qatar construction sector

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The Commercial Bank of Qatar (Q.S.C.)

Qatar Construction Sector1st Edition 2012


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Inspired by Qatar, we believe everything is possibl e


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Dear Investor,

Qatar continues to be a magnet for investment due to its impressive economic performance in the face of continued

global economic uncertainty.

On the back of a strong GDP growth of 19% in 2011, decelerating to a forecast 6% in 2012, Qatars GDP would reach

USD 197bn. Qatar also boasts the highest per capita income growth in the world, expected to reach USD 112k by 2016.

This has led to Qatar witnessing a construction boom since 2006 (ongoing construction related contracts have tripled in

value).

Qatars successful bid to host the 2022 FIFA World Cup led the Government to plan for high levels of investment in

infrastructure and real estate development - approximately USD 225 bn between 2011 and 2016, of which USD

125 bn has been unveiled for construction and energy projects alone. Spending directly related to preparations for the

2022 World Cup will amount to an estimated USD 80 bn, encompassing commercial and infrastructure projects andtherefore the construction boom in Qatar is expected to continue, albeit with different priorities and involving new

players.

This sector report highlights the changing pace of the Qatari economy and construction sector segments in comparison

with other GCC countries and provides detailed information on current projects and expected investments. For each

industry segment, we present a proprietary summary timeline of key projects. To take into account the challenges,

especially the tender phase and ramp up of projects, but also the opportunities for additional growth to be generated

thanks to the improved infrastructure and expertise based in Qatar, we have designed several scenarios of investment

in infrastructure and real estate; these scenarios are based on our proprietary model taking into account the expected

timeline, phasing and costs of most known major construction projects. In the final section of the report we provide

summary profiles of certain local and international companies which are actively participating in transforming Qatar.

2012 is, for most players, a year of preparation to take on new projects with new partners, new financings and new

clients. Investors in Qatar have therefore numerous opportunities to tap into the growth ahead, which creates new

employment opportunities and continues to help position Qatar as a major economic force.

Do not hesitate to call on Commercialbank for investment, strategic or financing solutions; we are inspired by Qatar, we

believe everything is possible.

We hope you will find our initial coverage of the construction sector of interest, in addition to Commercialbank

Capitals future research publications.

Alex Carre de Malberg Dr. Abdulaziz A Al-Ghorairi

Global Head Senior Vice President & Chief Economist

Commercialbank Capital Commercialbank Capital

Foreword


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We are inspired by Qatar and the entrepreneurial

ambition of our founders, who believed everything

and anything is possible.

Constrained only by our imaginations, we apply our

creativity and capability to help our customers fulfil

their goals. We aim to grasp the opportunities our

vibrant and dynamic economy offers to serve our

community better.

Everything is possible is our promise. It is what

we believe in and what drives everything the Bank

does. Where theres a way, well find it.


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1. Executive Summary 4

1.1 Growth Drivers 72. FIFA World Cup 2022: The Game Changer 9

3. Challenges and Market size 12

3.1 Challenges 12

3.2 Construction Sector: Mapping market size under three scenarios 12

4. Construction Sector 15

5. Transportation 18

5.1 Roads 20

5.2 Railways 23

5.3 New Doha International Airport 26

5.4 New Doha Port 28

6. ICONIC PROJECTS 30

6.1 The Pearl-Qatar 30

6.2 Msheireb 31

6.3 Lusail City 32 6.4 Seef Lusail 33

7. Retail & Leisure 34

7.1 Doha Festival City (DFC) 35

7.2 Lagoona Mall 35

7.3 Katara 36

7.4 Cinemas 36

7.5 Hotels & Tourism 37

8. Social Infrastructure 40

8.1 Education 40

8.2 Healthcare 41

9. Energy and Utilities 44

9.1 Energy 44

9.2 Solar Energy 47

9.3 Utilities 4710. Building Materials 52

10.1 Cement 52

10.2 Steel 55

10.3 Aluminum 56

11. Methodology and Assumptions 58

12. Company Profiles 59

13. Abbreviations 86

14. Disclaimer 87

Table of Contents

The Commercial Bank of Qatar (Q.S.C.)

PO Box 3232, Doha, State of Qatar

Telephone: +974 4449 0000

Facsimile: +974 4449 0070

www.cbq.qa


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April 2012

Commercialbank Capital

Economic Research

Dr. Abdulaziz A Al-Ghorairi Rajat Gupta, CFASenior Vice President and Chief Economist Associate, Investment Banking

Direct Tel: +974 4420 2663 Direct Tel: +974 4420 2627

[email protected] [email protected]

Qatars construction sector prospects seem increasingly bright following its successful bid to stage the FIFA 2022 World cup. The

country is set to spend up to USD 150 bn on infrastructure projects over the next five to six years in preparation for the World Cup.

Budget: The Qatar government has reportedly allocated a significant 40% of its budget between now and 2016

to infrastructure projects, including USD 11.1 bn for the setting up of a new international airport, USD 5.5 bn for adeepwater seaport, and USD 1 bn for a transport corridor in the capital, Doha. The government plans to spend USD 20

bn on roads, while stadium construction for the World Cup is expected to cost just under USD 4 bn, with the first stadia

venue to be built by 2015. According to German legal and financial adviser Dr. Nicola Ritter, USD 48 bn will be spent to

build air-conditioned stadia, USD 77 bn on facilities for soccer fans and players from across the world, and USD 33 bn fordeveloping Lusail City. Qatar has also allocated USD 50 bn to upgrade its transport infrastructure, including new rail and

metro systems.

Qatar on fast track: Qatar has been one of the fastest growing economies in the world over the past few years (real GDP

grew at a CAGR of 23% between 2003 and 2010). The countrys economy was the most resilient in the GCC region during

the global recession, largely due to capacity expansion and government initiatives to spur the financial sector.

Visionary leadership:The Emir of the country has been instrumental in transforming Qatar into a power house within

the region. In addition, the - Emir-led government has ensured political stability within the country, despite unrest in theother parts of the Middle East. The government has also allowed 100% foreign ownership in some sectors, and this is likely

to improve liquidity in the form of Foreign Direct Investment (FDI). Qatars political and economic developments are

both leading the country strongly along the path to achieving its Vision 2030.

Diversifying strategy: the Qatar Government has put in place a well-planned strategy for long-term growth sustainability.

The government initiated this strategy by focusing on its inherent strength, and increasing the export capacity of LNG. As

this production-led growth peaks in 2012, the government is focusing on the non-hydrocarbon sector to push for post-

2012 growth. The accumulation of wealth from the hydrocarbon sector has been re-invested in diversify its revenue base.

The wealth is re-invested through Qatar Petroleum in the hydrocarbon sector, and the Qatar Investment Authority (QIA)

in the non-hydrocarbon sector. In the initial years of growth, the government re-invested wealth to acquire foreign assets.

However, the government has now started focusing on investing domestically to provide a boost to the non-hydrocarbonsector.

Dual Government funding and PPP model: Government spending has increased, as also the adoption of the PPP (Public

Private Partnership) model in Qatar, especially in the hydrocarbon sector. According to National Development Strategy

(NDS), the expected investment by the private sector is around USD 130 bn. Cheap lending as well as governments

initiatives will boost the confidence of the private sector, which will benefit the construction sector and the economy in the

long term.

1. Executive Summary

4

- COMMERCIALBANK CAPITAL - CONSTRUCTION SECTOR REPORT


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Doha

Al Khawr

Al Khuwayr

Madinat ashShamal

Ras LaffanIndustrial City

Qatar

Exhibit 1: Key Projects

Source: Commercialbank Capital Research

Doha Cultural Village(KATARA)

Project Value: USD 82 mnRefer: Section 7.3

Doha Festival CityProject Value: USD 1.7 bnCompletion Date: Q4-14Refer: Section 7.1

Education CityProject Value: USD 6.6 bnCompletion Date: Q2-12Refer: Section 8.1

Lusail Mixed-UseProject Value: USD 33 bnCompletion Date: 2018

Refer: Section 6.3

MsheirebProject Value: USD 5.5 bnCompletion Date: Q4-17Refer: Section 6.2

New Doha Intl Airport(NDIA)Project Value: USD 11.1 bnCompletion Date: 2015Refer: Section 5.3

New Doha Port (Phase I)Project Value: USD 7 bn

Completion Date: Q1-16Refer: Section 5.4

Qatar National MuseumProject Value: USD 434 mnCompletion Date: 2014Refer: Section 7.5

Pearl GTLProject Value: USD 6.6 bnCommencement in Q4-11Refer: Section 9.1

Pearl QatarProject Value: USD 5 bnCompletion Date: Q3-13

Refer: Section 6.1

Sidra Medical andResearch CenterProject Value: USD 7.9 bnCompletion Date: Q4-12Refer: Section 8.2

9

1 7

2 8

3 9

4 10

5 11

6

2

113

7

5

6

8

1

10

4

COMMERCIALBANK CAPITAL - CONSTRUCTION SECTOR REPORT- 5


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Exhibit 1.1: Key Projects in Doha

Source: Commercialbank Capital Research 1. Qatar National ConventionCenter

Refer: Section 82. Doha International Airport Refer: Section 5.33. Museum of Islamic Art Refer: Section 7.54. Lagoona Mall Refer: Section 7.25. Lusail City Refer: Section 6.3

6. Msheireb Project Refer: Section 6.2

7. Qatar Foundation Refer: Section 88. Education City Refer: Section 8.19. Sidra Medical

Refer: Section 8.210. The Pearl Qatar Refer: Section 6.1

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Exhibit 2: Segmentation of Construction Sector


* Residential and commercial buildings are not covered in this report, except for iconic projects.

