Deloitte report finds that GCC governments plan to invest $1trn into infrastructure sector
Qatar and Saudi Arabia are the two countries with the most opportunities to attain a favourable return on investment, said Nabil Salim, AAA Construction Equipment director on Tuesday, as GCC governments look to step up infrastructure spending.
A recent report by Deloitte found that governments in the region plan to invest $1trn into their infrastructure, with Saudi Arabia’s government planning on spending $400bn to build schools, houses, universities, new railway infrastructure, airport extensions and road improvements.
Meanwhile, as Qatar gears up to host the 2022 World Cup, projects worth an estimated $230bn are planned and underway, the report said.
These massive investments in the region provide both positive and negative trends in the demand and supply of heavy machinery in the region, Salim said.
One negative trend he pointed out was the high level of competition that was bound to take place. This would lead to a ‘vast amount of low quality and low standard equipment’ being used in the region.
“This has been a major threat to reputed manufacturers,” said Salim, “Additionally, some customers are now looking for used equipment because of the huge investments required to buy heavy machinery.”
However, he pointed out that there were significant positive trends in the regional marketplace, with steady growth seen in the heavy machinery sector, while a number of projects have been awarded in the GCC, particularly the UAE, Saudi Arabia and Qatar.
Salim added that the UAE construction market, which had collapsed in the wake of the downturn, was now showing reasonable growth.
As a result, he said that AAA was strengthening its presence in the UAE through its Abu Dhabi subsidiary, AAA Construction Equipment and AAA Construction Equipment Rental Establishment. These entities would help it capitalise on current and future operations in the UAE construction sector, he explained.