Commercialbank Capital | Construction Sector Report

Transcription

Commercialbank Capital Sector Report: 1st Edition 2012
2012
Foreword
Dear Investors,
Qatar continues to be a magnet for investment due to its impressive economic performance. On the back of a
strong GDP growth of 19% in 2011, decelerating to a forecast 6% in 2012, Qatar’s GDP could reach USD 197 bn.
Qatar also boasts the highest per capita income growth in the world. By 2016, it is expected to reach USD 112k
per capita. This has led Qatar to witness a construction boom between 2006 and 2012 (ongoing construction
related contracts have tripled in value).
Qatar’s successful bid to host the 2022 FIFA world Cup has led the government to plan for high levels of
investment in infrastructure and real estate development. Approximately USD 225 bn is expected to be required
between 2011 and 2016, of which already USD 125 bn of spending has been unveiled for construction and
energy projects only. The spending directly related to the preparation of the 2022 World Cup will amount to an
estimated USD 80 bn of investment, encompassing commercial and infrastructure projects.
Therefore the construction boom in Qatar is expected to continue, albeit with different priorities and involving new
players.
This sector report highlights the changing pace of the Qatari economy and construction sector segments (in
comparison with other GCC countries) and provides detailed information on the current projects and expected
investments. For each industry segment, we are presenting a proprietary summary timeline of key projects. To
take into account the challenges, especially the tender phase and ramp up of the projects, but also the
opportunities for additional growth to be generated thanks to the improved infrastructure and expertise based in
Qatar, we have designed several scenarios of investment in infrastructure and real estate. These scenarios are
based on our proprietary model taking into account the expected timeline, phasing and costs of most known major
profiles of certain local and
construction projects. In the last section of the report, we provide summary
international companies, which are actively participating in transforming Qatar.
2012 is for most players, a year of preparation to take on new projects, with new partners, new financings and
new clients. Investors in Qatar have therefore numerous opportunities to tap into the growth ahead, which creates
new employment opportunities and continues to help position Qatar as a new major economic force. Do not
hesitate to call on CBQ for investment, strategic or financing advice, as inspired by Qatar, we believe everything
is possible.
We hope you will find our initial coverage of the construction sector of interest, in addition
to Commercialbank Capital’s future research publications.
Commercialbank Capital Research
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1. Executive Summary
Qatar’s construction sector prospects are looking increasingly
bright since winning the bid to stage the FIFA 2022 World Cup.
Qatar is set to spend up to USD 150 bn on infrastructure projects
over the next 5 to 6 years as it starts preparing for the World Cup.
•
Budget: The Qatari government has reportedly allocated a
whopping 40% of its budget between now and 2016 to
infrastructure projects, including USD 11.1 bn for a new
international airport, USD 5.5 bn for a deepwater seaport and
USD 1 bn for a transport corridor for the capital, Doha. It will
spend USD 20 bn on roads while stadium construction for the
World Cup should cost just under USD 4 bn, with the first
venue to be built by 2015. According to German legal and
financial adviser Dr Nicola Ritter, USD 48 bn will be spent to
build air conditioned stadia, USD 77 bn will be spent on
facilities for soccer fans and players from all over the world and
USD 33 bn will be allocated for developing Lusail City. Qatar
has also allocated USD 50 bn to upgrade its transport
infrastructure, including new rail and metro systems.
•
Qatar on the fast track: The country has been one of the
fastest growing in the world over the past few years (real GDP
grew at a CAGR of 23% between 2003 and 2010). Qatar was
the most resilient of the GCC economies during the global
recession thanks to the capacity expansion and government
initiatives to stimulate the financial sector.
•
Visionary Leadership: The Emir of Qatar has been
instrumental in transforming Qatar into the power house within
the region. In addition, the Emir led government has
maintained political stability within the country despite the
unrest in Middle East. The government has also allowed 100%
foreign ownership in certain sectors, which is likely to improve
liquidity in the form of FDI. Both the political and economic
developments in Qatar are contributing to achieve the Vision
2030.
•
Diversifying strategy: The Government of Qatar has a wellplanned strategy that will lead to long term growth
sustainability. The government initiated their strategy by
focusing on inherit strength, which is increasing export capacity
of LNG. As the production led growth peaks in 2012, the
government focused on non-hydrocarbon sector to push for
growth post 2012. The accumulation of wealth from
hydrocarbon sector was re-invested to diversifying its revenue
base. The wealth is re-invested through Qatar petroleum in
hydrocarbon sector, while Qatar Investment Authority (QIA) in
non-hydrocarbon sector. In the initial years of growth, the
government re-invested wealth to acquire foreign assets.
However, the government has started focusing on investing
domestically to boost the non-hydrocarbon sector.
•
Dual Government funding and PPP model: The government
spending has increased as well as the adoption of PPP (Public
Private Partnership) model in Qatar, especially in the
hydrocarbon sector. According to National Development
Strategy (NDS), the expected investment by the private sector
is around USD 130 bn. Cheap lending as well as government’s
initiatives will boost the confidence of the private sector, which
will benefit the construction sector, and the whole economy in
the long term.
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Key Projects
Pearl GTL
Project Value: USD 6.6 bn
Commencement in Q4-11
Refer: Section 9.1
Lusail Mixed-Use
Project Value: USD 33 bn
Completion Date: 2018
Refer: Section 6.3
Doha Festival City
Completion Date: Q4-14
Refer: Section 7.1
Pearl Qatar
Refer: Section 6.1
Sidra Medical and
Research Center
Refer: Section 8.2
Doha Cultural Village
(KATARA)
Project Value: USD 82 mn
Refer: Section 7.3
Qatar National Museum
Refer: Section 7.5
Education City
Refer: Section 8.1
Msheireb
Refer: Section 6.2
New Doha Port (Phase I)
Refer: Section 5.4
New Doha Int’l Airport (NDIA)
Refer: Section 5.3
Source: Commercialbank Capital Research
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Exhibit 1.1: Key Projects in Doha
1
8
7
SIDRA MEDICAL
9
4
6
5
3
10
2
1. Qatar National
Convention Center
Refer: Section 8
6. Msheireb Project
Refer: Section 6.2
2. Doha International
Airports
Refer: Section 5.3
3. Museum of
Islamic Art
Refer: Section 7.5
4. Lagoona Mall
Refer: Section 7.2
5. Lusail City
Refer: Section 6.3
7. Qatar Foundation
Refer: Section 8
8. Education City
Refer: Section 8.1
9. Sidra Medical
Refer: Section 8.2
10. The Pearl Qatar
Refer: Section 6.1
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Exhibit 2: Segmentation of Construction Sector
Construction
Energy and
Utilities
Transportation
Buildings*
Oil & Gas
Roads
Retail
Solar Enegy
Railways
Hospitality
Utilities
Airport
Social
Infrastructure
Port
* Residential and commercial buildings are not covered in this report, except for iconic projects.
1.1
Growth Drivers
Robust Macroeconomic environment
Qatar has witnessed robust growth in GDP over
the last few years, which is driven by significant
increase in LNG export capacity. According to
IMF, Qatar’s economy grew by 19% in 2011, up
from 17% in 2010. In 2012, real GDP growth rate
is projected to be 6%, with real hydrocarbon GDP
slowing down to 3%, while non-hydrocarbon
sector is expected to grow by 9%.
Diversification at full stream
The government launched National Development
Strategy (NDS) to achieve the targets of Vision
2030. The strategy is to use the hydrocarbon
sector revenues to build the non-hydrocarbon
sector and a more sustainable economic base.
the tourism sector. We believe that winning the bid
for World Cup 2022 will drive the construction
sector as government will ensure that projects are
completed on time to host the world biggest
sporting event.
Well regulated and capitalized banking
sector
Qatar banking sector is well regulated by the
Central Bank and capitalized by the government of
Qatar. Recently, the government of Qatar has
completed the two year capitalization program. In
August 2011, the central bank has lowered its
interest rates to kick start lending to private sector.
The sector has optimum capital ratios that will
enable them to extend lending to the construction
sector in general and private sector in particular.
Qatar eyes 2020 Olympics
FIFA World Cup 2022– The Game Changer
The successful bid to host the FIFA World Cup
2022 has been a big achievement for Qatar. The
construction sector has witnessed numerous of
new projects ever since. The government has
allocated USD 20 bn towards the development of
Around one year back, Qatar won the bid to host
world’s largest sporting event, FIFA World Cup
2022. Qatar is on the path of creating history as
the country has been accepted as an applicant city
to host Olympics and Paralympics in 2020.
Exhibit 3: Key Projects Timeline
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Barzan Gas Development
Education City
Msheireb
Sidra Medical Research
Centre
Lusail Mixed-Use
Pearl Qatar
2011
Solar Power Complex
2013
Pearl GTL
Commencement in Q4-11
Lagoona Mall
2012
2015
2018
Urjuan Mixed-Use
Development
Qatar National Railway
System (Phase I)
Water Recycling Plant
Qatar Entertainment City
Doha Festival City
New Doha International
Airport
2022
12 Stadiums
Doha Dukhan Road
Oil & Gas
Energy
Utilities
Roads
Railways
Airport
Port
Cities
Hospitality
Education
Healthcare
Stadiums
Entertainment
Retail
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Aspire: Venue for Asian Games in 2006
•
Aspire Academy for Sports Excellence
founded in 2004 by HH Sheikh Jassim Bin
Hamad Al Thani, to create a world class
institution for educational sport that would
develop athletes in Qatar, worldwide known
for its state-of-the-art sports science and
produce graduates who would become
Qatar’s most admired civic leaders. It covers
an area of approximately 290,000 sqm. Aspire
has an enviable list of world-class sporting
facilities including a 200m athletics track, an
Olympic-sized swimming and a diving pool, a
gymnastics hall, two multi-purpose sport halls,
table tennis courts, fencing strips, squash
courts, a bespoke goalkeeping training area
and fitness rooms.
•
It has astonishing 8 full size football pitches
including an international standard artificial
grass indoor pitch. The Academy also has 20
classrooms for subjects ranging from English
language classes to Physics and Biology. The
dormitory has 128 rooms and eight suites
which can house up to 255 students.
•
Currently there are approximately 200 student
athletes in grades 7 through 12 who specialize
•
•
in football, athletics, squash, table tennis,
sailing, judo, gymnastics, swimming, tennis,
fencing, rowing, shooting and golf. It has a
team of over 300 people including instructors,
trainers
and
educators
of
different
nationalities.
The iconic Aspire Dome has a capacity to host
ten different sporting events simultaneously in
a climate-controlled arena making it the
largest multi-purpose sports facility of its kind
in the world. It has 13 sports venues and 7
performance enhancement laboratories under
the same roof. It can seat a total of 15,000
spectators.
Aspetar is the first specialized Orthopedic and
Sports Medicine Hospital in the Gulf region,
situated within aspire zone. It provides the
high-quality medical treatment for sportsrelated injuries in a state-of-the-art facility,
staffed by some of the world’s leading sports
medicine practitioners and researchers. In
2009 Aspetar was officially accredited by FMARC as a FIFA Medical Centre of
Excellence. Aspetar provides a full range of
services from injury prevention to injury
management and performance improvement.
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Qatar’s World Cup Stadiums
1. Lusail Iconic Stadium
Location: Al-Daayen
Capacity: 86,250
Value: USD 662 mn
Matches planned: Opening
match, group matches, and
round of 16, quarter-final,
semi-final and final
2.
3. Al-Khor Stadium
Location: Al-Khor
Capacity: 45,330
Value: USD 251 mn
Matches planned: Group
matches and round of 16
2. Shamal Stadium
Location: Al-Shamal
Capacity: 45,120
Value: USD 251 mn
Matches planned:
Group matches
4. Al-Wakrah Stadium
Location: Al-Wakrah
Capacity: 45,120
Value: USD 286 mn
3.
5. Al-Rayyan Stadium
Location: Al-Rayyan
Capacity: 44,740
Value: USD 135 mn
matches
12.
6. Doha Port Stadium
Location: Doha
Capacity: 44,950
Value: USD 202 mn
matches, round of 16 and
quarter-final
1.
7. Education City Stadium
5.
Location: Al-Rayyan
Capacity: 45,350
Value: USD 287 mn
6.
4.
9. Al-Gharafa Stadium
Location: Al-Rayyan
Capacity: 44,740
Value: USD 135 mn
matches
11. Khalifa International Stadium
Location: Al-Rayyan
Capacity: 68,030
Value: USD 71 mn
matches, round of 16,
quarter-final and semi-final
8. Qatar University Stadium
Location: Doha
Capacity: 43,520
Value: USD 300 mn
10. Sports City Stadium
Location: Al-Khor
Capacity: 45,330
Value: USD 251 mn
12. Umm Salal Stadium
Location: UmmSalal
Capacity: 45,120
Value: USD 251 mn
matches, round of 16 and
quarter-final
Source: MEED
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3. Challenges and Market size
3.1
•
Challenges
The prospects of construction sector in Qatar are bright, which is underpinned by massive investment
by the government over the next decade. Despite the bright outlook, Qatar is likely to face certain
challenges as it prepares for the FIFA World Cup 2022. The government will continue to remain under
pressure to complete the projects on time to meet the deadlines and guidelines set by the FIFA
authorities.
Global slowdown
•
Qatar is not completely immune to the global environment; therefore uncertainty around the global
economies will have limited impact on Qatar in general and construction sector in particular. The global
slowdown will impact the private sector participation as credit environment becomes tighter and difficult
in such scenarios. In addition, the hydrocarbon prices will decline, which has a direct impact on Qatar’s
GDP, resulting in lower growth. We believe that the government of Qatar will continue to step in for
support to ensure projects are completed on time in case the private sector participation deteriorates.
