No end in sight for Gulf index declines

12 April 2011

Political turmoil and newly completed or stalled projects contribute to Gulf market’s continued slide

Contract awards

Biggest contract: $440M

Awarded to Doha Cables for the supply of 42,000 tonnes of copper cables in the next two years to Qatar General Electric and Water Corporation (Kahramaa)

$654m: Value of major contract awards

7: Number of contracts awarded

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The total value of projects planned or under way in the Gulf region fell by 0.3 per cent for the week leading up to 13 April.

The political unrest continues to impact on the projects market. The value of projects completed or put on hold this week surpassed the value of new projects announced. Sixteen projects worth a total $5.2bn were completed or put on hold, compared with the 18 new projects totalling $2.3bn announced.

The drop in the Gulf’s projects sector resulted from the 0.4 per cent decline in the GCC market, which accounts for about 73 per cent of the regional projects market.

Kuwait’s market fell by 1.7 per cent as the estimated $3.1bn Al-Zour North Power and Desalination Plant was removed from the index. The financing of the project is being restructured and will now be tendered as a separate independent water and power project.

Project updates 
 Project NameProject Status
IraqIraq water injection facilityDesign
IraqNajebia power plantTender
BahrainBahrain Financial Harbour: VillamarOn Hold
Saudi ArabiaKing Abdullah Economic City: Power plantOn Hold
UAEUmm al-Lulu field development: full field developmentPrequalified
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The political turmoil in Bahrain continues to affect its projects market. The total value of projects in Bahrain dropped by 0.5 per cent as a $380m real-estate development was put on hold.

Oman, also affected by protests, recorded a 0.4 per cent decrease in the value of projects planned or under way. The cancellation of a $234m sugary refinery complex and completion of a $125m road project contributed to this.

Saudi Arabia’s index also saw a fall of 0.4 per cent. This can partly be explained by a $2bn power plant project at King Abdullah Economic City being put on hold.

Upcoming tender deadlines
 ClientContractSubmission date
Saudi ArabiaMinistry of Higher EducationArar 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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Year-on-year, the Gulf index is down by 10.3 per cent. The GCC index is down by 17.5 per cent, driven by falls of 43.5 per cent in Kuwait and 33.6 per cent in UAE projects markets.

Iraq remains the region’s strongest growing market, recording a 55 per cent year-on-year increase.

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