Value rise good for the region

24 April 2014

Increasing projects value will provide confidence that the Middle East market has made it through the other side of the crises of 2008-09

The Top 100 Projects Index has now grown for three quarters in a row, its value rising as the projects market in the Middle East returns to health. Standing at $285bn, the index is 5 per cent higher than for the same period a year ago, and 3 per cent up on the previous quarter.

These are not large percentage increases, but when the market is worth billions of dollars, they represent healthy growth compared with the darkest days of the financial crisis, when the value of the projects market fell significantly.

The index has been promising a period of high activity for several quarters and following a busy start to 2014, projects worth $41.4bn have appeared in the index for the first time. It made the first quarter the most active since MEED launched the Top 100 Projects Index.

Oil projects provided the biggest push for the index, with $18bn-worth being added to the table. Significantly, this quarter saw contracts finally awarded for the Clean Fuels Project in Kuwait, important not because it pushed up the index value, but because for so long politics in the country stalled the scheme’s tender process. It gives hope that other major projects in Kuwait will also reach award without further delay.

While Kuwait’s oil sector provided the biggest boost, Saudi Arabia and transport are the engines that drive the Top 100

But while Kuwait’s oil sector provided the biggest boost, Saudi Arabia and the transport sector are the engines that drive the Top 100, and this is expected to continue in future quarters. Saudi Arabia will remain as the region’s biggest projects market, and transport will underpin major infrastructure plans in many countries in the Middle East.

This growth is good for those working in the region. Upcoming plans for railways, metros, roads and airports will provide opportunities for contractors to win long-term work that, within 12 months, could push the value of the Top 100 projects under evaluation above $300bn.

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