Depth charges: Land reclamation and dredging are big business

An important part of the development of Abu Dhabi has been the land reclamation and dredging works that have occurred along the emirate’s shoreline. This type of work has helped to form the island and coastal developments that are playing an increasingly important role in the local real estate market. But with most of this work having already been completed, dredging and reclamation firms are increasingly turning towards alternative activities, such as developing artificial islands for the oil and gas industry and expanding the emirate’s ports and shipping channels.

LAND FROM THE SEA: For developers that want to build on the coastline or an island, a necessary first step is often dredging and the reclamation of land from the water. Several projects that at least partially came onto the market in 2011 initially involved such dredging and reclamation works. For example, Belgian company Dredging International was awarded the dredging contract for Al Raha Beach from Aldar Properties in early 2006, following a tendering process that involved the participation of several other firms, including Dutch company Boskalis Westminster, US-based Great Lakes Dredge & Dock, Belgium’s Jan de Nul and local firm National Marine Dredging Corporation (NMDC). In October 2006 the agreement with Dredging International was significantly extended, more than tripling the value of the contract from €32m to €110m.

Saadiyat Island is another development that required dredging and land reclamation. In December 2006 the Tourism Development & Investment Company, the developer responsible for Saadiyat, awarded a Dh815m ($222m) contract to Jan de Nul to raise the level of the island from 2m to 11m above sea level. Moreover, additional steps were undertaken to ensure that this work did not disturb the environment.

INDUSTRIAL PROJECTS: Dredging is not just about preparing land to build hotels and apartment buildings; it can also be used to develop ports and associated infrastructure. For example, Abu Dhabi’s Urban Planning Council was behind a project to deepen the Mussafah channel to accommodate larger ships. In 2009 NMDC was awarded the Dh1.5bn ($408m) contract for this work, which involved dredging 65m cu metres of soil to create a 53-km-long channel with a minimum width and depth of 200 metres and 9 metres, respectively.

The waterway will provide a navigation channel that can accommodate the two-way movement of large commercial vessels such as Panamax carriers and single-way movement for large oil rigs. The Mussafah channel will complement the development of the Khalifa Port & Industrial Zone (KPIZ), as well as the existing Mina Zayed Port on Abu Dhabi Island. KPIZ, which is being developed by the Abu Dhabi Ports Company (ADPC), was opened in September 2012 and has an initial capacity of 2m twenty-foot equivalent container units and 12m tonnes of cargo. In 2007 the ADPC announced that it had awarded a Dh5.5bn ($1.5bn) contract to a consortium of Greece’s Archirodon Construction, Boskalis Westminster and Korea’s Hyundai Engineering and Construction for the dredging, reclamation and rock works, as well as the construction of a quay wall.

Another dredging and marine construction project is the development of four artificial islands in the Zakum offshore field. In 2009, Zakum Development Company awarded a Dh2.3bn ($626m) contract to NMDC to build the islands, which involves dredging and level operations, ground amelioration, beach protection work and building four ports and protective breakers.

Looking ahead, projects in the oil and gas sector will continue to provide work for dredging and land reclamation firms, according to Yasser Nasr Zaghloul, the CEO of NMDC. “There has been a slowdown in the construction sector, but business in oil and gas services has increased dramatically over this same timeframe. We anticipate that demand from the oil industry will remain strong for the foreseeable future,” he told OBG. Moreover, as the government continues its push to position Abu Dhabi as a centre for industry and transport, more port and industrial infrastructure projects could also offer opportunities for new work in this area.

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The Report: Abu Dhabi 2013

Construction & Real Estate chapter from The Report: Abu Dhabi 2013

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