A sharp decline in oil prices and an expected budget deficit of $210.5 million in 1998 is sure to delay several projects. The Ministry of Works & Agriculture has already cut its budget by more than 20 per cent and only essential projects - or those that have already arranged funding - are being undertaken.

The biggest project under way is the $400 million coke calcinating plant, seawater desalination plant and jetty upgrade project at Bahrain Aluminium (Alba), which has signed a loan agreement with a group of international and regional banks. Construction work is being carried out by Germany's Mannesmann KTI.

The Ministry of Works & Agriculture is prequalifying contractors for the first package of the estimated $118 million Tubli sewerage plant expansion project, which has been split into 12 packages. The ministry has also invited bids for the first package on the $26 million Zayed Town project, being funded by the Abu Dhabi Fund for Development. The package involves the construction of 52 of a total of 272 two-storey houses for the Bahraini armed forces near Isa Town.

For the new 400-metre, multi-span bridge to link Hidd and Muharraq island, the ministry has finally appointed the UK's Hyder Consulting as consultant. The construction tender for the estimated $26 million project is anticipated during the first quarter of 1999.

The Oil & Industry Ministry has appointed International Development Ireland to prepare the masterplan for a new $130 million industrial park south of Hidd. The park will be developed on 640 hectares of reclaimed land and will house small to medium-sized industrial units. The project is to be financed by the government.

Saudi Arabia's Petroma has announced that it will to set up a 500,000- barrel-a-day refinery, but no details are available to date. The estimated $5,000 million project, if approved by the authorities, will involve substantial construction work in late 1999. Its implementation, however, depends on Petroma's ability to arrange financing.

In the private sector, several small contracts for the construction of bank headquarters, a new airport hotel, and the Bahrain Specialist Hospital are due to be awarded shortly.

AS Egypt's economic recovery has picked up momentum, construction companies are finding more and more opportunities. High-profile investors are carrying out several new hotel and commercial developments, and are looking to world-class contractors to build them. The government is also pressing ahead with new infrastructure projects, including ports, metro systems and power stations. Further opportunities are coming up for the construction of oil and gas facilities and new industrial plants.

For the prestige building projects, the main developments are:

Golden Pyramids Plaza: Bids are under evaluation for the main construction contract for this hotel/commercial/leisure complex being built in Heliopolis for a group of investors led by the Saudi Sharbatly group. Spain's Necso submitted the lowest price at £E 588 million ($173 million), narrowly ahead of Athens-based Consolidated Contractors International Company (CCC). They were well ahead of the three other bidders.

Sharm el-Sheikh Four Seasons: the main contract for this South Sinai resort complex has been awarded to Athens-based Joannou & Paraskevaides (Overseas - J&P) for $60 million. The client is a partnership between the local Talaat Mostafa group and Saudi Arabia's Kingdom Holding Company, owned by Prince Alwaleed Bin Talal Bin Abdelaziz. It will be managed by Canada's Four Seasons Hotels & Resorts, in which the prince holds a 25 per cent stake.

Nile Plaza: contractors have just been invited to bid for this estimated $150 million-200 million development being carried out by Nova Park Cairo, controlled by Talaat Mostafa and Prince Alwaleed. The 34-floor complex will include a 392-room hotel to be managed by Four Seasons.

Marriott Mirage: A joint venture of CCC and the local Orascom has won the contract to build a hotel and resort on the outskirts of Cairo for a price of just under $40 million. The client is a new venture, Mirage Hotel Investment Corporation, set up by the local Sakkara Tourism Investment Corporation.

Nile City: A partnership of Orascom and the Saudi-owned Shobokshi group is building this twin-tower commercial and hotel complex on the east bank of the Nile, just north of the Cairo World Trade Centre. One of the towers will be some 50 storeys high. A French team of Soletanche Bachy and Sefi Fontec is now working on the £E 57 million ($17 million) substructure contract. Orascom and Belgium's Besix are likely to do much of the main construction work - the two firms are already working together on the Cairo Conrad project and the Cairo Meridien expansion.

San Stefano: A group of local and Saudi investors led by Talaat Mostafa and Commercial International Investment Company has just bought this landmark site in Alexandria for £E 270 million ($79 million). A major new hotel and shopping centre will now be built on the 30,000-square-metre site in a prime location on the Alexandria seafront.

