There are more than $18bn of major road contracts ongoing in and around Doha
Construction companies working in Qatar say that they are starting to feel the supply chain impact of the trade restrictions imposed by Saudi Arabia, Bahrain and the UAE.
On 5 June, the three GCC countries along with Egypt severed diplomatic ties with Qatar. The three GCC states also closed down their airspaces to Qatar aircraft, prevented ships heading to Qatar from leaving their ports, and closed Qatars only land border.
Contractors estimate that about half of Qatars building material and equipment are imported and if the embargo continues it will have a major impact on their ability to deliver projects and as a result there could be years of litigation.
So far the product of most concern is bitumen. Bitumen is the big worry at the moment, says an international contractor working in Doha. Most of Qatars bitumen comes from Bahrain, and they have now stopped shipments. Some contractors are sitting on a stockpile and will be ok for a while. Those that were relying on new deliveries have problems already.
Bitumen is a primary product used in road construction. According to regional projects tracker MEED Projects there are over $18bn of major road schemes under construction at the moment in Qatar. If the shortages persist Qatar will need to find alternative sources of bitumen from other markets if these projects are to progress as planned.
Contractors say that aggregate shortages are also feared as most material is important from the UAE. So far shortages do not appear to have happened. Companies say this is thanks in part to the expanded Gabbro Terminal and storage facilities at Mesaieed that was opened by Qatar Primary Material Company last year.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.