GCC Construction Outlook 2020 – Opportunities and Challenges in GCC Construction – MEED Insights

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Published: June 29, 2020 Report Code: GDMD019CON-ST

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With about $1tn of construction and transport projects planned or under construction, there is no shortage of potential opportunities in the GCC’s construction market. And with a further $1.2bn of developments promised through long-term transformational masterplans and megaprojects, such as Saudi Arabia’s $500bn Neom future city, the potential of the GCC construction market is not likely to disappear anytime soon.

But while there are abundant opportunities for construction companies in the GCC, there is no shortage of challenges. Over the past five years, contractors, consultants and manufacturers have faced considerable pain and uncertainty as a result of the fall in oil prices in 2014. Cuts to government spending and a growing oversupply in the key real estate markets such as Dubai reduced new project opportunities and increased competition for work, while delayed payments hit cash flow.

In terms of contract awards, 2019 was the worst year for the GCC construction industry since 2012 with only about $57.8bn worth of construction and transport project contracts awarded in the Gulf. The figure is 9.5 per cent down on award levels in 2018. And is far below the $107.5bn of contract awards seen in 2013, the best year on record.

By the end of 2019 however, construction companies were looking forward optimistically to a long-awaited rebound in construction activity, led by the giant Saudi Arabian market. The stabilisation of oil prices and the launch of the kingdom’s megaprojects promised a new dawn for GCC construction. By March however, the optimism was dashed as it became clear that the Covid-19 pandemic was not going to pass quickly, and companies shifted their focus to simply surviving the crisis.

While the Covid-19 lockdowns have disrupted supply chains and on-site delivery, a new slump in oil prices in March and April, has raised new doubts about future project opportunities. The problems of the past five years have accelerated in the first five months of 2020, and construction companies must rethink their processes and strategies in order to prepare for the new GCC construction market in a post-Covid-19 world.

Key to rethinking business development strategy is understanding where the future growth will come from, and who the key clients will be.

Written by MEED, the Middle East market experts within the GlobalData Group, "GCC Construction Outlook 2020" is the latest premium intelligence report from MEED Insight. It assesses the prospects for construction in the coming two years in the wake of Covid-19 outbreak, and analyses the opportunities and challenges for contractors, consultants and suppliers across the region’s six markets.

It is a powerful resource for anyone seeking to do business in the GCC construction and infrastructure sector at a key point in the development of the market.

Reasons to Buy

Gain an immediate insight on the GCC construction market

Identify new business development opportunities

Discover the current and planned client activities across the region

Identify top contractors, clients and competitors

Asses specific challenges and drivers behind each sub-sector

Table of Contents

Table of Contents

1. Executive Summary

2. GCC

2.1 State of the market overview comment

2.2 Project Trends

2.3 Industry issues

2.4 Market snapshots

3. Construction Finance

3.1 Overview

3.2 Bahrain

3.3 Kuwait

3.4 Oman

3.5 Qatar

3.6 Saudi Arabia

3.7 UAE

4. Bahrain

4.1 Impact of COVID-19 on Bahrain construction market

4.2 Overview of Bahrain construction

4.3 Project Trends

4.4 Vision 2030

4.5 Gulf Development Fund

4.6 Budget 2020

4.7 Key trends

4.8 Sector analysis

5. Kuwait

5.1 Impact of COVID-19 on Kuwait construction

5.2 Overview of Kuwait construction market

5.3 Project Trends

5.4 The Kuwait Masterplan

5.5 Budget 2020

5.6 Privatisation Programme

5.7 Sector analysis

6. Oman

6.1 Impact of COVID-19 on Oman construction market

6.2 Overview of Oman construction

6.2 Project trends

6.3 Vision 2020 and the ninth five-year plan

6.4 Budget 2020

6.5. Sector analysis

7. Qatar

7.1 The impact of Covid-19 on Qatar construction

7.2 Overview of Qatar construction

7.3 Project trends

7.4 Vision 2030

7.5 World Cup 2022

7.6 2020 Budget

7.7 Sector analysis

8. Saudi Arabia

8.1 Impact of Covid-19 on Saudi construction

8.2 overview of Saudi Arabia construction

8.3 Outlook for Saudi construction

8.4 Leading clients and contractors

8.5 Project trends

8.6 Vision 2030

8.7 Public Investment Fund

8.8 2020 Budget

8.9 Sector analysis

9. UAE

9.1 Covid-19 in the UAE

9.2 UAE construction industry faces deep challenges

9.3 Dubai

9.4 Abu Dhabi

9.5 Northern Emirates

Disclaimer

Table

List of Tables

Table 1: Biggest projects awarded in 2019

Table 2: Biggest projects completed in 2019

Table 3: Selected Construction Permits by Type

Table 4: Impaired loans in Bahraini banks, by type of bank and sector

Table 5: Credit to construction and real estate sectors in Kuwait

Table 6: Bank credit to the construction sector in Oman

Table 7: Credit to the construction and real estate sectors in Qatar

Table 8: Credit to the building & construction sector by Saudi banks

Table 9: UAE bank credit to the construction industry

Table 10: Bahrain’s largest construction and transport contract awards in 2019

Table 11: Most active construction and transport clients by value of contracts under execution

