Population growth rather than low oil prices is fueling the GCC construction sector, according to Spanish construction firm, Acciona.
A three-year lull in oil prices has forced GCC governments to cut spending, put a hold on some projects and slash jobs. Contracts in Saudi Arabia, the region's largest market, dropped by 51 per cent in the first quarter of last year compared to 2015, indicating a slowdown in the region's construction sector, according to an E&Y report.
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Al Khodari, a contractor in the kingdom slashed more than 8,000 jobs in 2015 while the Binladin Group released up to 60,000 labourers out of 200,000 workforce last year, according to the consultancy's report. Several media outlets in Saudi Arbia reported this week that Saudi Oger, owned by the family of former Lebanese prime minister Rafik Hariri has closed up shop.
"We know that the market has recently contracted for infrastructure, but it's just an impasse," said Jesus Sancho, the Middle East director of Acciona. Infrastructure projects need to be developed for healthcare, housing, commercial needs and transportation as the population throughout the region continues to rise and put a strain on existing frameworks.
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The population of the GCC rose by almost 20 per cent – more than six times the rate of growth in the United Kingdom or United States (2.9 per cent and 2.7 per cent respectively), according to the Centre for Economic and Business Research and ICAEW. In the UAE a child is born every three minutes with nearly 160,000 births to citizens and non-citizens in 2015, according to the latest figures from the Federal Competitiveness and Statistics Authority.
"Anything that's intimately related to the growth of populations are the first priorities that clients are tending to," he said.
The rapid pace of growth trickles into the utilities sector, impacting power and water projects in the pipeline across the GCC. That has led to a 10 per cent year-on-year growth for Acciona's Middle East division with a turnover of more than US$1.3 billion last year, of which the UAE accounts for about 70 per cent.
"At the moment the frontline is the UAE, the country hasn't stopped issuing tenders and contracts – it's quite active," said Mr Sancho.
The company's membership of the consortium that won the Dubai Metro expansion by the Road and Transport Authority (RTA) worth $2.5bn as well as the $800 million engineering, procurement and construction project of the 800 megawatt solar plant by the Dubai Electricity and Water Authority has fuelled Acciona's revenue.
Beyond the UAE, Saudi Arabia is on the firm's radar given the direction set out by the National Transformation Plan and economic development agenda under Vision 2030 which aim to open the country to private investment. The kingdom is preparing tenders for public-private partnerships in various sectors including power and construction.
These projects "will be massive" and Acciona is looking to gain a piece of the pie, said Mr Sancho.
Across the oil-reliant GCC, measures are being implemented to have companies carry more of the financial burden for projects to help ease the pressure on government coffers.
The size of projects that are coming up in Saudi Arabia will run into the tens of billions of dollars, including replicating the Riyadh metro line across other large cities such as Jeddah and Dammam.
Gulf countries are also ramping up efforts into renewable energy to help offset demand for oil and gas as the main feedstock for electricity. Mr Sancho added: "We are aiming to continue growing. If say there are four to five mega projects a year in the GCC, we expect to get at least one."
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Match statistics
Abu Dhabi Harlequins 36 Bahrain 32
Harlequins
Tries: Penalty 2, Stevenson, Teasdale, Semple
Cons: Stevenson 2
Pens: Stevenson
Bahrain
Tries: Wallace 2, Heath, Evans, Behan
Cons: Radley 2
Pen: Radley
Man of the match: Craig Nutt (Harlequins)
Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
GREATEST ROYAL RUMBLE CARD
The line-up as it stands for the Greatest Royal Rumble in Saudi Arabia on April 27
50-man Royal Rumble
Universal Championship
Brock Lesnar (champion) v Roman Reigns
Casket match
The Undertaker v Rusev
Intercontinental Championship
Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe
SmackDown Tag Team Championship
The Bludgeon Brothers v The Usos
Raw Tag Team Championship
Sheamus and Cesaro v Bray Wyatt and Matt Hardy
United States Championship
Jeff Hardy (champion) v Jinder Mahal
Singles match
Triple H v John Cena
To be confirmed
AJ Styles will defend his WWE World Heavyweight title and Cedric Alexander his Cruiserweight Championship, but matches have yet to be announced
Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
