Local contractors continued to dominate the GCC projects market in 2013, largely reflecting the size and nature of the majority of the contracts that were awarded last year.
Rapid population growth in the GCC has presented a host of challenges for governments in the region. Their desire to address the shortcomings was heightened by the regional unrest, which forced them to accelerate spending to meet the higher expectations of citizens.
As a result, the bulk of the contracts awarded last year were aimed at tackling pressing needs such as the provision of homes, roads and medical facilities. These types of projects generally do not require much expertise and are within the capabilities of local builders. Hence it is no surprise that local firms dominated the GCC projects market, picking up 62 per cent of the $88bn-worth of deals awarded across all sectors. The proportion of local contractors was highest in Kuwait and Bahrain, where project activity was slow and few big awards were made.
Foreign contractors made more headway in Saudi Arabia and Qatar, which launched a series of complex rail schemes. These projects require a level of skill and experience lacking in the region, giving foreign firms a big competitive edge when bidding for these projects.
With more than $600bn of deals in the planning phases in 2014, many of which are large-scale infrastructure projects, the opportunities for international contractors to capture a bigger slice of the regions projects market is growing.