Most of the large infrastructure schemes set to go ahead in the next few months are in the transport sector. They include:

East Port Said: Cairo consultants Hamza Associates are preparing tender documents for the approach channel, breakwater and navigation facilities for this new development, which the government wants to become the hub port of the East Mediterranean. The tender invitations are due to go out soon, and the deadline for bids is expected to be mid-November. The government will finance all the infrastructure work. The port itself will be built and operated by a private developer. A venture led by P&O Ports of Australia is putting together a detailed business plan for the port, to be submitted to the government in early October.

Al-Sukhna Port: Six international companies have bid for the estimated $70 million-90 million contract for the first phase of the quay walls for this new port, which will serve the Suez industrial zone. Ten companies have been invited to bid by 3 September for the dredging contract.

Metro lines for Cairo, Alexandria: France's Systra is working on tender documents for the Alexandria metro project, due to go out to contractors towards the end of the year. The French firm has designs been selected to carry out preliminary lines for the third line of the Cairo metro system. It is expected to run across the city, from Old Cairo to Imbaba.

Other construction schemes in the tendering phase include two major elements in the Cairo wastewater project. Bids are in for the Maadi rock tunnel, extending the system to the southeastern suburbs, with Ed Zueblin of Germany the low bidder at £E 190 million ($56 million). Technical evaluation is also under way on six bids for an expansion of the Gabal el-Asfar treatment plant northeast of the capital.

Construction companies have also found a ready supply of projects to bid for in the oil and gas sector - notably the Rosetta gas development being carried out by British Gas, and the Suez hydrocracker, being built by the newly formed Misr Oil Processing Company. Power, cement, fertiliser and steel projects have also provided new business opportunities.

CONSTRUCTION activity in Iran has been falling dramatically since mid- 1997, particularly in the housing sector in the Tehran area. The reasons are as much political as financial.

Tehran, the main area for housing construction, has been so badly hit that the growth rate there is measured in the negative at minus 10 per cent in 1997/98. Activity on newly started buildings was down by nearly one-third in the last quarter of 1997. In other cities, the picture is slightly better, but the overall effect on the economy has been to slow down the GDP growth rate to perhaps 2 per cent.

As of early 1998, oil revenues have suffered, reducing the government's foreign exchange earnings by about one-quarter, or about $4,000 million. But the construction industry had already been moving into recession due to political factors.

An anti-corruption drive in mid-1997 frightened many investors, some of whom moved their funds abroad, particularly to Dubai. Most important, however, was the start of prosecution of municipal officials, culminating in the arrest and trial of the mayor of Tehran himself in mid-1998. The decision-making machinery has been paralysed, pending the outcome of the mayor's trial.

Nationwide, many development projects have been slowed down or stopped due to a shortage of rials caused by the central bank's policy of reducing the money supply to keep inflation down.

Sectors and projects with hard currency inputs are doing better than schemes with only local content. This is particularly true of the oil industry, power generation and other sectors considered essential to the country.

Many contractors are looking ahead to an anticipated boom in construction activity in the oil sector which is expected to start in 1999 if some of the scores of projects valued at $8,000 million and tendered by National Iranian Oil Company (NIOC) as of July 1998 are awarded.

MAJOR minerals projects lead construction activity in Jordan at present with about $1,500 million in investments now getting underway, but decisions are also close on major private sector energy schemes.

Hydro Agri Jordan, a joint venture of the Jordan Phosphate Mines Company (JPMC) and Norway's Norsk Hydro, has tendered a $600 million-700 million turnkey project that includes a plant adjacent to JPMC's Shidiyeh mine for production of 440,000 tonnes a year (t/y) of phosphoric acid and a 1.2 million t/y NPK fertiliser plant at Aqaba, together with a dedicated port. JPMC has also tendered the $250 million second phase of its Shidiyeh expansion plant which will push phosphate production to 7.4 million-7.5 million t/y by 2001 (MEED 24.7.98).

The phosphate projects are being supported by changes within the Aqaba Railways Corporation (ARC). The Ministry of Transport and Telecommunications is studying technical proposals from eight companies for the concession to run the ARC and expand its railway network to connect it to the Shidiyeh mine. The project, which is due to begin by mid-1999, will cost an estimated $100 million and will boost the railway's capacity to 10 million t/y of phosphates and fertilisers (MEED 24.7.98).

