Contractors and consultants are expecting a busier 2015 as ongoing projects move into the construction phase and new work is awarded on major infrastructure schemes.

Industry leaders say the increase in activity will build on what has been a positive 2014 and they hope it will dampen the fierce competition that has been a characteristic of the market since late 2008, leading to better margins.

“Next year, the market will be better,” says Samer Khoury, president of engineering and construction at Athens-based Consolidated Contractors Company (CCC). “Bellies will be full and the margins will be more reasonable.”

There should be a slew of major awards by early 2015, as major schemes that are being tendered or are due to be tendered in the coming months are awarded and move into the construction phase. These include Saudi Aramco’s programme to build 11 new football stadiums, the Mecca Metro, the first phase of the Oman national rail network, and the expansion of Kuwait International airport.

Consultants that engaged in projects earlier than contractors confirm that spending on infrastructure is set to increase into the foreseeable future. “With some $2.5 trillion of megaprojects already under way in the Mena [Middle East and North Africa] region, of which 87 per cent are in the GCC, the growth in the region is both exciting and challenging,” says David Clifton, regional development director at UK-based Faithful+Gould. “Given the projects under way, let alone still to launch, the growth and scale of spending in 2014 will have to increase in 2015 and beyond, especially given the tight schedules for delivery of these schemes.”

Companies are already engaged on major projects that have moved into the construction phase, such as the Riyadh and Doha metros.

Faithful+Gould is working on the Red Line South and the Gold Line in Doha, and in Riyadh, the firm is working on lines 4,5 and 6. CCC is also working on the Riyadh Metro and like many other contractors working in the region, it has had a positive 2014, securing new orders across a variety of sectors in different markets. But so far, competition has remained tough.  “The market is picking up, but competition is still tough,” says Khoury.

Khoury adds that although the infrastructure sector is competitive, the oil and gas sector has been more so. “In traditional oil and gas, the margins are very tight,” he says. “You are competing against the [South] Koreans and the Indians – it is very aggressive. [In civil], there is less competition and better margins on projects such as stadiums, ports and airports.”

Transportation will be the most active sector together with prestigious building programmes for events such as Qatar’s 2022 Fifa football World Cup. “Rail and metro will continue to dominate the headlines, but roads spending across the GCC is often maligned, although it represents a massively significant area of work, such as Ashgal’s [Qatar’s Public Works Authority’s] major programmes, which, at an estimated $20bn, are five times greater than the stadium development costs for the 2022 World Cup,” says Clifton.

For geographies, the GCC will be the most active in launching new projects, and Saudi Arabia is expected to remain the dominant market as it continues to develop new infrastructure to serve its ever growing population.

“With Saudi Arabia still to launch the Jeddah, Mecca and Dammam metros into the construction phase, it is predicted that the kingdom will continue to be the biggest regional market for infrastructure spending,” says Clifton. “However, with Qatar’s expected development of more than $150bn of infrastructure ahead of 2022, the UAE’s commitment to the Etihad Railway and the Omani government’s much anticipated $16bn rail programme, these markets are also incredibly significant.“