Qatar: Laying a foundation for growth

28 November 2011

Doha has committed to spending $65bn to build infrastructure to host the 2022 World Cup. It is hoping the investment will be a driver for future economic growth

Key fact

Qatar has committed to providing 12 stadiums, each with a minimum capacity of 45,000

Source: MEED

While no country has ever made money directly from hosting a football World Cup, few global events can so effectively raise a nation’s profile.

Since being awarded the right to host the 2022 tournament in December 2011, Qatar has seen itself propelled into the global media spotlight and for better or worse has had to get used to its new found celebrity status.

Delivering a first-class event is obviously paramount to Doha, but of equal important is using the World Cup to fuel future economic growth. Creating a legacy that benefits Qataris for generations is vital to the success of 2022.

“It is vital that Qatar fits the World Cup into its overall development plan and not vice-versa as it is so short-lived,” says a contracting source, who worked on the South Africa 2010 World Cup. “[Qatar] needs to think about its own requirements first because they have to live with everything after everyone has gone home.”

Infrastructure spending in Qatar

The government has identified three key pillars in hosting a successful World Cup and has committed to spending $60bn on putting the required infrastructure in place.

Transport is at the forefront of the current planning and Qatar has earmarked $44bn to equip the country with a world-class network.

A new port and airport are already under construction and a fully integrated $35bn rail network is being planned, as well as the Bahrain-Qatar causeway. A full upgrade of the country’s roads is also under way.

Alongside transport links, about $12.4bn will be spent on improving and increasing hotel accommodation in the country. About 90,000 hotel rooms will be required for the tournament, the majority being in the four-star category.

Base camps that include training facilities also need to be built for the visiting teams.

Investing in a world-class transport network is an essential requirement for any developing nation if it wants to compete with fully developed countries. However, building tens of thousands of hotel rooms in a small Middle East country with no tourism industry is not what anyone could call viable in terms of legacy.

“It doesn’t take a leisure industry expert to say that Qatar is small and it doesn’t need that many hotel rooms,” says a Qatar-based executive. “It is going to need to find creative solutions to this problem, otherwise it will be left with a lot of empty buildings after 2022.”

Several innovative solutions have already been suggested including bringing in cruise liners for the duration of the tournament to lessen the need for new hotels, as well as turning some of the accommodation into university campuses or business parks after the event.

The most contentious question regarding Qatar’s World Cup legacy is not going to be the surfeit of accommodation, however. But rather what to do with $4bn-worth of stadiums after the tournament.

As part of the bid process, Qatar committed to providing 12 stadiums, each with a minimum capacity of 45,000. The bid document stated that some of the new facilities would be dismantled after the 2022 tournament and shipped to developing nations. Some construction experts doubt whether dismantling, shipping and then rebuilding large structures is a viable proposition, but Qatar has reiterated its obligation to carrying this out.

It is vital that Qatar fits the World Cup into its overall development plan and not vice-versa

Contracting source

The problem is not unique to Qatar and many venues around the world have remained empty after hosting a major sporting event and proven expensive to maintain. Many of the venues built for the 2004 Olympics in Greece have fallen into a state of disrepair.  

Sustainable legacy

Ensuring a sustainable legacy has become crucial to any global sporting event and bid documents for both World Cups and Olympic Games must now be written with this in mind.

“Sustainability has to be a principle that guides every planning and implementation step of the event,” says Fifa spokeswoman Delia Fischer. “The balance between economic, social and environmental factors is a key measure of success for the World Cup.” 

An idea of the task ahead for Qatar both in terms of executing a successful World Cup and ensuring a sustainable legacy can be gauged from South Africa’s recent experience.

The country hosted the World Cup in 2010 and despite reservations prior to the event, managed to stage what many regarded as a first-rate tournament.

Brazil 2014 World Cup direct spending
(Percentage of $13.33bn) 
Media 29
Other 4
Source: QFIB

Following the tournament, South Africa has benefited directly in areas such as tourism. While this is a promising start, the country hopes more indirect benefits can be reaped by using the skills and experience gained from hosting the tournament and exporting them to future hosts Brazil, Russia and eventually Qatar.

Although it is a larger country, South Africa’s cup preparations were similar to those of Qatar in that many billions of dollars had to be spent on improving infrastructure prior to hosting the 2010 tournament. A total of $87bn was spent by South Africa on various projects including airport, port and road schemes, with $3.6bn directly invested by the government for the tournament itself. South African contractors who worked on the 2010 tournament are now hoping to use their experience to win work in Qatar. Some are maintaining a realistic outlook regarding this, however.

