Market uncertainty subdues recovery

02 May 2011

Political turmoil continues to impact Gulf projects market despite resurgence last week

Contract awards this week

Biggest contract: $1bn

Awarded to Khatam al-Anbiya Construction, an affiliate of the Iranian Revolutionary Guard Corps (IRGC), for two gas development projects in Iran

$1.2bn: Value of major contract awards

2: Number of contracts awarded

For further information visit www.meed.com/contracts

The value of the Gulf projects index fell by 0.6 per cent to $2.52 trillion for the week leading up to 4 May, as the current political turmoil continues to impact on the Gulf projects sector.

The GCC projects market, which accounts for about 73 per cent of the total Gulf market, dropped by 0.9 per cent.

The biggest drop was recorded in Bahrain, where the continuing political uncertainty has resulted in the kingdom’s projects market falling by 4.4 per cent. The cancellation of a $2.5bn refinery project was the main contributor to the slide.

Project updates 04.05.11
 Project NameProject Status
QatarAl-Mail Roundabout to Bani Hajer RoundaboutConstruction
UAESharjah MarinaOn Hold
UAEShuweihat 2 IWPPComplete
Saudi ArabiaEmergency Communications NetworkConstruction
UAEThe Marina Umm al-QuwainOn Hold
For further information visit www.meed.com/meedprojects

Oman, also affected by protests in recent months, saw its projects market decline by 1.4 per cent as budgets on a number of mega-projects were revised and lowered. But it was not just countries affected by protests that saw their project markets decline.

The total value of projects in the UAE fell by 1.6 per cent as a number of megaprojects were downsized. Saudi Arabia, the region’s biggest projects market, recorded a drop of 0.9 per cent after a $1.2bn poly-silicon plant was put on hold.

Kuwait and Qatar were the only two GCC countries to record a growth in their projects markets. Kuwait achieved a 0.7 per cent increase, while the total value of projects planned or under way in Qatar rose by almost 1 per cent.

Upcoming tender deadlines
 ClientContractSubmission date
UAEEtihad Rail CompanyCivil engineering work18 May
Qatar                  Public Works Authrity (Ashghal)Lusail Expressway 23 May
Saudi ArabiaGeneral Authority of Civil AviationMedina Airport5 Jun
KuwaitHealth MinistryAl-Amiri hospital7 Jun
UAEAbu Dhabi Airport CompanyMidfield Terminal10 Jul
For further information visit www.meed.com/tenders

Outside the GCC, Iran’s project market recorded the highest growth in the region. Its index recorded an increase of 2.6 per cent as two new oil and gas projects worth $1bn were announced.

Iraq’s projects index slipped by 1.9 per cent as a $5bn petrochemicals project was cancelled.

However, despite the drop Iraq maintains its position as the region’s fastest growing projects market, recording a 20 per cent year-on-year increase.

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