Qatar’s construction sector – can it overcome current political pressures?
With news that Saudi Arabia, Bahrain, Egypt, Yemen, the UAE and the Maldives have cut diplomatic ties in the region, Qatar is in serious trouble. With closures of airspace, road and sea routes, with passages blocked through Saudi Arabia, alongside the suspension of flights to the country, such moves will no doubt cause economic instability.
Whilst Kuwait, who has yet to respond, is currently acting as an intermediary, Qatar has recalled citizens and informed diplomats they are to leave the country, leading to one of the largest diplomatic crises since the 1990s.
With limited access both in and out of the country, basic food supplies will become inflated, leading to further instability. The Guardian has reported that local shops amassed queues out of the doors, with citizens stocking up on essentials before potential price hikes or supplies run out.
This could soon cause a domino effect within every sector within Qatar, especially construction. With a reduced shortage of workers, with many originating from Egypt, materials can also no longer enter the country through Saudi Arabia. With a rising construction demand in a number of large projects, such as the FIFA 2022 World Cup stadium (alongside eight others), delays will be inevitable, with materials now taking longer to arrive via shipment, also leading to significant price hikes.
Additionally, this will also impact the country’s National Vision 2030, with many infrastructure projects now either delayed or postponed.
The economy has therefore saw a decline in stock prices, with companies losing significant revenue due to cut ties from neighbouring countries, impacting trading and future projects.
FIFA has yet to formally respond to recent events, but is in regular contact with the organising committee, according to Reuters. Many have commented that Trump has given Saudi Arabia in particular a new air of confidence to tackle Qatar head on, and take the country to task on its close relationship with Iran and extremist groups.
It is yet to be seen whether these relations will remain closed, but we will be keeping a close eye on how the construction sector and future projects remain affected.
France to invest €1.8bn in Egypt’s infrastructure
France will invest a total of €1.8bn into Egypt’s infrastructure focusing specifically on upgrading the Cairo Metro, building a railway to Sudan, and developing water and energy schemes. Officials have called the investment a “major boost to bilateral cooperation”.
The Cairo Metro
Included in the financing is a concessional government loan of around €800mn to upgrade Line 1 of the Cairo Metro, introduced in the 1980s. The financing will pay for 55 trainsets for the line and is provided by the French engineering company, Alstom.
Line 6 is also due to be upgraded using further state-guaranteed loans worth up to €2bn. Bruno Le Maire said that this would be negotiated over the next six months. France and Egypt have worked in close cooperation ever since Abdel Fattah al-Sisi became president in 2014, despite differences over human rights and strong criticism of Egypt by rights activists and some foreign states.
Nine more projects over the next half a decade
A further €1bn from France’s development agency, Agence Française de Développement (AFD), aims to cover a range of other projects over the next half a decade.
These projects include a railway line between Aswan, southern Egypt, and Wadi Halfa in Sudan, as well as several projects in the renewable energy and water purification industries. Bruno Le Maire, France’s Finance Minister, said Egypt was a “strategic partner and commercial dealings with it would be developed. France will substantially increase its direct exposure to Egypt, becoming the first counter-party for government to government loans,” he said.
According to Le Maire, the AFD will also €150mn to support the construction of a universal health insurance programme. French contractors such as Vinci and Bouygues have a long history of working on the Egyptian capital’s underground system.
Talking about the relationship between France And Egypt, Le Maire concluded: “France will substantially increase its direct exposure to Egypt, becoming the first counter-party for government to government loans”.