Source: The Peninsula
DOHA: Qatar has awarded a total of 35 mega contracts with a combined value of approximately $27.5bn in the first half of 2013. A further $29bn worth contracts are in the pipeline for the second half of this year.
In terms of the value, the total awarded contracts in the first half reflects a 30 percent increase compared to the value of all the contracts awarded in 2012 full-year. The high-value contracts tendered during the first half of 2013 are primarily transportation and construction-related, including tunneling for Doha Metro and commencement of the Barwa Al Khor real estate development.
The value of the tunneling work contract is an estimated $12.3bn, while the real estate development project is approximately $9.9bn.
The $29bn contracts, expected to be awarded in the second quarter, would put this year’s combined value of contracts at $56bn, which is more than double the value of contracts awarded in 2012, noted an Economic Update on Qatar issued by National Bank of Kuwait ( NBK ) yesterday.
“The package of contracts associated with the local roads and drainage programme that is managed by the Public Works Authority (Ashghal) is likely to be the main focus of project activity (in the second half of the year ),” said Omar Al Nakib, Senior Analyst at NBK .
According to the Economic Update, Qatar’s projects market has been driven by the twin targets of national development and infrastructure construction associated specifically with the World Cup in 2022.
Following completion of Qatar’s massive hydrocarbon investment program, which culminated in the final expansion of LNG capacity in 2011, as part of the National Development Strategy (NDS), efforts are under way to diversify and stimulate the country’s non-hydrocarbon economy–manufacturing, public infrastructure, services etc.
Outstanding projects in Qatar are therefore predominantly construction, transportation and industrial sector-related,. The high-profile development projects include the Lusail City development, integrated railway project, New Doha port, Barzan gas development and World Cup 2022 football stadia.
The NBK analyst noted NDS has earmarked $225bn in development spending (2011-16), of which $150bn is to be borne by the government and state-owned Qatar Petroleum (QP). The private sector, along with other public entities, is expected to finance the remaining portion of approximately $100bn.
Despite the fixed deadline of the World Cup in 2022 drawing ever nearer, there is optimism that projects will eventually be delivered on time — more than 51 percent of the projects have actually entered the execution phase, NBK quoted a Meed report as saying.
GDP figures recently released by the Qatar Statistics Authority (QSA) show that the construction sector was especially buoyant during the first quarter of the year, growing by 11.7 percent year-on-year and 6.3 percent quarter-on-quarter. Credit growth, meanwhile, continues to grow by a robust 18 percent year-on-year as of May.