Education City lifts construction sector in Qatar

26 October 2010

Qatar’s vision to be a knowledge-based economy is generating much needed work for the region’s construction sector

Qatar in numbers

$2.3bn: Estimated cost of the Sidra Medical and Research Centre

$1bn: Value of state-backed construction projects currently under way in Qatar

$50bn: Value of schemes to support the World Cup

Sources: Standard Chartered; MEED

The recent award of a QR1bn ($274m) contract to Cyprus-based Joannou & Paraskevaides to build student accommodation at Doha’s Education City development is evidence that Qatar is refusing to let the economic downturn derail its development plans.

Doha is pressing ahead with a series of large-scale government-backed construction projects. This is keeping the country’s construction sector buoyant, while awards elsewhere in the region are tapering off.

Qatar Foundation Projects
Education CityCost ($m)Status
Qatar Central Library275EPC due fourth quarter 2010
Faculty of Islamic Studies233EPC due fourth quarter 2010
College of Media and Communications80-100EPC due fourth quarter 2010
Qatar Foundation Headquarters275EPC due fourth quarter 2010
North Eastern Car Park233EPC due fourth quarter 2010
Sidra Medical and Research Centre2,300Under construction
Convention Centre610Under construction
EPC=engineering, procurement and construction. Source: MEED Projects

“The global recession did affect the Qatar construction market,” says a Doha-based contractor. “The effects weren’t as severe as in somewhere like Dubai, but the market has been affected. However, the government is now trying to recover and it is launching as many new projects as possible.”

As the world’s largest liquefied natural gas (LNG) exporter, Doha has been able to continue spending throughout the financial crisis, investing income from its hydrocarbons resources to keep its development plans on track.

“From an economic point of view, the reason why Qatar has weathered the storm of the downturn so well is due to a big increase in gas production,” says Marios Maratheftis, regional head of research at the UK’s Standard Chartered Bank in Dubai.

Maratheftis predicts Qatar’s economy will grow by 8-8.5 per cent this year, with increased gas production continuing to be the main driver of growth.

Doha Education City

Doha is currently tendering contracts totalling more than $1bn for state-backed construction projects. Many of these are located in Education City, a vast 14-square-kilometre site on the western edge of Doha.

Education City is being developed by the Qatar Foundation for Education, Science and Social Development, a non-profit organisation founded in 1995 by Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani to lead the state’s transformation into a knowledge-based economy. “Qatar is trying to distinguish itself as a niche market within the Gulf,” says Kerry Galbraith, director of architecture and engineering services at KEO International in Doha.

Qatar is trying to distinguish itself as a niche market within the Gulf

Kerry Galbraith, KEO International

“It’s not building indoor ski slopes, it is trying to take a more high-brow approach with projects such as Education City and the Islamic Arts centre on the waterfront. Educational infrastructure is important to the projects market in Qatar. There have been a number of large projects launched recently.”

In August, bids were submitted to build the QR1bn new Qatar Central Library at Education City. The scheme replaces the Qatar National Library project, which was scheduled to be built on the Doha corniche, but was cancelled after the main construction package had been awarded in 2005.

If Qatar secures the World Cup, it would ensure projects … go ahead

Doha-based consultant

On 19 September, contractors also submitted bids for the main construction package for the Faculty of Islamic Studies. The faculty building will be located in the southern zone of Education City. It will cover a total area of 55,980 square metres and will include classrooms, auditorium, exhibition space, offices, a mosque and an underground car park. The project is scheduled for completion by August 2012.

To date, six leading US universities have opened branch campuses at Education City. The most recent educational institution to move into the site was the US’ Northwestern University, which offers journalism and communication courses.

On 10 October, bids were received for the contract to build the College of  Media and Communications building. The $80-100m three-storey building will have a built-up area of 25,000 sq m.

Cultural facilities in Education City

In addition to the educational facilities, Qatar Foundation is also building a new QR1bn headquarters for its staff. About seven companies submitted bids on 24 October for the construction package for the 12-storey headquarters building and a three-four storey study centre.

The projects are being managed by Amstad, the project management arm of the state energy firm Qatar Petroleum (QP), which has been selected by Qatar Foundation to manage the construction of the majority of its projects.