1.1 Growth Drivers

Robust macroeconomic environment

Qatar has witnessed robust growth in GDP over the past few years, which is driven by significant increase in LNG export

capacity. According to IMF, Qatars economy grew by 19% in 2011, higher than 17% growth in 2010. In 2012, real GDP

growth rate is projected to be 7.6%, with real hydrocarbon GDP slowing down to 3%, while non-hydrocarbon sector is

expected to grow by 9.6%.

Diversication at full stream

The government launched the National Development Strategy (NDS) to achieve the targets of Vision 2030. The strategy

is to leverage the hydrocarbon sector revenues to build the non-hydrocarbon sector and a more sustainable economic

base.

FIFA World Cup 2022 The Game Changer The successful bid to host the FIFA World Cup 2022 has been a big achievement for Qatar. The construction sector

has since witnessed a spate of new project announcements. The government has also allocated USD 20 bn towards the

development of the tourism sector. We believe that winning the bid for World Cup 2022 will be the main driver for the

construction sector, as the government will remain committed to ensuring that projects are completed on time to host

the world biggest sporting event.

Well regulated and capitalized banking sector Recently, the government of Qatar has completed the two year capitalization program. In August 2011, the central bank

has lowered its interest rates to kick start lending to private sector. The sector has optimum capital ratios that will enable

them to extend lending to the construction sector in general and private sector in particular.

Qatar eyes 2020 Olympics

In 2010, Qatar won the bid to host the worlds largest sporting event, the FIFA World Cup 2022. The country is now on

the path of creating history as it has been accepted as an applicant city to host the Olympics and the Paralympics in 2020.

Construction

Transportation Buildings*Energy & GasUtilities

Roads

Railways

Airport

Port

Oil & Gas

Solar Energy

Utilities

Retail

Hospitality

Social Infrastructure



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Exhibit 3: Key projects timeline


Oil & Gas

Pearl GTLProject Value: USD 6.6 bnCommencement in Q4-11

Lagoona MallProject Value: USD 348 mn

Completion Date: 2011

Energy Utilities Roads Railways Airport Port

Cities Hospitality Education Healthcare Stadiums Entertainment Retail

2011 2013 2015 2018 2022

Urjuan Mixed-UseDevelopment

Project Value: USD 10 bnCompletion Date: Q3-14

Water Recycling PlantProject Value: USD 5 bnCompletion Date: Q2-14

Doha Festival CityProject Value: USD 1.7 bnCompletion Date: Q4-14

Qatar National MuseumProject Value: USD 434 mn


Doha Dukhan RoadProject Value: USD 1 bnCompletion Date: Q4-14

Qatar National RailwaySystem (Phase I)

Project Value: USD 35 bnCompletion Date: Q2-15

Qatar Entertainment CityProject Value: USD 3 bnCompletion Date: 2015

New DohaInternational AirportProject Value: USD 11.1 bn


New Doha Port (Phase I)Project Value: USD 7 bnCompletion Date: Q1-16

12 StadiumsProject Value: USD 4 bnCompletion Date: 2020

Sidra Medical ResearchCentre

Project Value: USD 7.9 bnCompletion Date: Q4-12

Education CityProject Value: USD 6.6 bnCompletion Date: Q2-12

Pearl QatarProject Value: USD 5 bnCompletion Date: Q3-13

Solar Power ComplexProject Value: USD 1 bn

Completion Date: Q3-18

Barzan GasDevelopment

Project Value: USD 9.4 bnCompletion Date: Q3-16

MsheirebProject Value: USD 5.5 bnCompletion Date: Q4-17

Lusail Mixed-UseProject Value: USD 33 bnCompletion Date: 2018

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Qatars integral links with sporting activities in the recent past have resulted in the overall development of the country. The

year 2010 can be marked as a year of extraordinary achievements for Qatar. In 2010, the country reached a milestone in itsLNG production capacity, apart from winning the bid to host the largest football sporting event in the world. We believe that

both these developments transformed the countrys future growth trajectory.

Qatar has participated as well as organized several sporting events during the past few years. In January 2011, the country

hosted the Asian Football Confederations (AFC) Cup for the second time. In addition, Qatar hosted the 2006 Doha Asian

Games, which will help in the planning and implementation for the 2022 event.

Exhibit 4: List of major events organized by Qatar in the past two years

Events Sport Frequency Year

Arab Boxing Championship For Men Boxing Yearly 2011

Qatar Int. Endurance Race Endurance Yearly 2011

Grand Prix Men and Women Fencing Tournament Fencing Yearly 2011

AFC Cup of Nations Football 4 years 2011

Commercialbank Qatar Masters Golf Yearly 2012

2011 Sail the Gulf-2010 Sailing Yearly 2011

Exxon Mobil Open Tennis Championship 2011 Tennis Yearly 2011

Qatar Int. Table Tennis Championship Volleyball Yearly 2011

Qatar Athletics Diamond League Athletics Yearly 2010

Asian Clubs Basketball Championship Basketball Yearly 2010

World (9) Balls Billiard Championship Billiard and Snooker Yearly 2010

Qatar 10th Int. Open Bowling Championship Bowling Yearly 2010

International Grand Prix and Golden Shirt Cycling Championship Cycling Yearly 2010

1st Int. Women Handball Championship Handball 2 Years 2010World Clubs Handball Championship Handball 2 Years 2010

World Formula Sailing Championship Sailing Yearly 2010

Qatar Classic Squash Championship 2010 Squash Yearly 2010

GCC 4th Women Table Tennis Championship Table Tennis Yearly 2010

Arab Wrestling Championship Wrestling Yearly 2010

Commercialbank Qatar Moto GP Motorbike Yearly 2012

Source: Qatar Tourism Authority

Winning the bid for the World Cup 2022 has been an extraordinary achievement, as it is one of the biggest sporting events

in the world. Qatar is the first country in the Middle East to get this honor. According to officials, the FIFA World Cup is

expected to draw around half a million visitors, almost a third of Qatars current population. The impact of Qatar winning its

bid for the 2022 FIFA World Cup would be profound for the state, its people and the region.

The dynamic vision of both, HH the Emir, Sheikh Hamad bin Khalifa Al-Thani and HH Sheikha Mozah bint Nasser Al-

Missned has resulted in economic developments that has transformed Qatar internationally. In addition, this has resulted in

successfully winning the bid to host World Cup 2022, which is laudable from all aspects. According to reports that the FIFA

World Cup in South Africa had added between 0.5% and 2.2% to the countrys GDP (depending on which infrastructure

projects one considers); and overall had created in excess of 300,000 jobs since 2006 - a 2.7% contribution to employment

figures. We believe that the impact of the World Cup 2022 preparations wil l be much larger on the GDP of Qatar compared

to other countries that have hosted the event in the past.

2. FIFA World Cup 2022: The Game Changer



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Aspire Academy for Sports Excellencewas founded in 2004 by HH Sheikh Jassim Bin Hamad Al Thani, to create a world-

class institution for educational sport that would develop athletes in Qatar. Worldwide, Aspire is known for its state-of-the-art sports science, and produce graduates who would become Qatars most admired civic leaders. It covers an area of

approximately 290,000 sqm. Aspire has an enviable list of world-class sporting facilities, including a 200m athletics track, an

Olympic-sized swimming and a diving pool, a gymnastics hall, two multi-purpose sport halls, table tennis courts, fencing

strips, squash courts, a bespoke goalkeeping training area, and fitness rooms.

Aspire has an astonishing eight full-sized football fields, including an international standard artificial grass indoor pitch. The

Academy also has 20 classrooms for subjects ranging from English language to Physics and Biology. Aspires dormitory has128 rooms and eight suites, which can house up to 255 students.

Currently, there are approximately 200 student athletes, in grades 7 through 12, who specialize in football, athletics, squash,table tennis, sailing, judo, gymnastics, swimming, tennis, fencing, rowing, shooting and golf. Aspire has a team of over 300,

including instructors, trainers and educators of different nationalities.

The iconic Aspire Dome has the capacity to host 10 different sporting events simultaneously in a climate-controlled arena,

making it the largest multi-purpose sports facility of its kind in the world. It has 13 sports venues and seven performance

enhancement laboratories under the same roof. It can seat a total of 15,000 spectators.

Aspetaris the first specialized Orthopedic and Sports Medicine Hospital in the Gulf region, situated within the Aspire zone.

