The value of the top 100 projects in construction in the Middle East has fallen for the second quarter in a row, down from $272.7bn in the first quarter to $263.7bn in the second quarter, a drop of 3.3 per cent, despite almost $36bn-worth of projects entering the table in the past six months. 

As in the last quarter, the top three countries by value in the top 100 remains unchanged at Saudi Arabia, Iran and UAE ($74.5bn, $69bn and $48.5bn respectively). Equally, the top three sectors also remain unchanged at gas, construction and transport ($65.5bn, $53.4bn and $51.8bn respectively).

Fourteen projects from the previous list have dropped out of the table. Six, at a value of $10.9bn, because they have been completed and the rest due to either their status or value being revised by regional projects tracking database MEED Projects.

The completed projects during the quarter are:

• Arzew Fertiliser Complex, Algeria
• Kalak Refinery Third Expansion, Iraq
• Villas at the Al-Falah Development, Abu Dhabi, UAE
• Jubail Acrylic Complex, Saudi Arabia
• Yanbu Refinery Upgrade: Process Package, Saudi Arabia
• Madinaty: Phase 2, Egypt

So far this year, $35.7bn-worth of contracts have been signed that now appear in the Top 100 projects, while $30.9bn-worth of projects that appeared in the previous list have been completed.

Although small, the $4.8bn net gain appears good news for contractors operating in the Middle East market, because it indicates that project work is slowly picking up again, in total 2013 is tracking slightly behind 2012.

Looking beyond just the Top 100, so far in 2013, $92.8bn-worth of major contracts have been awarded, compared to $94.8bn last year, suggesting that the year to date has been disappointing. Despite this, if contract awards track at a similar value to the first two quarters of 2013 ($47.1bn in the first quarter and $45.7bn in the second quarter), then this year should finish ahead of 2012, when $172.5bn-worth of contracts were signed.

Last quarter, MEED highlighted that Qatar had disappointed the market with its slow release of contract awards. This quarter there is a near doubling in value of Qatar-based projects appearing in the top 100, with four entries coming into the table, worth almost $8.1bn,.

Three of the contracts are for tunnelling works for the Green, Blue and Red lines on Doha’s metro, with the fourth being the Msheireb Downtown real estate development. In total, there are now seven Qatar-based projects in the top 100, with contract awards worth $13.6bn, compared with four in the first quarter, worth $7bn.

While new work in Qatar is finally beginning to trickle through, in other countries the changes are small or negative. The UAE experienced the second biggest rise in the value of the major projects that appear in the top 100, climbing 4 per cent.

So far, much of its large, $617.8bn mega-projects pipeline is yet to materialise as contract awards. The estimated $55bn Mohammed Bin Rashid City, for instance, has awarded a contract for the show village (which does not feature in the Top 100) but major awards for sub-packages such as Dubai Hills are not due until 2015, highlighting the potential problem for contractors of there being a gap between work finishing and new contracts being awarded.

In the first quarter, Egypt experienced a 98 per cent rise in the value of projects in the top 100, with projects in the top 100 including the $3.75bn Tahrir Petrochemicals Complex, $1.8bn Future City and $2.9bn Samalout Power Plant. The second quarter value shows a small increase to $13.75bn.

However, with the removal of the democratically elected President Mohamed Mursi and subsequent turmoil this is causing in Egypt, there is a danger that the progress of projects will slow down. Some contractors have told MEED that they are monitoring the situation and will consider pulling their foreign staff out of the country if the situation deteriorates.

The value of big-ticket projects in the Top 100 for all other countries remained flat or dipped, with Saudi Arabia (5.3 per cent) and Iran (5.2 per cent) experiencing the largest reductions.

By sector, the biggest rise has been around transport projects, the value for which in the top 100 have risen 18.3 per cent, to $51.2bn. More than half that value, $31bn, is for rail and metro projects, with contract awards for the previously mentioned Doha metro pushing up the number. Tunnelling works for the Doha Blue, Green and Red lines, part of the much-needed infrastructure work in the capital to help relieve congestion and prepare for the 2022 World Cup, are worth $6.2bn. A further $1.8bn awarded for the first section of the Oued Tlelat to Tlemcen railway in Algeria.

By the end of this year, Saudi Arabia should also have awarded the main contract for the Riyadh metro, and QRail the main contract for tunnelling works on the Gold line, pushing both into a future top 100 table.

There is approximately $1.4 trillion-worth of major projects in the pipeline in the Middle East. Of that, a budgeted $188.7bn-worth of projects are in the latter stages of the bid process.

Contracts that MEED could see awarded this year include the gas processing facility at the Akkas field in Iraq, Zayed museum in Abu Dhabi and package four of Oman’s Batinah Expressway, which was previously awarded, but then cancelled.

The pipeline looks healthy, although as previously mentioned, awards are tracking behind 2012. But there are a budgeted $225.8bn-worth of contract packages due for award during the second half of this year. The difficulty for companies in the market will be how much of that value reaches the contract award stage versus projects where the awards process stalls, pushing them back to 2014.

How MEED calculates the index value of the Top 100: To enable a consistent comparision each quarter, the value is derived by using only the first 100 projects in the table.