Education City is not just home to universities. The Qatar National Convention Centre is also currently under construction and the $2.3bn Sidra Medical and Research Centre is expected to open in 2012, offering 412 hospital beds for patients.

Beyond the construction work under way at Education City, Qatar is planning to further develop its cultural facilities. MEED recently reported tender documents for the new Qatar National Museum would be available by the end of November (MEED 13:10:10).

QP is also managing the construction of the project on behalf of Qatar Museum Authority. Designed by French architect Jean Nouvel, the museum will be built on two plots of land next to the existing Qatar National Museum. The two sites on the corniche cover an area of about 150,000 sq m, separated by Al-Muthaf Road.

Qatar housing schemes

At the same time, Qatar is also pressing ahead with real-estate and infrastructure projects. The emirate’s population is expected to grow from the current level of 1.6 million to about 2.5 million by 2020. Doha is aware rapid population growth needs to be met with new housing schemes and investment in the country’s infrastructure.

Qatar Foundation is also behind the $5.5bn Musheireb urban regeneration project. The 750,000-sq-m development is being built behind the Emiri Diwan centre on the Doha corniche. Earlier in the year, a joint venture of South Korea’s Hyundai Engineering & Construction Company and the local HBK Contracting Company was awarded a QR1.6bn contract to build phase 1a of the development.

The initial phase involves the construction of the Diwan Amiri Quarter, which includes the Diwan Annex, Amiri Guard and the National Archive, plus a heritage quarter that includes the Eid prayer-ground and four heritage houses. The total built-up area of the buildings is about 144,000 sq m. The construction package for the much larger phase 1b is expected to be awarded early 2011.

The Barwa Real Estate Company is also moving ahead with its Barwa City development in Doha.

Earlier this year it awarded India’s Shaporrji Pallonji a contract to build amenities for the first phase of the QR4.9bn development. In 2007, Bilfinger Berger of Germany won a contract to build 6,000 housing units and community facilities for the scheme.

Another factor that could have a major impact on the country’s projects market is Qatar’s bid to host football’s World Cup in 2022. Doha will find out on 2 December whether it has won the right to host the world’s largest sporting event.

“Everybody in Qatar is waiting for 2 December to see what happens after that,” says a Doha-based contractor. “It is very important, not just for Qatar, but also for the whole Gulf.”

If Qatar is selected to host the event, it would provide a huge lift for the region’s work-hungry contractors. Doha is prepared to spend more $50bn on developing sport facilities and infrastructure if it is chosen to host football’s showpiece event.

Its bid includes plans to spend $4bn on constructing nine new sports stadiums and expanding three existing stadiums. But it is not just stadiums that Qatar will need to build to stage the tournament.

Football’s governing body Fifa stipulates that a host country must have a minimum of 60,000 hotel rooms to accommodate spectators and the world’s media. Doha has pledged to build a total of 80,000-90,000 rooms by 2022.

This will require a significant amount of construction work, as the new hotels planned to open in 2010 are only expected to bring the total number of rooms to 15,000.

World Cup impetus for Qatar projects

The World Cup would not just provide the opportunity for new construction projects to go ahead, many in the sector believe it would also provide added impetus for some of the projects that have been delayed in Qatar to restart.

The $4bn Qatar-Bahrain causeway is a prime example of a large-scale scheme that has stalled. Construction work had been due to start in the first quarter of 2010, but the project was put on hold in June and is currently waiting for financing issues to be resolved before work can proceed.

“When Qatar was bidding for the 2016 Olympics a few years ago, at the same time it was planning the Qatar-Bahrain causeway project. At this point there was a lot of momentum on the Qatari side about the project. But once Qatar lost the Olympic bid, the causeway project slowed down,” says a Doha-based consultant.

“If Qatar secures the World Cup, it would ensure projects like this go ahead and will take a lot of volatility out of the market.”

Qatar has plenty of funds available to proceed with its plans to develop its infrastructure and the various developments under way in Education City are providing much needed work for the region’s construction sector.

But if Qatar is declared as the winner in the race to host the World Cup in 2022, Doha’s drive to become a knowledge-based economy by 2030 will quickly be overtaken by something much larger.

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