At its peak, at the start of 2009, the value of projects planned or under way in the Gulf topped $3 trillion, according to projects tracker MEED Projects. The GCC accounted for about $2.6bn.
By 12 August 2010, the market had contracted some 6 per cent, with the value of projects in the GCC falling more sharply by about 12 per cent. With a large proportion of these values accounted for by projects still under planning, the value of project work actually under way in the region has fallen more sharply still. Something every construction company in the Gulf will readily confirm.
However, after 20 months of sharp falls, there are signs that the market is stabilising. In the four months since the last set of data from MEED Projects, the market has remained stable, with growth in the value of projects flat at about 0.3 per cent. In the 12 months up to 12 August, however, there has been strong growth with the Gulf index rising 12.4 per cent since the 11 August 2009, and the GCC figures rising 6.9 per cent.
Projects planned or under way in the Gulf
|12 August 2010($m)||26 April2010($m)||% change onweek||11 August2009($m)||% change onyear|
|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.
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|
Upcoming tender deadlines
|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|
|For further information visit MEED.com/tenders|
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