Offers for Jordan Magnesia Company's $70 million turnkey project to produce 50,000 tonnes of magnesium oxide and 10,000 tonnes of magnesium special products from Dead Sea brine are due in August (MEED 12.6.98). The Arab Potash company, in joint venture with Finland's Kemira, expects to tender an estimated $70 million plant to produce 150,000 t/y of potassium nitrate and 75,000 t/y of dicalcium phosphate before the end of the year. In May, APC signed a memorandum of understanding with the US' Albermarle for a $120 million bromine project and it is also working on a full feasibility study for an estimated $300 million magnesium metal project (MEED 28.5.98).

Decisions are due soon on two major private sector energy ventures. A consortium of the US' Amoco, Tractebel of Belgium and Jordanian partners signed a memorandum of understanding in March 1997 for exclusive rights for the sale and distribution of gas in Jordan. The Ministry of Energy and Mineral resources is now close to choosing a consultant to work on preparation of terms for the licence for the consortium which plans to construct a $400 million-500 million pipeline to bring gas from Egypt.

The ministry is also close to inviting offers for construction of Jordan's first independent power project (IPP) for which 11 companies have prequalified (MEED 8.5.98). The plant was originally planned for 300 MW, but may be expanded to 450 MW to meet growing demand projections.

Industrial zone development is also showing some progress. The Jordan Industrial Estates Corporation is expanding its Al Hassan Industrial Estate in Irbid and constructing a new estate in Kerak. It has also tendered the infrastructure design for a 2,250 dunum estate in Mafraq. The privately owned Jordan Gateway Projects Company has leased 50 hectares of land from the Jordan Valley Authority and 30 hectares from the Israeli authorities for a cross-border industrial free zone and hopes to be accepting tenants by late 1999 (MEED 12.6.98).

LARGE construction contracts are few and far between in Kuwait these days, forcing many of the larger local contracting firms to look for opportunities elsewhere in the region.

The next major project likely to attract foreign interest is the renovation of the north and south piers at Mina al-Ahmadi refinery for Kuwait National Petroleum Company (KNPC). The Netherland's Frederic R Harris has completed detailed designs on the scheme which involves short-term repairs to the south pier to keep it operational for another five years and long-term repairs to the north pier to keep it working for 15 years. The contract is due to be tendered soon and is expected to be worth about $60 million.

One of the most drawn out projects in Kuwait is the new headquarters for the Kuwait Petroleum Corporation and the Ministry of Oil. First proposed in the late 1980s, its has been plagued by delays. Even today progress is slow. The local Mohamed Abdulmohsin Kharafi & Sons submitted a low bid of KD 1.25 million ($4.1 million) in January for the first construction package. However, a contract has still to be signed.

The scheme has a budget of KD 34 million ($112 million) and will be divided into at least nine separate tender packages. Designs have been completed by the local Salem al-Marzouk & Sabah Abi-Hanna and the US' Arthur Erickson Architects. Project managers are the UK's Bovis International and the Kuwait-based Project Analysis & Control Systems (Projacs).

Despite cuts in public spending, the Ministry of Public Works is pressing ahead with the expansion of Kuwait University. Local contractors were due to submit bids by the end of July for three contracts to build a ports complex at the Shuwaikh campus, a theatre at the Khalidiya complex and a faculty of health science at Jabriya. Contracts were awarded for a number of university expansion projects in 1996, including a main library, law college, computer building, lecture rooms and a conference hall.

In the private sector, Kuwait Cement Company has awarded contracts for a new 1.8-million-tonne-a-year clinker production facility at its Shuaiba plant. The main packages to equip the plant have gone to Denmark's FL Smidth. In April, the local Ahmadiah Contracting & Trading Company picked up a $17.6 million contract to build a 10-storey headquarters for Gulf Investment Corporation (GIC).

Most contractors believe the construction industry will stay flat while the oil price is low and state spending is kept on a tight leash. While Kuwait's private sector is no replacement for state sector spending, there are hopes that the development of the waterfront and the creation of a free trade zone in Shuwaikh will provide new work in the coming months.

THERE is an abundance of construction plans in Lebanon at present. The Council for Development & Reconstruction (CDR) has contracts worth more than $1,000 million in preparation, the Investment Development Authority of Lebanon (IDAL) is finalising details of build-operate-transfer (BOT) projects worth about $1,500 million and new investors are planning tourist projects in central Beirut. For the moment though, these are all still on the drawing board, which means a quiet period for contractors.

