Wednesday, 29 July 2009

Qatar Construction Projects Move Forward

Qatar Construction Projects Move Forward
Qatar: Wednesday, April 15 - 2009 at 11:03
About 82% of Qatar's 191 civil construction projects have been delayed, but only one has been canceled, and the delays are not affecting how much clients are spending on the schemes, according to a new report from research firm Proleads Global. 'Our investigation shows the Qatar construction industry is showing good growth as a whole,' Emil Rademeyer, director of Proleads Global said. 'No country in the world has proved itself immune to the credit crunch but it certainly does appear at this stage that, as far as civil construction is concerned, Qatar is probably one of the least affected.'

Qatar's $82.5bn civil construction projects show upward trend
Qatar: Sunday, April 12 - 2009 at 17:15

While most of the Arabian Gulf contemplates contraction or low growth in the civil construction sector, the pace of projects in Qatar continues a strong upward trend, according to a detailed study published today (Sunday 12 April 2009).

'While the Qatar economy is not immune to the global economic slowdown, it is expected to continue a reasonable rate of growth this year driven by the benefits from a long-term strategy to export liquefied natural gas from its vast gas field,' said Emil Rademeyer, Director of Proleads Global, authors of Insight Qatar, an investigation into the country's construction industry. The Proleads investigation is the most comprehensive and up-to-date yet on the Qatar civil construction industry and examines projects across real estate, infrastructure, leisure and entertainment. It finds the industry as at the end of March 2009 consisting of 191 major projects with a total value of $82.5bn. The investigation quantifies the current and future state of the sector in Qatar and considers how the industry in the peninsula state is changing as it migrates from prosperity through recession and back to prosperity. Giving a snapshot of the report's contents, Rademeyer said Proleads found that in spite of the global credit crunch, all major Qatar projects are still in operation. Further analysis of completed projects finds that more than 82% of all projects are late but that delays do not affect budgetary spend. A previous Proleads Insight investigation, published in February 2009, found that more than half of all civil construction projects across the same sectors in the United Arab Emirates had been placed on hold. In Qatar, most sectors experienced growth in cashflow over the greater part of 2008 but the leisure and entertainment sector saw a decline during the last quarter of 2008 and the first quarter of 2009, say Proleads. The data indicates only one major project in the real estate sector was cancelled in Qatar during 2008. 'Expenditure in the construction industry of Qatar grew steadily in 2008 and the first quarter of 2009,' Rademeyer added. 'However, in the light of the current global credit crunch, a number of questions beg to be asked. For example, will the growth trend persevere despite global market uncertainties? If so, what are the projections for growth? Will things get worse and, if they do, how quickly will it change?.' The Insight report on Qatar addresses these questions by presenting in detail the current size of the industry; exploring how the industry has changed of late; and projects the future state of the industry using statistics based on quantitative and qualitative data collected and processed by Proleads. On future projections, Rademeyer said, 'Our investigation shows the Qatar industry is showing good growth as a whole. Only the leisure and entertainment sector may see a slight decline from December 2008 to December 2009.'
He added, 'No country in the world has proved itself immune to the credit crunch but it certainly does appear at this stage that, as far as civil construction is concerned, Qatar is probably one of the least affected.' Proleads says the accuracy of the data upon which the report is based is estimated at 90%. The report contains an exhaustive list of all major Qatari civil construction projects. It also lists the top five developer companies in Qatar as: Qatari Diar Real Estate Investment Company; Barwa Real Estate Company; Energy City; Public Works Authority (Ashghal); and the New Doha International Airport Steering Committee.

Tuesday, 21 July 2009

Swift arbitration is the key

Jun 13, 2009

Dr Chandana Jayalath (is a Member of the Royal Institution of Chartered Surveyors and a Senior Contracts Specialist for the Public Works Authority (PWA) or ASHGHAL in QATAR)
Is there such a thing as solving construction disputes in a gentlemanly way? Dr Chandana Jayalath talks of a speedy process to minimise legal expenses.

Construction contracts often include ‘keep working provisions’ for the parties to perform their obligations, despite the existence of a dispute. The contract may expressly forbid the contractor’s right to suspend work or terminate the contract, although inconsistent with the local law. For example, under English law, there is a statutory right to suspend work for non-payment, which can not be excluded by contract..

Also, the employer may have the right to require a contractor to proceed with variations despite the time and cost consequences, not having been agreed in advance. In a fixed lump sum contract, the contractor may lodge a claim for variation, but the employer might deny it upfront on the basis of ‘lump sum’ or pay half of the cost pending evaluation at a later stage. The engineer may ask the contractor to go ahead with the rates he deems suitable whenever the contractor has no option, because of his obligation to complete works on time.

Although the contractor is supposedly responsible for quantity errors, in any typical lump sum contract where the quantities are said to be actual and correct, he will purposely keep silent in a windfall such as overestimated quantities that bring him money for nothing
Although the contract expressly says no re-measurement is possible, the losing party may bring out this case and attempt to interpret the function of re-measurement as the ‘standard practice’.

