Negative sentiment hits Gulf projects market

17 April 2011

Newly completed and stalled projects contribute to declines in politically stable countries

Contract awards

Biggest contract $190m

Value of the contract awarded to Alghanim International and OTV by Kuwait’s Electricity and Water Ministry for a desalination plant at Al-Zour South

$390m Value of major contract awards

3 Number of contracts awarded

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The current political turmoil in the region continues to have a negative impact on the Gulf’s projects market, with the total value of projects planned or under way falling by 0.2 per cent to $2.52 trillion for the week up until 19 April.

The GCC projects market, which accounts for about 74 per cent of the total Gulf market, dropped by 0.3 per cent.

Evidence of the impact of the unrest on the projects sector can be found in Bahrain, with the country’s projects market falling by 3.5 per cent. Ongoing political instability in the kingdom resulted in $2.5bn of real-estate projects being put on hold.

Projects updates 
 Project NameProject Status
BahrainShaza Manama HotelOn Hold
QatarAl-Waab CityOn Hold
Saudi ArabiaShoaiba Bulk PlantPlanned
OmanSouth Batinah Water Supply SchemeComplete
UAEAl-Ittihad Road Improvement and Widening SchemeComplete
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Oman, which has also been affected by the political unrest, recorded a 0.2 per cent drop in its projects market as a water supply project was completed and no new projects were announced.

However, the market decline is not just limited to countries affected by the protests.

Newly completed or stalled projects have resulted in market falls for politically stable countries in the Gulf. Qatar and the UAE recorded drops in their projects markets of 0.6 per cent and 0.5 per cent respectively. Qatar’s market fell as a $1.4bn real-estate project was put on hold and no new projects were announced. In the UAE, $1.7bn-worth of projects were completed and projects totalling $2bn were put on hold.

Upcoming tender deadlines
 ClientContractSubmission date
Saudi ArabiaHigher Education MinistryArar University Hospital30 Apr
Kuwait                  Kuwait UniversityCollege of Science and Faculty Club 26 Apr
Saudi ArabiaGeneral Authority of Civil AviationMedina Airport2 May
UAEEtihad Rail CompanyCivil engineering work4 May
UAEAbu Dhabi Airport CompanyMidfield Terminal10 Jul
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Saudi Arabia, the region’s largest projects market, was the only country in the GCC to witness growth in the value of its projects. It recorded a 0.1 per cent increase, with the $600m Saudi Aramco project in Shoaiba the main reason for the rise.

Outside the GCC, Iran’s projects index remained flat. Iraq recorded a 0.2 per cent rise after the announcement of new power plants at Al-Qaim and Najaf.

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