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LATEST NEWS IN THE MIDDLE EAST
Bahrain's $1 billion resort cancelled
ConstructionWeekonline.com
By : Benjamin Millington -
Jan 21, 2009
Sama Dubai has cancelled construction of their US $1 billion (BHD 377 million) Salam Resort project in Bahrain amid growing pressures of the financial crisis.
On Tuesday it was revealed the Dubai developer, part of government-owned Dubai Holdings, had revoked its contract with contracting joint venture Murray & Roberts and Nass Corporation.
“They decided not to go forward for now and they are going to review the viability of the project over the next six months,” Nass chairman Samir Nass told Construction Week.
“Sama have about 10 big projects and I think this is one of several that are not going forward at this point.
“I think definitely it is going to go ahead in the future but when is the big question.”
Nass said the cancellation will have no negative financial impacts on his company as did Murray Roberts in a public statement.
It is the second blow in as many months for Murray & Roberts who also had their contract for Trump Towers Dubai scrapped in December.
No one from Sama Dubai was available to comment but the company said in November it was considering job cuts and reviewing its upcoming projects.
Last week it was reported that their $534 million (SAR 2 billion) Dubai Jeddah Towers project in Saudi Arabia has been put on hold.
Until now construction projects in Bahrain have remained relatively unscathed from the financial crisis with no major delays or cancellations being publically announced.
The Salam Resort was billed to be the first luxury beach community on the untouched south western coast of Bahrain, 45km from the capital Manama.
Construction on phase one of the project started in September 2007 and was due to be completed this year.
Phase one included a 288-room luxury beach hotel, seven hotel villas, a conference centre and six royal villas on a private island. The second phase was made up of a residential community and retail outlets.
Nass joint venture loses $545m resort deal
Gulf Daily News
Published: 21st JANUARY 2009
DUBAI: A joint venture between South Africa's Murray & Roberts and Bahrain's Nass Corporation has lost a $545 million building deal, it emerged yesterday.
This is the latest sign the Gulf is struggling to cope with the economic downturn.
In a regulatory filing yesterday, Nass said Sama Dubai had terminated the contract covering the Salam resort, a luxury beach-front project close to the Bahrain Formula One track.
The global financial crisis has put the brakes on an economic boom in the Gulf, especially in Dubai, where a building boom is unravelling, property firms are laying off staff and banks are facing tight liquidity conditions.
When the project was announced in 2005, Sama Dubai put the project costs at Two billion UAE dirhams ($544.5m).
The Dubai firm did not give a reason for the termination in a letter to the joint venture published on the bourse website.
It is the latest in a string of projects to be cancelled or delayed in the Gulf region and the second Murray & Roberts has lost in as many months.
Last month, its key Trump Towers Dubai building project was scrapped.
Bahrain until now has not been as badly hit, but the kingdom is beginning to feel the effects of the crisis as projects financed by banks and developers from the rest of the region are being delayed.
Sama Dubai said in November it was considering job cuts and reviewing its project pipeline.
February and March are crunch time
by Jamie Stewart
February and March will be crunch months for the industry, a partner in one of Dubai’s foremost construction law firms told Construction Week.
Pinsent Masons partner Sachin Kerur, who consults regularly with industry insiders, said it will be at this time that developers decide whether to go ahead with projects that have been placed on hold, or cancel them.
“Speaking to the industry it seems that the real test will come about in February 2009, and then we will start to know,” he said.
“Like all businesses they (contractors) have to work on a forward order basis. I think by February they will begin to see to what extent developers are pulling projects which up until now have been suspended or slowed down.”
A number of projects in the region, and particularly in Dubai, have been suspended or have slowed down as a result of the fall in real estate demand coupled with the unwillingness of banks to lend money to finance new projects due to the high risk involved.
But Kerur added that the situation could be appeased by the more responsible lending criteria of the Islamic banking system.
“Because of all the boxes that need to be ticked before you can finance a deal using an Islamic financing structure, you’ll find that people may look to adopt those sorts of structures for safe lending in the future,” he said.
Amir Salam, consultant and until last month managing director of Dubai-based Kaizen Developments, agreed that February could be an important month. “There are a lot of sub-developers that are renegotiating with master-developers,” he said.
“They are trying to consolidate funds towards projects that will give them the biggest turnaround. I don’t know if decisions will necessarily be made in February or March, but it could end up that way.”
Analysts have stated that it may take Western based banks 12-24 months until they are able to finance major construction projects in the Gulf again.
“I don’t see the banks coming back soon to finance new projects,” Rasmala Investments founder and CEO Ali Al Shihabi said.
“I think that it may take a few years, but further down the road the “time out” will turn out to be a very healthy development in retrospect for Dubai, which needed to catch its breath,” he said.
Kerur agreed. “The time frames you hear before banks will start lending again are 12 – 24 months,” he said.
Construction to start on Qatar-Bahrain causeway
by
Rebecca Bundhun -
Sunday, 04 January 2009
Construction of the world’s longest marine causeway, which will link Bahrain and Qatar, is due to start in 2009, the Bahrain Economic Development Board (EDB) said on Sunday.
Considered one the most important infrastructure projects in the region, the $3 billion project will take four years to complete and the bridge will consist of more than 40km of twin carriageway running across 22km of viaducts over the sea and 18km of embankments.
Dubbed as the ‘Friendship Causeway’, this is expected to reduce the current travelling time from to Qatar to Bahrain from four and half hours to just 30 minutes.
