Arabtec lands Dh1.7bn housing contract in Fujairah

Arabtec has won a Dh1.7 billion contract to build 1,100 houses for Emiratis in Fujairah.

The UAE government’s Ministry of Presidential Affairs awarded the contract for the homes that will be built on a 2.15 square kilometre plot at Mohammed bin Zayed City.

Work is due to start immi­nently and take two and-a-half years to complete.

Arabtec Holding’s acting chief executive, Saeed Al Mehairbi, saidthe project was of “national significance”.

Arabtec’s share price finished the day 7 per cent higher at Dh1.73. It is the fourth major contract win announced by the company since the start of the year, bringing the combined value of deals won to almost Dh8.5bn.

Contractors across the region have been enduring tough market conditions as the falling oil price has led to a squeeze in government budgets in most markets. In Saudi Arabia, in particular, there have been widespread reports of workers going without pay for months as government ministries have halted payments.

Despite this, the UAE’s fed­eral budget for 2016 was cut only marginally to Dh48.56bn, down from Dh49.1bn in 2015.

When announcing preliminary results last month for 2015 showing a Dh2.3bn loss for 2015, Mr Al Mehairbi pledged that Arabtec would adopt a “more selective approach” to winning new work. The com­pany also told analysts that it would focus on the UAE market.

Speaking about current market conditions in the construction sector, Gary Adams, the Middle East president of the engineering consultancy Parsons, said: “The ongoing downward pressures on energy prices are having an impact on government budgets, which in turn affects our customers.

“However, there still is a lot of work going on in the region and we believe that the companies who bring to the table new ideas about efficiencies are going to be successful.”

Aabar Investments, an investment vehicle owned by the Abu Dhabi government, holds a 36.11 per cent stake in Arabtec.

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Michael Fahy

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