Construction Management
To be successfully delivery of highway facilities requires the application of a broad set of program and project management tools. Scope, design, cost, and schedule management are all regarded as essential for every major project. Highway agencies and their partners in the contracting community are well versed in cost estimating and scheduling techniques for these facilities and often apply them numerous times on each project. The treatment of risk is much less uniform and understood across the transportation community.
Salwa International highway Project
Recently, I had some study on this project and someone who had post a blog on it and I like to share this information to those who like to do construction business in GCC country and to those who really don’t know the problem of the project as case study.
The newspapers below are extracted from the “The Peninsula Qatar”. The news are categorized into:
SECTION 1 : Material Shortages & Costs, Visa etc
SECTION 2 : Inclement Weather
SECTION 3 : Traffic Rules
SECTION 4 : Ashghal Organization
SECTION 5 : Salwa Road News
SECTION 6 : Project Delay in Qatar
This is one of the major item will fail the projects.
| SECTION 1 : Material Shortages & Costs, Visa etc Cement shortage hits local market
DOHA • An acute cement shortfall has hit the local market again, threatening mega projects in particular. "The shortage is worse this time," says Nasser Al Meer, head of the contracting committee at the Qatar Chamber of Commerce and Industry (QCCI). The panel is convening a meeting this week, the first to be held after the Chamber elected a new board recently, and on the agenda is a discussion on ways to tide over the crisis. Cement has continued to be in short supply but the problem was never so alarming. Local demand for this essential construction material is 13,000 tonnes daily but supplies are much less, Al Meer told The Peninsula yesterday. When other mega construction projects announced by Qatari Diar and Barwa, for instance, are launched, the demand is likely to double to 25,000 tonnes a day, he said. Work at major construction sites are close to coming to a standstill and at risk are projects for the upcoming Asian Games. "That's our biggest worry since these projects need to be ready before the year-end," said an official of a contracting company, requesting anonymity. There are hardly any stocks left with the 25-odd ready-mix companies, so they are not in a position to meet the increasing demand for the material from the contracting companies. "Companies are suffering losses and a quick solution is the need of the hour," said Al Meer. The situation threatens to put a sudden brake to the ongoing building industry boom. Some contractors have placed requests for supply with the Qatar National Cement Company (QNCC) in vain, said Al Meer. The company's expansion project was expected to come on stream by the end of last year but nothing is known so far. The company could not be, however, contacted for comment. According to Al Meer, local cement producers should announce their production and import schedules to show how they were planning to cope with the yawning gap between supply and demand. A viable option with some construction companies is to directly import cement but the problem is that the local port remains overcrowded and berthing facilities are not easily available for ships. They have to wait longer than expected and importers have to pay huge fines as a result, said Al Meer. A floating (ship-mounted) cement production unit has already arrived at the Doha Port but due to the problem of non-availability of berthing space, it is not able to operate.
Cement remains to be scarce
DOHA • Cement continues to be in short supply threatening to bring many ongoing construction projects to a screeching halt, building industry sources said yesterday. The price per 50kg of cement bag has soared to as high as QR25, more than doubling over the past two years, and the problem is, even at this price the vital commodity is hardly available, said contracting company officials. One of the major sufferers are cement brick manufacturers. According to one manufacturer, local production of cement is able to meet only 30 per cent demand and imported cement is also not available easily. "It is hard to get supplies from Saudi Arabia. We are suffering losses," one manufacturer said.
