Infrastructure building to help sustain Qatar's growth past 2022

 

The state’s fastest-growing sector, construction is booming in Qatar, with the government planning to spend over $200bn as part of a major infrastructure investment scheme. Big-ticket transport projects coupled with the rapid expansion of tourism, education and real estate builds will see the sector continue to dominate economic diversification efforts under the auspices of Qatar National Vision 2030 (QNV 2030), while the 2022 FIFA World Cup has set a mid-term deadline for a number of high-profile projects.

The sector faces challenges in the wake of such rapid expansion. Late payments, project delays and cost overruns remain the most significant threats to stable long-term development, while rising labour, materials and transportation costs could pose mid-term challenges. The government is working to address these issues, however. For example, the opening of Hamad Port, formerly the New Port Project, in 2016 will reduce supply bottlenecks, while ongoing expansion of domestic production capacity should see the state’s supply of materials grow considerably in the coming years.

GOVERNMENT SPENDING: Growth in the sector is largely driven by public expenditure, with major reserves and budget surpluses allowing the state to finance many projects directly, rather than seeking public-private partnerships. Contracts are awarded by the Central Tenders Committee (CTC), which was established in 2005 to handle all government projects and requests from ministries and other government agencies, as well as Ashghal (the Public Works Authority), Qatar General Electricity and Water Corporation (Kahramaa), and Qatar Foundation. Ashghal was established in January 2004 as an autonomous body mandated to design, deliver and manage the state’s infrastructure, public amenities and related projects. A number of areas fall under its purview, including roads, drainage systems and highways, as well as public buildings like schools, hospitals and health centres.

Ashghal oversees projects across five divisions: Infrastructure Affairs is responsible for roads, expressways and drainage networks; Asset Affairs is mandated to maintain and upgrade road and drainage networks; Building Affairs is responsible for schools, hospitals, parks and cultural centres; Technical Support Affairs oversees preparation and management of tender documents, and Ashghal contracts; and Shared Services Affairs provides operational, technical and IT support.

Construction work on Qatar’s largest state-funded projects is overseen by a number of bodies, including the New Doha International Airport Steering Committee, Qatar Railways Company (Qatar Rail) and the New Port Project Steering Committee, all of which are overseen by the minister of transport. Qatar slid one spot in the World Bank’s 2015 ease of doing business survey’s “dealing with construction permits” category, to sit 23rd out of 144 countries. Qatari law requires 15 procedures in order to obtain a construction permit, compared to the OECD average of 12, while it takes just 58 days on average to obtain a permit, compared to the OECD’s 150 and the MENA region’s 132.

BY THE NUMBERS: According to the Ministry of Development Planning and Statistics (MDPS), Qatar’s construction and building sector has shown strong growth since 2010, when its contribution to GDP at constant prices reached QR34.15bn ($9.36bn). The sector’s value grew by 0.5% to reach QR34.32bn ($9.41bn) in 2011, by a further 9% to QR37.41bn ($10.25bn) in 2012 and by another 13.6% to hit QR42.51bn ($11.65bn) in 2013. Growth in 2014 was even stronger, with the MDPS reporting that the sector’s total contribution to GDP at constant prices reached QR24.85bn ($6.81bn) in the second quarter of 2014, a 18% increase over the second quarter of 2013’s total of QR21.07bn ($5.78bn).

The MDPS estimates that construction is the fastest-growing sector in Qatar, expanding 22% year-on-year (y-o-y) between the second quarter of 2013 and the second quarter of 2014, with the ministry’s September 2014 outlook reporting that its contribution to GDP at current prices grew to QR10.55bn ($2.89bn) in the second quarter of 2014, from QR8.65bn ($2.37bn) in the second quarter of 2013. The sector’s share of GDP rose from 11.1% in 2012 to 11.9% in 2013, according to the Qatar Central Bank’s “Fifth Financial Stability Review”. Its share of non-hydrocarbons nominal GDP expanded by 10.5% in 2012 and by 10.7% in 2013. Qatar National Bank (QNB) reported in December 2014 that the sector’s contribution to nominal GDP stood at QR10.5bn ($2.9bn), or 5.5% of the total, while its contribution to real GDP expanded by 15% y-o-y to reach QR12.2bn ($3.34bn), or 13% of the quarterly total.

