Index weakens as key markets contract

03 August 2015

Kuwait the only state with a market increase thanks to the award of the much-awaited Al-Zour refineries project

The value of projects planned or under way in every Gulf country except Kuwait, either contracted or was left unchanged for the week ending 31 July, leading to a 0.3 per cent fall in the overall Gulf Projects Index.

Saudi Arabia registered the most significant fall, with its index contracting by 0.5 per cent due to several projects that were put on hold, completed or where budgets have been revised. New project awards totalled only $76m.

In numbers this week

$11.38bn Value of projects put on hold across all markets

31 New projects announced or awarded in the UAE

$2.19bn Value of projects revived across markets

The $5.8bn Murooj Jeddah project has been put on hold, while budgets for the Jizan segment of the Asir-Jizan road scheme and the Saudi Housing Project have been significantly reduced. Furthermore, two new projects, including Saudi Aramco’s $700m Shaybah NGL Recovery Programme (package 4), were completed in the final week of July.

The UAE’s projects market, the second-largest among the Gulf countries, also fell by 0.3 per cent during the week. The drop resulted from an estimated $2.4bn budget reduction across 48 projects planned or under way, and the $2.9bn Pearl Dubai project being put on hold, along with a few other smaller real estate schemes.

While more than 30 new projects were announced in the UAE during the week, most of these, except for the $1.2bn Jebel Ali drainage tunnel, have relatively small budgets.

Project updates this week
 Project nameProject status
IranAzar OilfieldsOn Hold
IranNorth Yaran oil field developmentExecution
Saudi ArabiaMurooj Jeddah (Wadi Al Asla)On Hold
Saudi ArabiaShaybah NGL Recovery Programme: package 4Complete
UAEJebel Ali Drainage TunnelDesign
For further information visit www.meedprojects.com/home

In Iran, the reactivation of the $700m North Yaran oilfield development was undermined by Tehran putting the $1.6bn Azar oilfields development on hold.

Bahrain and Qatar each registered a 0.1 per cent drop in their projects indexes during the week.

No new projects were awarded or announced in Bahrain. The reactivation of the $35m Humainiya housing project was offset by budget adjustments that reduced the value of several projects by about $60m.

In Qatar, 16 new projects worth under $500m were announced or awarded during the week, while nine were completed. The $650m Lusail Museum was also put on hold.

Upcoming tender deadlines
 ClientContractSubmission date
UAEEmaar PropertiesCreek Harbour Towers17-Aug
UAEModern EleganceThe Scene Tower by Paramount23-Aug
Saudi ArabiaSaudi Electricity Company/Saudi AramcoFadhili independent power project31-Aug
Saudi ArabiaMetro Jeddah CompanyObhur Bridge10-Sep
UAERoads & Transport AuthorityRoute 2020 metro extension06-Dec
For further information visit www.meed.com/news/tenders

The only country where the projects market value increased during the final week of July was Kuwait.

Although the country saw only one new project, the Jahra Education Complex, announced in the week, there have been significant budget adjustments for the multiple refinery projects of the Kuwait National Petroleum Company (KNPC). The respective contract values for packages 1 and 5 of KNPC’s new refinery projects were $680m and $647m higher than the previously estimated budgets.

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