Gulf Construction Online - Cup that cheers

Qatar Review

Cup that cheers

A new global sports capital is in the making in Qatar following the country’s successful bid for the 2022 Fifa World Cup. DHUSHYANTHI RAVI reports on the opportunities presented by what is now the most attractive market in the region.

01 March 2011

A $100 billion-plus investment will spearhead Qatar’s infrastructure drive as the country gears up to host the Fifa World Cup in 2022, the first to be held in the Arab region.

The World Cup will be pivotal in Qatar’s development plans for the decade as it embarks on a myriad of projects crucial to staging the pièce de résistance of soccer tournaments in the world and in the process puts in place a world-class infrastructural network.

Financial experts have pegged the value of these construction projects at $86.5 billion, including nine spectacular new stadiums and extensive renovation of three existing stadiums worth $4 billion. Lusail will be the host city and hence will be virtually built from scratch as also will 54 team base camps, up to 32 training centres and a number of hotels required to accommodate spectators. Officials have pledged to add 90,000 new hotel rooms before 2022.

Infrastructure works will also involve $25 billion worth of rail projects within Qatar to link internal host cities, as well as improving connections to Saudi Arabia and Bahrain. Another $20 billion will be spent on roads including a new causeway to Bahrain, and $5.5 billion on a new port. In addition, work on a $11-billion new airport is currently under way.

In line with the infrastructural developments, Qatar’s power generation capacity will need to be boosted. A 12,000-MW power station involving an investment of QR15 billion ($4.1 billion) is among the first such projects that are being built by Qatar Electricity and Water Corporation (Kahramaa) to meet the increasing energy needs for the next 10 years.

Fortunately, many of these projects are already part of Qatar’s Vision 2030 development plan to boost its infrastructure, education, health, hospitality and sporting facilities. According to the UK-based Oriel Securities, outstanding projects in the country currently total $209 billion, of which 40 per cent is planned for infrastructure investment.

The Lusail Stadium ... will host the opening and final matches.

What the successful bid to host the World Cup means is that Qatar will have to put its construction programme in the fast lane.

And while sceptics have cast doubts whether the nation can host an event of such proportions, Qatar has in the recent past proved that it can deliver on its promises, albeit on a much smaller scale, having built Sports City-Qatar and successfully hosted the 2006 Asian Games there.

This apart, it also has the financial muscle to put the required infrastructure in place. Qatar is blessed with a 13.5 per cent share of the world natural gas reserves – the world’s third-biggest – in addition to two per cent of world oil reserves, thus providing an ample flow of hydrocarbon revenues. These revenues are being used to build a solid economic foundation that will sustain prosperity and promote economic diversification.

Qatar’s economy continues to weather the global downturn well, and stands among the fastest growing economies worldwide. The country’s government forecasts that its gross domestic product will grow 21 per cent this year, after a 16 per cent increase last year. The emirate has also been spared the political unrest that is currently spreading across the Arab world.

In line with its Vision 2030, the country has begun sure-footed strides toward environmental sustainability. According to an official of the Ministry of Environment, a comprehensive deployment plan was started last year and will end in 2020 – and during this time all installation and construction works in Qatar will achieve the requirements of green construction.

Now, as the nation prepares to meet the challenge it has set itself up against over the next decade and begun looking around for the best expertise in various fields, local and international companies are queuing up to snap up projects worth billions of dollars. International construction firms eyeing Qatar’s business opportunities for the first time will have to brace for some tough competition from regional players.

Sports infrastructure
The smallest country by far to host the World Cup, Qatar is gearing up to build the necessary sports infrastructure virtually from scratch. Nine air-conditioned outdoor stadiums will be built and three others renovated in a country where summer temperatures can exceed 50 deg C. Ten out of the 12 stadiums are located within a 25 to 30-km radius. Among the new stadiums planned is the Lusail Stadium, which will host the opening and final matches. The 86,000-spectator-capacity facility, which will be surrounded by water, is expected to be completed by 2019.

Lusail City, which will host the event, is located on the east coast of Qatar, approximately 15 km north of the capital. It comprises 37 sq km of waterfront land that is masterplanned into 19 integrated and diverse mixed-use districts. It will have 200,000 residents and the capacity to accommodate twice that many people. Scheduled for completion by 2019, the city will include manmade islands, an entertainment district, an office park for energy companies, a golf course and five stadiums.