SPENDING: Underpinning expansion in non-hydrocarbons is the government’s $200bn infrastructure investment programme, which will see gross investments as a share of GDP reach 30% in 2014/15, as the government ramps up spending on a host of critical projects. The 2022 FIFA World Cup is also helping to drive investment; in a May 2014 report, Deloitte reported that the government is preparing to spend in excess of $70bn on infrastructure, transport, hotels and stadia in anticipation of the World Cup and the broader QNV 2030.

The minister of economy and commerce, Sheikh Ahmed bin Jassim bin Mohamed Al Thani, announced in April 2014 that he expects project spending to reach $182bn over the next five years, and it is set to rise by 17% to reach QR87.5bn ($24bn) in the 2014/15 fiscal year. The segment is dominated by big-ticket transport projects, including the $7.4bn Hamad Port; the Qatar Rail Development Programme, which will comprise three separate rail networks worth a total of $ 35bn45bn; and expansion of Hamad International Airport (HIA), with the Middle East Economic Digest (MEED) estimating that the total value of projects planned or under way in Qatar stood at $276bn as of April 2014.

SLOWDOWN: With dozens of multibillion-dollar megaprojects scheduled for completion in the next seven to 15 years, industry stakeholders have warned that the state is at risk of “project indigestion”, which can occur when too many projects are launched and begin construction in too short a time period. However, a government reshuffle in 2013 has resulted in new efforts to curb some of its expenditure. In June 2013 Sheikh Tamim bin Hamad Al Thani ascended the throne as emir following the abdication of his father, Sheikh Hamad bin Khalifa Al Thani. A reshuffle ensued, bringing the creation of a number of new ministries, including the Ministry of Transport, and a new prime minister, Sheikh Abdullah bin Nasser bin Khalifa Al Thani.

Sheikh Abdullah bin Nasser has been at the forefront of a nationwide audit of construction spending since his appointment, with the Financial Times reporting in June 2014 that officials are attempting to downsize some of the state’s planned infrastructure spending prior to the World Cup; in April 2014, for example, the number of stadia planned for the tournament was cut from 12 to eight. “Sheikh Abdullah bin Nasser has made it clear that Qatar does not want to do everything at once, only to see a mass exodus following 2022. The World Cup sets a deadline for some priority projects, but most of these were already mandated by QNV 2030,” Maher Chatila, the country manager of Hyder, told OBG.

ASHGHAL: Ashghal plays a critical role in Qatar’s construction industry, awarding billions of dollars worth of new contracts in a bid to build up the state’s infrastructure in preparation for QNV 2030 and the World Cup. During the 2013/14 fiscal year, the authority awarded QR38.4bn ($10.5bn) worth of projects, a near-200% rise over 2012/13’s QR12.9bn ($3.5bn). More than 88% of this was dedicated to road developments, compared to 76%, or QR9.8bn ($2.7bn), the previous year. Although funding for drainage and sewage development fell to QR276.5m ($76m), allocations to new building projects more than doubled to reach QR4.2bn ($1.15bn), compared to QR1.9bn ($521m) in 2012/13. The company reported that the Ministry of Finance approved a QR16bn ($4.4bn) budget for Ashghal’s buildings, drainage and road projects, an 80% rise over 2012/13, while Ashghal spent 84% of its allocated budget for public infrastructure and buildings.

In December 2014 Ashghal announced that it had awarded an additional QR5.53bn ($1.5bn) worth of infrastructure contracts for road and sewage works. These brought the value of Ashghal contracts awarded in 2014 to over QR25bn ($6.9bn), including QR22.6bn ($6.2bn) of infrastructure projects, building contracts worth an estimated QR2bn ($548m) and QR762m ($209m) of sewage network contracts.

With infrastructure dominating sector growth, Qatar’s road and sewage networks are undergoing a major overhaul, driven by several ambitious schemes under Ashghal’s umbrella, including the Expressway Programme, the Local Roads and Drainage Programme (LRDP), and the Inner Doha Re-sewerage Implementation Strategy (IDRIS). Of the authority’s 12 December contract awards, eight were allocated to the LRDP and Expressway Programme, while Ashghal also moved to upgrade sewage and drainage networks in under-served western and northern regions.

LRDP: With total spending estimated to reach QR50bn ($13.7bn), the LRDP is one of Ashghal’s largest current infrastructure programmes. It aims to raise the standard of living in Qatar via the development of new roads, drainage and infrastructure across the state’s five regions: Qatar North, Qatar South, Doha North, Doha South and Doha West. Ashghal partnered with management consultant Parsons Brinckerhoff to develop the programme, which will see more than 200 projects delivered during the next seven years. The first LRDP contract awarded was worth QR217m ($60m), for the construction of new storm-water drainage, sewage networks and treated effluent networks over a 720, 000-sq-metre area in east Aziziya, to Leighton Contracting Qatar. Work on the project is set to finish by 2017.

