More than $50 billion of infrastructure capex in Qatar is at risk as the Iran conflict disrupts supply chains and delays project execution, according to KPMG.

The consultancy flagged risks to delivery timelines for the $30 billion North Field East LNG expansion and related Ras Laffan infrastructure, citing logistics disruption and equipment import delays in its recent whitepaper on post-confict scenarios for Qatar.

It said an estimated 10-billion-Qatari-riyal ($2.74 billion) pipeline of traditional as well as public-private partnership (PPP) projects may become more expensive due to higher risk premiums and reduced bidder participation.

KPMG pointed out that in the construction sector, input costs are rising due to supply chain disruptions affecting imported steel, cement, equipment, and construction materials.

The sector is also facing increasing logistics and insurance costs, as well as engineering, procurement, and construction (EPC) contract premiums due to the Strait of Hormuz closure, Hamad Port restrictions, and shipping delays.

High import dependence is intensifying exposure to delivery delays and cost escalation while labour constraints, force majeure risks and reliance on international contractors are increasing project execution and delay risk, the report stated. 

In the short term, authorities are likely to reprioritise spending and focus towards strategic and resilient projects, according to the report.

In the medium to long term, the disruption also creates an opportunity for transformation through logistics diversification, infrastructure redundancy, supply chain localisation, digital infrastructure adoption and renewable and green infrastructure development.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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