Qatar may reduce the number of stadiums it builds for the 2022 soccer World Cup as costs increase, according to Bank of America Merrill Lynch.
The Middle Eastern country is negotiating with FIFA, world soccer’s governing body, to cut the number of venues to eight or nine from the 12 originally planned, the U.S. bank said in a note to investors following meetings with the Qatar 2022 organizing committee.
“We are fully committed to delivering on the commitments we made to FIFA,” Yasir Al Jamal, technical director of the organizing committee, said in a statement. “The requirement is a minimum of eight and a maximum of 12 stadiums. We are currently working on delivering our first five stadiums,” he said.
Qatar, holder of the world’s third-largest natural-gas reserves, agreed to spend as much as $65 billion on infrastructure to host the world’s most-watched sporting event. The plan includes building stadiums equipped with solar-powered air conditioning, more than doubling hotel and apartment rooms and constructing a $25 billion rail and metro network.
Costs are likely to exceed the bank’s initial estimate of $95 billion, Alberto Ades, head of emerging-market fixed-income strategy at Bank of America Merrill Lynch, said in the note.
“The process of selecting the final proposed line-up of host venues is in process,” FIFA said in an e-mail. Qatar will submit a list of many as 12 stadiums to the FIFA executive committee for approval, the sports organization said.
Qatar’s selection as World Cup host has prompted speculation that the tournament could be moved to winter from summer to avoid temperatures that reach 50 degrees Celsius (122 Fahrenheit). Qatari officials are “indifferent to holding the event in the summer or winter,” Ades wrote.
Building the infrastructure will have to be carefully phased to avoid “overheating,” he said.
Qatar beat out the U.S., Japan and Australia three years ago for the rights to the World Cup in a vote by executives of FIFA awarding the 2018 and 2022 events. The organization said it would no longer select the hosts for more than one tournament at a time because of concerns about collusion between bidders and allegations of vote-selling by committee members. Russia was selected to host the 2018 tournament.
“We are in constant communication with FIFA on to how best fulfill our bid commitments and implement our unique, compact hosting concept for the 2022 FIFA World Cup in Qatar,” Al Jamal said.
Qatar’s development authorities expect medium-term economic growth of 5 percent “with flattish hydrocarbon sector growth,” Ades wrote. Construction could peak around 2015 and 2016 and, while the population is likely to grow, issues related to short-term labor contracts, lack of residency options for foreign workers and the country’s sponsorship system “could pose headwinds post-World Cup.”