Conflict weighs on Gulf index

25 September 2014

Large declines in Iraq and Iran drag down value of region’s projects market

The Gulf Projects Index dipped by 0.2 per cent in the week ending 23 September, with the region’s non-GCC members registering strong declines.

Iraq saw a fall of 4.3 per cent, as more major schemes were put on hold due to fighting between the radical militant group Islamic State in Iraq and Syria (Isis) and Iraqi armed forces backed by an international coalition.

The Eastern Route of Iraq’s $7bn High Speed Railway Network was one of several large projects put on hold during the week.

 Project NameProject Status
Saudi ArabiaPrince Abdulaziz bin Mousaed Economic City Revived
QatarAl-Sejeel petrochemical complexOn hold
IraqHigh Speed Railway Network: Baghdad-Mosul lineOn hold
UAEAkoya OxygenLaunched
UAEDubailand: MudonBudget changes
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The long-term rail scheme is planned to link Baghdad with Mosul. The main construction contract was set to be awarded in December 2020 and project completion was expected in 2040. Now, the project’s future looks uncertain. Isis took control of Mosul in June and has since made it one of its strongholds.

Iran’s projects market saw a decline of 3 per cent as several oil and gas projects were put on hold.

Upcoming tender deadlines
 ClientContractSubmission date
KuwaitMinistry of Electricity & WaterOverhead lines – various locationsSep-14
Saudi ArabiaMecca MunicipalityMecca Metro: phase 1Oct-14
DubaiDubai Electricity & Water AuthorityM station expansionOct-14
OmanOman Power & Water Procurement CompanySalalah 2Oct-14
UAENakheelPalm Hotel tower02-Nov
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In the GCC, only Qatar saw its market shrink this week, with a drop of 1.9 per cent.

This was due to a number of large schemes being put on hold, including the $7.4bn Al-Sejeel petrochemical complex.

Saudi Arabia, the region’s biggest projects market, was the week’s top gainer, with a 1.3 per cent jump. The expansion was supported by several new housing schemes that were announced over the week.

The UAE projects market also grew, finishing the week up 1.1 per cent. One of the new schemes helping to buoy the country’s projects market is the local Damac Properties’ plan to construct Akoya Oxygen, a mixed-use development in Dubai.

The expansion in Saudi Arabia and UAE helped the GCC region to finish the week up by 0.7 per cent.

In numbers

$26.5bn Combined decline in Iran and Iraq’s projects markets

10 Total number of Iraq projects put on hold

31 Total number of new projects in the UAE

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