The government’s focus on investing in large-scale transport projects is expected to continue for the next three to four years as new motorways, rail links and other expansions are built to service a growing population and meet demand projections for the 2022 FIFA World Cup. However, Qatar’s transformation is not just about football – it goes well beyond the 2022 FIFA tournament. Transportation infrastructure development is a key pillar of the government’s Qatar National Vision (QNV) 2030 – the development plan that brings together four pillars of economic, social, human and environmental progress. To achieve its QNV 2030 objectives and meet the challenges of rapid urbanisation, the government has a crucial role to play in developing and managing a robust urban infrastructure network to facilitate industrial and service sector growth. This is especially true in light of the economic blockade.
Funding
Financing the required level of investment to meet the country’s development goals has been made more challenging in recent years with the drop in oil prices. In 2016 Qatar ran an estimated budget deficit of more than $12.8bn, and the 2017 budget has a projected shortfall of $7.8bn. The state budget envisions expenditure of QR198bn ($54.4bn) on revenue of QR170bn ($46.7bn), assuming an oil price of $45 per barrel, according to regional media. Education, health and infrastructure will account for nearly half of all budget outlays, at QR87.1bn ($23.9bn).
Ali Shareef Al Emadi, the minister of finance, stated in February 2017 the main objective during the preparation of the 2016 and 2017 budgets was to ensure the completion and implementation of major projects in key sectors along with those related to the 2022 FIFA World Cup. Earmarked funds for these works have been protected from cuts to the national budget resulting from lower oil and gas prices, and Qatari officials have repeatedly issued guarantees that the drop in international petroleum prices will have no lingering effect on the country’s spending in preparation for 2022.
Moreover, the pressure on state finances has been easing recently thanks to higher oil prices, with Brent crude oil averaging $53 per barrel in 2017. The improvements in domestic funding conditions following significant declines over the past two years provide additional investment assurance for the country’s ongoing road, airport and port projects, which were all progressing to schedule in early 2017, according to local media reports.
Road Projects
The Ministry of Transport and Communications (MoTC) is currently in the final stages of completing a seven-year programme begun in 2010 focused on developing the country’ network of roads and bridges. The multibillion-dollar Expressway Programme contained provisions for 35 road schemes to be executed between 2010 and 2017. It was expected to deliver 900 km of mainline carriageway and 200 km of at-grade and multi-level intersections. Recent developments in support of the programme include the January 2017 retendering of work for the $789m design and construction of Al Bustan North Road and the June 2017 completion of Al Rayyan Road.
According to MOTC spokesmen, at the end of 2016 there were a total of 30 projects being implemented to improve link roads, intersections and tunnels. One of the larger projects awarded in the year was for the extension of the E-Ring expressway. The 42-month, $730m contract with South Korean builder Daewoo Engineering and Construction, which was later reduced to $590m, was tendered by Qatar’s Public Works Authority (Ashghal) with the objective of adding a 4.5-km extension to the expressway, while also building 4 km of roads with three multilevel intersections.
Another significant road construction project achieved its first milestone in February 2017, with the opening of 5 km of road connecting Hamad Port and the temporary Truck Route. The project falls within the broader scope of works for the QR3.26bn ($895.3m) Orbital Highway and Truck Route that is planned to extend a total of 195 km once it is completed. As part of its efforts to encourage the private sector’s contribution to developing a modern transport sector in Qatar, the MoTC signed four memoranda of understanding in the field of land transport in March 2017. The agreements with Smart Transport, Union Global Projects and Mawaqif Zakia were aimed at developing transport-related manufacturing in the country. The ministry also became a founding member of a consortium on connected and automated vehicles with the intention of creating an ecosystem to support newly emerging cooperative intelligent transport systems.
Smart systems on roads have not yet been activated and will be implemented after completion of all construction works. However, Ashghal issued a tender in early 2017 for specialised consultancy and systems integrators to design, develop, procure, install, commission, operate and maintain an intelligent transport system.
Rail Projects
With an estimated budget of $35bn-45bn, the rail development programme is one of the most expensive infrastructure projects under way in the state. The Doha Metro is expected to form the backbone of the integrated public transport system, supported by other Qatar Rail (QR) projects such as the Lusail City Light Rail Transit and the long-distance passenger and freight railway.
The metro has been designed with a line capacity of 32,000 people per hour per direction, operating trains that can carry 800 people. The first four trains in Doha were set to arrive in 2017, designed for fully automated and unattended train operation in a GoA 4 system. A consortium comprising Mitsubishi Heavy Industries, Mitsubishi Corporation, Hitachi, Kinki Sharyo and Thales is designing the train control system and telecommunications system. When complete, and after several years have passed for the service to ramp up and for the population to adjust their travel habits, the official figure for expected commuter volumes on Doha Metro is 600,000 boardings per day, or around 495,000 unique passengers daily. The system is designed to be upgraded and expanded over time, to accommodate even very optimistic growth rates in terms of population.
At the end of August 2017 overall progress of phase 1 covering all packages stood at 62%. Structural works have been completed on 11 stations and mechanical, electrical and plumbing works were progressing at 34 of 37 stations. The completion of phase 1 of the metro will turn a page on the rail development programme, transitioning QR from a rail development company to a rail operator. Designing a long-term business development strategy, which includes property development and retail and advertising, will be critical in the transition to ensure operational and financial sustainability.
Airport Development
Advanced planning is under way to boost the capacity of Hamad International Airport from 30m to 50m passengers annually, with various developments ongoing to enlarge the passenger terminal, including the addition of new check-in counters, lounges, restaurants and boarding gates (see analysis).
The steering committee responsible for the airport extension is expected to announce a public tender inviting internationally contracted parties to take part in late 2017 or early 2018. The improvements will build upon a strong foundation. The airport is already among the highest rated in the world, joining the top tier of global airports in January 2017 by becoming the sixth facility to receive the “five-star airport” designation by Skytrax, the London-based aviation institute.
Seaport Development
In the maritime sector, the government is investing heavily in a new commercial port to modernise and increase seaborne trade – both imports and exports – while facilitating growth and diversification of the economy. Commercial operations transitioned to Hamad Port from Doha Port in 2016. Container throughput for the year included 530,000 twenty-foot equivalent units (TEUs) through Doha Port to December 1, and 30,000-35,000 TEUs through Hamad Port for a total of roughly 560,000 TEUs for the year. Over the next few years, until at least 2021 when infrastructure projects are completed, authorities project increases in commercial volume and project cargo.
Hamad Port’s size and facilities will enable quicker and easier imports of raw materials to Qatar, which is crucial for completion of the country’s many ongoing infrastructure projects. Relocation of the container terminal operations to the new port has the added benefit of keeping the majority of heavy vehicles away from Doha, reducing traffic congestion and saving shipping firms additional costs and time owing to restrictions on the movement of heavy vehicles in the city area.
The Um Alhoul Special Economic Zone adjoining Hamad Port that is being developed by Manateq will help develop further storage capacity and add value to the port as a logistics, light manufacturing and warehousing centre. The government of Qatar has demonstrated its ongoing commitment to an investment strategy that will help transform the country into a global leader in transportation and logistics over the next 10 years. The knock-on benefits for local industry will help to rapidly diversify the economy and position Qatari companies to compete on the world stage.
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