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Extensive construction activities planned in Qatar have slowed down, causing jitters in some foreign companies, but the Qatari government has stated that projects have been only halted, not cancelled
Corruption allegations at soccer’s governing body, FIFA, have placed renewed focus on Qatar’s ability to host the 2022 soccer World Cup but Qatari officials are confident the event will go ahead as planned. New construction for the World Cup directly accounts for only about US$10bn of the US$200bn development programme that the Gulf state plans to complete by 2030. Despite that, the perceived uncertainty about the sporting event is creating concerns for foreign contractors.
For the World Cup, Qatar has appointed project managers to build five stadia to host games but needs eight to 12 stadia as per terms of its bid. “Rolling out the master plans for the 2022 World Cup has taken longer than anybody had thought,” said Darrell Bergesen, general manager of Abu Dhabi-based contractor Al Jaber LEGT Engineering & Contracting at its Qatar office. “However, it is a massive undertaking and the first for the Middle East, so the scale should not be underestimated and maybe we shouldn’t be so surprised at the time taken,” he reasoned.
Huge revenue from natural gas production has enabled Qatar to splurge on new infrastructure but it is doing so on strict terms. For instance, clauses in some contracts make consultants liable financially even after many years of project completion. Consequently, companies from the Middle East and local joint ventures seem to fare better in Qatar because they are seen as long-term investors in the country. “We prefer somebody who comes to work with us, not only for one job and then leaves,” said Jalal Salhi, infrastructure affairs director at Qatar’s Public Works Authority (Ashghal), which is in charge of various projects.
Qatar’s economy is expanding by more than six per cent annually but fast growth not translating into quick profits is prompting some foreign companies to go elsewhere. Ashghal’s Salhi said some foreign companies turn away after realising the amount of competition. “Some of the contractors were pre-qualified by us, but they did not tender,” said Salhi. “They said that was because of a very competitive market due to Asian and Turkish contractors. But, we are in a global market; we can’t say we will only open a tender to European companies.”
Some of the delayed projects are the Sharq Crossing, a US$12bn bridge and underwater tunnel link across Doha bay, which was due to start construction this year to be ready for the 2022 World Cup; a multi-billion dollar chemicals plant north of Doha; and Doha Grand Park which is modelled on New York’s Central Park.
Qatar says that short-term delays will not derail its infrastructure programme. According to a statement by the Qatar government, “A clear plan is in place with regards to the implementation of the major infrastructure projects. The government is keen to avoid any bottlenecks that may arise while at the same time continuing to closely coordinate fiscal and monetary policies towards that end.”