DUBAI'S construction industry continues to boom in the face of a global economic slowdown and regional instability.

Just over a year ago, economists had forecast that growth would level out as the demand for real estate eases. But Dubai has continued to defy the worldwide downturn by pressing ahead with multi-billion-dollar projects, including one to build the world's tallest tower.

Even the US-led war on Iraq has hardly affected construction work in the emirate, according to professionals in the industry.

Dubai's planners say the emirate's success is a direct result of its sustained development, and its rulers vow to continue to pursue their 'hungry' approach to becoming an economic powerhouse in the region.

In the next three to four years the entire landscape of Dubai is going to change, promised General Sheikh Mohammed bin Rashid Al Maktoum, Dubai's Crown Prince and UAE Defence Minister, in a recent interview with CNN, adding that so far, a mere five per cent of its ambitious development plan has been executed.

Among its major projects under way are a further expansion of its international airport at a cost of $4.2 billion, the gigantic $3 billion twin-island development called The Palm, the $10 billion Dubai Marina, the $1.6 billion Dubai Festival City, the Burj Dubai, Dubai Pearl, the expansion of the BurJuman shopping centre, the Madinat Jumeirah hotel and the $1.4 billion Jumeirah Beach Residence.

Other ongoing projects include the Dubai Technology, Electronic, Commerce and Media Free Zone (Tecom) projects, Emirates Hills, Emirates Lakes and Al Ghurair City expansion.

Fuelling further growth in the construction sector is the formation of high-profile development bodies like the Dubai Development and Investment Authority (DDIA), the Dubai International Financial Centre (DIFC), the Dubai Healthcare City (DHCC), the Dubai Silicon Oasis and the Dubai Metals and Commodities Trading Centre - all designed to boost the economy.

A major boost to the real estate market was making freehold property available to foreigners and expatriate residents by Emaar Properties.

Dubai has established itself as a world-class tourist destination and with the creation of projects like The Palm, Dubai will further enhance the infrastructure, range of experience and accommodation available to tourists. By offering hotel operators the opportunity to own, not simply operate, hotels on The Palm, Dubai is providing an incentive to capitalise fully on its tourism boom.

According to current plans, 150 new hotels are envisaged for Dubai in the next five to seven years. These include 80 hotels on the two twin islands of The Palm with 40 on each of the breakwaters surrounding the palms.

The Dubai Department of Civil Aviation is expanding Dubai International Airport to enable it to handle 60 million passengers per year (see page 32).

In addition, the retail sector is also being further developed and reports indicate that Dubai is planning to increase its gross leasable area from seven sq ft to 30 sq ft per head by 2007.

All these initiatives have ensured that the boom days will continue to reign in the construction sector and according to the industry, Dubai is recording a 11.7 per cent annual growth in construction activity. Currently more than $10 billion worth of development projects are under way, which would keep the emirate's construction sector buoyant for several years.

According to figures released by the Building and Housing Department of Dubai Municipality at the end of last year, there are around 343 multi-storey buildings under construction in Dubai, which include 3,199 apartments and 407 shops.

Apart from the multi-storey buildings, there are 3,533 other buildings under construction in different parts of Dubai. Also, the number of construction-related companies based in the Jebel Ali Free Zone has also increased. Today Jebel Ali is home to more than 2,300 national and multi-national companies, 231 of which serve the construction industry. The size of the UAE market for building products and materials is estimated at $3 billion while the market for heavy construction machinery is worth $700 million, and is growing.

Last year Dubai's hotel sector registered 19.28 per cent revenue growth at Dh3.8 billion ($1.03 billion) from Dh3.2 billion in 2001, according to the Department of Tourism and Commerce Marketing (DTCM). This includes Dh3.4 billion generated from the hotel sector (excluding furnished apartments) which showed a 22.12 per cent increase over 2001 figures.

A number of hotels are currently under construction in the emirate, including the Shangri-La Hotel on Sheikh Zayed Road, which is due to open later this year. Two hotels - a 412 room four-star Novotel and a 210-room IBIS Hotel - are coming up as part of the Dubai International Convention Centre.

Some of the recently completed projects include the Grand Hyatt Dubai (see separate report).

Work on The Palm project has progressed quite dramatically with the first of the two islands, The Palm Jumeirah, now easily visible. More than two thirds of the palm has been built. The Palm completed last November its first structure - a sales office - in less than a month.

Work is also under way on The Palm, Jebel Ali, which will feature a wealth of 'Destination' opportunities. It will be home to the region's first water theme park with dolphins and killer whales and will also host an 18-hole golf course (see page 36).

