GCC CONSTRUCTION

REPORT 2019-2020
 GCC CONSTRUCTION REPORT 2019-2020

About the Report

This ProTenders report covers an overview of the GCC
Construction market based on market data available as of
October 1, 2019. Large scale project developments can
have a significant influence on the numbers and values
presented in this report and for real time data, it is best to
reference ProTenders’ construction intelligence platform
at www.protenders.com. All project-related data has been
gathered directly from ProTenders’ construction intelligence
solution, unless indicated otherwise.

For the purposes of this report, active projects include in

planning, design, tender and under construction statuses
unless indicated otherwise. Urban buildings construction
includes agricultural, commercial, corporate, educational,
cultural, governmental, healthcare, hospitality, industrial,
laboratory, pharma, religious, research, recreational,
residential and retail sectors. Infrastructure construction
includes aviation, transport, energy and infrastructure sectors.

Oil & gas construction includes the oil and gas sector only.
The values of master and child projects are not double
counted in this report.

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Introduction
The Gulf Cooperation Council (GCC) economies witnessed
a period of economic growth following the global financial
crises of 2008 up until 2014. In 2014, the world and
the GCC states faced a new economic reality of low oil
prices. However, countries like Saudi Arabia and the UAE
had greater resilience on the short terms due to greater
economic diversification, fiscal policies and financial
reserves that cushioned the impact on the short term.
However, as the oil prices continued to fluctuate at the
US$40 to US$ 60 price range and with the break-even
point, oil prices for several GCC states will be higher than
this price range. Most GCC states were faced with slow and
even negative real Gross Domestic Product (GDP) growth in
2017. Although, all GCC states recorded a positive real GDP
growth in 2018, albeit it was lower than 2%.
GDP GROWTH RATE (%)
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
2014 2015
According to the International Monetary Fund (IMF), the
GCC region is expected to record a 0.7% real GDP growth
in 2019. The IMF forecast of the UAE economy remain
positive as it forecast it to grow at 1.6% in 2019 and 2.5%
for 2020 on the back of higher oil prices. The IMF expects
Saudi Arabia’s economy to grow at 0.2% in 2019 and
forecast a growth of 2.2% in 2020.
With a slower than expected economic growth the GCC
governments were forced to rethink how to fund their
projects as they continue to invest and spend on social
infrastructure and infrastructure projects. Based on the past,
current and future economic activity in the GCC, decision
makers in the construction sector have greater need for
analysis and understanding of the construction activity. In
this report, we will examine what has happened and what
the future looks like for the construction sector in the GCC.
2016 2017 2018
WEST TEXAS INTERMEDIATE (WTI) CRUDE
SPOT OIL PRICE, US$ PER BARREL
120
100
80
60
40
20
0
Jan 2014
Jan 2015
Jan 2016
Jan 2017
Jan 2018
Source: World Bank October 2019 database.
 GCC CONSTRUCTION REPORT 2019-2020

The GCC construction market has seen GCC CONTRACT AWARDS (%)
continued YoY growth since 2016. We expect GCC Contract Awards (US$ Bn) YoY Growth (%)
that 2019 will also experience the same trend,
although at a lower rate. This growth is proof
that the construction market in the GCC as a
whole has been resilient to all the economic
pressures such as lower oil prices, geo-political
implications and funding challenges.

The sentiment in the market is that there is

capital to invest, however, these days investors
and developers are more risk averse towards
their investments. Additionally, developers, both
public and private sector, are putting greater
emphasis on market fundamentals of supply
and demand. In recent years, governments took GCC CONTRACT AWARDS BREAKDOWN BY SECTOR (%)
initiatives to further develop infrastructure Urban Buildings Oil & Gas Infrastructure
projects to stimulate the economy.

Noteworthy infrastructure projects such as Al

Abdaliyah Integrated Solar Combined Cycle
Power Plant ($700M), Al Layyah Combined
Cycle Power Plant ($755M), King Salman
International Complex for Maritime Industries &
Services ($1.3Bn) were awarded in 2018 while
projects such as Al Qunfudhah Airport ($1Bn), Al
Taweelah Seawater Desalination Plant ($1.2Bn),
Al Shuaiba South Power Station ($1.8Bn),
North Field Expansion Offshore ($2.4Bn), Ibri II
Solar Independent Power Plant ($550M) were
awarded in 2019.

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GCC CONTRACT AWARDS BREAKDOWN BY COUNTRY (%)
Bahrain Kuwait Oman Qatar Saudi Arabia UAE

The United Arab Emirates and Saudi Arabia continue to be the

biggest construction markets in the GCC accounting for more than
60% of total projects while Bahrain and Kuwait continue to be the
smallest markets in the GCC.

