Abu Dhabi continues to maintain high development spending to spur growth, with the main areas of focus being oil and gas and electricity followed by infrastructure.

The emirate is set to boost oil production, while the non-oil sector is maintaining its upward trend on the back of large public and private investments. Despite sharp fluctuations in crude prices, Abu Dhabi's overall economy has recorded growth in most years over the past decade.

The UAE's oil income (which essentially is generated by Abu Dhabi) is expected grow by more than $2 billion this year to exceed $16 billion, according to the London-based Middle East Monitor (MEM) bulletin. The bulletin, citing estimates by the UAE Ministry of Economy and Commerce, the International Monetary Fund and the World Bank, said higher revenues would be a result of an increase in the UAE's production of crude oil and condensates from an average 2.2 million barrels per day to around 2.4 million bpd.

In the gas sector, the Abu Dhabi-based Dolphin Energy Limited is spearheading a landmark project which will see the creation of a GCC gas network. The gas will be used to fuel the power plants in the UAE as well as industrial facilities.

The emirate has made commendable strides in privatisation of its power sector, having launched a total of four independent water and power projects (IWPP) with possibly more in the pipeline.

Tourism is another area which is receiving a great deal of attention with hotels, shopping malls and an ambitious airport expansion taking shape in line with developments throughout the region.

With the emirate scheduled to host the GCC summit in 2004, the Conference Palace, a striking hotel complex, is being built as the venue for the event. A new town with over 2,000 housing units is set to take shape shortly.

Given these projects and a number of large-scale building projects, contractors in Abu Dhabi anticipate better times ahead. A larger number of tenders are being issued, they say, but competition is very tough.

Power & water

Abu Dhabi is pushing ahead to achieve complete privatisation of its power and water sector by 2007 when 100 per cent of its generation and desalination capacity is expected to be in private hands. Plans are in progress to develop new independent water and power projects (IWPPs) and sell existing ones with power producers Al Mirfa Power Company and Al Taweelah Power Company on the list for sale.

Three IWPPs are now in various stages of development with the fourth, the Umm Al Nar plant under planning.

Currently, some 32 per cent of Abu Dhabi's generation and desalination capacity are in private hands. By the year 2004, 54 per cent of power generation (3,819 MW) and 42 per cent of water production and desalination capacity (236 millions gallons per day - mgpd) will be privatised.

The distribution and supply side will rest in government hands.

Some 10 international firms shortlisted by Abu Dhabi Water and Electricity Authority (Adwea) are to submit proposals next month for the Umm Al Nar IWPP. These include two consortia Belgium's Tractabel with Italy's Enel Power, and UK's International Power with Japan's Mitsui and Tokyo Electric Power Company (Tepco) and other firms including France's TotalFinaElf, Electricity de France, Korea Electric Power Company (Kepco), AES of the US, Japan's Marubeni Corporation and two German companies, RWE and Steag.

The selected developer or developer consortium will own 40 per cent of a special purpose vehicle (SPV) to purchase, develop, build, own, operate and maintain the complex. The remaining equity will be held directly or indirectly by Adwea.

The complex east of Abu Dhabi city currently has power and desalination capacity of some 1,100 MW and 100 million gallons per day (mgpd) respectively. A further 62.5 mgpd of desalination capacity is under construction, which is expected to be commissioned before the execution of the project agreements and the commercial close of the project.

The project will involve taking over the new 62.5 mgpd desalination capacity and two recently commissioned units of roughly 7 mgpd with associated infrastructure and the development, financing and construction of at least 1,000 MW of new electricity generating capacity and, potentially, additional water generation capacity.

Commissioning of the first of the new power units should be completed by summer 2005 and the project should be fully operational by summer 2006.

The Taweelah A2 power project, the UAE's first IWPP built at a cost of $740 million, has recently begun commercial operations.

Work is under way on Taweelah A-1, Abu Dhabi's second IWPP which will add 500-700 MW to the plant's 225 MW capacity and more than double water desalination capacity to 80 mgpd. The project is scheduled for completion in mid-2003.

Meanwhile, on the third IWPP at Shuweihat, Electricite de France (EdF) has been selected as consultant for the dispatch and settlement special facilities associated with the project which are due to be commissioned by October 2003.

CMS Energy Inc, a US power provider, won a $1.6 billion contract with the UK's International Power, Europe's largest independent electricity producer, in July last year to build the Shuweihat power and water desalination plant. The facility, which will include a gas-fuelled 1,500-MW power plant and a water desalination facility with a capacity of 100 mgpd, is expected to be completed in 2004.

