The DEC has collaborated with dmg.events to organize ‘Excellence in Construction Summit’ on the sidelines of The Big 5, the largest construction event in the Middle East, held on 22 November, 2016 in Dubai World Trade Centre. HE Hani Al Hamli, DEC Secretary General delivered a welcome note entitled “Leveraging infrastructure industry for sustainable economy- Dubai’s perspective”
Mr. Hani said that infrastructure always considered one of the key pillars of a modern economy. From economic perspective, there is a positive relation between infrastructure and economic growth. Modern and maintained infrastructure would lead to a smooth movement of factors of production: labor, raw materials, machinery, and the like, thus the production would be increased. Other advantages of infrastructure are alleviating poverty, increasing productivity and thereby raising competitiveness advantage.
Many countries worldwide, advanced, emerging and developing ones have paid close attention in infrastructure development industry. Spending on infrastructure has been widely perceived by policy makers and economists alike as a catalyst to stimulate the economy through creating demand, and thus creating jobs and subsequently generating incomes.
Despite these facts, the road is not rosy. Infrastructure industry facing several challenges, among others the ‘finance gap’ due to the lack of public fund to fuel the large scale and long terms Infrastructure projects which usually require a great deal amount of capital to construct and operate in addition to maintenance. Another challenge is the risks usually encountered in these projects.
It is against this background; UAE has invested heavily in infrastructure, covering various areas, starting from state-of-art roads, tunnels and highways, through social infrastructures including universities, hospitals and childcare, to state offices and courts. This is why UAE among few countries in the region has established a dedicated ministry to cater for infrastructure development with three strategic objectives: sustainability, competitiveness, and client trust building.
It has been also observed that modern infrastructure is one of the main secrets of Dubai’s novelty as a regional and global hub for business and finance. Real estate and constructions has contributed about quarter of Dubai’s GDP over the last four decades and it is likely to capture the same ratio over the next four years.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has launched last year Dubai Plan 2021 aims to reinforce Dubai's positioning as a global centre. The framework of the plan includes six themes – The People: City of Happy, Creative & Empowered People; The Society: An Inclusive & Cohesive Society; The Experience: The Preferred Place to Live, Work & Visit; The Place: A Smart & Sustainable City; The Economy: A Pivotal Hub in the Global Economy; The Government: A Pioneering and Excellent Government and most if not all of these themes are all vital areas intrinsically related to the construction industry.
In figures, according to a recent report, the value of Dubai’s construction projects in execution and planning stages is expected to reach a record of 390.7 billion dollars (1.407 trillion dirhams) this year. 13.7% of these projects, which are valued 53.5 billion dollars, are currently under progress. That means we are on the right track.
In 2016, Dubai is expected to award an additional 36.5 billion dollars (equivalent to 131 billion dirhams) worth of projects.
Dubai however tends to push the bar far. His Highness Sheikh Mohammed bin Rashid Al Maktoum launched recently the Dubai Industrial Strategy 2030 that aims to elevate Dubai into a global platform for knowledge-based, sustainable and innovation-focused businesses.
The other point I would like to mention is the role of innovation in the sustainability of infrastructure development industry. Achieve more with fewer resources, develop new approaches to overcome challenges and ensure we focus our efforts on the areas of greatest importance and value; deliver infrastructure in a timely, sustainable and safe manner for a growing population; extract additional value over and above the delivery of the project, are all realized in Dubai.
Al Hamli also said that in terms of its vision to be a strategic partner for the Government of Dubai in the economic-policy making, and its mission to advice the government on forward looking economic strategies and advocate sound policies and initiatives that enhance Dubai's economic growth and thus its competitiveness in the world economy, Dubai Economic Council has launched a number of critical initiatives over the last few years to enhance its ecosystem, focusing on construction and infrastructure as a foundation for modern and sustainable economy.
Among these initiatives is “Global Financial Alliances” that aims to turn Dubai into a platform that brings together the major Export Credit Agencies (ECAs), international banks, and related-service providers to provide smooth and timely credit and guarantees to the Government-related Entities (GREs) and major private entities to help implementing their large-scale infrastructure development projects. Among the major ECAs that the Council signed forged partnerships with are: 5 billion dollar agreement with the US Ex-Im Bank, China Development Bank, in addition to the Ex-Im banks of Mexico, Italy, India and Germany, and many others are in the pipeline.
Looking forward: Dubai is currently witnessing a new momentum of growth, thanks to the critical initiatives launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum. The knowledge-based economy, innovation, Islamic economy, and most recently “Dubai Future Accelerators” to name a few are driving forces strengthening the contribution of the construction sector to Dubai’s economic trajectory.
In addition, I cannot forget to mention the Expo 2020, which will be another driver for massive and huge infrastructure projects in Dubai, with estimated value that exceeds 300 billion dirhams over the next four years. Those projects include incredible variety of areas, entertainment, housing, retail, tourism, among many others. It goes without saying that these projects would contribute significantly to the growth and prosperity not for Dubai or UAE citizens exclusively, but to the region and the world as well.
However, one of the most popular and cost-effective manner to implement infrastructure-related projects is public private partnership (PPP). The literature is kind to map a massive number of projects in various infrastructure areas that have been implemented worldwide through PPP. However, Dubai also wants to utilize this paradigm. It therefore enacted Law No 22 of 2015, commonly known as the PPP Law, seeks to ease the path to financing and construction by bringing both clarity and efficiency to the public-private process.