QUARTERLY GCC CONTRACT AWARDS (US$ BN)

Specifically, Q4 of 2018 and Q1 of 2019 recorded the In Q1 of 2019, Medinat Alwurud City ($2Bn), Jubail 2
highest value of projects awarded since Q1 2016. In Q4 Export Refinery Petrochemical Complex ($9Bn), Shuqaiq 3
2018, the awarding of Khalifa Port Container Terminal 2 Independent Water Plant ($605M) projects in Saudi Arabia
($1.1Bn), Hamriyah Integrated Power Plant ($2Bn), Saudi were awarded.
Landbridge ($10.7Bn) projects in the infrastructure sector
and Address Harbour Point Hotel & Residences ($320M), Al
Asfar Residential Complex - Phase 1 ($2.7Bn), Dream Doha
Hotel ($305M) projects in the urban sector were some of
the major projects awarded in this period.
 GCC CONSTRUCTION REPORT 2019-2020

QUARTERLY GCC CONTRACT AWARDS BREAKDOWN BY SECTOR (US$ BN)

Urban Buildings Oil & Gas Infrastructure

QUARTERLY GCC CONTRACT AWARDS BREAKDOWN BY COUNTRY (US$ BN)

Bahrain Kuwait Oman Qatar Saudi Arabia UAE

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COUNTRY BREAKDOWN

United
Arab
Emirates
Despite a slow real GDP growth from 2016 to 2018,
contract awards witnessed a double-digit growth over the
same period. In 2017, Dubai’s real estate and construction
market accounted for 6.8%, according to Dubai Economic
Department. The challenging construction market driven by
a continued financial pressure due to prolonged payment
by the private and public sector did not have a negative
impact in terms of developer awarding projects in the UAE.
Contractors had to adjust to the new financial cycle and the
government policies to ensure subcontractors payments
were not delayed after receiving payment from the private
sector which is supported by the government.

According to our data, on average, an estimated $19Bn

worth of contracts were awarded from the first quarter
of 2018 to the third quarter of 2019. Assuming the same
quarterly trend applies to Q4 of 2019, the total value of
contracts to be awarded is forecast to be $80Bn. This
quarterly analysis will result in different patterns when
examining each of the three sectors: urban, infrastructure,
and oil & gas.
 GCC CONSTRUCTION REPORT 2019-2020

UAE CONTRACT AWARDS

UAE Contract Awards (US$ Bn) YoY Growth (%)

UAE CONTRACT AWARDS QOQ (%)

UAE QUARTERLY CONTRACT AWARDS (US$ BN)

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The urban sector continues to be the leading UAE Contract Awards By Sector (US$ Bn)
sector driven by residential, commercial, Urban Buildings Oil & Gas Infrastructure
hospitality and social infrastructure projects.
According to our data, 64% of all contracts
awarded since 2016 have been in the urban
sector. Infrastructure projects constituted almost
23% of contract awards over the same time
period, while oil & gas comprised the rest. Q1
and Q4 of 2017 witnessed the highest growth
rate in terms of oil & gas contract awards,
followed by Q2 in 2019.

According to our data, 2019 has so far seen an

average of $12Bn of new urban sector contracts
awarded every quarter for the first three
quarters. However, as a whole, we expect that UAE Current State & Forecast (US$ Bn) as of Oct 2019
the urban sector contracts awarded in 2019 will
register a small, if not negative YoY growth in
2019 from 2018.

As per industry sources, 56,701 new hotel rooms

are to be added in the UAE by 2020. Hotels
such as Address Sky View, Paramount Hotel
Dubai, ISuites Development, Yas Bay Hilton Abu
Dhabi Yas Island Resort, The Address Residences
Jumeirah Resort & Spa, and Andaz Dubai The Palm
are some of the new hotels due to open.

As of October 2019, $414Bn worth of projects are in early stages and

another $453Bn worth of projects are under construction in the UAE. In
total, the value of the UAE construction market is $1.2Tn, however, given
almost 30% of the projects are on-hold, the real value of the market in our
opinion is $867.3Bn.

UAE Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix UAE Contract Awards Forecast (US$ Bn)

Project Value Contract Value

The UAE’s leadership and vision has resulted

in significant drive towards economic
diversification and innovation. UAE strategy
2021 focuses on a knowledge economy, world
class healthcare and first-rate education system.
As such the UAE will continue to invest through
public and private investment in healthcare and
education as well as a sustainable infrastructure
over the near future.

According to current available data, there are

$385.8Bn worth of projects forecasted to be UAE Buildings Contract Awards Forecast (US$ Bn)
awarded in the UAE. Although $252.9Bn of Project Value Contract Value
these projects are announced to be awarded in
2020, we highly believe that the contractors’
capacity, funding and real estate cyclical planning
will result in only a maximum of $89Bn worth
of contracts to be awarded in 2020 with the
balance moving forward.

Our forecast model considered a 5-year

cyclicality, as such some of the balance projects
will either be awarded in later years or be put
on-hold. Hospitality and infrastructure projects
led by the UAE governments will not be delayed
beyond the announced date as these are key
UAE Infra Contract Awards Forecast (US$ Bn)
Project Value Contract Value
economic projects.

