Construction costs in Qatar are expected to increase by 18% over the next five years as the Gulf state starts work on projects for the 2022 World Cup.

Based on data which has been sourced from more than 200 construction projects across a variety industry sectors, the MEED Tender Price Index also predicted a four percent rise over the next year.

Mr Emil Rademeyer GM for MEED Costs Indices said that "Construction costs in Qatar are expected to increase by 18% by 2017 as the country starts work on projects as it prepares to host the 2022 Fifa World Cup. Next year's four percent rise will be driven by work starting on major new infrastructure projects such as the Doha Metro scheme.

Overall, the index forecasts that over USD 15 billion worth of construction contracts will be awarded in Qatar this year. The value of contract awards is set to more than double from 2013 onwards and is forecast to peak in 2017 at USD 40 billion.

According to new findings, a rapid increase in project awards and the resulting construction work on site will strain Qatar's supply chain to breaking point. With limited domestic production of construction materials and a dependence on foreign workers and staff most resources are expected to be in short supply, driving up costs. Shortages are expected for resources such as cement, rebar, steel, skilled and unskilled labor.

Mr Rademeyer said that "For cement, Qatar is expected to have a shortfall reaching almost 3 million tonnes a year in 2015. The current production capacity of 6.2 million tonnes per annum will render a small surplus during 2012 and acute shortages form 2013 onwards."

Source - Arabian Business.com

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