Sunday, 13 December 2009

Barwa comes to the rescue of subcontractors
Web posted at: 12/13/2009 3:31:32

DOHA: Barwa has started delivering outstanding payments that the now-defunct main contractor owed to subcontractors who had completed work on the Barwa Masaken (Alsailya and Mesaimeer) project, the company said yesterday.

The move has come after the main contractor for the project, Panceltica, became insolvent in July, leaving many of the subcontractors without payment.

Barwa had no obligation to these sub-contractors, however, it believed this move would be necessary for the completion of the project in the best technical conditions, the company said in a statement issued yesterday. “Barwa has taken the initiative to demonstrate its commitment to the developer community and ensure that local subcontractors’ outstanding payments are resolved,” said Barwa Deputy Chairman, Hitmi Ali Al Hitmi.

This has taken some time due to the detailed financial and legal process that has followed the termination of Panceltica, to ensure only subcontractors who had delivered work were compensated. “We are delighted with this conclusion as we wanted to support those who have been committed to the Barwa Masaken project so that they could continue working with confidence,” he added.

EXCLUSIVE: US $2.5 billion claim over Dubai Metro

Construction Week
by Benjamin Millington on Dec 10, 2009

The RTA is disputing a massive US $2.5 billion (AED9.18 billion) claim from the consortium responsible for building Dubai Metro, according to a source connected to the project,Construction Week has learned. The RTA has not denied the claim.

When asked if the claim was valid, RTA corporate communications director, Peyman Younes Parham said: “We won’t comment on any contractual issues.”

The source, who did not want to be named, said the consortium is insisting it is entitled to $2.5 billion in unpaid certified amounts and additional escalation costs, variation costs and delay costs due to changes in the metro design and specifications, but the RTA does not agree.

“(The RTA) is totally disputing it, they have said the money is not due and in actual fact, the consortium is already being overpaid,” he said.

“Right now it is just a claim and hasn’t got to the arbitration stage. But it is probably the biggest claim for a civil works contract ever seen in Dubai, possibly the world.”

If the claim proceeds to the courts it will be one of the most significant cases in Dubai’s construction history, he added.

The Dubai Rapid Link (Durl) consortium includes Mitsubishi Heavy Industries, Mitsubishi Corporation, Obayashi Construction and Kajima Corporation of Japan and Yapi Merkezi of Turkey.

The consortium was awarded a $3.39 billion contract in 2005 to build the metro’s red line and a $1.11 billion contract to build the green line in 2006.

In August the RTA chairman HE Mattar Al Tayer conceded that the cost of building the metro system had increased by “billions” since the original contracts were awarded.

He said more than half of the project had changed in terms of its design and facilities since its inception to cope with the growing needs of the city.

According to estimates the cost of the project increased by 75% to around $7.6 billion.

Durl corporate affairs manager Sam Majed also refused to talk about the claim.

“We don’t make any comments about anything related to the project, definitely nothing aboutcontractual agreements between us and the client, it’s all part of a 100% confidentiality agreement, so absolutely no comment,” he said.

It is still unclear how much Durl has been paid for their work on the project, but in November the general manager of Mitsubishi Heavy Industries’ Middle East office Koji Okamoto told The Nationalnewspaper they were “still awaiting payment.”

Ten of the 29 stations on the metro’s red line opened in September, with the green line expected to be operational next year.

Wednesday, 9 December 2009

Dubai contractors face bankruptcy threat

by ConstructionWeek staff on Dec 8, 2009

Tabari also warned that many developers could go out of business next year
Tabari also warned that many developers could go out of business next year

By Andrew White

The construction industry in Dubai has no chance of recovery in 2010, Khaldoun Tabari, vice chairman and CEO of Dubai-based engineering contractor Drake & Scull International, has said.

Speaking at the Arabian Business Conference 2009, he added that for construction companies solely operating in the emirate, there were big problems.

"If you are 100 percent in Dubai with nothing outside you are dead," he told Arabian Businessin an interview.