Cement supplies stabilise in Qatar
Doha • Cement supplies have stabilized of late but building industry sources say the respite could be short-lived. “There is big demand for interlocks, bricks, and blocks but the cement supply in Qatar has been fluctuating and I can't predict how long this respite would last. Right now we are not facing any cement shortage”, said a cement block and concrete manufacturer on grounds of anonymity. He also did not want to see the name of his company in print. He said his daily requirement is 450 tonnes of cement, but the factory somehow manages to obtain 300 tonnes. This takes care of the present requirement for interlock, block and ready-mix manufacturing since during summer season there is less demand for interlocks and concrete. The general sentiment among cement product manufacturers is that although there is enough supply for now, there is a big gap between demand and supply with vast building projects, from tourist resorts to roads driving up demand for these basic building materials. “The construction sector has been growing so fast that the current production capacity can hardly match up to the requirements despite the efforts being made by producers,” a building industry source said.. “We will continue to import cement to meet our requirements, but it does not come cheap at QR120 per tonne and our customers bear the brunt of the high price,” he added. As a solution to the never-ending cycle of supply and short-supply, one manufacturer suggested that private companies be allowed to establish their own cement manufacturing plants. He said that the local cement production capacity currently can only meet one third of the demand. Qatar's total demand amounts to some 700,000 tonnes of cement per month. The remaining quantity required is imported, he said. But this is also not enough to meet the demand for lack of sufficient storage capacity at the Mesaieed port leading to long delays and limited quantities available in the market. “The increase of the number jetties at the Mesaieed port to allow larger quantities of imported cement to be unloaded and authorizing private firms to establish cement factories in the country could provide a long-term solution,” said the source. Qatar, which has embarked on major tourist resorts and residential development projects, has repeatedly suffered from cement shortages over the past two years.. However, recently the Qatar National Cement Company (QNCC), the country's largest cement producer, indicated that the company was planning to build a fourth production line with a capacity of between 4,000 and 5,000 tonnes of cement per day to meet the rising local demand.
Ashghal defends roadworks
DOHA • Amid criticism faced from various quarters on frequent road blocks, and undue delay in the completion of their projects, The Public Works Authority (Ashghal) yesterday came out with a detailed explanations.. “Only short-sighted persons may feel that Ashghal’s projects are just diggings and road closures…If the critics look at the project with clear vision and have some patience to wait for a better tomorrow, they can realize the real value of Ashghal’s efforts”, said Mishal Al Dhanim, Project manager, Ashghal, here today. Al Dhanim, who explained the hindrances and challenges faced by the engineers and the labourers said that the proejcts are putting a lot of pressure on them. “Regarding the much criticised Airport Project, Ashghal is facing a series of problems every day, which demands an on-the-spot solution. While the works for the traffic diversion from Airport Interchange was on its final face, suddenly there was shortage in the supply of Petromene, a raw material produced from petrochemicals. It was the shortage of Petromene which had delayed the opening of the Interchange”, he said. On the Ahmad bin Ali street works, Al Dhanim said the pending works like lighting, interlock, beautification and service road would be completed soon. After the completion of the pending works, the street will get a new face lift. “Only 25 per cent of the works are remaining and the entire work will be completed by this month”, he said. Al Dhanim dismissed the popular criticism that speed in the work would affect the quality of work. He said Ashghal has laboratories attached to each work site to ensure the required standard in quality. Rearding Suhaim Bin Hamad Street, he said 35 per cent of the work is pending. The works will be over soon. “We have to admit that Qatar’s infrastructure network is quiet old and they must be changed. But it will take time. We have to make sure that no street is blocked in toto for maintenance of infrastructure networks. All networks of electricity, water, telephone etc have to be replaced without disrupting the road service. It's a really delicate job”, he said. On the hurdles faced by Ashghal while carrying out the project works, Al Dhanim continued: “Most of the hurdles are occurred in the crowded areas and commercial zones. Changing old networks, especially in the thickly populated area, is a difficult and time consuming exercise. Ashghal’s critics often forget these facts”, he added. Prices of building materials still high