A QR490m ($134m) contract was awarded for construction of roads and infrastructure in Al Wakrah. A joint venture between Lane Mideast Qatar, Solid General Construction and Tadmur Contracting won the contract, with work starting in 2014 and expected to finalise by the end of 2016. A joint venture between Teyseer Contracting and Consolidated Contractors Group won a QR545m ($149m) contract for the second package of the Rawdat Abal Heeran development, which will see roads developed across a vast area of open desert on the western outskirts of Doha. Package two covers 2.18m sq metres of work, with construction expected to finish in the fourth quarter of 2016.

The fourth contract was a QR323m ($89m) award to a joint venture between Teyseer Contracting and Consolidated Contracting Group, for roads and infrastructure development in the Bani Hajer area north of Doha. Spanning 1.35m sq metres, the contract includes construction of linking roads and paved roads granting access to housing units, as well as secondary roads linking local and arterial networks. Construction is expected to finish in the fourth quarter of 2016.

A fifth contract, worth QR61.3m ($16.8m), was awarded to ALCAT Contracting Company, to carry out preparatory works for the Ras Al Khor Industrial Area, which has been divided into five packages. ALCAT won a contract for the fifth package, under which it will install a 9-km boundary wall around the development.

The project is due to be completed by the end of 2015.

Also under the LRDP was a QR290m ($80m) contract for development of roads and infrastructure in the northern area of New Salata, awarded to a joint venture between Al Mohanna Trading & Contracting and Puentes Y Calzadas Infraestructuras. The project started in the third quarter of 2014 and is set to finish by the third quarter of 2016, with works including construction of 24 km of internal roads, as well as street lighting, parking lots, cycle paths and landscaping. Finally, Ashghal awarded a QR118m ($32m) contract for construction of a deep sewage tunnel in the Al Wajbah and New Al Rayyan areas. Bin Omran Trading and Contracting will finish work by the third quarter of 2015 as part of the government’s broader efforts to replace pumping stations with gravity drainage systems.

EXPRESSWAY PROGRAMME: Under its ambitious Expressway Programme, Ashghal plans to construct 240 major interchanges ranging from conventional traffic lights to tunnels and flyovers, divided into dozens of contracts, and including new freeways, highway upgrades, expressways and arterial roads.

Programme manager KBR reports that there are 50 projects under development, with 17 under construction and four completed, making it another of Ashghal’s largest programmes. Major ongoing projects include the Lusail Expressway, the New Orbital Highway and Truck Route, and the East-West Corridor.

Recent years have seen a number of contracts awarded for ongoing expressway projects, including a QR2.24bn ($614m) contract for the eastern corridor of the East-West Corridor project, awarded to China Harbour Engineering Company in June 2013, as well as a QR1.67bn ($458m) contract awarded to Cyprus-based firm Joannou and Paraskevaides for the western corridor, awarded in the same month. Work on the corridor began in April 2014, and is expected to finish in the second quarter of 2017. The QR3.5bn ($959m) Lusail Expressway, awarded to Hyundai Engineering and Construction in May 2011, is expected to open by 2017.

The New Orbital Highway and Truck Route, meanwhile, is expected to facilitate trade flows through the construction of an orbital road circumventing Doha, and including a dedicated heavy truck lane, which will significantly reduce congestion. The $4.6bn project has been divided into four contracts, all of which have been awarded (see Transport chapter).

One additional Expressway Programme contract was awarded in December 2014, a QR669m ($183m) deal with Qatar Building Company for the construction and development of the existing Al Shahhaniyah-Al Jemailiya road, which passes by Al Otouriyah over a 29-km stretch. The project will include construction of a dual-lane road in each direction, pedestrian paths and cycle lanes, with the possibility of adding a third lane. Work is expected to finish in the fourth quarter of 2016.

SEWAGE: Qatar’s sewage system is also in the midst of an overhaul, under programmes including IDRIS, which will provide vital drainage infrastructure for southern Doha, including a major deep tunnel sewer network and advanced sewerage treatment works. Running until 2019, the project will see construction of 40 km of deep main trunk sewer, over 70 km of lateral interceptor sewers, a 70-metre deep terminal pumping station, a sewage treatment plant in New Doha South with initial capacity of 500,000 litres per day, and more than 70 km of sewage effluent return mains and pump stations. Ashghal estimates that its total cost will be in excess of QR10bn ($2.7bn).