Wastewater projects in Tyre, Tripoli, Kesrouan and Sidon are central to CDR's plans. Contracts for the construction of treatment plants, sewers and sea outfalls are expected to be worth more than $200 million. More than 40 companies are anxiously waiting to see if they have been prequalified for the work. Other major schemes planned by the CDR include the damming of the Bisri river and the construction of a water conveyor to Beirut. However, the timing and the financing of the schemes are uncertain and construction companies do not expect to see tender documents before the end of 1998.

The government is increasingly turning to BOT as a way of implementing priority construction projects. IDAL says it will issue tender documents in August for the construction of two BOT airports and associated free zones, at Al-Quleaat, near Tripoli and Riyak in the Bekaa valley. The appointed developers will be responsible for building the airports and all the infrastructure for the free zones and will be awarded an operating concession. IDAL is also preparing tenders for a $350 million BOT culture and conference centre and says it will invite bids for the centre later this year.

IDAL is also working on documentation for the construction of toll roads. The planned Arab highway linking Beirut to the Syrian border has been dropped, but IDAL is preparing new documentation for the Beirut ring road and the northern highway from Beirut to Maameltein. A number of international contractors are understood to be interested in the scheme.

The government has embraced the BOT concept for a whole range of projects, but with varying success. Bidding, in May, for the Linord development of the coastline between Beirut and Anteliyas attracted just two groups - Kuwait's Kharafi International and United Development Company, which includes Almabani General Contractors Company. The work involves the reclamation of 2.4 million square kilometres of land and the installation of sewage and water networks, a marina and a harbour. In return for an estimated $550 million investment the developer will take a portion of the land, either to rent out or sell.

The scheme offers one of the few contract awards expected in the remainder of 1998. Other contracts that may be awarded include 10,000 housing units for the government and the northern parking area for Solidere's souks project in central Beirut. Both bids are currently under evaluation. Solidere is also expected to release another tender for the souks project.

In the longer term contractors will be keeping an eye on Prince Alwaleed of Saudi Arabia's plans for a Four Seasons hotel, associated plans for luxury apartments and a shopping complex and a Sheraton hotel planned by Hariri Construction Company. It is clear that there are still plenty of plans for construction projects in Lebanon. What is not so clear, contractors say, is the pace at which they will progress.

THE Great Manmade River (GMR) project is still the single most important construction project in Libya, with South Korea's Dong Ah Construction the most significant contractor on the scheme. However, Dong Ah cannot be assured of picking up more work on GMR after Dumez of France submitted the lowest bid for the first of seven contracts on the $5,000 million third phase.

Bids for the work, which will involve the construction of a water conveyance system with a capacity of 700,000 square metres of water a day, were submitted in December 1997. Dumez was followed by Hyundai Engineering & Construction Company, with Dong Ah trailing in third. As more than six months have elapsed since the bidding, industry sources say that low oil prices could be affecting the timing of a contract award. However, work is still underway on the second phase and a slight delay in awarding the contract will not be detrimental to the project, they say.

Railways are expected to provide a new source of construction work in Libya. Bidding is due to start in August for 12 tenders issued by the Railways Projects General Authority, which is planning to build 2,178 kilometres of railway running east-west and 992 kilometres running north- south. The first phase of the project will comprise 700 kilometres linking the Tunisian border town of Ras Jedir to Sirte on the Mediterranean coast. The tenders cover everything from earthmoving to bridge construction, from signalling systems to railway laying. The government also says it will award a $20 million contract to a French company for the construction of a plant to manufacture concrete sleepers and a contract to build a rail link between the plant at Khoms and the port.

Other work in Libya is concentrated in the oil and gas sector, with the supply and the installation of pipelines providing a substantial amount of business. Sirte Oil Company (SOC) is expected to make an award later this year for the construction of a gas pipeline from Zueitina to Benghazi after bids were submitted in April. SOC is also evaluating bids for the construction of a gas pipeline from Homs to Tripoli. However, the response to the tender may not have been as strong as SOC had hoped as some bidders requested an extension to the deadline, which was not granted, industry sources say. The contract could be worth up to $200 million. Another contract which may be awarded later this year is the construction of a gas-oil separation plant for Waha Oil Company.

CONTRACTORS in Oman are making do for the moment with a mixed bag of small and medium-sized projects. One of the biggest projects, the Oman LNG scheme, is well under way with major construction contracts awarded in late 1996 and 1997. Other plans include an aluminium smelter, a petrochemicals complex and a fertiliser plant, but there has been little progress on any of those schemes and construction seems a long way off.

