Qatar makes moves to slash building red tape

Qatar’s construction reforms could spell the end of tendering nightmare

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By  Sean Cronin Published  May 28, 2005

Qatar has moved to slash the red tape involved in tendering for construction projects in response to a wave of complaints from contractors. It could open the floodgates for construction companies based in other GCC countries, which have so far been deterred from chasing work in Qatar through fear of getting bogged down in bureaucracy. Qatar’s booming construction industry holds massive potential for contractors in the region, with an ongoing infrastructure programme valued at US $6.8 billion (QR25 billion). But the industry also has one of the worst reputations of any GCC country for cumbersome contractual requirements and bureaucratic procedures. Now the Public Works Authority (Ashgal) has introduced a raft of changes aimed at simplifying contract forms, relaxing import restrictions of construction machinery, and lifting quotas covering the employment of foreign construction labour. The authority has also slashed payment terms for contractors from 90 days to 45 days. Contractors and consultants in the country have welcomed the news, while the changes will also be music to the ears of construction companies based in neighbouring countries that have been struggling to break into one of the region’s most challenging markets. Ahmed Al Kuwari, the assistant general manager for technical affairs at Ashgal, commented: “There has been some relaxation of the restrictions on contractors which will allow them to bring in construction equipment that is more than nine years old — providing they complete a technical inspection. “The invoice payment period used to be 90 days, but that is now 45 days. We have also established a committee looking at the general conditions of contract.” Al Kuwari added: “Regarding the general conditions of contract, we have established a committee to look at following up on FIDIC.” FIDIC (the international contracts body) has been advising Qatar’s government on amending contract conditions which could see the introduction of new contracts customised for the Qatari market. Construction costs have been rising rapidly in Qatar over recent months, which has forced the government into introducing the sweeping changes. Some building material shortages have started to emerge and contractors have been hit hard by price inflation. But the latest raft of reforms may go some way in cooling the market down. “As you know, there is a huge amount of work going on at the moment, and if we didn’t relax these issues we would find it difficult to get contractors to do the work, so we listened to what they had to say,” explained Al Kuwari.

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