Table 12: Major contract awards scheduled for 2020

Table 13: Largest ongoing real estate projects

Table 14: Future Ministry of Housing projects

Table 15: Bahrain healthcare projects

Table 16: Bahrain major road projects

Table 17: Bahrain Rail projects

Table 18: Kuwait major contracts awarded in 2019

Table 19: Major projects due for award in 2020

Table 20: KAPP's construction projects

Table 21: Selected PAHW contract awards

Table 22: PAHW townships under execution/completed

Table 23: PAHW planned cities

Table 24: Kuwait University awarded projects

Table 25: Kuwait University projects yet to be awarded

Table 26: Main hospital projects under execution

Table 27: Planned hospital projects

Table 28: Value of road projects planned and underway

Table 29: Packages under the Southern Regional Road

Table 30: Packages under the North and East Regional Highway

Table 31: Ministry of Public Works' main road projects underway

Table 32: Planned road projects

Table 33: Kuwait International Airport expansion projects

Table 34: Kuwait rail projects

Table 35: Kuwait National Rail Road packages

Table 36: Kuwait Metropolitan Rapid Transit project: Original plan

Table 37: Prequalifiers for Mubarak al-Kabeer package 3A

Table 38: Mubarak al-Kabeer seaport

Table 39: Planned KPA upgrades

Table 40: Major megaprojects under execution in Oman

Table 41: Largest construction and transport contracts awarded in 2019

Table 42: Major projects due for award in 2020

Table 43: Planned residential projects

Table 44: Major tourism-related projects underway

Table 45: Unawarded tourism-related projects

Table 46: Major mixed-use real estate projects planned or underway

Table 47: Major education projects planned or underway

Table 48: Hospital projects planned or underway

Table 49: Batinah Expressway awarded contracts

Table 50: Other major road contracts under execution

Table 51: Road projects in the pre-execution phase

Table 52: Airport projects planned and underway

Table 53: Oman National Railway Packages

Table 54: Oman port projects

Table 55: Largest construction and transport contract awards in 2019

Table 56: Largest megaprojects under execution in Qatar

Table 57: Selected major contracts under execution at Lusail City

Table 58: Major contracts due for award at Lusail City

Table 59: Contracts under execution at the Pearl-Qatar

Table 60: Contracts under execution on the Msheireb project

Table 61: Major real estate projects expected to be awarded in 2020

Table 62: Major hospitality projects underway in Qatar

Table 63: World Cup Stadium Projects

Table 64: 2033 Hospital services gap analysis

Table 65: Capital programme estimates (QRm)

Table 66: Planned hospital projects under Qatar Healthcare Facilities Masterplan 2013-33

Table 67: Major hospital projects planned and underway

Table 68: Major education projects due to be awarded in 2020

Table 69: New Orbital Highway & Truck Route Project

Table 70: Unawarded packages on the Expressway Programme

Table 71: Local roads and drainage programme

Table 72: Major road projects expected to be awarded in 2020

Table 73: Qatar Passenger & Freight Rail

Table 74: At-grade, elevated and underground segments of phase 1 of the Doha Metro

