01 January 2009
The value of construction contracts awarded in the UAE fell by 85 per cent in the final quarter of last year compared to the same period a year earlier, according to a report out yesterday.

Contract awards worth $14.4 billion were made during the fourth quarter of 2008, down from $98.1 billion in 2007, as the global credit crisis rendered project financing a struggle, Middle East Economic Digest (MEED) said.

Around $23.2 billion worth of projects have been put on hold, almost ten per cent of the $249.7 billion of projects under construction in the UAE, MEED reported.

In total, $191.8 billion of contract awards were made last year, a 60 per cent drop from the $482.5 billion of awards made in 2007.

Imad Al Jamal, vice chairman of the UAE Contractors' Association, told 7DAYS he felt the quarterly figures were exaggerated and was taking them with "a pinch of salt".

"There is no statistical base here that you can rely on," he said. "Because of that, it is difficult to substantiate [figures]."

But he felt saying that ten per cent of projects were on hold was something of an understatement.
"I think it is much more than that. I think probably 30 or 40 per cent, at least," Al Jamal said, adding that he was feeling rather pessimistic about the year ahead.

"We are at the beginning of a downturn, and it will probably take us a minimum of one year to three years... to start looking ahead.

"Having said that, we are in a much better position to come back bigger and better than others, based on a very simple fact - we have more fluidity and cash flow."

© 7Days 2009