Qatar projects market

05 June 2014

The Qatar projects market offers some of the largest and most ambitious projects in the region. What makes the sector even more attractive is the fact that the state’s projects plans come under the time pressure of the 2022 Fifa World Cup, ensuring they have to go ahead and must be built to a specific deadline.

After the initial excitement around the World Cup award in late 2010, there was some disappointment in 2011 and 2012 when the expected rush in new project activity did not arise. However, the large increase in contract awards in 2013 and the expected growth in 2014 have focused the project market community on the state. Last year, just over $20bn-worth of contracts were awarded, an increase of 24 per cent on the previous 12 months, making 2013 the best year for contracts since 2008.

This year the number is expected to grow even further. In the first four months of 2014, Doha had already signed $12bn-worth of contracts, 60 per cent of last year’s annual total. With many deals still to be awarded, 2014 could be a record year.

The findings of a recent report by MEED Insight, MEED’s premium research division, include:

2013 was the year when Qatar saw a significant ramp up in project activity, starting with the $8bn-worth of contract awards for the first stage of the Doha Metro project, along with a number of deals on the expressway and local roads and drainage programmes;

This came after a relatively disappointing 2012, when $14.5bn-worth of contracts were awarded, a 13 per cent fall on the previous year. The 24 per cent increase in contract awards in 2013 represents the start of the surge in project activity in the state as it gears up for the World Cup;

The MEED Insight forecast is for about $34bn-worth of contracts in 2014, a 50 per cent increase on 2013. This is based on further contracts on the Doha Metro, deals on the worldscale Al-Karaana petrochemical complex, and more awards on the expressway and roads programmes. Should all these deals come to fruition, Qatar is anticipated to rival the UAE as the second-largest projects market in the GCC after Saudi Arabia;

Doha has a considerable backlog of work to execute, which should sustain the market until 2019 at least. According to MEED Insight estimates, just over $140bn-worth of projects are planned. Transportation schemes dominate the future market with more than $46bn-worth of road, port and rail work planned, followed by about $45bn-worth of construction projects, and $15bn of petrochemical schemes.

Last year saw the end of Qatar’s liquefied natural gas production capacity-building programme. Along with the Doha Metro contracts, other major deals included the $1.2bn Laffan condensate refinery and the $300m Al-Thumama multi-purpose sports hall contract. From a sector perspective, 81 per cent of contract awards in 2013 were related to the transport and construction sector, largely driven by the requirement to have the correct infrastructure in place in time for the 2022 World Cup.

Major contracts signed in the first three months of this year include three packages on the orbital highway programme, the tunnelling package on the metro’s Gold Line, and the fifth cement production line for the Qatar National Cement Company.

Conversely, the oil and gas sector has been relatively flat since it delivered the highest volume of work in 2006. With the exception of the $3bn Barzan Gas Development in 2011, oil and gas contract awards have averaged a low $1.2bn a year, and just 10 per cent of total contract awards in 2013.

Compared with its neighbours, Qatar has far fewer oil, gas and power projects and a much greater focus on civil infrastructure. With a healthy power reserve margin and the continued moratorium on further development of the North field, spending in these key sectors is not expected to rebound, at least in the short term.

Instead, the focus will continue to be on civil infrastructure, and transport in particular, as the state builds the necessary facilities for the World Cup and, potentially, the 2024 Summer Olympic Games. Doha had submitted a bid to host the 2020 Olympics, but this was rejected by the International Olympic Committee in 2012. It says it plans to rebid for the games in 2024, giving it time to strengthen its bid book and revise its plans.

There is no doubt that the World Cup has added some impetus to project activity. However, the authorities have stated that many infrastructure projects, such as the metro and expressway programme, would have been implemented regardless of the event. Nonetheless, the pressures of having a strict time limit for the completion of many schemes mean a lot of work that would customarily be spread out over several years will now have to be executed concurrently.

There is more uncertainty in the construction sector, which, at just over $45bn, is the second-largest sector after transport. The boom in real estate in 2005-08 has created surplus capacity in the office sector and satisfied most of the immediate demand for residential accommodation. Several large real estate projects have been postponed and many have been redefined in light of lower demand and more limited private investment on which such projects depend.

The transport sector dominates the major projects that are likely to be awarded in 2014. Qatar Railways Company is set to award the elevated works on its green, gold and red lines on the Doha Metro, while Ashghal has several more contracts to award on its local roads and expressways programme.

Significant projects scheduled for award in 2014 not related to transport are the Facility D independent water and power project for Qatar General Electricity & Water Corporation (Kahramaa), the first packages on the Al-Karaana petrochemical complex, and the mega reservoir programme also planned by Kahramaa.

In 2015 and 2016, MEED Insight expects to see similar numbers to the 2014 forecast thanks to megaprojects such as the Sharq Crossing, Doha Zoo, Al-Sajeel and Al-Karaana petrochemical complexes, and the Inner Doha resewerage implementation strategy (Idris) programme.

This article by Ed James, head of MEED’s premium research division, MEED Insight, is an excerpt from the Qatar Projects Market Report 2014. To order a copy or for more details on MEED Insight publications and its bespoke services, please call (+971) 4 390 0436 or email

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