It provides high-quality medical treatment for sports-related injuries in a state-of-the-art facility, staffed by some of the

worlds leading sports medicine practitioners and researchers. In 2009, Aspetar was officially accredited by F-MARC as aFIFA Medical Centre of Excellence. Aspetar provides a full range of services from injury prevention to injury management

and performance improvement.

Aspire: Venue for Asian Games in 2006

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0 km 30

Ras Laffan

Mesaieed

Madinat al-Shamal

Al-Khor

Umm SalalLusail

Al-Wakrah

Al-Rayyan

Doha

QATAR

2

3

12

1

6

5

4

1. Lusail Iconic Stadium

4. Al-Wakrah Stadium

7. Education City Stadium

10. Sports City Stadium

2. Shamal Stadium

5. Al-Rayyan Stadium

8. Qatar University Stadium

11. Khalifa International

Stadium

3. Al-Khor Stadium

6. Doha Port Stadium

9. Al-Gharafa Stadium

12. Umm Salal Stadium

Location:Al-DaayenCapacity:86,250Value:USD 662 mnMatches planned:Opening

match, group matches, andround of 1 6, quarter-final,semi-final and final

Location:Al-WakrahCapacity: 45,120Value: USD 286 mnMatches planned:Group

matches and round of 16

Location: Al-RayyanCapacity: 45,350Value:USD 287 mnMatches planned:Groupmatches and round of 16

Location:Al-KhorCapacity: 45,330Value: USD 251 mnMatches planned:Groupmatches and round of 16

Location: Al-ShamalCapacity:45,120Value:USD 251 mnMatches planned:Group

matches

Location:Al-RayyanCapacity: 44,740Value: USD 135 mnMatches planned: Group

matches

Location:DohaCapacity:43,520Value:USD 300 mnMatches planned: Groupmatches and round of 16

Location:Al-RayyanCapacity:68,030Value:USD 71 mnMatches planned: Groupmatches, round of 16, quarter-finals and semi-finals

Location: Al-KhorCapacity:45,330Value:USD 251 mnMatches planned: Group

matches and round of 16

Location:DohaCapacity:44,950Value:USD 202 mnMatches planned: Group

matches, round of 16 andquarter-final

Location: Al-RayyanCapacity:44,740Value: USD 135 mnMatches planned: Groupmatches

Location: UmmSalalCapacity: 45,120Value: USD 251 mnMatches planned: Groupmatches, round of 16 andquarter-finals.

Source: MEED

Qatars World Cup stadiums



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3. Challenges and Market size

3.1 Challenges

The prospects of Qatars construction sector are bright, underpinned by significant investment by the government overthe next decade. Despite the bright outlook, Qatar is likely to face certain challenges as it prepares for the FIFA World Cup

2022. The government will continue to remain under pressure to complete the projects on time to meet the deadlines and

guidelines set by the FIFA authorities.

Global slowdown

Qatar is not completely immune to the global environment; therefore, uncertainty around the global economies will

have a limited impact on Qatar in general, and the construction sector in particular. The global slowdown will impact

private sector participation, as the credit environment becomes tighter and more difficult in such scenarios. In addition,

hydrocarbon prices will decline, having a direct impact on Qatars GDP, resulting in lower growth. We believe the

government of Qatar will continue to step in with support to ensure projects are completed on time in case private sector

participation deteriorates.

Shortage of skilled/unskilled laborThe shortage of both technical staff and labor will continue to one of the biggest challenges for the sector. These projects

require people who have applied similar principles to creating efficient, cost effective, high tech systems in other

countries like Germany, Ireland and Australia. The companies operating in the construction sector have learned from

their previous experience (the Asian Games); however, the scale and magnitude of the projects for the World Cup 2022

will be a whole new experience for both the companies, as well as for Qatar. Shortage of schools for children and the lackof a well-publicized clampdown on alcohol in Doha are some of the other problems that are currently being resolved.

Shortage of raw materials The construction sector is likely to witness shortages in raw materials between 2013 and 2017, as the period is expected

to be the peak for the sector. The government will ensure that the shortages in raw materials do not lead to unexpected

rise in prices. Both of these factors will lead to delays in execution of the projects. Therefore, the sector will have to bridge

the gap during this period by mutual agreements with the companies in Saudi Arabia and the UAE.

3.2 Construction Sector: Mapping market size under three scenarios The indicators for the construction sector outlook look solid, as much of the investment is backed by government or

semi-government entities. The news of Qatar hosting the FIFA World Cup 2022 has further brightened the outlook of

the sector. The rapid increase in population over the past few years has resulted in increasing demand for infrastructural

development in Qatar. All these factors will collectively lead to ample opportunities for construction activity in Qatar.

Within the construction sector, we remain buoyant on the transportation, retail and hotel and tourism sectors.

The transportation sector is the biggest beneficiary of the massive investment by the government, as it plays a vital role

in the infrastructural development of the country. The improvement in the transportation network will also be essential

as the country prepares for the FIFA World Cup 2022. The tourism authority of Qatar has done a commendable job

over the past few years by organizing and participating in conferences and exhibitions. This has resulted in the influx of

tourists, thereby boosting the hotel sector. The rapid increase in population, as well as inflow of tourists, will boost the

retail sector. As a result, the country is witnessing massive investments in shopping malls to address the shortages in the

retail space.

We have forecasted the Qatar construction sector market size until 2020, as we believe that the majority, if not all the

projects will be completed by the end of the projected period. We have assumed USD 225 bn investment as our base for

total investment, which is provided by the NDS. Based on our assumptions, we have assumed additional investments in

the construction sector as a percentage of the GDP. The additional investments have been assumed in two phases, the first

phase will be from 2013 to 2017, while the second phase is from 2018 to 2020.

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The following is a brief summary of the methodology adopted to arrive at the market size:

1. Initially, the list of projects ongoing and planned was compiled from various relevant sources. However, we decided

to take data from one source due to inconsistency from various sources. This data was further classification as perthe construction sector. The value of each project was divided in quarters based on the completion date to arrive at

the actual value invested in a particular year until 2020.

2. We have assumed additional investments between 2013 and 2017 based on the announced investments of USD 225

bn by NDS.

3. Finally, we have assumed a percentage of the GDP that will be re-invested in construction to further upgrade theinfrastructure sector. The forecast for GDP is taken from IMF until 2016. This constant rate as a percentage of GDP

has been differentiated based on two phases, the first from 2013 to 2017 and second from 2018 to 2020.

In order to arrive at the total market size, we have added the contributions from three approaches as described above. Thismethodology was adopted to build three scenarios in our analysis to arrive at a market size. In each scenario, contribution

from first two points remains the same while contribution from third point varies for three different scenarios:

Exhibit 5: Spending patterns based on different scenarios forecast (USD bn)

Source: NDS and Commercialbank Capital Research

Best Case

In this case, we have assumed a higher percentage of GDP that will beinvested over and above the planned investment by the government. Basedon this assumption, we arrive at a market size ofUSD 315 bn.

Base Case

In this case, we have assumed a lower percentage of GDP that will beinvested over and above the planned investment by the government. Basedon this assumption, we arrive at a market size of USD 270 bn.

Worst Case

In this case, we have made two assumptions. First, we have assumed thatthere will no additional investment and secondly we have assumed thataround 15% of the planned projects will be cancelled going forward. Basedon this assumption, we arrive at a market size of USD 191 bn.

2012

34

138

170

188

185

249

284

191

270

NDS: USD 225 bn

315

2015

350

300

250

200

-

50

100

150

Base Case

2018 2020

Worst Case Best Case



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Major Projects

AIRPORT

New Doha International Airport (NDIA) will be able to handle 24 mn passengers per

year and will have 42 contact gates, six of which will be dedicated to the Airbus A380

superjumbo. When construction started in 2004, the new airport was scheduled to openin 2008.

It is now planned for an opening in December 2012. The new terminal is being built by

the Sky Oryx consortium of Japans Taisei Corporation and Turkeys TAV. The terminal

extension is being built by a joint venture of Belgiums Six Construct and the local Midmac

Contracting.

PORT

New Doha Port is to be built at Mesaieed, south of Doha and will replace the existingDoha Port downtown on the citys Corniche.

The new port will support industrial development to the south of Doha. Completion of

the first phase is expected in 2014.

Beijing based China Harbour won contract to execute the onshore excavation works.

Firms have been prequalified for the contract to dredge the ports approach channel.

STADIUMS

As of now, Qatar has committed to spending USD 65 bn to build infrastructure to host the

2022 World Cup. As part of the bid process, Qatar committed to providing 12 stadiums,

each with a minimum capacity of 45,000.

The direct spending on building stadiums will be 4% of the total planned investment.

It will renovate three stadiums and will construct nine new stadiums. Stadiums will be

equipped with cooling systems using clean renewable energy resources to achieve the first

completely carbon-neutral World Cup.

RAILDoha Metro is the first section of Qatars USD 25 bn rail plan to be developed and will be

a crucial part of Dohas infrastructure when complete.

The metro will consist of four lines running more than 300 km across the city.

The first phase involves building the Red line, which will run from Doha city to new

Doha International airport. In 2009, Germanys Deutsche Bahn was appointed to

develop Qatars national railway network. It is currently prequalifying consultants for thepreliminary metro designs.

