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Tue 12 Feb 2008 12:44 AM

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UAE 'too dependent' on physical labour

Construction industry employs too many people, not enough technology, says Nakheel CEO.

The UAE construction industry will be hit by the increasing world-wide labour shortage, and must take steps to reduce dependence on a physical workforce, Nakheel CEO Chris O’Donnell said on Sunday.

O‘Donnell told ArabianBusiness.com that the global labour shortage would become an “incredibly big” issue for the UAE over the next five years, and called for construction contractors to invest in mechanisation resources, at the Arabian World Construction Summit.

“There’s too many people, not enough technology. Contractors here utilise labour to a great extent because its relatively inexpensive but that’s not going to last. With the labour shortages around the world we are going to have a big problem in Dubai, and mechanisation means you can reduce the amount of labour.”

UAE contractors are employing large numbers of staff and using inadequate mechanisation when equipment such as a Bobcat loader could improve safety, project timeframes and reduce labourers by 25%, therefore decreasing industry issues such as strikes and protests.

O’Donnell also warned the UAE property market was facing capacity issues, and predicted developers would start to become more cautious in their approach to project launches.

Current high property prices could not continue to increase, and investors will not continue to pay current prices, as a property cycle comes into the real estate purchasing process, he said.

“We’ve all to acknowledge there are capacity constraints and they’re not going to be easily fixed. Before we start our projects we are testing the market to ensure our product sells. I think you’ll see developers become more prudent and cautious.”

Some developers were facing profit losses after over-extending themselves in project offerings, he said.

“These people are dinosaurs. They bought big projects several years ago and now they’ve overextended themselves and are facing huge losses.

O’Donnell also dismissed recent media reports about the Nakheel project tipped to overtake the Burj Dubai as the world’s largest tower, saying it would be an iconic tower but time would tell whether it became the biggest.

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