Qatar hesitant to spend on construction projects this year

Qatar that was spending millions over construction projects until the recent past, has now taken a step back reports a Dubai-based business intelligence firm.

According to figures from Meed, Qatar has undertaken the least number of new construction contracts over the first three months of this year in more than five years. In fact, Qatar’s spending on construction and transport projects has fallen by 92% in the first quarter of this year.

While the drop in oil prices is one major reason for this plummet in Qatar’s spending over its construction projects, thenational.ae further reports, “The decline was blamed on delays to major investment decisions that were due to be made by Qatar’s government and a number of government-controlled clients. It represents further anecdotal evidence of a slowdown in the country’s construction sector.”

The country is also predicted to run a 46.5 billion riyals deficit this year, partly because it has maintained commitments to major construction and infrastructure projects such as the new port, the metro systems and major new roads and utilities projects.

Also, infrastructure expenditure is expected to reach 50.6bn riyals this year.

Furthermore, last month the Philippines’ department of labour and employment stated that 60 Filipino workers had been laid off as a result of downsizing and cost-cutting measures at QDVC – a joint venture between state-owned real estate developer Qatari Diar and French contractor Vinci Construction.

According to R. Seetharaman, the chief executive of Doha Bank, Qatar and other GCC governments should look to develop infrastructure bond markets to finance projects.

“GCC infrastructure bonds need to be issued with sovereign guarantees to stimulate project financing," he said. “We also need to bring long-term investors such as pension, insurance and mutual funds in [to the] GCC project market."