Source: MEED

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Qatar has two main focuses in the next decade; first is staging the largest sporting event, and the second is implementing its

National Vision 2030, which aims to diversify away from a reliance on hydrocarbons.

Qatars ambitions and investment plans are different compared to other GCC countries. Qatar won the right to host the 2022World Cup, which has imposed a time frame for completing the projects. The infrastructure that the country will build over

the next decade will also result in meeting the objectives of the national development plan.

Preparing for the World Cup 2022 will drive spending on sports and transport infrastructure, while the National Vision 2030

will focus on social infrastructure, such as education, healthcare and cultural projects.

Qatars construction sector witnessed unprecedented growth between 2005 and 2008, growing at a CAGR of 46%. Sectorproductivity increased from QAR 8.7 bn in 2005 to QAR 27.5 bn in 2008. Following this, the construction market contracted

in 2009 and 2010 on the back of the global crisis. According to a study by Oxford Economics and Global Construction

Perspectives, the Qatari construction market is expected to grow by an average of 12.5% a year over the next decade, compared

with growth in European countries averaging just 1.7% to 2020.

The sector has not witnessed any major cancellations or projects on hold, unlike its regional peers, including Dubai, Bahrain

and Kuwait. The total value of projects put on hold or cancelled stood at USD 460.3 bn at the end of October 2011. In Qatar,the projects put on hold were around 4% of the total market, compared to 59% and 24% in UAE and Kuwait, respectively.

The value of such projects in Qatar and Saudi Arabia was insignificant compared to the total size of the market.

With Qatar slated to host a zero carbon World Cup in 2022, Qatar Green Building Council (QGBC) has set up a group to

foster green infrastructure as a national resource. Qatar is utilizing Leadership in Energy and Environmental Design (LEED)

and the Qatar Sustainability Assessment System (QSAS) to this end. A number of projects are targeting LEED Gold or

Platinum status. Dr. Alex Amato, Chairman of the Research and Innovation Committee at QGBC, commented: In linewith the environment pillar in Qatars National Development Strategy 2011-2016, this interest group complements national

and regional efforts to utilize our current and future green infrastructure. This initiative demonstrates the value of green

infrastructure investment and reiterates the benefits and need for sustainable investment in this field. This group also wants

to encourage the appreciation of Qatars natural systems and their role in the landscape architecture profession.

Exhibit 6: Construction sector as a % of non-hydrocarbon GDP in Qatar

Source: Central Bank

4. Construction Sector

QARbn

2007 2008 2009

30.0

25.0

20.0

15.0

0

5.0

10.0

21%

-

19%

17%

15%

13%

11%

9%

7%

5%

2010 9M-11

15.9

27.225.5

24.1

17.6

11.4%

14.4%

13.0%

10.8%

9.1%

As % of non-hydrocarbon GDPBuilding and Construction



18/92

Exhibit 7: GCC - Projects planned or underway (2008 2011)

Source: MEED, Note: Oct end for each year

The total number of projects that were planned or underway in the GCC stood at USD 1,784.7 bn at the end of October 2011.

Saudi Arabia has emerged as the largest market for planned or underway projects in the GCC, while UAE became the second

largest market because of cancelled or on-hold projects.

Qatar has been in the limelight for various reasons from acquiring international assets to hosting the biggest sporting event in

the world. The total number of planned and underway projects in Qatar stood at USD 214 bn at end of Oct-2011. The value

of projects has grown at a CAGR of 40% during 2005 and 2011. The growth in projects value during the period is the secondlargest in the GCC, as Kuwait witnessed a growth of around 43% despite all the cancellations/on hold projects.

The value of the projects under execution stands at USD 59.8 bn with the transportation sector accounting for around

30% of the projects under execution. Within transportation, airport and roads have been the main contributors as they are

witnessing a substantial revamp or new additions in facilities.

As of Oct-2011, the total value of projects under execution in Qatars energy sector stood at USD 11.2 bn accounting for 19%of all the projects under execution in the country. This indicates that the worlds leading supplier in the hydrocarbon sector

has been capitalizing on its core sector to meet the rising global demand in the oil and gas sector. Furthermore, commercial

and residential construction projects accounted for 21% of the total projects under execution.

Exhibit 8: GCC - Projects planned or underway Exhibit 9: Projects planned or underway in Qatar

till Oct-11 (USD bn)

Source: MEED Projects Source: MEED Projects

0

250

500

750

1,000

USDb

n

1,250

Bahrain Kuwait Oman Qatar Saudi Arabia UAE

2008 2009 2010 2011

BahrainKuwait

Oman

Qatar

Saudi Arabia

UAE

605.4

167.9

55.5

111.6

214.0

630.3

Oct-05

28.2

Oct-06

116.4

Oct-07

145.3

Oct-08

202.8

Oct-09

204.3

Oct-10

254.9

Oct-11

214.0

USDb

n

30.0

25.0

20.0

15.0

0

5.0

10.0

16



19/92

Exhibit 10: Projects under execution (Oct-11)

Source: MEED Projects

Sporting events in Qatar have also been one of the main drivers of the construction sector. The 15th Asian Games were held in

the country in 2006 and the preparation for the games resulted in a great deal of construction activity, including the building

of a Sports City, which contains stadium and other sports facilities. In January 2011, the country hosted the Asian Football

Confederation Cup for the second time. The biggest driver and the game changer for Qatar has been its winning bid to host

the football World Cup 2022.

Transportation and building projects account for more than 50% of the projects under execution. These sectors are essential

for the infrastructure development of the country. The transportation sector is focusing on modernizing its existing network,

while the building sector is transforming the country by building some iconic projects over the next decade. The country is

building several start-of-art projects that will transform the country.

As seen in Exhibit 11, the total spending in the construction sector stood at USD 47.7 bn, accounting for 39% of the total

spending. In the construction sector, 48.3% was allocated towards the residential and commercial sub-sector, while 10.7%was in industrial and 12.1% in ports.

Exhibit 11: Sector wise spending


Others

Stadiums

Social

Building

Retail

Tourism

Utilities

Energy

Transportation

2.7%

0.0%

9.6%

21.2%

1.7%

2.7%

12.6%

18.7%

30.7%

Transmission12.7%

Storage4.1%

Production30.2%

Processing52.9%

Telecom0.3% Commercial

14.9%

Cultural2.8%

Education4.0%

Retail2.9%

Mixed Use9.2%

Residential33.5%

Chemical6,864

Construction

47,690

Water7,629Transport

11,334

Power16,119

Oil3,927

Industrial2,280

Gas26,570

Public1.2%

Healthcare

4.0%Hospitality

4.5%

Industrial10.7%

Marine12.1%



20/92

The Exhibit 12 focuses on the expected spending over the next four years. The capital spending is expected to grow by

about 48% between 2011 and 2014. The majority of the growth is expected in 2013 and 2014, when most of the projects areexpected to kick start.

Exhibit 12: Expected increase in capital spending


Exhibit 13: Qatars top 10 contractors 2011

Company Awards (USD mn) Origin

JGC Corporation 1,700 Japan

Saudi Binladin 1,150 Saudi ArabiaConsolidated Contractors Company 965 Athens Based

Hyundai Heavy Industries 889 South Korea

China Harbour Engineering 880 China

QDVC (Qatari Diar/Vinci Construction) 535 Local/France

Qcon 510 Local

Hyundai Engineering & Construction 434 South Korea

Qatar Building Company 419 Local

Al-Bader Construction & Steel Works 400 Local

Total 7,882


20142013201220112010

Capital spending is expected to increaseby 48% between 2011 and 2014

2009

10.0

8.0

6.0

4.0

2.0

0.0

Power & Water Petrochemical Oil & Gas Production Construction Infrastructure

18



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The transportation sector has been at the forefront of public spending plans in the GCC region in general and Qatar in

particular. In Qatar, the transportation sector is pacing development and expected growth in the country. In addition, themodernization of the transportation sector in Qatar is essential for successful hosting of the worlds biggest event. The

government is significantly focused on developing the countrys road network especially through main highways to easetraffic congestion. We believe that the improvement of the roads network will continue to be an ongoing investment for the

government as the growth momentum continues in the region.

Exhibit 14: Landmark projects in transportation sector

Projects Cost (USD bn) Client Status

Qatar National Railway System 35.0 Qatar Railways Planned

Company (QRail)

New Doha International airport

(NDIA) - (Phase I) 11.1 NDIA Steering Committee Completion due in 2012


The total revised investment in the GCC transportation sector is USD 298 bn compared to an original budget of USD 281

bn. The total investment in rail projects is USD 95 bn in the region. The GCC countries are focusing on upgrading and

developing rail networks within countries and also to connect the region. The GCC governments are also making significant

investments in upgrading their airports to meet the rising demand of both passengers as well as freight services. The totalplanned investment in airports is USD 41.4 bn in the GCC.

During the past three years, Saudi Arabia has awarded about USD 28.3 bn worth of projects, UAE has awarded about

USD 11 bn worth of projects and USD 6.1 bn in Qatar. Given the size of projects awarded or in the pipeline, many regional

and international contractors are expanding operations in Qatar and Saudi Arabia. The regional contractors are mostly from

Kuwait and the UAE as activity within their respective the respective countries have remained subdued.