“The causeway will provide many new opportunities for companies based in Bahrain to further develop their business, not only in Qatar but right across the GCC,” said Sheikh Mohammed bin Essa Al Khalifa, EDB’s chief executive.
The causeway will also provide a connection for future high-speed freight and passenger rail lines between the countries, the EDB said in a statement.
There are also plans to extend the route to link Istanbul, Turkey and Muscat, Oman.
10 companies shortlisted for $40bn Saudi project
by
Andy Sambidge
-
Sunday, 04 January 2009
Ten companies have been shortlisted for the construction of a new $40 billion economic city in Saudi Arabia.
Modon, the kingdom’s industrial development agency, has shortlisted 10 developers for Sudair City, which will be the largest development of its type in the country.
It is one of a number of economic cities planned which also include King Abdullah Economic City, Knowledge Economic City in Medina, Prince Abdulaziz bin Mousaed Economic City in Hail and the Jazan Economic City, south of Jeddah.
The developers in the frame for the Sudair contract will be invited to submit their proposals within the next eight weeks, UAE daily The National reported on Sunday.
The successful developer will then be responsible for hiring sub-developers for the project, which will be spread across a 258 million square metre site north of Riyadh.
Modon initially invited about 60 companies to bid for the project.
“We did a pre-qualification of all companies that expressed an interest and will issue a request for proposal (RFP) to 10 companies within the next eight weeks,” Tawfig al Rabiah, the director general of Modon, told the paper.
Rabiah added that Sudair City was progressing according to plan despite the global economic crisis, with a contractor hired in November to build electricity networks and substations for the first phase of the project.
Etihad bucks aviation downturn
by
Rob Morris -
Sunday, 04 January 2009
Etihad Airways carried more than six million people in 2008, bucking last year’s global aviation industry downturn.
Some 6,021,931 passengers flew with the Abu Dhabi-based airline, with average seat factors rising to 75 percent from 68 percent.
Etihad’s busiest day came on December 19 when 20,937 flew with the carrier.
James Hogan, Etihad Airways’ CEO, attributed the airline’s passenger figures to fleet and route expansion. Last year, the carrier launched six new services to Beijing, Minsk, Almaty, Kozhikode, Chennai and Moscow.
The airline received nine new aircraft last year, boosting its fleet to 42, and ordered 205 Airbus and Boeing planes worth $43bn worth at the Farnborough International Airshow.
“Despite the impact of the global economic downturn, Etihad performed extremely well in 2008 and we hit our target of flying more than six million passengers during the year,” Hogan said.
“Etihad now has a flight network of 50 global destinations, with an average seat factor of 75 percent, which is an impressive achievement in just five years of operations. It is also pleasing to note Etihad's pivotal role in the growth of Abu Dhabi as the emirate becomes a global capital for business and tourism,” he added.
Seat loads in Etihad’s economy cabins reached 77 percent on average, rising to 84 percent for Asia-Pacific routes in 2008.
The airline’s business class loads were 63 percent, with flights to European destinations reaching 73 percent.
Aside from healthy passenger numbers, Etihad also announced codeshare agreements with four airlines, and increased its workforce to 7000 last year.
Dubai Metro on track despite global crisis - RTA chief
by
Andy Sambidge
- Friday, 02 January 2009
A top RTA Rail Agency official said on Friday the Dubai Metro project would be completed on schedule but other projects planned for 2009 would be re-evaluated amid the global economic crisis.
Abdul Redha Abu al-Hassan, RTA Rail Agency director said that although 2009 would present challenges, the $4.2 billion Metro deadline was "on track".
He added that from a financial position, the project had "no problem".
In comments published by Emirates Business on Friday, he added: "We need to re-programme ourselves according to the market now.
"It's not right that we spend money here and there on new projects without following the development in the city. Most of the developers have stopped their projects, so we have to study our programmes again, especially for the new ones underway."
He said: "Existing projects will go ahead and be finalised as planned, but for new projects we have to re-study our schedules so we can be with the areas' needs for transportation in rail."
The red line, which is due to open on Sept. 9, 2009 runs a total of 52.1km from Rashidiya to Jebel Ali.
The green line, stretching 23.9kms around Dubai creek from Al Qusais to Jedaff, is set for completion on March 21, 2010.
2012 date for world's tallest commercial tower
by
Andy Sambidge
- Friday, 02 January 2009
The developer behind plans for the world's tallest commercial building said on Friday it would deliver the project in early 2012.
Despite the global economic crisis, the Fortune Group said it would soon announce the construction contract for the 108-storey Burj Al Alam, being developed at the Business Bay, Dubai.
"Right now, the Middle East Foundations Group is carrying out the shoring and piling works, following which we will be able to finalise the main construction contract for the project," Syed Mohammad Ali, Fortune Group's founder and chief executive, said in comments published by UAE daily Gulf News.
He added that about 50 per cent of the project was already sold out and the company was committed to deliver the building, which is expected to rise 510 metres, in the first quarter of 2012.
The news follows an announcement by Emaar earlier this week that the Burj Dubai, the world's tallest building of any type, currently stood at 780 metres and was still rising. It is slated to be completed by mid-2009.
Fortune Group's development portfolio is valued at 12 billion dirhams and other projects underway include Fortune Bay at Business Bay and Fortune Pavilion at Dubai Sports City.
"All our projects are going to be delivered in time. In extreme cases, at best six months delay could occur due to logistics reasons," Ali said.
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