Offering a long-term solution to wastewater treatment challenges in Doha, Al Wakrah and Mesaieed, IDRIS will upgrade and expand Doha’s sewerage infrastructure, boosting capacity for projected population growth of an additional 1m people in Doha’s south catchment. Officials estimate the project will meet long-term demands in Doha South for the next 50 years once completed, removing over 35 existing pump stations and reducing hydraulic overloads.

MEED reported in February 2014 that Ashghal has announced pre-qualified companies for $2.7bn worth of IDRIS tenders, although contract awards have not yet been announced, with companies including Al Jaber Engineering, Qatari Diar/Vinci Construction (QDVC) and Larsen & Toubro bidding on the tender.

Outside of IDRIS, work is ongoing on a host of new sewage and drainage projects across the state. Ashghal’s December issue of infrastructure contracts included four sewage and drainage awards, to projects in the state’s northern and western regions. The first was a QR1.51bn ($414m) design, build, operation and maintenance contract for Al Dhakhira Sewage Treatment Works, awarded to a joint venture between Hyundai Rotem and Aqualia Mace. Scheduled to finish in late 2018, the project will see construction of a sewage treatment facility with a capacity of 56,200 cu metres per day (cmpd), treating effluent from Al Khor and Al Dhakhira.

The second contract awarded was for the expansion of the existing Doha West Sewage Treatment Works, a QR797m ($218m) deal awarded to a joint venture between Degrémont and Marubeni Corporation. The project will increase existing capacity by 104,500 cmpd, bringing total capacity to 280,000 cmpd. The project is expected to finish in the third quarter of 2017.

The third contract, for QR239m ($66m), was awarded to a joint venture between Larsen & Toubro and Waterleau Group, a design, build, operation and maintenance agreement for Al Shamal Sewage Treatment Works. The project comprises design and construction of a wastewater treatment plant in the north, with capacity of 7500 cmpd, and includes operation and maintenance services for 10 years from the date of completion. Work will commence in 2015 and finish in the first quarter of 2017, according to Ashghal.

The final sewage contract was for the second phase of design and construction of the Doha West Sewage Treatment Works, a QR237.5m ($65m) deal awarded to Six Construct. The project will increase capacity at the industrial treatment plant from 30,000 to 60,000 cmpd, with work expected to finish in 2017.

MACHINERY: Qatar is witnessing unprecedented import of machinery and equipment as a result of its current infrastructure investments. The total value of freight-on-board imports in the country rose by 8.5% to reach QR57.4bn ($15.7bn) in the second quarter of 2014, against QR52.9bn ($14.5bn) in the second quarter of 2013, which the MDPS attributes to increased imports of machinery and motor vehicles, while the total value of imports to Qatar stood at QR98.1bn ($26.9bn) in 2013, led by QR29.2bn ($8bn) of industrial supplies.

“Based on the amount of heavy equipment requests and rentals we have been receiving lately, it is clear that we will see a surge in construction activity, especially considering several major infrastructure projects were awarded during 2014,” Mohamed Jaidah, group executive director of Jaidah Group, told OBG.

TUNNEL VISION: The Doha Metro, for example, will see millions of tonnes of material excavated over the course of the project, requiring the state to import some of the world’s most advanced excavation machinery, with construction contracts for its red, green and gold lines awarded during the previous two years.

In January 2014, QDVC officials announced that Germany’s Herrenknecht had won a supply contract for five tunnel-boring machines (TBMs) to be used in construction of the red line south, with Qatar Rail later announcing that a total of 21 TBMs will be imported for work on the metro, including nine for the red line, six for the green line and six for the gold line. Each TBM for the Doha Metro must be dismantled into 22 sections to be transported from Europe, making the metro one of the most complex logistics projects in progress in the state. The TBMs measure 7.05 metres in diameter and 120 metres in length, installing locally manufactured precast concrete tunnel pieces as they excavate.