We believe that Qatar and Saudi Arabia will continue to remain the most dominant markets within the GCC region. Both thecountries have announced significant investment plans, especially in rail projects. The Qatari market looks more promising

as the government is expected to accelerate the execution of planned projects to ensure timely completion as it prepares for

the FIFA World Cup 2022.

Exhibit 15: Value of projects announced in Exhibit 16: Value of projects awarded in transportation sector

transportation sector (USD bn)

Source: MEED Projects Source: MEED Projects

5. Transportation

Bahrain

Kuwait

Oman

QatarSaudi Arabia

UAE

88.0

32.6

15.7

25.3

54.8

81.6

10

9

6

8

3

5

2

0

Bahrain

0.1 0.3 0.2

Kuwait

2.1

4.1

1.0

Oman

1.3

3.7

1.8

Qatar

0.5

1.8

3.8

Saudi Arabia

9.1

10.1

9.1

UAE

4.1

2.5

4.4

2009 2010 2011

U

SDb

n



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5.1 Roads

The total planned or projects underway in the GCC countries are valued at about USD 128 bn. The UAE leads themarket with USD 46 bn worth of projects planned or underway. Saudi Arabia is the second largest market with USD 38

bn worth of projects either planned or underway, while Qatar accounts for USD 18 bn worth of projects. Collectively,

Kuwait, Oman and Bahrain have USD 27 bn worth of projects planned or underway. We believe that the execution of

these projects will be important to reduce over congestion in the GCC.

In the GCC, Qatar was the most active roads market in 2011. Ashghal awarded USD 2.3 bn worth of contracts during the

year 2011. The biggest of these was the USD 1 bn construction package awarded to the joint venture of the Saudi Binladin

Group and the local Qatari Diar for work on the Dukhan highway. The other big contract that was awarded related to

the two road contracts in January, worth an estimated USD 0.52 bn, to a joint venture of Consolidated Contractors

Company and the Teyseer Contracting Company for the 12th package of the Doha Expressway.

The investment in Qatars roads sector is set to continue, with Ashghal planning to build 136 km of new roads by 2014,

providing plenty of opportunities to local and international contractors and material suppliers. The major upgrades inroads infrastructure were undertaken even before the country won the bid to host the FIFA World Cup 2022. Strong

economic growth in the past few years have led to a rapid increase in population, thus resulting in significant congestion

in the capital city of Qatar, Doha.

The country has allocated USD 20 bn over the next five years to upgrade its road network, of which USD 17.9 bn isplanned or underway. Development of roads network is also essential for the overall infrastructure development of

the country. The preparation for the World Cup 2022 will also speed up the process of the construction of roads to

ensure decreases in traffic congestion, an increase in regional accessibility, and minimize the environmental impact of its

transportation network.

Exhibit 17: Planned/underway projects in roads (USD bn)


Exhibit 18: Roads project awarded in 2011 (USD mn)

Projects Contract Value Completion Date EPC Contractors

Doha Dukhan Highway: Central Section 275.0 Q1-14 CCC and Teyseer Contracting

Peripheral Roads to Barwa City 152.0 Q2-13 Bin Omran

Doha Expressway: Phase XII: F Ring Road 233.0 Q1-14 CCC and Teyseer Contracting

Doha Dukhan: Al-Mail Roundabout to

BaniHajer Roundabout 1,000.0 Q4-14 Qatari Diar and Binladin Group

Nakhilat Shipyard: Phase 4A 45.0 Q3-12 Eversendai Corp.

Doha Expressway: Package 6 85.0 Q4-13 Sinohydro Corporation

Doha Dukhan: Eastern Section 150.0 Q4-14 Qatari Diar and Binladin Group


11.8

2.1

12.7

17.9

37.8

45.7

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

20



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Qatar is likely to witness the announcement of USD 7.8 bn worth of projects over the next two years. Qatar is expected to

finish its planned roads network by the end of 2016, well ahead of the -World Cup 2022. According to our estimates, thetotal size of the road and bridges market in Qatar will be USD 26.5 bn at the end of 2020. We believe that new projects

will be announced in line with the rising population as well as the trend to own cars in the region resulting in furtherupgrades in the countrys roads infrastructure.

The governments USD 20 bn plan also includes investments in improving its sewage networks. USD 362 mn worth of

projects has been awarded so far in 2011 for improving sewage networks around the city. The Doha North Sewerage

Treatment and Associated Works project is a USD 2.2 bn four-part expansion. The improvement in sewerage networks

at the Doha North Project is important as it is likely to witness increase in flows. Doha North will witness projects such

as Lusail, the Pearl and Gharaffa, West Bay area, as well as alleviate some of the pressure placed on the existing Doha WestSewerage Treatment Works (STW).

Three major road projects that which are underway further substantiate the five-year plan to upgrade the road network of

the country. The Doha Expressway, currently under construction is valued at USD 2 bn, the Dukhan Highway also underconstruction has been valued at USD 275 mn, and the largest proposed project, the Lusail Highway, which is currently

being tendered, has been valued at a significant USD 687 mn.

Timeline: Road projects

Ashghal has awarded USD 120 mn project to HBK Contracting. The project comprises of mechanical and electricalrefurbishment work with related drainage works, civil and structural works at the existing pumping stations PS3/1,

PS8/1, PS8/6, Series 8 Trunk Sewer, PS15, PS23, PS31 and PS44.

Nakilat Shipyard: Phase 4AProject Value: USD 45 mnCompletion Date: Q3-12

Doha Dukhan Highway:Central Section

Project Value: USD 275 mnCompletion Date: Q1-14

Doha Expressway: Phase XII:F Ring Road

Project Value: USD 233 mnCompletion Date: Q1-14

DohaDukhan: Al-MailtoBani Hajer

Project Value: USD1 bnCompletion Date: Q4-14

Doha Dukhan: Eastern SectionProject Value: USD150 mn

CompletionDate:Q4-14

Peripheral Roads to Barwa CityProject Value: USD 152 mnCompletion Date: Q2-13

Doha Expressway: Package 6Project Value: USD 85 mnCompletion Date: Q4-13

2012 2013 2014 2015 2017



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The Public Works Authority (ASHGHAL): The leader in Roads and Sewage developments has undertaken QAR 100 bn

worth infrastructure projects in five years.

Proposed Road Network in Greater Doha

Expressways

Artorial Roads

RoadsThe master plan programme called for a four phaseprogramme to be implemented by Ashghal. This wasto have included:

Phase I (2008-11) Upgrading the Al-Rayyan road from the BaniHajar

roundabout to Souq Waqif The F-ring arterial road The east-west corridor and New Doha International

Airport road The F3 Salwa road freeway, stage I The F5 central freeway, stage I (Lusail expressway) The F1 freeway to Al-Shamal

Phase II (2012-16) The F6 Doha Bay Freeway The F2 Khalifa Street/Majlis al-Tawoon The E8 Al-Khor expressway (Lusail North to Lusail South) The F21 Al-Waab freeway The Salwa road freeway, stage III The F5 central Freeway, stage III The Al-Saad arterial road The F61 Al-Wahda freeway The F2 Dukhan freeway (Al-Shamal road to orbital

freeway) The F6 east-west corridor (from the Orbital freeway to

New Doha port) The F4 Orbital freeway/E9 Lusail tangential The F5 Central freeway, stage II The E12 Western industrial expressway

Phase III (2017-21) The E2 D-ring extension to New Doha International airport The A12 E-ring extension to the airport The E10 Al-Wukair expressway The E10Al-Waab expressway, stage II

Phase IV (2021-26) Phase 4 consists of a pumping station for Treated Sewer

Effluent (TSE3)

Source: Ashghal website

22



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5.2 Railways

The GCC region has a planned investment of USD 96 bn in the rail sector. The rail networks have garnered a significant

32% share of the total transportation sector. Qatar is the largest market for the railways sector in the GCC, with a total

investment of USD 35 bn. The total investment in the rail sector in Qatar accounted for 53% of the total planned

investment in the transportation sector.

Exhibit 19: Planned projects in railways

Source: MEED

35

30

70%

60%

50%

40%

30%

20%

10%

0%

20

25

10

15

5

0

Bahrain Kuwait Oman Qatar Saudi Arabia UAE

50% 52%

12%

64%

7.9

17.0

3.0

35.0

15.0

18.0

18%

20%

% of Transportation sectorValue of Projects



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Exhibit 20: Ongoing or planned railway projects in GCC

Expected

Projects Value Completion Date Coverage

GCC Railway Network USD 30.0 bn 2017 GCC nations

Qatar National Railway System USD 25.0 bn 2015 North-South within Qatar

UAE National Railway Project USD 10.9 bn 2015 Connects All Emirates in the UAE

Dubai Metro USD 10.6 bn 2015 Dubai

Bahrain Rail Masterplan USD 7.9 bn 2025 Bahrain

Abu Dhabi Metro USD 7.0 bn 2020 Key Cities in Abu Dhabi

Kuwait City Rapid Transit USD 7.0 bn 2016 Kuwait City

Saudi Land Bridge USD 7.0 bn 2014 From Jeddah to Riyadh in KSA

Haramain High-Speed Railway USD 7.0 bn 2014 From Mecca to Medina in KSA

Source: Frost and Sullivan, Commercialbank Capital Research

Qatar is the largest market for the railways sector in the GCC, with a planned investment of USD 25 bn. The objective ofQatars massive investment plan is to ensure that it can accommodate the movement of thousands of tourists during the

tournament. The public transport, which is currently operated by Mowasalat in the form of taxis and buses, will not be

adequate to host the FIFA World Cup 2022. In addition, increasing taxis and buses will put additional pressure on new

roads and create congestion; therefore, a rail network within the country will be the most viable option for Qatar.

