4.32 AM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

Al Mazaya plans to buy contracting company

Salwa Malhas, Executive Vice-President of Al Mazaya Holding

Published
By Joseph George
Lack of skilled contractors and increasing construction cost is forcing developers and contractors to seek mutual alliance, a leading Kuwait-based developer said.

Al Mazaya Holding, which has investments worth more than Dh18 billion and is working on more than 20 projects in the UAE, yesterday said it is on the lookout to enter into an exclusive agreement with a contractor or acquire a contracting company.

Salwa Malhas, Executive Vice-President of Al Mazaya Holding, told Emirates Business that it is on the lookout for a suitable contracting company.

According to her, such a move is beneficial to both parties. "Shortage of good contractors is seriously affecting several developers and the best way to ensure you find good contractors for future projects is to align with a contracting firm or to acquire one," said Malhas.

"Several contractors, on the other hand, are seeking alliances with real estate developers in an attempt to work together to control construction costs. These partnerships are becoming more commonplace year on year. This may alleviate the pressure on contractors, as they are apparently unable to bear the burden of rising costs alone," she said.

According to Malhas, construction cost in the GCC increased by about 50 per cent during the first half of 2008 compared to 30 per cent in 2007. Contractors are trying hard to offset rising building material prices fuelled by local and global forces and record oil prices. "Building material prices have increased by 50 per cent on average, and even more in the case of certain materials. We are working out timetables to avoid delays in the delivery of our projects. We are also examining plans to offset the effects of rising prices and the labour shortage," said Malhas.

Delays in project delivery is not caused by a lack of reliable contractors but by the inability of the contractors to find skilled labourers and by the rising cost of building materials. "Changes in steel and cement prices mean the delays in project delivery are inevitable," she said.

She also warned that the existing shortage of labour could worsen if GCC countries decided to introduce a cap on residence periods.

Malhas also stressed on the need for private and public sectors to create a balance between supply and demand in the long term. "There is massive ongoing construction activities in the region and especially in the UAE. The problem cannot be solved solely by developers and contractors coming together. To what extent private and public sectors will go ahead in creating a balance will be crucial for the steady growth of property market in the region," she said.


Dh462m Queue Point contracts

Al Mazaya Holding has awarded contracts for the construction of 14 residential units at Queue Point Liwan to three contractors. The total value of the three contracts is Dh462 million.

Queue Point in Al Liwan is the first middle-income residential project in Dubailand. The ground-breaking ceremony was held at the project site in Dubailand recently.

While Al Omran Contracting Company has won the contract to build four residential units for Dh110m, Al Asarh Contracting will be building five residential units for Dh230m, while Al Ruwabi Contracting will build five residential units for Dh122m.

The work is expected to be complete in various phases, until the end of 2009.

The contracts for the second phase of construction at Queue Point Liwan will be awarded soon, said Malhas.