DUBAI: Dubai contractor Arabtec is seeking opportunities in North Africa as it looks to weather a downturn in its home market and is confident it will receive outstanding payments, its chief executive said on Thursday.
Construction firms are increasingly looking outside Dubai to drive business after a sharp decline in the emirate s property sector led to billions of dollars worth of construction projects being scaled back or cancelled.
We are not optimistic about picking up sizeable contracts in Dubai, Riad Kamal said at a meeting with investors and analysts.
We are looking at a couple of projects in Algeria. Between Algeria, Saudi Arabia and Libya … in the next six months we should be able to divert a lot of our resources, which will become available from the Dubai market.
Arabtec, which recently started work on its first project in Saudi Arabia, a 1.5 billion riyal ($400 million) university in Riyadh, has two potential contracts in the kingdom worth 1.5 billion riyals and 500 million dirhams respectively, he said, adding the firm hoped to have a backlog of at least 3 billion dirhams there by year-end.
Kamal said Arabtec had held talks with quasi-government institutions in Libya about possible projects, but was taking its time.
The UAE s largest contractor by market value envisages more than 50 percent of its revenues in the next three years coming from outside Dubai.
It is close to securing three new projects in Abu Dhabi worth in total more than 4.5 billion dirhams, Kamal told Reuters on Wednesday.
Kamal said Arabtec had outstanding payments of about 3 billion dirhams, of which 1.3 billion dirhams was for work completed and pending payment.
About 80 percent was due from the Dubai government or related entities, he said.
Several Dubai-based contractors have said they are owed hundreds of millions of dirhams by state-linked developers and some may face bankruptcy as credit dries up.
Payments started flowing in the months of February and March … however, with the volume of work it doesn t take long before that outstanding amount gets built up again, he said.
Arabtec is hoping to meet government officials next week to discuss payments.
We feel quite secure the money is going to come eventually. It s a question of if its going to come in good time to be able to sustain the outlook and commitments that we have with our suppliers and sub-contractors.
The company s total backlog of projects was around 28.3 billion dirhams, he said.
