Qatar construction: Year in review
CWQ caught up with four construction leaders who have graced our pages over the past 12 months to hear what they have to say about the year that was and the year to come
CWQ caught up with four construction leaders who have graced our pages over the past 12 months to hear what they have to say about the year that was and the year to come.
This year has been a mixed batch with the price of oil spilling a dark slick across all sectors. There was no getting away from it. The hydrocarbon-dependant countries of the Gulf looked ever more keenly into ways of counteracting the slide as economies tightened proverbial belts, austerity measures were considered and enacted and projects slowed or halted.
Diversification has become the new buzz word with every opportunity scrutinised. VAT was mooted and found acceptable and, as from 2018 will be implemented across the region, with Qatar possibly even introducing a ‘sin tax’ on top of that.
Foreign contract firms flocked to Qatar when it announced a raft of billion-dollar projects upon winning hosting rights for the 2022 FIFA World Cup in 2010. However, expectations of profits have been tarnished by project delays, contract snags and bureaucracy, leaving numerous contractors in disarray and their returns unclear.
Qatar’s spending on new construction and transport contracts fell by 92% in the first quarter of this year, according to figures from a Dubai-based business intelligence firm, making the first few months of 2016 the slowest period for signing on new projects since that auspicious bid win in December 2010.
The National newspaper reported that figures also reflected that spending was down more than 90% from the same period last year, and 70% less than the value of new contracts awarded in the last quarter of 2015.
Increasingly, the government is wooing the private sector to become involved, with Qatar recently drafting fresh legislation governing PPP to help spur economic growth, the chairman of Qatar Chamber of Commerce and Industry revealed.
With $200bn ring-fenced for infrastructure in Qatar, among the projects going forward are the new Hamad Port, redevelopment of HMC’s medical city, construction of at least eight stadiums for the World Cup and the Doha Metro, while Ashghal is also in the midst of a $30-billion national infrastructure upgrade to create expressways, reconfigure roads and intersections and update sewage and drainage networks.
Qatar’s Ministry of Development, Planning and Statistics noted previously that it expects construction to peak in the first half of 2017, before tapering off as projects near completion.
CWQ caught up with some of the leaders that have graced its pages during this past year to see what the news ‘on the ground’ is, through their individual views.
Arab Engineering Bureau
Ibrahim Mohamed Jaidah: GCEO and Chief Architect
"Irrespective of the forecasts that construction market will slow down in the coming year, construction sectors of infrastructure, sporting venues, medical and educational developments in Qatar will remain strong in 2017.
"These are the projects that have been planned and even budgeted some time ago and it would be highly unexpected to see them slow down or pause due to the market slowdown. We are fortunate enough to be diversified in our practice and will be able to continue to be involved in such projects and manage to sustain once the market hits the plateau.
The oil prices are expected to increase in 2017, although not significantly and, in my opinion it will be a good time for developers to build as the cost of construction is expected to hit a five-year bottom. Lusail will continue to thrive; we are involved in some major developments in the new city; and all World Cup 2022 stadia is expected to be awarded in the first quarter of 2017. With all being said, a lot of cranes are expected to go up in the coming year.”
AEB won Architecture Firm of the Year for the fourth consecutive time at the CWQ Annual awards. While CWQ conducted numerous site visits, two of AEB's graced our pages and here is a brief update.
Commercial Building Tower at Marina Mix 52 Tower's complex building facade comprises curtain walls with stone cladding elements arranged in a systematic pattern on the left and right elevations of the building.
The front elevation is adorned in multiple coloured glass panels forming enlarged traditional Arabic pattern.To date, the hard landscape work has been completed around the building with a stamped concrete surface finish, and the soft landscape work has started after receiving Kahramaa power, while water the requirements must be set for each type of plant.
The complexity of the façade has entailed that the project needed to be extended by six months. and is nearing completion.
Testing and commissioning activities are in progress to prepare for the Qatar Civil Defence Department inspection and approval. Besides QCD approval, it also needs to obtain Lusail authority approval and the Building Completion Certificate from the Municipality. The project is due for occupancy at the beginning of 2017.
Commercial building tower at Marina Mix 52, Lusail, Qatar
The mixed-use development in Al Sadd has finally been revealed with the outside scaffolding fully removed. The project is currently in the testing and commissioning stage and will be ready for a hand over end of December 2016 or early January 2017, depending on Kahramaa and the Civil Defence inspection request schedule and approval process.
Some minor MEP works remain to be completed. Most of the time-consuming challenge has been around implementing and completing the delicate decorative ceiling elements.
These were designed to create a link between the building’s French inspired architectural style and the local traditional style in terms of concept and colour pallete. Developing the ceiling’s structural design was also time consuming as it had to be integrated with the skylight and with the buildings’ overall structural design.
Upon completion of the decorative ceiling, scaffolding will be removed, at which stage the finalisation of the ground floor atrium patterned marble flooring will take place.
Stone cladding, including all mouldings/corniches works are 95% completed, while snagging and cleaning stages are close to the final hand over stage.
Jason Morris, Vice President Construction Services Aecom, Qatar
"In 2016, the construction sector experienced a number of challenges following the sharp decline in the price of oil and its corresponding impact on government revenues, leading to a decrease in new opportunities in Qatar’s construction and real estate market. While these challenges have had an effect, responses by industry leaders have helped to reduce their negative impact.
