Infrastructure Opportunities in MENA and the Domino Effect of Dubai Expo 2020
Rapid infrastructure development across the GCC is being powered by mind-bending sums of investment, and has only been amplified further by Qatar’s hosting of the 2022 FIFA World Cup and last month’s confirmation of Dubai’s winning Expo 2020 bid.
GCC governments are currently committed to USD $804billion of ongoing infrastructure projects in the region (Zawya). These infrastructure projects form part of a much wider GCC construction drive over the next decade, estimated at USD $4trillion, as governments seek to diversify their economies into non-oil sectors and cater to some of the fastest growing populations in the world.
Qatar’s 2022 FIFA World Cup™ and Dubai’s Expo 2020 involve monumental construction efforts, and are set to have a domino effect on those countries’ tourism, banking, trade, IT, logistics and other related sectors in the lead up to, and beyond, both events.
Dubai will require infrastructure investment of USD $43billion (government and private sector) to host Expo 2020, according to Deutsche Bank. Qatar’s infrastructure spend ahead of the 2022 FIFA World Cup™ is expected to reach USD $150billion, with 40% of Qatar’s government budget allocated to infrastructure projects between 2011 and 2016.
In this blog post we’ll look at the largest infrastructure projects underway in the GCC, and also how Expo 2020 is expected to fast track infrastructure development in Dubai and its wider impact on the UAE economy.
The scope of all this activity has created tremendous opportunities for businesses operating across all segments of the construction industry. Arabian Gateway is an event designed to assist construction companies expand successfully into MENA. Industry experts will explore insight and challenges within the sector; market analysts will facilitate workshops to help you build strategies specific to your company to tap into these opportunities; and you will be networking with 700 senior business delegates from across the globe. Book today for your 10% early bird discount.
A Snapshot of Infrastructure Projects in GCC
(Zawya’s GCC Project Report 2013)
Saudi Arabia: The Ninth Development Plan commits spending of USD $284billion to develop infrastructure over 2010–14. Projects include expansion of King Abdul Aziz International Airport, development of a high-speed rail track connecting Mecca with Medina, housing projects, and addition of a 3,900km railway network with development of three major railway projects.
UAE: The estimated total value of projects planned or underway in the UAE is USD $549billion. Each of the seven emirates has separate infrastructure development plans. Abu Dhabi will spend USD $200billion over 2008–13 as part of its Abu Dhabi Vision 2030. Major projects include USD $58billion for roads and bridges.
Qatar: Qatar’s spend is estimated to be USD $225billion, as part of its infrastructure development drive ahead of the 2022 FIFA World Cup™, and in accordance with Qatar Vision 2030 pipeline for 2011–16. Major projects include USD $20billion investment for road development, USD $ 25billion investment in rail, USD $15.5billion to build a new airport, USD$ 4billion investment to build stadiums, USD $8billion to construct a deepwater seaport and USD $ 1billion transport corridor project in Doha.
Kuwait: Kuwait plans to invest around USD$ 110billion in line with its Kuwait Vision 2030 pipeline for 2010–14. Major construction projects include Kuwait City’s USD $ 7billion metro project, USD $ 3billion Kuwait International Airport terminal project, USD $6.2billion for construction of motorways, USD $ 1.8billion water and power project, and a USD $14.5billion refinery that would be the largest in the Middle East.
Oman: Oman has planned investments of around USD $ 78billion over 2010–15. Major projects include USD $ 4.4billion for new road constructions, and a new port.
Bahrain: The estimated value of projects planned or underway is USD $62billion. Major projects include USD $4.8billion for Bahrain International Airport expansion, USD $4.2billion for a 40km Bahrain-Qatar Friendship Bridge, and USD $3.2billion for housing development.
Dubai Expo 2020 – 25million Visitors Driving Infrastructure Demand
Dubai’s hosting of Expo 2020, which ranks third in global importance in terms of economic and cultural impact behind the Olympics and FIFA World Cup™, means a substantial boost for construction in order to build necessary infrastructure to successfully deliver the event.
- Barclays report Dubai’s economy may grow 6.4 percent on average over the next three years and potentially 10.5 percent annually through to 2020.
- It is anticipated that Expo 2020 could boost the emirate’s GDP by USD23 billion, or 24.4%, over 2015–21 (Bank of America Merrill Lynch).
- Ripples of growth will be experienced throughout the wider Dubai economy, particularly in the tourism, hospitality, transportation, logistics and retail sectors.
Deutsche Bank forecasts 25 million tourists and visitors to Dubai in 2020, up from 10m in 2012. Infrastructure requirements will be significant, and their analysis shows a total of USD $43billion (government and private) will need to be spent on the following:
Airport Expansion USD $7.8bn
Construction of hotel rooms and hotel apartments USD $24bn
Creation of additional retail space USD $9bn
Metro expansion plan USD $1.38bn
Jebel Ali Port – T3 Terminal USD $1bn
Total infrastructure spend USD $43bn
Tourist arrivals, underpinned by domestic population growth, will be the key driver behind construction of USD $33billion of new developments in Dubai’s hotel and retail space.
Oxford Economics expects around 277,000 new jobs to be created as a direct result of Expo 2020. Job creation will be robust across most of the sectors, particularly hospitality, construction, transportation, logistics, retail, and services.
Arabian Gateway is a comprehensive seven-day program, with delegates attending the first two days in the city closest to their current business premises (London, New York, Sao Paolo, Singapore, Sydney or Johannesburg). The final five days take place in Dubai, at the JW Marriot Marquis, from 25th-29th May 2014 (Flights and accommodation included). Book your place now, and enjoy a 10% early bird discount.