Importing skills

“[South African] contractors who worked on stadiums have about as good a chance as anyone else with similar experience in regards to winning work in Qatar,” says the South African contracting source who worked on the 2010 tournament. “The operating skills such as liaising with Fifa and tournament security are more unique and salable by South Africa than merely the construction in my opinion.”

Qatar 2022 World Cup direct spending
(Percentage of $65bn)
Source: QFIB

Fifa confirms that the organising committees from World Cups usually work together on organisational issues such as security and infrastructure. South Africa was no different in this regard.

As one of the richest countries in the world, Qatar’s World Cup legacy will differ from the one being pursued by South Africa. Doha has been at pains to not make the tournament the complete focal point of its development plan.

Qatar has had a 2030 vision in place since 2008 that earmarks huge spending plans for non-oil infrastructure, as well as ambitious plans for its education, health and sport sectors.

“What the World Cup brings is a finite timeline for us all to focus on and work to. For me, that is one of the biggest advantages of being awarded the tournament,” says Emad Mansour, chief executive officer of Qatar First Investment Bank (QFIB). “These projects, especially the transport and infrastructure schemes, have to be completed on time and there can be no excuses.” 

South Africa 2010 World Cup direct spending*
(Percentage of $3.6bn*)
Ports of entry infrastructure10
Safety and security4
*does not include $87bn investment in transport in 2006-10. Source: QFIB

In a recent study on the 2022 World Cup event, QFIB states that the World Cup will bring tremendous investment opportunities to Qatar and in the short to mid-term, it will be the construction and transport sectors that will be the main beneficiaries of investment.

Contractors based in Qatar say that they are seeing more competitors opening new offices in Doha and attending meetings and conferences that focus on the country’s development plans.

Securing work in Qatar

“You are seeing Abu Dhabi slowing down and companies are looking for new opportunities,” says a Doha-based executive. “What many of them do not realise is that much of the work is still years away.” 

Many contractors say that the sheer amount of work available is worth the wait and that they are prepared to be patient in order to secure contracts.

Qatar’s 2022 World Cup is certainly going to be different from the three that preceded it, with the distinct cultures of Russia, Brazil and South Africa.

Qatar also has a unique challenge to overcome: its hostile environment. Temperatures regularly top 50 Celsius during the summer months.

Traditionally, the World Cup has always been held in June or July and Qatar has said it is working on state-of-the-art cooling systems for the stadiums and spectator areas. Despite these measures, it still would make more sense from both a health and safety, and fan comfort perspective to move the tournament to the cooler winter months.

At the moment, officials in Doha and at Fifa have insisted the event will take place in the summer, but rescheduling it has not been completely ruled out.

“As it stands today, the 2022 World Cup is planned to be staged in Qatar in June and July 2022,” says Fischer.  “Any potential change would have to be first requested by the competition organisers and then presented to the Fifa Executive Committee.”

Whether the tournament is moved or not Qatar has just 10 years left to build the required infrastructure. For Qataris, 2022 will undoubtedly be an unforgettable moment in their history. The key question is whether Doha can turn the event into a catalyst that can benefit the country for decades.

Q&A Rob Davies, South African Minister of Trade & Industry

What have been the most enduring benefits of hosting the 2010 World Cup?

We ended up hosting a good tournament and one of the spin-offs that we achieved was a greater recognition of our country as a significant emerging market. People are beginning to look at South Africa as a place that can do things and this is part of a greater recognition of the African continent.

Have you got any advice for Qatar in regards to their World Cup?

One of the lessons is to prepare early. There is an enormous number of challenges. I would also say that the infrastructure programmes require consistency. We had a national organising committee and we had cabinet members playing a part from the very start.

You also had to invest heavily in infrastructure. Is this knowledge something you are looking to export?

Yes, we had to basically rebuild three airports and our road and rail systems needed to be upgraded also. We also built the stadiums and the infrastructure around them. I am sure South African firms will be more than happy to share these acquired skills with Qatar and we have already made some partnerships for the Brazil tournament.

What are the similarities between your tournament in 2010 and Qatar’s?

Like South Africa, people will go to Qatar and stay until their team is knocked out. Another similarity is that we held our World Cup very much as an African event and as such there were spin-offs in other countries as well. Maybe that would be an option for Qatar – it could be looked at as a Middle East event.

What challenges do you see Qatar having?

Qatar has got some specific challenges around heat. We had the opposite and tried to convince Fifa that it would be better if the tournament took place in September instead of June when it would be warmer. Fifa were not willing to change in our case and they wanted it to run in the summer so it could fit in with the European season.

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