Shortage of skilled/unskilled labor
•
The shortage of both technical staff and labors will continue to one of the biggest challenges for the
sector. These projects require people who have “applied similar principles to creating efficient, cost
effective, high tech systems in other countries like Germany, Ireland and Australia.” The companies
operating in the construction sector have learned from their previous experience (Asian Games),
however, the scale and magnitude of projects for the World Cup 2022 will be a whole new experience
for the companies as well as for Qatar. Shortage of schools for children and a well-publicized
clampdown on alcohol in Doha are some other problems that are currently being resolved.
Shortage of raw materials
•
3.2
The construction sector is likely to witness shortages in raw materials between 2013 and 2017 as the
period is expected to be the peak for the sector. The government will ensure that the shortages in raw
materials do not lead to unexpected rise in prices. Both of these factors will lead to delays in execution
of the projects. Therefore, the sector will have to bridge the gap during this period by mutual
agreements with the companies in Saudi Arabia and UAE.
Construction Sector: Mapping market size under three scenarios
The indicators for the construction sector outlook looks solid as much of the investment is backed by
government or semi-government entities. The news of hosting FIFA World Cup 2022 has further brightened
the outlook of the sector. The rapid increase in population over the last few years has resulted in increasing
demand for infrastructural development in Qatar. All these factors will collectively lead to ample
opportunities for construction activity in Qatar. Within the construction sector, we remain buoyant on
transportation, retail and hotel and tourism sectors.
Transportation sector is the biggest beneficiary of the massive investment by the government as it plays a
vital role in infrastructural development of the country. The improvement in transportation network will also
be essential as the country prepares for the FIFA World Cup 2022. The tourism authority of Qatar has done
a commendable job over the last few years by organizing and participating in conferences and exhibitions.
This has resulted in influx of tourists, which is boosting the hotel sector. The rapid increase in population as
well as inflow of tourist will boost the retail sector. As a result, the country is witnessing massive
investments in shopping malls to address the shortages in the retail space.
We have forecasted the Qatar construction sector market size until 2020 as we believe that majority if not
all the projects will be completed by end of the projected period. We have assumed USD 225 bn investment
as our base for total investment, which is provided by the NDS. Based on our assumptions, we have
assumed additional investments in the construction sector as a percentage of the GDP. The additional
investments have been assumed in two phases, first phase will be from 2013 to 2017, while the second
phase is from 2018 to 2020.
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Following is a brief summary of the methodology that was adopted to arrive at the market size:
1. Initially, the list of projects ongoing and planned was compiled from various relevant sources.
However, we decided to take data from one source due to the inconsistency from various sources.
This data was further classification as per the construction sector. The value of each project was
divided in quarters based on the completion date to arrive at the actual value invested in a
particular year until 2020.
2. We have assumed additional investments between 2013 and 2017 based on the announced
investments of USD 225 bn by NDS.
3. Finally, we have assumed a percentage of the GDP that will be re-invested in the construction to
further upgrade the infrastructure sector. The forecast for GDP is taken from IMF until 2016. This
constant rate as percentage of GDP has been differentiated based on two phases, one from 2013
to 2017 and second from 2018 to 2020.
In order to arrive at the total market size, we have added the contributions from three approaches as
described above. This methodology was adopted to build three scenarios in our analysis to arrive at a
market size. In each scenario, contribution from first two points remains the same while contribution from
third point varies for three different scenarios:
Best Case
In this case, we have assumed higher percentage of GDP that
will be invested over and above the planned investment by the
government. Based on this assumption, we arrive at a market
size of USD 315 bn.
Base Case
In this case, we have assumed a lower percentage of GDP that
will be invested over and above the planned investment by the
government. Based on this assumption, we arrive at a market
size of USD 270 bn.
Worst Case
In this case, we have made two assumptions. First, we have
assumed that there will no additional investment and secondly
we have assumed that around 15% of the planned projects will
be cancelled going forward. Based on this assumption, we
arrive at a market size of USD 191 bn.
Exhibit 5: Spending Patterns based on different scenarios – Forecast (USD bn)
350
270
249
250
NDS: USD 225 bn
188
200
185
191
170
150
138
100
50
315
284
300
34
2012
2015
Base Case
2018
Worst Case
2020
Best Case
Source: NDS and Commercialbank Capital Research
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Major Projects
AIRPORT
New Doha International Airport (NDIA) will be
able to handle 24 mn passengers per year and
will have 42 contact gates, six of which will be
dedicated to the Airbus A380 superjumbo.
When construction started in 2004, the new
airport was scheduled to open in 2008.
It is now planned for an opening in December
2012. The new terminal is being built by the Sky
Oryx consortium of Japan’s Taisei Corporation
and Turkey’s TAV. The terminal extension is
being built by a joint venture of Belgium’s Six
Construct and the local Midmac Contracting.
New Doha Port is to be built at Mesaieed, south
of Doha and will replace the existing Doha Port
downtown on the city’s Corniche.
Beijing based China Harbour won contract to
execute the onshore excavation works. Firms
have been prequalified for the contract to
dredge the port’s approach channel.
PORT
The new port will support industrial development
to the south of Doha. Completion of the first
phase is expected in 2014.
STADIUMS
As of now, Qatar has committed to spending
USD 65 bn to build infrastructure to host the
2022 World Cup. As part of the bid process,
Qatar committed to providing 12 stadiums, each
with a minimum capacity of 45,000.
Stadiums will be equipped with cooling systems
using clean renewable energy resources to
achieve the first completely carbon-neutral
World Cup.
The direct spending on building stadiums will be
4% of the total planned investment. It will
renovate three stadiums and will construct nine
new stadiums.
RAIL
Doha Metro is the first section of Qatar’s USD
35 bn rail plan to be developed and will be a
crucial part of Doha’s infrastructure when
complete.
The metro will consist of four lines running more
than 300 km across the city.
The first phase involves building the Red line,
which will run from Doha city to new Doha
International airport. In 2009, Germany’s
Deutsche Bahn was appointed to develop
Qatar’s national railway network. It is currently
prequalifying consultants for the preliminary
metro designs.
Source: MEED
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4. Construction Sector
•
Qatar’s ambitions and investment plans are
different compared to other GCC countries.
Qatar won the right to host the 2022 World
Cup, which has imposed a time frame for
completing the projects. The infrastructure that
the country will built over the next decade will
also result in achieving the national
development plan.
•
Preparing for the World Cup 2022 will drive
spending
on
sports
and
transport
infrastructure, while the National Vision 2030
will focus towards the social infrastructure,
such as education, healthcare and cultural
projects.
•
•
•
Qatar’s
construction
sector
witnessed
unprecedented growth between 2005 and
2008, growing at a CAGR of 46%. Sector
productivity increased from QAR 8.7 bn in
2005 to QAR 27.5 bn in 2008. Following this
robust growth, the construction market
contracted in 2009 and 2010 on the back of
the global crisis. According to a study by
Oxford Economics and Global Construction
Perspectives, the Qatari construction market
is expected to grow by an average of 12.5% a
year over the next decade, compared with
growth in European countries averaging just
1.7% to 2020
The sector has not witnessed any major
cancellations or projects on hold unlike its
regional peers such as Dubai, Bahrain and
Kuwait. The total value of projects put on hold
or cancelled stood at USD 460.3 bn at the end
of October 2011. In Qatar, the projects put on
hold were around 4% of the total market
compared to 59% and 24% in UAE and
Kuwait respectively. The value of such
projects in Qatar and Saudi Arabia were
insignificant compared to the total size of the
market.
With Qatar slated to host a ‘zero carbon’
World Cup in 2022, Qatar Green Building
Council (QGBC) has set up a group to foster
green infrastructure as a national resource.
Qatar is utilizing two: Leadership in Energy
and Environmental Design (LEED) and the
Qatar Sustainability Assessment System
(QSAS). A number of projects are targeting
LEED Gold or Platinum status. Dr. Alex
Amato, Chairman of the Research and
Innovation Committee at QGBC commented,
"In line with the environment pillar in Qatar's
National Development Strategy 2011-2016,
this interest group complements national and
regional efforts to utilize our current and future
green
infrastructure.
This
initiative
demonstrates the value of green infrastructure
investment and reiterates the benefits and
need for sustainable investment in this field.
This group also wants to encourage the
appreciation of Qatar's natural systems and
their role in the landscape architecture
profession."
Exhibit 6: Construction sector as a % of NonHydrocarbon GDP in Qatar
30.0
21%
19%
25.0
17%
14.4%
20.0
QAR bn
Qatar has two main focuses in the next
decade; one is staging the largest sporting
event and second is implementing its National
Vision 2030, which aims to diversify away
from a reliance on hydrocarbons.
15%
13.0%
15.0
11.4%
13%
10.8%
9.1%
10.0
11%
9%
5.0
15.9
27.2
25.5
24.1
17.6
2007
2008
2009
2010
9M-11
7%
5%
0.0
Building and Construction
As % of Non-hydrocarbon GDP
Source: Central Bank
Exhibit 7: GCC - Projects planned or underway
(2008 – 2011)
1,250
1,000
USD bn
•
750
500
250
0
Bahrain Kuwait
2008
Oman
2009
Qatar
Saudi
Arabia
2010
2011
UAE
Source: MEED, Note: Oct end for each year
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•
•
•
•
•
The total number of projects that were
planned or underway in the GCC stood at
USD 1,784.7 bn at the end of October 2011.
Saudi Arabia has emerged as the largest
market for planned or underway projects in the
GCC while UAE became the second largest
market because of cancelled or on-hold
projects.
decade. The country is building start of art
projects that will transform the country.
Exhibit 8: GCC - Projects planned or underway
till Oct-11 (USD bn)
Qatar has been in the limelight for various
reasons from acquiring international assets to
hosting the biggest sporting event in the world.
The total number of planned and underway
projects in Qatar stood at USD 214 bn at end
of Oct-11. The value of projects has grown at
a CAGR of 40% during 2005 and 2011. The
growth in projects value during the period is
the second best in the GCC, as Kuwait
witnessed a growth of around 43% despite all
the cancellations/on hold projects.
The value of the projects under execution
stands at USD 59.8 bn. Transportation sector
accounts for around 30% of the projects under
execution. In transportation, airport and roads
have been the main contributors as they are
witnessing substantial revamp or new addition
in facilities.
Bahrain
55.5
167.9
Kuwait
111.6
605.4
Oman
214.0
Qatar
Saudi Arabia
630.3
UAE
Source: MEED
Exhibit 9: Projects planned or underway in
Qatar
300
254.9
250
202.8 204.3
As of Oct-11, the total value of projects under
execution in the energy sector is USD 11.2 bn
or 19% of all projects under execution in
Qatar. This indicates that the world’s leading
supplier of hydrocarbon sector is capitalizing
on its core sector to meet the rising global
demand for oil and gas sector. The
commercial and residential construction
projects accounted for 21% of the total
projects under execution.
Sporting events in Qatar has also been one of
the main drivers for the construction sector.
th
The 15 Asian Games were held in 2006 and
the preparation for the games resulted in great
deal of construction activity including building
of a Sports City, which contains stadium and
other sports facilities. In Jan-11, the country
hosted the Asian Football Confederation’s
Cup for the second time. The biggest and the
game changer for Qatar is winning bid to host
the World Cup 2022.
145.3
150
116.4
100
50
28.2
0
Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11
Source: MEED
Exhibit 10: Projects under execution (Oct-11)
Others
Stadiums
2.7%
0.0%
Social
9.6%
Building
Retail
Tourism
Transportation and building projects account
for more than 50% of the projects under
execution. These sectors are essential for the
infrastructure development of the country.
Transportation
sector
is
focusing
on
modernizing its existing network, while
building sector is transforming the country by
building some iconic projects over the next
214.0
200
USD bn
•
2012
Utilities
Energy
Transportation
21.2%
1.7%
2.7%
12.6%
18.7%
30.7%
Source: MEED
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•
2012
As shown in Exhibit 11, the total spending in the construction stood at USD 47.7 bn, accounting for 39%
of the total spending. In the construction sector, 48.3% was allocated towards residential and
commercial sector, while 10.7% in industrial and 12.1% in ports.
Exhibit 11: Sector wise spending
•
Exhibit 12 focused on expected spending over the next four years. The capital spending is expected to
grow by around 48% between 2011 and 2014. Majority of the growth is expected in 2013 and 2014,
where most of the projects are expected to kick start.
Exhibit 12: Expected increase in capital spending
10.0
Capital Spending is expected to increase by
48% between 2011and 2014
8.0
6.0
4.0
2.0
0.0
2009
2010
Power & Water
2011
Petrochemical
2012
Oil& Gas Production
2013
Construction
2014
Infrastructure
Exhibit 13: Qatar's Top 10 Contractors 2011
Company
JGC Corporation
Saudi Binladin
Consolidated Contractors Company
Hyundai Heavy Industries
China Harbour Engineering
QDVC (Qatari Diar/Vinci Construction)
Qcon
Hyundai Engineering & Construction
Qatar Building Company
Al-Bader Construction & Steel Works
Total
Awards (USD mn)
1,700
1,150
965
889
880
535
510
434
419
400
7,882
Origin
Japan
Saudi Arabia
Athens Based
South Korea
China
Local/France
Local
South Korea
Local
Local
Source: MEED Projects
18
Page | 18
2012
5. Transportation
•
have significant focus on developing the road
network especially through main highways to
ease the congestion. We believe that the
improvement of roads network will continue to
be an ongoing investment for the government
as the growth momentum continues in the
region.