State-owned company Lusail Real Estate Development Company, which has undertaken to build Lusail City in time for the World Cup, plans to award about $3-billion worth contracts for roads and infrastructure over the next year.

The largest of the projects to be awarded is expected to be for the construction of the Al Khor Highway, running along Lusail City’s western border.

Lusail Real Estate – part of Qatari Diar Real Estate Investment Company, the development arm of Qatar’s sovereign wealth fund – has teamed up with Hochtief, Germany’s biggest construction company, to provide planning and construction services for the new city.

About 75 per cent of the city’s land has been sold to private developers, mostly from the Gulf, who are required to complete their projects within four years of receiving the land.

Among the projects being implemented in Lusail is a marina by Mourjan Marinas, while Qatar Real Estate plans to construct a QR1-billion ($275-million) mall.

Qatar-Bahrain Causeway
In light of Qatar’s successful bid for the World Cup, it is now imperative that work is launched on the stalled $3-billion Friendship bridge project linking Qatar and Bahrain. Contractors for the project include France’s Vinci and Germany’s Hochtief, Qatari Diar Real Estate and Consolidated Contractors Company (CCC).

The 40-km causeway has been beset by problems with the project team scaled back, amid escalating costs and increased political tension. First announced in 2001, the project suffered further setbacks in 2008, when the project’s scope was changed to include railway lines. Late last year, Qatar and Bahrain indicated that work would start this year for completion by 2015.

Railway
Work on Qatar’s multibillion-dollar metro and ground rail projects – central to the emirate’s dreams of hosting the World Cup – has begun and is set to be completed in phases by 2016.

The three projects – a metro network within Greater Doha, railways covering Qatar, and then links to the rest of the GCC region – are expected to cost as much as $40 billion, according to Qatar’s daily newspaper the Peninsula.
The railway project will also include an east coast link, a high-speed link, a freight link and a light rail system. It will serve suburbs of Doha and developments such as Lusail, Education City and West Bay.

The network will be linked to the proposed GCC railway system by 2017.

Airport & port
In the new context, work will also be speeded up on the $11-billion New Doha International Airport (NDIA), which has suffered a few delays. About 80 per cent of the work is reported to have been completed on the project, which is now due to be officially opened in December.

Last year, a $750-million contract to build Phase Three of the project went to a joint venture of Six Construct Qatar and Midmac Contracting Company for structural, mechanical and electrical works as well as design coordination for the airport lounge and retail area at the airport’s passenger terminal complex.

Qatar also gave the go ahead for a key contract on its New Doha Port. Under an $880-million deal, China Harbour Engineering Company (CHEC) is responsible for the port foundation and breakwater construction for the new port.

Real Estate
Qatar’s successful bid to host the 2022 World Cup has boosted confidence in the local property market, with a marked increase in the volume of both sales and leasing enquiries, according to Asteco property management firm.

Real estate is a main projects market in Qatar. Among the leading developers in the country is the semi-government-owned Barwa Real Estate Company, which is developing projects valued at more than $10 billion, including Barwa Al Khor, Barwa City, and Barwa Financial District (see separate report).

Among the trendsetting projects in the country is Qatar’s ambitious urban regeneration plan for downtown Doha. Previously known as the Heart of Doha, the Musheireb project is proceeding on schedule and is expected to be completed in 2016 (see separate report).

Another stunning development in the country is the Qatar National Convention Centre (QNCC), work on which is due for completion this year. The project’s façade sports a replica of a sidra tree.

Conclusion
Given the demographic size of the nation, the question arises whether Qatar can sustain the vast infrastructure it will set up to host the World Cup. Also, there is some scepticism about whether the World Cup will actually produce the sort of return on investment being talked about.

However, it has been rightly pointed out that a state-of-the-art road and rail system, a world-class airport and a regional seaport are all projects that are likely to assist in increasing the overall standard of living of Qataris while increasing the nation’s competitiveness in the global arena.

What perhaps needs to be well thought through is to what use the nation will put the various stadiums it will build. In its quest towards sustainability, it is a question Qatar will have to address over the next decade.

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