Construction Week Newsletter 28 May 2005

One step nearer to cracking Qatar’s construction sector

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By  Sean Cronin Published  May 28, 2005

One step nearer to cracking Qatar’s construction sector |~||~||~|So the good news is that the government of Qatar has moved to simplify contract forms, relax import restrictions of construction machinery and lift quotas covering the employment of foreign construction labour. As if that wasn’t enough work for one week, they’ve also decided to slash invoice payment terms from 90 days to 45 days. It’s amazing what public servants can achieve when they put their minds to it. The bad news is that so far these changes only apply to Ashgal — the Public Works Authority. But fair play to the government for at least listening to contractors’ gripes and acting on them. The praise would be unqualified if they went the whole way and introduced similar measures covering the industry at large, or at least the other government departments. Contractors can be a bit like farmers when it comes to complaining, but in the case of Qatar’s public contracting regime, the moaning has been well justified. There’s a lot of excitement about Qatar’s construction sector at the moment, and there are more than a few contractors based in other GCC countries that would like to break this most difficult of markets. Until now, the bureaucracy associated with winning work in the country (or even getting onto pre-qual lists) has been one of the main barriers to entering the market. The decision by Ashgal to act swiftly and fix what was clearly broken, is encouraging. It just goes to show that practical, effective and timely government reforms do not necessarily need steering committees, public consultations, green papers, white papers or any other form of paraphernalia in order to work, and make a difference. The adoption of the Ashgal reforms by other public and private sector clients in the country would be a positive move, and would certainly go a long way in helping the sector cope with some of the other inflationary pressures being experienced by the market. With the possible exception of Bahrain, construction costs in Qatar have been rising faster than anywhere else in the region. By paying contractors in half the time, giving them the freedom to source labour and materials from where they want and simplifying the contractual conditions they must sign up to, the government is making moves to take some of the heat out of the rapidly over-heating construction sector. The intervention is a timely one, but perhaps we should reserve final judgement on the latest changes to the new contracting procedures in Qatar before they bed down a little. They look good on paper. Let’s see how they work in practice. ||**||

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