Qatar construction boom starts

16 April 2012

Doha moves ahead with raft of promised construction projects. Market risks overheating as huge volume of projects starts to be awarded ahead of key events

The wait is finally over. As Doha tenders the first five construction contracts for its metro, prequalifies firms for Olympic sports halls and talks to contractors about its upcoming football stadiums, Qatar’s construction boom may finally be about to start.

Since Qatar won the right to host Fifa’s football World Cup in 2022, construction companies have been positioning themselves to be ready for when contracts are tendered.

For local firms this means teaming up with international partners that have the experience of working on similar schemes in other markets. For foreigners, it means establishing a joint venture with a local firm that can offer established links with client organisations and Doha’s supply chain. So far, only a limited number have been successfully prequalified for major contracts.

In mid-April, Qatar Railways Company invited about 16 groups to bid for Doha metro packages. In 2011, about 60 groups were hoping to prequalify for the contracts, which will be some of the largest tendered as Doha prepares to host the World Cup and the Olympics.

For the firms that did not prequalify, there will be more chances to win work. Qatar Olympic Committee is pre-selecting contractors for two multi-purpose sports halls. Other government agencies in Qatar have begun preliminary talks with contractors about building the World Cup stadiums.

As these projects are tendered and awarded, Qatar will become the centre of attention for the region’s construction companies. Concerns are already being raised about the prospect of an overheated market with rampant cost inflation and unrealistic delivery schedules.

Those firms that worked in Dubai during the boom will know what it is like to operate in a market that puts seemingly impossible demands on its construction industry. Some will be wary of the risks involved, but the prospect of having too much work will ultimately be more attractive than not taking part at all.

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