Qatar’s construction boom gathers pace

These are exciting times for Qatar. Whereas 10 years ago most people would have struggled to locate the small Gulf peninsula on a map, today, it is known the world over as the ambitious, gas-rich nation that has won the right to host the 2022 Fifa football World Cup.

In the past decade, Qatar has undergone an immense transformation. Thanks to billions of dollars of investment ploughed into its hydrocarbons sector over the last 20 years, the country is now the world’s leading exporter of liquefied natural gas, with a capacity of 77 million tonnes a year, and the world’s richest nation on a per-capita basis.

Its capital Doha’s skyline has been redrawn. Dozens of ultramodern tower blocks have sprung up in the new West Bay business district, a man-made island has been built to the north of the city offering luxury living, and Qatar has firmly established itself as a regional hub for graduate education and research.

But the next decade will see the country undergo an even greater transformation. A construction boom is gathering pace that will see Qatar gain a $35bn integrated transport system, with high-speed rail lines, light rail networks and a metro, which will enable travel around the country and to neighbouring states. A major overhaul of roads and highways is also under way, and the downtown area of Doha is getting a $5.5bn facelift. A series of mixed-use real estate developments are moving ahead and the drainage and sewage system is being revamped and extended in Doha.

In order to host the Fifa tournament in 2022, nine stadiums are planned to be built and three existing sports venues are due to be upgraded. Dozens of hotels and resorts are also in the pipeline to accommodate visiting football fans.

At the same time, investment is still being ploughed into projects to expand the country’s industrial base, with several petrochemicals plants planned at Ras Laffan Industrial City in the north of Qatar. Other schemes are already nearing completion, such as Hamad International airport. In total, $223bn-worth of projects are planned or under way in the country, according to regional projects tracker MEED Projects.

The majority of project activity is being driven by the state and government-related entities, with key clients including Qatar Railways Company (QRail), the Public Works Authority (Ashghal), Qatari Diar and Qatar Petroleum. Between 2012 and 2020, $117.5bn has been budgeted to be spent on capital projects, according to the Finance & Economy Ministry. Meanwhile, Qatar Petroleum and its affiliate companies are planning $50bn-worth of investments between 2012 and 2016.

Last year, there were $10.9bn of construction and infrastructure contracts awarded in Qatar, an 11 per cent increase on the $9.7bn awarded in 2011.

The major contracts in 2012 included the $1.2bn award to Germany’s Siemens for a tram system serving Qatar Foundation’s Education City campus on the outskirts of Doha; a $1.2bn contract won by a team of the local/Belgian Dredging International and Middle East Dredging Company for the phase 2 works at the new port project; and several big construction contracts at the Msheireb development in downtown Doha. This year, there will be more awards on a range of major projects including the Doha metro.

The various schemes are being executed in order to fulfil Qatar’s National Vision 2030, which was published in 2008 and aims to move the economy away from its reliance on oil and gas income into a modern, knowledge-based society.

In 2011/12, Qatar’s hydrocarbons revenue totalled QR155.3bn ($42.6bn), accounting for 62.7 per cent of government income and 38.6 per cent of gross domestic product. The vision commits to investing the country’s abundant wealth into projects that will provide a high standard of living for its people for generations to come. The investments in education and research, healthcare, transport and industry, along with the support being given to startup companies, is intended to transform Qatar into an advanced country by 2030, capable of sustaining its own development.

The national vision specifically cautions against spending on trophy projects and emphasises the need for managed growth rather than uncontrolled expansion, distinguishing it from other markets in the region.

The present construction boom offers opportunities for all businesses operating in the Middle East, from materials suppliers to contractors and service providers. The government is keen to promote local firms, but it realises outside expertise will also be needed to help it achieve its many goals. Qatar is open for business.