When Fifa President Sepp Blatter enthusiastically declared, “We go to new lands,” on December 2, 2010, Qatar made history by becoming the first country in the Middle East to get to host a Fifa World Cup tournament.
Given that the tiny desert nation is one of the world’s fastest-growing economies, with its vast gas and oil reserves, and boasts the highest GDP per capita in the world, according to the International Monetary Fund (IMF), the Qatar Supreme Committee’s tagline, Expect Amazing, is an apt sentiment.
The country has outlined a plan, based on which about 87 per cent of its current GDP will be spent on infrastructure projects, largely in the transportation, tourism, health, education and housing sectors.
Amidst criticism about lack of infrastructure, the heat and the cultural taboos, Qatar is determined to put on a show like no other.
Oblivious to the naysayers, Qatar is powering on full steam ahead to set the stage for one of the biggest sporting events in the world. “The country has outlined a plan, based on which about 87 per cent of its current GDP will be spent on infrastructure projects, largely in the transportation, tourism, health, education and housing sectors,” Dr Mahir Nayfeh, Vice-President of consulting firm Booz Allen Hamilton Middle East and North Africa, tells GN Focus in an email.
In an endeavour to fulfil its claim to amaze the world, Qatar will invest about $100 billion (Dh367 billion) in infrastructure projects by 2016, the IMF estimates. This is an impressive figure but not impossible, considering that over the past decade the country’s GDP growth has averaged 14 per cent per annum, driven mainly by the hydrocarbon sector and government spending. The oil and gas sector accounted for 57 per cent of the country’s GDP last year.
However, non-hydrocarbon sectors have become increasingly dynamic over the past two years, posting double-digit growth.
“Winning the Fifa World Cup 2022 [bid] helped further expedite the completion of infrastructure projects, thereby accelerating the diversification agenda of Qatar’s economy,” says Firas Qoussous, Office Managing Partner of service firm Ernst & Young Doha, in an emailed comment.
Already on the fast track to becoming one of the most modernised Arab states, the Fifa victory has transformed the growth trajectory of Qatar’s economy. Some of the sectors that are set to grow exponentially because of this new impetus include construction, transportation and energy. According to a construction report by Commercial Bank of Qatar (CBQ), the transportation sector is the biggest beneficiary of the massive investment by the government, as it plays a vital role in infrastructural development.
The report also cites a study by Oxford Economics and Global Construction Perspectives which states the Qatari construction market is expected to grow by an average of 12.5 per cent per year over the next decade, compared with growth in European countries averaging 1.7 per cent to 2020.
Some of the key projects include Doha Cultural Village, with an estimated project value of $82 million; the $1.7-billion Doha Festival City; Education City, worth $6.6 billion; New Doha International Airport (Phase 2), estimated to cost $11.1 billion; the $7-billion New Doha Port (Phase I); $5-billion Pearl Qatar; and the Qatar National Railway, with an estimated project value of $35 billion.
But no matter how posh the roads, airports and ports, there cannot be a World Cup without state-of-the-art stadiums. And though the country has come under flak for its team having never qualified for a World Cup, the fact remains that Qatar has hosted high-profile sporting activities in the recent past. Last year it hosted the Asian Football Confederation Cup for the second time and in 2006 it played host to the Asian Games.
Gearing up for the big event will see the nation constructing about a dozen stadiums that include the Lusail Iconic Stadium, pegged at $662 million, with a capacity of more than 85,000. The opening, closing and semi-final matches will be played here.
“The vast majority of infrastructural development required to host the Fifa World Cup was already earmarked in the national planning, such as the metro network, road infrastructure and increasing accommodation,” says Nasser Al Khater, Director of Communications and Marketing, Qatar 2022 Supreme Committee. “Our estimate during the bid for infrastructure related to stadiums was between $4 billion and $5 billion.”
