Qatar leads road project awards

04 September 2016

GCC states awarded nearly $100bn road projects since 2006

Qatar has awarded a total of $34.5bn road projects from 2006 to August 2016, accounting for nearly 35 per cent of all road projects awarded across the six GCC states during this period, data from regional projects tracker MEED Projects indicated.

For 2016, the $2.1bn contract for the construction of the Al-Khor Expressway project, which was awarded on 23 August to Turkey’s Tekfen Construction, is so far the only major road construction contract awarded by Qatar.

However, it is the largest single road package ever awarded this year across the GCC states, accounting for nearly half of the total contract awards that stood at $4.8bn. The other major award has been the infrastructure works for Kuwait’s South Al-Mutlaa City project, valued at $955m.

The value of awarded road contracts in the GCC peaked in 2014, when total contracts awarded reached $19.6bn. Packages for Qatar’s local roads and expressway projects dominated the total awards during this year, with a combined value of $11.5bn.

The value of awarded projects across the GCC, however, halved in 2015, against an expected award totalling $15.1bn that year.

The gap between actual and expected project awards value is expected to further widen in 2016. With only four months remaining before the year draws to a close, only 16 per cent of the expected $30.8bn contracts have so far been awarded between January and August 2016.

While awards have been delayed in nearly all GCC states, the gap is especially huge in Saudi Arabia, which has awarded only $105m of the expected $13.7bn road contracts meant to be awarded for 2016.

Beyond 2016, and with infrastructure spending in Saudi Arabia expected to remain hard to predict given the existing austerity measures in place, Qatar - and to a lesser extent Kuwait and Oman - will remain the largest potential sources of opportunities for road contractors.

It is understood that improving the state’s nationwide road infrastructure is part of its $70bn commitment for staging the 2022 Fifa World Cup, as well as its long term economic diversification strategy. It has now become apparent that an improved road network that complies with international traffic standards is a key element of the intelligent transportation system that state plans to put in place prior to 2022.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.