Transportation sector has been at forefront of
the public spending plans in the GCC region in
general and Qatar in particular. The sector is
pacing apace with the development and
expected growth in the country. In addition,
the modernization of the transportation sector
in Qatar is essential for successful hosting of
the world’s biggest event. The governments
Exhibit 14: Landmark Projects in Transportation Sector
Projects
Cost
(USD bn)
Client
Status
Qatar National Railway System
35.0
Qatar Railways Company
(QRail)
Planned
New Doha International airport (NDIA) - (Phase I)
11.1
NDIA Steering Committee
Completion
due in 2012
•
The total revised investment in the GCC
transportation sector is USD 298 bn compared
to the original budget of USD 281 bn. The total
investment in the rail project is USD 95 bn in
the region. The GCC countries are focusing
on upgrading and developing the rail network
within the country and also intend to connect
the region. The governments are also making
significant investments in upgrading their
airports to meet the rising demand of both
passengers as well as freight services. Total
planned investment in airports is USD 41.4 bn
in the GCC.
Exhibit 15: Value of projects announced in
transportation sector (USD bn)
Bahrain
15.7
32.6
Kuwait
88.0
25.3
Oman
Qatar
54.8
Saudi Arabia
81.6
•
During the last three years, Saudi Arabia has
awarded around USD 28.3 bn worth of
projects, UAE awarded around USD 11 bn
worth of projects and USD 6.1 bn in Qatar.
Given the size of projects awarded or in the
pipeline, many regional and international
contractors are expanding operations in Qatar
and Saudi Arabia. The regional contractors
are mostly from Kuwait and UAE as the
activity within the respective countries have
remained subdued.
We believe that Qatar and Saudi Arabia will
continue to remain the most dominant markets
within the GCC region. Both the countries
have announced significant investment plans,
especially the rail project. The Qatari market
looks more promising as the government will
accelerate the execution of the planned
projects to ensure timely completion as it
prepares for FIFA World Cup 2022.
.
UAE
Exhibit 16: Value of projects awarded in
transportation sector
10.1
9.1
9.1
11
9
8
USD bn
•
6
4.1
5
3
2
2.1
2.5
1.8
1.8
4.4
4.1
3.8
3.7
1.0 1.3
0.5
0.10.3 0.2
0
Bahrain Kuwait
2009
Oman
Qatar
2010
Saudi
Arabia
2011
UAE
19
Page | 19
5.1
•
•
•
Roads
The total planned or projects underway in the
GCC countries is around USD 128 bn. UAE
leads the market with USD 46 bn worth of
projects planned or underway. Saudi Arabia is
the second largest market with USD 38 bn
worth of projects either planned or underway,
while USD 18 bn in Qatar. Collectively,
Kuwait, Oman and Bahrain have USD 27 bn
worth of projects planned or underway. We
believe that execution of these projects will be
important in reducing the over congestion in
the GCC.
•
In the GCC, Qatar was the most active roads
market in 2011. Ashghal awarded USD 2.3 bn
worth of contracts during the year 2011. The
biggest of these was the USD 1.0 bn
construction package awarded to the joint
venture of Saudi Binladin Group and the local
Qatari Diar for work on the Dukhan highway.
The other big contract that was awarded was
the two road contracts in January, worth an
estimated USD 0.52 bn, to a joint venture of
Consolidated Contractors Company and the
Teyseer Contracting company for the 12th
package of the Doha Expressway.
The investment in Qatar’s roads sector is set
to continue, with Ashghal planning to build 136
km of new roads by 2014, providing plenty of
opportunities to local and international
contractors and material suppliers. The major
upgrades in the roads infrastructure were
undertaken even before the country won the
2012
bid to host the FIFA World Cup 2022. Strong
economic growth in the past few years have
led to rapid increase in population, thus
resulting in significant congestion in the capital
city of Qatar, Doha.
The country has allocated USD 20 bn in the
next five years to upgrade its road network,
out of which USD 17.9 bn is planned or
underway. Development of roads network is
also essential for the overall infrastructure
development of the country. The preparation
for the World Cup 2022 will also speed up the
process of the construction of roads to ensure
decrease in traffic congestion, increase
regional accessibility and minimize the
environment impact of its transportation
network.
Exhibit 17: Planned/Underway projects in
Roads (USD bn)
2.1 11.8
Bahrain
12.7
45.7
Kuwait
Oman
17.9
Qatar
Saudi Arabia
37.8
UAE
Source: MEED
Exhibit 18: Roads Project Awarded in 2011 (USD mn)
Projects
Doha Dukhan Highway: Central Section
Peripheral Roads to Barwa City
Doha Expressway: Phase XII: F Ring Road
Doha Dukhan: Al-Mail Roundabout to
BaniHajer Roundabout
Nakhilat Shipyard: Phase 4A
Doha Expressway: Package 6
Doha Dukhan: Eastern Section
Contract
Value
275.0
152.0
233.0
1,000.0
45.0
85.0
150.0
Completion
Date
EPC Contractors
Q1-14
CCC and Teyseer Contracting
Q2-13
Bin Omran
Q1-14
CCC and Teyseer Contracting
Q4-14
Qatari Diar and Binladin Group
Q3-12
Eversendai Corp.
Q4-13
Sinohydro Corporation
Q4-14
Qatari Diar and Binladin Group
Source: MEED
•
Qatar is expected to witness USD 7.8 bn
worth of projects to be announced during the
next two years. Qatar is expected to finish its
roads network by the end of 2016, which is
well ahead of the world cup 2022. According
to our estimates, the total size of road and
bridges market in Qatar will be USD 26.5 bn at
the end of 2020.We believe that new projects
will be announced as the rising population as
well as the tendency to own cars in the region
will continue to result in further upgrades in
the roads infrastructure.
20
Page | 20
•
The government’s USD 20 bn plan also
includes investments in improving its sewage
networks. USD 362 mn worth of projects has
been awarded so far in 2011 in improving
sewage networks around the city. The Doha
North Sewerage Treatment and Associated
Works project is a USD 2.2 bn four-part
expansion. The sewerage network at the
Doha North Project is important as it is likely
to witness increase in flows. The Doha North
will witness projects such as Lusail, the Pearl
and Gharaffa, West Bay area, as well as
alleviate some of the pressure placed on the
2012
existing Doha West Sewerage Treatment
Works (STW).
•
Three major road projects which are underway
further substantives the five year plan to uplift
the road network of the country. The Doha
Expressway, currently under construction is
valued at USD 2 bn, the Dukhan Highway also
under construction has been valued at USD
275 mn and the largest proposed project, the
Lusail Highway which is currently being
tendered has been valued at an impressive
USD 687 mn.
Timeline: Road Projects
Peripheral Roads to Barwa
City
Doha Expressway: Package 6
2012
2013
Nakilat Shipyard: Phase 4A
2014
2015
2017
Doha
Dukhan
Highway:
Central Section
Doha Expressway: Phase XII:
F Ring Road
Doha Dukhan: Al-Mail to Bani
Hajer
Doha
Dukhan:
Eastern
Section
21
Page | 21
•
Ashghal has awarded USD 120 mn project to
HBK Contracting. The project comprises of
mechanical and electrical refurbishment work
with related drainage works, civil and
2012
structural works at the existing pumping
stations PS3/1, PS8/1, PS8/6, Series 8 Trunk
Sewer, PS15, PS23, PS31 and PS44.
The Public Works Authority (ASHGHAL):
The leader in Roads and Sewage
developments has undertaken QAR 100 bn worth infrastructure projects in five years.
Roads
The master plan programme called for a four
phase programme to be implemented by
Ashghal. This was to have included:
Phase I (2008-11)
•
•
•
•
•
•
Upgrading the Al-Rayyan road from the
BaniHajar roundabout to SoufWaqf
The F-ring arterial road
The east-west corridor and New Doha
International Airport road
The F3 Salwa road freeway, stage I
The F5 central freeway, stage I (Lusail
expressway)
The F1 freeway to Al-Shamal
Phase II (2012-16)
•
•
•
•
•
•
•
•
•
•
•
•
•
The F6 Doha Bay Freeway
The F2 Khalifa Street/Majlis al-Tawoon
The E8 Al-Khor expressway (Lusail North
to Lusail South)
The F21 Al-Waab freeway
The Salwa road freeway, stage III
The F5 central Freeway, stage III
The Al-Saad arterial road
The F61 Al-Wahda freeway
The F2 Dukhan freeway (Al-Shamal road
to orbital freeway)
The F6 east-west corridor (from the Orbital
freeway to New Doha port)
The F4 Orbital freeway/E9 Lusail
tangential
The F5 Central freeway, stage II
The E12 Western industrial expressway
Phase III (2017-21)
•
•
•
•
The E2 D-ring extension to New Doha
International airport
The A12 E-ring extension to the airport
The E10 Al-Wukair expressway
The E10Al-Waab expressway, stage II
Phase IV (2021-26)
•
Phase 4 consists of a pumping station for
Treated Sewer Effluent ( TSE3)
Source: Ashghal website
22
Page | 22
•
Railways
The GCC region has a planned investment of
USD 96 bn in the rail sector. The rail networks
have garnered a significant share of 32% of
the total transportation sector. Qatar is the
largest market for the railways sector in the
GCC with a total investment of USD 35 bn.
The total investment in the rail sector in Qatar
accounted for 53% of the total planned
investment in transportation sector.
Exhibit 19: Planned projects in railways
35
30
60%
53%
50%
50%
43%
25
USD bn
5.2
2012
40%
20
25%
25%
30%
15
10%
20%
10
10%
5
7.9
0
14.0
2.5
29.0
20.3
22.2
0%
Bahrain Kuwait Oman Qatar Saudi UAE
Arabia
Value of Projects
% of Transportation sector
Source: MEED
23
Page | 23
2012
Exhibit 20: Ongoing or Planning Railway Projects in GCC
Value
Expected
Completion Date
GCC Railway Network
USD 30.0 bn
2017
GCC nations
Qatar National Railway System
USD 35.0 bn
2015
North-South within Qatar
UAE National Railway Project
USD 10.9 bn
2015
Connects All Emirates in the UAE
Dubai Metro
USD 10.6 bn
2015
Dubai
Bahrain Rail Masterplan
USD 7.9 bn
2025
Bahrain
Abu Dhabi Metro
USD 7.0 bn
2020
Key Cities in Abu Dhabi
Kuwait City Rapid Transit
USD 7.0 bn
2016
Kuwait City
Saudi Land Bridge
USD 7.0 bn
2014
From Jeddah to Riyadh in KSA
Haramain High-Speed Railway
USD 7.0 bn
2014
From Mecca to Medina in KSA
Projects
Coverage
Source: Frost and Sullivan, Commercialbank Capital Research
•
Mowasalat in the form of taxis and buses will
not be adequate to host the FIFA World Cup
2022. In addition, increasing the taxis and
buses will put additional pressure on new
roads and create congestion; therefore rail
network within the country would be the most
viable option for Qatar.
Qatar is the largest market for railways sector
in the GCC with a planned investment of USD
35 bn. The objective of massive investment
plan is to ensure that it can accommodate
thousands of tourists that are going to move
within the city during the tournament. The
public transport which is currently operated by
Exhibit 21: Details of Qatar rail project
Award
Date
Value (USD
mn)
NDIA - Doha International Airport: Passenger Rail Station Box
Q1 2010
120
QRDC - Qatar Integrated Rail Project
Q2 2012
20,675
QRDC - Qatar Integrated Rail Project: Automated People Mover in West Bay
Q2 2012
2,200
QRDC - Qatar Integrated Rail Project: Doha Metro: Green and Yellow Line
Q2 2012
2,000
QRDC - Qatar Integrated Rail Project: Doha Metro: Lusail Light Rail Network
Q3 2012
1,158
QRDC - Qatar Integrated Rail Project: Doha Metro: Blue Line
Q2 2012
1,000
QRDC - Qatar Integrated Rail Project: Doha Metro: Red Line
Q2 2012
1,000
QDREIC - New Doha Airport to New Doha Port Railway
Q4 2014
200
Projects
•
•
Recently,
the
organization
that
was
responsible for developing the rail network has
been restructured with the objective of
expediting the process. A Railways Steering
Committee has been established, Chaired by
the Prime Minister; will be responsible for
coordination of the entire project.
QRail will now look after the rail network
project, which was earlier been assigned to
Qatar Railways Development Co (QRDC), a
51:49 joint venture between Qatari Diar and
DB International (formed in 2009).QRail has
started inviting expressions of interest from
local and international companies to bid for
design and construction contracts for Doha
Metro project.
•
Recently, QRail has signed a USD 535.4 mn
contract with Qatari Diar Vinci Construction
(QDVC) for the new phase of works on the
Lusail Light Rail Transit system. The contract
covers civil engineering works in seven
underground stations, the construction of a
viaduct over the motorway between Doha and
the northern part of the country and
preliminary works on an LRT depot and
maintenance workshop.
24
Page | 24
2012
Qatar plans to build a rail network,
which is part of Qatar’s plan to spend
USD 35 bn on rail infrastructure. Doha
Metro, a 350 km rail network will have
four lines, Red Coastal line, Golden
Historic line, Green Education line and
Blue City line.
Red line: is the first line to be
developed and will operate from the
NDIA to the West Bay area in central
Doha.
Gold line: will operate from east-west
route linking NDIA and the airport city
with the industrial areas in the west of
Doha.
Green line: will be from the industrial
areas in the south through central Doha
to Education City.
Blue line: will follow the coast road,
running from NDIA to West Bay and on
to The Pearl and Lusail.
Doha Metro map
Timeline: Railways
GCC Railway Network
Testing and commissioning
of Red Coast Line to start
Civil works award due for
West Bay by September
2012
2011
2013
Consultants prequalify for
metro. PMC bids invited for
West Bay people-mover
2016
Testing and commissioning
of freight railway to start by
2016
2017
2026
Entire rail programme will
be completed
PMC bids invited for Lusail
LRT
Aecom-Parsons wins PMC
for Lusail LRT
Civil works tender due for
West Bay. Construction
due to start on Red Coast
PMC award due for West
Bay
25
Page | 25
5.3
•
New Doha International Airport
Exhibit 22: Projects awarded (USD bn)
The aviation sector in the GCC has undergone
major transformation during the last decade.