Another resort development is the Madinat Jumeirah which will be located adjacent to the Burj Al Arab and Jumeirah Beach Hotels. Designed in traditional Arabian style, the project features two hotels, villas, 20 restaurants, a craft suq and the largest spa in the Middle East, located on 120 acres of land. The first hotel will open later this year and the rest of the project will be completed in 2005. All the properties will be linked by picturesque waterways.

The recent completion of Union Properties' Skywalk Bridge between the two Marriott executive apartment buildings in Deira added a new landmark for Dubai. The bridge is claimed to be the world's longest footbridge between two buildings. It links the buildings at the 19th floor and gives residents of the apartments access to the shared leisure facilities, including a swimming pool, gymnasium and sauna. The buildings are 20 storeys high, and occupy a prime site overlooking Dubai Creek.

Al Obaid Group has opened its first property, Delmon Hotel, in Deira, and is set to open another deluxe hotel in Bur Dubai shortly. The seven-storey hotel with 120 deluxe rooms has four food outlets, one tea garden and one coffee shop offering a wide variety of entertainment outlets.

Safir Deira Hotel, the 154-room five-star hotel located on Muraqqabat Road in Deira, opened for business late last year. Facilities at the hotel include 14 suites; two meeting and banqueting rooms with capacity for up to 200; a business centre; Club Select business floor; pool, Jacuzzi, gym and sauna; the Adam's kids club; and five restaurant and lounge outlets.

The Dh400 million Mercato mall, Dubai's first fully themed mall built and owned by the Al Zarouni Group and opened late last year, is the latest addition to Dubai's 35 shopping malls.

Meanwhile, work is under way on a number of shopping malls. The BurJuman centre is currently undergoing a $365 million expansion project which is scheduled for completion in December (see page 40). Wafi Centre is also expanding further, adding another 8,000 sq m of space and the Al Ghurair City is being redeveloped at a cost of $ 375 million.

Dubai Shopping Centre is under construction and will add 145,000 sq ft to the emirates' retail sector end of this year.

The Saif Al Ghurair Group is building a Dh200 million ($54.4 million) major shopping complex called Reef in Deira . The project, covering an area of 250,000 sq ft, is planned for completion by December. It will include 100 shops, fashion and food outlets, entertainment and services for the entire family.

Century Mall, coming up in Mamzar area, has already leased out more than 85 per cent of the retail space, ahead of its opening in the second quarter of this year. The mall, spread across 300,000 sq ft of leasable area, adjacent to the Al Shabab Club, will house Century Market and a 65,000 sq ft department store.

The Gardens shopping mall is currently under construction off Sheikh Zayed road between interchanges five and six. The mall is expected to cost $220 million and will open in the first half of 2004. The mall features five country-themed shopping zones inspired by the Arab explorer Ibn Battuta's travels through Morocco, Egypt, Persia, India and China.

The Al Souk Nakeel complex, to be built at a cost of $545 million, involves the construction of a giant indoor ski slope serviced by a state-of-the-art ski lift. The whole complex will be enclosed under a high tech snow dome in a temperature-controlled environment. Retail stores, a hypermarket, entertainment and leisure facilities as well as restaurants and cinemas will form part of the complex.

Emaar Properties also has plans to construct one of the largest malls in the world in Dubai.

Among other developments, Dubai is constructing a 56-lane bowling centre which will be the venue for one of the world's biggest bowling championships to be hosted in Dubai in two years time. The $16 million centre, named the Dubai Millennium Entertainment and Bowling Centre, will consist of 56 alleys and will be situated on the Sheikh Zayed Road.

The Dubai International Exhibition Centre has been enhanced with the addition of the newly-completed $65 million Convention Centre, additional exhibition facilities, offices, a shopping concourse and two hotels. The Convention Centre, which will host the 58th Annual General Meeting of the Board of Directors of the International Monetary Fund and International Bank for Reconstruction and Development (World Bank) in September this year, has a capacity for 6,000 delegates and has 25 meeting rooms.

As part of Dubai's 2010 strategic vision, the $1.8 billion DHCC was announced in November last year. The project aims at transforming Dubai into a global hub for specialised healthcare and a centre for medical education and research, serving patients in the region, covering 31 countries including the Middle East, East Africa and the Indian Subcontinent.

DHCC has already secured a $680 million foreign direct investment for its centrepiece, the University Hospital (see page 34).

Work is expected to commence shortly on the DIFC, which involves the development of 13 commercial towers and a host of related developments such as boulevards and shopping malls that will cover an area of 3.5 million sq ft of land. The towers will provide nine million sq ft for office and commercial development.

