Mass declines on Gulf index

06 April 2015

Iran leads slump in region, with Bahrain and Iraq only countries to record gains

Iran saw the biggest decline in its projects market in the week ending 2 April.

The Islamic Republic saw $1.7bn wiped off the value of its market over the week, a decline of 0.9 per cent. This left Iran’s projects market down by 16.2 per cent year on year.

The talks between Tehran and the P5+1 group of world powers, which includes the five permanent members of the UN Security Council as well as Germany, ended late on 2 April with an agreement to limit Iran’s nuclear programme in exchange for relief from economic sanctions.

The framework deal paves the way for a final agreement to be brokered by 30 June. If sanctions are lifted as planned, many foreign companies will gain access to the Islamic Republic’s projects market for the first time in decades.

Project updates
 Project nameProject status
KuwaitWest Abdullah al-Mubarak Township: infrastructureMain contract bid
OmanDuqm Frontier Town: phase 2AOn hold
OmanMajarat Oman (Galaxy Theme Park)Design
QatarNew schools around Doha and in villages: package 7AComplete
Saudi ArabiaKing Abdullah Sports City: multi-purpose facilitiesComplete
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Sanctions currently restrict a broad range of sectors including banking, shipping and energy. Analysts say their successful removal over coming years is likely to create a surge in trade with an accompanying economic boom and increase in project activity.

Elsewhere in the Gulf, there were declines for six out of the eight countries tracked by the index, with Bahrain and Iraq the only two countries to see gains.

Upcoming tender deadlines
 ClientContractSubmission date
OmanRural Areas Electricity Company (Raeco)Harweel wind farm12-Apr
UAEEmaar PropertiesBoulevard Point20-Apr
UAENakheel Nad al-Sheba Mosque26-Apr
UAEDubai Electricity & Water Authority (Dewa) Hassyan coal plant30-Apr
QatarQatar General Electricity & Water Corporation (Kahramaa)Ras Laffan independent water project10-May
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Each saw a modest expansion of 0.1 per cent, while the GCC projects market decreased by 0.2 per cent as a whole.

Saudi Arabia, the index’s biggest projects market, saw a decline of 0.2 per cent, as two schemes were cancelled, worth a total of $305m, and three projects were completed, worth a total of $290m.

Qatar recorded a slump of 0.4 per cent, with $1.1bn wiped off its projects market.

In numbers

$1.7bn Decline in Iran’s projects market

$2bn Slump in Saudi Arabia’s projects market

$1.1bn Decrease in Qatar’s projects market

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