A US giant may have scooped the lead role on Qatar’s World Cup, but UK firms are well placed to target the $100bn that the richest country in the world is investing in construction before 2015. Building took a flight out east
In a sovereign state far, far away - 7,000 miles away to be exact - a whole new world is emerging. Imagine a place where your coffee is brought to your car from the nearest cafe if you sound your horn loudly and frequently enough outside. A place where you can call in advance for your groceries and have them selected, packed and ready to be passed through the car window by the time you drive past the shop. A place so wealthy that an equine spa exists, complete with Jacuzzi, swimming pool and massage area with infrared warming lamps to ensure the horses are as well looked after as the people.
Welcome to Qatar - a state the size of Yorkshire jutting out into the Persian Gulf off the coast of Saudi Arabia and the richest country in the world. This is a place where the people, and apparently the horses, benefit from the spoils that come from living in a state worth almost $100bn and where vast oil reserves and a forward thinking royal family, with billions to invest, hold out the promise that by 2030 Qatar will be one of the most culturally rich and politically significant regions in the world.
But this ambitious vision for Qatar’s future development will only become viable if the country has the infrastructure to support it - and so the state plans to invest over $100bn in construction by 2015. The funds will go towards a series of mega projects, building new regions and cities with accompanying social and transport infrastructure such as the £3.5bn Downtown Doha project now being built in the capital city. The upcoming development plan, supported almost entirely by state investment, is underpinned by the royal family’s desire to build schemes more in keeping with Qatari culture than the existing skyscrapers. But Qataris are quick to insist that this is not a case of building just for the sake of it, pointing to an expected population growth of 4% year on year, rapid urbanisation and the fact the country will need more sophisticated infrastructure and facilities to host the 2022 World Cup.
Specific opportunities to win work on the World Cup stadiums and associated infrastructure are up in the air, following the announcement last month that US engineer CH2M Hill had scooped the £5bn role to lead construction. But there is little doubt there will be plenty of UK involvement (see box below) and there’s no shortage of other construction work in the meantime. The separate $100bn investment from the state is hardly sewn up at all with a vast pipeline of projects still to come. There is added security in that the investment, like most other funding, is part of a controlled, steady outlay provided by the sovereign government which greatly reduces the risk of another Dubai.
Last year, Qatar’s economy grew 20%, taking its income per capita to $90,000 - almost twice that of the US - according to the International Monetary Fund
Qatari clients not only want to work with UK firms, they are seeking them out. John Rose, the development director of Qatari developer Msheireb Properties, revealed to Building last week that British firms still “have the edge” when it comes to winning work in Qatar, mainly thanks to their experience in the country. Add to all this the opportunity to triple your salary while living tax free and you might find yourself hard pushed to find a reason not to jump on the next flight to Doha.
Next month Qatar representatives will attend Mipim, the annual Cannes-based property conference to showcase its upcoming projects for the first time on such a scale. So what are the opportunities and challenges of working and living in the richest country in the world?
Last year, Qatar’s economy grew 20%, taking its income per capita to $90,000 - almost twice that of the US - according to the International Monetary Fund. This pushed it past Liechtenstein to become the richest in the world. The country’s overall GDP is just under $100bn.
This hasn’t happened overnight. The country has been steadily growing since the discovery of oil in 1939 - before this, it focused on fishing and pearl hunting. The region’s economic growth has been almost exclusively based on its petrol and natural gas industry and, more recently, high oil prices. Proved oil reserves of 15 billion barrels should ensure continued output at current levels for 37 years. Qatar’s reserves of natural gas are nearly 26 trillion cubic meters, about 14% of the world total and the third largest in the world.
Despite over 60 years of growth, now is Qatar’s time to shine. The country’s political presence and construction and development activities have kicked up a notch with mega projects like the £3bn Pearl and £3.5bn Downtown Doha schemes hitting the headlines.
George Pearson, chief executive of Parsons Brinckerhoff, the engineering subsidiary of Balfour Beatty and a firm active in Qatar, says “The 2022 World Cup bid win in December 2010 was a catalyst. But the wider work is part of a much broader, co-ordinated development laid out in the 2030 plan.”
He is referring to the Qatar National Vision 2030, the plan being propelled forward by the ruling Emir Sheikh Hamad bin Khalifa Al Thani and his wife Sheikha Mozah bint Nasser Al Missned. The mission is to “transform Qatar into an advanced country by 2030, capable of sustaining its development and providing for a high standard of living for all of its people for generations to come”. Ensuring development occurs at the same rate as economic growth is a key element of the 2030 plan requiring “continued commitment by the state”. Most developments will be funded by the Qatar Foundation, a private, chartered non-profit organisation.
The key to future development in the country is to redefine Qatar - moving away from iconic glitz and bling that populates Doha’s West Bay skyline, which many Qataris consider out of keeping with their history and culture. Issa M Al Mohannadi, chief executive of Msheireb Properties, the developer behind the 31ha Downtown Doha project, says: “We can’t dictate one style. And there are some people who like the West Bay. But we think we can do it better and create new developments with better links to our country’s past.”