DOHA • Prices of building materials which had gone sky-high over the past few months have not fallen yet, despite a lull in construction activities after the Asian Games, say industry sources. The market, however, is expecting a significant fall in prices after the holidays. The hectic construction activities ahead of the Asian Games had led to a huge demand for building materials and a consequent shortage in supply. The prices spiked beyond control as companies went on a buying spree to meet their contractual obligations. "The situation has not changed after the Games.. Prices are still high and some items, especially cement, are short in supply," said an official of a leading construction company. "The market should stabilise after the holidays and prices are expected to fall considerably in the next two months," he said. He predicted at least a 15 per cent fall in prices in general. Cement and steel, which are the most widely-used construction materials, had become particularly dear following the boom. Steel prices had gone up from QR1,600 to QR2,000 per tonne, while a 50kg bag of cement, which had been priced at QR11.50 cost QR15. However, there has been a noticeable fall in the prices of cement blocks, which has come down from QR2.70 to QR2.10 per piece over the past two weeks. One of the factors that contributed to the price hike was the high demurrage cost that importers had to pay at the port due to the heavy backlog. "This problem is not likely to exist after the Asian Games," the official said. "The market is now stagnant due to the holidays as well as the year-end. There will be more supply after the holidays and prices are all likely to come down," said the Pakistani manager of another construction company. The construction boom in the country is poised to continue for another two or three years, with several major projects on the cards, he stated. Industry sources pointed out that there is a correlation between construction costs and zooming house rents in the country. The increasing cost of land as well as materials was a major factor that forced several landlords to hike rents. A stepped-up demolition drive and the consequent shortage of residential buildings worsened the situation. "The authorities should give a break to the demolition work until new buildings come up to meet the severe shortage of residential space in the city," said an industry expert. He noted that an expected fall in construction costs would reflect positively on the real estate market as far as consumers are concerned in the coming few months. Cement shortfall hits ‘readymix’ firms; QCCI to discuss problem
doha • Having battled the shortage of sand recently, the local building industry is now confronted with a severe shortfall of cement. ‘Readymix’ companies are the worst sufferers as work at their plants has literally come to a standstill. Their supplies to contracting and construction firms have almost ceased as a result.. Not unaware of the problem, the Qatar Chamber of Commerce and Industry (QCCI) has convened a meeting of its industrial committee next week to discuss the issue and look for quick solutions. The head of the committee, Rashid Seraiya Al Kaabi, told local Arabic dailies yesterday: “The cement shortage has resurfaced threatening private projects once again.” The ‘readymix’ factories are unable to cope with the demand due to the shortfall, he added. “We are going to take up the issue at a meeting next week.” The QCCI committee had recently convened a meeting to discuss the issue of sand shortage, which had hit the construction industry badly.. It was pointed out by some businessmen that the transport cost of sand had multiplied almost five times. The shortage had prompted some truck operators to buy sand from the factory on their own for black marketing, the meeting was told.. A participant suggested that the factory be asked not to sell sand to individuals but only to companies. But the proposal was struck down as that would make private housing and villa projects to suffer. The largest sand manufacturer affiliated to the Qatar Industrial Manufacturing Company had, however, clarified later that the sand shortage was caused due to incessant rains and the supplies eased subsequently. Building material shortage delays project completions
doha • Most experts agree that delays in major infrastructure and construction projects are due to the shortage of building materials, lack of qualified contractors and skilled manpower and the changing of specifications at the drop of a hat. Al Sharq conducted a survey to find out the opinions of contractors, businessmen, Central Municipal Council (CMC) members and the Arbitration Centre at the Qatar Chamber of Commerce and Industry (QCCI). Nassir Sulaiman Haidar, a member of the Advisory Council, said that there were several rounds of informal discussions held on the issue in the Council after which it sought clarifications from the Public Works Authority (Ashghal). The Authority ensured that it has already taken punitive action against several contractors by putting them on a blacklist. Asked about the causes of the delay, Haidar said that some ineligible contractors are in charge of projects beyond their capacity. For immediate resolution of conflicts related to delays in executing major projects, Haidar suggested that such cases have to be referred to the Arbitration Centre at the QCCI instead of the courts and this has to be mentioned clearly in the contract agreement between both contractors and owners. Ahmed Al Khalaf, a businessman, said that a rise in prices and scarcity of building materials are the major causes in the delay of accomplishing projects.. "The country is witnessing a huge construction boom, but the supply of materials cannot cope with the high demand from various projects across the country," he said. A lack of skilled manpower is also another major cause of delays, he pointed out. Visas for certain nationalities such as Indians, Pakistanis and Bangladeshis are banned. "The only option for contractors is to recruit workers with little experience in construction from other countries. All this has resulted in a great loss for contractors," he said.
Ashghal asks authorities to help with contractors’ visa matters
DOHA • The Public Works Authority (Ashghal) has asked immigration authorities to help contracting companies doing their various infrastructure projects bring foreign workers without any problems. Ashghal was prompted to approach immigration officials for helping contracting firms in workers' visa matters after a mega Dukhan road project got stuck due to the shortage of manpower, a local Arabic daily reported yesterday. Another challenge facing the project is that the acquisition of private properties by the state for the purpose is being delayed. Ashghal said it has also asked the Standards and Measurements Department to keep a track on the quality of materials used in the various public projects, the daily said.
