THE mood is upbeat as Qatar gets set to announce its budget for the next financial year that begins next month (April 1).

And with Prime Minister Sheikh Hamad bin Jasim bin Jaber Al Thani having indicated that it will be “much larger” than the last one – probably the largest in its history – there is every reason to be optimistic about prospects for the coming year.
“Huge sums will be allocated and spent on infrastructure, while new giant projects will also be announced,” Sheikh Hamad has been quoted as saying. This could provide a massive boost to the country’s construction industry, which is reported to have grown by 17 per cent last year, and is expected to register a similar growth this year.
Currently, a whopping $100 billion is being spent on projects to build up the country’s infrastructure and raise its annual LNG export capacity from 54 million tones to 77 million tonnes this year.
The government’s goal behind an expansionary budget will be to stimulate the economy and complete existing infrastructure projects. The emphasis, however, will be on encouraging sustainable development and eventually help in achieving the objectives of Qatar National Vision 2030.
The world’s largest natural gas exporter is expected to outperform the oil region’s key players — Saudi Arabia and the UAE — this year due to massive expansion of its gas facilities and is on target to achieve economic growth exceeding 16 per cent this year, up from nine per cent last year, on the back of rising liquefied-gas exports and an increase in world oil prices.
Qatar has been cited as the best performer in the region last year, recording another budget surplus, and prospects for this year appear to be even brighter. None less than the state’s central bank chief Sheikh Abdullah bin Saud Al Thani has confirmed that its economy will perform better this year and its financial position is good.
Over the past year, as most of the Gulf adopted a “watch-and-wait” approach in the wake of the global financial crisis, Qatar has continued to award a number of contracts, concluding the year with a deal worth QR91 billion ($25 billion) for an integrated railway project. The go-ahead for the much-anticipated state-of-the-art railway network will further Qatar’s ambitions as a logistics hub and a business destination.
Also, while the rest of the region has been shying away from launching projects and awarding contracts in the real estate sector, a QR4.75-billion ($1.3 billion) deal was awarded last November for the mega Barwa Financial District, by Barwa Real Estate, the largest semi-public property group in Qatar. Another major project – the estimated QR2.5-billion ($686.5 million) Asia Towers – was launched in January by Ezdan Real Estate Company, with Qatar General Insurance and Reinsurance Company and Al Sarri Trading Company.
A pioneering project mooted over the past year and which has just broken ground is the ‘Heart of Doha’ – now renamed a ‘Musheireb’ – a QR20-billion ($5.49 billion) signature project of Dohaland, a subsidiary of Qatar Foundation. The project, which aims to revive the old commercial centre of Doha by deploying a community-based architectural language across a massive 35-hectare site, will be a trendsetter in the region, as the global focus turns to sustainability and retaining the cultural fabric of Middle Eastern cities (see Page 62).
Qatar has managed well the impact of the global financial crisis because the nation – one of the top three gas producers in the world – can bank on gas windfalls that have enabled it to invest in infrastructure development and construction projects.
According to International Monetary Fund (IMF), Qatar can look forward to positive economic prospects in the medium term, but has however cautioned that infrastructure projects should be phased to avoid supply bottlenecks that could drive up inflation.
The state will continue to enjoy strong growth, moderate inflation and a fiscal and current account surplus this year, IMF said, though rapid growth has “the potential of overheating the economy unless the government continues to prioritise and sequence its spending toward infrastructure spending”.
Doha is in the happy position of having been able to learn from Dubai’s experience and in the wake of the fallout of the latter’s market, has seen a number of consultants and contractors relocating to Qatar and making a beeline for its projects.
This has resulted in a surge in demand particularly in the commercial segment of the real estate market. Hence, the property market in Qatar, which witnessed a downturn last year on the back of the global financial crisis is expected to recover this year, with a degree of stability in demand and prices. However, in the short term developers will still be hesitant to put money into real estate.
House rents fell by 25 to 30 per cent over the past one year, while the prices of real state properties dipped by 30 to 40 per cent. According to news reports, the market is currently witnessing a surge in supply of residential properties, resulting in lower prices. On the other hand, rentals of commercial properties still remain high due to a shortage in supply. Qatar has also been quick to benefit from the current regional economic scenario and has retendered a number of projects to take advantage of lower construction costs. Hence, while the country has several projects on the drawing boards, many will suffer delays as developers try to obtain the best prices.