The project will be spread over three phases with the initial phase being the construction of DIFC gate, which will be completed next year.

Emaar Properties currently has nine major real estate projects under development, including Dubai Marina, Arabian Ranches, Emirates Hills, The Lakes, The Meadows, The Springs, the Greens, Emaar Towers and the Gold & Diamond Park.

Emaar is also set to build the world's tallest tower in Dubai near to the Dusit hotel on the Sheikh Zayed highway. Construction of the half-kilometre high Burj Dubai will begin shortly.

The $10 billion Dubai Marina, spread over many phases, will be completed over a 20-year period. The first phase involved the construction of a 3.5 km canal and marina area connected to the sea and was completed last year. Work is under way on the next phase, which involves the construction of six residential towers, incorporating more than 1,200 apartments and waterfront villas with more than 60 shops and commercial buildings.

Fourteen local and international construction companies and consultancies have been awarded contracts for the multi-billion dirham premium residential villas project at Arabian Ranches - Desert Paradise. The sale of these villas, to be developed on an area measuring 3,000 acres, has also started.

The project will have two world-class golf courses, equestrian and polo grounds, a network of man-made lakes and health spas.

Arabian Ranches will have luxurious one and two-storey single-family houses incorporating smart technology. The project will be constructed in several phases with the first phase expected to be ready by 2004.

The key elements of the project - including the construction of the main approach road, a state-of-the-art sales centre and an impressive man-made lake - have been completed. Work on the golf course, the polo grounds, the equestrian stables and a range of luxurious facilities is underway.

Emirates Hills involves the development of 621 villas overlooking the golf course, park and lakes. The Meadows project involves the construction of 800 villas. Phase 1b incorporating 69 villas was recently completed on time. The Springs and the Greens apartment projects comprise 600 units.

Emaar Towers comprise 17-storey twin towers with 168 apartments and penthouses.

Another ambitious beachfront residential project under construction is the Jumeirah Beach Residence. It encompasses more than 6,000 luxury apartments ranging from studio flats to four-bedroom apartments in 21 high-rise buildings. More than 80 per cent of the project has already been sold out. The project is scheduled for completion in early 2005.

Dubai Festival City, being executed in phases, is estimated to cost around $3 to $4 billion, when completed. The first phase of the project, which includes the golf community, automotive and lifestyle centre and the retail centre, will require $1 billion (see page 38).

The Dubai Technology, Electronic, Commerce and Media Free Zone (Tecom) will invest Dh1 billion, including Dh800 million from the private sector, in several projects this year. According to a recent report, 14 private investors have committed to developing real estate projects in the Dubai Technology and Media free zone.

One such project, known as Towers@DIC, was announced recently. It includes 18 high-rise buildings, each estimated to cost around Dh200 million.

Work on two major phases - the fourth and fifth - of Dubai Internet City (DIC) at Tecom will be completed soon. The fourth phase is scheduled for completion by the end of this year, while phase five, will be ready shortly. It will be spread over 19,000 sq ft. Phase four will add another four buildings to DIC's existing network.

The Knowledge Village currently under construction within Tecom will open later this year. The project is estimated to cost around Dh140 million (see page 42).

Tecom has more than 900 tenants and the number is expected to reach 1,000 before June. Major infrastructure expansion is going on at both DIC and Dubai Media City (DMC). In a recent move, Tecom allowed private investors to develop their own buildings. So far, since 2000, Tecom had been self-financed.

A new operating company - Dubai Pearl Development - will undertake a Dh3 billion project to develop an upscale township between Dubai Technology Free Zone and Palm Island. Qatar's Omnix Group is the main promoter behind the mammoth 'Dubai Pearl' project, coming up over a 10 million sq ft area. Work is to start by summer and the project should be ready in three years (see page 47).

The latest venture takes the amount put in by private investors on realty projects in the Dubai Technology Free Zone to more than Dh7 billion.

Dubai Pearl is being billed as the largest privately-owned project in the UAE and one of the largest construction projects in the world.

Tecom is a full partner in the venture, but has not yet committed to being an equity partner in Dubai Pearl Development, according to Omnix officials. The three hotel projects that will be a component of the project will together have more than 1,500 rooms. One hotel will have the Movenpick branding.

Saudi Arabia's Prince Alwaleed bin Talal's Kingdom Holdings is partnering Omnix to develop the Movenpick property. Officials at Omnix declined comment on whether Prince Alwaleed will be a partner in the Dubai Pearl venture.