Passenger traffic in the GCC has grown at a
CAGR of around 10% between 2002 and
2010, significantly higher compared to global
traffic.
•
According to the International Air Transport
Association (IATA), Middle East is one of the
fastest growing markets in the world as it
expects around 9% yearly growth till 2014.
The most recent forecast by Boeing indicates
that it expects orders of 2,520 planes from the
Middle East carriers by 2030.The total value of
projects planned or underway in the GCC is
USD 42 bn.
•
In the GCC, Qatar has an aggressive
expansion plan in the aviation sector to
become one of the aviation hubs in the region.
The country is also preparing itself to maintain
the pace with steady increase in passenger
traffic to and from Doha. In addition, the rising
fleet size of Qatar Airways was also leading to
increase in transit passenger, which was
putting additional pressure on airport
authorities.
•
The current airport of Qatar is facing
increasing congestion, which will be replaced
by the new airport with much larger cargo and
passenger facilities, thereby providing an
important transportation hub for the people
and materials.
2012
8.2
Bahrain
4.9
2.7
Kuwait
Oman
7.1
11.2
Qatar
Saudi Arabia
UAE
7.3
Source: MEED
•
The government plans to invest USD 11.1 bn
for NDIA which includes two runways and a
140,000 sqm airport terminal. Currently, the
airport is handling 14.9 mn passengers a year.
At the completion of first phase in March 2012,
the airport will be able to handle 24 mn
passengers and 750,000 tons of cargo a year.
•
At the completion of the second phase in
2015, the capacity will double to 50 mn
passengers per year. The NDIA is also
developing its air cargo terminal with an initial
capacity of handling 1.4 mn with the
completion of phase one. This figure will reach
to 2 mn tons (mt) at the end of second phase,
making it one of the largest cargo terminals in
the world. In line with these developments,
Qatar Airways is also planning to develop its
air cargo business.
Exhibit 23: Airport Contracts Awarded (2004 – 2010)
Projects
Value
( USD mn)
Project
status
Award
date
NDIA – Infrastructure Packages
3,550
Execution
2007
NDIA – Passenger Terminal Complex
1,000
Execution
2007
NDIA – Airfield Paving, Tunnel and Detention Ponds Works
932
Execution
2005
NDIA – Concourse C
778
Execution
2009
NDIA – Aircraft Maintenance Hangar
670
Execution
2006
NDIA – Reclamation and Dredging
425
Execution
2005
Total
7,355
26
Page | 26
2012
New Doha Int’l Airport
•
expected rise in demand as Qatar Airways
further enhances its fleet size to move up the
international ranking. This will help the airline
in increasing its current flying destinations,
making Qatar a hub for major connections
across the globe.
The government of Qatar began upgrading the
NDIA even before the winning the bid for
hosting FIFA World Cup 2022. The country
was witnessing increase in number of tourists
thanks to the initiatives taken by the tourism
authority of Qatar. Qatar is preparing for the
Timeline: Airport Projects
2012
2014
(Phase I)
Total Project Value: USD 11.1 bn
Passenger Capacity: 24 mn
Cargo Capacity: 750,000 tn
2015
Qatar Airways is a group of companies with
the diverse interests from core passenger and
cargo transportation and airport to alcohol
distribution, sports and hospitality. The group
comprises of Qatar Airlines, Qatar Duty Free,
Qatar Airways Cargo, the Qatar Distribution
Company (the only licensed retail distributor of
alcohol in Qatar) and Doha International
Airport. Since the re-launch of Qatar Airways
in 1997, the company has been able grow at
30% per year. During this period, the fleet has
2018
(Phase II)
Total Project Value: USD 11.1 bn
Passenger Capacity: 50 mn
Cargo Capacity: 2 mn tn
increased from 4 planes to 97 planes in 2011.
This figure is expected to reach 110 by the
end of 2013. The company has entered into a
multi-billion dollar deal with Airbus to supply
80 aircrafts.
Qatar Airways
•
2016
•
The company is one of the best and the
fastest growing airlines in the region. It has
won the award for the Best Airline in Middle
East and Africa at 2011 Business Traveler
Asia Pacific Awards for the second year in a
row. In December 2011, the CEO of Qatar
Airways has been unanimously nominated to
27
Page | 27
serve on the board of governors of the
International Air Transport Association, which
represents over 90 % of the world's air
transport. This further substantiates Qatar
Airways image in the industry and its
commitment towards being one of the best
airlines in the region. The company is rapidly
expanding its destinations as well as flight
frequency. In 2011, it has expanded and/or
started new flights to various destinations. The
company is expected to add 20 new
destinations by the end of 2013.
•
•
In March 2011, the company announced a
strategic partnership with Qatar Telecom
(Qtel) for the migration of its primary IT
infrastructure to the Qtel data centre. In
September 2011, the company bought a 35%
stake at the Luxembourg-based cargo carrier
Cargolux, which is in with the company’s
objective to develop its air freight business.
Qatar Space City is a plan of government of
Qatar to establish a USD 3.3 bn Space City in
the Al-Khor area, which will cover an area of
40,000 sqm. The project will include
establishment of a university in cooperation
with US National Aeronautics and Space
Administration (NASA) along with a science
museum and other tourism attractions. The
planned project is expected to be
implemented in several phases under the
supervision of an official body that would be
appointed with General Authority of Civil
Aviation. The concept of the space city project
is based on the American Space Museum.
2012
rising hydrocarbon of the years, which has
resulted in accumulated surpluses. The main
objective of the new port is also to replace the
existing port, which is struggling to keep up
with the growing demand with its limited land.
•
Currently, the country has three main ports:
Port of Doha (Qatar’s main commercial
seaport), Port of Ras Laffan (the world's
largest LNG exporting facility), and Port of
Mesaieed (Qatar's main oil export terminal
and the main point of entry for aggregates and
other building materials). In order to meet the
heightened traffic of goods and supplies
generated by the country's economic boom
and rising population, the government of Qatar
plans to expand and develop its port
infrastructure.
•
Qatar’s ports are dominated by the LNG
export. However, this phenomenon is likely to
change over the next few years as the country
makes significant investments to diversify its
economy away from hydrocarbon sector. The
current planned investments in the sea port
sector is to address the additional capacity of
LNG, but the future expansion plans is to
address the expected rise in demand from the
massive development program undertaken by
the government.
Exhibit 24: Planned projects in sea ports ($ bn)
0.8
Bahrain
2.7
2.8
5.4
•
•
Kuwait
New Doha Port
The GCC ports sector is mostly dominated by
the oil and gas sector as most of the
production is exported to emerging markets.
However, this is set to change in the coming
years as the region continues to make
significant investments to diversify its
economic base.
The new proposed port in Qatar is likely to
transform the country into the new trading hub
of the region, which is in line with the country
Vision 2030. The country can aspire for such
goals as it has the required funding thanks to
2.1
15.4
Oman
Qatar
Saudi Arabia
8.6
UAE
Source: MEED
28
Page | 28
2012
An artist impression of USD 5.5 bn deepwater seaport near Qatar's industrial city of Mesaieed
Exhibit 25: Port Capacity
Port Name
New Doha Port
Port of Ras Laffan
Port of Mesaieed
Capacity
Year of Completion
6 mn teu
2016
6.3 mn m3*
NA
2 mn teu
2014
Source: Commercialbank Capital Research, Note:*Cubic meter
•
year deal. The second contract received bids,
however, which is likely to be awarded soon.
We believe that Qatar will have to expedite the
process of bidding and awarding and then
execution in order to keep up the pace with its
regional peers.
In April 2010, Qatar received bids from around
9 consortiums for the major contract of the
New Doha Port. In March 2011, the steering
committee signed first contract with the China
Harbor Engineering Company (CHEC) with a
price of QAR 3.2 bn, which is a four and half
Timeline: Port Projects
New Doha Port (Phase II)
Total Project Value: USD 7 bn
Start Date: 2020
Capacity: NA
2013
2016
Capacity: 6 mn TEU (20-foot
equivalent units)
2020
2025
2030
New Doha Port (Phase III)
Start Date: 2030
Capacity: NA
29
Page | 29
2012
6. ICONIC PROJECTS
6.1
•
investors took up residency in 2009 and the
entire project is expected to be completed by
2013.
The Pearl-Qatar
The Pearl Qatar is a Riviera style manmade
island developed in an exclusive environment
in Doha. It is one of the largest real estate
developments in the GCC which covers 400
hectares (4 mn sqm) of reclaimed land. It is
also Qatar’s first international luxury
residential development
that
offers
international investors freehold title ownership.
It is located 20 kms from Doha's International
airport and 350 meters offshore of Doha’s
prestigious West Bay District. The first
•
The Pearl will house about 40,000 residents
and includes luxury apartments, high rise
towers, town homes, penthouses and
Mediterranean villas, an international yachting
hub with three marinas and 700 boats, three 5
star hotels, 2 mn sqf of international retail,
restaurants and entertainment as well as a
family destination with schools and community
facilities.
The Pearl, Qatar
•
United Development Company (UDC) is the
project developer, who is overseeing the
project's entire infrastructure and construction
of municipal buildings. Dar Al-Handasah
(Shair and Partners) is a project manager.
•
The whole idea of the Pearl Qatar is to attract
as many people as possible from Qatar and
the region as well as other parts of the world.
It will have high end shops and fine dining
restaurants from countries such as Spain, Italy
and the United States. The Pearl-Qatar, with it
40 km of reclaimed coastline and 20 km of
pristine beaches, is definitely a one of main
tourist attractions of Qatar.
•
which covers 200,000 sqm, which consists of
385 retail shops including fashion, jewellery
and fine dining. The Medina Centrale with an
area of 600,000 sqm is set to provide cinemas
and supermarkets among others while the
Qanat Quartier will be the cultural destination
with its impressive design allowing people to
enjoy parks and art galleries.
•
Nikki Beach Resort & Spa is a Miami based
resort chain set to open in July 2012. It will be
a boutique beachfront resort with 47 luxury
villas and spa suites located at Porto Arabia. It
is designed by the award winning Singapore
based ECO ID Architects with interior design
by Gatserelia Design.
There are three retail areas which have their
own themes. One of them is the Porto Arabia
30
Page | 30
6.2
•
capacity of 500 to 700 seating capacity. One
of other distinctive feature of the project is that
it is expected to have underground metro
stations to provide the link to other parts of
country.
Msheireb
Msheireb is an iconic project which will display
innovative development and rediscover the
local heritage and culture. The project is
divided into six main character zone named as
Diwan Quarter, Heritage Quarter, Retail
Quarter, Kahraba Quarter (residence and mix
use), Nakheel Quarter (HQ gateway). The
project will have 226 buildings to provide
home to 27,637 residents. It will have parks
and open spaces spread over approximately
122,217 sqm. The project will have three
types of hotel, Lifestyle hotel, Luxury hotel and
Business hotel and a theatre auditorium with a
2012
•
The project will be completed in five phases
and the first phase is due for completion by
2012. The first phase will consist of a multiuse Cultural Forum, central luxury hotel and
serviced apartments, offices, a shopping
street, townhouses, a primary school and a
mosque. The Phase 2, 3 and 4 will consist of
retail malls, hotels, office apartments and
shops.
Msheireb
Exhibit 26: Details of Msheireb Development
Projects
Msheireb Properties - Mandarin Oriental Hotel
Msheireb Development: Infrastructure Works: Phase I
Budget Value
(USD mn)
Project
Status
80
EPC Bid
142
Execution
50
Execution
Msheireb: Phase 1a
428
Execution
Msheireb: Phase 1b
500
Execution
Msheireb: District Cooling Plants
Msheireb: Phase 2, 3 and 4
4,072
Design
Source: MEED
31
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6.3
99-year lease basis. The infrastructure of
Lusail city is divided into two phase which
was further subdivided into construction
zones, known as construction package
(CP).
Lusail City
•
Lusail City is a modern yet traditional and
environmentally
friendly
city.
The
estimated cost of the development is USD
33 bn, which will be executed in phases
over the next 10 years.
•
Lusail City will be located on the east
coast of Qatar, approximately 15 km north
of the city center of Doha. Lusail City will
have residential, commercial and two
marinas. It will also have a full array of
community needs such as schools,
mosque,
medical
facilities,
sports,
entertainment, cultural facilities and
shopping centers.
•
The city will have 25,000 residential units
which will accommodate approximately
200,000 residents. An estimated 170,000
are anticipated to work at the different
districts and expected to attract further
80,000 visitors to the city. Freehold
ownership of Lusail City properties is
available to all Qatari and GCC nationals,
while foreigners can acquire property on a
2012
•
There are 16 major CP which are under
different stages of development. The
entire infrastructure at this stage is
planned to be completed by the end of
2013. Similarly, the entire Lusail City will
be connected to an extensive natural gas
pipeline network.
Lusail City
Exhibit 27: Lusail City construction projects
Projects
Total value Status
Client
Transport
Al-Khor Highway
NA Design
Public Works Authority (Ashghal)
Lusail Expressway – Phase one
USD 350 mn EPC bid
Ashghal
Lusail Expressway – Phase two
USD 350 mn Design
Ashghal
Lusail light-railway transit (LRT)
USD 1.8 bn PMC awarded
Qatar Railways Development Company
(QRDC)
Lusail LRT rolling stock contract
USD 1.8 bn EPC bid
QRDC
USD 3.5 bn Design
Arcapita, Barwa Real Estate Company
USD 800 mn On Hold
Diyar al-Kuwait Real Estate Company
Real Estate
Al-Sidra Golf Residential
Development
Lusail mixed-used development
Lusail Entertainment City
USD 1.5 bn On hold
ADIH, Majid al-Futtaim Group
Sports
Lusail Iconic Stadium
USD 662 mn Design
Qatar Olympic Committee
32
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6.4
•
offices worldwide. It has been operating in the
Gulf region since 2005 and their key projects
in the region include The Dubai Mall, the
Address at Dubai Marina, Doha Festival City,
Dilmunia Health City in Bahrain and The
Eighth Gate in Damascus. The firm was
founded with a deep concern for the built
environment and the need to create
architecture of excellence that enriches the
human experience and spirit.