In April 2014 the first TBMs arrived in Qatar, with the inaugural TBM being used to excavate tunnels on the red line north. According to Qatar Rail, TBM Lebretha will travel 7.95 km underground over a period of 22 months, between the third quarter of 2014 and the second quarter of 2016. Average speed will range from between 14 and 21 metres per day, with daily excavation standing at around 680 cu metres, for a total of 5.4m cu metres of excavated material. Excavated material will be transported to a storage facility near HIA and left to dry for two years, before being used as backfill in other construction projects. According to Qatar Rail’s February 2015 progress report on the metro project, 17 of the 21 TBMs are currently in the country, with 14 of them operational. To date, 10.22 km of tunnels have been bored, out of the total 114 km. “TBMs that will be received by Qatar and deployed into the Doha Metro projects rank among the best in the world, having been tailor-designed for the state of Qatar’s geographic characteristics, nature and areas. We expect the next 12 months to bring about similar milestones for our projects,” Qatar Rail’s CEO, Saad Ahmed Al Muhannadi, wrote in a May 2014 Deloitte report.

SOFT INFRASTRUCTURE: Although hard infrastructure projects dominate Qatar’s construction landscape, a host of new projects in the real estate, tourism, retail, health care and education sectors have also bolstered revenues for contractors. “There are several projects in the pipeline from Ashghal, like schools and social infrastructure, so we will focus our efforts there,” Nasser Mohammed Al Kaabi, the chairman of Tadmur Holding, told OBG (see health and education analysis).

Qatar is moving forward on major new city developments, including Lusail City, Msheireb Downtown Doha, Airport City, Energy City and a planned Medical City, while the state has allocated $20bn to tourism projects. With Qatar’s population tripling between 2004 and 2014 from 744,000 to 2.22m, these high-demand mixed-use developments are expected to offer significant opportunities to contractors. “We are forecasting huge growth in commercial building as private building is spurred by government spending. The amount of work we are carrying out in commercial building has picked up exponentially, whether at hotel towers like the JW Marriott or Oberoi, Marriott’s four- and five-star brands, malls like Place Vendome, residential towers like Hilton Residence, Qatar Navigation projects, office towers like Al Mana … the list goes on and on,” Fawzi Ismail, general manager of MZ & Partners, told OBG.

OIL & GAS: Outside of infrastructure, some of Qatar’s largest ongoing construction projects are in the oil and gas sector, including the $1.7bn Barzan Gas Project’s first phase of onshore development and the $1.2bn Laffan condensate refinery. In January 2011, Qatar Petroleum and ExxonMobil signed agreements confirming the Barzan Gas Project, which will play a major role in meeting Qatar’s rising domestic gas demand. The drilling platform to supply the Barzan plant will be located 80 km north-east of Ras Laffan Industrial City, with onshore and offshore facilities to be completed by JGC of Japan and Hyundai Heavy Industries of South Korea, respectively. RasGas, Qatar’s second-largest natural gas producer after Qatargas, is managing construction of the new plant, and will operate it when work finishes.

The project itself will be developed in two phases: Train 1 will come on-line in 2015. Trains 1 and 2 together will supply around 2bn standard cu feet per day (scfd) of sales gas, with most directed to the power and water sector. When both trains are in operation, total offshore production from all RasGas-operated facilities will reach 11bn scfd, the equivalent of 2m barrels of oil, making RasGas Qatar’s largest gas producer.

Expansions at the existing Ras Laffan condensate refinery, which has been in operation since 2009, are also moving forward. In May 2013 a joint venture between Japan’s Chiyoda Corporation and Taiwan’s CTCI Corporation was awarded a $1.5bn engineering, procurement, supply, construction and commissioning contract for the refinery’s phase two expansion. The expansion will allow the facility to double its current production levels of 146,000 barrels per stream day of condensate when it comes on-line in 2016.

HOUSING: Although the combination of the state’s generous welfare system, a preference among Qataris to build their own homes and readily available, zerointerest financing for home construction (see Real Estate chapter) have led to low demand for new social housing projects compared to other GCC member states, the Ministry of Labour and Social Affairs’ Department of Housing provides housing units, grants and allowances for citizens, including housing for senior citizens, low-income Qataris, senior employees and orphaned children. The state is expected to deliver thousands of new housing units under the 2014/15 budget, with authorities announcing in April 2014 that the current budget had allocated QR3.3bn ($905m) for completion of 3700 housing units under construction, as well as 2300 new homes, for a total of 6000 units.

CHALLENGES: Demand for construction materials is expected to rise significantly in the medium-term, as projects across all sectors progress in 2015. With such import demands for equipment and materials, some contractors have worried that the sector is at risk of serious overheating, leading to labour and material scarcity, inflation, project delays and cost overruns.

