The UAE is projected to spend $329 billion on major construction projects by 2030, according to an EC Harris study.
Big construction projects which cost more than $1 billion are due to peak in the UAE by 2016. The report found that projects worth $40 billion will be due for delivery in 2016.
However the report predicts a potential squeeze for labour and material resources due to an increase in construction activity across the Middle East. This could in turn impact the project delivery.
Around 117 construction programmes, costing more than $1 trillion, are planned for completion across the Middle East by 2030. Most of these programmes include major infrastructure, energy, property and transportation projects.
UAE will be spending the highest amount on construction projects by 2030 followed by Saudi Arabia and Qatar, where construction expenditures are projected to touch $225 billion and $156.8 billion respectively.
“These programmes, particularly the more ambitious mega cities, are at the forefront of these enormous infrastructure developments which will bring diversification, foreign and domestic investment and job creation on an unparalleled scale,” said Alistair Kirk, head of infrastructure, industry and utilities, Middle East at EC Harris.
However, with demand currently outstripping supply for human capital and material resources, the report noted that there is a risk of inflation, which will make it harder to secure resources in a competitive market.
But Kirk said that all major construction programmes can be completed and delivered on time if there is a collective effort from governments, developers and contractors.
The report also said that with the Middle East playing host to large-scale events, it is important to ensure that there is enough infrastructure to support the influx of labour due to the ensuing construction boom.
“Countries that are proactive in the provision of enabling infrastructure that will stretch over a long period are at much less risk of programme slippage than countries with little supporting infrastructure,” the report said.
Dubai’s expenditure, if its bid to host the World Expo becomes successful, stands at $8.1 billion. Most of the investment will be used to ramp up the emirate’s infrastructure and public transport, a senior official told reporters recently.