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Dubai: Dubai's construction boom has created a shortage of contracting capacity, and the spiralling cost of materials and the scarcity of labour remain major problems for contractors, an industry expert said on Sunday.
The problem was also highlighted yesterday at the Middle East Road Infrastructure 2008 Conference, where business leaders suggested ways to address the challenges facing the construction industry.
Yu Tao, managing director of the China State Construction Engineering Corporation, which won Dh6 billion worth of high-profile projects in Dubai, confirmed that contractors have suffered significant losses and are finding it difficult to keep pace with the rapid development of the city.
"The way we are trying to bring more resources here cannot match the speed of development of the city. The shortage of resources applies to everything, from labourers to construction materials," Tao told Gulf News.
To address the labour supply shortage, Tao suggested that salaries of construction workers should be increased, and their accommodation improved.
He noted that labourers, particularly those from China, prefer to work in their own countries because the salaries here are not as attractive.
There is also a shortage of skilled management staff, like experienced engineers and managers, and contractors have to deal with skyrocketing prices, he added.
"We have a lot of engineers and management staff, but we also do a lot of projects around the world. The scale of construction is expanding everywhere, from China to the Middle East," Tao said.
"Aside from that, the supply of materials is also causing a lot of headache. As a responsible contractor, we are trying very hard to break even, to keep some balance.
"But we have noticed that for concrete alone the price increased 50 per cent. And as far as the supply of cement is concerned, we can't find it in the market," Tao said.
To keep prices of construction materials manageable, a participant at the conference suggested that the procurement process should be modified.
Another suggested that the productivity of labour should be doubled to address the scarcity problem.
The way we are trying to bring more resources cannot match the speed of development of the city."
Yu Tao
China State Construction
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