Research and Markets: Qatar Infrastructure Report Q3 2010 - Qatar's Construction Industry Contracted In 2009, With Industry Value Falling To QAR25.78bn (US$7.08bn)

DUBLIN--(BUSINESS WIRE)--Research and Markets(http://www.researchandmarkets.com/research/39ea2c/qatar_infrastructu) has announced the addition of the "Qatar Infrastructure Report Q3 2010" report to their offering.

Qatar Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Qatar's infrastructure industry.

Qatar has long been one of BMI's top markets in the Middle East, a view underlined by the level of activity in the market, and the governments commitment to infrastructure and the focus of regional construction companies on the sector. However, with the release of new data, and the revision of historical data, Qatar's fortunes over recent years appear to be a very mixed bag.

The newly revised data shows that Qatar's construction industry grew at an exceptional rate between 2006 and 2008. However, despite the historic high growth trend, Qatar's construction industry contracted in 2009, with industry value falling to QAR25.78bn (US$7.08bn), a real contraction of 21.78%.

Despite these figures, BMI is still optimistic that Qatar will outperform other countries in the region in the short term, the low base effects from 2009 will drive high growth in 2010 (forecast at 17% y-o-y). Over the next five years, growth is expected to average 9.9% between 2010 and 2014. Our optimism is grounded on a number of factors:

Government investment plans: 36.9% of 2010/2011 fiscal budget (QAR43.5bn/US$11.9bn) has been allocated for major capital projects, with infrastructure set to account for the majority of this QAR35.5bn (US$9.7bn). The country's comfortable fiscal position will enable it to continue to allocate large sums to the infrastructure sector;
Large infrastructure projects are under way and upcoming: US$9bn New Doha International Airport, US$7bn New Doha Port project, US$13bn Qatar-Bahrain Causeway, US$17bn development of a national rail network and a handful of power and water plants, including the US$3.9bn Ras Laffan C the largest power and water plant in the region;
Attitude of construction industry players to the market: Saudi Binladin Group set up a joint venture (JV) with Qatari Diar Real Estate Investment Company in March 2010, to target Qatari construction projects, the UAEs Al Habtoor Leighton and Drake & Scull International have been eyeing up the sector; and,
Strong Project Finance and Infrastructure Business Environment Ratings means the country will continue to attract private investors to its infrastructure sector. Qatar scores in the 60s for both, indicating an attractive and safe project finance environment and a stable business environment with numerous opportunities.

Government support for infrastructure projects is probably the biggest fundamental driver of growth in the sector. The government is in a comfortable position to afford capital investment outlays allocated in the budget. In April 2010, the government of Qatar announced its budget for the 2010/2011 fiscal year (April 1 to March 31). Capital projects will eat up 40% of the budget equal to QAR43.5bn (US$11.9bn), with infrastructure accounting for the vast majority of that with QAR35.5bn (US$9.7bn) allocated.

This support illustrates that the government is committed to infrastructure projects. This in turn presents optimism for a number of large flagship infrastructure projects currently planned to eventuate over the medium term. Qatar is investing heavily in transport infrastructure, with a US$22bn national rail network planned, a new port and airport and the longest marine suspension bridge, which will link to Bahrain. In the energy and utilities sector, investments are ongoing into the power and water capacity build up.

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