"Earlier this year, plummeting oil prices shocked the region, reducing revenues and opportunities. The uncharacteristically low prices led to a reduction in public spending budgets, forcing the public sector and developers to re-think strategy when it comes to spending. In response to this challenge, clients are turning to consultants such as AECOM to help assess and revise their targets as well as priorities, advising them on how to maximise return on investment.
"By rethinking our strategies, we were able to identify new ways of securing funding for clients’ projects as well as apply our services and expertise effectively to guarantee and maximise a return on investment. This led to an increased focus on how the private sector can engage in ongoing social infrastructure programs.
"For our existing clients, we maintained a focus on anticipating their needs and working hard to deliver them.
"Following fewer new opportunities in the traditional market, we invested in increasing our capabilities in new and growing areas such as defence and security. A focus on improving worker welfare on construction sites industry wide, has allowed AECOM to showcase its commitment and leadership by upskilling our people, clients, contractors and other consultants with the skills required to safeguard project-based operatives. Specifically, we have rolled-out our Supervisor Training in Accountability and Recognition Techniques (S.T.A.R.T) program to parties across the industry to ensure the highest standards of health and safety are upheld on site by promoting cultural change from a top-down and bottom-up approach
"Looking forward to 2017, our business will continue with the release and acceleration of critical works for the 2022 FIFA World Cup Qatar which, when completed, should provide impetus to the industry.
"We plan to further our growth in new sectors such as defence and security. As we get closer to realising the Qatar National Vision 2030, we see progress with the improvement and construction of crucial infrastructure works.
"We hope for a steady year but headwinds and geopolitical events unfolding could see unforeseen effects on the industry.”
Mark Ainger, Country Director, Faithful+Gould
"This year has been one of delivery and future project evaluation in Qatar which is symptomatic of the rest of the markets F+G operates in the Middle East. Governments, including Qatar’s have been understandably looking at their development pipelines in light of low oil prices and subsequent pressures on their balance sheets as well as tightening liquidity for funding internationally and to a greater extent, regionally.
"This prioritisation has enabled the government to critically review and determine what is genuinely required to deliver for the national population to support Qatar’s four pillars of development aligned with the 2030 National Vision, and to meet the more immediate objectives of the FIFA 2022 World Cup – whilst establishing what is a ‘nice to have’ project. In many respects this new age of austerity is more akin to short term pain whilst the markets mature to a level seen in the developed economies.
"Qatar is still a significant market regionally and, whilst slowing dramatically in 2016 – we estimate construction awards to have dropped by over 45% from almost $33 billion to $17 billion when the year ends – it still has a significant pipeline of nearly $250 billion worth of schemes.
'Which, even with revaluation, reprioritisation and potentially stalling or cancellation of certain projects, the outlook we believe will still be reasonably positive from 2018 onwards.
'The new reality of the region is that there is a focus on need, not want, as governments trim expenditure, look to raise taxes as a way to diversify away from oil revenue and rebalance their economies with non-oil GDP growth.
'This applies equally to Qatar as to the other major oil exporting countries.
'Our strategy for Qatar continues to focus on delivery and exceeding the requirements of our key account clients as we look to build long term, sustainable relationships with organisations we are able to add value to in the delivery of their developments. This includes developers aligned with Doha Festival City and Shaza Doha Hotel, both schemes able to benefit from our ‘lifestyle’ expertise.
'We have also ensured that we are building relationships for the future and investing in the learning and development of our team to enable us to deliver on these requirements as the market returns in 2018 and onwards."
Ronan Clifford - Regional Director, Atkins, Qatar
'This year has seen a period of market consolidation for the industry, with a number of challenges arising as a result of the impact of lower oil prices, which has obviously had a budgetary impact for the government. We’ve seen this manifest in a number of ways in Qatar – projects have been delayed or cancelled, while others have been set more challenging delivery targets and reduced budgets. There are arguably less opportunities compared to recent years, and this has led to increased competition.
'All this has resulted in a difficult year for the entire delivery chain – clients, contractors and consultants – and places more importance on prompt payment to retain confidence and meet delivery targets. It also presents challenges we have to meet as an industry, to ensure these conditions do not undo the improvements in standards we have seen in key areas such as health, safety and welfare of the workforce.
'Despite the current uncertainty and difficulty arising from the tougher economic climate, the immovable milestone of the 2022 World Cup means that there is still a significant programme of work that must be delivered. This has softened the blow to an extent, allowing some optimism looking forward to next year.
'For Atkins, 2016 has been a year of focusing on our key clients and our core strengths which has seen us win some exciting new projects in Qatar. We’ve also launched our Acuity business during the year, combining our company’s extensive engineering and master planning capability with new structuring, financing and project preparation expertise – an end-to-end advisory/consulting offering which will open up new opportunities for the business.
'We continue also to look at ways of innovating and improving our service offering, particularly through the use of technology, and working with our clients to promote the value of this approach in serving their current and future needs.
'Looking at the year ahead, I would expect to see an increase in construction activity by the middle of the year, based on the increase in tendering we have seen recently. It is unlikely we will see an immediate return to the level of activity experienced in recent years during 2017, but the World Cup 2022 will continue to drive the construction agenda in the short term, followed in the medium term, by the 2030 National Vision."