Looking beyond the World Cup, Al Khater asserts that the stadiums and their precincts are intended to serve local communities for years to come and will include leisure facilities, office spaces and possibly schools and other community services.
An integral part of the hosting concept is the plan to downsize nine of the 12 stadiums after the tournament. This plan will be carried out by building them with modular components. After 2022, a total of 170,000 seats will be extracted from the stadiums and shared with countries in need of sporting infrastructure, in collaboration with Fifa and the relevant confederations. “This creates a legacy for international football development and also ensures that Qatar is left with fit-for-purpose stadiums and avoids the white elephant phenomenon,” adds Al Khater.
With Qatar slated to host a carbon-neutral World Cup in 2022, energy is a big concern. RasGas is currently undertaking one of Qatar’s most innovative engineering projects ever, the Barzan Gas Project. “With the first train expected to come online in 2014, a large portion of the Barzan sales gas will provide clean natural gas to the electricity and water sector to support major infrastructure projects in the run-up to the Fifa World Cup 2022,” says Hamad Rashid Al Mohannadi, Managing Director, RasGas.
“This includes the construction of a new sea port, a national rail network and the new Doha International Airport.”
Having laid down the blueprint that will fuel the massive infrastructural undertakings, the country is systematically checking all the boxes on its Fifa wish list. And as for the issue of connectivity that was raised with the World Cup being held for the first time in the Middle East, Qatar Airways and the New Doha International Airport are already poised to be the imposing gateway into the country.
“The rapid expansion of Qatar Airways puts us in a prime position to support the 2022 Fifa World Cup in multifaceted ways,” Akbar Al Baker, Chief Executive Officer, Qatar Airways, tells GN Focus via email. “Our ever-growing operational routes allow us to operate a hub-and-spoke network, making the country’s capital easily accessible to more than 120 key international business and leisure destinations.
“More strategic routes will be launched prior to 2022,” he says.
The redevelopment of its future aviation hub, the New Doha International Airport, will dramatically increase Doha’s airport passenger capacity.
“By the time 2022 is upon us, the 2,200-hectare airport site will be fully operational and have the capacity to process more than 50 million people a year. This will do wonders for the nation in terms of catering to the increased volume of visitors expected in 2022, which is critical to the success and popularity of the games, as well as filling our stadiums,” adds Al Baker.
With these staggering visitor numbers, it is natural that the hospitality industry has braced itself for what promises to be the biggest boom Qatar has seen in this sector. According to the CBQ report, the total worth of planned projects and those under way in the sector is $2.4 billion, while only $1.6 billion worth of projects have been awarded.
There are currently 10,000 hotel rooms and an additional 5,500 should be ready by year end. By the end of 2013, the total hotel rooms is expected to reach 30,000. Around 90,000 new rooms should be ready for the World Cup, despite Fifa only requiring an additional 65,000 rooms.
“We view the hospitality industry in Qatar as part of the country’s infrastructure, essential for supporting the country’s development,” says Hamad Abdullah Al Mulla, Chief Executive Officer, Katara Hospitality.
“While we are currently focused on expanding our portfolio internationally, we will definitely bring a significant contribution to the development of the domestic tourism industry.”
Katara recently launched a new project in the Marina District of Lusail city, planning to erect an iconic hospitality complex that is intimately related to the country. With an architectural design inspired by the seal of Qatar, the Iconic Towers in the Marina District are set to become the country’s hospitality landmark.
There is no denying the sense of urgency that hosting the World Cup has added to a country that can’t wait to showcase itself to the world. But looking at the long term, the biggest benefit from this power rush is the fact that the economic growth ties in with Qatar’s National Vision 2030. “Qatar seeks to capitalise on its large natural gas reserves and create a diverse economy through the expansion of industries and services that have competitive advantages,” says Dr Nayfeh.
This vast spending programme in the run-up to the World Cup will help the nation achieve its vision.
Qatar will invest about $100 billion in infrastructure projects by 2016.