By Joanne Bladd www.arabianbusiness.com
Qatar’s $100bn spending spree ahead of the World Cup is set to force a string of legacy infrastructure projects to the top of the agenda, an economic report has said.
Gas-rich Doha must scramble to complete multibillion-dollar projects including the much-delayed $4bn Qatar-Bahrain Causeway, and its $25bn metro and rail scheme – originally slated for completion in 2025 – said National Bank of Kuwait (NBK) in a report.
“Hosting the World Cup foremost adds a sense of urgency and an ultimate hard deadline for the completion of the projects critical to a successful hosting,” the report said.
Doha had already announced plans to splash $100bn- or 87 percent of GDP – on sprucing up its infrastructure before being chosen to host the world’s biggest sporting event.
Projects in the pipeline include a $7bn deep water port, the $10bn Doha International Airport and a $20bn upgrade to the emirate’s road system.
For the World Cup alone, Qatar has pledged to build 12 state-of-the-art stadiums at a cost of $2bn each, and to add 90,000 new hotel rooms – despite FIFA only requiring the addition of 65,000.
“Hosting the World Cup will set tight deadlines, create extra spending, bring in new expertise and present additional motivation and incentives,” the report said.
The massive investment will spur on Qatar’s economy at a time when its hydrocarbon-driven growth was set to end, NBK said, with the Gulf’s banking sector poised to be one of the chief beneficiaries.
“Sustained fee plans will help banks generate revenues through balance sheet growth and increased fee generating businesses. The plan could result in deeper stock markets with some companies set to go public for their funding.”
Some Gulf firms are likely to establish joint ventures to meet extra demand created by Qatar’s World Cup preparations, bolstering intra-regional trade and aiding scores of contractors.
Qatar, however is at risk of building excess supply in certain areas, mainly in hotel rooms.
“[But] the returns of hosting the event, tourism, TV rights, should cover a good deal of the additional expenses,” NBK said.