Qatar may trim more projects in run-up to World Cup

14 May 2014

Doha re-examining projects to ensure timely delivery of schemes

Qatar may cut some major development projects that are planned ahead of the Fifa World Cup tournament in 2022 to avoid construction bottlenecks and cost overruns and ensure that projects are delivered on time, according to the IMF’s latest country report.

The government is currently re-examining its planned investments and compiling a short-list of important schemes to ensure they are logistically feasible, the IMF says.

Qatar currently has $210bn worth of projects in the pipeline, with the government bankrolling the majority of them ($160bn).

These projects are essential to propel non-hydrocarbon sector growth and facilitate economic diversification, says the IMF, but they present risks of overheating in the near term, and low return and overcapacity in the medium term.

Cost overruns “pose a particular threat” and spending “should be smoothed if signs of overheating emerge,” the IMF noted.

The international body has urged Qatar to set up an integrated public investment management process to coordinate the development projects under way. The IMF also called on Qatar to further strengthen its fiscal institutions, and to create a medium-term budget for all its projects.

Qatar would also benefit by improving its efficiency in the delivery of its projects. While its government effectiveness is broadly in line with its GCC peers, the report cites World Bank figures that show Qatar is “lagging behind resource-rich, advanced economies,” such as Canada, Norway and Sweden.

Greater efficiency would help Qatar maximise its existing resources across all its projects, delivering them on time with better value for its money.

Qatar has already signalled that it plans to cut back on the number of stadiums that it plans to build for the World Cup. It had initially planned to spend $4bn on building nine new stadiums and expanding its existing Al-Rayyan, and Al-Gharafa stadiums as well as Khalifa Stadium for the tournament.

But Qatar’s organising committee for the 2022 Fifa World Cup recently stated that it is considering reducing the number of proposed host stadiums to an amount that better reflects the ‘size of the country’.

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