The GCC construction industry will see a greater number of alliances on projects, especially in Saudi Arabia.

The heads of various construction companies, both regional and international, also called for a more regulated financial environment to support huge infrastructure projects under way in the region at the Arabian Construction Summit held at Adnec yesterday, which was organised by Meed conferences.

Johann Beerlandt, Chief Executive Officer, Besix, said: "Contractors have to respond to the changes in the market. Meanwhile, the need of the hour is that we see a more regulated financial environment so that we can concentrate on our businesses and follow the opportunities."

Samer Khoury, Executive Vice-President (operations), CCC, said: "We have to find new ways and means to co-operate and that is the future. We have started with a few alliances but we will be announcing a few more in the near future."

Mustafa Sani Sener, President and CEO, Tav, said: "We will see the economy change. We cannot continue with the same thinking that created the problems in the first place. Billions of dollars are parked in the region but access is hard. We also need to review the situation and look at bankable projects. Alliances are definitely the way to go forward."

Fatima Obaid Al Jaber, COO, Al Jaber Group, said: "We need to see a greater amount of regulations in the markets. We are in a good position in Abu Dhabi and have ongoing projects worth Dh25 billion. The target is to secure enough projects for 2010 and 2011. We do not see any chances of going for an IPO since we are a family group. We are working on Al Falah, a residential project with Aldar. We managed to get certain payments from Emaar and Nakheel and we are not worried about payments in Dubai. We did not see any payment issues either on Mirdif City Centre.

Mutaz Sawwaf of CPC, said: "We are very positive about Saudi Arabia and see a 20 per cent growth for the coming years. Our JV with Arabtec has been very positive and we are open to other potential alliances due to the volume and complex nature of projects in Saudi Arabia."

Riad Kamal, CEO, Arabtec Holding, said: "We were quick to move when the recession hit the construction sector in the UAE and we have had a good year with our JV with CPC in Saudi Arabia and have moved more than 6,000 people to the country. It is not the easiest of markets but all this has been possible due to the strength of our Saudi partner CPC. There is fierce competition in Abu Dhabi but contractors must not take on work for the sake of taking on work and give the wrong perception that the contractor is desperate.

"We need to consolidate as an industry and ask for a little bit more of meat on the bone since both the contractor and the client will suffer in a squeezed market. Please do not burn prices to stay in the market. We need to keep our margins to continue to sustain the business. We are seeking work in Turkmenistan and Angola and they are markets that provide opportunities for healthier margins though they are difficult markets."

Khaldoun Tabari, CEO, Drake & Scull International, said: "Abu Dhabi is a difficult market and that lowering prices is not the best option. When contractors lower their prices, that drop is passed all the way down to suppliers and this will, in turn, affect the heart of the building, which is the MEP."

Ali Kolghassi, Vice-President, Saudi Oger, said: "While the situation is difficult on contractors, one also has to bear in mind that the clients do not have the budgets anymore. The challenges that are facing the contractors in Saudi include a rise in foreign contractors from Asia and the UAE. We are also working with companies on a consortium basis and through partnerships."

Laurie Voyer, CEO and MD, Al Habtoor Leighton, said: "2010 was an improvement on 2009. We might go in for joint ventures and consortiums in the future." (Sona Nambiar)

POTENTIAL LOCAL AND REGIONAL PROJECT AWARDS

Construction companies are at various stages of bidding, bagging and executing new orders.

- Laurie Voyer, CEO and MD, Al Habtoor Leighton Group, said: "We have just won a $700 million contract on an offshore oil project in Iraq. We have also bid on another project yesterday in Iraq.

- Fatima Obaid Al Jaber, COO, Al Jaber Group, said: "We have tendered with Besix and Maquarie Bank on the Mafraq- Ghweifat project and the Department of Transport is still looking in the evaluation stage and we are awaiting the decision. We should know by July. We see more housing projects in future in Abu Dhabi since the government wants to develop housing for its citizens. We have a presence in Qatar but that does not stop us from looking anywhere else. We are waiting for news on the Presidential Palace project. We did not prequalify for the Zayed Stadium.

- Arabtec is expecting to hear on the prequalification for the Guggenheim Museum as well as on the Abu Dhabi International Airport expansion and the Mafraq Hospital.

- Khaldoun Tabari, CEO, Drake &Scull International, said: "We are looking at acquiring two companies in Saudi Arabia and have signed a non-disclosure deal and will announce by the end of the second quarter. We will acquire 75 minimum and maximum 100 of both companies. We see Kuwait as a potential market. Saudi is a big market and we are acquiring a company that is already there. Libya is a difficult market and we have bid the lowest on two projects but not heard anything. Same in Algeria where we have bid on some hospitals and still waiting. Governments are still recalculating the costs. The total value of contracts that we are bidding for total to around 40 to 50 contracts – Palestine, Libya, Fujairah – back log is Dh3.6 billion.

We are targeting a backlog of Dh5bn to Dh6bn this year.

- Ali Kolghassi, Vice-President, Saudi Oger, said: "There are many projects for contractors to choose in Saudi Arabia in the coming years – from the Riyadh Metro to 93 hospitals and 1,200 schools as well as airport projects.