Meeting tight project deadlines without going over budget will require Qatar to carefully oversee its many public investment projects, the International Monetary Fund (IMF) has said in its latest country report.
Qatar currently has $210 billion worth of projects in the pipeline, with the government bankrolling the majority of them ($160 billion).
In a series of recommendations, the IMF urged Qatar to set up an integrated public investment management process to coordinate the planned infrastructure and development projects underway ahead of the 2022 World Cup.
This would prevent construction bottlenecks and rising costs, and ensure that projects are delivered on time, the IMF said.
The international body also called for Qatar to further strengthen its fiscal institutions, and to create a medium-term budget for all its projects.
Meanwhile, Qatar could also see improvement in the arena of efficiency, the report said.
While its government effectiveness is broadly in line with its GCC peers, the report cites World Bank figures that show Qatar is “lagging behind (other) resource-rich, advanced economies,” such as Canada, Norway and Sweden.
Greater efficiency would help Qatar maximize its existing resources across all its projects, delivering them on time with better value for its money.
Forthcoming projects
Qatar’s level of public capital spending relative to GDP in 2012 was almost twice as high as public investment in other emerging markets, excluding China.
Infrastructure and construction projects underway include:
- The new Hamad International Airport, which soft launched late last month;
- A new port;
- A rail and metro system;
- Development of residential areas;
- New petrochemical plants; and
- The upgrading and expansion of Qatar’s road network.
This is in addition to the redevelopment and construction of at least eight new stadiums for the World Cup.
“Given the ambitious investment program envisaged under the National Vision 2030
and compressed timetable ahead of the FIFA Cup 2022, the focus on investment efficiency is essential,” the report said.
Eye on cost
Examining Qatar’s efficiency, the report used statistics from Zawya’s database of MENA oil-exporting countries to compare construction costs of large public infrastructure projects.
It noted that while construction costs on Qatar’s metro project appear low, the project is “subject to the risk of cost over-runs.”
While it states that Qatar’s metro seems quite expensive when taking into account relatively low labor cost, the report adds that Qatar still compares favorably to its MENA peers. The quoted figures do not take into account Qatar’s need to import most of its raw materials.
The report also noted that Qatar’s road projects appear “expensive,” at a per km/per lane cost of between $0.7 million to $7.4 million. This compares to Oman’s rate of $1.5 million, but land values, quality and technical competency were not factored into these figures, it said.
The IMF report comes as Qatar moves to streamline a number of publicly-funded organizations. For example, the Doha Film Institute made 40 of its staff redundant in January of this year.
Thoughts?
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Now the IMF is picking on Qatar because they got the cup. 😉
It’s a cultural thing. When I recommended 3 years contract period for a project. The Director granted 2 years, when I protested he said “if I give them 3 years they will take four, if I give it 2 years it will take three” Of course it took five years. Contractors under unrealistic pressure have to spend time finding excuses, claims, rather than concentrating on finish the project.
Too common in Qatar.
They issued three documents on their website at https://www.imf.org/external/country/QAT/ , this pdf looks like it’s more important… https://www.imf.org/external/pubs/ft/scr/2014/cr14109.pdf (it has all the details)
I agree with the IMF, Qatar only has 8 years left for the world cup, constant changes in project design and specifications hampers the efficiency of the projects, creating lack of direction and work delays. Establishing a clear cut and transparent project management foundation along with labor law reformation will be a good start.
too much time and money wasted on layer upon layer of expensive project managers, instead of paying the right price for the work and to do’ers to get on with it …. if you try to buy cheap, it dictates you will almost certainly have to over manage it to achieve mediocrity ….. but Qatar “deserves the best”, and doesnt seem to have a structure to achieve it
They prefer to spend their money on expensive consultants instead of getting skilled workers. Go figure.
Employees not only in Qatar but across the GCC are normally recruited based on how high their previous package is or from which country they are from. I see hired people who get paid so much but are the most incompetent for the job, they put in a lot of effort but achieve minimal result. Employees should be compensated based on knowledge, skill, experience. Instead of salary increment, incentives should be provided based upon company profits & societal requirement. Qatar still has a long way to go in this regard, primary focus needs to be in sorting out the country’s inefficient labor system.
If Qatar can afford the escalating cost, so let them be. After all, I’m assuming most of the gainers will come from the west anyway.
So let Qatar spend how they wish. IMF need not worry about Qatar being bankrupt and seeking assistance from IMF. At least not in 300yrs.
The 300 years of gas is a fallacy. If no one wants to buy it or is becomes so cheap, then Qatar will suffer.
Qatar would not suffer, rather it will need to evolve based upon market conditions. But yes, there is a great possibility of price stagnation in about 10-15 years, a lot of countries like U.S.A, Russia, Australia, Canada have investing a lot in the gas sector.
Things can change very quickly. If you said to someone in 2000 we would have the smart phones we have now and explained everything they can do that would not have believed you. Things change that quickly. Without the necessity of hydrocarbon money underpinning the whole economy Qatar would see a catastrophic reduction in economy and living standards. Don’t tell me the old line about diversifying the economy, Saudi has tried that for years and has failed, plus other business do not generate the huge profit margins large LNG plants do.
Are you telling me that Qataris in future are only going to rely on their gas wealth?? That will never work. A country’s resources are not the key to economic prosperity. Qatar will need to stop being conservative, while strengthen its social and economic institution to integrate with the global economy. Look at the U.A.E., they were once a very conservative society, they have begun to integrate well into the world economy.
The key to a nation’s prosperity lies in socio-economic stability through co-operation, this is what is hindering Saudi Arabia to integrate, while Qatar hosting the Fifa games is a positive step for such changes, a wealth of experience will be gained here……
I doubt that will happen anytime in our lifetime. People has talked about alternative energy for many years without one convincing method. Millions (if not billions) has been spent. Nothing can replace the temptation of petroleum, be it oil or gas.
why spend money when you don’t need to spend money? why build a road 3 times when you can build it once?
the above logic is so flawed i don’t even know where to begin…
Well sometime mega rich are not subjected to logic.
efficiency requires free capital and labour markets to push and pull capital appropriately. Let’s hope the lessons being learned are implemented.
Yeah… from what I understand, there is a very very low probability that Qatar would need assistance from the IMF. Even if Qatar managed the projects so horribly that they doubled the cost I think Qatar would be able to handle that. If anything… the IMF may need some assistance from Qatar. So here is a thought…. Maybe Qatar should start telling the IMF how to run things. LOL!!!