Meanwhile, a new development of 736 villas on 46 small islands in an artificial lake, Jumeirah Islands, has begun registering buyers at the Palm Sales Centre. The project stretches along the Sheikh Zayed highway from the junction for DIC on the opposite side of the road to Dubai Marina. There will also be four deluxe apartment buildings with 184 units.

Khansaheb-NCP, a joint venture of Khansaheb Investments with British car parking major, National Car Parks (NCP), is investing about Dh200 million in developing 10 to 12 multi-storey car parks in three years in Dubai. All the car parks are being built on a build-operate-transfer basis for a 15-year term. They are being built on selected empty spaces in Deira and Bur Dubai, under an arrangement with Dubai Municipality.

To support the ambitious expansion of Dubai International Airport, Dubai Municipality has launched a major programme to upgrade the road network serviing this regional air travel hub. The Dh159.9 million Dubai International Airport road improvement (Phase II expansion - Terminal 3 and Cargo Village access roads) project involves relocation of the Airport Road and the associated utilities of around 1.5 km, a series of access ramps and tunnels to connect Airport Road to Terminal 3, access to Cargo Village with a bridge over Al Ittihad Road and roadway signage, street lighting, storm water drainage and landscaping. Work on the project has started and will take 21 months to complete.

One of the longest and widest tunnels in the Middle East will be constructed around Dubai International Airport as part of the project. A 1.5-km tunnel, longer than the Al Shindagha Tunnel, will be built beneath the airport. The tunnel will have four lanes in each direction, shoulders and pavements.

There are plans to construct a comprehensive road network to serve the arrival and the departure areas of the airport to ease the traffic around the airport.

In order to avoid traffic congestion in the area, new interchanges and shorter tunnels will also be built. The main tunnel will replace Rashidiya Road. Part of the road that connects the interchanges in Al Rashidiya and Al Twar from Beirut Road will be demolished because of the airport runway's expansion. In its place will be a tunnel that connects Nad Al Hmer Road near the Airport Expo in Al Twar area. The tunnel, which will pass under the airport runway, will be a key landmark of Dubai.

As part of the project, there will be a new interchange near Terminal 1 to ease traffic in Al Rashidiya Road and Al Khawaneej. Seven smaller tunnels will be constructed to give smoother access to Terminal 3. At the same time, a new interchange will be constructed on Al Garhoud Road to ease traffic from Cargo Village. There will be a free-flow interchange to connect Al Rashidiya area with Al Ghusais area.

There will be entrance and exit points connected to the new multi-storey parking lot, which will be part of Terminal 3, and used exclusively by Emirate airlines.

Municipality is also looking into the feasibility of linking the roads around the airport, such as Al Ittihad Road, Al Rashidiya Road, Al Nahda Road, Al Twar Road and Airport Road.

Last October, Dubai Municipality had announced that it would invest Dh900 million in infrastructure during 2003, a 50 per cent increase in its budget for road projects from last year's Dh600 million, in a bid to improve the road networks in and around the city, and ease traffic management by launching some new projects, including the mass transit or Intelligent Transport System and the multi-million dollar light monorail projects.

An engineering study is to be conducted for the $1.3 billion Dubai light rail transport (LRT) project, which will involve evaluation of sites for the stations and cost reduction. Four companies have been shortlisted for the study. The winner of the tender will have to submit detailed designs for final evaluation by early next year.The light rail system is expected to be operational by spring 2008.

The project will be constructed in two phases. The first phase will run from Jebel Ali to Al Ittihad Road, and the second will cover Dubai International Airport and the central business districts of Dubai city. The rail network will not affect the existing road network and there will be no interruptions.

Meanwhile work is under way on a Dh22.47 million project to improve the Trade Centre interchange, which involves adding a fourth lane within the Trade Centre roundabout and an additional lane to each approach road, construction of a three-leg signalised intersection to replace the existing roundabout at the intersection between the second Zabeel Road and Road 313, two signallised intersections at the intersection between Road 308 and Street 11, and between Street 11 and Dhiyafa Road, and additional two exclusive lanes for the northbound traffic by means of extension to the existing tunnel.

Work has started on adding one more lane to the Al Maktoum Bridge in the Bur Dubai-Deira direction, bringing the total to five. The project involves modifications to the mobile part of the bridge in order to ensure its safety during opening and closing.

Dubai Municipality has approved a Dh59.58 million project for constructing roads in Al Quoz Industrial Area. The project, representing the second phase of roads in Al Quoz Industrial Area, comprises the construction of a new 48 km single carriageway, rehabilitation of 5 km of single carriageway, dualling of 16 km of existing single carriageway, 1.6 km of service roads and four new roundabouts.