Adwea is currently setting up two new 400 kV substations and at least six 33/11 kV substations across the capital as part of the transmission expansion plan. The 33/11 kV substations will be built in six to seven locations across Abu Dhabi. The UK's PB Power is the consultant for the projects.

Adwea has completed several projects and more ventures are under way in the fields of production, transmission and distribution of electricity and desalinated water. Around Dh984 million ($268 million) has been invested in new electricity projects and expansion of existing networks. These include a 200-km overhead line between Shahama and Mirfa, constituting the backbone of a power grid connecting Abu Dhabi to the Western Region.

They also cover the extension of the Taweelah power station and installation of overhead lines to Shahama and Musafah at a total cost of Dh320 million ($87 million).

Currently, Abu Dhabi has a 400 kV station and a 132 kV station in Taweelah. The completion of the substations is set for 2004.

In addition to the substations, the project involves installing overhead transmission lines, cabling works and related works.

Meanwhile, the Abu Dhabi Oil Refining Company (Takreer) has signed a power purchase agreement with the Abu Dhabi Water and Electricity Co (Adwec) enabling Takreer to provide Adwec with a peak of 300 MW of electric power.

Takreer is also commissioning a power plant with a capacity of 500 MW comprising four 125 MW gas turbine generators, in addition to 132/33/11 kV substations, two desalination units, with a capacity of 30,000 cu m per day, three waste heat recovery boilers, chlorination facilities, sea water cooling water intake/outfall and pump house, demineralisation water plant with a capacity of 460 cu m per hour and auxiliary units to provide power, steam, potable water and various utilities to the Ruwais Industrial Complex and other consumers in the Ruwais area. The plant is in the final stages of commissioning.

Meanwhile, the General Utilities Plant (GUP) at the Ruwais Refinery is being connected to the 220,000 V Adwea grid in Ruwais to exchange electrical power.

Oil & gas

Dolphin Energy Limited (DEL) has invited contractors to prequalify for engineering, procurement and construction (EPC) works on an onshore gas plant and compression facilities to be sited at Ras Laffan in Qatar. It has also invited EPC contractors to prequalify for work on offshore pipelines, jackets, wellhead platforms and receiving facilities, forming part of the company's development of Qatar's North Field (See Regional News).

The company last month signed a memorandum of understanding with Oman Oil Company for the supply of Omani natural gas to new power and water plants currently under construction in Fujairah. The gas supply is to start in late 2003. In June, DEL appointed Halliburton Brown & Root Limited, part of the US' Halliburton Group, as the project management consultant (PMC) for the Al Ain-Fujairah gas pipeline and shortlisted two companies, Technip/Al Jaber and Dodsal, for its engineering, procurement & construction (EPC).

DEL also signed development and productions sharing agreement (DPSA) and the export pipeline agreement (EPA) with Qatar last December.

Abu Dhabi is set to develop one of the largest offshore oilfields in the world as part of an ambitious programme to upgrade its crude production capacity and tap its enormous oil resources.

The $3.5 billion Dolphin project, promoted, by the UAE Offsets Group, was set up to bring 2 billion cu ft per day of Qatari natural gas to the UAE via a 350-km subsea pipeline.

Abu Dhabi National Oil Company (Adnoc), which controls the emirate's massive energy sector, as well as the Abu Dhabi Marine Operations Company (Adma-Opco) and the Zakum Development Company (Zadco) are involved in the latest underwater project to search for more hydrocarbons and expand the output capacity of the giant Zakum field. The three companies have completed the first phase of the project involving what they described as the biggest seismic survey of its kind in the world, intended to assess the field's hydrocarbon reserves and develop its production capacity. The latest survey covered around 1,500 sq km.

An estimated $15 billion have been pumped into oil and gas expansion in the emirate over the past decade and at least $10 billion is expected to be invested in future projects to add more than half a million barrels to the sustainable capacity.

Abu Dhabi has a viable output capacity of around 2.4 million barrels per day (bpd) and is targeting at least 3 million bpd within three to four years. According the Planning Ministry's latest estimates, Abu Dhabi controls oil reserves in excess of 92 billion barrels out of the UAE's proven crude reserves 98 billion, nearly 10 per cent of the world's total extractable oil wealth.

