Arabtec: slowdown may bite in 2010

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Contractors across the region may come under pressure as order backlogs run dry next year.

Major contractors may not feel the full effect of the construction slowdown until 2010, as many have sufficient orders to pull through the rest of 2009, a top industry boss said yesterday.

"We have the backlog for 2009 and so 2010 may well be more of a challenge," Besix Group chief executive Johan Beerlandt said during a panel discussion of contractor bosses at the Arabian World Construction Summit (AWCS) in Abu Dhabi.

Further, construction giant Arabtec Holding chief executive Riad Kamal revealed that his firm's order book has been slashed from US $10.9 billion (AED40 billion) to $8.2 billion in just four months.

The 25% cut could lead to further job losses at the firm, Kamal added on the sidelines of the AWCS, as it moves to accommodate the dramatic change in its outlook for the foreseeable future.

The figure excludes the proposed $2.7 billion contract to build the Gazprom Neft headquarters in St Petersburg, Russia, Kamal said, the final value of which is still to be hammered out.

The former chief executive of Arabtec Construction, who following a recent high level shake-up is now chairman of Arabtec Construction and chief executive of Arabtec Holding, also said the firm would play no part in the future of the Meydan Racecourse in Dubai.

Arabtec had its contract for construction of the racecourse, which it was undertaking as a joint venture with Malaysia-based WCT, cancelled at the beginning of this year.

The developer, Meydan, cited a failure to "abide by the time schedule for the completion (of the course)" on the part of WCT.

"We have had absolutely nothing at all to do with the Meydan contract since 9th January," Kamal said.

Kamal also went on to dismiss claims made this week that up to 53% of construction projects in the UAE had been placed on hold or cancelled in light of the economic downturn. "I think such figures are an exaggeration," he said.

RELATED LINK: Bright 2009. But 2010?

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