“One of our biggest challenges in 2014 is that we have multiple large-scale projects of over QR1bn ($274m) all starting at the same time, whereas previously we staggered projects to help manage overall risk. The amount of coordination required in the industry now is crucial to ensure no delays are encountered,”

Yanick Garillon, the CEO of QDVC, told OBG. Indeed, project delays and resultant cost overruns were cited by the IMF in 2014 as one of the most significant challenges facing Qatar’s economic expansion.

DELAYED PAYMENTS: Many contractors cite delayed payments as the primary factor behind project delays and contract disputes. Contracts in Qatar often provide a high level of risk transfer to contractors and consultants, with the full extent of risk transfer remaining unclear due to poor drafting of amendments and conditions. Terms with the client are rarely negotiable for main contractors and consultants, and the industry is known for late payments across all types of projects.

Qatar Construction News reported in August 2014 that the problem often starts at the initial advance payment stage, even though the contractor may have already submitted the statutory 10% advance payment guarantee and 10% performance bond, continuing through all payment cycles and forcing contractors to absorb significant excess costs. “One of the biggest challenges for our company and the industry has been delayed payments. When contractors are not paid by the clients, companies that supply materials are not paid either. This issue must be resolved, otherwise there will be delays across all projects,” Wael Shtayyeh, the CEO of Investment Holding Group, told OBG.

INFLATION & MATERIALS COSTS: Another factor in project delays is rising inflation. Supply bottlenecks at the existing Doha Port – and resultant rising material costs – are a growing problem for contractors, while the rising cost of land, labour and transportation is also an issue. “Qatar Fuel hiked up the prices of diesel in the second quarter of 2014 with no warning, which added more than 20% to transportation costs. Margins in Qatar are already very small, so with rising materials pricing, fuel costs, manpower and staff accommodation, contractors can see their profitability go the other way very quickly. All contractors must consider this in their risk assessment when pricing for projects,” Osama Hadid, the CEO of Al Jaber Engineering, told OBG.

Deloitte reported in May 2014 that the government is moving to keep costs in check, with plans to regulate commodities through the creation of a single buyer run by a government subsidiary, which will manage imports and sell materials to contractors. Work is also progressing on increasing domestic supply through targeted investment in local industry, including cement and steel, with the government hoping to raise domestic production and stockpile supply to mitigate against external price hikes (see materials analysis).

TENDER DEVOLUTION: The devolution of tendering responsibilities is becoming increasingly popular in the state. In October 2014, the Cabinet endorsed a draft decision to form a tenders committee at the Ministry of Information & Communications Technology (ictQATAR). Under the legislation, ictQATAR would assume the powers of the CTC and the Local Tenders Committee (LTC) in launching, assessing and awarding tenders. The Cabinet also approved the establishment of a tenders committee at the Qatar Tourism Authority (QTA), giving the authority control over tourism-related tenders previously overseen by the CTC and the LTC. More recently, the Cabinet approved a proposal from the Ministry of Transport in January 2015, which changed the formation of the tenders committee associated with the New Port Project Steering Committee. Similar to the proposed committees for ictQATAR and the QTA, the New Port Project Steering Committee would assume the tendering responsibilities of the CTC and the LTC should the proposal be approved.

Further changes could be forthcoming in 2015. In December 2014 the Cabinet approved a draft law regulating tenders and auctions, which will be forwarded to the Advisory Council prior to approval. While full details of the new law were not available at time of press, local newspaper The Peninsula reports that it will be applicable to all government bodies and ministries – except the armed forces and police – and include detailed provisions for contracting methods, subcontracting, bidding, insurance, bids evaluation, contract conclusions and auctions. While there is still room for improvement, particularly in the area of contract law and risk sharing, the recent reforms indicate that the government is committed to improving the operating environment for construction stakeholders.

OUTLOOK: Despite facing the challenges intrinsic to a fast-growing sector, Qatar’s construction stakeholders remain optimistic about the future. The industry saw its strongest growth in recent history in 2014, with long-awaited contracts awarded across a range of sectors, and the prevailing sense in Doha is that business will continue to boom for at least the next five years. Although contractors continue to grapple with late payments, inflation, cost overruns and project delays, the government’s recent move to address these risks has demonstrated its commitment to steady growth, setting the stage for expansion in 2015 and beyond.

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The Report: Qatar 2015

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