A soft landing?

The Dubai vision, set some 13 years ago, is that the economy will be independent of oil revenues by 2010. To do this, the government wants the city to become a tourist resort, an oasis of industrial activity and a global financial hub.

Massive inward investment from the Gulf States has provided the capital to fuel this boom. It is said that 25% of the world's tower cranes are now in Dubai and that the city grew by 700 floors last week.

Along with putting the infrastructure and facilities in places, and the reclamation of huge amounts of land, this all adds to the frenzy of construction currently taking place.

Residential activity over the last three years has grown exponentially due to the Royal decree allowing the ownership of freehold property by non-emirates. This has led to demand from owners across the Gulf, the former Soviet Republics, India, Pakistan and Western Europe.

Residential supply was traditionally provided by the government and quasi- government organisations. Now these have effectively been deregulated. Companies such as Emaar properties and Nakheel (the developer of the Palm Islands) are leading the way. However, local and international developers are also now seeking to meet the demand. Returns for investors in this buoyant market are far better than those available in the established markets in the West.

Typically, construction techniques in concrete frames are geared up for a floor a week per building no matter the size. Structural steel supplies are in big demand for the industrial and large-scale developments such as the airports. Dubai has one international airport under expansion now and is just starting the second, which will be five times the size of the first. Basic supplies of rebar, cement and cladding are absorbing large capacities from around Asia and Europe. Supplies of major machinery too (chillers, generators, lifts, escalators and the like) are equally stretched.

A landing (soft or hard is the big question) is widely predicted over the next 18 to 24 months for Dubai’s economy

The constraints do not only show up in difficulties with materials and labour resources on the construction sites but also with the consultants that are project managing, cost controlling and designing the schemes. Good quality staff, using good quality delivery techniques are few and far between.

It is traditional in the Dubai marketplace to design buildings in detail, to generate bills of quantities and tender to the contracting marketplace. However, with the speed to market becoming paramount, developers are looking to experienced project managers and cost consultants to guide them through the potential risks of more aggressive contract forms - particularly in the design & build and construction management arena.

The use of experienced and modern-thinking cost and project management consultancies is high on the developers' radar and essential these days. Meanwhile, delivery of good quality services is recognised and compensated while poor achievement is often penalised.

Against all of the pressures to achieve and deliver hotels, apartments, offices and factories, EC Harris has grown its operation carefully but substantially in the region and is working on several large schemes in Dubai and the wider region. What is happening today in Dubai is predicted to happen over the next few years in Abu Dhabi, Doha and Bahrain which are all waking up to the opportunities of evolving their economies away from pure energy revenues.

Construction in Dubai is booming. However, a landing (soft or hard is the big question) is widely predicted over the next 18 to 24 months for its economy. That said, Abu Dhabi is just starting up - a home for all the tower cranes no doubt.