GCC roads sector up in 2012

13 November 2012

Qatar and Saudi Arabia have been the two most active road markets to date

The $4.9bn worth of construction contract awards in the GCC’s roads sector was up 22 per cent for the first three quarters of 2012, compared with the $3.8bn awarded for the same period in 2011. Since the end of the third quarter, the roads sector has been boosted by an additional $400m worth of deals.

Qatar and Saudi Arabia have been the GCC’s most active road markets to date, both awarding about $1.8bn-worth of road contracts in 2012.

Qatar’s road market in 2012 has been propped by two major awards, the $640m deal awarded to the UAE’s Al-Jaber Group for package 13 on the Doha Expressway and the $961m deal awarded to South Korea’s Hyundai Engineering & Construction for the Lusail Expressway.

Contract awards in Qatar’s road sector is expected to rise sharply in 2013 as its Public Works Authority (Ashghal) plans to oversee a QR100bn ($27.5bn) plan to upgrade the country’s roads and drainage infrastructure, which will include more than 30 major highway projects.

In Saudi Arabia, the largest road contract award so far this year is the estimated $125m contract to build connecting roads for the Ras al-Khair Highway on the eastern coast of the country.

Despite most sectors in Saudi Arabia’s projects market recording a slowdown in 2012, the kingdom’s road sector is up 56 per cent year-on-year. The Ministry of Transport is by far the kingdom’s most active road client, awarding $.2bn or 75 per cent of the road contracts awarded in the first three quarters.

Oman has been the GCC’s third most active road market this year, with more than $1.1bn-worth of contracts awarded. This includes the contract awards for the first and second phases of the Batinah Expressway project, worth $361m and $319m respectively. Oman will continue to invest heavily in its roads infrastructure into 2013, with $15bn allocated to the development of roads, airports and ports in the current five-year plan.

Kuwait’s road sector has been relatively quiet in 2012 in terms of contract awards, with only $154m of contracts signed to date. However, this is expected to change before the end of the year with $301m worth of contracts due to be signed before the end of the year. The Public Works Ministry is planning to spend KD4bn ($14bn) on 88 new road projects over the coming years as it looks to improve the country’s infrastructure. This includes the long-awaited KD162m Nawaseeb road, which is a 42-km long border road that will link Kuwait with Saudi Arabia.

The UAE’s road sector has only recorded $154m worth of road contracts in 2012. The largest of these is the $108m package awarded for the Ras al-Khaimah ring road in the northern emirate. However, the country’s road sector should pick up in the coming months after contractors were recently invited to bid for two packages on the Mafraq to Ghuweifat highway scheme.

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