com/gccnews/developers-praise-ghadan-21/http://www.hoteliermiddleeast.com/34582-uae-leads-middle-east-countries-by-total-hotel-rooms-in-construction/https://www.khl.com/access-international/geda-and-potain-hoist-partnership-/133904.articlehttp://www.constructionweekonline.com/article-50741-mea-smart-city-spending-to-double-in-next-four-years/

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The Rise in the Construction of Power Plants in the GCC

The economic and the population growth in the GCC in the past few years have increased the demand for more power and consequently an increase in the construction of power plants in the GCC. In this report we will look into the value of the construction of power plants in the GCC and the biggest projects that are underway in the region.

According to a report by Arabian Business, GCC power construction deals is set to exceed $23bn in 2018. New report says Saudi Arabia will lead the way on contract, accounting for more than half of total.

The value of power construction contracts awarded throughout the GCC in 2018 is forecast to reach $23.6 billion, according to a report by Middle East Electricity, the region’s annual international trade event for the power industry. The figure represents a substantial 41 percent increase on 2017. The report highlights that Saudi Arabia will lead the awards ranking, accounting for 59 percent of contract value, followed by the UAE and Kuwait.

“This upsurge in the value of contracts reflects the vibrancy of the region’s power sector where governments are looking to meet spiraling demand – between 7-8 percent a year,” said Anita Mathews, group director – Industrial Portfolio at Informa Exhibitions, which organizes the event.

The report said the GCC will require a spend of approximately $81 billion for generating capacity, transmission and distribution over the next five years with that investment likely to be prioritized despite any prevailing economic headwinds.

GCC Power construction contracts to soar by 41 percent

According to a report by Saudi Gazette, Energy Storage & Management Solutions joins four other specialized sectors at the show including the Transmission & Distribution, Power Generation and Lighting stalwarts, as well as Solar, which joins the MEE (Middle East Electricity) line-up as a dedicated sector after six years as a co-located event.

As the GCC power contract investment pipeline readies for 2018 growth, the MEE report forecasts the renewables sector is on the rise as the region pursues economic diversification policies.

“GCC countries are shifting towards renewable resources for energy generation to preserve their oil wealth. Currently, renewables form the fastest growing energy source for electricity generation. GCC countries are investing heavily in renewable energy to achieve significant targets by 2030-2040,” states the report.

The drive towards renewables is just one emerging trend in a region where the power sector is, according to Mathews – group director of industrial portfolio at Informa Exhibitions, witnessing tectonic transformation.

“Change is the name of the game with the region being driven by a new economic impetus and proving more responsive to changing fundamentals, including falls in the price of solar, storage and wind power,” said Mathews. “This transformation is impacting all, at every level. Technology advances now see buildings serving as thermal batteries. This seismic shift is seeing new businesses and astounding innovation enter the industry as it moves from a highly-regulated sector into a fiercely competitive one.

“Consequently, there are a host of amazing opportunities in new technology and systems optimization, and the global industry has acknowledged the regional prospects. They have chosen to make their market and advanced product entries at Middle East Electricity, which itself is morphing into a beacon of change, signaling what we can expect in the short, medium and even long-term from the power sector and how it will impact all our lives,” added Mathews.

The rise of waste-to-energy in the GCC

According to a report by Gulf Business, the oil price drop of 2014 has left a lasting legacy, with diversification plans across the GCC reshaping not just energy industries, but entire economies, societies, and business landscapes.

Yet it is the energy industry that has perhaps felt the tremors of these seismic changes in the most profound way, as governments try to break what Saudi Arabia’s Crown Prince Mohammed bin Salman describes as an “addiction to oil”.

As a result, a wider range of energy sources than ever before have come to prominence, with solar, wind, hydro and other types of energy emerging across the region. One of the most promising avenues is waste-to-energy (WTE) – a process that not only generates significant levels of energy, but also tackles a major problem for the region.

“Across the GCC, governments are actively pursuing strategies to achieve zero waste,” says Khaled Al Huraimel, group CEO of Sharjah-based environmental and waste management company Bee’ah.

“Average levels of waste per capita per day in the region stand at 1.65kg, and with the rapid urbanisation of the Middle East, waste production in the region is only expected to increase.

