Business | Construction
Qatar to gain from construction boom
Qatar's economy is undergoing considerable growth on the back of substantial activity in the construction sector.
- By Jasim Ali, Special to Gulf News
- Published: 00:00 December 4, 2004
Qatar's economy is undergoing considerable growth on the back of substantial activity in the construction sector.
Undoubtedly, an ambitious spending programme in both the public and the private sectors over the next five years would transform the economy.
The largest spending is in the energy sector. The state-owned Qatar Petroleum plans to invest $24 billion (Dh88.15 billion) for developing oil, gas and petrochemical projects.
The gas industry leads the sector through the production and export of liquefied natural gas (LNG).
State-owned Qatar Liquefied Gas Co and Ras Laffan Qatar Liquefied Gas Co are the two companies producing and exporting LNG. Minister of Energy and Industry, Abdullah Bin Hamad Al Attiyah, has said that output could reach as high as 77 million tonnes a year by 2010. This could make Qatar the largest exporter of LNG, replacing Indonesia.
The Ministry of Municipal Affairs and Agriculture plans to invest $3.5 billion (Dh12.85 billion) primarily in a road network, besides a series of cultural projects, hospital and schools, and a drainage system.
Sports complex
The government has also set aside more than $2 billion (Dh7.34 billion) for constructing more than 20 projects for the 15th Asian Games in December 2006.
They include equestrian, hockey, basketball and handball stadiums plus swimming pools and facilities for martial arts, gymnastics and weightlifting and badminton and a 36-lane bowling alley.
The largest single investment will elevate the Khalifa stadium to Olympic standards by increasing the seating capacity to 50,000. The event is expected to draw 10,000 athletes from 45 nations, competing in 40 sports.
Additionally, a substantial investment will go into expanding Doha International Airport. In January, Bechtel of the United States was awarded a $2.5 billion (Dh9.18 billion) contract to build the first phase of the project.
Private sector companies and investors are helping in the extraordinary development in Qatar. For instance, privately-owned United Development Co (UDC) is promoting the ambitious Pearl of the Gulf project, which is expected to cost $2.5 billion.
Island
Being developed at Doha's West Bay district, the island will be 350 metres off the coast. The project includes three hotels and four marinas besides 7,600 homes. Also, it allows non-GCC expatriates the right to own freehold property, a novelty in Qatar.
UDC is Qatar's largest private company whose shareholders include the royal family and investors from other GCC states.
By one account, some 150 towers with at least 15 floors are expected to light up the Doha skyline along the shore as early as 2007. Among them will be office buildings and hotels.
For example, Four Seasons is close to opening its $130 million (Dh477.49 million) West Bay Complex, which consists of an 18-storey hotel, a 28-storey office tower and two 22-storey apartment blocks.
The construction sector, which accounts for 7.5 per cent of Qatar's gross domestic product, will contribute more to the economy. The sector grew by about 3.5 per cent in 2003.
Not surprisingly, both Qatar National Cement Co and Qatar Steel Co are busy adding capacity to meet growing demand of construction materials.
Adjusted for inflation of about 3 per cent, the economy is projected to expand 7 per cent in 2004. Qatar's relatively high inflation rate reflects rising prices of construction materials.
Anyway, the booming economy will give Qataris a per capita income of $33,000 (Dh121,209) by end of 2004, making it one of the richest countries.
Jasim Ali is an assistant professor at University of Bahrain's College of Business Administration.
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