FT: Construction groups race for Doha contracts

British construction companies are scrambling to win lucrative contracts in Qatar as the gulf state gears up for the 2022 Fifa World Cup with an estimated $275bn worth of spending.

With Doha planning to invest up to $149bn on infrastructure and a further $126bn on housing, bidding for contracts to build schools, hospitals, shopping centres and rail networks has already started.

Hyder Consulting, the engineer behind the Sydney Harbour Bridge, has already scored its largest project win ever – an £80m contract to design roads and drainage in the north of the capital, while Atkins has won a £65m deal to the same in the west of the city. Two more contracts for the south and east of Doha have yet to be let.

Other British companies including Balfour Beatty and Mace are also bidding for work in Qatar, one of the fastest-growing construction markets in the world.

With the US and UK markets stagnant and growth in China slowing, competition for Qatari contracts is intense with construction companies worldwide racing to secure a share of the action.

Plans for a new $20bn Doha Metro have already attracted more than 60 expressions of interest from international consortiums competing for a $7bn first phase of the contract to build tunnels, stations and other infrastructure.

More than 10 of the bidding consortiums are thought to be Chinese, as Asian companies increasingly look towards international markets amid a slowdown in the commercial residential property market in China.

The China Harbour Engineering Company has won an estimated $880m contract to design the first phase of the new Doha deepwater port. It is rumoured that CHEC bid up to 20 per cent lower than other international consortiums competing for the project.

While many construction companies were hurt by the collapse of the Dubai property market in 2008, Qatar is seen as a safer bet given the strength of the nation’s oil and gas markets.

Graham Robinson, consultant at Pinsent Masons, the law firm, said British construction companies could have an advantage given their experience in building the London Olympics venues.

“To be successful, the Qatari government should follow the approach used in 2012, which was very collaborative.”

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 per cent a year over the next decade, compared with growth in European countries averaging just 1.7 per cent to 2020.

http://www.ft.com/cms/s/0/c85f5172-23ef-11e1-bbe6-00144feabdc0.html#axzz1gIMdiDbo

Article by Links Group on Dec 12th 2011
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