Infrastructure focus
Qatar’s priorities lie in putting in place the much-needed infrastructure to sustain a population growth that can be expected with industrial and real estate development and hence realises that an efficient transportation network is a prerequisite to achieving its goals. The strategic deal inked with German rail and logistics giant Deutsche Bahn for its intergrated rail project will go a long way in furthering its ambitions.
Other vital infrastructural projects that are due to go ahead include:
• The estimated $4-billion Qatar-Bahrain causeway (Friendship Bridge), work on which is now due to start shortly after a number of delays;
• The north node of the main terminal of the estimated $7-billion New Doha International Airport; and
• The $10-billion New Doha Port project, one of the largest greenfield port developments in the world, which entails the relocation of Doha port to a site outside the capital.
The rail project, expected to be completed it by 2022, includes freight and passenger trains and a metro, entailing 180 km of high-speed track to Bahrain, as part of the Bahrain-Qatar causeway project; 100 km of track to Saudi Arabia and 325 km of freight train track. In addition, Qatar’s capital Doha will get a metro network covering surrounding areas, totalling 300 km in length. Construction is due to start next year.
Qatari Diar Real Estate Investment Company has tied up with Deutsche Bahn (DB) to create the Qatar Railways Development Company (QRDC), which will unify all planned railways in Qatar, including the Doha metro, Lusail light rail, and West Bay people movers. QRDC will also connect Qatar’s network to neighbouring countries via the Bahrain-Qatar causeway, to create the region’s first fully-integrated railway system.
QRDC has already completed an initial study, and agreed on the concept design for the integrated railway network. It is now working with all stakeholders within Qatar to coordinate the planning and construction process, and is preparing to identify additional world-class partners needed to undertake this massive Qatari development.
The country is also anxious to press ahead with its ambitious road network programme, including 280 km of new primary roads, upgrade of Qatar’s North Road and important links to the airport and the new port. The government has allocated about $20 billion for road construction over the next five years. Among the projects which are due to be tendered shortly is the North Road, a 100-km stretch of highway that includes 22 bridges and connects to the planned Qatar-Bahrain causeway.

Airport & port
The opening of Qatar’s ambitious New Doha International Airport has been delayed until late next year as it evolves to meet the requirements of the country. Among the latest developments at the project, bids were submitted in January for an estimated QR2.5 billion ($686.7 million) contract to build an extension to the passenger terminal, known as the north node or Phase 3a. The terminal extension, which involves five-level structures with a total floor area of 127,000 sq m, will connect to the main passenger terminal, which is being built by the Sky Oryx consortium comprising Japan’s Taisei Corporation and Turkey’s TAV.
Meanwhile, China State Construction Engineering Corporation has been given the green light to proceed on a QR641-million ($176 million) deal to build airport support facilities including a general aviation terminal and hangar, general service buildings, fire stations and administration buildings. In August last year, Cat International Qatar, secured a deal to build three utility plants at the airport.
Phase One includes a 140,000-sq-m airport terminal with 24 aircraft gates and a capacity to handle 12 million passengers a year as well as two runways. The north node, which will double the airport’s capacity to 24 million passengers with the addition of about 80,000 sq m of space, is being developed as part of the second phase.
Apart from the airport, Qatar is moving ahead with plans to relocate its port to a greenfield site. The new port is being designed to meet Qatar’s requirements well beyond 2030 and will provide further impetus to Doha’s development, the economic zones being set up and to the growth of the Mesaieed Industrial City as a whole. The port will be equipped to handle the world’s largest ships, each laden with up to 12,000 containers.
Work is expected to start this year on the $4.4 billion first phase of new port. Slated for completion by 2014, Phase One is designed to have a capacity of 2 million TEUs (twenty-foot equivalent units), which will eventually increase to 6 million TEU with the completion of the third phase of the project in 2030.

