GCC to spend $86bn on infrastructure projects

Updated 06 August 2014

GCC to spend $86bn on infrastructure projects

Infrastructure project awards across the GCC are forecast to exceed $86billion in 2014, an increase of 77.8 percent over 2013. New figures released by construction intelligence firm Ventures Onsites how a dramatic increase in contract awards across the region, in every country except Saudi Arabia.
Qatar will award projects worth $26.2 billion compared with just $9.4 billion last year while Kuwait is expected to award$3.45 billion, almost 10 times the previous year.
In the UAE, $15.18billion will be awarded, almost five times the 2013 contracts,while in Oman infrastructure awards are expected to reach $7.4 billion — up $5.5 billion on 2013.
Meanwhile, Bahrain, which awarded $382 million last year, is expected to offer deals worth $3.4 billion.
The figures were released by Ventures Onsite, the intelligence partner for Middle East Concreteand PMV Live exhibitions, which run alongside The Big 5 international building and construction show set to take place in Dubai in November.
Saudi Arabia’s forecast award of $29.34 billion — the highest in the region — represents a decrease year on year, however last year’s total awards of $33.6 billion included the $22.5 billion Riyadh Metro project.
Infrastructure projects make up 16 percent of the total construction value of GCC projects,and rail projects like the Riyadh Metro are the main beneficiary.
According to Ventures, itis estimated the rail sector is worth $200 billion as the six countries aim for an integrated GCC-wide network by 2018.
Infrastructure is a key focus for seminar sessions at this year’s Middle East Concrete and PMV Live exhibitions.
During the first day there will bea panel sessionentitled ‘Market update and future forecast of the Middle East’s infrastructure sector’ which will look at the key issues the region has to overcome.
Panellist Paul Groves, Head of Tunnelling & Ground Engineering with Atkins, will also present a case study on a metro project. Atkins is among the leading rail sector consultancies in the Middle East, has recently set up a center of rail excellenceand is involved in major rail and metro projects in the UAE, Saudi Arabia and Qatar.
Atkins first developed its team to provide multidisciplinary design and management of the civil works on Dubai Metro seven years ago.
“Existing roads are already over capacity, to the point where congestion is having an impact on the local economy and quality of life for residents,” said Ghassan Ziadat, director of planning and infrastructure for Atkins.
But, it is not simply about cutting congestion and improving freight transport links.
The railway network will create new jobs and bring environmental benefits to the region according to Feras Shadid, a rail assurance and asset management consultant who will also be a panelist at the infrastructure seminar on the first day of the exhibitions.
“Rail networks create a more sustainable society that is not dependent on one mode of transport for passengers and goods,” Shadid said.
“Also the environmental advantages of using railways have been documented extensively, and the rail projects will create a range of employment opportunities including high-tech engineering positions,” Shadid said.


Turkey hikes interest rate for first time since 2018

Updated 38 min ago

Turkey hikes interest rate for first time since 2018

  • The bank said the one-week repo rate would go from 8.25 percent to 10.25 percent
  • The coronavirus pandemic has forced nations worldwide to cut rates to revive their stalled economies

ANKARA: Turkey’s central bank raised Thursday its main interest rate for the first time since September 2018, boosting it by two percentage points to haul the lira up from historic lows.
The bank said the one-week repo rate would go from 8.25 percent to 10.25 percent.
The lira gained around one percent in value against the US dollar within minutes of the announcement, after touching a record low of 7.71 earlier in the day.
“Massive surprise, and positive,” said Timothy Ash, an analyst at BlueBay Asset Management.
The coronavirus pandemic has forced nations worldwide to cut rates to revive their stalled economies.
But Turkey has been burning through its hard currency reserves to support the lira, which has lost nearly 22 percent of its value against the dollar this year and is one of the world’s worst performing emerging market currencies.
The Moody’s ratings agency estimated on Monday that Turkey’s hard currency reserves were now at a 20-year low.
A central bank statement said it “decided to increase the policy rate by 200 basis points to restore the disinflation process and support price stability.”
Inflation edged up to 11.77 percent in August from 11.76 percent in July but it has remained stubbornly in the double digits in the past few years.
This means that Turkey is running a negative real interest rate, where bank deposits and bonds lose value over time, forcing investors out of the market and Turkish nationals to convert their liras into dollars or euros.
The bank last increased its main rate in September 2018 from 17.75 percent to 24 percent owing to a currency crisis caused by tense relations with the United States.
But President Recep Tayyip Erdogan opposes high rates, once describing them as “the mother and father of all evil,” and called for them to be lowered to stimulate growth.
Erdogan last year sacked the bank’s governor and appointed Murat Uysal, under whose direction the rate has been cut nine times.
Ash said the rate decision “suggests the (bank) listened to the market and decided they had to move to avoid a disorderly devaluation and potential balance of payments crisis.”
“They are not out of the woods yet, but they have given themselves a fighting chance.”