Iraq drags down Gulf Projects Index

09 June 2015

Iraq, Qatar and Iran see significant falls in the values of their projects markets 

The Gulf Projects Index fell 0.5 per cent in the week ending 5 June 2015, the largest fall since 20 February. Only the UAE’s project market expanded, with Iraq, Qatar and Iran leading the losses.

Iraq recorded a huge 5 per cent, or $20.5bn, week-on-week drop in the value of its project market, reaching its lowest level since 2013. Major military and infrastructure projects were put on hold, despite Baghdad receiving an $833m loan from the IMF.

Iraq is being forced to prioritise development spending as the fight against Islamic State in Iraq and Syria (Isis) and lower oil prices strain public finances.

Project updates
 Project nameProject status
IraqAl-Rasheed military camp developmentOn hold
IranSouth Pars Gas Field: phases 15 & 16Complete
UAEFujairah oil terminalStudy
UAEOil field development projectStudy
UAETameer Towers (Shams Abu Dhabi – Al-Reem Island)Design
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Qatar’s project market lost 1.1 per cent, after several real estate and infrastructure projects were completed. The $3bn expansion of the Idd al-Shargi offshore field has been placed on hold as it is not considered economically feasible at present.

The UAE was the only market to expand over the week, gaining 1 per cent, or $7.7bn, driven by activity in Abu Dhabi. Oil and gas investment, and real estate projects boosted the market by $8.6bn, although the large number of projects completed dampened the impact.

Outside the UAE, new projects did not keep pace with the $5bn in project completions seen during the week, contributing to the $17.5bn contraction in the region’s project market.

Upcoming tender deadlines
 ClientContractSubmission date
UAEInvestment Corporation of DubaiAtlantis Resort21-Jun
Saudi ArabiaMetro Jeddah CompanyObhur Bridge26-Jul
OmanOman Power & Water Procurement CompanySohar 3/Ibri independent power project (IPP)02-Aug
Saudi ArabiaSaudi Electricity Company/Saudi AramcoFadhili IPP31-Aug
UAERoads & Transport AuthorityRoute 2020 metro extension06-Dec
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The largest projects market, Saudi Arabia, saw only a minor rise of less than 0.1 per cent. The $1bn of new infrastructure schemes announced barely compensated for completions and inactive projects.

Oman recorded a 0.3 per cent fall in the value of its market after $782m of mostly real estate developments were completed.

Iran saw a 0.6 per cent decrease in the value of its project market after major project completions.

In numbers

$20.5bn Week-on-week contraction in Iraq’s projects market

$8.6bn Value of new and revived projects in the emirate of Abu Dhabi

$3bn Estimated value of the on-hold Idd al-Shargi expansion project in Qatar

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