Cement prices have climbed to Dh230 /t from Dh180/t at the end of last year. Now there is a fear project costs will rise in the long run. Contractors have been forced to absorb the price rises as many would have committed themselves through long-term supply tenders. T. Siddiqui, project manager of Petron Emirates Contracting, confirmed: "There has been sharp rise in the prices but so far little of it has been passed on to the clients.
"And since contractors are unable to pass on the rises they are becoming increasingly apprehensive about new projects and reluctant to commit themselves to them."
The tendering has, inevitably, been affected, with contractors wary of the cost of raw materials, such as steel and cement, which keeps fluctuating. The rise in the price of cement has led to a parallel increase in the cost of products such as ready mix concrete. This has increased to around Dh175 a cubic metre from around Dh140 only a few months ago.
Industry experts believe the upward trend in prices is likely to continue. Siddiqui forecasts prices will continue to rise for at least another year. He predicted cement prices would increase by a further 15 per cent to 20 per cent during next three to six months.
Yousif said: "Prices are bound to go up as the gap between cement supply and demand widens further, with new projects being announced in the UAE almost every fortnight."