Arabtec Construction has secured a Dh561 million contract from Dubai Aviation City Corporation (DACC) to carry out expansion related work at Dubai International Airport, the construction arm of Arabtec Holding — the UAE's largest construction company — said yesterday in a statement posted on the Dubai Financial Market (DFM) website.
The project, spanning 25 months, will include structural work; mechanical, engineering and plumbing (MEP); special airport systems; finishes; and site work for DIA's Terminal 2 expansion, according to the statement.
"This project demonstrates Arabtec's track record in carrying out infrastructure works for airports," Greg Christofides, chief executive of Arabtac Construction, said in the statement, adding that this is the 12th project awarded to the company relating to civil aviation work.
"Projects completed at Dubai airport and Dubai World Central included passenger terminals, control towers, energy centres, maintenance hangars, cargo buildings and fuel shortage and distribution," Christofides said.
Arabtec Holding's shares rose to a two-week intraday high following the news, but fell later in the session to close at Dh1.62, down 1.82 per cent.
The construction sector in the Middle East and North Africa (Mena) will continue to be supported by government spending in Saudi Arabia, Qatar and Abu Dhabi in 2012, according to the latest report by Fitch Ratings.
The growth would be on the back of these markets having "undertaken massive infrastructure spending plans" backed by government and government-related entities.
The Dubai construction market, however, is projected to remain "fragile" in the medium term, according to the Fitch report.
"In Saudi Arabia and Qatar, infrastructure spending continues to be strong but with lower margins. During the construction boom, Mena region contractor margins have remained higher than international peers," Bashar Al Natoor, Director in Fitch's EMEA Corporates team in Dubai, said in the note. He added that with the recently increasing competition, however, "contractors have started to go for lower margins", and that Fitch expects this to remain the case over the next few years.
Arabtec has been hit hard by a severe downturn in Dubai's property market where prices have slumped by about 50 per cent since late 2008. The company has recently started looking at new markets such as Saudi Arabia, Pakistan and Egypt.