As such we forecast an average of $34Bn of

infrastructure contracts to be awarded between
2020 and 2022. Over the same period, we
forecast a yearly average of $45B of urban
sector contracts. The decision of ADNOC Group
in 2017 to open up to foreign investors will
continue to result in more oil & gas projects
being awarded over the forecast period, with
an estimated $48Bn of contracts to be awarded
between 2020 and 2022.
UAE Oil & Gas Contract Awards Forecast (US$ Bn)
Dubai Government has approved a budget Project Value Contract Value
for 2019 foreseeing expenditure of $15Bn, a
marginal increase on last year, with infrastructure
investment for the upcoming Expo 2020 again a
focus for the emirate.

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COUNTRY BREAKDOWN

Saudi
Arabia
Driven by the Crown Prince Mohammad bin Salman bin
Abdulaziz Al Saud, Saudi Arabia’s economy is going through
a massive shift from being highly dependent on oil revenues
to a more increased diversification and investments in
non-oil sectors. This strategy is further detailed out in
Vision 2030, which was announced in April 2016 where
economic diversification and Small and Medium enterprises
(SME’s) are considered core objectives of the vision.
The government first focused on economic policies that
positions the economy to drive this vision. Saudi Arabia
will continue to seek private sector investment in public
projects through Public Partnership Projects (PPP).

Due to economic slowdown in 2017, the Saudi construction

market witnessed a period of decline year on year from
2016. This is further reflected with a declining QoQ in
2017. However, since 2018, the Saudi construction sector
witnessed a period of high growth with major projects such
as Riyadh Metro Operations & Maintenance - Lines 3, 4,
5 & 6 ($2.9Bn), National Guard Housing & Infrastructure
Development - Phase 1 ($1.35Bn) and Al Asfar Residential
Complex - Phase 1 ($2.7Bn) being awarded in 2018. 2019
has already witnessed the awarding of projects such as
SoftBank Sudair Solar Photovoltaic Plants ($3Bn), Jubail 2
Export Refinery Petrochemical Complex ($9Bn), Medinat
Alwurud City ($2Bn) and The Avenues Riyadh - Phase 1
($2Bn).
 GCC CONSTRUCTION REPORT 2019-2020

SAUDI ARABIA CONTRACT AWARDS

Saudi Arabia Contract Awards (US$ Bn) YoY Growth (%)

SAUDI ARABIA CONTRACT AWARDS QOQ (%)

SAUDI ARABIA QUARTERLY CONTRACT AWARDS (US$ BN)

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In addition, the PIF giga-projects are beginning to show
notable progress with the Qiddiyah entertainment city
moving to phase four, from planning to building, during
2019, while NEOM City – phase 1 Project and the Amala
project started in Q1 of 2019. Saudi Arabia is seeking
$426Bn in private investment by 2030 for infrastructure as
well as energy, mining and other industrial projects, as part
of an effort to cut its reliance on oil. The Saudi National
Housing Company has recently signed an agreement with
China State Construction Engineering Company for the
construction of more than 5,000 housing units of various
designs at an investment of $670M.
The Saudi General Authority of Civil Aviation has officially
launched work on two international terminals at the King
Khalid International Airport at an investment of $590M.
Once the project is completed, the airport will be able to
accommodate 11 million passengers annually.
Saudi Arabia Ministry of Housing has launched the
Sakani 2019 program that includes the allocation of
200,000 housing units in major areas of the kingdom for
beneficiaries of the Sakani scheme. The ministry also seeks
to build 70,000 residential units and develop 69 million
sq.m as free-of-cost land plots. The Ministry of Health
plans to build 35 hospitals during 2019 with the Ministry
of Education expecting to deliver 1,069 schools between
2017 and 2019.
The kingdom has completed 55 road projects worth
$1.3Bn and has approved another 72 new projects. $400M
is being pumped into nine major road projects including
the King Hamad Causeway. Virgin Hyperloop One is likely
to reveal details of its plan to link Neom, the mega Red Sea
tourism project, and Qiddiya Development soon.
GCC CONSTRUCTION REPORT 2019-2020

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Despite the new strategic direction towards Saudi Arabia Contract Awards By Sector (US$ Bn)
a more diverse economy, the oil & gas sector Urban Buildings Oil & Gas Infrastructure
continued to have the biggest share of
projects awards since 2016. Only in 2018,
infrastructure projects recorded the highest
level of investments. The decision by the
leadership of Saudi Arabia to take Aramco
public is a further sign of the seriousness and
decision by the government to diversify the
economy as they seek to channel more public
funding towards infrastructure and social
infrastructure projects.

A key driver for the urban sector in Saudi

Arabia is the development of major cities such Saudi Arabia Current State & Forecast (US$ Bn) as of Oct 2019
as NEOM, a 26,495 square Km city valued at
$500Bn, which will drive further investment
and development in the urban sector.
According to our database, there are currently
$379Bn projects under construction with a
further $682Bn projects in the early stages of
construction. We expect that the urban sector’s
share of total projects will increase and surpass
oil & gas investments over the short to mid-term
from 2020 onwards.

