Qatar to finalize 25 year masterplan for economic development
Published on Sep 22nd, 2009 by internetcont in Press with
MEED reported that trying to devise realistic economic plans is fraught with difficulties at the best of times, let alone in the middle of a global economic downturn. But that is the task facing officials at Qatar’s Urban Planning & Development Authority and Japan’s Oriental Consultants which are due to finish work on the Qatar National Masterplan by the end of 2009.
The document, which will be published in January will set out a guide for the development of Qatar over the next 25 years and could be one of the most important documents in the country’s history. Such masterplans are nothing new in the Gulf. Abu Dhabi and Bahrain both have plans covering the next 21 years and governments across the region have been keen to put in place long term targets to guide their economic development. But the reality does not always match the ambition Dubai is reviewing its Strategic Plan 2015 in light of the global economic downturn.
Construction concerns
As much of the work on Qatar’s masterplan has been carried out during the current downturn, Doha should at least be realistic about the country’s economic prospects and the need for continued large scale government investment.
On the face of it, Qatar’s economy appears to be the strongest in the GCC, with the International Monetary Fund predicting growth of 18% in 2008 and 16.4% in 2010 in part due to the healthy revenues from the sale of liquefied natural gas. But there are worrying signs of a potential slowdown in private sector activity.
In early August, a report by the US’ Bank of America Securities Merrill Lynch warned that Qatar could face a significant oversupply of homes by 2012 as the workforce that has been building the country’s infrastructure in recent years begins to leave.
Mr Blair Hagkull MD for the Middle East and North Africa at US real estate services company Jones Lang LaSalle said that “The ‘build and they will come’ era is behind us. Doha is evolving into a much more mature market that is more focused on the traditional real estate fundamentals, rather than how quickly something can be built.”
He said that with private sector development slowing, the government is likely to play an even more crucial role in the country’s economy. Already, the majority of upcoming projects in Qatar are government backed and construction industry sources in Doha said that they expect a large number of major contract awards in the coming months.
Rail projects
Further infrastructure schemes are expected to be launched in the coming years, based on targets in the masterplan. They are likely to include a series of rail lines to be developed over the next 10 years. The government said that it plans to build a rail link following the east coast between Ras Laffan and Mesaieed a high speed line across the causeway to Bahrain, a freight line connecting to the planned GCC rail network, a metro network in Doha and a light rail network serving residential developments around the capital.
The billions of dollars worth of work that such schemes represent should ensure that Qatar remains an attractive market for inter national companies. But the recent downturn has also exposed some problems for companies working in Qatar. Malaysia’s UEM claims it has not been paid in full by the Public Works Authority after completing the 81 kilometer long Salwa Road project in 2008 and other contractors working on road projects complain of difficulties and delays in being paid.
One international contractor working in Doha said that “It is a difficult place to work. The supply chain is limited and you have to use a lot of local suppliers so there are a lot of hidden problems that you do not plan for at the tender stage.”
Perhaps the biggest problem the masterplan will need to address is ensuring that international companies and their staff want to come to the country in the future. A large number of real estate developments have been launched in recent years including Lusail and The Pearl Qatar and the market is already showing signs that supply and demand are approaching equilibrium.
Mr Hagkull said that “After many years of chronic shortages, supply is catching up with demand.”
He said that much of that demand comes from expatriates who are working on developing the country’s infrastructure. Unless Qatar creates new jobs for these people, many could leave, creating a problem of oversupply as the Bank of America Securities Merrill Lynch report warns. That in turn would have a knock on effect on other areas of the economy with consumer demand falling for other goods and services and could bring to an end the recent period of rapid economic growth Qatar has enjoyed.
Construction on the port and the railways will still be going on in 2012 which will help to mitigate the problem but the government’s masterplan will also need to lay out other strategies to spur the private sector into action.
(Sourced from MEED)
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