2013-12-27 15:24:51 - Fast Market Research recommends "Qatar Water Report Q1 2014" from Business Monitor International, now available
Further water utility projects have unfolded in recent months, affirming our positive view on the sector. We forecast Qatar to remain the fastest-growing country in the region for the ninth year in a row, continuing to seek improved execution rates for capital infrastructure projects. This bodes well for the water sector, which is seeing particular investment in desalination and water treatment.
The water sector in Qatar is coordinated by the Public Works Authority (Ashghal), established in 2004 to oversee all infrastructure related projects and public amenities of the State. Since then the country has embarked on ambitious plans to modernise infrastructure across a range of sectors, with the number and scale of projects accelerating since the country was named as host
of the 2022 World Cup. These include the construction of 810km of water pipelines and five new reservoirs, with a total capacity of 2.7bn gallons per day. The government also aims to increase drinking water production by 180mn gallons per day, reaching 500mn gallons per day by 2018.Several high-profile infrastructure improvement projects are planned or underway, including the proposed overhaul of Doha's wastewater treatment system and increases in desalination capacity.
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Expansion of desalination capacity is likely to remain a key focus, as Qatar has one of the world's highest rates of per capita water use. While the country currently has a surplus of 20% to 30% of its water production, consumption is growing faster than 10% per year. We expect, however, that with a range of investments planned, Qatar will benefit from a massive increase in water production over the forecast period to 2022 which will allow the country to more than keep up with a sharp increase in demand.
* We have upwardly revised our forecast for total water extraction in 2013 to 388.4mn cubic meters.
* Total mains consumption will reach 188.4mn cubic meters in 2013, with water consumption per capita at 238.0 litres per day.
* Total waste water in 2013 is expected to reach 415.5mn cubic meters.
Risk/Reward Rating: With an aggregate score of 55.7 out of 100, Qatar ranks sixth out of the 12 countries in our Risk/Rewards Ratings matrix. The country's average place in our ratings, above Egypt and below Saudi Arabia, is a reflection of it scoring highly for some indicators, but poorly for others. We view Qatar as a stable prospect for investors, with an established regulatory system and openness to investors. However, the country scores poorly for Country Rewards, hampering its position in our rankings. The small size of the country will continue to restrict potential rewards over the long term.
Key Recent Developments:
* In October 2013 Qatar-based Qatar Electricity and Water Company (QEWC) entered a QAR1.6bn (US$450mn) financing deal with four local banks to provide funds for the construction of a desalination plant in Ras Abu Fontas. The plant, which will desalinate 36mn imperial gallons of water a day, is expected to begin operations in June 2015. Qatar National Bank will provide a loan worth QAR655mn (US$180mn), while Barwa Bank, Masraf Al Rayan and Qatar Islamic Bank will contribute QAR983mn (US$270mn) on an equal basis via a shari'a-compliant arrangement.
* In September 2013 OOSKAnews reported that the government has disclosed it will invest QAR455bn (US$125bn) in the water and energy sectors over the next five years. While water production doubled between 2001 and 2011, there remains a pressing need to meet rising demand through investments in desalination, water treatment and cooling facilities.
* In August 2013 the Qatar Public Works Authority, Ashghal, scheduled the construction of a sanitation project worth QAR1.7bn (US$474mn) in northern Doha. The scope of the project includes the design and constitution of a wastewater pumping station, pipeline network and a lifting station. This forms part of the authority's initiative to improve sanitation in New Doha.
* Ashghal also concluded expansion work for the second phase of the Doha South Wastewater Treatment Plant, worth US$190mn, in August 2013. The capacity of the plant has increased to 180,000m3 per day, compared with the earlier 106,000m3.
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