However, progress is expected on associated projects and some tender documents could emerge soon, as Petroleum Development Oman (PDO) needs to start construction of a 300-kilometre gas pipeline from Fahud to Sohar, which will supply the planned industries with gas.

Construction companies will also be looking forward to tenders for a new port at Sohar which will be used for importing raw materials and exporting finished products. Earlier this year the Communications Ministry awarded the consultancy contract for the scheme to the UK's Halcrow International Partnership and the local Ibn Khaldun Consulting Engineers. Communications Minister Salem Bin Abdullah al-Ghazali says that tender documents will be ready in December. The $250 million port will have a 4.5-kilometre breakwater and a 1,700-metre quay wall. Part of the port will be dedicated to the planned aluminium smelter and petrochemicals plant. The ministry may also decide to incorporate a fishing harbour into the construction contract.

There has already been progress this year on the Salalah sewerage scheme, which was once tendered as a build-own-operate (BOO) scheme. It involves the installation of a main trunk line, lateral sewers, 10,000 house connections and the construction of three main pumping stations and 21 area pumping stations. The $30 million contract was awarded in June to the local Galfar Engineering & Contracting. The same company is still hoping to carry out similar work in Muscat, where it was selected in early 1996 to carry out the work and operate the system. Project sources say that a draft agreement has been negotiated and is being considered by the municipality.

PDO has also decided to embrace BOO, and in mid-June awarded two concessions to build accommodation for its contractors in Fahud and Nimr. Tawoos Industrial Services Company and Catering & Supplies, both local, won the concessions and will each carry out construction work worth about $26 million. The companies will then operate the hostels for a concession period expected to be 20 years.

Despite these awards PDO has not decided to adopt BOO for every project. The company had planned to appoint a company to develop a 90-MW power plant as a private project, but after considerable deliberation the national oil company decided to award a conventional engineering, procurement and construction contract for the scheme. Bids from Kvaerner Energy, Thomassen, General Electric Company, Hyundai Corporation and Bharat Heavy Electricals are still under evaluation. Local contractors will be hoping to get a slice of the construction work on the project after the award of the main contract.

CONSTRUCTION activity in sanctions-hit Pakistan is expected to slow down in the coming months as the government has cut its development budget for 1998 by almost half.

However, a few projects are going ahead. Work has started on a new $200 million terminal at Lahore airport, being built by a joint venture of Airsys ATM of the UK and Athens-based Joannou & Paraskevaides (Overseas). The Lahore Development Authority continues to evaluate proposals for its $365 million ring road project, which involves the construction of 78 kilometres of road, with 11 interchanges and six flyovers.

The National Highway Authority received bids in early June for a $20 million BOT highway from Karachi to Hyderabad. A contractor is still be selected. Substantial construction work is due to be awarded at the $480 million purified terephthalic acid (PTA) plant of ICI Pakistan and the US-based DuPont Company.

Karachi Port Trust is also due to select a contractor for a deep water port at Gwadar and a road linking the port to Rotadero. The two projects are expected to cost more than $1,000 million. In a new development, the US' Forbes and Company has signed a memorandum of understanding with the Board of Investment to set up a $460 million fisheries project comprising a small port, a free trade zone and associated facilities in Karachi.

In Islamabad the Capital Development Authority (CDA) has completed the design for a $50 million development. The project involves construction of roads, stormwater drainage, sewerage, water and electricity networks. CDA is expected to invite bids shortly for the 750-acre development.

In the absence of government funding, the Ministry of Housing & Works has approached the private sector to build 20,000 flats at three locations in Islamabad. The project will cost more than $790 million and be completed in seven years.

The Water & Power Ministry has signed a memorandum of understanding with the US' Synergics Hydro Power for the development of a power project on the river Jehlum at Kohala, Azad Jamu and Kashmir. The feasibility study and masterplan for the project will be completed over the next 18 months. Construction is expected to start in early 2000. The project is estimated to cost more than $1,300 million.

THE oil price slump is starting to take its toll on the Qatari construction sector. With government oil revenues set to fall by about 20 per cent this year, only one major public infrastructure project - the new terminal building at Doha airport - is expected to proceed.

The situation will leave foreign contractors even more reliant on the energy sector for new business. Up to 10 new hotel projects are also planned, although their fate will be determined by the ability of the developers to secure funding.