“What does it mean if you are dead? If you are a construction company and you pay 10,000 or 20,000 people, and you do not get any work because there’s an abundant supply of buildings, you are going to be bankrupt.”

The UAE's real estate and construction sectors have been badly hit by the downturn. A recent report suggests they have seen the biggest declines in the Middle East region. Some 566 projects have been shelved or cancelled in the country – the majority of which are in Dubai – according to the research house Proleads.

Tabari added that Dubai real estate operators were likely to face further difficulties over the coming months.

“We had hundreds of real estate developers, but these are not going to exist anymore, that’s a simple fact,” he said.

“There’s going to be consolidation or they’re going to go out of business, because they’re not going to make their payments. We’re going to see less and less developers in this business; it will be an orderly exit.”

Listed on the Dubai Financial Market, DSI operates in engineering, procurement and construction (EPC), and civil contracting in addition to the development of design and build engineering expertise in infrastructure, water & power (IWP).

Tabari also revealed that the company was looking to buy two companies in Saudi Arabia, at a combined value of up to $400m, during the first quarter 2010. He has already said that two planned acquisitions in Kuwait and Qatar will cost $40m to $55m.

In November, DSI bought 82 percent of a water treatment company from Bilfinger Berger AG, Germany’s second-biggest builder, to tap growing regional demand. DSI acquired the majority stake in Passavant-Roediger for $39m.

Tuesday, 1 December 2009

Bilfinger Berger plans to pull out of Qatar
Web posted at: 12/2/2009 2:34:3
Source ::: The Peninsula

DOHA: Fed up with the way it is being treated by the Public Works Authority (Ashghal), German construction major Bilfinger Berger is planning to pull out of Qatar. The company, which is involved in some key projects in the country, announced yesterday it was seriously considering the pull out due to disagreement with Ashghal.

“The bad experience with the Doha project prompts us to reconsider our commitments in the Gulf region”,

Reuters quoted Bilfinger Berger Chief Executive Herbert Bodner as saying to the German media yesterday.

The CEO’s announcement comes in the wake of the German construction major losing a legal battle with Ashghal over the multi-million riyal Ashghal project, a key component of Ashghals’ prestigious Doha expressway project. Obtaining a court order in favour of it, the Ashghal has now issued orders to hand over the project work to three Qatari companies.

In fact, the German company was expecting the contract termination long ago. The project uncertainty has hit it so hard that it was forced to cut its full-year (2009) profit forecast by at least $145m. It reduced its forecast for earnings before interest and taxes (EBIT) this year to a range of ¤210m to ¤230m against the previous forecast of ¤250m.

Bilfinger’s Q3 2009 Interim Report contains detailed reference to their flopped project works in Qatar. In fact, the Q3 report begins with the statement that the company’s total earnings were burdened by risk provisions made in relation to a road construction project in Qatar.

“In the third quarter of 2009, as previously reported, we recognized provisions totaling ¤80m for Doha expressway project in Qatar. This resulted in an EBIT for the first nine months of 2009 of ¤140 m. EBIT in the prior-year period was burdened by one-time effect in the amount of ¤65m, which was partially offset by a capital gain of ¤9m”, the report said. Barwa City is another major project that Bilfinger is working on in Qatar.

Industrial Interchange: Two more phases almost ready
Web posted at: 12/1/2009 5:47:51
Source ::: The Peninsula/ By Joyce C AbaƱo
Plans are afoot to open the Industrial Interchange’s second and third phases in March and April next year.

DOHA: Konstruktor Engineering, the construction company handling the first three phases of the Public Works Authority’s (Ashghal) Industrial Interchange Project, plans to hand over the second and third phases of the project for opening in March and April 2010 respectively.

A structural engineer at Konstruktor Engineering said they plan to hand over the three-lane Al Furusiya Road leading to the Industrial area upper bridge in March 2010 and the overpass in April, the second and third phases of the QR650m project, which is part of the Doha Expressway, to Ashghal. The project is aimed at connecting the north of Doha with the south and the east with west. Konstruktor Engineering, the contractor for the construction of the third phase of the Doha Expressway project, announced that they plan to hand over the 600-metre underpass from Al Furusiya leading to the Industrial Area and the 450-metre overpass from Doha to the Industrial Area in March and April next year respectively.

