DOHA: Qatar’s standard project contract conditions are rigid and hugely in favour of the project owners. The customary clauses and conditions set in the project contracts need to be improved according to the current market conditions, consultants and contracting companies said yesterday.
Attending Qatar Contractors’ Forum 2013, the industry leaders noted that the conditions and clauses in the standard contract form are basically structured in favour of the owners. The contract conditions must be fair and equally beneficial for the two parties. The one-sided conditions will bring undesirable results, they noted.
The training background of most of the clients is from a public sector company, which has been strictly following the old school of business model. They are still sticking to the old school of negotiations. Market has changed over the time. They must realise it and need to think differently to suit the changing market. Or else, the consultants will advise the investors to look for better markets, said an expert.
The market leaders also noted Qatar’s existing dispute resolution system is detrimental to the interests of contracting companies. The contracting companies have more faith in the GCC Centre of Arbitration. Their judgements are faster than Qatar’s.
There is a huge workload in the pipeline. With the project works pick up, the prices of construction materials will go up. It will definitely put extra pressure on contractors. These future scenarios must be foreseen while drafting the contract conditions. The possible increase in international competition and the impact on the profitability must also be considered.
Elaborating on the challenges in attracting talents to Qatar, top company executives said Qatari market need to be opened further matching with the Dubai. Again, there is also problem in attracting talents to Qatar from places like Dubai and Abu Dhabi. Professionals are unwilling to move to Qatar due to several reasons, including the problems in getting admissions to their children in their preferred schools and ideal housing facilities.
Qatar has been exhibiting phenomenal activity in the sector with a growth rate of nearly 13 percent. With huge infrastructure and project development necessary to fulfil the country’s obligations to the FIFA World Cup Committee this flurry of construction activity is not surprising. What is compelling is the fervour with which the Qatari authorities have embraced the challenge and have embarked on a plan to develop some of the most iconic and environmentally friendly projects ever built.
Rod Stewart, Managing Director, Atkins who chaired the forum said: ‘The challenges for contractors are clear here in Qatar – increasing contractor competition, slow decision making processes, unbalanced contractual conditions, and likely shortages of material and staff supply. It is great to see a forum such as this bringing the main contractors and other key stakeholders together to discuss these challenges, solutions and promoting early contractor engagement.”
The Peninsula
