Iraq projects market value collapses in Top 100 projects index

19 August 2015

But the value of the index in the second quarter edges higher

The value of the Top 100 Projects index continues to rise, despite the uncertainty surrounding the Middle East and North Africa projects market.

However, its growth slowed to 0.6 per cent in the second quarter, reaching a value of $299.5bn. In the first quarter of 2015, the index rose 3.9 per cent, and overall it has now seen three quarters of growth in a row.

The index tracks the value of the 100 largest contracts in the region, from the point of the main contract award until completion.

QuarterContract value ($m)
Q4 2012274,993
Q1 2013271,693
Q2 2013262,705
Q3 2013275,722
Q4 2013276,996
Q1 2014285,389
Q2 2014281,744
Q3 2014281,458
Q4 2014286,429
Q1 2015297,554
Q2 2015299,569
Source: MEED Projects

Saudi Arabia continues to be the powerhouse of the Middle East and North Africa projects market, with $106.1bn-worth of contracts in the Top 100. Transport is again the biggest sector by value, worth $97.1bn, driven by the many rail and metro projects under way in the region.

Islamic State in Iraq and Syria (Isis) forces taking swathes of Iraq is damaging that country’s projects market, with the value of projects under way collapsing as they get put on hold because of security concerns and budgetary constraints due to its war against the jihadist group.

Iraq had begun to see growth, with companies returning and renewed confidence that it was going to push ahead with badly needed infrastructure projects. The value of major projects under way in the index reached a high of $24.2bn in the second quarter of 2014. It now stands at $10.1bn, with questions surrounding whether those still in the index are moving ahead.

CountryQ2 2015 ($m)Q1 2015 ($m)
Saudi Arabia106,117104,217
Iran77,19671,601
UAE28,57832,978
Qatar23,80623,806
Egypt21,05018,450
Kuwait18,60013,700
Algeria13,74813,748
Iraq10,10018,980
Jordan9,5503,550
Oman3,9343,934
Morocco1,8003,000
Sudan1,5901,590
Source: MEED Projects

The value of projects in Egypt has been boosted by deals signed in June with Germany’s Siemens, working in partnerships with local companies Orascom Construction and Elsewedy Electric to push ahead with gas-fired, combined-cycle power plants.

Siemens has signed contracts for three major conventional energy projects that appear in the top 100 – Beni Suef, Capital Cairo and Kafr el Shaikh (Burullus) – all of which are due for completion in 2017. The country suffers from frequent power outages and once commissioned, the schemes will provide an additional 14.4GW of energy for Egypt’s electricity grid.

As reported by MEED in August, Egypt needs $200bn-$300bn-worth of financing to fund its planned infrastructure projects, and is facing challenges to secure the foreign direct investment it needs for some projects. These challenges are not expected to affect the three Siemens power plants, however, as financing is close to being in place.

Abdul Fattah al-Sisi was elected as Egypt’s president in late May 2014, and quickly injected urgency into the need to push ahead with infrastructure projects.

More than $130bn was pledged to the country by international investors during the Economic Development Conference in March and over the past year, the value of major projects in the Top 100 index has almost doubled to $21.1bn compared with the same quarter in 2014.

SectorQ2 2015 ($m)Q1 2015 ($m)
Transport97,09998,599
Oil61,25346,258
Gas58,60160,401
Power46,93040,630
Construction45,58655,066
Chemical5,1005,100
Industrial1,5003,500
Source: MEED Projects

The Siemens contracts also pushed the overall value of power projects in the Top 100 up 15 per cent, to $46.9bn when compared with the first quarter. The value of contracts in most sectors covered in the index remained broadly static over the quarter, although the value of oil projects jumped almost one-third to $61.3bn, pushed up mainly by developments in Jordan and Kuwait.

Not surprisingly, given the tougher pipeline of awards in the region’s projects market, the value of construction contracts in the top 100 fell 17 per cent in the second quarter to $45.6bn.

However, while contractors anticipate a slowing market for major awards over the coming 12 months, consultants have been reporting an uplift in early-stage activity.

Although this means contractors face a time gap between planning and the main contract awards for major schemes, new work is on the horizon, and many international contractors say they have enough work to see them through that slump.

About the Top 100 Projects index

The quarterly index tracks the value of the 100 biggest contracts in the Middle East that feature in the main Top 100 Projects table.

Often there are more than 100 projects listed in the full table, due to a number of schemes having the same value. To calculate the Top 100 figure on a comparable basis, MEED adds up the value of only the first 100 projects each quarter. However, all projects listed in the table are used to provide figures by country and sector.

MEED tracks projects over their development lifecycle, and sometimes the value of a project is adjusted as costs or development phases become clearer.

If a change occurs, we will similarly adjust the value of previous quarters’ index if the project had featured. This is done to ensure that the values quarter-on-quarter can be compared.

The Top 100 Projects uses MEED Projects as a source.

Stay informed with the latest in the Middle East
Download the MEED app today, available on Apple and Android devices

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.