The Industrial Interchange (Phase III) is part of the overall Doha Expressway project which includes 12 other packages.

Package three includes the construction of an intersection at the north-east corner of the industrial area at the junction of Salwa Road and Al Furusiya Street. The engineer said they have set these target dates for the handing over of the two parts of the project next year, including the 80-metre roundabout.

The Industrial Area Interchange Project comprises 13 phases in total. The project includes the construction of a three-lane dual carriageway, service roads on both sides, and two multi-level interchanges, in addition to the development of the network infrastructure and landscaping work. According to the engineer, Konstruktor Engineering is now seeing to the last phases of the project, like covering the railing, and looking into some of the most important part of infrastructure work on the bridges and some parts of the underpass.

(The project is supposed to be completed in 26 months (October 2008), started in September 2006 - The Peninsula, Wednesday 19/7/2006 July, 2006).

Konstruktor Engineering Qatar, a branch of Croatia-based Konstruktor Inzenjering dd Split, is one of the leading infrastructure developers widely engaged in the construction of civil and industrial engineering projects across the world.

the peninsula
Qatar and Deutsche Bahn ‘in $25bn deal’ German rail operator Deutsche Bahn is set to sign a $25bn contract with Qatar tomorrow

By K T Chacko
News Editor ,
Sat, November 21, 2009

Qatar is set to award a $25bn contract to German rail and logistics group Deutsche Bahn tomorrow to build and operate a passenger and freight rail network in the country.

A source said the deal would see the launch of the Qatar Railway Development Company, a joint corporation in which Qatar Railways is expected to hold 51% and Deutsche Bahn 49%.

German Transport Minister Peter Ramsauer yesterday said in Berlin that he would travel to Doha together with Deutsche Bahn chief executive Ruediger Grube to sign the deal.

Earlier, he told a meeting of transport ministers in Heidelberg that the deal included building a rail connection to the New Doha International Airport (NDIA), which is being built to the east of existing one.

German newspaper Handelsblatt also reported in its online edition yesterday that Deutsche Bahn had won a 17bn euro contract to build the proposed rail network in Qatar.

Handelsblatt, citing government sources, said German industrial group Siemens could be involved in supplying trains and the German building industry in the construction of the rail network.

The project would involve the construction of a rail network in Doha as well as a high-speed connection to the airport and a link to Bahrain through the causeway, construction work on which is expected to start early next year.
Qatari Diar Real Estate Investment Company had signed a memorandum of understanding (MoU) with Deutsche Bahn in August last year to prepare the ground work for developing “a comprehensive and consolidated” national railway system.

The ambitious project consists of an east coast rail link, a passenger and freight line linking Ras Laffan and Mesaieed via Doha, a high-speed link between the NDIA, Doha city centre and Bahrain through the causeway, a freight rail link based on GCC rail and Doha Expressway studies, a Doha Metro network based on the Qatar Transport Master Plan and light rail/people mover networks linking Lusail, Education City and the West Bay.

The Qatar railway will form part of the GCC network, which is expected to be ultimately connected to Turkey, providing a rail link between the Middle East and Europe. All the GCC countries are currently carrying out feasibility studies on the proposed rail network linking the member states.

In Qatar, work is expected to begin first on the Doha Metro Network, which will be developed as one cluster. Qatar’s Urban Planning and Development Authority is overseeing the work.

According to a source, the kind of metro Qatar is looking at is “mostly underground which takes time to build”.

The first section runs 30km from the under-construction Lusail mega-project to the New Doha International Airport. Four further sections, originally set to break ground between 2010 and 2012, run a total of 55km.

The New Doha International Airport Steering Committee has invited companies to pre-qualify for a contract to build a train station at the airport.
UK-based Mace International is the project manager for the scheme, known as the Passenger Rail Station Box. The project involves building a railway station terminal for an express airport rail line that will connect to rail and metro stations in downtown Doha and other rail networks.