Saudi Arabia Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix Saudi Arabia Contract Awards Forecast (US$ Bn)

Project Value Contract Value
A key variable when building a forecast for Saudi
Arabia’s construction sector is contractors’ capacity
and availability of manpower. This can be clearly
noticed when considering the total value of projects
announced when compared to actual contracts
awarded historically.

Over the past three years, the total value of contract

awards was on average $44.5Bn, however, the
government’s aggressive economic diversification
and development will result in historical value of
contract awards over the next three years. Saudi Arabia Buildings Contract Awards Forecast (US$ Bn)
Project Value Contract Value
This will drive further growth in capacity, new
contractors entering the market and existing
contractor growing capacity to meet the rising
demand. This will further be supported with greater
automation and adoption of technologies to
manage cost and increase efficiencies.

The oil & gas sector will be the most stable

in terms of contract awards size year on year.
We forecast the greatest growth to be in the
infrastructure sector as development in mega
cities starts. Other key sectors that we forecast to
witness greater development are the healthcare,
Saudi Arabia Infrastructure Contract Awards Forecast (US$ Bn)
Project Value Contract Value
education and hospitality sectors. The hospitality
sector is forecast to witness a double digit growth
over the next three years driven by initiatives
such as the Riyadh Season, a three months mega
event, and the new Saudi visa system, an e-visa
program allowing people from 49 countries
to visit by applying for a visa ahead of their
trip or on arrival. Furthermore, the Al-Qiddiya
development project will also drive investment in
the hospitality sector as the government expects
1.5 million visitors annually to the development
when the first phase opens in 2022.
Saudi Arabia Oil & Gas Contract Awards Forecast (US$ Bn)
With more than $1.06Tn worth of major projects Project Value Contract Value
planned or underway, Saudi Arabia is the biggest
projects market in the region, accounting for
almost half of the entire GCC projects market.
With KSA’s estimated budget for 2020 and
robust economic growth, the government is
recommitting to investments in the future with
the help from the private sector. The kingdom’s
construction market is expected to show
significant growth and offer lucrative potential
due to its Vision 2030, NTP 2020, and ongoing
reforms to diversify away from oil.

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COUNTRY BREAKDOWN

Oman
Being a small market, it is valued at $10-20Bn construction
market. The market in Oman has witnessed a period of
decline year on year since 2017. In terms of economic
development, the government dept have grown and a delay
in implementing some fiscal reforms have had significant
damping on the economy, all this despite a rebound on oil
prices which fueled economic growth in 2018. According to
IMF, gross government debt rose to 53.5% of GDP last year,
the IMF does not believe that this could result in a credit
crunch as the government has sufficient reserves to cover
debt repayments.

In terms of quarterly contract awards, no specific trend

exists in Oman, some quarters the total value of projects
awarded was $2Bn and other quarters they reached
$9Bn. The construction market in Oman is very volatile
and is highly dependent on major oil and gas projects
being awarded. The government is looking to expand the
use of PPP framework to carry out its investment and
diversification agenda under the country’s ninth five-year
plan and its Vision 2040 development.
 GCC CONSTRUCTION REPORT 2019-2020

OMAN CONTRACT AWARDS

Oman Contract Awards (US$ Bn) YoY Growth (%)

OMAN CONTRACT AWARDS QOQ (%)

OMAN QUARTERLY CONTRACT AWARDS (US$ BN)

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There are currently 786 projects under Oman Contract Awards By Sector (US$ Bn)
construction, 24% of these projects are Urban Buildings Oil & Gas Infrastructure
infrastructure related projects and 67% urban
sector projects. On average the value of urban
projects is $38M, whereas, the average project
value of infrastructure projects is $83M.

In 2017 a total of $11Bn oil & gas contracts

were awarded because of major projects such
as Duqm Refinery & Petrochemical Complex
Process Units - Package 1 ($2.75Bn), Ghazeer
Gas Field Development - Phase 2 ($1Bn) and
Khazzan Tight Gas Development Central
Processing Facility ($685M). In 2019, year
to date, $8Bn worth of contracts have been Oman Current State and Forecast (US$ Bn) as of October 2019
awarded for oil & gas projects including Sohar
Petroleum Coke Calciner Plant ($560M) and
Marmul EOR Project - Phase 2 ($495M).

In the urban sector, 2018 saw a total of

$10.32Bn contracts awarded including projects
such as Al Khaboura 1000 Villas Complex
($550M), Integrated Residential Complex for
Supreme Council for Planning ($200M), and The
Al Araimi Walk ($291M) project.

According to our data, Oman has 558 early stage

projects valued at $113.6Bn, of which, 58%
projects in volume and 44% in value are in the
urban sector.

Oman Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix Oman Contract Awards Forecast (US$ Bn)

Project Value Contract Value
Due to its cyclical nature, we forecast the Omani
construction sector to have a period of growth
over the near term and a period of slowdown
in 2022. The urban construction is expected to
show tremendous growth driven by growth in
population and tourism. Investment, especially
in Integrated Tourism Complexes are consistent
and registering more potential.

