Abstract
Qatar has been one of BMI’s best prospects for growth in the
infrastructure sector in the Middle East in
2009. Although our forecasts
have been revised downwards, we still expect it to achieve one of the
highest growth rates in the region this year. In BMI’s Q309 Qatar
Infrastructure Report we are
forecasting real growth of 6.23% for the
construction industry to reach a value of QAR20.68bn
(US$5.68bn).
In
the last quarter, the ongoing mega-projects in the country continued to
dominate the infrastructure
sector. The largest project in the transport
sector continues to be the Qatar-Bahrain Causeway. Work is
still expected
to start at the end of 2009, and Qatar’s commitment to the project was
illustrated through
the country offering Bahrain a loan in May for
US$350mn for the project. Also dominating activity in the
transport sector
are ongoing projects the New Doha International Airport, which is being built
by the
US’s Bechtel, and the New Doha Port, which is one of the
largest greenfield port developments in the
world, and is due to be
completed in 2014.
In the utilities sector, demand for both water and
electricity has been rising rapidly in 2009, and catering
for this
increased demand is a top priority. Construction started in May 2009 on the
Ras Laffan C (Ras
Girtas) independent power and water plant (IWPP). The
IWPP is the largest in Qatar and will be one of
the largest in the The
Gulf Cooperation Council (GCC), with an electricity generating capacity of
2,730MW. It is being developed by GDF Suez and Mitsui, in co-operation with
Qatar Petroleum and
Qatar Electricity and Water Corp.
BMI believes
that the number of ongoing mega-projects in Qatar’s relatively small
construction industry
will continue to fuel growth in the sector,
especially in the transport and utilities subsectors. The
residential and
commercial construction sectors, however, are unlikely to experience the same
growth.
One key indicator is house prices, which have fallen by 30% in the
six months to May 2009, leading to
over-supply and therefore delays on new
projects. This is presenting a downside risk to our forecasts in
2009.
Although many oil-rich states in the GCC are feeling the pinch this year,
Qatar is reliant on gas and LNG
exports for revenue for the most part and
thus will not be hit as hard as Saudi Arabia, for example.
However, the
gas downturn will follow the oil price decline, and the country will not be
immune to the
impact of the global downturn; this may present a future
downside risk to our forecasts as much of the
investment in the country is
state funded. These factors have led to a reduction in our real growth
forecasts for 2009, and indeed beyond, with 2010 looking to post the slowest
growth between 2009 and
2013 of 4.38% y-o-y.
| 
View Cart