Exhibit 21: Details of Qatar rail project

Projects Award Date Value (USD mn)

NDIA - Doha International Airport: Passenger Rail Station Box Q1 2010 120

QRDC - Qatar Integrated Rail Project Q2 2012 20,675

QRDC - Qatar Integrated Rail Project: Automated People Mover in West Bay Q2 2012 2,200

QRDC - Qatar Integrated Rail Project: Doha Metro: Green and Yellow Line Q2 2012 2,000

QRDC - Qatar Integrated Rail Project: Doha Metro: Lusail Light Rail Network Q3 2012 1,158

QRDC - Qatar Integrated Rail Project: Doha Metro: Blue Line Q2 2012 1,000

QRDC - Qatar Integrated Rail Project: Doha Metro: Red Line Q2 2012 1,000

QDREIC - New Doha Airport to New Doha Port Railway Q4 2014 200


Recently, the organization that was responsible for developing the rail network has been restructured with the objective

of expediting the process. A Railways Steering Committee has been established, Chaired by the Prime Minister; will be

responsible for coordination of the entire project.

QRail will now look after the rail network project, which was earlier been assigned to Qatar Railways Development Co(QRDC), a 51:49 joint venture between Qatari Diar and DB International (formed in 2009).QRail has started inviting

expressions of interest from local and international companies to bid for design and construction contracts for the Doha

Metro project.

Recently, QRail has signed a USD 535.4 mn contract with Qatari Diar Vinci Construction (QDVC) for the new phase of

works on the Lusail Light Rail Transit system. The contract covers civil engineering works in seven underground stations,

the construction of a viaduct over the motorway between Doha and the northern part of the country and preliminaryworks on an LRT depot and maintenance workshop.

24



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Qatar plans to build a rail network, which ispart of the countrys plan to spend USD 35 bnon rail infrastructure. Doha Metro, a 350 kmrail network will have four lines, Red Coastalline, Golden Historic line, Green Education lineand Blue City line.

Red line:is the first line to be developed andwill operate from the NDIA to the West Bayarea in central Doha.

Gold line:will operate from east-west routelinking NDIA and the airport city with theindustrial areas in the west of Doha.

Green line: will be from the industrial areasin the south through central Doha toEducation City.

Blue line: will follow the coast road, runningfrom NDIA to West Bay and on to The Pearl

and Lusail.

Phase1Underground: 28,952mElevated: 56,170mAt Grade: 44,327mTotal length: 129,449m



Qatar Integrated Rail Project

Doha Metro map

Timeline: Railways

Consultants prequalify for metro.PMC bids invited for West Bay

people-mover

Civil works tender due for WestBay. Construction due to start on

Red Coast

PMC bids invited forLusail LRT

PMC award due for West Bay

Aecom-Parsons wins PMCfor Lusail LRT

Civil works award due forWest Bay by September 2012

Testing and commissioning ofRed Coast Line to start

GCC Railway NetworkProject Value: USD 30 bnCompletion Date: 2017

Testing and commissioning offreight railway to start by 2016

Entire rail programme will becompleted

2011 2013 2016 2017 2026



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5.3 New Doha International Airport

The aviation sector in the GCC has undergone a major transformation during the past decade. Passenger traffic in theGCC has grown at a CAGR of around 10% between 2002 and 2010, significantly higher compared to global traffic.

According to the International Air Transport Association (IATA), the Middle East is one of the fastest growing markets

in the world with expected annual growth of about around 9% till 2014. A recent Boeing forecast indicates that it expectsorders of 2,520 planes from the Middle East carriers by 2030.The total value of projects planned or underway in the GCC

is USD 42 bn.

In the GCC, Qatar has an aggressive aviation sector expansion plan to emerge as an aviation hub in the region. The

country is also gearing itself to maintain pace with a steady increase in passenger traffic to and to traffic to-and-from

Doha. In addition, Qatar Airways rising fleet size has also been leading to an increase in transit passengers, putting

additional pressure on airport authorities.

Qatars current airport is facing increasing congestion and will be replaced by a new airport with significantly larger cargoand passenger facilities, thereby making it an important transportation hub for the people and materials.

Exhibit 22: Projects awarded (USD bn)


The government plans to invest USD 11.1 bn for NDIA which includes two runways and a 140,000 sqm airport terminal.

Currently, the airport is handling 14.9 mn passengers a year. At the completion of first phase in March 2012, the airport

will be able to handle 24 mn passengers and 750,000 tons of cargo a year.

On completion of the second phase in 2015, the capacity will double to 50 mn passengers per year. The NDIA is also

developing its air cargo terminal with an initial handling capacity of 1.4 mn on completion of the first phase. This figure

is expected to grow to 2 mn tonnes (mt) at the end of second phase, making it one of the largest cargo terminals in the

world. In line with these developments, Qatar Airways is also planning to develop its air cargo business.

Exhibit 23: Airport contracts awarded (2004 2010)

Projects Value (USD mn) Project status Award date

NDIA Infrastructure Packages 3,550 Execution 2007

NDIA Passenger Terminal Complex 1,000 Execution 2007

NDIA Airfield Paving, Tunnel and Detention Ponds Works 932 Execution 2005

NDIA Concourse C 778 Execution 2009

NDIA Aircraft Maintenance Hangar 670 Execution 2006

NDIA Reclamation and Dredging 425 Execution 2005

Total 7,355


Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

2.7

4.9

7.1

7.3

11.2

8.2

26



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New Doha International Airport

The government of Qatar began upgrading the NDIA even before winning bid to host the FIFA World Cup 2022

following increase in the number of tourists thanks to initiatives undertaken by the tourism authority of Qatar. Qatar

is preparing for the upcoming expected rise in demand as Qatar Airways further enhances its fleet size to move up the

international ranking. This will help the airline post an increase in its current flying destinations, making Qatar a hub

for major connections across the globe.

Timeline: Airport projects

Qatar Airways

Qatar Airways is a group of companies with diverse interests from core passenger and cargo transportation and airportto alcohol distribution, sports and hospitality. The group comprises Qatar Airlines, Qatar Duty Free, Qatar AirwaysCargo, the Qatar Distribution Company (the only licensed retail distributor of alcohol in Qatar) and Doha International

Airport. Since the re-launch of Qatar Airways in 1997, the company has been growing at 30% per year. During this

period, the fleet size has increased from four aircrafts to 97 aircrafts in 2011. This figure is expected to reach 110 by the

end of 2013. The company has entered into a multi-billion dollar deal with Airbus to supply 80 aircrafts.

Qatar Airways is among the best and the fastest growing airlines in the region winning the award for the Best Airline inthe Middle East and Africa at the 2011 Business Traveler Asia Pacific Awards for the second year in a row. In December

2011, the CEO of Qatar Airways was unanimously nominated to serve on the board of governors of the International

Air Transport Association, which represents over 90 % of the worlds air transport. This further substantiates Qatar

Airways image in the industry and its commitment to being one of the best airlines in the region. The company is rapidly

expanding its destinations, as well as flight frequency. In 2011, it has expanded and/or started new flights to various

destinations. The company is expected to add 20 new destinations by the end of 2013.

New Doha InternationalAirport (Phase I)

Total Project Value: USD 11.1 bnCompletion Date: 2012

Passenger Capacity: 24 mnCargo Capacity: 750,000 tn

New Doha InternationalAirport (Phase II)

Total Project Value: USD 11.1 bnCompletion Date: 2015

Passenger Capacity: 50 mnCargo Capacity: 2 mn tn

2012 2014 2015 2016 2018



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In March 2011, Qatar Airways announced a strategic partnership with Qatar Telecom (Qtel) for the migration of its

primary IT infrastructure to the Qtel data centre. In September 2011, the company bought a 35% stake at the Luxembourg-based cargo carrier Cargolux, which is in line with its objective to develop its air freight business.

Qatar Space City is a plan of the Government of Qatar to establish a USD 3.3 bn Space City in the Al-Khor area,

covering an area of 40,000 sqm. The project will include establishment of a university in cooperation with the US

National Aeronautics and Space Administration (NASA), along with a science museum and other tourist attractions.

The planned project is expected to be implemented in several phases under the supervision of an official body that would

be appointed with the General Authority of Civil Aviation. The concept of the space city project is based on the American

Space Museum.