Over the past decades, the Omani government

have been transforming its economy away
for oil dependence. The hospitality industry is Oman Buildings Contract Awards Forecast (US$ Bn)
the main growth and investment driver, with Project Value Contract Value
a number of current and pipelined projects
being implemented and planned. According to
industry estimates, the number of hotel rooms is
expected to grow to 16,866 keys in 2021.

The ninth development, which is the last of

the series of 5-Year Plans for the Vision 2020
plan focuses on key sectors of manufacturing,
transportation and logistics, tourism and mining.
Private sector role is the backbone of the plan
and the government have already been engaged
in supporting this view through either the public
private partnerships.
Oman Infrastructure Contract Awards Forecast (US$ Bn)
Project Value Contract Value

In terms of the pipeline of projects, the

Madinat Al Irfan Urban Development - Phase 2
project valued at $10Bn and Duqm Refinery &
Petrochemical Complex -Phase 2 project valued
at $8Bn are some of the major projects we
forecast to be awarded in 2020.

In accordance with Oman’s strategy on public

transportation, the Ministry is considering the
move from vehicle transportation to light rail.
Omani government has rolled out regulations
and projects to harness power supply from solar Oman Oil & Gas Contract Awards Forecast (US$ Bn)
plants and wind farms. Oman is expected to Project Value Contract Value

invest in renewables with the objective to deliver

up to 10% of electricity supply by 2025, which
will mean more than 2,500 MW of
installed renewable capacity by 2025.

In 2019, the oil & gas sector with an estimated

contract awards of $8.6Bn is expected to be the
largest sector in contractor awards, followed by
the infrastructure contract awards at $4Bn and
the urban sector contract awards at $3Bn.

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COUNTRY BREAKDOWN

Kuwait
Although Kuwait’s GDP declined in 2017, projects award
recorded the highest YOY growth. Projects like Al Zour
Refinery Marine Works - Package 5 ($1.55Bn), South Saad
Al Abdallah City ($4Bn) and KERP Bio Remediation SEK 1
valued at $3.26Bn were awarded in 2017.

In December 2018, Kuwait Authority for Partnership

Projects (KAPP) had issued RFP on Az Zour North phase
2 & 3 and Al Khairan phase 1 - power and desalination
projects. Az Zhour North phase 2 & 3 covers a plant of
2,700 MW and 165 MIGD (750,105 m3/d) of desalinated
water. Al Khairan phase 1 is for a plant of 1,800 MW and
125 MIGD (568,261 m3/d).

According to our quarterly data, the market in Kuwait

was highly volatile in recent years and currently a total of
1,706 projects are under construction valued at a total
of $137Bn. Urban sector accounts to 85% of total active
projects by volume and only 28% by value. Oil & gas
projects continue to have the biggest share by value at
45% of current active projects.
 GCC CONSTRUCTION REPORT 2019-2020

KUWAIT CONTRACT AWARDS

Kuwait Contract Awards (US$ Bn) YoY Growth (%)

KUWAIT CONTRACT AWARDS QOQ (%)

KUWAIT QUARTERLY CONTRACT AWARDS (US$ BN)

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Further analysis of the Kuwait construction sector, Kuwait Contract Awards By Sector (US$ Bn)
our data shows that 2017 and 2019, Oil & gas Urban Buildings Oil & Gas Infrastructure
projects lead the sector, whereas 2016 and 2018,
infrastructure projects led. Specifically projects
such as Al Zour Petrochemical Complex Olefins
3 - Catalytic Cracker Plant ($2Bn), Abdullah Al
Mubarak South Residential Complex ($1Bn) and
South Al Mutlaa City - Major Infrastructure Works
Package - Contract 3 valued at $2.54Bn in 2017
and Madinat Al Hareer - Phase 1 ($20Bn) in 2019.

Major projects such as Dabdaba Photovoltaic

Power Plant ($1.65Bn), Al Shuwaikh New
Children’s Hospital ($850M), and South Saad Al
Abdallah City ($4Bn) projects in 2016 and West Kuwait Current State and Forecast (US$ Bn) as of October 2019
Al Fintas Fresh Water Ground Tanks - Phase 2
($1.5Bn), South Sabah Al Ahmad City ($2Bn), Al
Shaheed Park ($575M) in 2018. In total, there are
$457Bn worth of projects in the pipeline, out of
which 38% are in the design stage.

Driven by Kuwait’s Vision 2035, further

investment of $100Bn is planned in the future
towards achieving the vision. According to the
Ministry of Finance, many more projects are
expected to be completed by 2023. A core pillar
in the vision is economic diversification away
from oil dependency. The diversification plan According to QNB’s Kuwait Economic Insight 2018, projects under the
focuses on infrastructure projects to support the New Kuwait Development Plan have an estimated total cost of over
transport and logistics sector and the healthcare $39Bn, with 44% directed towards the economy pillar (which includes
sector to improve quality of life. energy-related projects such as the Clean Fuels Project, Al-Zour refinery,
and Al Khiran Plant) and 36% directed towards infrastructure projects
(such as the airport expansion, causeway and regional highway projects).