The population of Qatar is just 1.5 million with very few indigenous contractors or architects
Qatar may be hell bent on ensuring that future development is its own in terms of style, but this doesn’t mean there are not still opportunities for UK firms to win
work. There is a need for overseas help and expertise due to a lack of local resources. The population of Qatar is just 1.5 million with very few indigenous contractors or architects. Although university courses in these skills are now up and running, it will take a while for the knowledge to filter through.
“There are tremendous opportunities as the Qatari government is very progressive,” says Parsons Brinckerhoff’s Pearson. “They are keen to bring in international expertise.”
Roger Nickels, consultant Buro Happold’s regional director for the Middle East, adds: “There is a definite empathy with British firms in Qatar and lots of affection for UK organisations. This is a lot to do with the length of time these firms have historically been working in the region - for a lot of people there is a real understanding of the market and a cultural overlap.”
So what of the opportunities themselves? On top of the mega-schemes such as the Pearl and Downtown Doha projects - mixed use developments in the Qatari capital with plenty of work still to be awarded - there are major infrastructure schemes under way.
Examples include the $11bn Doha International Airport, a 2,200ha site due for completion in 2015. The contract for the first phase was awarded to Bechtel in May 2006. Phases two and three will include a luxury hotel, 40 contact gates and an extension of the terminal building.
The $7bn New Doha Port scheme, phase one of which is expected to complete in 2014, with final completion scheduled for 2023; the $3bn Doha Metro scheme due for completion in 2015; and the $8.2bn Education City project, located on the outskirts of Doha - a 14km site that will be home to a number of university buildings.
And ahead of the 2022 World Cup, there are a host of stadiums to be built. Limited Qatari expertise in sports design and construction opens the door for more UK firms to work in the region. (See box below for more details)
Qatar is becoming more and more sustainably minded and so UK firms with expertise in this area are particularly well received. Following the establishment of the Qatar Green Building Council (QGBC) in 2009, a green infrastructure group was launched this year to ensure the environmental criteria of the Qatar National Vision 2030 are upheld.
Msheireb Properties’ Al Mohannadi, who is also founder and chair of the QGBC says: “Downtown Doha is made up of over 100 buildings and the project will have a Gold LEED standard average with several buildings being Platinum LEED rated. This could make it the greenest collection of buildings of this size in the world. I can see the World Cup venues being powered and cooled by renewables. Firms with expertise in sustainability are attractive here.”
Then there’s that other perk associated with working in Qatar. Money. You can expect to see your salary double, at least. In some cases you can earn three times what you would in the UK and live tax free.
“I earn double what I did before,” says one UK expat living in Doha. “In the UK I made £2,000 [a month] before tax. Now I take home £4,000 and pay no tax on it at all. In my mid-twenties that’s a pretty good salary.”
While Qatari clients are open to overseas input - especially from the UK - they are not to be underestimated. “Qatari clients are demanding and tough,”says Pearson.
Buro Happold’s Nickels adds: “Respect with Qatari clients must be earned. Papers and contracts are rigorous and if you don’t have all that in order, forget it. Many people fall foul of the processes involved in winning work in Qatar before they have even started.”
Culturally there are also hurdles to overcome. Qatar is a dry state and while these laws may be relaxed in time for the 2022 World Cup, for now alcohol can only be drunk at hotel bars or at home.
Similarly there are different attitudes to women, though this is changing and there are plenty of Qatari and expat pat women working in the country in increasingly
Finally, there are political concerns to take into consideration. Possible strikes against Iran’s nuclear programme would have an impact on Qatar, just 500 miles away - too close for comfort some might say.
Weighing it up
Cultural differences and potential political issues aside, for most people it seems that living and working in Qatar presents few hurdles. While individuals may have to think about whether they are happy to fit into an Arabic way of life before making the move, it’s amazing what $100bn worth of investment in construction can do to soften the blow of a re-location.
But it’s not just about the money. Changing Qatari attitudes and a country of open, forward thinking people, businesses and leaders have a crucial part to play in welcoming Westerners. The overarching feeling of acceptance is something you pick up on almost immediately. And once you get over the sight of a horse being led into an equine Jacuzzi before being taken for a massage under infra red warming lights, Qatar doesn’t feel all that alien after all.
Winning World Cup work in Qatar
When it comes to the World Cup, Qatar may have the billions, but it is still lacking the building expertise. Stadium design and construction is simply not part of the local knowledge base and, following the London 2012 Olympics, it will be top of many British firms’ skills sets. US engineer CH2M Hill may have bagged the £5bn role to head the construction effort but there will be plenty of work up for grabs for UK firms. Olympic Delivery Authority chairman Sir John Armitt has already visited Qatar earlier this year to discuss UK involvement in the projects.
Construction plans include nine stadiums and the renovation of three existing stadiums, which will add up to about $3bn worth of work. Infrastructure works over the next five years will include $25bn worth of rail projects to link internal host cities, as well as improving connections to Saudi Arabia and Bahrain. A further $20bn will be spent on roads, $11bn on a new airport and $5.5bn on a new port. Master planning should start next year, with infrastructure works soon to follow. Qatar is also bidding for the 2020 Olympic Games - another potential outlet for UK expertise in the pipeline.
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