Takreer recently awarded Technip Italy and CBI Eastern Anstalt of the US the Dh1.75 billion ($480 million) main contract for the unleaded gasoline (ULG) and low sulphur gas oil (LSGO) project at Ruwais. While Technip will act as the EPC contractor, CBI Eastern Assault will undertake the tankage package works.

Both contracts will be implemented on a lumpsum turnkey basis and the overall work is expected to be completed within 36 months.

Meanwhile, the onshore gas development projects currently under implementation include the Onshore Gas Development (OGD) III that is expected to be completed in early 2007. The project comprises expansion of the Bab Thamama 'F' Gas, and gas reinjecting facilities for recycling gas to Thamama 'F' reservoir. The additional condensate production will be in the range of 140 million bpd.

The other onshore project, Asab Gas Development Phase II (AGD-II), expected to be completed also in early 2007, comprises expansion of Adnoc Asab Gas Plant for sweetening and NGL (natural gas liquefaction) recovery to process a further 800 mscfd of gas processed.

An LPG train project currently under detailed engineering is being undertaken to give Abu Dhabi Gas Liquefaction Company (Adgas) further capacity to capture residual market opportunities. The project aims to increase the feed supply to Adgas by 25 per cent that is 1,220 mscfd and produce an additional one million tonnes per year of LPG.

Meanwhile, Abu Dhabi National Oil Company for Distribution (Adnoc-Fod) has launched the UAE's first major highway petrol station at Al Musafah that will provide travellers with a host of services covering petrol, auto technical test, car wash, oil change, food, medicine and other facilities. Six other services facilities are to be set up on key UAE highways.

Airport

The Abu Dhabi International Airport (ADIA) has embarked on a multimillion-dollar expansion programme. This includes a second terminal and a satellite. Work on the new Dh925 million ($250 million) terminal will start in the first quarter of 2003 (see separate report).

Other new developments at the ADIA include a second runway of 4,100 m, five passenger rotundas at the existing terminal, 1,900 sq m of passenger lounges, a 200-room airport hotel with nine-hole grass golf course and extension of the airport hotel.

Meanwhile, the Abu Dhabi International Airport Hotel is doubling its present accommodation capacity and providing a host of new facilities. The hotel currently has 19 rooms and provides five-star services to all rooms. It has a health club with sauna, Jacuzzi and gymnasium, massage chairs and children's play area. A total of 21 new rooms will be added according to the plan.

The Al Ain International Airport is also set for expansion, with the airport's main passenger terminal being extended. A new purpose-built cargo centre will also be built to turn Al Ain into a mini cargo hub.

Hotels & leisure facilities

Construction is under way on the estimated $400 million Conference Palace Hotel which will be managed by the hotel group Kempinski Hotels and Resorts. The property will house one of the largest conference facilities in the region as well as support facilities for 1,200 delegates. It will be completed by 2004 in time to host the GCC summit to be held in Abu Dhabi.

The spectacular guest palace will offer residential accommodation for 22 heads of state, 300 luxurious guestrooms and suites, 10-12 restaurants, a sports facility, spa, business centre and a range of entertainment options.

Set in an 84-hectare beachfront park on the northwestern tip of Abu Dhabi island, the Conference Palace Hotel is the first example of grand civic building in the UAE.

The UK's Wimberly Allison Tong & Goo (WAT&G) is the project architect and the US' Turner International is the project manager.

Belgium's Six Construct has the $40 million package for the superstructure works for the convention centre and palaces while The Netherlands' Interbeton has won the estimated $28 million package for the superstructure works for the east and west hotels and related facilities.

Another major hotel project is the Dh330-million Al Raha Resort development. Al Habtoor Engineering Enterprises is building a five-star hotel and shopping mall forming part of the development (see separate report).

The Beach Rotana Suites Abu Dhabi, is scheduled to open next month. The property is located within the Beach Rotana Hotel and Towers complex, and consists of 19 studios, 102 one-bedroom apartments, 18 two-bedroom apartments and six three-bedroom apartments.

Meanwhile, the Dh120 million renovation and expansion work currently under way at Abu Dhabi Grand Hotel is expected to be completed by the first quarter of next year. Under the plan, a new five-storey building will be added, raising the total number of rooms from 197 to 305. The expansion includes another seven-storey tower, a culinary village, a landscaped entertainment centre and swimming pool, and, a two-level underground parking area for 200 vehicles.

Other additions include a food and beverage area and a 500-capacity ballroom with a pre-function area. Renovation to the existing tower is another feature of the expansion programme.