Real estate
Over the past year, the real estate market in Qatar has witnessed a downturn on the back of the global financial crisis. Following the frenetic pace of construction over the past decade, Qatar – like the rest of the region – is now taking a breather and getting an opportunity to assess its requirements and evaluation the direction it needs to take. In this introspection, we are likely to see the re-emergence of Islamic and local architecture. The pioneering regeneration project Musheireb that is being readied for launch is set to be one of many such developments that can be expected to be unveiled.
That is not to say that skyscraper developments will be a thing of the past. As recently as January, Qatar has seen the announcement of the launch of the Asia Towers project. The complex, slated for completion in three years, will see four residential towers built on a 30,000 sq m plot of land in Doha’s West Bay area.
Each of the four towers will be 55 floors high with 1,600 residential units, and will have a built-up area of about 560,000 sq m. The project will also include commercial and entertainment facilities as well as hotel apartments.
Over the past year, there have been several developments within the mega projects that were launched during the realty sector boom, namely the 35-sq-km Lusail City, which includes the $10-billion Energy City; $9.6 billion Urjuan; $3.2 billion Al Wa’ab City; $790 million Barwa Financial Centre; the 972-hectare Education City where projects such as the $2.3 billion Sidra Medical and Research Centre and a host of additional colleges are taking shape and the Pearl-Qatar, Qatar’s first international real estate venture, which will be home to over 40,000 residents.
Work on Barwa Financial District has received the go-ahead with the award of a QR4.75 billion ($1.3 billion) construction contract to Bouygues Bâtiment International, a subsidiary of the French Bouygues Construction group. Situated in Doha’s new business district in West Bay, the huge complex will include nine 18- to 52-storey office buildings, a five-star hotel with more than 400 keys, a shopping centre, a conference centre, a mosque and all the necessary parking facilities and utilities. The work will take place in a particularly challenging environment due to the cramped site.
Meanwhile, Barwa Real Estate expects to deliver QR1.5 billion ($412 million) Barwa Village to its tenants by this month. The project aims to accommodate occupants of areas that form part of the Musheireb development (see Page 67).
Lusail, which is slated for completion by 2020 and will accommodate around 200,000 inhabitants, continues to see the launch of mega developments, with a number of developers gearing up to move their projects to site. Among them is a mixed-use development by Diyar Al Kuwait, which is expected to break ground by the end of this year (see Page 53).

Gas & industry
As the world’s largest exporter of LNG, Qatar remains committed to develop its gas sector. In addition to the eight LNG trains that are currently in operation, all the 14 LNG plants planned are expected to be fully operational next year with the total LNG capacity increasing to 77 million tonnes a year.
Another industry landmark is the world’s largest gas-to-liquids (GTL) plant, Pearl GTL, work on which continues apace at Ras Laffan. More than 40,000 workers are currently working on the site as various components arrive from all parts of the globe. The infrastructure to support such massive developments in the energy sector is proceeding in parallel.
Among the major contracts awarded in the industrial sector is an $610 million engineering, procurement and construction (EPC) deal for Qafco-6, a complete granulated urea production plant with a capacity of 3,850 tonnes per day and associated utilities and off-site units at Qatar Fertiliser Company’s (Qafco) complex in Mesaieed Industrial City. Construction works will take 35 months to complete. The contract went to a consortium including Italian oil and gas services contractor Saipem as the leader, and South Korean Hyundai Engineering & Construction. The Qafco-5 expansion project will be completed in early next year.
Among projects that have suffered is the proposed 250,000 barrels per day (bpd) Al Shaheen refinery in Mesaieed, which has been put on hold because of the current economic climate and poor refining economics.
Meanwhile, Qatar’s rapid industrialisation has necessitated a major expansion of its power generation capacity.
Large independent power and water projects (IPP) projects have been launched at the Ras Laffan and Mesaieed industrial cities in a bid to increase the power generation capacity from about 4,000 MW in 2008 to more than 9,500 MW by next year.
Among the largest projects under way is the third Ras Laffan IWPP (Ras Laffan C), with GDF Suez and Mitsui working on the main contract.
Among other developments, the Qatari government plans to build a $1 billion solar power project and is currently in talks with investors.

Wastewater
The Public Works Authority (Ashghal) is evaluating three bids for a feasibility study, which could lead to it outsourcing the operation and maintenance of Qatar’s waste-water network for the first time.
Two US firms, Parsons Brinckerhoff and Aecom, plus the UK’s Hyder submitted bids for the study in mid-December. Ashghal is expected to award the contract for the study next month. Once the study is completed, Ashghal is expected to invite contractors to bid for several operation and maintenance deals. These will cover a total of about 5,000 km of wastewater collection and disposal, treated sewage effluent and surface and rainwater networks.
Ashghal is moving ahead with plans to add 80,000 cu m a day of new capacity at its 112,000 cu m a day Doha South wastewater treatment plant.

Conclusion
Over the next couple of years, Qatar’s construction sector will be increasingly looking at the public sector as the private sector takes a back seat in view of the difficulties in obtaining finances. After a period during which it was difficult to attract the larger contractors given their bulging order books, countries in the region could well take advantage of the better pricing and increased number of bids to execute their vital projects.