Ashok Jha

COVID-19 has had a significant adverse impact on organisations, people’s health, their livelihoods and the economy at large in the GCC region countries, says Ashok Jha, Head, FM & Retrofit Projects, Universal Voltas LLC. However, Jha is quick to point out that while the duration and severity of COVID-19’s impact on economies and sectors will undoubtedly vary, companies and governments in the GCC region have done well to set in motion a “look ahead, anticipate, innovate and adjust” roadmap, which has led the construction sector to focus on energy optimisation and retrofitting in existing buildings, which is a key to sustainable construction.

Oman 

Citing figures from Global Data, a leading data and analytics company, Jha says that Oman’s construction industry contracted sharply in 2020, plummeting by nearly around -10.3%. “The industry is struggling with challenges presented by the COVID-19 outbreak, low oil prices, and the impact of sovereign credit rating downgrades,” he says. Further compounding the downside risks to the outlook for the industry, the Omani Government has had to rationalise spending.”

Jha adds that given the limited prospects for the government to boost investment in infrastructure and other investment projects, a recovery in the construction sector is expected to be very slow. “Global Data currently expects the construction industry to fall further in 2021, with output contracting by -5.8%,” he says. “The fiscal plan by the Oman Government is intended to reduce public debt, increase the state’s reserves, and diversify revenue away from the oil sector.”

Owing to these factors, Jha believes that new construction spend will be very minimal, and more impetus will be on the retrofitting, deep retrofitting, fit-outs and energy performance optimisation in the built-environment in Oman.

Kuwait

Kuwait has faced similar challenges, Jha says, adding that the construction market shrunk in the year 2020 at about -9.5% approximately, as per Global Data. “The construction industry is struggling with the challenges presented by the outbreak of COVID-19, low oil prices and the impact of sovereign credit rating downgrades,” he says. “Because of this, focus is more towards existing buildings in Kuwait.”

Jha adds that within the built-environment in Kuwait, residential buildings constitute around 81%, commercial buildings are 11%, whereas government buildings constitute four per cent; the remaining four per cent includes commercial, industrial, agricultural and services. “Also, Kuwait has one of the highest per capita electricity consumption and carbon footprint globally, which further necessitates the retrofitting of the buildings to make them more sustainable,” he says. “All the above factors, along with the economic strain, is forcing Kuwait to focus on energy conservation, deep retrofitting, retrofitting and fit-outs in the built-environment with a very minimal spending on new construction.”

UAE

Sharing observations on the UAE market, in particular, Jha says that the COVID-19 outbreak, coupled with low oil prices, has led the construction output in the UAE to contract by nearly 4.8% in 2020, but that a rebound is expected in 2021, as per Global Data. “New project opportunities are expected to be minimal in the coming quarters, as the government is consolidating its widening fiscal debt and COVID-19-related force majeure,” he said. “Over the medium- to longer-term, government investment will remain focused on upgrading physical infrastructure and reforming the financing and regulatory environment.”

Jha adds that the UAE has set high targets for building retrofit, which are reflected in the UAE Energy Strategy 2050 and the Dubai Integrated Energy Strategy. “The latter targets an overall 30% reduction in energy and water use by 2030,” he says. “To support this, Etihad ESCO aims to retrofit 30,000 buildings in the next 10 years and generate 1.68TWh energy savings and around 5.64 BIG of water savings by year 2030.”