Huge GCC investment – positives and negatives
09 October 2012
According to a recent report from Deloitte, governments across the GCC (Gulf Cooperation Council) region plan to invest US$1 trillion in infrastructure development over the coming years.
That level of investment, according to Nabil Salim, director of the region’s AAA Construction Equipment, speaking at the Intermat Middle East Exhibition in Abu Dhabi, will have both positive and possibly negative impacts on the area’s construction equipment sector.
On the negative side, Mr Salim warns that the high level of competition could result in a vast amount of low quality and lower standard equipment flowing into the region. “This could be 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 machineries.”
But, on a more positive note, Salim highlighted the positive trends stating that a steady growth can be seen in the heavy machinery market and a lot of projects have been awarded in the GCC, particularly UAE, Saudi Arabia and Qatar throughout the year. Additionally, the construction market which collapsed in the UAE, now shows reasonable growth.
Of those countries, Salim maintains that that Qatar and Saudi Arabia are the two countries with the most opportunity to attain a favourable return on investment. The report by Deloitte highlights investments made by the Saudi Arabian government including the estimated US$400 billion plans to build schools, houses, universities, new railway infrastructure, airport extensions and road improvements. Projects related to hosting of the 2022 FIFA World Cup in Qatar are estimated to be worth US$230 billion, according to Deloitte.
To help service the new investments, AAA recently strengthened its presence in the UAE with the establishment of Abu Dhabi subsidiary AAA Construction Equipment, and AAA Construction Equipment Rental.
At the Intermat Middle East exhibition, AAA showed the 280 tonne IHI CCH2800 crawler crane, the 70 tonne IHI CCH700 crawler crane, the IHI 50 NX 3 mini excavator, the low noise and exhaust emission Nippon Sharyo NES150 Generator, and a used Tadano crane.