5.4 New Doha Port The GCC ports sector is mostly dominated by the oil and gas sector, as most of the production is exported to the emerging

markets. However, this is set to change in the coming years as the region continues to make significant investments to

diversify its economic base.

The new proposed port in Qatar is likely to transform the country into the new trading hub of the region, which is in

line with the country Vision 2030. The country can aspire for such goals as it has the required funding thanks to risinghydrocarbon prices in recent years, which has resulted in accumulated surpluses. The main objective of the new port is to

replace the existing port, which is struggling to keep up with growing demand owing to the limited land at its disposal.

Currently, the country has three main ports: Port of Doha (Qatars main commercial seaport), Port of Ras Laffan (the

worlds largest LNG exporting facility), and Port of Mesaieed (Qatars main oil export terminal and the main point of

entry for aggregates and other building materials). In order to meet the heightened traffic of goods and supplies generated

by the countrys economic boom and rising population, the Government of Qatar plans to expand and develop its portinfrastructure.

Qatars ports are dominated by LNG exports. However, this phenomenon is likely to change over the next few years

as the country makes significant investments to diversify its economy away from the hydrocarbon sector. The current

planned investments in the sea port sector are aimed at addressing the additional capacity of LNG, while the future

expansion plans aim to address the expected rise in demand from the massive development program undertaken by the

government.

Exhibit 24: Planned projects in sea ports ($ bn)


Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

2.7

0.8

2.8

2.1

8.6

15.4

28



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Exhibit 25: Port capacity

Port Name Capacity Year of Completion

New Doha Port 6 mn teu 2016

Port of Ras Laffan 6.3 mn m3* NA

Port of Mesaieed 2 mn teu 2014 Source: Commercialbank Capital Research, Note: *Cubic meter

In April 2010, Qatar received bids from about nine consortiums for the major contract of the New Doha Port. In March2011, the steering committee signed its first contract with the China Harbor Engineering Company (CHEC) for of QAR

3.2 bn, in a four-and-half year deal. The second contract has received bids, and is likely to be awarded soon. We believe

that Qatar will have to expedite its process of bidding and awarding and thereafter execution in order to keep pace with

its regional peers.

Timeline: Port projects

An artist impression of the USD 5.5 bn deepwater seaport near Qatars industrial city of Mesaieed

2016 2020 2025 2030

New Doha Port (Phase I)Total Project Value: USD 7 bn

Completion Date: 2016Capacity: 6 mn TEU (20-foot

equivalent units)

New Doha Port (Phase III)Total Project Value: USD 7 bn

Start Date: 2030Capacity: NA

New Doha Port (Phase II)Total Project Value: USD 7 bn

Start Date: 2020

Capacity: NA



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6.1 The Pearl-Qatar

The Pearl-Qatar is a Riviera style manmade island developed in an exclusive environment in Doha. It is one of thelargest real estate developments in the GCC, covering 400 hectares (4 mn sqm) of reclaimed land. It is also Qatars first

international luxury residential development that offers international investors freehold title ownership. It is located

20 km from Dohas international airport and 350 meters offshore from Dohas prestigious West Bay District. The first

investors took up residency in 2009, and the entire project is expected to be completed by 2013.

The Pearl will house about 40,000 residents and includes luxury apartments, high rise towers, town homes, penthouses

and Mediterranean villas, an international yachting hub with three marinas and 700 boats, three 5-star hotels, 2 mn sqf

of international retail, restaurants and entertainment hubs, as well as a family destination with schools and community

facilities.

United Development Company (UDC) is the project developer overseeing the projects entire infrastructure and

construction of municipal buildings. Dar Al-Handasah (Shair and Partners) is a project manager.

The idea behind Pearl Qatar is to attract as many people as possible from Qatar and the region, as well as from other parts

of the world. It will have high-end shops and fine-dining restaurants from countries such as Spain, Italy and the United

States. The Pearl-Qatar, with it 40 km of reclaimed coastline and 20 km of pristine beaches, is among the main tourist

attractions of Qatar.

There are three retail areas which have their own themes. One of them is the Porto Arabia covering 200,000 sqm, andconsists of 385 retail shops, including fashion, jewellery and fine dining. The Medina Centrale, with an area of 600,000

sqm, is set to provide cinemas and supermarkets among others, while the Qanat Quartier will be the cultural destination

with its impressive design, allowing people to enjoy parks and art galleries.

Nikki Beach Resort & Spa is a Miami-based resort chain set to open in July 2012. It will be a boutique beachfront resort

with 47 luxury villas and spa suites located at Porto Arabia. It is designed by the award winning Singapore based ECO IDArchitects with interior design by Gatserelia Design.

6. Iconic Projects

The Pearl, Qatar

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6.2 Msheireb

Msheireb is an iconic project aimed at displaying innovative development and rediscovering local heritage and culture.The project is divided into six main character zones namely Diwan Quarter, Heritage Quarter, Retail Quarter, Kahraba

Quarter (residence and mix use), Nakheel Quarter (HQ gateway). The project will house 226 buildings to provide homes

to 27,637 residents. It will have parks and open spaces spread over approximately 122,217 sqm. The project will have

three types of hotels namely Lifestyle hotel, Luxury hotel and Business hotel and a theatre auditorium with a 500 to 700seating capacity. One of other distinctive features of the project is that it is expected to have underground metro stations

to provide links to other parts of country.

The project will be completed in five phases with the first phase due for completion by 2012. The first phase will consist

of a multi-use Cultural Forum, central luxury hotel and serviced apartments, offices, a shopping street, townhouses, a

primary school and a mosque. Phase 2, 3 and 4 will consist of retail malls, hotels, office apartments and shops.

Exhibit 26: Details of Msheireb development

Projects Budget Value (USD mn) Project Status

Msheireb Properties - Mandarin Oriental Hotel 80 EPC Bid

Msheireb Development: Infrastructure Works: Phase I 142 Execution

Msheireb: District Cooling Plants 50 Execution

Msheireb: Phase 1a 428 Execution

Msheireb: Phase 1b 500 Execution

Msheireb: Phase 2, 3 and 4 4,072 Design

Source: MEED

Msheireb



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6.3 Lusail City

Lusail City is a modern yet traditional and environmentallyfriendly city. The estimated cost of the development is

USD 33 bn, which will be executed in phases over the next

10 years.

Lusail City will be located on the east coast of Qatar,

approximately 15 km north of the city center of Doha. Lusail

City will have residential, commercial and two marinas.

It will also have a full array of community needs such as

schools, mosque, medical facilities, sports, entertainment,

cultural facilities and shopping centers.

The city will have 25,000 residential units which will

accommodate approximately 200,000 residents. An estimated170,000 are anticipated to work at the different districts and

expected to attract further 80,000 visitors to the city.

Freehold ownership of Lusail City properties is available to all Qatari and GCC nationals, while foreigners can acquire

property on a 99-year lease basis. The infrastructure of Lusail city is divided into two phase which was further subdividedinto construction zones, known as construction package (CP).

There are 16 major CP which are under different stages of development. The entire infrastructure at this stage is planned

to be completed by the end of 2013. Similarly, the entire Lusail City will be connected to an extensive natural gas pipeline

network.

Exhibit 27: Lusail City construction projects

Projects Total value Status Client

Transport

Al-Khor Highway NA Design Public Works Authority (Ashghal)

Lusail Expressway Phase one USD 350 mn EPC bid Ashghal

Lusail Expressway Phase two USD 350 mn Design Ashghal

Lusail light-railway transit (LRT) USD 1.8 bn PMC awarded Qatar Railways Development

Company (QRDC)

Lusail LRT rolling stock contract USD 1.8 bn EPC bid QRDC

Real Estate

Al-Sidra Golf Residential Development USD 3.5 bn Design Arcapita, Barwa Real Estate Company

Lusail mixed-used development USD 800 mn On Hold Diyar al-Kuwait Real Estate Company

Lusail Entertainment City USD 1.5 bn On hold ADIH, Majid al-Futtaim Group

Sports

Lusail Iconic Stadium USD 662 mn Design Qatar Olympic Committee


Lusail City

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6.4 Seef LusailSeef Lusail, a project under development by Seef Lusail Real Estate Development Company SEEF, has appointed DP

Architects as master planners for the project. The developer, SEEF, is a joint venture between Masraf Al Rayan and Qatari

Diar that will take on the full development of Seef Lusail. Issa Mohammed Al Kaladari, CEO of Lusail City was appointed

as Chairman of SEEF. Khalid Ahmad Fakhroo, Executive Director of Engineering and Real Estate at Masraf Al Rayan, has

been appointed as the CEO of SEEF.

Seef Lusail is a 600,000 sqm multi-use development located at the waterfront of Lusail, a distinctive 21st century iconic

city which celebrates the special cultural and geographical heritage of Qatar and the Gulf Region

DP Architects is a leading architectural practice in Asia with over 1200 staff and 12 offices worldwide. It has been

operating in the Gulf region since 2005 and their key projects in the region include The Dubai Mall, the Address at Dubai

Marina, Doha Festival City, Dilmunia Health City in Bahrain and The Eighth Gate in Damascus. The firm was foundedwith a deep concern for the built environment and the need to create architecture of excellence that enriches the human

experience and spirit.

