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Qatar ranked second best infrastructure market

by Kim Kemp on Nov 27, 2014




RELATED ARTICLES: Qatar scores highest on ME confidence index | INDEX Fixing Systems targeting Middle East growth | Qatar has cash to finance infrastructure - QNB

RELATED ARTICLES: Qatar scores highest on ME confidence index l INDEX Fixing Systems targeting Middle East growth l Qatar has cash to finance infrastructure - QNB

Qatar has been ranked the second most dynamic infrastructure market in the world according to the Arcadis Global Infrastructure Investment Spending Index.

The index measures the world’s 41 potential countries with the greatest potential for infrastructure investments and Singapore came at number one. UAE has overtaken Canada to make the third rank.

For the first time, the US and the UK have entered the top 10, a clear indication that their economies are improving.

The report noted access to finance will be critical for the top-tier countries to scale up investment, including Qatar. In Qatar and the UAE, national vision strategies, combined with major international events, such as the FIFA World Cup 2022 and Dubai’s 2020 World Expo, have led to expectations of peak spend in the next four to five years.

In its ‘Qatar: Avoiding the Inflation Bubble’ report from 2012, Arcadis predicted that construction inflation could reach 18% between 2016 and 2019. However, given overall investment levels around the region mean up to 20% construction inflation is more probable. This is compounded because of the firm deadlines around projects related to Qatar’s 2022 FIFA World Cup and Dubai’s 2020 World Expo.

Almost half of the investment planned relates to improving transportation. There are major plans across the region to build a metro system, with lines being constructed simultaneously in a relatively short period of time. At the same time ports, airports and a heavy rail network are all under construction leading to increased competition for resources, fanning the risk of inflation in construction resources, including specialist skills and construction materials.

“While the future prospects for Qatar’s infrastructure projects market look promising, supply and construction costs issues will eventually surface and must have to be addressed,” said Mohammad Moataz Al Khayyat. “Al Khayyat is currently developing many projects, and is feeling the burden of rising construction costs. By Al Khayyat’s estimates, prices of construction materials have increased by as much as five to 10%in the last twelve months,” reported the daily.
 



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