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Issue 5

Budgeting for the big build - Finding funding has been a key issue for developers across the Gulf in the last two years. Is the situation finally easing?

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25 May 2011

Urban regeneration in the Middle East

Timon Singh

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With transport networks being upgraded, renewable energy plants being constructed and mega-projects planned, urban regeneration in the Middle East has never been more popular.

Projects have been particular prevalent in the UAE and Saudi Arabia, where they can range from upgrading and regenerating cities to create public parks and tourist attractions.

That is the case for Abu Dhabi, where a major urban regeneration plan has seen the development of a public park featuring tourist attractions such as museums and zoos. The 'Mushrif Park development' will see the transformation of what is currently a 'women-only' park into a 'people's park', complete with an interactive children's museum, petting zoo, water features, fountains and 3km of walking and jogging trails.

Abu Dhabi in particular has been pushing their urban regeneration projects, with plans to to invest over US$1 trillion into their infrastructure for their 2030 vision. By doing this, Abu Dhabi, other emirates in the UAE and Saudi Arabia hope to attract more business and tourism into the region, diversifying their economies and make their cities 21st century commerce hubs.

For Abu Dhabi, a large amount of investment is going into infrastructure systems such as roads, power plants and a metro system. According to Sultan bin Saeed al Mansouri, the Minister of Economy, "will lead to extraordinary demand for building materials and technological innovations, thus boosting the economy further."

The emirate currently has ten massive civil projects underway, said to be cost in excess of US$208 billion. While this is being paid for by the state's oil wealth, they are pushing urban regeneration plans in a bid to wean themselves off oil supplies and ensuring Abu Dhabi has a future once the oil reserves dry up.

Abu Dhabi's biggest projects include Saadiyat Island, another major offshore development costing US$28 billion, the US$22 billion Masdar City project, billed as the first zero-carbon, zero-waste city and the Khalifa City project. This is the single biggest project in the capital and has a budget of US$40 billion.

 

Riyadh's urban regeneration

This week, it was announced that the Kingdom of Saudi Arabia was planning to invest US$3.4 billion (13 billion riyals) into a urban regeneration plan that could transform the centre of the capital Riyadh.

Headed by Arriyadh Development Company, a consortium of eight companies is to develop the city's centre into a series of housing, commercial and tourism components. It is expected to take 15 years to complete once planning is finalised.

To make way for the new structures, it has been reported that 90 percent of the city centre's buildings will be demolished. The project has been compared to the development of London's Canary Wharf and Downtown Beirut.

For Saudi Arabia, urban regeneration has been of great importance as the Kingdom's population is expected to grow to 33 million by 2020, required an additional 1.4 million homes.

All in all though, the investment in urban regeneration is good news for one particular sector - the construction industry. Since the Dubai debt crisis hit, UAE construction firms have faced multiple difficulties with many expanding into Kuwait, Oman and Libya in order to find work but with an increase in domestic projects, many are being awarded contracts returning to a sense of normality after the financial chaos of last year.

Relevant articles:

Revolutionising the agricultural infrastructure in the Middle EastTransport infrastructure in the Middle East | Water infrastructure in the Middle East


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