Qatar construction has worst quarter since winning World Cup bid

17 April 2016

 Contract awards total drops by 92 per cent during first quarter of 2016

The first quarter of this year was the worst quarter for construction contract awards in Qatar since the country secured the rights to host football’s 2022 World Cup in December 2010.

According to data from regional projects tracker MEED Project, during the first quarter of 2016 the total value of construction and transport contract awards was $830m, down 92 per cent on the same quarter of 2015 and 70 per cent on the fourth quarter of last year.

It is the first time that the quarterly total for contract awards in Qatar has dropped below $1bn since the fourth quarter of 2010, when Qatar was selected to host the 2022 World Cup.

 Qatar Contract awards

Qatar contract awards

Since winning the rights to host the tournament, several key infrastructure project have moved forward. The largest is the Doha Metro scheme, which has been broken down into a series of multibillion-dollar construction contracts. Most of these contracts were awarded in 2013 and 2014.

After a strong start to the year, activity declined steadily during 2015 as financial concerns meant that government and government-controlled clients delayed investment decisions. The most high-profile major project to be affected by the drive to limit expenditure was the Sharq Crossing, which was delayed in early 2015.

As the value of awards declines, contractors have become increasingly concerned this year that the pipeline of projects for the World Cup may now be coming to an end. “Qatar has shifted. Before it was a market that we visited regularly looking for new work. It is now a market where the local office is focused on delivery,” says an international contractor working in the region.

From a regional perspective, Qatar accounted for just 5 per cent of contract awards made in the GCC during the first quarter of 2016.

Some new projects are being tendered in the second quarter. They include a car park building at Hamad International airport, a new headquarters building for Qatari Diar and a hotel at Doha Festival City.

UAE accounts for 60 per cent of GCC construction deals


Awards in Qatar and Saudi Arabia have slowed

The UAE accounted for nearly 60 per cent of the $15bn of construction and transport contract awards made in the GCC during the first quarter of 2016.

The high percentage was achieved as awards slowed in previously active markets such as Qatar and Saudi Arabia, while the UAE, notably Dubai, continued to drive forward with new projects. Read more

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