There is usually a term implied to the effect that the client will not prevent the contractor from carrying out work in accordance with the terms of the contract, which is sometimes referred to as the prevention principle. In the UK case of Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970), some defective work was discovered before practical completion had been achieved. The client was responsible for long delays owing to failure to approve a scheme of remedial works. A dispute arose concerning the contractor’s entitlement to an extension of time. Unfortunately, there was no specific provision for an extension of time when the contractor is delayed by the client, which is a fatal shortcoming in the contract. Another aspect is that many contracts do not have a mechanism to compensate the loss behind unprecedented price escalation in the Gulf region. This is where swift solutions are required to minimise potential losses suffered by parties, instead of allowing ‘loss to prevail where it lies’, particularly when contracts are silent.

Perhaps some claims are indeed necessary and the provision for making claims is essential in order to accommodate unavoidable changes, for example by granting justifiable extensions without invalidating the contract. However, problems arise when the provision is abused, for example by contractors who allegedly tender at low prices with the objective of profiting from their claims. For example, the government sector has now been bombarded by claims more than ever before.

Claims specialists have been busy with compiling claims for work suspended in recession. On the other hand, clients who attempt to aggressively suppress legitimate claims may provoke exaggerated, unjustified or even frivolous claims with the help of their in-house experts. Needless to say, the vicious circles generated by such exaggerated actions and reactions definitely add to the avoidable costs of construction.

The author therefore strongly believes in a speedy, flexible and a fair process, indeed a gentlemanly way to resolve disputes between gentlemen, as Alexis Mourre says, rather than too formal court lawyering. This is where ‘swift’ arbitration comes into play in the context of construction thus minimising the legal expenses for making and breaking claims and demoting the tendency towards interim awards and temporarily-binding decisions.

Friday, 17 July 2009

Abu Samra-Doha ride a reality

26 January 2009

Abu Samra-Doha ride a reality

LANI ROSE R DIZON - DOHA The 81-km Salwa International Highway Phase1 project, which links Doha to the south-western town of Abu Samra on the Qatar-Saudi border, has been completed. This international highway is likely to be opened for public soon after the authorities concerned give the go-ahead.The QR441-million road project, completed in six years, will allow faster commuting for motorists between Abu Samra and Doha. The upgraded project includes a dual fourlane highway with 10 major interchanges, three camel crossing underpasses and 22 Qatar Petroleum culverts. The project, which was completed on December 8 last year, has been built in accordance with international standards.Malaysian-based UEM Builders which constructed the project organised a function here on Saturday to celebrate the project’s completion. Speaking on the occasion, Malaysian Ambassador to Qatar HE Dato’ Muhammad Shahrul Ikram Yaakob said that the international highway would trigger an increase in business activities in Qatar as well as neighbouring Gulf countries.He thanked the Qatari government for granting Malaysian companies the opportunity to participate in the country’s progress. He said that a total of QR10billion worth of investment projects have already been awarded to Malaysian companies since 2002. “In 2007 alone, we had received QR5billion worth of investment projects, and we hope today’s success will open doors for more Malaysian companies to contribute to the development of Qatar,” he added.Chairman of UEM Builders Berhad, Yang Berbahagia Dato’ Ir Abdul Rahim Abu Bakar, said the project is a big achievement for the group. “As one of the leading engineering and construction companies in Malaysia, we are happy at sharing our construction knowledge, expertise and skills with our new counterparts in Middle East. We hope that our efforts will help in upgrading the expertise of those working in the engineering and construction industry of Qatar. By completing the Salwa international highway project we have proved our credentials in this field. We hope to get more opportunities in Qatar and the region,” he added.Several officials of the company based in Kuala Lumpur also attended the event.

Thursday, 9 July 2009

Contractors go for arbitration, avoid litigation

Web posted at: 6/26/2009 2:27:15
Source ::: The Peninsula/ BY SATISH KANADY

DOHA: Disputes between the main and sub-contractors involved in the Public Works Authority’s (Ashghal) prestigious projects make up majority of cases being heard by the Qatar International Centre for Arbitration (QICA).

Of the total 150 arbitrations that came up before the Centre, more than 40 percent are related to the disputes between the contractors of Ashghal projects. The Arbitration Centre is also hearing multi-million riyal cases, in which two major public sector companies are involved.

Talking to The Peninsula here yesterday, Dr Ahmed Mohamed Sheta, Secretary General, QICA said arbitration is increasingly becoming a popular alternative to litigation in Qatar. Over 150 arbitration cases, involving a sum of about QR1.3bn, have come up before the Qatar Arbitration Centre ever since it was launched in 2006. The QICA has already settled 89 cases through mediation and arbitration, he said.

Dr Sheta, who said many Qatari and foreign companies have approached the QICA to resolve the dispute through arbitration, however, was unwilling to disclose the name of the companies and nature of the cases. “We can’t reveal the details of the cases and the amount of money involved in the dispute in individual cases. For, acocrding to the agreement, we are supposed to maintain the confidentiality of the cases”, he said.

Dr Sheta denied that the dispute over the multi-billion riyal Salwa Highway road project is before the QICA. However, QICA is hearing many cases involved in the construction sector, he said. Though several cases are emerging from the energy sector, the contending parties prefer to go to the international arbitration centres outside Doha.

QICA has signed agreements with 27 international centres of arbitrations all over the world. The partner countries include the US, UK, Egypt, Lebanon and Spain. The arbitration agreements at the QICA will have the approval of the arbitration centres of these partner countries.

Dr Sheta said arbitration culture is fast catching up in Qatar. Arbitration is an increasingly popular alternative to litigation in Qatar