Developers to invite foreign construction companies

They say that the ongoing boom in construction business in the country coupled with a shortage of experienced and qualified labour is the main reason for the problem.

According to June Kim, chief executive officer of Axon Gulf, his company, which is planning to invest around $1 billion in different projects in Dubai, cannot hire a local contractor and is using a Korean construction company to develop its projects.

He told Khaleej Times yesterday: "We can't use a local contractor first because there is an acute shortage of them in the market and second they can't deliver projects on time. We have seen a lot of cases in the market when the projects are delayed indefinitely to the dismay of developers and clients alike."

The construction boom in the country, which started in the new millennium, although initially benefited contractors filling their order books, it has also badly affected them a couple of years ago when building materials prices went up due to shortage and high demand.

While the market has corrected itself recently both price-wise and stock-wise and contractors were able to go back to normal, it is developers' turn now to struggle to find a contractor and to have their projects delivered on time.

The total value of the ongoing projects in the UAE is estimated to be the highest in the AGCC at around $250 billion, of which Dubai alone accounts for almost $200 billion.

Kim spoke after the official launch of Axon Gulf's first project in Dubai — a $100 million commercial tower to be developed in Dubai Sports City. The company is planning to develop two residential towers there at a combined cost of $160 million.

Axon Gulf, which was established last year, will also invest $400 million in two mixed-use towers in Business Bay, $140 million in 70 villas Nakheel's Golf Estate, as well as $200 million to develop a tower in the second phase of the Lagoons project, he said.

"Axon Gulf is the first Korean property developer established in Dubai and also in Dubai Sports City project," he added.