Mysterious diesel shortage continues; retailers baffled
DOHA • Diesel continues to be in short supply but officials at filling stations say they are completely in the dark about the reasons behind the crisis. An official of at least one station in Doha said he made an effort to find out from Qatar Fuel (Woqod), the company which supplies petroleum products locally, exactly what the problem was but in vain. Consumers and filling stations alike find it surprising that Woqod has been silent and has not even issued a statement to the media explaining the reasons behind the shortage and how long it would continue. "It is their (Woqod's) moral duty to at least come out with a statement. Silence breeds rumor-mongering, which should not be encouraged," a trucker stranded at a petrol station for diesel said. He said he had been trying to find out from employees at petrol stations the reasons behind the "mysterious" shortage, but no one is in a position to explain. Filling stations, especially those located outside the city limits of Doha which cater mostly to trucks and other heavy vehicles, said they have been suffering losses since diesel supplies have been irregular. "We are not getting full quota of diesel from Woqod," an official of a petrol pump said. "Our daily requirement is 50,000 liters, but we are getting between 25,000 and 40,000 liters," he added. Filling stations say they fear losing their permanent corporate customers. Most petrol stations have tie-ups with companies, who pay them a week in advance for the gasoline required for their vehicles. Many companies, particularly the ones in the transport business, have fleets of vehicles and they issue coupons to their drivers to get gasoline from designated filling station or stations. "From one company alone, we get something like QR50,000 as weekly advance. We are cutting a sorry figure for the past several days as we are in no position to fulfill our commitment," said an official from another petrol station. Some petrol stations said they are forced to give half the quantity of diesel to customers due to the shortage.
Diesel shortage could intensify inflation
DOHA • If the diesel shortage is not addressed at the earliest, it would be hard to prevent a multiplier effect on the inflationary trend the country has been witnessing, warn trade and industry sources. There is already a shortage of trucks to carry building materials like cement, sand and steel, to cope with the rising demand in the booming construction sector and the diesel crisis has compounded the problem. As it is, trucks are allowed to move within the city limits of Doha only for nine hours a day and now they have to wait in long queues for diesel, further aggravating the situation. Building materials continue to be in short supply, but transporting stocks when they are available remains a perennial challenge. There is a shortage of processed sand, but the other kind of sand which is used in plastering and pavement-making is available in abundance. "Trucks are, though, not available easily to transport the sand," said an official from a ready-mix company. The shortages of building materials and trucks are delaying various building and infrastructure projects.. A number of contractors have been fined for not being able to deliver within the contractual period.. "They are not paying the fines from their profits. They will recover the money from the market one way or the other and this will indirectly affect the general pricing situation," said another source. Ready-mix companies are operating at 25 per cent of their capacity due to the short supply of cement and sand. The diesel shortage has worsened the situation since the cement-mixers use this fuel. "We are the worst sufferers in these times of crisis," said the official from the ready-mix company. Take the example of processed sand. Its demand per day is 200,000 tons but there are only two companies producing something like 40,000 tons combined. So, one can see the huge gap between demand and supply. The government has, though, promised to ease the shortage of building materials and ensure supplies at affordable rates within 12 to 18 months. "So, there is still time," said the official. Industry sources believe that with the diesel shortage continuing, the efforts being made by the state to check inflation are unlikely to bear fruit. "On the contrary, the prices would keep spiraling, adding to the cost of living," he said. Experts believe that even if strict measures are taken to combat the skyrocketing prices and bring the rate of inflation down by the year-end, as announced by the Qatar Central Bank recently, the prices would not decrease. They would only stabilize at the prevailing levels. There are some experts who believe that any attempt to control inflation may not succeed before 2010 when a common Gulf currency is expected to be launched.
