Page 73 - magazine Jun 2020

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“The problem is that we see no projects being said.
announced in different emirates. [Currently] Despite the pandemic, he noted that during the
ongoing projects make Dubai busy in the first three months of 2020, their company has
construction sector. Normally, we see parallel new cast over 112 slabs, poured more than 55,000
project announcements in other emirates, which cubic meters of concrete and built over 1.3 million
is not happening at the moment. Due to this, the square feet of built-up area, with monthly average
same traders are not willing to buy additional building progress of nearly 8 percent and more
quantity of steel products from us in the steel than 1.6 million recorded man-hours.
manufacturing industry,” Bhatia added. “We have not faced any supply chain issues,
He clarified that he hasn’t seen any work stoppage having sourced all necessary products well
related to existing projects. “All the current projects before the crisis. Our construction is therefore
are doing well. We only see a huge decline in unaffected,” he pointed out.
new projects. Also, in some of the areas, we see “Our developments are progressing swiftly despite
quarantine measures being imposed,” Bhatia the current global situation, with construction
added. being one of the very few vital, fully operational
Every year, Conares produces one million tons of sectors,” he added.
steel products, including steel pipes, rebars and Azizi, however, admitted that they will not be rolling
pre-painted coils. It also operates three steel bar out new projects anytime soon. “This, however, is
mills. Despite the decline in demand, Bhatia said, not due to COVID-19 or other market conditions.
they have not resorted to salary or job cuts. Rather it is due to the extensive amount of
“If things will not improve as we expected, then we developments that are already in our pipeline and
will have to take some measures,” he added. that we are focusing on delivering,” he said.
The UAE is one of the biggest construction Outlook
markets in the Gulf Cooperation Council (GCC) Colliers, however, estimated that the coronavirus
region. According to estimates by BNC Network, outbreak will influence the cost of construction in
a total of 23,000 projects were active in the region the UAE in the near future.
at the end of March 2020. New projects worth $21 Project proponents are likely going to have to deal
billion were announced during the first quarter, with higher costs, as contractors are expected
with the UAE bagging more than half (59 percent) to factor in the issues they go through related to
of the pie. the pandemic, including restrictions on labor and
Developers management, shortage of materials and longer
Some developers are already feeling the lead times, delay in response due to remote
economic toll. Nakheel has just cut the salaries of working, cost of precautionary measures on
its employees by as much as 50 percent, as the the site and delayed response from authorities,
pandemic starts to bite. among others.
However, despite the challenges posed by the “We would anticipate that tender pricing would
coronavirus outbreak, some businesses remain increase due to contractors pricing in risk to cover
confident that, with Dubai’s proactive and resilient a prolonged program due to logistical difficulties
leadership, the economy will be able to beat the and management/ labor restrictions,” Flanagan
downturn. said.
“So far, we have seen a swift, outstanding In about two to six months, if the virus is under
enactment of policy from both federal and control, the impact is expected to ease, along with
local government authorities in an attempt to the loosening of restrictions relating to materials
support businesses and residents during these and increased competition from contractors.
trying times,” said FarhadAzizi, CEO of Azizi “However, there will be a backlog, which may
Developments. increase materials cost,” added Flanagan.
Azizi noted that work on their projects has not If the virus is contained globally within the next six
been delayed despite the supply chain disruptions months, Flanagan said they expect tender prices
caused by coronavirus. “Most projects are to be lower than the last quarter of 2019 with
progressing rapidly - all of ours at Azizi are in full increased tender competition, lower overhead
swing. Some developers, such as ourselves, have costs and easing of externally sourced materials
received a special permit from the government backlog.
that allows us to work on some projects,” Azizi

Contractors News Magazine 9