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Qatar likely to need 'external sources of funding' to deliver World Cup infrastructure projects, says expert

Qatar is likely to need "external sources of funding" to deliver its various major infrastructure projects in time for the FIFA World Cup in 2022, an expert has said.10 Feb 2017

Doha-based projects expert Peter Blackmore of Pinsent Masons, the law firm behind, said that the additional money will likely be required despite signs that the squeeze on the price of oil, which is central to the state's finances, is easing.

Blackmore was commenting after it was reported recently that Qatar is spending $500 million a week on infrastructure projects in preparation to host the World Cup in 2022.

Minister of finance Ali Sherif Al Emadi said that level of spending is likely to continue for three to four years as the country builds stadiums, motorways, railways and hospitals, the BBC reported. More than $200 billion will be spent in total, Al Emadi said. The World Cup projects have been protected from budget cuts put in place due to the fall in oil and gas prices, he told the BBC.

The minister claimed Qatar may not need to issue international bonds this year to raise additional funds, according to the BBC.

Blackmore of Pinsent Masons said: "Qatar certainly has massive commitments on projects that need to be completed before the World Cup in 2022 but even if the price of Brent crude achieves stability around $55 per barrel it is unlikely that Qatar will be able to deliver on all its plans without recourse to external sources of funding."

"Whether or not Qatar decides to tap the international bond market in 2017, we may at last see genuine progress on innovative financing structures such as PPP being used to deliver social infrastructure projects, and perhaps the relaxation of foreign investment rules to permit overseas developers to take majority stakes in development projects. Without such innovations there may have to be further trimming of departmental budgets to ensure spending is targeted on priority stadium and transport projects," Blackmore said.

According to the BBC, Qatar has already awarded 90% of the contracts for the World Cup projects and two-thirds are due to be delivered within the next 24 months.

"We are giving ourselves a good chance to deliver things on time," Al Emadi said. "We don't want to be in a place where we start painting when people are coming to the country."

Indeed, pressure on the country's finances is now easing as oil prices rise, and Qatar may not need to issue international bonds this year, Al Emadi said. 

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