Completed projects bring market down

15 December 2010

GCC projects fall for a fourth successive week, with only Bahrain and Saudi Arabia showing notable growth

Contract awards 15 December 2010

Biggest contract: $800m

Awarded to South Korea’s GS Engineering & Construction for the engineering, design, procurement and construction for an ethylene vinyl acetate plant in Saudi Arabia

$901m: Value of major contract awards

5: Number of contracts awarded

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The value of projects under way in the Gulf dropped for a fourth straight week on 15 December as the total value of projects in the region planned or under way fell by 0.8 per cent to $2.84 trillion.

Overall, $23.68bn of projects fell off the index with 24 projects worth $4.23bn completed in the week, while 17 projects worth $16.33bn were put on hold. Nine new projects worth $3.12bn were added to the index.

With a decline of 0.9 per cent in the value of its projects, the GCC accounted for most of the drops. Fresh from winning the rights to host football’s 2022 World Cup, it was ironic that it was Qatar’s market that performed most poorly, falling by 2.3 per cent as major project budgets were revised.

Project updates 15 December 2010
 Project NameProject Status
IraqSadr City Rebuilding ProjectConstruction
KuwaitKuwait Airport Expansion: Phase ITendering
IranMashad to Chabahar Railway LineConstruction
UAEAl-Ain HospitalConstruction
UAEPolysilicon PlantConstruction
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The other major decline was registered in the UAE, where the index fell by 1.9 per cent. The UAE’s market was driven down by 14 projects, mostly in the real-estate sector, now being considered by MEED Projects to be on hold.

The largest scheme now on hold is Abu Dhabi’s $15bn Mina Zayed development. The project had been in the planning stages since 2005, but had struggled to move forward as the project’s developer, the local Aldar Properties, continues to struggle in a market where real-estate prices have fallen by up to 25 per cent since late 2008 and off plan sales have dried up.

Upcoming tender deadlines 15 December 2010
 ClientContractSubmission date
UAECentre of Waste Management - Abu DhabiIntegrated waste management project23-Dec
UAEAbu Dhabi Polymers Company (Borouge)Specialist plastics plant23-Dec
OmanThe WaveKempinski Hotel2-Jan
KuwaitKuwait UniversityCollege of Science and Faculty Club11-Jan
Saudi ArabiaSaudi Electricity CompanyQurayyah independent power project28-Feb
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The Omani market also witnessed a slight dip of 0.1 per cent.

Balancing the declines in Qatar and the UAE was Bahrain, which recorded growth of 1.3 per cent, and Kuwait and Saudi Arabia, which posted minor gains of less than 0.1 per cent.

Outside the GCC, Iran’s project market fell by 0.7 per cent and Iraq’s index rose by 0.1 per cent.

Compared to last year, the Gulf Index remains in positive territory with overall growth of 4.8 per cent.

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