The expansion project is divided into two main areas - the culinary village, entertainment centre and parking facilities on Najda Street; and the new tower and ballroom on Khalifa Street.

The Sheraton Resort & Towers, Abu Dhabi, owned by the Abu Dhabi National Hotels (ADNH) is also undergoing renovation at a cost of Dh130 million. The work is being executed in two phases. The phase one renovation which has already been completed included the resort area, some restaurants and the pool and health club. Phase two includes a new, spacious lobby, doubling the size of the banquet rooms, transforming the Liwa Brasserie into a fusion food court, upgrading some restaurants.

Additionally, all guest rooms and suites will be refurbished. Once completed, the hotel will increase the number of executive tower floors from one to three levels. Sheraton Abu Dhabi comprises 250 guest rooms in all. The first set of 100 rooms undergoing refurbishment will be ready by September. Arabtech is the main contractor for renovation.

Al Habtoor Engineering is completing work on the Zayed Cricket Stadium. This 22,000-seat stadium is being built at the cost of Dh52 million (see separate report).

Commercial & residential projects

Abu Dhabi's Department of Social Services and Commercial Buildings is planning 37 new projects with a total outlay of Dh410 million. The department, popularly known as the Khalifa Committee, is mainly responsible for the creation of the capital's business and residential district.

Since it was set up, the department has so far completed 6,000 projects at a total cost of Dh35 billion. It has also provided over 100,000 housing units.

Work on the prestigious headquarters for the National Bank of Abu Dhabi at the junction of Khalifa Street and Lulu Street is drawing to a close with handover scheduled for October this year (see separate report).

Construction work is in progress on a 185-m tower for Abu Dhabi Investment Authority (Adia) on Corniche Road. Samsung Engineering & Construction is the main contractor. The project is scheduled for completion in mid-2003 (see separate report).

The Dh960 million first phase of the Ruwais Housing Complex in Abu Dhabi is set for handover this month. The project includes 1,300 housing units.

Municipal projects

Abu Dhabi Municipality and Town Planning Department is currently undertaking 200 infrastructure and sewerage projects at a total cost of Dh4.2 billion to meet the urban and industrial expansion and rapid increase in population.

A report by the department's sewerage projects committee said 23 projects costing Dh545.8 million had been completed last year and 49 projects worth Dh1.1 billion are under construction. Operational contracts for drainage networks and stations are valued at Dh253 million. Twenty-six projects are in the planning stages with an estimated cost of Dh462 million.

A new town called Al Hailiyah is being developed by Abu Dhabi Municipality and the Town Planning Department. Work has already begun to fill the land for the construction of the town behind Al Shawamekh Town near the Abu Dhabi-Dubai Highway.

The project was planned under the Sheikh Zayed Housing Scheme to build 2,270 houses at a cost of Dh800 million for free distribution among UAE nationals and is scheduled for completion in 18 months time. According to the work process plan, the project will be divided among 10 local construction companies and each contractor will be assigned to build 100 to 600 housing units. A consultant will be hired to supervise the work of the contracting companies.

The houses will be built on 450 sq m plots, featuring three buildings. They include a building for guests and visitors, with two main halls with attached washroom and bath. The second building is the servant's quarters with the main kitchen, laundry, storeroom and electricity switchboard room. The third and main building will be a six-bedroom villa for the family.

According to the approved design, each unit will have a front yard and lawns for gardening and tree plantation.

The Al Hailiyah Town will have schools, hospitals, shopping malls and several small mosques, each with a capacity to accommodate 200 people, in addition to a grand mosque accommodating 1,000.

It will include schools, kindergartens, clinics, hospitals, shopping malls, cultural centres, and parks. A civil defence station, an Etisalat office, petrol pumps and banks will also be established in the town. Spaces for future hotels, restaurants, wedding halls and a transport station have also been allocated.

Work is under way on the Khalifa Park project at a cost of Dh196.75 million ($53.58 million). The project involves the construction of a huge leisure park and will be the first of its kind in the Middle East and cover an area of 430,000 sq m. The amusement park comprises a theme park garden, women's and children's garden, museum, amphitheatre, party hall, time tunnel ride, and a train ride touring the park. The project will have extensive landscaping surrounding the whole amusement park. The contractor is Al Hamed Development & Construction.

Among other municipal projects, reclamation work has begun as part of a major project to expand the Abu Dhabi corniche. The corniche is one of the main entertainment and tourist hallmarks in Abu Dhabi. The corniche adjoins the breakwater where the heritage village, ship restaurants, sea sport centres, the Marina Mall and other facilities have been set up.

