Arabian Business reported that Qatar's USD 100 billion spending spree ahead of the World Cup is set to force a string of legacy infrastructure projects to the top of the agenda.
National Bank of Kuwait in a report said that gas rich Doha must scramble to complete multibillion dollar projects including the much delayed USD 4 billion Qatar Bahrain Causeway, and its USD 25 billion metro and rail scheme, originally slated for completion in 2025.
The report said that "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."
Doha had already announced plans to splash USD 100 billion or 87% of GDP on sprucing up its infrastructure before being chosen to host the world’s biggest sporting event. Projects in the pipeline include a USD 7 billion deep water port, the USD 10 billion Doha International Airport and a USD 20 billion 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 USD 2 billion each, and to add 90,000 new hotel rooms, despite FIFA only requiring the addition of 65,000.
The report said that "Hosting the World Cup will set tight deadlines, create extra spending, bring in new expertise and present additional motivation and incentives."
NBK said that the massive investment will spur on Qatar’s economy at a time when its hydrocarbon driven growth was set to end, with the Gulf’s banking sector poised to be one of the chief beneficiaries.
It added that "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.
NBK said that "But the returns of hosting the event, tourism, TV rights, should cover a good deal of the additional expenses."
(Sourced from www.arabianbusiness.com)
