For the global construction industry, publication of Engineering News Record's (ENR's) top 225 international contractors is an eagerly awaited event. Released in late August, the annual survey from the US construction magazine not only provides details on which contractor is biggest and where, but also a snapshot on which regional markets are hot and which are not. And according to its latest offering, the Middle East was the place to be in 2003. The 81.3 per cent increase in total Middle East revenues from those companies surveyed was more than double the growth achieved by any other region and five times higher than the total for Asia.
ENR's findings are the latest indicator of just how buoyant the Middle East projects market is. The dramatic rise in the oil price since the 1998 nadir of $9 a barrel, coupled with the opening up of property ownership to expatriates in much of the Gulf, has resulted in a rise in project opportunities and contract awards, the likes of which have not been seen since the heady days of the 1970s. In 2002, considered the start of the current upturn, the GCC projects market yielded contract awards totalling an estimated $10,000 million. Last year, the figure shot up to about $25,000 million, driven primarily by a five-fold increase in UAE orders largely on the back of a construction frenzy in the Dubai real estate market (see table 1). The upward trend has continued into 2004. So far this year, major GCC contract awards have been totalling on average about $3,000 million a month. There is little doubt that the 2004 total will exceed $35,000 million given the host of major projects across the region preparing to move into the implementation phase. In Saudi Arabia, on-site construction has recently started on the $3,200 million Jebel Omar real estate development in Mecca. In the UAE, main contract awards are awaited on the $850 million Burj Dubai tower and the neighbouring $750 million Dubai Mall development. Bidding is under way in Kuwait on an $800 million flowline replacement programme for Kuwait Oil Company, while in Qatar the liquefaction plant package is due to be awarded in November on the $11,000 million integrated Qatargas II scheme. The rising deal flow and the expanding project pipeline mean that 2004 is increasingly being seen as the mid-point rather than the peak in the current projects cycle. Indeed, market forecasts from MEED Projects, drawn up with Contax Market Intelligence, show that there will be at least another three years of rising regional orders, with the total value of the GCC market for 2004-06 projected to reach an estimated $220,000 million (see table 3). Vying for top spot will be Saudi Arabia, Qatar and the UAE, all of which are forecast to generate orders of over $50,000 million. Each market will have its own distinctive characters. In Saudi Arabia, the oil and gas, petrochemicals and power sectors will dominate the contracting scene. In Qatar, it will be gas export projects - liquefied natural gas (LNG) and gas-to-liquids (GTL) - along with infrastructure upgrade schemes. In the UAE, the rapidly expanding Dubai real estate and tourism sectors will continue to make the largest contribution. MEED Projects estimates that a third of all GCC contracts over the coming three years will come from the infrastructure sector, which covers everything from roads and buildings to airports and ports (see table 4). Next up will be the power sector, where over $30,000 million- worth of new contract work is projected, while upstream oil and gas projects and petrochemical schemes are each set to deliver more than $25,000 million worth of new business. The projected volume of work will present its own challenges as well as opportunities. The growth in both the deal flow and the size of contracts has already seen leading international contractors become far more selective about what they bid