Kuwait Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix Kuwait Contract Awards Forecast(US$ Bn)

Project Value Contract Value
Under the 2035 strategic plan, the development
of five islands namely Boubyan, Warbah, Failaka,
Maskan and Oaha into economic zones with an
investment value of up to $160Bn is expected to
double up as tourist and recreational areas, in turn
requiring investments in commercial and residential
complexes as well as infrastructure.

According to our forecast and analysis, there is

significant growth in infrastructure and urban sector
projects and a slowdown in oil & gas sectors. We
believe that a few urban projects will be delayed in Kuwait Buildings Contract Awards Forecast(US$ Bn)
Kuwait as the government pushes towards achieving Project Value Contract Value
the vision goals. The government will also have
to implement major reforms to attract the private
sector to have significant economic contribution. As
of October 2019, the total value of building projects
was the highest and worth $217.5Bn among the
sectors. Around $179Bn (82%) worth of urban
projects are in the pre-construction stage and $38.4
Bn (18%) are in the construction stage.

The rise in demand for public housing is expected

to drive long-term residential construction growth,
with the Public Authority for Housing and Welfare
(PAHW) announcing plans to build 174,000
Kuwait Infrastructure Contract Awards Forecast (US$ Bn)
Project Value Contract Value
housing units by 2020. The government also plans
to employ a PPP model to deliver public housing,
including 11,000 units under the Sabah Al-Ahmad
project, which will house up to 100,000 people
upon completion. The South Al-Mutlaa City project
is in its initial infrastructure development phase
and, in five years, 28,000 families are expected
to be housed. The New Kuwait plan calls for over
$23Bn in road, rail, and air transport projects
through 2022. Kuwait’s infrastructure sector is
expected to grow by 15-20%.

Kuwait has begun working on key upstream Kuwait Oil & Gas Contract Awards Forecast (US$ Bn)
and downstream projects as part of its longer- Project Value Contract Value

term plans to boost hydrocarbons capacity, in

anticipation of rising global energy demand.
Kuwait Petroleum Corporation plans to carry out
a number of major projects to boost oil production
to 4.75m barrels per day by 2040. Kuwait’s Capital
Markets Authority is undertaking modifications
to facilitate entry of foreign investors into the
market and overhaul the national business-financial
environment. The government is delivering on its
commitment to growing the national economy, and
executing infrastructure projects in-line with the
‘New Kuwait’.
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COUNTRY BREAKDOWN

Bahrain
Bahrain’s GDP continued a positive YoY real growth since
2016. Over the same period, the construction sector
recorded significant growth YOY from 2016 to 2018. The
construction sector is a major contributor to employment
and GDP, which has expanded in recent years, despite
slower regional growth.

According to the International Trade Administration, a key

driver of this growth is a $32Bn infrastructure investment
pipeline comprised of $10Bn in government funding,
$7.5Bn from the GCC Development Fund, and $15Bn
from the private sector to support the country’s funding
requirements as it embarks on a fiscal program aimed at
eliminating its budget deficit by 2022. Particularly, 2018
saw the awarding of Al Dur Independent Waste Water &
Power Plant - Phase 2 ($2Bn), North Manama Causeway -
Phase 2 & Busaiteen Link Road Network ($1.22Bn), ALBA
Port Capacity Upgrade ($2.7Bn), Vida Hotel & Residences
at Marassi Al Bahrain ($278M), East Hidd Housing Village
D ($400M) and Golden Gate ($200M) which were a
significant contributor to the growth in that year.
 GCC CONSTRUCTION REPORT 2019-2020

BAHRAIN CONTRACT AWARDS

Bahrain Contract Awards (US$ Bn) YoY Growth (%)

BAHRAIN CONTRACT AWARDS QOQ (%)

BAHRAIN QUARTERLY CONTRACT AWARDS (US$ BN)

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The growth in the construction sector in Bahrain Bahrain Contract Awards By Sector (US$ Bn)
was driven by large scale infrastructure projects Urban Buildings Oil & Gas Infrastructure
that has stimulated the sector positively. These
projects include New Bahrain International
Airport ($10Bn) and Bahrain Metro ($8Bn). In
2018, a major oil and gas project, the ALBA Port
Capacity Upgrade valued at $2.7Bn was awarded
by and company FATA SpA won the project.

Currently, there are 382 projects under

construction, with Urban sector projects
account for 68% of these projects by volume
and 65% by value. In Bahrain, only a small
value of projects is currently on-hold, a sign
that project on-hold rate is significantly lower Bahrain Current State and Forecast (US$ Bn) as of October 2019
when compared to other GCC countries. As
of October 2019, the total project value is
estimated to be worth $123.1Bn. The building
sector has the highest share with $56.4Bn (46%)
followed by the infrastructure $46.1 Bn (37%)
and oil & gas sector $20.6 Bn (17%).