Seef Lusail
Seef Lusail, a project under development by
Seef Lusail Real Estate Development
Company “SEEF”, has appointed DP
Architects as master planners for the project.
The developer, SEEF, is a joint venture
between Masraf Al Rayan and Qatari Diar that
will take on the full development of Seef
Lusail. Issa Mohammed Al Kaladari, CEO of
Lusail City was appointed as Chairman of
SEEF. Khalid Ahmad Fakhroo, Executive
Director of Engineering and Real Estate at
Masraf Al Rayan, has been appointed as the
CEO of SEEF.
•
Seef Lusail is a 600,000 sqm multi-use
development located at the waterfront of
Lusail, a distinctive 21st century iconic city
which celebrates the special cultural and
geographical heritage of Qatar and the Gulf
Region
•
DP Architects is a leading architectural
practice in Asia with over 1200 staff and 12
2012
•
Seef Lusail will feature an interactive 2.3 km
waterfront promenade that will include multiple
world class attractions that will cater to various
age groups and families. The developer,
“SEEF” conducted a number of studies on
waterfront destinations worldwide in an effort
to create an innovative design with a strong
emphasis on creating themes throughout Seef
Lusail that reflect and compliment Qatar’s
traditions and values. Seef Lusail will further
add to Qatar’s appeal as an international
destination
that
rivals
major
global
destinations.
Seef Lusail
•
The design will take into consideration the
climate in Qatar, in order to have a lively and
active waterfront all year long.
•
The hotels in Seef Lusail will cater to the
family, business and luxury leisure segments.
One of the hotels will be a fully integrated
resort and spa providing guests with a unique
leisure
experience.
Discussions
and
negotiations are underway with global hotels
brands that will bring new concepts and ideas
to Qatar.
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2012
7. Retail & Leisure
•
•
GCC retail sector has undergone a shift in
paradigm over the last decade on the back of
robust macroeconomic environment. The
region has become one of the most attractive
destinations for retailers across the globe. The
changing consumer behavior and lifestyle,
increasing influence of western culture, rising
disposable income has led to phenomenal
growth in the retail sector. As a result, the
retail sector in the GCC is contributing to the
overall growth in the non-hydrocarbon sector.
Shopping malls and organized retail stores
have gained prominence in the region as it is
regarded as one stop entertainment for
residents and tourists. Therefore, the total
projects planned or underway for shopping
malls in the region is USD 11.1 bn. We believe
that Qatar have the potential to attract a
bigger share as they prepare for the World
Cup 2022 and the government thrust towards
becoming a touristic hub in the region.
•
Cup 2022 and the government thrust towards
becoming a touristic hub in the region.
Exhibit 28: Gross Leasable Area (GLA) in 2010
(sqm 000’s)
639 311
UAE
521
Qatar
4,045
Saudi Arabia
Kuwait
Bahrain
4,234
630
Oman
Source: Retail International
Doha Festival City
•
•
The emergence of trade, restaurant and hotels
sector as the fourth largest contributor to GDP
in 2010 reflects the strong and growing
performance of Qatar’s retail industry in the
recent years. The contribution to the GDP has
increased from 4.4% in 2006 to reach 5.5% in
2010. The retail sector growth in Qatar has
mirrored the economic growth in Qatar. Rapid
economic growth has led to one of the highest
GDP per capita in the world.
The retail sector in Qatar has evolved over the
last few years on the back of rapid growth in
population. The sector has benefitted from the
rising purchasing power of its residents in the
recent years. This has led to a shift from
unorganized to organized shopping, resulting
in shopping malls and complexes. Shopping
malls have become an important part of the
society as it is the best source of
entertainment for the residents and tourists in
the country.
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2012
Exhibit 29: Retail future supply 2012 – 2015
Project
GLA
(sqm)
Gulf Mall
80,000
2012
USD 100 mn
Business Trading Company
Ezdan Mall
40,000
2012
USD 50 mn
Ezdan Real Estate Company
Doha Festival City
433,847
2012-2014
USD 1.65 bn
Bawabat al-Shamal Real Estate
Northgate Mall
100,000
2013
USD 327 mn
Mirqab Mall
36,000
2013
USD 200 mn
Marina Mall
57,605
2014
USD 275 mn
Equinox
H.E. Sheikh Hamad Bin Jassim Al
Jaboor Al Thani
Qatar Foundation
Barwa Commercial Avenue Mall
56,600
2012
USD 1,100 mn
271,000
2014
USD 824 mn
Barwa Al Doha
Completion
Date
Project Value Developer
Barwa Real Estate Company
Barwa Al Doha (Developer)
Source: DTZ Research and MEED Projects
•
Although, shopping malls and commercial
centers have entered the market during the
last couple of years, the retail space remained
scarce in the country. This has resulted in
speculative demand, which has prompted subletting at enormously high prices. The prices
of sub-letting can vary between QAR 100 to
QAR 150 per sqm depending on the location.
Surprisingly this phenomenon has become
highly common in Doha.
•
Qatar’s total retail stock was around 630,000
sqm (GLA) at the end of 2010, an increase of
around 30% compared to 2009. Based on the
planned developments, Qatar will add 626,000
sqm (GLA) of new organized retail space by
the end of 2012, thus doubling the existing
retail capacity. The completion of 433,847
sqm (GLA) of Doha Festival City complex,
which is being developed by Al Futtaim will be
completed by 2014. The Barwa Commercial
Avenue is under construction, which will yield
1 mn sqm of built up area. The first phase of
the project will yield around 0.5 mn sqm of
GLA. The first phase is around 60%
completed and the rest to be completed by the
end of 2012.
•
7.1
•
The total planned and projects underway in
shopping mall are USD 3.1 bn. There are
around 10 new malls being planned in Qatar.
The total number of projects awarded during
the year 2011 is USD 523 mn. Around USD 2
bn worth of projects is to be awarded in the
year 2012 and 2013.
Doha Festival City (DFC)
DFC will be the largest mall in Qatar with a
mixed use of shopping, entertainment and
leisure. The project is owned and developed
by Bawabat Al Shamal Real Estate Company
(BASREC). BASREC shareholders include AlFuttaim Real Estate Services, Qatar Islamic
Bank (QIB) and private Qatari companies.
DFC will be built on a 433,847 sqm plot with a
GLA of around 260,000 sqm, which is located
around 15 km north of downtown Doha on Al
Shamal Road. DFC will consist of mall and
entertainment complex, hospitality and offices
and automotive showrooms. The retail section
will have four distinct interior zones, namely
Water Concourse, Garden Promenade,
Rainforest Boardwalk and Fashion Galleria.
DFC will be the home to IKEA, Toys R Us,
Marks & Spencer and Inter-sport. The first
phase of the project, which will include the
retail section, is likely to be completed by the
fourth quarter of 2012. The remaining sections
of the DFC are expected to be completed by
the end of fourth quarter of 2014.
7.2
•
Lagoona Mall
Lagoona Mall is a 127,000 sqm two level
lifestyle shopping centre with 53,000 sqm of
retail shopping, built at an estimated cost of
QAR 1.4 bn. Lagoona is developed by Dar
Investment & Development and is leased and
managed by Darwish Holding for an initial
period of 30 years. The main contractor was
Al Seal Contracting & Trading Co and Hill
International (project Management) MZ &
Partners (Design and Supervision) are the
consultant. One of Lagoona's unique features
is a 20,000 sqm European piazza, featuring
5,000 sqm of fine dining which will be home to
20 restaurants with outdoor patios. The
shopping center comprises 170 retail stores.
Similarly, it also provides parking for over
2,000 vehicles. The mall is the home to
luxurious multi brand store, Fifty One East.
The store covers an area of 13,000 sqm which
is the biggest in the Middle East region.
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2012
KATARA - Cultural Village
7.3
•
Distribution Company for nearly QAR 2 bn. Q
media and Qatar Cinema and Film Distribution
Company plans to invest more than QAR 1 bn
in the next three years to open more than 50
state-of-the-art multiplex facilities.
Katara
Katara is the Cultural Village of Qatar, where
cutting edge activities of all fields show the
cultural diversity of the world in one single
traditionally Qatari place. It is the largest and
the most multidimensional cultural project of
Qatar. It covers an area of 1 mn sqm and is
located between Doha's West Bay and the
pearl. The approximate cost of the project is
USD 82 mn.
Exhibit 30: Cinemas in the Region
17
Abu Dhabi
•
7.4
•
Katara hosts international, regional and local
festivals, workshops, performances and
exhibitions at its prestigious venues such as
theatres, libraries, art galleries, museums, an
opera house, and a multi-purpose halland
Roman-style amphi theatre which is the
largest in the Middle East. It also has
traditional
cafes/restaurants,
marinas,
handicrafts souq, mosques and playing field
for children. Katara has held various
performances since its opening in October
2010 which includes Qatar Philharmonic
Orchestra, Doha Tribeca Film Festival,
Photography Exhibitions (i.e. Our Time,
Doharama) and Cultural Performance during
AFC Asian Cup Jan 2011.
Cinemas
Recently, Q media announced a deal to
acquire 60% stake in Qatar Cinema and Film
Dubai
38
13
Kuwait
Qatar
14
Source: Various
•
In the GCC, Qatar has the maximum number
of cinemas. The total number of cinemas in
Qatar stood at 38 compared to around 30 in
Dubai and Abu Dhabi.
•
Aspire Zone Foundation (AZF) opened the
first women cinema in Qatar capital, Doha. All
the films for this cinema are provided by Qatar
Cinema and Film Distribution Company. Qatar
has also launched Doha Film Institute (DFI) to
build a strong film industry in Qatar along with
strong links to the international film
36
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•
community. World Cinema Foundation has
signed a three-year cultural partnership with
DFI to restore and preserve international films
of cultural significance.
Doha has hosted international film festivals Tribeca Film Festival Doha and Al Jazeera
Documentary Film Festival in the past. Qatar
2012
is moving in the right direction to become the
main attraction and hosting big events in the
coming years. We remain optimistic on the
prospects of the entertainment and believe
that it will gradually emerge as one of the top
entertainment hubs in the GCC.
Timeline: Retail projects
Northgate Mall
GLA: 100,000 sqm
Lagoona Mall
GLA: 127,000 sqm
2011
Mirqab Mall
GLA: 36,000 sqm
2012
2013
2014
Gulf Mall
GLA: 80,000 sqm
Marina Mall
GLA: 57,605 sqm
Ezdan Mall
GLA: 40,000 sqm
Barwa Al Doha Mall
GLA: 271,000 sqm
Barwa Commercial Avenue
Mall
Project Value: USD 1,100 mn
NLA: 56,600 sqm
Doha Festival City
GLA: 260,000 sqm
2015
37
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7.5
•
•
Spa, and a 1,850 sqm Grand Ballroom with a
capacity of accommodating 1,200 guests.
Hotels & Tourism
Qatar Tourism Authority (QTA) plays an
important role in promoting Qatar as an
evolving tourist destination. The company
organizes and supervises the development of
the tourism industry in Qatar. According to
World Travel and Tourism Council (WTTC),
Qatar is one of the fastest growing tourism
sectors in the world. The contribution of travel
and tourism sector to GDP is expected to rise
6.4% per annum by 2021 from QAR 3.8 bn or
0.7% of total GDP in 2011. These
assumptions are on the back of massive
planned investments in the sector and in line
with the government’s thrust to become a
touristic destination.
QTA have done a commendable job in
organizing and participating in conferences
and exhibitions over the years, which has
transformed Qatar into a business destination
within the region. The increase in the number
of business travelers due to the conferences
and exhibitions is improving the hotel
occupancy rates in Qatar. In terms of
revenues, 4 star hotel revenues increased to
QAR 182.4 mn in third quarter of 2011 to QAR
101.9 mn during the same period of previous
year. In terms of 5 star hotels, the revenue
increased to QAR 385.6 mn in third quarter of
2011 compared to QAR 304.6 mn of the
previous year.
2012
•
According to the latest figures from QTA, the
tourism sector in Qatar is witnessing a steady
growth. The report indicated that the
occupancy rates have increased by around
4% in the third quarter compared to the same
period of the previous year. The revenues
from 4 and 5 star hotels witnessed an
increase during the period, indicating strong
domestic and regional interest in the sector.
This increase was due to the 24% increase in
visitors from the GCC region, especially Saudi
Arabia as it accounts for around 60% of the
total tourist within the region.
•
According to hotelier Middle East, Qatar has
17 five star and 13 four-star hotels at the end
of January 2011. In total, Qatar had around 66
hotels. According to QTA, the total number of
hotels is expected to reach 240 by end of
2022. This is a substantial increase in the
number of hotels in the next ten years.
According to QTA, about 90% of future supply
will provide four and five star accommodation.
•
The total planned and underway projects are
USD 2.4 bn. As of now, USD 1.6 bn worth of
projects has been awarded. Currently, there
are 10,000 hotel rooms and additional 5,500
will be come on stream by the end of this year.
By the end of 2013, the total hotel rooms will
reach 30,000. Around 5,000 new rooms will
come on stream each year through 2022.
