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PDF | 9 MB - Australian Building Codes Board

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INTERNATIONAL Regulatory Development<br />

<strong>Building</strong> and<br />

construction<br />

to the United<br />

Arab Emirates<br />

Trends and opportunities<br />

The market<br />

Australia is a strong exporter of products<br />

and services to the UAE construction<br />

sector. Statistics indicate that in 2009<br />

Australia exported A$78.3 million of<br />

construction-related products to the<br />

UAE. Total services exports to the UAE,<br />

which are harder to quantify, totalled<br />

A$1.7 billion in 2008. A significant<br />

amount of this income comes from<br />

the construction sector. Many large<br />

<strong>Australian</strong> services firms have an office<br />

in the UAE including:<br />

• Leighton<br />

• Worley Parsons<br />

• GHD<br />

• Cardno<br />

• Bovis Lend Lease<br />

• Woods Bagot<br />

• PTW<br />

In fact, the total number of <strong>Australian</strong><br />

offices of building-related companies<br />

numbers over 100.<br />

The effect of the global financial crisis<br />

(GFC) on Dubai’s property sector has<br />

been significant and widely reported.<br />

However the outlook for the United<br />

Arab Emirates (UAE) remains optimistic<br />

as Abu Dhabi, the capital and home to<br />

10 per cent of the world’s oil reserves, is<br />

spending widely to meet the ambitions<br />

of its 2030 master-plan under which the<br />

emirate’s population is set to increase<br />

from 1.2 million in 2010 to 3.1 million by<br />

2030.<br />

The building and construction sector<br />

remains the third largest sector of<br />

the economy after oil and trade,<br />

constituting US$23 billion or about six<br />

per cent of GDP, even the in the current<br />

post-financial crisis climate. In addition,<br />

the UAE is still the largest construction<br />

market in the Gulf and double the size<br />

of Saudi Arabia, with US$714.8 billion of<br />

projects planned or underway (Source:<br />

Zawya, ‘Construction sector outlook:<br />

challenging 2010, promising 2011’,<br />

20 July 2010).<br />

Five of the 10 biggest projects in Gulf<br />

Cooperation Council (GCC) region are in<br />

Abu Dhabi, amongst them the Capital<br />

District (US$40 billion), Yas Island (US$37<br />

billion) and Saadiyat Island (US$27.5<br />

billion). (Source: Zawya, ‘Construction<br />

sector outlook: challenging 2010,<br />

promising 2011’, 20 July 2010).<br />

Significant changes in the market<br />

In addition to the rise of Abu Dhabi, a<br />

number of other significant changes<br />

have taken place in the market.<br />

There has been a shift away from<br />

residential and commercial construction<br />

towards large infrastructure projects.<br />

Several reports estimate that the<br />

government is planning infrastructure<br />

spending of US$272 billion in the next<br />

five to seven years, which will equate<br />

to one-third of the total spending for<br />

the entire GCC. (Source: Business Monitor<br />

International, United Arab Emirates<br />

Infrastructure Report Q3 2009). Significant<br />

infrastructure spending is occurring on<br />

power and water, roads, ports and rail.<br />

Financing and delivery of some of<br />

these large projects have opened up<br />

to the private sector. Bids for the first<br />

PPP in road development are under<br />

consideration, and power and water<br />

projects have been attracting private<br />

sector financing for some time.<br />

Transport projects<br />

Transport projects are taking centre<br />

stage. Even in Dubai which has<br />

experienced a major property decline,<br />

more than 45 per cent of 2010 budget<br />

expenditure (US$4.71 billion) was<br />

allocated to infrastructure and transport.<br />

(Source: Middle East Economic Review,<br />

‘The UAE’s economy: a tale of two cities in<br />

2010’, by Richard Nield).<br />

The UAE is moving forward with plans<br />

to be part of the US$100 billion GCC<br />

Railway Project which will link the Gulf<br />

countries together by rail. The UAE’s<br />

portion of the GCC rail project comprises<br />

a 1,500km domestic rail network which<br />

is due to be delivered by 2015 with a<br />

forecast value of US$11 billion. Light<br />

rail and metro systems are also under<br />

consideration.<br />

Rejuvenation of ports<br />

Abu Dhabi is building and rejuvenating<br />

a series of large ports. In all emirates,<br />

road and bridge construction and<br />

upgrades are receiving significant<br />

funding.<br />

Government investment in Abu Dhabi<br />

is flowing into regional areas such as Al<br />

Ain in the south, and Al Gharbia (known<br />

in English as the Western Region),<br />

which despite their small populations<br />

contribute roughly half of the UAE’s GDP<br />

from agriculture and oil and gas.<br />

Green building<br />

Green building and sustainable<br />

infrastructure is being championed and<br />

mandated in Abu Dhabi by the Urban<br />

Planning Council and Department of<br />

Municipal Affairs under new building<br />

codes effective from 1 September 2010.<br />

18 • <strong>Australian</strong> <strong>Building</strong> Regulation Bulletin

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