By Neeraj Gangal
Value of projects planned or being carried out in the GCC total $2.1 trillion - study.
A total value of nearly $930bn-worth projects in the construction and other sectors are underway in the UAE, according to a report.The Emirates Business reported on Friday that the UAE is carrying out projects in construction and other sectors with a total value of nearly AED3.4 trillion, which is around 45 per cent of all projects planned in the Gulf.
Quoting a Kuwait National Bank (KNB) study, the daily said that the combined value of projects planned or being carried out in the GCC totalled around $2.1 trillion (AED7.7 trillion) at the end of the second quarter of 2009, more than four times the estimated value of projects in June 2005, an annual growth of nearly 50 per cent.
Quoting the Meed project database, the bank said in its 10-page report: “The UAE accounts for by far the biggest share of project activity, totalling around $929bn and affirming its position as the leading GCC country in attracting capital investment. Some 81 per cent of the UAE projects are in the construction sector.”
"Indeed, the construction sector dominates in every GCC country, though to a lesser degree… while the total value of projects in the UAE is far higher than anywhere else, Saudi Arabia has a much larger base of non-construction related projects – some $224bn, which is 28 per cent larger than in the UAE. This probably reflects the larger size of the Saudi economy in absolute terms, necessitating a greater degree of industrial diversification.”
Emirates Business noted that according to the study, the higher value of non-construction-related projects in Saudi Arabia stems largely from the petrochemical, power and utilities sectors. At a combined $127bn, the value of the Kingdom's projects in those sectors is about 35 per cent larger than in the UAE, it said.
"The overwhelming balance of non-construction-related projects in other GCC countries comes in the oil and gas, power and utilities sectors, with the latter reflecting the region's growing domestic power needs," the study added.
Don't be confused by the word construction, because that is only a means to an end, and clearly the bulk of what is being built is property, making the boasts a little hollow at this bottomless canyon gets deeper by the day. Foreign investors don't make investments in the construction sector, but in what is being built, so the terminology is deliberately misleading, unless something is lost in translation here.