Bahrain’s vision 2030 and recent priorities

setting for the next four years (2019-2022), we
forecast infrastructure development to be a
core area of investment and development in the
Kingdom. Our forecast highlights a significant
reduction in oil & gas sector investment, this is
also in line with the strategic direction towards
Vision 2030. Social infrastructure investment
in healthcare, education and in particular in
innovation related sectors will drive further
projects within the Urban sector.

Bahrain Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix Bahrain Contract Awards Forecast(US$ Bn)

Project Value Contract Value
Bahrain’s private sector has committed to
provide 25,000 housing units under the
government action plan 2019-2022. The retail
and hospitality sectors are also witnessing rapid
growth, which is evident from the number of
five-star hotels and shopping malls planned for
the kingdom. Around 39 hotels would open in
the kingdom between 2019 and 2023.

Bahrain is proposing the construction of a

second airport to support the existing and
under-expansion Bahrain International Airport Bahrain Buildings Contract Awards Forecast(US$ Bn)
(BAH), in line with its Transportation and Project Value Contract Value
Telecommunications Agenda. New Passenger
Terminal is already under construction at Bahrain
International Airport and is due to open in Q1
of 2020. Work is currently in full swing on the
world’s largest eco-friendly underwater theme
park coming up within Diyar Al Muharraq, which
is scheduled to open in Q4 this year. In Q1 of
2019, the government launched an international
bid for its the ‘Bahrain Metro’ project. The
project is expected to be launched in Q4 2019
with the completion scheduled for 2030.
Roadworks on Budaiya and Janabiya Highways
are expected to start in 2019, with the $80mn
Bahrain Infrastructure Contract Awards Forecast (US$ Bn)
Project Value Contract Value
schemes to be paid for by Kuwait Fund for Arab
Economic Development.

The government aims for renewables to account

for 5% of the kingdom’s total electricity capacity
by 2025 under targets set by the National
Renewable Energy Action Plan. Around 50 MW
of the 2025 total is expected to come from
power generated by wind, 20 MW from waste-
to-energy and the rest from solar. According to
our data, there are currently 269 projects valued
at $65Bn in the projects pipeline under either
design, planning or tender stage. Out of which Bahrain Oil & Gas Contract Awards Forecast (US$ Bn)
29%, by value, are urban sector related projects Project Value Contract Value

and 55%, by value, are infrastructure related

projects. In terms of volume, 55% urban sector
and 44% infrastructure sector.

This is expected to boost growth in the

construction industry for the next five years.
Private firms are already playing a significantly
major role in the construction of transport and
industrial infrastructure, along with housing.
More PPP agreements are expected over
the medium to long term due to budgetary
constraints faced by the government.
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COUNTRY BREAKDOWN

Qatar
Despite the political and economic sanctions on Qatar by
several GCC member states, particularly the UAE, Saudi
Arabia and Bahrain, Qatar’s GDP continued to witness
GDP growth in 2017. However, this growth has been on
a declining trend dropping from 2.13% in 2016 to 1.5% in
2018. According to IMF, Qatar’s GDP witnessed a modest
growth of 0.9% year on year in Q1 2019.

This slower growth is further witnessed in the construction

sector. Since winning the bid to host the FIFA World Cup in
2022, a decade long of growth in the construction sector
is winding down up until 2019 where a sudden surge and
growth is expected. Although large scale infrastructure
projects have been completed, other are yet to be. Qatar’s
National Vision 2030 and the FIFA World Cup 2022
are major growth drivers for the country’s construction
industry.

Qatar’s construction market witnessed the highest level of

contract award in Q4 2016 at $19.61Bn, which included
projects such as Al Khor Expressway ($2.6Bn), Mozoon
Towers ($685M), Qatar Foundation Stadium ($700M), Al
Rayyan Stadium ($362M), and Doha E-Ring Road Extension
($730M). All of 2017 through Q3 of 2018 witnessed very
low levels of contract awards. Since Q4 of 2018, a surge in
contract awards was driven by the continued development
for projects leading up to the FIFA World Cup in 2022. This
trend is particularly evident in the QoQ data for the first
three quarters in 2019
 GCC CONSTRUCTION REPORT 2019-2020

QATAR CONTRACT AWARDS

Qatar Contract Awards (US$ Bn) YoY Growth (%)

QATAR CONTRACT AWARDS QOQ (%)

QATAR QUARTERLY CONTRACT AWARDS (US$ BN)

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In 2016, 64% of contracts awarded were oil & Qatar Contract Awards By Sector (US$ Bn)
gas sector projects, whereas, year to date in Urban Buildings Oil & Gas Infrastructure
2019, 52% of total contracts awarded are within
the infrastructure projects. The share of the
urban sector was the highest in 2017 at 46%.

