Gulf Construction Online - Qatar building material costs to surge

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Qatar building material costs to surge

01 July 2015

The cost of construction materials in Qatar is likely to jump as the host nation intensifies infrastructure building ahead of the 2022 World Cup, and other building projects could finish late as a result, industry experts said.

Qatar is set to spend more than $200 billion on the soccer tournament as part of a 2030 development plan, although tough contract terms and state bureaucracy have left some contractors in difficulties.

The high level of construction activity –predominantly in the capital Doha – is already making it hard for contractors to get workers and materials to sites.

“The pinch point will likely be in 2017-19 when the construction work peaks, but the government can take measures to mitigate that,” said Nick Smith, partner at engineering consultants Arcadis in Qatar.

He predicted materials inflation would be about three per cent in 2015. This will include early supply chain engagement, standardisation of products and direct procurement of certain items. Qatar is already pursuing some of these initiatives.

Materials inflation could surge 15 to 20 per cent from 2018, according to Steven Humphrey, a director at infrastructure specialist Aecom.

Qatar will import many of the building materials it needs from neighbouring UAE but Doha’s limited port facilities mean these goods must travel on small barges or via truck through Saudi Arabia, adding to supply chain pressures.

“Contractors pick and choose what their priorities are, so there’s a real danger – looking at bids today where they seem very competitive – that these are projects that may not be able to be delivered on time,” added Humphrey.