Saudi Arabia, UAE lead in GCC planned projects valued at $2 trn
Saudi Arabia leads the region in terms of the value of projects in the pre-execution stage, with 38.91 percent of the total value
The pipeline of projects planned in the GCC as of May 2016 amounts to $2 trillion.
Delegates at the recently concluded MEED Construction Leadership Summit in Dubai were told at a briefing hosted by leading professional services firm Deloitte that Saudi Arabia leads the region in terms of the value of projects in the pre-execution stage, with 38.91 percent of the total value, followed by the UAE with 34.84 percent.
Qatar is next with an 8.57 percent share, then Kuwait with 8.22 percent. Oman follows with 6.48 percent with Bahrain having a 2.97 percent share of the market.
In order to maintain the momentum in the project pipeline and in the face of austerity concerns, Cynthia Corby, Partner, Middle East Infrastructure and Capital Projects Leader, Deloitte, said “it will be necessary to innovate, perhaps with a drive toward privately- financed solutions.”
Besides the oil price slump, the future growth of the projects sector will depend on several factors, including the speed of enacting legislation, restructuring, prioritization of project plans, and the ability to obtain funding, according to Ed James, Director of Content and Analysis, MEED Projects. “But more importantly, governments’ commitment to maintain spending in the face of falling revenues to keep the economy moving will be a key factor in driving the industry forward through the challenging times,” he noted.
Experts forecast huge project investment will still be made between now and the end of this decade. Growing economies across the Gulf region will require improved infrastructure for cities to function and expand as planned, but innovative financing models need to be explored as funding gaps arise because of government budget deficits.
“Significant opportunities still exist and public-private partnerships are high on the agenda as a way to leverage private funding,” said Chris Palfreyman, Director, Infrastructure Owner/Operator, Bentley Systems.
The MEED Construction Leadership Summit is the annual meeting place for the GCC’s construction leaders to discuss the challenges threatening the performance of the industry. It is supported by Six Construct (Gold Sponsor); Mashreq, Parsons, Deloitte, Sara, Bentley (Silver Sponsors); and Al Bawani (Bronze Sponsor).
This article first appeared in the Saudi Gazette on May 29, 2016.