Qatar imports diesel to meet rising demand
Doha • An unexpected demand for diesel triggered by an exploding vehicle population has prompted oil exporting Qatar to import the fuel to meet local consumption. Qatar Petroleum (QP), in fact, began importing diesel in June last year and the recent shortage was caused by a sudden import of 3,500 trucks last month, senior officials of Qatar Fuel (Woqod), sole distributors of petroleum products locally, said. The vehicle population in the country rose considerably last year to around 500,000, some half the number of them using diesel, Woqod’s Vice-Chairman and Managing Director, Mohamed Khalifa Turki Alsobai, told a news conference here yesterday. There was a tremendous strain on Woqod’s supplies as some 84,000 vehicles were imported last year as compared to 26,000 in 2005 and 18,000 in 2004. Half the number of the 84,000 automobiles were heavy vehicles which ran on diesel, stated Alsobai. “Already our supplies were at full capacity and the sudden import of 3,500 trucks last month led to a crisis,” he pointed out. There is only one multi-product pipeline which supplies petroleum products from the refinery in Messaieed to Woqod’s depot in Doha and it has been operating at full capacity. There was a shortage of ‘Super’ petrol for a day or two as more diesel was channeled from the Mesaieed refinery to Woqod’s depot to meet the shortfall.. A new pipeline with larger capacity is under construction and is expected to be ready by next year. By then, the upcoming refinery in Ras Laffan would also be operational, Alsobai said. There is no shortage of diesel now as Woqod has set up three distribution centres to provide additional supplies to filling stations across the country. The centre in Doha will take care of supplies in the city as well as the suburbs while the one in Messaieed and Ras Laffan will be catering to those and surrounding areas. The distribution facility in Doha is already operational, while those in Mesaieed and Ras Laffan will begin supplies shortly. These will augment supplies by about 50 per cent. The three supply centres will take care of growing demand for the next two years and by that time the new pipeline and the new refinery in Ras Laffan will be ready, Alsobai said. QP is paying between $75 and $80 per barrel for the imports but is making the diesel available to petrol stations at a subsidised rate of $30 per barrel for retail sale as also for local companies. Foreign companies are being provided the fuel at international rates, disclosed Alsobai. Also present at the briefing was Nasser Ibrahim Fakhroo, Woqod’s operations director. Alsobai said that Woqod had not expected such a huge jump in demand for diesel before 2010. The company was, therefore, taken by surprise, he admitted.
Ashghal seeks to make contractors’ life easier
DOHA • Contractors working on infrastructure projects awarded by the Public Works Authority (Ashghal) are likely to be allowed to hire workers from countries of their choice for the contractual periods. A proposal is also being presently studied by Ashghal to make advance payments to contractors to the extent of 10 percent of the total cost of a project against bank guarantees. It is being studied if basic building materials can be supplied to the contractors at fixed prices during the contractual period to help reduce their risks. In case a contractor buys materials at higher prices, there could a provision to compensate him monetarily. The period of payment is proposed to be reduced from the existing 90 days to 45. These are some of the facilities the Authority is thinking of providing to contractors to ensure they do not suffer in these times of rising inflation and the huge infrastructure works are not affected. "We are studying these proposals," Mohamed Ali Darwish, of Ashghal, told 'The Qatar Conference 2008' hosted by MEED.. The two-day convention ended at Al Sharq Village and Spa here yesterday.. He said the Authority was in talks with the Ministry of Interior and the Department of Labour and urging them to allow contracting companies being awarded its projects to hire workers from countries of their choice for the period of the contract. Darwish later told this newspaper that rising costs of inputs such as building materials and labour were indeed an issue with the contractors, so these facilities were being proposed to be provided. "The proposals are under study," he said. Earlier, giving details of future projects, he told the conference four hospitals are to be built at Hamad Medical City, aside from a central medical laboratory and ENT and ophthalmology departments. Forty new schools are to be built in different parts of the country and plans are afoot to construct another 20 next year. Besides this, 30 kindergartens are expected to be ready by August this year so they can begin operating from the next academic session. Package contracts for these schools and kindergartens are being awarded to contractors and local contracting firms are being encouraged to set up joint ventures with their foreign counterparts so they can benefit, said the official.
Ashghal price agreement
DOHA • The Public Works Authority (Ashghal) has signed memorandums of understanding (MoU) with four national companies for stabilization of prices of the raw materials in the construction sector. Zayed Mansoor Al-Khayarin, Board Member and CEO of Ashghal signed the MoU yesterday with a series of companies including Woqod, Qatar National Cement Company, Qatar Industrial Manufacturing Company and Qatar Quarries and Building Materials Company.