Table 75: Hamad International Airport Expansion

Table 76: Hamad Port main contracts

Table 77: Other port projects

Table 78: Selected major contract awards in 2019

Table 79: Major projects on hold in Saudi Arabia

Table 80: Largest projects due for award in 2020

Table 81: Major real estate projects expected to be awarded in 2020

Table 82: The $68bn Saudi Housing Project – packages planned and underway

Table 83: Selected healthcare projects planned and underway

Table 84: Selected unawarded education projects

Table 85: Major road projects at main contract bid stage

Table 86: Mainline rail projects under execution

Table 87: Unawarded mainline rail projects

Table 88: Major planned and underway metro projects in Saudi Arabia

Table 89: Consortiums on the Riyadh Metro

Table 90: Riyadh Metro Project

Table 91: Jeddah Metro phase 1

Table 92: Jeddah LRT and tramway: phase 1

Table 93: Jeddah Metro Project

Table 94: Medina Metro Project

Table 95: Mecca Metro packages

Table 96: Passenger volume in airports by year

Table 97: Unawarded airport projects

Table 98: Ports projects planned and underway

Table 99: Biggest contract awards in UAE in 2018 and 2019

Table 100: Leading contractors by value of contracts under execution

Table 101: Key clients in the UAE by value of projects under execution

Table 102: Selected major contracts due for award in 2020

Table 103: Biggest contract awards in Dubai in 2018 and 2019

Table 104: Selected major contracts due for award in 2020

Table 105: Leading contractors in Dubai by value of contracts under execution

Table 106: Key clients in Dubai by value of projects under execution

Table 107: Consultants and contractors appointed on the Expo site

Table 108: Selected real estate projects due for award

Table 109: Top unawarded hospitality projects in Dubai

Table 110: Dubai housing schemes under construction

Table 111: Unawarded education projects in Dubai

Table 112: Largest road projects under construction in Dubai by value

Table 113: Largest transport projects under construction in Dubai by value

Table 114: Biggest contract awards in Abu Dhabi in 2018 and 2019

Table 115: Leading contractors in Abu Dhabi by value of contracts under execution

Table 116: Key clients in Abu Dhabi by value of projects under execution

Table 117: Selected major contracts due for award in 2020

Table 118: Selected real estate projects due for award

Table 119: Unawarded education projects in Abu Dhabi

Table 120: Largest road projects under construction in Abu Dhabi by value

Table 121: Largest transport projects under construction in Abu Dhabi by value

Table 122: Biggest contract awards in Northern Emirates in 2018 and 2019

Table 123: Selected major contracts due for award in 2020

Table 124: Leading contractors in Northern Emirates by value of contracts under execution

Table 125: Key clients in Northern Emirates by value of projects under execution

Table 126: Real estate projects due for award

Table 127: Road projects under construction in Ajman by value

Table 128: Road projects under construction in Fujairah by value

Table 129: Selected real estate projects due for award in the coming years

Table 130: Unawarded hospitality projects in Ras Al-Khaimah

Table 131: Unawarded large road projects in Ras Al-Khaimah by value

Table 132: Real estate projects due for award in the coming years

Table 133: Unawarded hospitality projects in Sharjah

Table 134: Unawarded road projects in Sharjah by value

Table 135: Selected real estate projects due for award in the coming years

Figures

List of Figures

Figure 1: COVID-19 cases in the GCC region since March 2020

Figure 2: GCC construction and transport projects in execution ($bn), 2010−2019

Figure 3: Value of construction and transport projects awarded and completed ($bn), 2010−2019 .

Figure 4: Value of projects awarded and completed by country ($bn), 2019

Figure 5: Top 10 GCC contractors by value of work ($m)

Figure 6: GCC construction & transport awards by country, 2012−19 ($bn)

Figure 7: GCC total project awards by country and sector, 2019 ($bn)

Figure 8: Construction & Transport projects completed vs projects launched in 2019 by country ($bn)

Figure 9: Pipeline of planned unawarded projects by country, ($bn)

Figure 10: Pipeline of planned unawarded projects by status, ($bn) .

Figure 11: GCC construction & transport project activity monitor, 2010−19 ($bn)

Figure 12: GCC construction & transport cash flow, 2012−19 ($bn)

Figure 13: Bahrain construction & transport awards, 2012−19 ($bn)

Figure 14: Bahrain construction & transport cash flow, 2012−19 ($bn)

Figure 15: Bahrain construction & transport project activity monitor, 2010−19 ($bn)

Figure 16: Bahrain construction & transport market sustainability assessment

Figure 17: Kuwait construction & transport awards, 2012−19 ($bn)

Figure 18: Kuwait construction and transport cash flow, 2012−19 ($bn)

Figure 19: Kuwait construction and transport project activity monitor, 2010−19 ($bn)

Figure 20: Kuwait construction and transport market sustainability

Figure 21: Oman construction & transport awards, 2012−19 ($bn)

Figure 22: Oman construction & transport cash flow, 2012−19 ($bn)

Figure 23: Oman construction & transport project activity monitor, 2010−19 ($bn)

Figure 24: Oman construction & transport market sustainability assessment

Figure 25: Qatar construction & transport awards, 2012−19 ($bn)

Figure 26: Qatar construction & transport cash flow, 2012−19 ($bn)

Figure 27: Qatar construction & transport project activity monitor, 2010−19 ($bn)

Figure 28: Qatar construction & transport market sustainability assessment

Figure 29: Saudi Arabia construction & transport awards, 2012−19 ($bn)

Figure 30: Saudi Arabia construction & transport cash flow, 2012−19 ($bn)

Figure 31: Saudi Arabia construction & transport project activity monitor, 2010−19 ($bn)

Figure 32: Saudi Arabia construction & transport market sustainability assessment

Figure 33: UAE construction & transport awards, 2012−19 ($bn)

