Modest Gulf project market gains in traditional summer lull

23 August 2011

Kuwait projects market is the strongest performer of the week, recording 0.8 per cent growth

Contract awards

Biggest contract: $305m

Contract awarded to Turkey’s Sezai Turkes-Feyzi Akkaya (STFA) for the upgrade of the Bidbid-Sur highway in Oman

$305m: Value of major contract awards

1: Number of contracts awarded

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The Gulf Projects index rose by a modest 0.1 per cent to $2.45 trillion for the week up to 23 August.

While August and Ramadan are traditionally months of limited activity for the region’s projects markets, the GCC still grew by 0.2 per cent, with the total value of projects planned or under way reaching $1.8 trillion.

The strongest growth was in Kuwait where there was a 0.8 per cent increase. The rise was from the introduction of several new projects, including $370m of electrical submersible pumping system projects for Kuwait Oil Company. Oman was the GCC’s next-best performer, a fraction behind Kuwait, despite the cancellation of the $400m upgrade to Sultan Qaboos Port. It was cancelled so the area can be developed as a tourist club. Elsewhere in the GCC, Saudi Arabia, the UAE and Qatar also witnessed a rise in the value of projects planned or under way. Bahrain was the only GCC state to see its projects market decline. It fell by 5 per cent.

Project updates
 Project NameProject Status
Saudi ArabiaQurayyah IPP 2Planned
UAEFalcon City of Wonders (Dubailand)Construction
BahrainCentral MarketOn Hold
OmanSultan Qaboos Port RevampCancelled
KuwaitWara Pressure Maintenance Project (WPMP)Construction
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The main reason for the fall was Manama Municipality putting on hold its $2.65bn Central Market project. It has been a bad year for the country, with its market falling by 29 per cent.

Outside the GCC, the total value of projects planned or under way in Iran fell by 0.2 per cent due to Ilam Petrochemical Company cancelling the high-density polyethene unit and a cracker at its 13th Olefins Complex. The combined value of the units was $550m.

Upcoming tender deadlines
 ClientContractSubmission date
IraqLukoilTwo central processing facilities31 August 
QatarQatar Rail CompanyDoha Metro 11 September
KuwaitHealth MinistryAl-Amiri hospital11 September
OmanMinistry of Transport & Communications  Batinah Expressway (package 2)26 September
UAEAbu Dhabi Airports CompanyMidfield Terminal13 November
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In Iraq, the addition of the Sarsang Block being developed by two US companies, HKN Energy and Marathon Oil Corporation, with the Kurdistan Regional Government, resulted in slight growth.

Iraq is still the region’s fastest-growing market. It has grown by 53 per cent over the past year. Oman has also achieved positive growth over the past year, rising 12 per cent.

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