Qatar to suffer price rise as World Cup 2022 nears
 

Qatar to suffer price rise as World Cup 2022 nears
http://img-s-msn-com.akamaized.net/t...6&q=60&o=f&l=fConstruction costs are likely to increase in Qatar, which is due to spend more than $150bn on infrastructure development for the FIFA World Cup 2022 and its national development plan for 2030. Consequently, building projects in the country face potential completion delays, compounding the situation for contractors in Doha, which are already suffering labour and material shortages in the intensely active construction hub. "The pinch point will likely be in 2017-19 when the construction work peaks, but the government can take measures to mitigate that," Nick Smith, partner at engineering consultants Arcadis said. Smith predicted material inflation could be as high as 3% in 2015. "This will include early supply chain engagement, standardisation of products and direct procurement of certain items. Qatar is already pursuing some of these initiatives," Smith added. Building material inflation could peak to 15%-20% by 2018, Steven Humphrey, a director at AECOM told newswire Reuters in Qatar. "Qatar, like most other Gulf states, has suffered from projects being delivered late, sometimes over budget, and usually because the scope has changed from what was originally set out," he said. "With a fixed deadline like 2022, these attitudes will **t be permitted. As prices get squeezed, contractors who bid at the incorrect prices will shy away from doing the projects and move their resources into more profitable projects," Humphrey added. Construction inflation fluctuates more than general inflation, and small markets such as Qatar are less able to absorb changes in workload, the report stated, quoting Arcadis unit EC Harris. Qatar will import much of its demand from neighbouring United Arab Emirates, and Doha's limited port facilities mean these goods must travel on small barges, or via truck through Saudi Arabia, adding to supply chain pressures. "Contractors pick and choose what their priorities are, so there's a real danger, looking at bids today where they seem very competitive, that these are projects that may **t be able to be delivered on time," warned Humphrey. RELATED ARTICLES: Qatar-oil-reserves-to-last-at-least-138-years , GCC-invested-3-2bn-for-building-materials-in-2014 , Qatar-Skills-materials-shortages-ongoing-issue ,