* Estimated $140-200 bln of projects in the pipeline
* World Cup projects to be prioritised over others
* Stadiums to cost $4 bln more than planned
* Logistical, cost issues may delay other projects
* Analyst says cost could exceed budget by $80 bln
By Praveen Menon
DOHA, March 20 Qatar is likely to reschedule
about 15 percent of its planned building projects for coming
years and go over budget, amid a push to complete preparations
for the 2022 World Cup soccer tournament, sources familiar with
government policy said.
After it won the right to host the World Cup in 2010, the
tiny nation, with a population of about 2.1 million, announced
plans for a raft of projects that would transform it over the
following 15 years. They include a new airport, roads, port
facilities, railways, stadiums and other infrastructure.
The government has not released a comprehensive, detailed
schedule of its construction plans, but analysts estimate they
will cost between $140 billion and $200 billion through the
early 2020s, paid for with the country's vast natural gas
wealth. This is expected to provide a bonanza to the foreign
construction firms that will do much of the work.
But so far, contract awards and work on many projects have
been slower to get started than the business community expected,
apparently because of bureaucratic and planning problems. If
they are not handled carefully, the projects could destabilise
Qatar's small economy, creating bottlenecks and driving up
A government source, declining to be named under briefing
rules, acknowledged that Qatar faced pressures in pushing
through the projects and would have to slow some, though he
stressed that construction specifically for the World Cup would
take priority and be completed on time.
"About 15 percent of the projects will be rescheduled," the
government source told Reuters.
"All projects associated directly with hosting the World Cup
cannot be rescheduled since they have to finish by 2022. But
there are others which can be moved." The source did not give
Qatari officials have declined to discuss changes to the
construction schedule publicly. Earlier this week, the central
bank governor said the government was expected to sign contracts
for construction projects worth as much as $50 billion this
year, but he did not elaborate.
Yasser al-Mulla, project manager at Al-Rayyan Precinct for
the Supreme Committee for Delivery and Legacy, which is handling
construction of tournament venues, said this week that all World
Cup projects were on track to be completed on time.
A change in Qatar's leadership may be partly responsible for
a slower pace of construction. Last June, Sheikh Tamim bin Hamad
al-Thani, 33, took over from his father as emir.
He has replaced some senior economic officials and in a
policy speech last November, said he was particularly keen to
prevent high inflation and corruption. Those purposes could be
helped by implementing projects at a more measured pace than the
Another factor is the sheer difficulty of assembling enough
construction workers, materials and equipment from around the
world. Qatar, the world's largest exporter of liquefied natural
gas, needs an additional 400,000 workers for its next phase of
development, the government source said.
Qatar is likely to face increasing competition for regional
construction resources in the next few years from Saudi Arabia,
which is accelerating a housing construction programme, and the
United Arab Emirates, where Dubai is preparing to host the 2020
By delaying some projects, Qatar can ensure that its own
banks and companies have the capacity to handle a larger share
of the contracts, limiting the extent to which it needs to rely
on bigger foreign firms.
A third factor appears to be cost. Qatar does not seem to
face any difficulty financing its projects; the government's
budget surplus was $27.3 billion, or a huge 14.2 percent of
gross domestic product, in the fiscal year to last March.
Nevertheless, slowing some projects may save money, if it
allows resources to be used more efficiently.
"The final expenditure may never be made public and will be
handled by the government," Anthony Holmes, director of the
London-based Institute for Infrastructure Studies, said at a
conference in Doha on Wednesday.
"But, if the performance conforms to global norms, the final
cost may exceed the original budget by $80 billion or around 50
percent of one year's GDP," said Holmes, who has advised
companies on World Cup-related projects.
Qatar's labour costs will probably rise because of publicity
about deaths of migrant construction workers building World Cup
infrastructure, the International Monetary Fund said in a report
Britain's Guardian newspaper reported in September that
dozens of Nepali workers had died during the summer in Qatar and
that labourers were not given enough food and water. Qatar
denied the Guardian's findings, but the IMF said the issue
"could affect the availability and cost of hiring new workers in
Qatar appears ready to pay what it takes to ensure that the
World Cup stadiums and other directly related projects are
completed on time, however.
Mulla at the Supreme Committee for Delivery and Legacy said
10 tenders would be issued this year for the stadiums' project
managers and design consultants.
"We are in the advanced stages of design work for six
stadiums and this year we will see five stadiums begin the early
works on foundations and construction," he said at a conference
organised by business information firm MEED.
Mulla said Doha now expected to spend $4 billion more than
originally planned on building stadiums and related sporting
infrastructure. He did not provide reasons, give details of the
additional spending or say how big the original budget was.
(Additional reporting by Amena Bakr; Editing by Andrew Torchia)