Ashghal signs deals to keep costs down
Doha • The Public Works Authority, Ashghal, signed agreements with Qatar Steel and Qatar National Transportation Company yesterday in order to control costs in its projects. Signing of the contracts is a part of Ashghal's efforts to stabilize the prices of construction materials and the cost of transporting them to project sites.. "The prices of raw materials are going up. The transportation cost is also on the rise. Many contractors are being lost due to the price rise, so this initiative can help to bring in more contractors," said Ashghal CEO and Board Member, Eng. Zayed Mansoor Al Khayyarin. Mansoor Al Khayyarin signed both the memoranda of understanding on behalf of Ashghal, while Sheikh Nasser bin Hamad al Thani, General Manager and board member of Qatar Steel, signed the deal on behalf of his company to stabilize the prices of its products. Ali Hassan Al Mohannadi, General Manager, signed the MoU on behalf of Qatar National Transport Company to control the cost of transporting sand and similar materials from the site of production to Ashghal project sites. The high prices have been causing financial loss to the contractors. The agreement with the suppliers will help the contractors to agree on tenders without fearing financial loss. "The agreements will minimize the risk of the contractors. The suppliers will have to account for the extra charges and if the reasons are valid, the government will meet the extra expenses of the raw materials. This can also improve the performance in the construction sector and the structures under construction," said Eng. Ahmed Sultan Al Kuwari, Chief Operations Officer "The agreement is for one year now and, according to the results, we will think about extending the period of agreement," he told The Peninsula. Insufficient supply of raw materials in the market had also pushed up project costs. "Some of the cement and sand companies had problems, which have been overcome now. We also have some new companies that will be opened later. This can also help in lowering prices." Early this year, Ashghal signed MoUs with Woqod, Qatar National Cement Company, Qatar Industrial Manufacturing Company and Qatar Quarries and Building Materials Company and National Leasing Company. Freeze on prices of cement, steel and diesel for three years
Source ::: The Peninsula/ by Nasser Al Harty
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| (From left) The Minister of Finance and Acting Minister of Economy and Commerce, H E Yousuf Hussain Kamal, the Prime Minister and Foreign Minister, H E Sheikh Hamad bin Jassem bin Jabor Al Thani, and the Chairman of Qatar Chamber of Commerce and Industry, Sheikh Khalifa bin Jassem Al Thani, during the Second Consultation Meeting with Businessmen yesterday. (SHAIVAL DALAL) |
Doha • Qatar is to freeze the prices of four basic construction materials for three years, Prime Minister and Foreign Minister H E Sheikh Hamad bin Jassem bin Jabor Al Thani told businessmen here yesterday.
Speaking at the Second Consultation Meeting with Businessmen and the Qatar Chamber of Commerce and Industry (QCCI), he said: "On the directives of H H the Emir, Sheikh Hamad bin Khalifa Al Thani, there will be a freeze in current prices for four construction materials, including sand, steel, cement and gabbro, which will not be increased for a period of three years."
He said a decision to this effect would be issued soon and the government would bear any surcharges so that contractors in the construction sector could go on with their projects without fear of price increase in these basic materials.
The Prime Minister also said the subsidized prices at which gasoil like diesel is sold to local companies will be extended for another year in view of the current situation. The government spends some QR1.4bn a year to support the price of diesel that is used domestically, he said.
Sheikh Hamad bin Jassem noted that inflation is a global phenomenon, but said some traders were also responsible for increasing the prices of certain products.
The Prime Minister also announced that as part of the government's contribution to the private sector, the Qatar Development Bank (QDB) is to set up a company with a capital of approximately QR2bn.
The company's objective will be to form partnerships with the private sector to bring about innovation.
Meanwhile, the government is planning to allocate soon 104,000 plots of land for housing in different parts of the country, including Doha, to Qatari nationals who do not yet own their own house.
Referring to the dollar peg of the Qatari Riyal, Sheikh Hamad bin Jassem said there was no plan either in the short or medium term to de-peg from the dollar or change the exchange rate of the Qatari Riyal.
As for the developments taking place in the country, he called for the local economy to be more competitive in view of the current regional and economic situation embodied by globalization and the requirements of the World Trade Organization.
This, he said, requires modern methods of production and management and use of knowledge-based tools.
He also said stepping up cooperation between the private and public sectors and opening up more opportunities in service provision to the private sector was one of the government's top priorities.
To be cont...
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