QATAR IN NUMBERS
$60bn: Amount Qatar will spend to develop sporting facilities and infrastructure by 2020
$25bn: Value of the rail schemes being planned
70,000: Number of hotel rooms Doha needs to build by 2022
Doha has a major challenge on its hands to build all the new infrastructure committed to in its World Cup bid. Qatar has a poor track record in project delivery, and in recent years has gained a reputation among contractors for excessive bureaucracy and slow decision-making.
The tendering process is too slow … submission deadlines are often repeatedly extended
When Qatar was declared as host of the 2022 World Cup on 2 December 2010, it was not only a pivotal moment for the Middle East’s sporting sector. The Gulf state’s success in winning the right to stage the world’s biggest sporting event has ushered in the start of a new regional construction boom.
As part of its bid, Doha pledged to spend almost $60bn in developing sporting facilities and infrastructure to host the tournament in 12 years’ time.
Qatar is the world’s leading liquefied natural gas (LNG) exporter and will have no problem financing the massive construction programme. The real challenge will be executing all the projects as planned. Qatar has a poor track record in delivering projects and has been a difficult place for construction companies to work in recent years.
Construction pipeline in Qatar
Doha is planning to spend $4bn on building nine new stadiums and expanding its existing Al-Rayyan, Al-Gharafa and Khalifa stadiums.
The capacities of the Al-Rayyan and Al-Gharafa stadiums will be increased to accommodate 45,000 sporting fans, while the capacity of the Khalifa stadium will be increased to 68,000, from the current 50,000.
The new Lusail Iconic stadium is the largest arena planned. It will be able to hold more than 86,000 people and will be used for the opening and closing matches. The capacity of the other eight stadiums that will be built for the tournament will range from 43,500 to 47,500.
In terms of planning and structuring all the projects that are required, 12 years is not that long
Karim Yazbek, Hill International
In addition to the sporting facilities, Qatar needs to provide accommodation for the estimated half a million people that will descend on the Gulf state in 2022. Football’s governing body Fifa stipulates that a host country must have a minimum of 60,000 hotel rooms. In its bid book, Qatar pledged to provide 84,000 rooms by 2022. With Doha’s current total room capacity estimated to be about 15,000, Qatar will have to build more than 50,000 hotel rooms over the next 12 years.
The stadiums and accommodation make up just a small part of the development work that Doha will undertake in the run-up to the event. To successfully host the World Cup, Qatar needs to build an expansive infrastructure and transport network.
|Qatar’s World Cup Spending Programme|
|Percentage of $60bn|
The Public Works Authority (Ashghal) has pledged to spend $20bn on road development over the next five years. Doha’s current road links are in need of urgent improvements and, with so many stadiums and hotels planned, the country will require several new connecting routes.
The gas-rich state is also planning to spend $25bn on developing rail schemes to assist with moving people between matches. In addition to the four-line metro, the investment includes high-speed rail links between New Doha International airport, Doha city centre and across the proposed Qatar-Bahrain causeway into Bahrain.
With such a variety of large and complex construction projects needed to be completed before the tournament, Qatar has to ensure all the schemes are completed on time and to the required standard. But delivery of projects is something that the Gulf state has struggled with in recent years.
Project delays in Qatar
A number of major construction projects have suffered from delays in recent years due to bureaucracy and slow decision-making.
The estimated QR2.5bn ($686m) Lusail Expressway is a prime example. The project has fallen behind schedule in the tendering process. The expressway is planned to be about 12 kilometres long and will run from Doha city to Lusail and then on to The Pearl real-estate development. The largest proposed stadium will be built in Lusail and it is vital that infrastructure work is carried out by the scheduled deadline, so that contractors have suitable access to construct the stadiums and associated facilities.
Tenders for the expressway project were initially due to go out in August 2010, but contractors had still not received news by the end of the year.
“The tendering process is too slow, submission deadlines are often repeatedly extended and then it can take months for a decision to be made after bids are submitted,” said a Doha-based contractor just after Qatar had won the right to host the World Cup.
Another example of a project that has suffered from delays is the New Doha International airport. The first two phases of the $14bn airport project are set to open in 2012, almost two years later than originally planned.
