Jordan’s construction sector has shown signs of recovery in 2012, with the value of construction and infrastructure awards in the first three quarters of the year rising almost 84 per cent compared with the same period in 2011.

Like other economic sectors in Jordan, sentiment in the construction industry has been affected by rising internal tensions.

Protests have resulted in Jordan’s government being reshuffled several times, with the latest cabinet being sworn in on 12 October. Despite a pledge to create jobs and develop new infrastructure, political uncertainty has resulted in delayed progress with major government-funded schemes.

Jordan port schemes

The largest construction contract awarded to date in 2012 is the estimated $1.2bn deal for the Ayla Oasis real estate development in Aqaba. The real estate scheme will be located next to the new Aqaba port development, a key project designed to improve Jordan’s logistics facilities and boost its economy. The estimated $320m contract for a new grain terminal at the $6bn Aqaba port ranks as the second-largest construction deal in 2012 to date.

In addition to the port project, the Aqaba Development Corporation is expanding the King Hussein International airport to double its capacity to 2 million passengers a year. An estimated $100m package on the expansion scheme is one of the largest construction deals awarded this year.

Transport projects remain integral. Earlier this year, Jordan’s Transport Ministry invited companies to submit technical and financial bids for the consultancy contract to develop a long-term national transport strategy. Planned projects include a $4.3bn freight railway to serve the New Aqaba port and other railway lines linking Jordan with neighbouring countries, such as Syria and Iraq.

Jordan’s tourism sector has accounted for about 20 per cent of the country’s gross domestic product in recent years. As a result, hotel and tourism projects remain major drivers of Jordan’s construction market. In the first quarter of 2012, the local Issaam Khatib Contracting Company was awarded an estimated $60m contract to build a new Fairmont hotel in Amman.

International developers are also looking to tap Jordan’s tourism sector, with Abu Dhabi’s Al-Maabar and Dubai’s Emaar properties both planning to build large hotels in the kingdom. In April, contractors were invited to bid for Al-Maabar’s St Regis hotel in Amman and Emaar’s Samarah Rift development, located on the Dead Sea.

Jordan’s development plans were given a boost in August when the Washington-based IMF approved a $2bn loan to the kingdom over the next three years. However, future opportunities in Jordan’s construction sector will be dependent on King Abdullah’s success in granting reforms to appease the local population and prevent further unrest.