Qatar to fund 2022 World Cup with cash

0
782

By Kevin Brass  www.thenational.ae

The Qatari government will be able to pay for US$70 billion (Dh257.1bn) of infrastructure projects for the 2022 Fifa World Cup of football out of cash flow, the chief of the International Bank of Qatar (IBQ) says.

Thanks largely to revenue from oil and gas projects, Qatar is expected to generate a surplus of $130bn in the next five years, which will cover the cost of the World Cup developments, says George Nasra, the managing director of IBQ.

“All government-sponsored projects will be cash funded,” Mr Nasra said this week.

The infrastructure is to be built in phases. Work on a national rail system and metro lines in Doha is expected to start in 2015, along with the development of an airport, a deepwater port and a causeway connecting Qatar with Bahrain.

Mr Nasra said plans called for 12 stadiums to be built by 2022. A total of 19 stadiums will be needed.

Estimates of the amount needed for the projects have varied. Standard & Poor’s (S&P) puts the amount at 233 billion rials (Dh234.99bn), which would be 47 per cent of the country’s GDP last year.

But S&P doesn’t expect Qatar to increase its sovereign debt to pay for the infrastructure.

“We expect most of the infrastructure will be financed via revenues from the oil and gas sectors,” the S&P credit analyst Luc Marchand said in a report in December.

“In our opinion, this could lead to a lower, although still substantial, surplus in the government’s budget at above 7 per cent of GDP in 2011-2013.” The private sector is also expected to lift its role in Doha’s development. Plans call for a total of 90,000 hotel rooms to be available by 2022, up from 12,000 today, according to IBQ. And $5.5bn is to be spent on housing and schools for expatriates expected to flock in to support the projects.

Overall, Qatar is developing $317bn of projects, up from $145bn in 2007, according to the IBQ. Forty per cent of those projects involve property and 26 per cent are infrastructure-related, including the rail system, the metro and a network of new roads.

The government expects to complete 480km of roads by 2015, according to Saad al Misnad, an engineering adviser to the president of Ashghal, the Qatari public works authority.

Fifty per cent of the projects under way are expected to be completed by 2015, Mr Nasra said.

All the projects will have “multiplier effects” on Qatar’s economy, Mr Nasra said. The country’s GDP is expected to grow to $221bn, up from $43bn in 2005, according to analyst estimates.

kbrass@thenational.ae