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Sat 14 Feb 2009 04:00 AM

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Bright 2009. But 2010?

A by-product of building things in a boomtown is that the rumour mill is rampant. No matter what is said or who says it, someone will say the exact opposite.

A by-product of building things in a boomtown is that the rumour mill is rampant. No matter what is said or who says it, someone will say the exact opposite.

One expert may give what appears to have a definitive word on the state of the construction industry. But the next day an equally credible source will say something entirely different.

If you are looking for the definitive word from me, forget it. I'm just like everybody else. But after cutting through the chaff some observations make sense.

Although the economic future of the UAE construction industry is far from clear, one thing appears to be certain: building goes on but at a slower pace. The dust is settling a little now and we can make some reasonable predictions.

Johan Beerlandt, chief executive of Besix Group, told a panel the other day at the Arabian World Construction Summit in Abu Dhabi that there is enough work for his company to see them through 2009.

Besix is already committed to its projects and the funding is there. But with few developers making plans or even promises in 2009, what could happen in 2010 doesn't look so good.

And as assistant editor Jamie Stewart reports in this week's issue of Construction Week, Arabtec Holding chief executive Riad Kamal says his firm's order book has been slashed from US $10.9 billion (AED40 billion) to $8.2 billion in just four months.

So while the world's banks could be on the road to recovery by 2010, builders may very well sit around for a year or two waiting for investors to gear up to approach UAE projects at full throttle.

Another aspect of 2009 worth pointing out is the falling out between Arabtec and Meydan over the construction of the Meydan Racecourse in Dubai.

At this point it doesn't matter who is at fault for the cancellation of Arabtec's contract. The most pressing issue is whether the racecourse will even open as promised for 2010.

The project is 60% finished and was scheduled for completion in October. Although Meydan reportedly is having other contractors shore up the existing work in Arabtec's absence, it's not a stretch to wonder whether it can achieve its goal to open the track to racing in 2010.

This is not to paint a dark picture of what lies ahead for the industry, but illustrative that decisions made in the coming months will have a tremendous impact on how the UAE fares economically in 2010 and beyond.

We work in an environment that is not kind to nervous nellies. Working through 2009 back orders will provide a fairly good financial picture for the present for many builders, but coasting on back orders and waiting out the year with crossed fingers without specific plans for 2010, may hurt the industry more than we can imagine.

Rob Wagner is the editor of Construction Week.

RELATED LINK:Arabtec: slowdown may bite in 2010

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