Dubai’s 2026-2028 Budget – Implications for the Construction and Infrastructure Sector

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, has approved Dubai’s general budget for the fiscal years 2026-2028 with total estimated expenditure of AED302.7 billion and revenues of AED329.2 billion, the largest in the emirate’s history.

This multi-year budget underscores Dubai’s commitment to sustainable growth, advanced infrastructure, and economic diversification. The allocation reflects strategic priorities under Dubai Plan 2033 and the Dubai Economic Agenda D33, setting the stage for transformative investments across a multitude of sectors.

The estimated expenditure for 2026 is AED99.5 billion, with nearly half allocated to infrastructure investments, signalling growth across the transport, utilities, energy, digital systems and urban development sectors.

Transport and mobility investments are expected to target the metro expansion, tunnels and road upgrades. In energy and utilities, focus is likely to be on clean energy, grid enhancements, district cooling, water infrastructure and waste-to-energy projects. These investments are also likely to accelerate digital and smart infrastructure, including data centres, AI-enabled systems and cyber-resilient networks. Urban development will advance through new housing programmes, community infrastructure and green urban initiatives. Collectively, these priorities highlight Dubai’s emphasis on integrated, technology-driven, and sustainable infrastructure, presenting extensive opportunities for developers, contractors and consultants alike.

For market participants, the budget signals a period of high activity with elevated expectations for capability, compliance and risk management. Developers will see larger, more complex projects requiring stronger procurement processes, sustainability alignment and early coordination with authorities. Contractors can expect a surge in tenders alongside stricter qualification criteria, tighter performance obligations and increased reliance on digital project-delivery requirements.

Subcontractors and specialists stand to benefit from opportunities in MEP, utilities, systems integration and advanced technologies, although pressure on pricing, timelines and scope clarity may intensify.  Architects, engineers will see rising demand for design, supervision and advisory services, particularly those with strengths in sustainability, digital design and compliance. Overall, the market will be opportunity-rich but competitive, with success hinging on readiness, technical strength and robust contract and risk management.

Procurement compliance is likely to be more stringent, with updated qualification requirements, digital tendering protocols and environmental standards. Price escalation and material risks remain significant, making clear adjustment mechanisms and early procurement strategies essential.  Programme and delay management will be critical, as resource constraints and concurrent projects increase exposure to delays and disputes, highlighting the importance of well-drafted EOT provisions and notice procedures.

Multi-year planning increases exposure to change-in-law risks, particularly in sustainability, technology and workforce requirements. Large, multi-package projects also heighten interface and coordination risks, requiring clarity in design responsibilities, approvals, and party coordination. Attention to contract terms and proactive risk management will be vital for successful delivery.

Key recommended actions include reviewing tender-readiness and prequalification materials, auditing standard-form contracts to ensure protections on pricing, delays and compliance, and aligning early with sustainability, permitting and environmental requirements. Planning for resource constraints, including long-lead items and specialist personnel, will be critical to meeting project timelines.

In addition, implementing or refining digital project delivery systems, such as BIM mandates and cybersecurity protocols can improve coordination, compliance and overall efficiency. Early preparation across these areas will help parties manage risk, maximize opportunities and deliver projects successfully within this period.

This latest budget brings both opportunities and challenges for the construction and infrastructure sector. With investments driving more complex technology-driven projects, market participants should anticipate heightened compliance obligations, sustainability requirements and risk management demands. Success will depend on proactive planning, robust contractual protections and adoption of digital systems to meet evolving standards.

For any questions regarding the information discussed in this article, or for tailored advice on procurement, contract drafting, risk allocation, disputes and/or regulatory compliance across all project stages, please contact Claire Miller and Natalie Ledger.