“Waste-to-energy projects will enable us to tackle this insurmountable problem of waste, in addition to meeting our energy needs and creating value out of discarded materials.

The rise of several new waste-to-energy projects in the region exhibits the responsiveness of the GCC market to waste-to-energy initiatives.”

One of these projects was confirmed earlier this year when Bee’ah formalised a partnership with clean and renewable energy player Masdar to create the Emirates Waste to Energy Company (EWEC) and build a WTE facility that will incinerate up to 37.5 tonnes of solid waste per hour – adding an extra 39MW of green energy to the Sharjah electricity grid and providing power to thousands of homes.

It was a big step in the company’s WTE ambitions, and is set to complement the firms existing projects and initiatives, which include the region’s first – and the world’s largest – gasification plant.

The facility has the capacity to process around 160,000 tonnes of non-recyclable waste annually – generating a gross output of 35MW of energy that can be used to power around 50,000 homes.

“This facility will enable Sharjah to become the first city in the region to achieve ‘zero waste-to-landfill’ status, in addition to achieving the UAE’s 2021 goal of diverting 75 per cent of solid waste away from landfills,” says Al Huraimel.

According to another report by The National, The UAE is aiming to generate 75 per cent of its electricity from renewables by 2050, while Saudi Arabia,the world’s biggest oil exporter, has ambitions of adding 9.5 gigawatts (GW) of renewable energy to the grid by 2023, which approximates to ten per cent of its energy mix.

“I fully expect the kingdom of Saudi Arabia to announce their energy mix for 2030 and in that mix, I fully expect to see a significant amount of renewables – 40 to 50 per cent levels,” said Paddy Padmanathan, chief executive at Riyadh-based power and water developer Acwa Power.

“Saudi Arabia is the sort of later entrant to this reality but it’s a big volume and this will be the most exciting.”

The analysis below by the International Renewable Energy Agency, can give a clear picture of the renewable energy market in the GCC:

Top 5 GCC power and water projects

To conclude the report, we are looking into the largest power and water projects in the GCC and we have listed them here  – BNC Network estimates 48 power plant projects under construction as of October 2018 in the GCC. Here are some of these projects:

Saudi Arabia: Jizan Economic City (JEC) – Power Plant (Actual value: US$3.4 billion)

CPI Power Engineering was awarded the main construction contract in November 2008. Construction of the 2 400 MW captive power plant started early this year and is expected to be completed in 2013. It is intended to power an aluminium smelter in Jizan Economic City. The city itself is 725 km south of Jeddah and will include residential, commercial and industrial zones. The economic city will be built in phases and is expected to be completed by the end of 2020. The Aluminum Corporation of China (Chalco) signed an agreement with Malaysia’s MMC Corporation and the local Saudi Binladen Group to develop a 1 million ton per year aluminum smelter in November 2007.

Saudi Arabia: Jubail IWPP (Actual value: US$2.5 billion)

The independent water and power plant in Jubail Industrial City will be made up of four blocks and based on combined cycle generation gas turbines. The extraction steam will supply the desalination plant, which will have 27 units employing multiple effect distillation technology. When operational, the plant will produce 2 745 MW of power and 800 000 m3 per day of desalinated water.

These resources are destined for Jubail Industrial City and the Eastern Province of Saudi Arabia. The project is being developed with on a build, own, operate and transfer basis. The Seuz consortium was awarded the construction contract in December 2006. The consortium is a joint venture between Suez Energy International and Saudi Arabia’s Acwa Power Projects.

UAE: Hassayan power and desalination plant (Actual value: US$2 billion)

The Dubai Electricity and Water Authority’s Hasssyan power and desalination complex is planned to be a huge plant made up of six stations (P1, P2, Q1, Q2, R1, R2) each with a gross capacity of around 1 500 MW and between 100 – 120 million gallons per day of desalinated water. Configurations on the drawing board include gas turbines with associated heat recovery steam generators, auxiliary boilers, backpressure steam turbines and MSF desalination units. The project will also include infrastructure for water storage and distribution.

