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Abu Dhabi Committee Formed at Critical Time for Construction

The move by Abu Dhabi’s Executive Committee to form an infrastructure committee to oversee the development and operation of infrastructure in the emirate is an important step at a critical time for the construction sector, said GlobalData, a leading data and analytics company.

Colin Foreman, deputy dditor, GlobalData, commented: “In the future, new projects including public-private partnership (PPPs) should move into delivery faster, while at the same time providing a mechanism to more quickly resolve problems on existing projects. Both of these issues have been a major bugbear for the construction industry in the past, and while decisions may not always be favourable, the fact that decisions will be made more promptly will be welcomed.”

The timing of setting up the infrastructure committee is also important. The economic disruption caused by the COVID-19 pandemic has been far reaching, and while work on construction sites continues, there are growing concerns from the industry about the outlook for the future.

Foreman added, “Companies are concerned that as the virus spreads, project activity will slow down, and as that happens a cash flow crisis will emerge, leaving contractors unable to settle their dues or pay salaries.”

The federal government was the first to publicly address these cash flow concerns in late March when the UAE cabinet approved another round of measures to support the economy, including improved payment terms for contractors working on government contracts, as well as exempting companies from penalties that arise from delays caused by the coronavirus crisis. 