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Qatar Construction Faces Rising Costs

Diplomatic crisis could also impact ability to deliver World Cup 2022 projects on time

The ongoing diplomatic rift in the Gulf will have a severe impact on Qatar’s construction sector, an industry expert has told Big Project ME.

Saudi Arabia, the UAE, Egypt and Bahrain earlier this week severed diplomatic ties with Qatar and blockaded its borders, with several other nations also cutting relations with Doha over allegations it supports extremist groups.

In an emailed statement, Gary Tracey, associate director – Project and Development Services, MENA for Jones Lang LaSalle, said that the cost of building materials and the tender price index will increase. Furthermore, contractors will face increased risk on projects in the country.

“Most materials are delivered to Qatar from KSA and they have now cut off ties through land, air and sea. Qatar do not have many other alternatives for supply in the GCC / Middle East only Oman, Kuwait and Iran,” Tracey said.

“However, these three countries mostly import materials and will not solve the short to medium term demand of materials Qatar will need to fulfill its existing construction projects. International contractors and consultants will increase their fees considerably due to many staff living in the UAE and flying in and out each week. This is now more difficult after the announcement.”

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Paul Edwards
Editor for HSME
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