There has been a massive rise (833 per cent) in retendering of civil projects since October 2008, according to Proleads, an independent project database provider.
"From three projects in October, the number of projects in the civil sector being retendered has risen to 28 in March. Similarly, the value of these tenders have risen by 2,024.39 per cent to $28,743 million in March from $1,353m in October," said Emil Rademeyer, Director at Proleads. "The credit issue started around October. That is when this phenomenon started when projects started to go on hold."
"In the past four to five months, we have witnessed many big projects being retendered to benefit from the fall in construction materials in Dubai and also Abu Dhabi (in projects such as Yas Island and Liwa phase 2). But we might probably see an increase in tenders being awarded only after Ramadan," he added.
According to him, people are now paying more attention to "the project economics" and looking at the feasibility. "They are also looking at whether they are going to be able to sell all those projects," he added.
"Towards the end of 2009, we will see the playing field change a bit. From the residential and commercial point of view, we will see a scaling down of the big developments to a probably phased approach."
Another visible change will be smaller developments that comprise 100 villas instead of a billion dollar contract for 500 or 1,000 villas. "They will have slower releases of smaller portions of these developments till inventories start to deplete and then start on the next phase. From the infrastructure investment, though done in phases, the investment required for all the large master-planned projects is billions. It will all be about appetite and someone has to buy it," said Rademeyer.
"You will also see a rise in smaller projects valued below $200m in terms of size."
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