Exhibit 31: Qatar growth in hotels (forecast till
2022)
240
250
No of Hotels
200
150
100
51
58
2008
2009
66
50
St. Regis Hotel, Doha
•
St. Regis Hotels & Resorts is making a
landmark entry into the Middle East with The
St. Regis Doha. The hotel is part of Al Gassar
Resort and is expected to open on 28
February 2012. The hotel is strategically
located near the Katara Cultural Village and
Doha Exhibition Centre. It will comprise of 336
guest rooms and suites, a cornucopia of
signature restaurants, a world-class Remede
0
2010
2022F
Source: Qatar Tourism Authority (QTA)
•
Qatar Museums Authority (QMA) has awarded
a contract worth USD 434 mn to a South
Korean construction firm Hyundai Engineering
& Construction to build the National Museum
of Qatar designed by the French architect
Jean Nouvel over an area of 46,000 sqm in
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Doha. The construction of the museum is
expected to be completed by 2014. Qatar's
•
2012
Pei, which opened in December 2008, as well
as the Arab Museum of Modern Art in Doha,
which opened last December.
National Museum will be an add-on to the
Museum of Islamic Art in Doha designed by IM
New National Museum of Qatar
•
facilities like music evenings, paddle boats,
film screenings, sports events and art
workshops. The plans for building a new
Museum of Photography designed by
Santiago Calatrava are in progress.
The QMA has also announced to open a
“Museum of Islamic Art” (MIA) park built upon
an area of around 280,000 sqm with no
entrance fees for visitors. The park is
designed by Pei Partnership Architects of New
York. In addition, they will also provide various
Timeline: Hospitality Projects
2011
2012
2013
2014
New Doha Hilton Hotel
Capacity: 320 rooms
Capacity: 220 seats
Crowne Plaza Doha: The
Business Park
Capacity: 265 rooms
Mandarin Oriental Hotel
Capacity: 160 rooms
St.
Regis
Hotel and
Residential Tower
Capacity: 320 rooms
Doha Regent Hotel
2015
Planet Hollywood Hotel
Entertainment City
Capacity: 300 rooms
Four Seasons Hotels and
Resorts
Project Value: USD150 mn
Capacity: 350 rooms
39
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2012
8. Social Infrastructure
•
8.1
infrastructure such as hospitals and education
is on the rise as providing adequate education
for the growing young population is the
backbone of economic diversification. Both the
healthcare and education is part of the
government’s
human
development
programme.
The
social
infrastructure
development
becomes important in the midst of economic
development. In addition, it is important in
attracting expatriates to work and live in Qatar.
These are indirect ways of creating demand,
which will support the country’s National
Vision 2030 of reaching their target population
by the end of 2030. Investments in social
Education
Education City
•
The education sector has undergone major
transformation over the last two decades. The
country has made major investments in
improving the quality of its education system.
Qatar leads the GCC in terms of education
reforms as it ranks among the top five nations
globally in terms of quality of primary
education. The government established the
regulatory body, Supreme Education Council
(SEC). The SEC comprises of three institutes,
namely Education Institute to develop
curriculum and professional training for
teachers and staff, Evaluation Institute to
assess and monitor the performance of
schools and the Higher Education Institute to
help outstanding students.
•
According to the recent study by Qatar’s
permanent Population Committee, the number
of students is rising by around 4.5% annually.
The strong growth in student enrolment led to
reform of Qatar’s primary and secondary
schools. Currently, there are 165 independent
schools serving around 80,000 students under
the new system provided by the SEC. We
believe that there are opportunities for the
primary and secondary schools due to the
rising demand, however, the main challenge
would be the exorbitant prices of land. This
would be lead to higher pricing structure for
new schools, which might be unfavorable
when compared to other existing schools.
40
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2012
Exhibit 32: Universities in Qatar
University / College
Country of Origin
Qatar University
Qatar
Virginia Commonwealth University
USA
Northwestern University
USA
Weill Cornell Medical College
USA
Georgetown University
USA
Texas A&M University
USA
Carnegie Mellon University
USA
HEC Paris
University College London
Europe
Europe
Stenden University
Netherlands
University of Calgary
Canada
College of the North Atlantic
Canada
•
One of the most significant changes in the
education sector was the establishment of
Education City by Qatar Foundation. Due to
the modernization and world class facilities, it
has attracted both universities and students
around the region. Six American universities
have opened their branches in Education City.
•
Apart from these international universities,
Qatar University continues to remain the main
attraction for the Qatari students. The
university also underwent series of reform
during 2003 and 2007. The university offers
60 degrees from seven different colleges. In
addition, the main driver for Qatari people to
enroll in the public university is to secure high
paying public sector jobs.
•
Hamad bin Khalifa University is an initiative of
Qatar Foundation for Education, Science and
Community Development (QF) in honor of His
Highness the Emir, Sheikh Hamad Bin Khalifa
Al-Thani. This new multi-disciplinary university
will combine the learning, teaching and
research being carried out at the branch
campuses of the universities and other
academic centers at the Education City.
•
The total projects planned or underway in
Qatar is USD 6.6 bn. Total projects awarded
during the year 2011 reached USD 1.2 bn,
while it is expected that USD 620 mn worth of
projects will be awarded during the fourth
quarter of 2011. We believe that the total
investment is likely to surpass the USD 6 bn
as the development in Qatar will induce more
primary and secondary schools and western
universities to meet the rising demand in
Qatar. Going forward, the government will
continue its investment program to further
improve its education system, which is
important for the overall development of the
country. The government intends to bring in
modern educational curriculum, which will
benefit the development of local population.
This is in line with the government’s Vision
2030.
8.2
Healthcare
•
The government thrust towards improving its
healthcare system, makes in one of the
largest spenders in the GCC region. The rapid
increase in population during the last five
years has resulted in serious shortages for
healthcare system in Qatar. Qatar has a total
of 9 hospitals and 22 primary healthcare
centers. On an average, the Qatari
government allocated around 10% of the total
annual budget toward healthcare and related
activities. In the country’s 2011/12 budget, the
government has allocated QAR 8.8 bn (USD
2.4 bn) to the healthcare sector, which is
around QAR 300 mn higher compared to the
previous year.
•
One of the key elements of human
development of Qatar National Vision 2030 is
health of the population. Qatar has come up
with its National Health Strategy (NHS) 201116, in order to align with the Qatar’s National
Vision 2030 and its ambition of becoming a
regional centre for medical research. The
strategy has 35 projects in plan over the next
six years which will improve the overall
healthcare services and fulfill the needs of
world class healthcare system.
41
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2012
Timeline: Healthcare Projects
Sidra Medical City (Phase I)
Capacity: 380 Beds
2011
2012
Al Wakrah Hospital
Capacity: 280 beds
•
•
•
2013
Qatar spends around USD 137 mn per annum
to send patients outside the country for
treatment as it lacks quality healthcare. In
order to address this issue, the government is
planning to spend USD 8 bn on hospital
construction projects by the end of 2016. The
country’s public works ministry approved plans
to build eight new hospitals by 2016. The new
hospitals will add 5,000 beds to the current
capacity. One of the main challenges is
attracting skilled professionals to achieve
quality healthcare system in the country.
The government has taken several initiatives
in improving the quality and services of the
healthcare system in Qatar. The government
has formed partnerships with foreign
universities, institutions and colleges like
University of Calagry Qatar and the Weill
Cornell Medical College. The institutions have
their
campus
in
Qatar
providing
healthcare/medical education and nursing
training programmes. One of the most
ambitious projects in the healthcare sector is
the USD 2.5 bn Sidra Medical and Research
Centre, USD 1.5 bn Hamad Medical City, and
USD 500 mn Al Wakhra Hospital.
Mozah bint Nasser Al-Missned. The aim is to
become the leading centre for the
development of medical science in the Middle
East. The three essential missions behind the
initiative are patient care, medical education
and biomedical research. Sidra Medical and
Research Center will be located in Education
City. It is owned and funded via a USD 7.9 bn
endowment from Qatar Foundation.
•
Sidra Medical and Research Centre will
provide employment to around 5,000 people
including doctors, nurses, technical staff,
biomedical researchers, administrators and
support staff. The centre will also have parking
facility for approximately 2,000 vehicles and a
residence for 350 nurses.
•
The medical center will work closely with Weill
Cornell Medical College in Qatar and Hamad
Medical Corporation in regard to all three
missions, raising the standard of health care
throughout the country and providing valuable
opportunities for training the medical students
and clinician. It will also include research in
the field of pregnancy health, infertility, genetic
abnormalities, the health needs of children,
and diseases specific to women. It will be the
first hospital in Qatar to have a fully integrated
clinical information system as well as the first
academic medical center in the region based
on the North American model.
•
Total building area (sqf): Approx. 2,520,000
(hospital and clinic); Approx. 3,600,000
(including structured parking). Phase I
consists of 380 beds, not including labor and
delivery rooms, and 53 high-risk/ICU obstetric
Sidra Village: Mazaya Qatar Real Estate
Sidra Medical and Research Centre is
one of several initiatives taken by HH Sheikha
2015
Hamad Medical City Project
Value: USD 1.1 bn
Capacity: 1,340 Beds
Development Company has awarded a $130m
contract to China’s Sinohydro to deliver the
Sidra Village project in 20 months. Sidra
Village comprises 1,165 residential units,
including 658 one-bedroom and 507 twobedroom apartments.
•
2014
42
Page | 42
•
•
•
•
•
•
beds. Phase II is planned to expand hospital
capacity to approximately 550 beds and
double the sizes of the Outpatient Clinic and
research facilities.
Qatar
Foundation's
Capital
Projects
Department is overseeing all elements of the
design and construction of Sidra Medical and
Research Center.
Led by Engineer Saad Al Muhanadi, QF Vice
President for Capital Projects, a world class
team has been assembled that includes the
following entities:
Qatar Petroleum serves as the Client
Representative on behalf of Qatar Foundation.
KEO
International
is
the
Program
/Construction Manager, serving as the link
between Qatar Foundation, Qatar Petroleum,
the Executive Architect, and all other parties.
Pelli Clarke Pelli, a US architectural firm, is the
Design Architect and creator of the actual
design of Sidra.
Kurt Salmon Associates is conducting the
medical planning and space programming.
•
2012
A $ 2.3 billion construction contract has been
awarded to an international consortium
including OHL and Contrack.
New Sidra Medical and Research Centre
Site map: Sidra Medical and Research Center
43
Page | 43
2012
9. Energy and Utilities
9.1
•
•
•
•
•
Energy
Exhibit 33: Value of planned investments in Oil
and Gas projects (USD bn)
The gradual recovery in the global economies
during the start of 2011 has resulted in steady
flow of investments in the hydrocarbons sector
in GCC region. This recovery reassured the
region to increase in its production capacity to
meet the growing demand. Energy sector
plays an important role in the GCC region as it
is main source of revenue.
The original planned investment in oil and gas
sector within the GCC was around USD 420
bn till 2020. However, the revised planned
budget was 4% lower compared to the original
planned investments. The revised planned
investment in the GCC is around USD 401 bn
(refer exhibit 33). The drop in value is due to
Kuwait, which has revised its budget
downwards by around 30%. Saudi Arabia, on
the other hand, has increased its planned
investment by around 10% to USD 134.6 bn.
The change in revised investment plans can
be attributed to the petrochemical sector,
where the Saudi Arabia is considering
massive investments over the next decade.
Qatar accounts for only 10% of the total
planned investments in the oil and gas sector
in the GCC.
In the GCC, the amount of contracts awarded
is about USD 156.4 bn, which is around 40%
of the revised planned investment in the oil
and gas sector (refer to Exhibit 34). UAE and
Saudi Arabia are by far the largest markets for
the oil and gas in the region. UAE has
awarded USD 70.2 bn worth of projects, while
Saudi Arabia has awarded USD 58.2 bn.
Saudi Arabia, the world’s largest producer of
oil, has announced massive investments
during the next five years as it wants to
capitalize on the rising oil prices. UAE, on the
other hand, believes that focusing and
investing in the oil and gas sector would be
the most appropriate to boost the overall
economy, especially after the sharp correction
in the real estate sector on the back of global
recession.
131.7
134.6
64.1
8.9
24.9
Bahrain
Oman
37.1
Qatar
Kuwait
UAE Saudi Arabia
Exhibit 34: Contracts awarded in Oil and Gas
projects
0.6 12.7
Bahrain
3.4
11.2
Kuwait
Oman
70.2
Qatar
58.3
Saudi Arabia
UAE
Exhibit 35: Natural gas reserves (Tncf)
Russia
1,681
Iran
1,046
Qatar
896
Saudi Arabia
275
U.S.
273
Source: Oil and Gas journal 2011
44
Page | 44
•
•
•
•
Hydrocarbon sector is the main contributor to
the robust growth witnessed during the last
few years. Qatar is the third-largest in the
world behind Russia and Iran in terms of gas
reserves. It is the world’s largest global
supplier of LNG and will become the world’s
largest exporter of GTL. The government will
continue investing further to enhance its
capacity to meet the rising demand in the gas
sector, however, the investment will be much
lower compared to the ones seen earlier.
Since 2006, Qatar has invested around USD
40 bn in the oil and gas sector. In Exhibit 36,
majority of this was invested during the year
2006 and 2007 in order to achieve the desired
capacity as mentioned above. In the year
2011, total amount of projects awarded in the
energy sector was USD 2.9 bn, which is
around 25% of the total projects awarded
during the year.
Qatar started operation of mega train-7
(capacity 7.8 mtpa) in July 2009 and had
brought another five plants on-stream (46.8
mtpa) till Feb 2011. Qatar transportation
company has 52 LNG vessel out of which 9
conventional vessels (145,000 – 154,000 m3),
31Q-Flex vessels (210,000 – 216,000 m3), 14
Q-max Vessels (263,000 – 266,000 m3). In
2011, Qatar achieved its target capacity of 77
mtpa for LNG.
