Despite grappling with challenges and delivery issues related to current projects, major opportunities in the construction sector remain prevalent in Saudi Arabia, Qatar, Abu Dhabi and Iraq in 2012, according to the newly released Deloitte Middle East’s annual report on the sector: ‘GCC Powers of Construction: Five Lessons to Learn From’.
Key findings in the Deloitte report indicate that large infrastructure projects, particularly around social and transport infrastructure, will offer tremendous opportunities for contractors, as will continuing upstream and downstream oil and gas related developments in the coming years. Cemented as a trusted advisor to a large number of clients throughout the Middle East construction industry and supply chain entities, Deloitte is uniquely positioned in this report to analyze the impact of the global financial crisis on the GCC construction sector, particularly regarding current projects.
Of the biggest investments currently underway is Qatar’s plan to spend US$ 100 billion in preparation for hosting the 2022 World Cup and achieving its 2030 vision, and Saudi Arabia’s capital spend program approaching US$ 400 billion over the next 10 years alone. The Deloitte report indicates that although there are massive opportunities associated with huge construction spend, many project sponsors still have to deal with illiquid projects and debt.
“What primarily differentiates participants in the GCC’s construction industry from their Western counterparts is that grand opportunities continue to be capitalized upon across the region, despite being forced to deal with continuing negative financial circumstances – simultaneously – in specific locales,” states Rizwan Shah, Managing Director, Corporate Finance, and Leader of Deloitte’s Capital Projects Advisory services practice for the Middle East.
The ‘GCC Powers of Construction’ series is an annual report issued by Deloitte Middle East. The 2012 edition provides a collection of unique perspectives on the underlying issues that have challenged the GCC’s multi-trillion dollar construction industry, and how these challenges have been overcome by some of the largest and most sophisticated businesses in the region.
“This report demonstrates Deloitte’s unique perspective on the construction industry and its commitment to addressing what is ‘next’ for the benefit of our clients and wider GCC industry participants, by leveraging a multitude of lessons learned in the context of projected growth for the GCC construction industry in the future,” adds Shah. “Collectively, the report is designed to share what is typically privileged client intelligence in a neutral medium, to help stakeholders involved in the construction industry improve their business performance and to benefit and advance the GCC construction industry as a whole,” he said.
