A sudden surge in projects in Abu Dhabi intended to develop its oil and gas infrastructure and expand production is forcing up the price of construction, according to Arbar Ali Kahn, general manager, Trans Middle East General Construction.
With ADNOC committing $40 billion in development of new fields, downstream pipelines and storage and cargo facilities, Khan told Khaleej Times that by March several EPC (engineering, procurement, construction) companies will have broken ground on new sites that are expected to be built in the first half of the 2011.
However he warned that the burst of activity was having a detrimental effect on the availability of construction machinery.
“Abu Dhabi’s strategy has worked perfectly in the wake of the global crisis as construction material prices dropped up to 35-40%, which resulted in attractive pricing,” he said. “However, now when several projects are going into ground breaking stage, simultaneously, the costs are rising as there is a shortage of construction machinery and rising diesel prices.”