The project is designed to shift Corniche Street from the intersection of Arab Gulf Street to a new location, now in the process of reclamation. The area being reclaimed is being beautified and is located between the existing Corniche Park and the new street. The new Corniche Street will have three lanes in both directions extending for around 2 km, from Al Salam Road to Mina Zayed. Two roundabouts now on the present street will be turned into junctions with traffic lights.

The corniche road is around 6.5 km long and 100 m wide, including traffic lanes, parks and pedestrian paths. The new project will expand that width by at least 150 m, most of which has already been covered. It involves additional traffic lanes, parks and pedestrian paths of up to 8 km into the sea. A park, reflecting Arab architecture, will also be built in this area. A 7-m-high traditional wind tower will also part of the beautification project. It is expected to have coffee shops and other outlets.

Work on the massive project is expected to be completed in 2004.

Abu Dhabi is also planning to set up a marine museum at its breakwater to complement its famous ship restaurants, the water sports club and the heritage village that have become a hallmark of its vast seaside. The museum, to cost around Dh100 million, will be the first of its kind in the Gulf and is part of a new development programme to be launched in October by the Abu Dhabi Municipality at a cost of Dh250 million. It will include recreation facilities and exhibitions depicting the country's culture and past marine life.

Meanwhile, Abu Dhabi has reopened a key road that links the emirate with the highways leading to Dubai and Al Ain. This is part of a project to expand and build roads, flyovers and tunnels. The Umm Al Thomam crossroads (formerly Umm Al Nar roundabout) was re-opened following the completion of a flyover that leads to Al Ain and to Shahama on the way to Dubai, where traffic had been diverted since November 2000.

The project, costing around Dh150 million ($41 million) is expected to be completed in April 2003. It involves a main flyover and other smaller bridges, a tunnel and more than 13 km of new roads.

Meanwhile, the emirate has launched a number of projects to ease daily traffic jams that are getting worse despite heavy investment in road expansion projects.

The Abu Dhabi Municipality will undertake the expansion plan until 2010 and officials said it would take into consideration a steady growth in the city's population. The plan involves building more bridges and tunnels, expanding three-lane streets to four lanes, installation of advanced traffic control systems, reduction of taxi cabs and increasing public transport buses.

The municipality is also spending around Dh90 million on projects to build 15 underpasses by 2003 as part of the expansion plan.

The municipality is also building 17 multi-storey car-parks in various areas within the city to meet the increasing demand for car parking facilities. Last year, three parking facilities were opened behind Liwa Centre (Hamdan Street), behind the Abu Dhabi Investment Authority and at Madinat Zayed Shopping Centre, to accommodate 393, 838 and 371 vehicles respectively.

Abu Dhabi has launched a drive to expand its sewage systems in Wathba and other remote areas to protect the environment and serve the fast growing population. A Dh60 million project to expand the existing sewage network in Wathba and Bani Yas is nearing completion. It has a capacity to treat around 3.5 million gallons per day and will serve at least 40,000 people in those areas.

Wathba and Bani Yas have undergone a substantial construction upswing over the past years and this required new investments in infrastructure projects.

Abu Dhabi intends to pump nearly Dh811 million into irrigation and sewage projects this year, as part of a long-term development plan in the emirate. The Abu Dhabi Municipality said the projects in Abu Dhabi city and the Western region include new sewage systems, expansion of current sewage networks, installing more irrigation facilities in the Western region and other water and power projects. The projects will cover Abu Dhabi city, nearby Musafah, Gayathi, Delma Island, Bani Yas and Wathba, Shahama, Samha and other areas.

The municipality is working on two wastewater projects for Al Masafah area, including Zayed residential area. The projects will cost Dh82 million and include the rain water drainage system and the sewerage system.

The Municipality and Town Planning Department has set up a large fish and vegetable market in Madinat Zayed in the Western Region and is also working on five other markets in different areas of the emirate.

Abu Dhabi is planning to replace its oldest commercial centre with a traditional and heritage bazaar as part of its long-term development plan stretching until 2010, according to the municipality. Hamdan's old marketplace will be demolished to give way to another suq "reflecting the UAE's past and present", according to the municipality's blueprint.

The blueprint includes several other projects involving greening, setting up more parks, road improvements and a "very fast electromagnetic train linking Abu Dhabi with Dubai in just 20 minutes as it travels at 850 kph, according to news reports.

Other projects