Major projects awards:

• 2016 – Mesaieed Strategic Petroleum
Products Storage Tanks ($605M), Al Khor
Expressway ($2.6Bn), Mozoon Towers
($685M), Qatar Foundation Stadium
($700M), Al Rayyan Stadium ($362M), Doha
E-Ring Road Extension ($730M)
• 2017 – New Doha Port – Phase 2 ($1.5Bn),
Doha Automated Metro & Lusail Light Rail Qatar Current State and Forecast (US$ Bn) as of October 2019
Network ($3.55Bn), Lusail Iconic Solar
Stadium ($780M)
• 2018 – Bul Hanine Oilfield Redevelopment
- Phase 1B ($3.5Bn), Barzan North Field
Development Offshore Pipeline ($1.3Bn),
Dream Doha Hotel ($305M)
• 2019 – North Field Expansion Offshore
($2.4Bn), Lusail Towers ($1.93Bn), Umm
Al Houl Power Plant extension ($502M),
Accommodation & Supporting Facilities at
Al Udeid Airbase ($820M)

In terms of QoQ growth, the oil & gas sector
witnessed the highest growth rate between
Q3 of 2018 and Q2 of 2019. Qatar’s upcoming
pipeline of projects is estimated at $148Bn
compared to the ongoing under construction
projects valued at $200Bn.
Out of the currently active projects, 42% is in the Infrastructure
sector, where 387 projects by volume. The Urban sector accounts
for 43% of total active projects by value and 91 by volume (4,488
projects).

Qatar Contract Awards QoQ by Sector (%)

Urban Buildings Oil & Gas Infrastructure
 GCC CONSTRUCTION REPORT 2019-2020

Opportunity Matrix Qatar Contract Awards Forecast(US$ Bn)

Project Value Contract Value
Hamad International Airport will commence
its much-anticipated Phase II expansion and
new terminal project, which saw passenger
capacity double to 60 million in Q1 2019. The
health sector has been allocated $6.2Bn, which
represents 11% of the total expenditure.

The education sector is allocated $5.2Bn in the

budget, representing 9.3% of total expenditure.
New projects to construct 45 schools within
the public-private partnership building program
were announced in January 2019. Infrastructure Qatar Buildings Contract Awards Forecast(US$ Bn)
projects are allocated $9Bn in the budget, which Project Value Contract Value
represent 16% of the total expenditure.

With the lifting of the moratorium on the north

field, we expect greater activity in contract
awards in the oil & gas sector in the near future.
On the other hand, as the date of the world
cup nears, less infrastructure investment will
be underway and a significant slowdown in
the urban sector will be seen in the short to
mid-term. This is a trend that is expected when
major infrastructure and urban development
is concluded. It is a challenge that the Qatar
government will face to continue development
Qatar Infrastructure Contract Awards Forecast (US$ Bn)
Project Value Contract Value
post 2022 when the world cup concludes.

Leading developers will have to undertake

significant efforts over the next 2 years to add
more urban sector projects to the pipeline.
Several research reports forecast a growth in the
construction sector over the next 3 to 4 years
and we are of the opinion that more project
announcement will be done in the next year or so.

Over 150 large-scale projects worth billions

of dollars are to be offered after 2022, which
include projects related to infrastructure Qatar Oil & Gas Contract Awards Forecast (US$ Bn)
development, roads and construction of Project Value Contract Value

buildings, hospitals and schools, according to a

top official of Qatar Chamber (QC).

The private sector is expected to play a

significant role in these projects in partnership
with the public sector to reach the objectives
of the Vision 2030. The government has
committed to the improvement of healthcare,
rail and road networks, and education, creating
a plethora of opportunities in the construction
sector in the coming years.

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GCC Opportunity
Based on current market data and on our analysis, the
Saudi construction market remains the most attractive for
the next 3 to 5 years as the government undertakes the
development of mega projects.
Despite a few setbacks over the past decades, the
construction market is expected to witness stable growth
and development. Investors and developers are optimistic
in the longer term due to various government initiatives
aimed at stimulating the market. The GCC region’s tourism
sector is poised to further accelerate the region’s real estate
market, especially for the UAE.
The Qatari market is currently active; however, it remains
to be seen if new major development is announced in
the short term. Over the short term, the construction
market in Oman and Kuwait provides greater opportunities
than Qatar, whereas, the market in Bahrain continues
to be small and cyclical. In Saudi Arabia, the greatest
opportunities are in the Infrastructure sector projects,
whereas, in the UAE the Urban sector provides the
greatest opportunities.

The Dubai construction market in 2019 could benefit

from the potential increase as the Expo 2020 draws near,
bringing in tourists as well as new residents into the country.
Like Dubai, Abu Dhabi still continues to be a favorable
market for investors and tenants. The new visa reforms and
changes to the foreign ownership system are anticipated to
help the real estate market pick up in 2019.

Conclusion
The GCC construction sector has a strong pipeline of
projects comprising over 30,000 active projects with a
combined estimated value of over $3.34 trillion. On the
whole, the report demonstrates a positive outlook of the
GCC construction landscape as each country commits
to diversifying away from its dependence on oil. While
Saudi Arabia, Oman and Qatar are most active with
infrastructure-related projects, the UAE is focused on
urban building projects, and Kuwait and Bahrain remain
the only two member states with most active projects in
oil and gas construction.
 GCC CONSTRUCTION REPORT 2019-2020

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Contact Us
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