Figure 34: UAE construction & transport cash flow, 2012−19 ($bn)

Figure 35: UAE construction & transport project activity monitor, 2010−19 ($bn)

Figure 36: UAE construction & transport market sustainability assessment

Figure 37: Outstanding loans & advances to construction & real estate in Bahrain (BD m)

Figure 38: Bahrain construction and transport awards, 2010−19 ($m)

Figure 39: Main construction and transport contractors by value of contracts under construction ($m)

Figure 40: Bahrain planned rail networks

Figure 41: Kuwait construction and transport contracts awarded and completed by year ($bn)

Figure 42: Kuwait net gain or loss in awarded contracts compared to completed contracts ($bn)

Figure 43: Kuwait construction and transport awards, 2010-19 ($m)

Figure 44: Kuwait construction and transport awards 2010-19 by subsector

Figure 45: Most active clients by value of work underway ($m)

Figure 46: Most active contractors by value of work underway ($m)

Figure 47: Kuwait construction contract awards by sector ($m), 2010-19

Figure 48: Kuwait transport contract awards by sector ($m), 2010-19

Figure 49: The Third Kuwait Masterplan Review, 2005

Figure 50: Housing waiting list

Figure 51: Location of PAHW’s new cities

Figure 52: Neighbourhoods in South Al-Mutlaa City

Figure 53: Sabah al-Salem University Campus masterplan, 2010

Figure 54: Kuwait International airport expansion

Figure 55: Kuwait city metro network

Figure 56: Oman contract awards in construction and transport, 2010−19 ($m)

Figure 57: Oman construction and transport contract awards by sector, 2019 ($m)

Figure 58: Biggest clients in Oman by contracts under execution ($m)

Figure 59: Biggest contractors in Oman by contracts under execution ($m)

Figure 60: Oman Railway

Figure 61: Qatar construction and transport contract awards, 2010−19 ($m)

Figure 62: Qatar construction and transport active projects market ($m)

Figure 63: Leading clients by value of work under execution ($m)

Figure 64: Leading contractors by value of work under execution ($m

Figure 65: Qatar construction contract awards by sector ($m), 2010−19

Figure 66: Qatar transport contract awards by sector ($m), 2010−19

Figure 67: Lusail land-use masterplan

Figure 68: Road projects by status ($m)

Figure 69: The proposed QIRP delivery schedule

Figure 70: Doha Metro map

Figure 71: Lusail LRT network

Figure 72: Hamad Port

Figure 73: Saudi Arabia construction and transport contract awards ($m), 2010−19

Figure 74: Most active clients in construction and transport sectors by work underway ($bn)

Figure 75: Most active contractors in construction & transportation sectors by work underway ($m)

Figure 76: Planned but unawarded construction and transport projects in Saudi Arabia ($m)

Figure 77: Saudi Arabia construction contract awards by sector ($m), 2010−19

Figure 78: Saudi Arabia transport contract awards by sector ($m), 2010−19

Figure 79: Active education projects by status ($m)

Figure 80: Planned rail networks in Saudi Arabia to 2040

Figure 81: Riyadh Metro network

Figure 82: Jeddah transport masterplan

Figure 83: Mecca Metro

Figure 84: UAE construction and transport contract awards, 2010−19 ($m)

Figure 85: Contract awards Dubai and Abu Dhabi, 2010−19 ($bn)

Figure 86: UAE contract awards by emirate, 2019 ($m

Figure 87: UAE contract awards by emirate in 2018 and 2019 ($bn)

Figure 88: Dubai construction and transport contract awards, 2010−19 ($m)

Figure 89: Dubai construction contract awards by sector ($m), 2010−19

Figure 90: Dubai transport contract awards by sector ($m), 2010-19

Figure 91: Dubai World Expo Economic Impact (AEDbn)

Figure 92: Dubai World Expo location map

Figure 93: Dubai transport projects under construction by sector (per cent

Figure 94: Dubai transport projects planned but unawarded by status ($m)

Figure 95: Dubai metro with planned expansions

Figure 96: Abu Dhabi construction and transport contract awards, 2010−19 ($m)

Figure 97: Abu Dhabi construction contract awards by sector ($m), 2010−19

Figure 98: Abu Dhabi transport contract awards by sector ($m), 2010-19

Figure 99: Education projects planned and underway by emirate, 2019

Figure 100: Abu Dhabi transport projects under construction by sector (per cent)

Figure 101: Abu Dhabi transport projects planned but unawarded by status ($m)

Figure 102: Etihad Rail

Figure 103: Northern Emirates construction and transport contract awards by Emirate, 2010−19 ($m)

Figure 104: Northern Emirates construction contract awards by sector ($m), 2010−19

Figure 105: Northern Emirates transport contract awards by sector ($m), 2010−19

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