The municipality has recently completed a similar roads project in the Al Quoz Residential Area, east of the second interchange on the Sheikh Zayed Road (Al Safa Interchange), in a bid to provide easy access for the residents.

Among other developments, Dubai Municipality has chalked out a long-term plan to reconstruct all the historic buildings in the emirate.

Historic Buildings Section has completed some reconstruction projects to give the emirate's residents and visitors a glimpse of its glorious past. The municipality has restored buildings and structures, such as Sheikh Saeed House, Al Fahidi Fort, Al Bastakia Area, Heritage House, Al Wakeel House, Lootah Mosque and Al Ahmadiya School. It has reconstructed 57 historic buildings dating back to 1890. It recently reconstructed Al Hamele House at Al Rass in Deira. It will be used as a motel, in co-operation with the Tourism Department.

Dubai Electricity and Water Authority (Dewa) is studying bids for the prestigious Dh1 billion L power and desalination project. To be located at Jebel Ali, L Station will add 700 MW of power and 70 million gallons per day of desalination capacities.

Meanwhile, two gas turbines were commissioned at the K station. Total power generated from the plant will be 850 MW. The desalination facility - with a capacity of 530 million litres a day is also on stream. By the end of last year, Dubai's power generation capacity had gone up to 2,976 MW from 2,579 MW the year before.

Earlier, Dewa awarded a Dh70 million contract to the Cegelec-ETA consortium for the automation of the Dubai water network. The project - supervisory control and data acquisition (Scada) - that will be the first such system for the water network, includes the supply, installation and commissioning of a supervisory control system.

Dubai is setting up the Dubai Metals and Commodities Exchange. The free zone has been established with a 50-year tax holiday to resident companies with the intention of attracting half of the total global trade in gold to Dubai.

Another project, Dubai Textile City involves the construction of another area of approximately 500,000 sq.m and will be dedicated to the textile trade. It is expected to cost more than $40 million and will include a meeting hall, a small exhibition centre, banks, clearing and forwarding offices. United Engineering Construction (UNEC) has been awarded the contract to build Dubai Textile City.

Meanwhile, phase one of Dubai Investment Park was inaugurated last month and the foundation of phase two of the Dh1.5 billion Dubai Investments Park has been laid. Covering 3,200 hectares, Dubai Investment Park is a mixed-use industrial, business, residential and recreational development, offering investors pre-serviced sites, high-level infrastructure and facilities and quality services for manufacturing, housing, academic, research, distribution and logistics purposes. It is developed and managed by the private sector and offers industrial, commercial and residential projects the options of up to 99 years lease.

Phase one was completed at a cost of Dh120 million and has attracted more than 40 local and foreign investors representing a broad scope of economic activity, from pharmaceuticals and property development to building systems, distribution of TV satellite equipment and the manufacture of fire-fighting equipment.

The Dh45 million phase two will be completed by the year-end while phase three, which will start later, will focus on the development of land for industrial projects. Phase four will focus on commercial and residential projects.

Also nearing completion is the second phase of development of Jebel Ali Free Zone (Jafz). Due to the continuous growth within the free zone, Jafz is carrying out extensive work on the other side of Sheikh Zayed Road to accommodate new companies. More than 2,300 companies are in the Jafz. All the communication and road networks have been upgraded to link the next phase.

A Dh4.2 billion plan to expand Jebel Ali Port has just been announced. Jebel Ali Port will have 82 berths equipped with 125 quayside cranes and supporting yard equipment when all four phases of the plan have been completed.

Dubai Ports Authority (DPA) recently completed the development of berth 11 and extension of its corresponding container yard area at Jebel Ali, in addition to further container storage areas at neighbouring berths, as part of the Master Plan announced in January.

The development and expansion project is in response to the phenomenal growth in business that DPA has witnessed over the last two years. The port has also acquired two Super Post Panamax cranes, bringing the total of quayside cranes to 28 between Jebel Ali (21 quayside cranes), and Port Rashid (seven quayside cranes). Berth 11 has been developed to exclusively accommodate feeder vessels calling at DPA. When combined with berth 11's additional container storage areas, the already completed expansion of container storage areas at the neighbouring berths 12 and 13, will increase container terminal storage capacity to 4.2 million TEUs per year.

Dredging of berths 14, 15 and 16 is currently under way. The dredging will reach down to 14.8 m from the current depth of 12 m, in order to accommodate deeper draft vessels, which are increasingly calling at DPA.

The Master Plan comprises four phases and on completion of all phases, in 2020, Jebel Ali Port will have 82 berths equipped with 125 quayside cranes and supporting yard equipment and a capacity to handle 21.8 million TEUs.