UAE Government’s Action in Boosting the Country’s Infrastructure Ecosystem

23 Apr 2021   |  UAE

The United Arab Emirates (UAE) expects its construction industry to rebound in 2021 by 3.1%; this forecast is due to the recently approved Dubai Building Code that outlines a restructured set of construction regulations and standards for the country.

The establishment of the Dubai Building Code would unify the standards and promote sustainable developments in building design, further inviting international investments to come in a more diverse project in the emirates' construction sector.

Initiatives to Support Infrastructure Recovery

Infrastructure Recovery

The code seeks to reduce costs by streamlining building rulers and creating an omnibus law for construction licensing that would simplify procedures for the business players in the industry.

The UAE government hopes the launching of this code would positively impact the development following the industry's decline of 4.8% in 2020.

The country actively rolls out various initiatives that would support rigorous infrastructure developments. One of the initiatives is the Energy Strategy 2050 that aims to increase the role of clean energy to 50% of the total energy contribution by 2050, allowing them to reduce 70% of the carbon footprint from power generation and saving AED 700 Billion.

The government has announced its plan to invest AED 100 Billion in green funds to encourage renewable energy projects investments.

Other initiatives range widely, such as the Sheikh Zayed Housing Programme, which seeks to provide UAE citizens with sustainable housing through innovative designs of project housing units and to develop a comprehensive infrastructure system.

The program has progressed per schedule, finishing more than 1.29 Million sqm area and over 818 houses in 2020. The Jumeirah Central Project approaches similar to the housing program by involving developments of a new city district that would result in 11,000 housing units and 7,200 hotel rooms.

A Response for the Global Crisis

Infrastructure projects are the key priority for UAE's economic expansion, as the government builds efficient transports and logistics networks fueled by clean energy. The numerous initiatives respond to UAE's construction developers' worries as the construction costs, specifically imported building materials, arise extremely at the end of 2020.

Most building material costs in the local market except for cement have occurred up to 20% alongside the increase of freight costs that have reached nearly 400% in the fourth quartile of 2020.

The increasing cost of raw materials brings dilemmas to construction developers on whether they would want to pass on the cost and increase their prices that would decrease buyer's interests or seek support from the banks to increase their loans and mitigate their crisis.

2021 holds tremendous pressure for the construction sectors. The government needs to free up import containers and ease the burden on project costs in UAE. Otherwise, the cost of raw materials would result in scarcity, eventually disrupting UAE Vision 2021.

However, UAE holds a strong reputation globally, ranking fourth out of 138 countries in the World Economic Forum Global Competitiveness Report--giving good faith for the government's responsiveness to improve the well-being of the infrastructure ecosystem and resolving the issues that arise from the global crisis in 2020.

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UAE Government’s Action in Boosting the Country’s Infrastructure Ecosystem
UAE Government’s Action in Boosting the Country’s Infrastructure Ecosystem

The United Arab Emirates (UAE) expects its construction industry to rebound in 2021 by 3.1%; this forecast is due to the recently approved Dubai Building Code that outlines a restructured set of construction regulations and standards for the country.