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Sun 22 Apr 2012 04:05 PM

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Cancelled MENA projects rise 8% - Citigroup

Value of projects stalled or cancelled in region has continued to rise since start of year

Cancelled MENA projects rise 8% - Citigroup
(Bloomberg)
Cancelled MENA projects rise 8% - Citigroup
(Bloomberg)
Cancelled MENA projects rise 8% - Citigroup

The value of construction projects cancelled in MENA has risen by eight percent since the start of the year, according to a report published by Citigroup.

However, the value of cancelled and delayed construction projects in the region remained largely unchanged at approximately US$719bn since January 2012, the lender's latest construction project tracker showed.

According to the study, more than half (57 percent) of these cancelled or delayed projects were in the UAE, with the value of such projects rising two percent since Citigroup's last report, published in January.

The story was significantly different in Saudi Arabia, where the value of cancelled and delayed developments pared by eight percent to US$316bn.

In Qatar, which has seen a huge number of new developments in recent years, the value of delayed projects plummeted by 41 percent, but in terms of those being cancelled the value soared by almost a third, at 32 percent.

Looking at the construction industry as a whole, on a year-on-year basis, the value of GCC projects planned and underway crept up 2.5 percent to US$1,906bn.

Citigroup's report showed that Saudi Arabia leads the way, with US$750bn of new projects in the pipeline, making up 31 percent of the entire MENA market.

Iraq, which is now looking to rebuild its balance sheet, remains the third largest market in the region with just under US$315bn of new projects. It is also showing signs of spending across segments, which could mean more opportunities for contractors.

In Kuwait, though the value of projects has grown 10 percent to almost US$200bn since the start of the year, the market generally is expected to be hampered in the coming months by domestic political tensions.

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Fed up of Dubai property 8 years ago

And disgracefully there is still no protection for the investors who have lost so much money, who are sitting waiting 5 years later for projects that were due to take 2 years to complete and for those projects that have been cancelled. Dubai and the UAE is supporting developers who delay and delay and no compensation is offered to the investors. After the period of original completion date investors should be able to apply via RERA, rather than
Aging to go to court, for a FULL fund, for the projects that are late we should be offer compensation in the form of interest on the delay period, if buyers are late with payments we get charged interested by the developers so why it is not a reciprocal arrangement the other way round????