Knowledge base
London Chamber
Knowledge base
construction and infrastructure projects in the middle east

Creating an attractive environment for investors in infrastructure is no easy task. Politics and policy can make or break private participation and the flow of investment.

This supplement to the Infrastructure Index examines the opportunities in the Middle East specifically - and the outlook is positive.  The investment climate for international investors is heating up as the region focuses on PPPs and privatizations.

The Middle East is continuing to diversify away from oil and take advantage of its natural solar resources. The region also has solid plans around healthcare, transport, water and sewage, offering some prime opportunities for investors.

In addition, as traditional infrastructure assets classes become more competitive, investors are increasingly looking to alternatives. Examples including 4G and fiber optic networks, all of which are creating a platform for smart cities and the Internet of Things.

Across the region, WE identified 117 major programmes that are planned for completion by 2030, costing in excess of US$1 trillion. They involve a combination of retail, real estate, leisure, health and education asset developments as well as transport, communication and supporting social infrastructure systems.

Projects valued over US$10 billion

Over three quarters of the major programmes analysed are valued at over US$10 billion including ‘new city’ developments, for example, King Abdullah Economic City (KSA), Lusail City (Qatar), Basra New City (Iraq) and Mohammad Bin Rashid City (UAE). The Oman Rail and Kuwait Metro developments and several energy projects are also all expected to be built in five years or less.

To meet the fixed deadlines of global events in the region, such as the FIFA World Cup 2022™ in Qatar, and the National Vision plans, rapid project commitment is expected in the next three years with almost two thirds of spend scheduled between 2014 and 2016 with a peak of US$144 billion in construction in 2016. In fact, 95% of major programmes in Iraq are scheduled in the peak period, as are 90% of Oman’s and 79% of Qatar’s projects, raising significant questions around feasibility, impact on social infrastructure and labour capacity. The US$640 billion to be spent in the six years between 2014 and 2019 on major programmes does not include the other infrastructure and project commitments in the region (those under US$1 billion in value), placing further pressures on already stretched human and material resource requirements.

 ‘New cities’ driving major developments

City and Commercial property developments account for nearly half of all major programmes’ spend ‘New cities’ are the most ambitious programmes; they are major economic or social developments comprising many individual projects, each of considerable value, for example, King Abdullah Economic City, in Saudi Arabia, and Mini World Park, in UAE. 46% of expenses on ‘mega cities’ will be between 2014 and 2019, with over US$200 billion to be spent in this period, including the aforementioned Basra New City in Iraq and Lusail City in Qatar. The value of these ‘New cities’ cannot be underestimated as these developments bring sustainable economic and social value to the area. They help oil-reliant countries to diversify their economies, bringing direct foreign and domestic investment and creating jobs. Despite strong competition between Saudi Arabia and Qatar, one third of city and commercial property development spend will be in the UAE. Procurement strategies that take into consideration the complexity of the overall programme are essential.

Major programmes are just the tip of the region’s property investment strategies

The majority of major programmes in the Property sector are in UAE and Saudi Arabia. It is worth considering that part of UAE’s US$90 billion financial support for capital development projects includes nine massive Emirate housing projects, which fall below our ‘major programme’ criteria, i.e., less than US$1 billion. Foreign investment in real estate for example from China, will help guarantee projects get off the ground, particularly in ‘safe haven’ markets like Dubai, but managing risks around labor and material flow will impact on project realization and return on investment. Residential real estate development in new areas, such as Dubai Hills Estate, the first district in Mohammad Bin Rashid City, is lagging, and will be in competition for resources and labour when it does start on site. This could potentially have an inflationary effect on the estimated US$2 billion programme. National housing programmes, such as Saudi Arabia’s US$6 billion housing programme are to be delivered alongside major programmes such as the Makkah Grand Mosque. Large-scale housing development strategies need supporting physical infrastructure, and hence large-scale transport, energy and other social infrastructure will be required for their successful delivery. Additionally, Oman was planning US$8 billion of property development by 2020 though additional major programmes, the detail on which is yet to be confirmed.


Countries across the Middle East and North Africa are spending unprecedented amounts on their economic and social infrastructure. Their investment objectives vary widely, from a desire to improve competitiveness and attract investment, to responding to growing social and political pressures in the region.

However, the global financial crisis and subsequent economic fragility mean that all countries are looking hard at how to deliver their investment programs effectively, on time and at best value for money. Long delays and large cost overruns are no longer acceptable.

We as sohatoos group could help enthusiastic investors regarding required information, investment opportunities, legalization, legal registration, certification, and brand and company registration in infrastructure and construction sector in Middle East and is able to help clients resolve issues and deploy global best practice at all stages in the lifecycle of major projects and programs.