The government’s investment in the energy
sector is through Qatar Petroleum (QP), which
is the only state owned petroleum company in
Qatar. The company operates all oil and gas
activities primarily including exploration,
production, refining, transport, and storage. It
is also involved in sale of crude oil, NGL, LNG,
GTL, refined products, petrochemicals and
fertilizers. QP accounts for about 50% of the
country's total crude oil output. Qatar
petroleum has allocated USD 30.7 bn (20102014) for project in crude oil, natural gas, GTL
and petrochemicals. However, the budget has
been declining in gas sector as the expansion
is nearing its completion.
Gas-to-liquids (GTL) projects have received
significant attention in Qatar over the last
several years. The government had originally
set a target of developing 400,000 bpd
(64,000 m3/d) of GTL capacity by 2012.
•
The biggest GTL project in Qatar is Pearl
GTL. In February 2007, the same week that
Exxon Mobil decided to cancel its GTL plans,
Shell held a ground breaking ceremony for its
Pearl GTL project. The Pearl plant is 51%
owned by Qatar Petroleum, though Shell will
act as the operator of the project with a 49%
stake.
•
ORYX GTL is a synthetic fuel plant based in
Ras Laffan Industrial City, Qatar, which is a JV
between by Qatar Petroleum (51%) and Sasol
(49%). The capacity of Oryx GTL is 34,000
bpd of oil.
Exhibit 36: Projects awarded in Qatar
25
21.5
20
15
USD bn
•
2012
11.0
10
5
0.8
1.3
2008
2009
2.3
2.9
2010
2011*
0
2006
2007
Source: Oil and Gas Directory Middle East-2011 * till Date
•
The facility is expected to use 1.6 bn cubic
feet or 45 mn cubic meters per day (m3/d) of
natural gas feedstock to produce 3.1mbd
(499,000 cmd) of GTL products as well as
120,000 bpd (19,000 cmd) of associated
condensate and LPG. Initially, the estimated
cost of the project was USD 4 bn, which
increased to between USD 12 and USD 18
bn. The Pearl GTL is the first integrated GTL
operation in the world, which will have
upstream natural gas production integrated
with the onshore conversion plant. By 2012,
Qatar is likely to have 177,000 barrels per day
(28,100 cmd) of GTL capacity from Oryx GTL
and Pearl GTL.
45
Page | 45
2012
Timeline: Energy Projects
QEWC / KAHRAMAA – Ras
Laffan IWPP Expansion
Capacity: 4,200 MW
2013
2014
2015
2016
KAHRAMAA - Facility D
IWPP
Capacity: 2,000 MW
Ras Laffan Polysilicon
Plant
2018
KAHRAMAA
Solar
Power Complex
Timeline: Oil and Gas Projects
Ras
Laffan
Olefins
Complex
QP - Al Shaheen Refinery
(On Hold)
2013
Barzan Gas Development
- Onshore (Phase I)
2015
2016
Qatargas - Jetty Boil Off
Gas Recovery
Barzan Gas
Development
2017
2021
Barzan Gas Development Onshore (Phase II)
Oryx - Gas to Liquids Plant
(GTL) Phase II
Shell
Petrochemical
Complex
Govt of Qatar/Govt of
Kuwait - Petrochemical
Complex
46
Page | 46
9.2
•
positioned over any of the stadiums in Qatar
and can be maneuvered with a remote control
from the ground to keep the passing sun off
the field.
Solar Energy
Winning the bid for FIFA world cup 2022 has
given further fillip to the solar energy sector in
Qatar. In addition to the existing investment in
the sector, more investments will take place in
the near term as the country prepares itself for
the World Cup 2022. The ideas and concepts
conceived from solar power are likely to
ensure cooling and power control within the
stadiums, which is very essential for the
successful hosting of the event. As a result,
Qatar is expected to invest around USD 1 bn
on alternative energy. As of now, the country
has awarded projects worth USD 0.7 bn.
•
Qatar Science and Technology will develop a
plant at Ras Laffan Industrial City, which will
be one of the first operational polysilicon
plants in the region. The plant will produce
well over 3,500 tons per annum and has been
designed with future expansion in mind.
•
The solar energy will play an important role in
successfully hosting the World Cup 2022 as
the world will focus on Qatar’s to see if it has
been able to deliver the cooling standards
promised during the bidding stage.
9.3
Prototype: Qatar Solar Power Stadium
•
Qatar plans to build 9 new solar powered
open-air stadiums designed by German
Architects Albert Speer and Partner GmbH
(AS&P), and renovate 3 existing stadiums.
Electricity to cool these stadiums will be
generated with photovoltaic panels (PV) and
solar thermal collectors installed on the
stadiums’ roofs and sides. Cool air will be
pumped at spectators’ ankles, backs, and
necks, and if permissible, the retractable roof
can provide additional shade. Similarly,
scientists and engineers at Qatar University
have also developed a solar powered gasfilled cloud that will shade spectators and
athletes from the roaring sun. In addition, the
USD 0.5 mn artificial clouds that can be
2012
Utilities
•
The region is undergoing transformational
changes in utility sector due to rapid growth in
population, commercial and industrial growth
in the region. The governments of the GCC
countries with the exception of Kuwait have
embarked on a plan to restructure and
privatize the sector.
•
One of the other major developments in the
power sector was the establishment of Power
Grid Authority known as the GCC
Interconnection Authority. The authority will be
responsible for overlooking and monitoring of
the GCC Power grid. The grid's existing
members are Saudi Arabia, the UAE, Kuwait,
Bahrain and Qatar (for Phase 1) with Oman
joining the alliance for Phase 2. Saudi Arabia
can give and receive 1,200 MW, while the
UAE 900 MW and Qatar 750 MW to and/or
from the grid. Members are expected to
maintain a minimum reserve ratio level and
negotiations for power trading (which is to
commence next year) have already begun. It
is estimated that the grid would save USD 5
bn in energy costs for member countries. All
six countries have joined in the second phase
of the USD 1.4 bn project which was formally
initiated in April 2011.
Exhibit 37: GCC Desalination Capacity (000 m3/d)
Country
2006
2011
2016
Saudi Arabia
UAE
Qatar
Bahrain
Kuwait
Oman
7,410
5,730
1,197
519
2,081
377
12,564
9,030
1,676
1,183
3,466
1,140
17,654
12,330
2,481
1,977
4,617
2,059
Source: MEED
47
Page | 47
•
•
•
•
The total revised value of investment in the
power and water sector is USD 221.5 bn in
the GCC compared to USD 216.5 bn planned
initially. According to Exhibit 38, the total value
of planned investment in Saudi Arabia is USD
96.9 bn, largest market within the GCC. UAE
is second largest market with a total
investment of USD 57.8 bn. Qatar has a total
planned investment of USD 16.8 bn.
regulator responsible for transmission and
distribution
of
electricity
and
water,
development of policies and procedures for
the management and supervision of the water
and electricity sectors in Qatar.
Exhibit 38: Planned investment in power and
water
The total planned investment in the water
sector is USD 42.9 bn. Saudi Arabia is the
largest market with planned investment of
USD 16.9 bn. The country has awarded
around USD 8.3 bn worth of projects, while
the remaining is likely to be awarded in the
coming years. UAE has planned investment of
USD 8.4 bn, while USD 5.2 bn worth of
projects has been awarded. Qatar is the third
largest market in the GCC with planned
investment of USD 6.9 bn.
In 2011 so far, the total value of projects
awarded in utility was USD 18.3 bn in the
GCC (refer to Exhibit 39). Out of this, USD
10.8 bn worth of projects was awarded in
Saudi Arabia, accounting for around 59% of
the total value. Kuwait awarded USD 2.7 bn
worth of projects, while USD 2.1 bn in the
UAE.
80
55 58
60
40
20
27 29
14 14
18 17
Oman
Qatar
7 7
0
Bahrain Kuwait
Sum of Original Budget
Saudi
Arabia
UAE
Sum of Revised Budget
Exhibit 39: Projects awarded in 2011 (USD bn)
In the GCC, Qatar is well placed in terms of
meeting the rising demand in the near future.
The government is investing in the power
sector but in phases to ensure that the there is
no excess capacity. Qatar as well as the other
GCC nations faces the problem of high
consumption of electricity compared to the
global averages. One of the main factors
could be the subsidies provided by the
government of Qatar on the cost of power and
water in the country. Electricity and water is
free of cost to the nationals, which accounts
for around 13% of total population.
Qatar is among the top countries in GCC in
promoting Public Private Partnerships (PPPs)
in energy and utilities sector. The drive to
increase private-sector involvement in the
country stepped up in 2000, with the formation
of Qatar General Electricity and Water
Corporation (QEWC). In Qatar, the power
sector plants are owned and operated by
QEWC. The company is also responsible for
meeting the consumption needs of Qatar. The
power-generation segment of QEWC’s
business is privatized. However, it sells its
products through long-term power and water
purchase Agreements (PWPAs) to Kahramaa,
which is fully owned by the Qatari
government. Kahramaa is the Qatari utilities
97 97
100
USD bn
•
2012
2.1
Bahrain
0.4
2.7
Kuwait
1.9
Oman
0.5
Qatar
Saudi Arabia
10.8
UAE
•
Qatar is planning to privatize the transmission
and distribution segment, which would
increase the transparency and efficiency
within the sector. In the past 20 years, QEWC
has continued to expand its production
capacity through fully and jointly owned plants.
In 3Q 11, the company reached electricity
generation capacity of 5,578 MW and waterdesalination capacity of 265 million imperial
gallons per day (MIGD), representing more
than 60% and 70% of Qatar’s total power and
water production capacities, respectively.
48
Page | 48
•
•
•
expected to increase by 24% from current
levels to reach 325 MIGD by the end of 2012.
Exhibit 40: Value of investment in power sector
1.8
1.7
1.4
1.5
1.2
USD bn
In 2011, Qatar commissioned the USD 3.9 bn
Ras Girtas power plant, which is expected to
be one of the major power generation plants in
the country located in Ras Laffan Industrial
City. The plant is expected to produce 2,730
MW of electricity and 286,404 m3/d of
desalinated water. Qatar holds 60% of the
plant which is divided between QEWC (45%)
and Qatar Petroleum (15%) and rest 40% is
being held by Ras Qatar Energy Company. It
is a 25 year contract between Ras Qatar and
QEWC, according to which Ras Qatar will
supply its production to QEWC which in turn
will use it to supply to the local network or
externally in the context of the GCC Electricity
Link-up System.
0.9
0.6
0.4
0.2
0.3
0.0
The total planned investment in power sector
is around USD 9.0 bn. Total value of projects
awarded was USD 3.7 bn since 2008, out of
which USD 3.1 bn was awarded in 2008 and
2009. In 2011, three projects were awarded
with a total value of USD 422 mn. The value of
projects awarded accounted for around 6% of
the total value of projects awarded in Qatar.
There were a total of 19 projects awarded in
the power sector compared to 338 projects in
Qatar.
The total investment in the power sector
during 2010 and 2011 (so far) has remained
subdued especially as the major capacity is
expected to come online in 2011. Power
sector investments will continue to remain
subdued as Qatar is well placed in terms of
meeting the demand requirements. The
expected investment in power sector is around
USD 5 bn in the next decade. As a result, the
excess capacity is likely to sold to other
members of the GCC through Kahramaa,
especially Sharjah and Kuwait as they are
experiencing shortages. This process may be
facilitated by the completion of the GCC
Interconnection Power Grid. Qatar has already
completed the first phase of this project with
the remaining two phases set to conclude this
year.
In Qatar, more than 75% of the water
requirement is dependent on the supply of
desalinated water. The average per capita
consumption is estimated at 310 liters per
person per day. Construction activity
(preparation for World cup 2022) and the
agricultural sector accounted for more than
70% of water demand in Qatar. Qatar has
minimal groundwater reserves with an
average rainfall of about 75 millimeters a year.
Therefore, it is more than 99% reliant on
desalination to meet its domestic demand.
The desalination capacity in the region is
2008
2009
2010
2011
Exhibit 41: Investment in Qatar water sector
1.6
1.5
1.4
1.2
1.2
1.0
USD bn
•
2012
0.8
0.6
0.6
0.4
0.4
0.1
0.2
0.0
2007
2008
2009
2010
2011
•
The Kahramaa has invested in water storage
construction activity, undertaking a USD 2.75
bn reservoir project capable of holding seven
days' worth of fresh water as a backup for
desalinated water supply. The 1.9 bn gallon
facility will include a network of reservoirs
connected by a 183 km, 2.5 m-wide pipeline
linking the Ras Laffan desalination facility in
the country’s north and the Ras Abu Fonts
plant in the south. Treated wastewater
contribution to the water supply is expected to
rise from 0.05 bn cubic meters per year in
2011 to 0.065 bn cubic meters per year by
2015. Ensuring that more and more water in
the country is re-used, the government of
Qatar has formed a joint venture with
Singapore’s Darco Water Technologies to
build a USD 5 bn wastewater recycling plant
for serving the small towns and villages of
Qatar. The Public Works Authority (PWA) is
49
Page | 49
•
responsible for the waste water and drainage
projects in the country.
The total planned investment in water sector is
around USD 6.9 bn, which has been revised
upwards from USD 5.2 bn. Total value of
projects awarded was USD 3.8 bn since 2008.
In 2011, three projects were awarded with a
total value of USD 362 mn. The expected
investment in water sector is around USD 3 bn
in the next decade.
•
2012
Kahramaa has allocated USD 4.3 bn for two
main pilot projects. The first, a water
production technology independent of power
expected to be operational by 2012, will add
0.05 mn m3/d capacity to the system. The
second is for a reservoir with 8,000 meter
cube holding capacity to service the West Bay
and
Airport
area
in
Doha.