UAE: Nuclear Power Plant : Barakah Nuclear Energy Plant

The project involves construction of a nuclear power plant with a capacity of 5,600 MW in Baraka in the Western region of the capital city. It will include four nuclear reactor plants each with capacity of 1,400 MW. Unit 1 is slated for completion in five years, with commercial operations commencing in 2017, pending regulatory approval. The project upon completion will enable UAE to meet a quarter of its electricity needs from safe, clean, efficient and reliable nuclear energy, and save up to 12 million tons in carbon emissions each year. The project is estimated at 40 billion US$ and NFT has had 60 tower cranes installed throughout the multiple phases of the project.

Bahrain: Al Dur IWPP (Estimated value: US$2 billion)

The Al Dur power and desalination plant in Bahrain is being developed on a build, own, operate basis by a consortium composed of GDF SUEZ and Gulf Investment. The project has seen lucrative contracts awarded to large international players and will be located at Al Dur. The plant will consist of a combined cycle gas turbine power plant and a reverse osmosis desalination plant, together with all support facilities such as seawater intake and discharge structures and gas connection.

Oman: Al Duqm IWPP (Estimated value: US$2 billion)

The Al Duqm IWPP is currently on the books as the first coal-fired power plant in the GCC. If it goes ahead the proposed plant is expected to have an electricity capacity of 1 000 MW.

Kuwait: Az Zour South 3 Power Plant Expansion

The project involves the expansion of Az Zour South 3 power plant from open cycle to combined-cycle mode. The plant is located in Kuwait and is operated by the Ministry of Electricity & Water (MEW). The expansion will increase the total installed capacity of the plant by 263 megawatts (MW) without using any additional gas.

Az Zour South 3 began operating as an open cycle power plant with two SGT5-4000F gas turbines in 2015. After the steam turbine expansion, the hot waste gases of the gas turbines will be used to produce steam which will feed the turbo set. This will increase the plant’s total capacity without any additional gas consumption and will boost its efficiency significantly.

Dar Al-Handasah to build first commercial Hyperloop system in Abu Dhabi

Design and engineering firm, Dar Al-Handasah has been appointed to head construction of Abu Dhabi’s first commercial Hyperloop system.

Dar Al-Handasah will act as design lead on the project heading at team including fellow Dar Group members: Perkins+Will (architects, USA), T.Y. Lin International (engineers, USA), GPO Group (engineers, Spain) and Currie & Brown (cost management consultants, UK), said Hyperloop Transportation Technologies in a statement. Construction of the Hyperloop commercial track as well as HyperloopTT’s XO Square Innovation Center and Hyperloop Experience Center is targeted to begin in Q3 2019.,

“We are extremely honoured to be part of this global movement in mobility and rapid transportation and are looking forward to collaborating with HyperloopTT to deliver a truly iconic project in Abu Dhabi,” said Talal Shair, chairman, Dar Group.

HyperloopTT confirmed it had signed an MoU with Aldar Properties earlier this year for the construction of a new HyperloopTT centre including; a full scale commercial Hyperloop system, an XO Square Innovation Center and Hyperloop Experience Center. The proposed site within Aldar’s Seih Al Sderieh landbank is also conveniently located on the border of the Emirates of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport, according to HyperloopTT.

Dubai Creek Harbour construction site uses anti-collision crane tech

Details have been revealed of the anti-crane collision technology being used on the construction site of Emaar’s Dubai Creek Harbour project. AMCS Technologies is providing its systems for the 59 cranes working on Dubai Creek Harbour’s Island District.  AMCS’s DCS 60 anti-collision and zoning systems are managing the equipment, which is helping nine contractors avoid interference with their cranes.  Among the project challenges AMCS is helping to mitigate is the proximity of different luffing and topless cranes on site. Due to the interference caused by this number, the construction process may be hindered by collisions between jibs and counter-jibs and jibs and cables.

Explaining the technology’s functions, Radoine Bouajaj, sales director at AMCS Technologies, said: “Anti-collision and zoning systems are essential for this spectacular project. The DCS 60 guarantees site safety by managing prohibited areas and interferences between cranes. It makes the work even easier by displaying useful settings for operating the crane.”

End.

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