Business & Finance Club Magazine - Real Estate Sector - Abu Dhabi: Arabtec Holding said yesterday its subsidiary Target Engineering Construction Company has been awarded three projects in Abu Dhabi, cumulatively valued at Dh747 million.

This is yet another indication that Abu Dhabi’s construction projects remain on track and new orders continue to be placed.

“The projects include civil, engineering, construction and commissioning works,” Arabtec said in a mandatory filing to the Dubai Financial Market (DFM), where its shares are listed.

“This brings the total value of secured work in the first six months of 2010 to about Dh1.6 billion,” Arabtec said.

Arabtec’s shares rose 2.7 per cent on the news, its stock closing at Dh1.97 yesterday.

Diversification strategy

“The size of the projects is about 4 per cent of Arabtec’s backlog of projects.

“In terms of size, the projects are not huge, but it is good for Arabtec to diversify geographically,” Chahir Hosni, sales manager with EFG-Hermes said. “It’s a positive.”

Arabtec said the first project worth Dh170 million was awarded by GS E&C Korea to execute civil works in area No 4 at the Ruwais refinery expansion project. It has a completion target of 26 months.

The second project worth Dh251 million was also awarded by GS E&C Korea to execute the steel structure, equipment installation and piping work in SMP area No 5 at the Ruwais refinery expansion project. The project has a completion target of 24 months.

The third project, worth Dh326 million was awarded by a Petrofac-GS E&C joint venture for the execution of the structural, mechanical and piping works (East Area) of the Gasco Ruwais fourth NGL train project. The project duration is 28 months.

Arabtec said work will commence on the projects after Target completes major civil and mechanical works on Abu Dhabi’s Das Island OAG project, adding that it is about to finish the green diesel mechanical and piping works at Ruwais.

Arabtec CEO Riad Kamal said last month the company expects to receive an overdue payment from real estate developer
Nakheel by end-June following the latter’s debt restructuring.

Kamal said at the time Nakheel’s cash would be circulated to pay Arabtec’s suppliers and subcontractors in the UAE, adding the firm would not need to raise additional cash for its projects outside the UAE.

Arabtec expects to have 10,000 employees in Saudi Arabia, up from 6,000 now — by the end of this year as the property company seeks to diversify its operations away from Dubai.