Seef Lusail will feature an interactive 2.3 km waterfront promenade that will include multiple world class attractions

that will cater to various age groups and families. The developer, SEEF conducted a number of studies on waterfront

destinations worldwide in an effort to create an innovative design with a strong emphasis on creating themes throughoutSeef Lusail that reflect and compliment Qatars traditions and values. Seef Lusail will further add to Qatars appeal as aninternational destination that rivals major global destinations.

The design will take into consideration the climate in Qatar, in order to have a lively and active waterfront all year long.

The hotels in Seef Lusail will cater to the family, business and luxury leisure segments. One of the hotels will be a fully

integrated resort and spa providing guests with a unique leisure experience. Discussions and negotiations are underway

with global hotels brands that will bring new concepts and ideas to Qatar.

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The GCC retail sector has undergone a paradigm shift over the past decade on the back of a robust macroeconomic

environment. The region has emerged as one of the most attractive destinations for retailers across the globe. Changingconsumer behavior and lifestyle, increasing influence of western culture, rising disposable income have led to phenomenal

growth in the retail sector. As a result, the retail sector in the GCC is contributing to the overall growth in the non-hydrocarbonsector.

Shopping malls and organized retail stores have gained prominence in the region as they are regarded as one stop entertainment

shop for residents and tourists alike. Therefore, the total projects planned or underway for shopping malls in the region is

USD 11.1 bn. We believe that Qatar has the potential to attract a bigger share as it prepares for the World Cup 2022 and the

government thrust towards becoming a touristic hub in the region.

Exhibit 28: Gross leasable area (GLA) in 2010 (sqm 000s)

Source: Alpen Capital

The emergence of trade, restaurants and hotels sector as the fourth largest contributor to GDP in 2010 reflects the strong and

growing performance of Qatars retail industry in recent years. The contribution to GDP has increased from 4.4% in 2006

to reach 5.5% in 2010. The retail sector growth in Qatar has mirrored the economic growth in the country. Qatars rapid

economic growth has led to one of the highest GDP per capita in the world.

Qatars retail sector has evolved over the past few years on the back of rapid growth in population. The sector has benefitted

from the rising purchasing power of its residents in recent years. This has led to a shift from unorganized to organizedshopping, resulting in shopping malls and complexes. Shopping malls have become an important part of everyday life as they

constitute a good source of entertainment for both residents and tourists in the country.

7. Retail & Leisure

Doha Festival City

311

4,0454,234

639

571

521

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

UAE

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Exhibit 29: Retail future supply 2012 2015

Project GLA (sqm) Completion Date Project Value Developer

Gulf Mall 80,000 2012 USD 100 mn Business Trading Company

Ezdan Mall 40,000 2012 USD 50 mn Ezdan Real Estate Company

Doha Festival City 240,000 2014 USD 1.65 bn Bawabat al-Shamal Real Estate

Northgate Mall 100,000 2013 USD 327 mn Equinox

Mirqab Mall 36,000 2013 USD 200 mn H.E. Sheikh Hamad Bin Jassim

Al Jaboor Al Thani

Marina Mall 60,000 2015 USD 275 mn Qatar Foundation

Barwa Commercial Avenue Mall 56,600 2012 USD 1,100 mn Barwa Real Estate Company

Barwa Al Doha 55,000 2015 USD 824 mn Barwa Al Doha (Developer)

Source: DTZ Research and MEED Projects

Although, shopping malls and commercial centers have entered the market during the past couple of years, the retail space

remained scarce in the country. This has resulted in speculative demand, which has prompted sub-letting at enormously high

prices. The prices of sub-letting can vary between QAR 100 to QAR 150 per sqm depending on the location. Surprisingly this

phenomenon has become highly common in Doha.

Qatars total retail stock was about 630,000 sqm (GLA) at the end of 2010, an increase of around 30% compared to 2009.Based on planned developments, Qatar will add 626,000 sqm (GLA) of new organized retail space by the end of 2012, thus

doubling the existing retail capacity. The completion of 433,847 sqm (GLA) of Doha Festival City complex, which is being

developed by Al Futtaim will be completed by 2014. The Barwa Commercial Avenue is under construction, which will yield

1 mn sqm of built up area. The first phase of the project will yield around 0.5 mn sqm of GLA. The first phase is about 60%

complete and the rest is to be completed by the end of 2012. Both these projects will more than double Qatars current GLA

upon completion.

The total planned and projects underway in shopping mall are USD 3.1 bn. There are around 10 new malls being planned in

Qatar. The total number of projects awarded during the year 2011 is USD 523 mn. Around USD 2 bn worth of projects is to

be awarded in the year 2012 and 2013.

7.1 Doha Festival City (DFC)DFC will be the largest mall in Qatar with a mixed use of shopping, entertainment and leisure. The project is owned and

developed by Bawabat Al Shamal Real Estate Company (BASREC). BASREC shareholders include Al-Futtaim Real EstateServices, Qatar Islamic Bank (QIB) and private Qatari companies. DFC will be built on a 433,847 sqm plot with a GLA

of around 260,000 sqm, which is located around 15 km north of downtown Doha on Al Shamal Road. DFC will consist

of mall and entertainment complex, hospitality and offices and automotive showrooms. The retail section will have four

distinct interior zones, namely Water Concourse, Garden Promenade, Rainforest Boardwalk and Fashion Galleria. DFC

will be the home to IKEA, Toys R Us, Marks & Spencer and Inter-sport. The first phase of the project, which will include

the retail section, is likely to be completed by the fourth quarter of 2012. The remaining sections of the DFC are expectedto be completed by the end of fourth quarter of 2014.

7.2 Lagoona MallLagoona Mall is a 127,000 sqm two level lifestyle shopping centre with 53,000 sqm of retail shopping, built at an

estimated cost of QAR 1.4 bn. Lagoona is developed by Dar Investment & Development and is leased and managed by

Darwish Holding for an initial period of 30 years. The main contractor was Al Seal Contracting & Trading Co and Hill

International (project Management) MZ & Partners (Design and Supervision) are the consultant. One of Lagoonas

unique features is a 20,000 sqm European piazza, featuring 5,000 sqm of fine dining which will be home to 20 restaurantswith outdoor patios. The shopping center comprises 170 retail stores. Similarly, it also provides parking for over 2,000

vehicles. The mall is the home to luxurious multi brand store, Fifty One East. The store covers an area of 13,000 sqm

which is the biggest in the Middle East region.



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7.3 Katara

Katara is the Cultural Village of Qatar, where cutting edge activities of all fields show the cultural diversity of the worldin one single traditionally Qatari place. It is the largest and the most multidimensional cultural project of Qatar. It

covers an area of 1 mn sqm and is located between Dohas West Bay and the pearl. The approximate cost of the project is

USD 82 mn.

Katara hosts international, regional and local festivals, workshops, performances and exhibitions at its prestigious venues

such as theatres, libraries, art galleries, museums, an opera house, and a multi-purpose halland Roman-style amphi

theatre which is the largest in the Middle East. It also has traditional cafes/restaurants, marinas, handicrafts souq, mosques

and playing field for children. Katara has held various performances since its opening in October 2010 which includes

Qatar Philharmonic Orchestra, Doha Tribeca Film Festival, Photography Exhibitions (i.e. Our Time, Doharama) and

Cultural Performance during AFC Asian Cup Jan 2011.

7.4 Cinemas Recently, Q media announced a deal to acquire 60% stake in Qatar Cinema and Film Distribution Company for nearly

QAR 2 bn. Q media and Qatar Cinema and Film Distribution Company plans to invest more than QAR 1 bn in the next

three years to open more than 50 state-of-the-art multiplex facilities.

Exhibit 30: Cinema screens in the region

Source: Various

KATARA - Cultural Village

13

17

38

14

Abu Dhabi

Dubai

Kuwait

Qatar

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In the GCC, Qatar has the maximum number of cinemas. The total number of cinemas in Qatar stood at 38 compared

to around 30 in Dubai and Abu Dhabi.

Aspire Zone Foundation (AZF) opened the first women cinema in Qatar capital, Doha. All the films for this cinema areprovided by Qatar Cinema and Film Distribution Company. Qatar has also launched Doha Film Institute (DFI) to build

a strong film industr y in Qatar along with strong links to the international film community. World Cinema Foundation

has signed a three-year cultural partnership with DFI to restore and preserve international films of cultural significance.

Doha has hosted international film festivals - Tribeca Film Festival Doha and Al Jazeera Documentary Film Festival in

the past. Qatar is moving in the right direction to become the main attraction and hosting big events in the coming years.

We remain optimistic on the prospects of the entertainment and believe that it will gradually emerge as one of the topentertainment hubs in the GCC.

Timeline: Retail projects

7.5 Hotels & Tourism

Qatar Tourism Authority (QTA) plays an important role in promoting Qatar as an evolving tourist destination. Thecompany organizes and supervises the development of the tourism i

qatar construction sector

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