Qatar Construction Review

Construction companies in Qatar 2014: Business as usual...

At the time of writing this article the FIFA World Cup in Brazil is in full swing and the issue of whether or not Qatar will host the 2022 edition of the said event still has not been resolved - at least publicly. There has been a welcomed respite for some since at the moment the football on the pitch is dominating the headlines (it's been a very good tournament actually). The situation currently is that there are those that think the World Cup will never take place in Qatar. Then there is the European leagues scheduling nightmare emanating from talk of the games going ahead in Qatar, but moving the tournament dates away from some of the hottest months in the country. It is very difficult to forecast what might happen from our point of view because we do not know how things work internally with the FIFA organisation. Although a very messy affair as things stand, QCR believe that it is highly unlikely that the games will be taken away from Qatar.

None the less, the majority of infrastructure projects in Qatar were already planned prior to said announcements. The award of the FIFA 2022 World Cup to Qatar primarily put a scheduling date into the 2030 National Vision timetable. Qatar also want to host the Olympics and many other major international celebrations. That said, the decision to give the football event to Qatar hit another level when sections of the British media (of which we are part of), uncovered a myriad of 'damming emails' seemingly suggesting that Qatar had indeed 'bought' the World Cup. We cannot comment on these allegations, but they seem to be of little interest outside the UK.

What might all this actually mean though in terms of the construction projects in Qatar and for Qatar construction companies or for global contractors that are seeking to work in the country? This Qatar Construction Review commentary looks at the situation from a construction companies in Qatar perspective. We are not for or against Qatar being awarded the event - Qatar Construction Review seeks to analyse any given situation pertaining to events surrounding the wider construction industry in the country. Further, whatever projects are undertaken in the country, we would would always like to see the best companies in Qatar delivering their solutions. Yes, many projects would be cancelled if Qatar were to lose the games and in a worst case scenario a few may even get abandoned. Yet this worst case scenario - if FIFA could actually get to this point, would actually be a blessing in disguise.

I have to say that a nervousness appeared to hit Qatar following World Cup corruption allegations. Indeed many international contractors were also seemingly hesitant waiting for the next twist and turn of the protracted saga. However, we at Qatar Construction Review believe that the GCC is currently experiencing some capacity constraints in delivering projects and that these issues will become increasingly more acute. Market capacity is falling behind levels of demand primarily because of financial constraints and adequately skilled people. There are also delays in the client decision making process that is leading to projects falling behind scheduled time frames and raising costs. Indeed, we happen to think that if the 2022 FIFA World Cup was taken away from Qatar, that there is a very strong argument this would lead to greater efficiency in the management and execution of the country's planned infrastructure projects.

What does this mean for construction companies already operating in the country and those that want to enter the Qatar construction market? For the companies already working in Qatar, very little changes with or without the games. Even in the worse case scenario (for authorities in the country), vital master contractors have already won tenders so are well known and have the connections, some have completed projects and where they are currently working on infrastructure mega projects within transportation, electricity and water supply, Qatar's requirement for them will not change. Government spending will be underwritten by the continued supply of LNG and recent reports cite how Qatar's dominant position in it's production globally is secured for several more years.

Some floating hotel projects may never see the light of day... but you can bet that within 10 - 15 years, Qatar will have one of the most advanced metro systems in the world: some projects are not going anywhere with or without the World Cup. For the big international contractors it will be business as usual because there will still be a demand for their expertise and they will be called upon to deliver international project solutions. Add to that the issues of over capacity and the market failing to keep pace with demand... the worse case scenario could actually mean better management and less pressure on the supply chain.

Whenever (and where ever) the dust finally settles with this saga... what it means politically, or for the media, is completely different to what it means for international construction companies in Qatar, where it will be business as usual: construction companies looking for work overseas, going where the demand takes them and highlighting their particular areas of expertise. It is probably also worth mentioning that what we care about in the UK... all too often is at odds with the rest of the world. Whatever the size of the construction market in Qatar, www.qatarconstructionreview.com will always have a vested interest in seeing the best project solutions globally, reaching the Qatari market.

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