By 12 August 2010, the market had contracted some 6 per cent, with the value of projects in the GCC falling more sharply by about 12 per cent. With a large proportion of these values accounted for by projects still under planning, the value of project work actually under way in the region has fallen more sharply still. Something every construction company in the Gulf will readily confirm.

However, after 20 months of sharp falls, there are signs that the market is stabilising. In the four months since the last set of data from MEED Projects, the market has remained stable, with growth in the value of projects flat at about 0.3 per cent. In the 12 months up to 12 August, however, there has been strong growth with the Gulf index rising 12.4 per cent since the 11 August 2009, and the GCC figures rising 6.9 per cent.

Projects planned or under way in the Gulf

  12 August 2010($m) 26 April2010($m) % change onweek 11 August2009($m) % change onyear
Bahrain 75,332 69,282 8.7 60,906 23.7
Kuwait 238,945 273,085 -12.5 266,994 -10.5
Oman 93,580 99,968 -6.4 93,761 -0.2
Qatar 249,286 220,646 13.0 212,240 17.5
Saudi Arabia 698,748 610,355 14.5 598,054 16.8
UAE 941,879 1,001,177 -5.9 917,751 2.6
GCC total 2,297,770 2,274,513 1.0 2,149,706 6.9
Iran 320,797 364,310 -11.9 307,853 4.2
Iraq 321,627 292,084 10.1 157,885 103.7
Gulf total 2,940,194 2,930,907 0.3 2,615,444 12.4
Source: MEED Projects 

The biggest driver of growth has been the continuing strength of the Saudi Arabian market, which has risen some 16.8 per cent over the past year, driven by strong investment in infrastructure by Riyadh. The other driver of growth has been the improvement of market conditions in Iraq, whose projects market has doubled in the last 12 months.

The deteriorating political environment surrounding Iran has had a significant impact on the country’s projects market since the start of 2010, with projects’ value falling almost 12 per cent since 26 April.

With restrictions set to continue in the credit market, private-sector investment will remain stunted for years to come. The state sector is set to remain the primary driver of project activity in the region for the foreseeable future.

Contract awards this week – 12 Aug 2010

Project updates this week

  Project Name Project status
Saudi Arabia Ras Tanura Refinery To Riyadh Pipeline Construction
Bahrain Hidd Industrial Area Sugar Refinery Construction
Kuwait Kuwait Airport Expansion Phase I: Infrastructure & utilities Design
Libya Tripoli Metro System: Red Line Study
Syria Al-Nasserieh Independent Power Plant Prequalifi cation
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Upcoming tender deadlines

  Client Contract Submission
Qatar Qatar Petroleum/Exxon Mobil Barzan gas phase 1 onshore 20 Aug
UAE Abu Dhabi Health Services Company (Seha) Al-Ain Hospital 22 Aug
UAE Abu Dhabi Polymers Company (Borouge) Cross-linked polyethylene unit 30 Aug
Saudi Arabia Saudi Aramco Wasit gas onshore gas process facilities 30 Sep
UAE Tourism Development & Investment Company (TDIC) Louvre Museum main construction 30 Oct
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