Contractors face slower awards
Project pipeline builds in the region, but number of contracts awarded falls in the first quarter of the year
The GCC construction market has slumped in early 2012. The value of construction and infrastructure deals awarded in the first quarter was less than half that in the same period in 2011.
Much has been said about the prospects for contractors in some of the Middle East’s emerging construction markets, but despite an increasing number of projects in the pipeline, few have been awarded.
Saudi Arabia’s construction market continues to grow in size and value, but although the number of planned projects continues to rise, the number of awarded contracts has fallen for the first quarter of the year. The fall in contract awards can partly be explained by the length of time it can take for clients to appoint contractors after bids have been submitted.
The Interior Ministry is a prime example of a major construction client in the kingdom that has tendered a lot of work, but made few contract awards.
Qatar is another construction market that has whetted the appetite of the region’s contractors since it was appointed as the host for football’s World Cup in 2022.
However, the slow start to 2012 is only expected to be a temporary lull as Saudi Arabia and Qatar finalise planning on their large construction and infrastructure programmes. The completion of the planned projects in both countries is a necessity, with the rapidly growing Saudi population and Qatar’s World Cup plans meaning that governments will face intense pressures to deliver on their promises.
Firms will hope that the raft of planned construction projects start to reach execution so that the rest of 2012 is more fruitful than its first quarter.