Timeline: Utilities Projects
QEWC / KAHRAMAA RasLaffan IWPP Expansion
Capacity: 235 mmgpd
2012
2013
Qatar Transmission Phase
VIII
IX
2014
2015
2016
KAHRAMAA - Facility D
IWPP
Capacity: 60 mmgpd
KAHRAMAA
Water
Security Mega Reservoirs
IX: Substation Package
Doha North Wastewater
Treatment Plant
Doha
and
Rayyan
Sewerage
50
Page | 50
2012
10. Building Materials
the construction will come from infrastructure
and real estate sector, where cement sector is
the direct beneficiary.
10.1 Cement
•
•
•
The two major cement producers in the region
are Saudi Arabia and UAE. The UAE
registered a CAGR growth of 16.6% from 11
mt in 2006 to 20.3 mt in 2010 (refer to Exhibit
43), which is the highest in the region. The
country’s strong growth in production was
driven by massive investment in construction
during 2003 to 2008. Since then the country
has witnessed the highest number of projects
on hold or cancelled due to the overall liquidity
crisis, which was led by the global recession.
Saudi Arabia is the largest producer of cement
in the GCC.
During 2006 and 2010, cement production
grew at a CAGR of 17.0% to 50.8 mt (refer to
Exhibit 43). This healthy growth in production
was on the back of massive public spending in
the construction sector, especially the real
estate sector.
•
Qatar’s contribution to GCC production has
increased from 4.9% in 2007 to 6.2% in 2010.
We believe that this is likely to increase further
as the companies gear to meet the rising
demand in the next five years. Qatar’s current
production capacity stands at 6.2 mt.
Exhibit 42: World Cement Production
3,500
3,000
2,610
2,810
2,850
3,300
3,040
3.0%
2.6%
2,500
MT
•
The cement industry has undergone
significant expansion during the last few years
on the back of massive investments in the
construction sector. The cement sector is the
biggest beneficiary of the construction
spending in general and real estate sector in
particular. The demand for cement in GCC
countries has given an entry option to new
players in the region. In 2005, the region
produced 48 mt of cement which further
increased to 85 mt in 2010.
2.6%
2.2%
2,000
2.2%
1,500
1,000
1.8%
1.8%
1.8%
1.9%
1.4%
500
1.0%
0
2006
2007
World Production
2008
2009
2010
GCC Production as % of World
Source: USGS
Exhibit 43: Cement production in the GCC
54.0
50.8
45.0
40.0
36.0
Qatar is the third largest cement market in the
GCC in terms of both consumption and
production capacity. Historically, the cement
production in Qatar was below the
consumption and the excess demand was
accommodated by importing from Saudi
Arabia. Qatar National Cement Company
(43% owned by Government of Qatar) was the
only cement company in Qatar up until 2010,
which enjoyed the monopoly in the market.
But since 2010, two new companies entered
the cement market due to capitalize on the
construction activity, namely Al Khalij and Al
Jaber Cement Industries.
The production of cement has increased over
the years as the companies gear up for the
ongoing construction activity. Currently, the
companies are planning to further expand
their production to prepare for the massive
investment in construction sector. Majority of
MT
•
27.0
20.3
16.0
18.0
9.0
0.8 1.0
2.0 2.5
4.2 5.3
4.0 5.1
Bahrain Kuwait Oman
2009
Saudi
Arabia
UAE
Qatar
2010
Source: USGS
•
Qatar National Cement Company (QNCC) is
the largest cement producer with a production
capacity of 4.4 mt and a market share of
around 70%. QNCC also announced that it is
going to increase it cement capacity by 0.93
mtpa to 5.36 mtpa in the coming years. Al
Khalij and Al Jaber have a market share of
24% and 5% respectively in the domestic
market.
51
Page | 51
•
The current production capacity of cement in
Qatar is enough to absorb the demand. Going
forward, we believe that cement consumption
will grow at a CAGR of around 12% from 2011
to 2015 (refer to Exhibit 45). In our view,
majority of the projects that are under
construction or planned will be completed by
the end of 2015.
Based on that assumption, we have
forecasted the cement consumption in Qatar.
We believe that the consumption will be at its
peak in the years 2013 and 2014. Qatari
cement companies are unlikely to match this
demand, which means that the excess
demand will be imported from Saudi Arabia
and UAE. The outlook on cement sector in
Qatar is positive on the massive investment in
the construction sector backed by strong
macroeconomic fundamentals.
Exhibit 44: Qatar Cement Production
6.4
5.6
4.8
4.0
MT
•
Cement prices have been volatile in the GCC,
especially in the UAE. However, the cement
price in Qatar has been cement as it is
controlled by the government. Going forward,
we do not expect any volatility in the cement
price and believe that it will continue to remain
stable at current levels.
3.2
6.2
5.3
2.4
1.6
3.5
4.2
2.5
0.8
0.0
2007
2008
2009
2010
Current
Source: USGS
Exhibit 45:
Forecast
Qatar
16.0
Cement
15.3
Consumption
14.2
12.2
12.0
MT
•
2012
8.0
5.5
5.5
2011
2012
4.0
0.0
2013
2014
2015
Source: Commercialbank Capital Research, ConstructionWeek
52
Page | 52
10.2 Steel
•
•
•
•
•
Exhibit 46: GCC Steel Production (‘000 MT)
The global steel industry has witnessed a
boom and bust in last few years. In last five
years, world steel production grew at a CAGR
of 2.1%, while the GCC grew by 9% in 2010.
The contribution of GCC to the world has
remained same for the last four years (refer to
Exhibit 46), indicating that the region’s
capacity expansion is line with global
standards.
1,500
In the GCC, there are 18 steel companies,
engaged in production of raw steel and
finished steel products. Steel consumption
throughout the GCC region has increased
significantly
underpinned
by
massive
investment in the construction sector.
0
Saudi Arabia is the largest market in not only
GCC but the MENA region. Saudi Arabia’s
Hadeed is the world’s 40th largest producer of
steel with a production of around 5.0 mt.GCC
countries will continue to remain a major
consumer of steel products, which constitute
60.0% of the estimated demand as these
countries continue to invest in its infrastructure
and petrochemical sector to sustain economic
growth.
In the GCC, Qatar is witnessing the fastest
growth in steel production during the last four
years. The steel production capacity in Qatar
grew at a CAGR of 15%, while it grew by 5.9%
in the GCC (UAE, Saudi Arabia and UAE as
shown in Exhibit 48). Qatar is increasing its
production capacity to meet the rising demand
underpinned by the planned investments in
the next decade.
Qatar Steel, which is a wholly owned
subsidiary of Industries Qatar (70% owned by
Government of Qatar), has emerged as one of
the biggest players in MENA region with an
annual production capacity of 2 mt per year. It
is the second largest steel producer in the
GCC, after Saudi Arabia Hadeed.
2012
1,247
1,417
1,347 1,329
1.0%
1,232
1,136
1,200
900
0.6%
600
0.4%
0.4%
0.5%
0.5%
0.5%
0.4%
0.5%
300
0.2%
0.0%
2006
2007
2008
2009
World
2010 Sep-11
GCC as % of World
Exhibit 47: GCC steel production (‘000 MT)
6,000
5,015
4,690
3,959
4,000
2,000
1,970
1,503
1,448
90
90
Qatar Steel plans to enter new markets such
as Egypt, Yemen and the Far East (Korea,
China, and Indonesia). The company has
decided to expand its steel making capacity by
1.1 mt per annum through a plant adjacent to
its existing plant in Mesaieed. The plant is
expected to start operations from first quarter
of 2013.
90
0
Qatar
2009
Saudi Arabia
2010
UAE
Sep-11
Source: World Steel Association
Exhibit 48: Steel Production in Qatar (‘000 MT)
1,970
2,000
1,600
1,200
1,406
1,448
1,147
27.8%
22.8%
800
35%
1,503
30%
27.1%
25%
23.2%
20%
19.5%
15%
400
10%
0
•
0.8%
2007
2008
Qatar
2009
2010
Sep-11
Qatar % of GCC
53
Page | 53
the biggest markets for aluminum products in
the region.
10.3 Aluminum
•
GCC aluminum sector has become a major
non-oil industry sector and contributor to the
economic growth. Currently, the GCC
produces 7% of the world’s global production
of aluminum (refer to Exhibit 50). The addition
of new smelters and expansions in the
pipeline, the region’s production could reach 9
mn metric tons or 13% of global supply by the
year 2020. Currently, the GCC building and
construction industry consumes up to 400,000
tons of aluminum annually, making it one of
2012
•
The total production of aluminum is likely to
increase by 8.4% annually till 2014, which will
take the total production to 4.2 mt. The
demand for aluminum products in the
construction sector is expected to increase at
a CAGR of 9%, which means that GCC will
continue to import to meet the excess demand
on the back of massive investment plans in
the construction sector.
Exhibit 49: GCC Aluminum smelters
Country
Company
Current Capacity (mt)
Future Capacity (mt)
Completion Year
Bahrain
Alba
0.87
1.4
2014
Qatar
Qatalum
0.58
1.2
-
Saudi Arabia
Maaden (Phase I)
-
0.7
2013
Saudi Arabia
Maaden (Phase II)
0.74
2.4
2016
UAE
Emal
0.75
1.5
2014
Source: Gulf Aluminum Council
•
•
•
Qatar accounts for around 15% of the total
production in the GCC. Qatar is expected to
grow at a CAGR of 12% between 2010 and
2014, faster in the GCC region. We remain
optimistic on Qatar Aluminum sector and
believe that it will continue to witness strong
demand on the back of massive investment
plans in Qatar as it prepares for the World Cup
2022.
Qatar Aluminum (Qatalum) is a 50-50 joint
venture between Qatar Petroleum and the
Norwegian company Hydro Aluminum. The
plant has a production capacity of 585,000 mt
per year. Qatalum’s complex facilities include
a carbon plant, port and storage facilities, as
well as a captive power plant. The company is
planning to increase the production capacity
and export to all countries as company does
not have a specific quota.
Dubai Aluminum Company Limited (DUBAL) is
one of the largest industrial companies in the
UAE, located in Jebel Ali. The company was
established by Investment Corporation of
Dubai in the year 1975. DUBAL is currently
ranked as the 7th largest global producer in
the industry with a current production capacity
of 980,000 tons per annum by the end of
2010.
Exhibit 50: Aluminum Production in GCC (‘000
MT)
45,000
36,000
27,000
33,864
40,752
38,044 39,584 36,856
6.9%
6.0%
5.1%
18,000
4.6%
8.0%
7.0%
6.0%
5.0%
4.0%
4.7%
3.0%
2.0%
9,000
1.0%
0.0%
0
2006
2007
World Production
2008
2009
2010
GCC % of WorldGCC
•
Emirate Aluminum (EMAL) is a 50-50 JV
between DUBAL and Mubadala Development
Company. EMAL is a green-field smelter
development at Al Taweelah, Abu Dhabi.
Commissioning of EMAL Phase 1 began in
December 2009 and was completed by
December 2010. The company’s current
production capacity is 750,000 tons per year.
The company has USD 4.5 bn expansion
plans, which will almost double its capacity to
1.3 mt per year.
54
Page | 54
2012
11. Methodology and Assumptions
Methodology
•
•
•
•
•
•
Step 1: Economic indicators was sourced from Qatar Statistics Authority and IMF (Forecast)
Step2: Initially, the list of projects ongoing and planned was compiled from various relevant
sources. We decided to take data from one source due to the inconsistency from various sources.
Step 3: Project data was further analyzed and categorized as follows:
o The data was re-classified based on the sectors that are being discussed and analyzed in
this report. The residential project data was also re-classified in to residential, commercial,
hotel and tourism based on description of each project under this category
o We have analyzed the start and end date for each project and calculated the remaining
days left on each project. The number of days was divided by 90 to arrive at the remaining
quarters left on each project
o The project value was appropriated based on project life. The allocation was done on per
quarter basis. For example, if a USD 200 mn project started in Q3-09 and is set for
completion in Q3-11, USD 25 mn is allocated per quarter. 2009 project value would be
USD 25 mn, 2010 USD 100 mn and allocation for 2011 will be USD 75 mn
Step 4: We have taken the existing projects in the above format. We have added future investments
to the existing projects based on the USD 225 bn announced by NDS.
Step 5: Based on this assumption, we have created three scenarios, which are Base, Worst and
Best case scenarios.
Step 6: In each scenario, we have assumed a % of GDP based two growth stages. The forecasted
GDP is taken from IMF until 2016, thereafter a 5% growth in GDP is assumed till 2020. The first
growth stage would be from 2013 to 2017, while the second growth stage would be 2018 to 2020
Total Construction size = planned/underway projects + planned by NDS + additional investments as
a % of GDP
Scenario Assumption
In order to arrive at the total market size, we have added the contributions from three approaches as
described above. This methodology was adopted to build three scenarios in our analysis to arrive at a
market size. In each scenario, the base of USD 225 bn remains the same while following assumptions are
made for each scenario:
•
•
•
Base case: The optimum Scenario
o No projects cancellation or on hold is assumed during the projection period
o We have assumed additional investments as a % of GDP in two growth stages. One is
between 2013 and 2017 and other is 2018 and 2020
Worse case: Slowdown to impact the overall projects planned
o We have assumed a 15% drop in planned investments by the government due to the
adverse effect of global slowdown
o No additional investments as a % of GDP
Best case: Optimistic based on new sporting events
o No projects cancellation or on hold is assumed during the projection period
o We have assumed additional investments as a % of GDP in two growth stages. One is
between 2013 and 2017 and other is 2018 and 2020
Data Limitations
•
•
Data discrepancies were witnessed for various projects. Therefore, we have taken the data from
what we perceived as the most reliable source, which has been referred as the source throughout
the report
Since GDP estimates by IMF were available till 2016, we have taken a conservative growth rate of
5% per year until 2020.
55
Page | 55
Pearl GTL
Commercialbank Capital | Construction Sector
Report
2012
88
Page | 88

Commercialbank Capital | Construction Sector Report

Transcription

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