In addition to schemes suffering delays during the tender process, progress has stalled on some flagship projects after contractors were awarded the contract.
The estimated $4bn Qatar-Bahrain causeway was a key component of Qatar’s World Cup proposal when it launched its campaign early last year. Preparatory construction work had been scheduled to start in the first quarter of 2010. But in June, it was announced that the 45km bridge had been put on hold and the contracting consortium had demobilised its team. “In addition to some financing issues, there were problems at the political level,” an engineer close to the project told MEED in November.
In October, it was reported that Qatar and Bahrain were carrying out financial negotiations with the contracting consortium involved in the stalled project and that the scheme would resume once negotiations had been completed. Doha’s success in winning the right to host the World Cup is expected to provide the impetus for the project to restart.
With so much development work required in the next 12 years, it is important similar political disputes do not derail Qatar’s construction programme.
Contractual disputes are another problem that has beset Qatar’s projects market. In 2009, Ashghal replaced Germany’s Bilfinger & Berger on the first two packages of the Doha Expressway project due to a financial disagreement. The contractor had been awarded the QR1bn contract in 2005 in a joint venture with the UAE’s Al-Hamed Development & Construction.
Coordinated action for World Cup deadline
In the run-up to the World Cup, Doha will be tendering a vast number of multibillion-dollar construction contracts. It is vital that when negotiations are concluded, clients and contractors abide by contract terms and projects are swiftly started and completed on time.
Although it is 12 years until the tournament starts, those in the region’s construction sector are aware that Doha needs to start planning now.
“In terms of planning and structuring all the projects that are required, 12 years is not that long,” says Karim Yazbek, vice-president for Middle East at US-headquartered project management firm Hill International.
Qatar is currently setting up a steering committee to plan and coordinate the $60bn-worth of infrastructure work to be built over the coming years. The committee will be headed by Sheikh Mohammed bin Hamad bin Khalifa al-Thani, one of the sons of Qatari emir Hamad bin Khalifa al-Thani and chairman of Qatar’s 2022 World Cup bid committee. The World Cup steering committee will need to ensure it works with programme managers and the authorities to ensure that an efficient system for tendering and awarding projects is implemented.
“The current tendering process in Qatar needs to be improved. Tenders and decisions need to be pushed through more quickly. If not, there could quickly be a large backlog of projects,” says a Doha-based consultant.
“The steering committee will need to ensure that it coordinates all the government organisations and departments involved so that projects can be tendered and started within the required time.”
It is also important that the steering committee selects programme and project managers that have experience in handling large sporting events. “There are so many things that need to be taken into consideration: The social impact, the economic impact and the environmental impact. There needs to be a project manager assigned for each task within the World Cup project programme to help decisions to be taken fast,” said Jassim al-Jolo, chairman of the Qatar Society of Engineers, after Qatar was selected to host the event. “The programme also has to be logical and implementable so that projects do not overlap.”
Doha’s previous sporting experience
Doha does have experience in setting up organisational structures for large sporting events. In preparation for the 2006 Asian Games, Qatar established The Doha Asian Games Organising Committee to oversee the development work for the competition. In 2002, the steering committee appointed an Australian consortium, headed by GHD, as the prime consultant and programme manager. The consortium had previous experience as a planner for the Sydney Olympics in 2000.
But the World Cup is a much larger undertaking. So it is important that Qatar ensures contracts are awarded to companies with the capacity to deliver projects to the required standard on time.
Doha was able to use its vast oil and gas reserves to pull off the seemingly impossible and win the right to host the World Cup. But now it has to deliver on its promises, and this will take more than just capital.
The steering committee will need to work with the relevant government authorities to ensure the tender processes are streamlined and that bureaucracy is reduced to enable decisions to be taken as quickly as possible.
Political interference and contractual disputes are issues that have plagued Qatar’s project market in the past, and those in charge of the World Cup programme will have to try to avoid a repetition of such problems over the next 12 years.
Building $60bn-worth of infrastructure for the world’s biggest sporting event is not an easy task. But after a difficult three years for the region’s construction industry, it is one that will be relished, and contractors across the GCC will be eager to be part of the game.