The scale of the construction boom in Qatar has brought significant difficulties along with a host of fresh opportunities, says an expert
By Santhosh V Perumal
Business Reporter
Inflation is a “serious” issue for the construction sector and the “restrictive” banking norms have “knock-on” effects on the industry in Qatar, which, otherwise, hosts fresh opportunities, according to a new study.
Besides, there have been shortage of visas for skilled manpower from certain countries and lack of institutional system to test the capabilities of prospective engineers.
These were encapsulated in a report by International Quality and Productivity Center (IQPC), based on inputs from two experts in the construction sector, ahead of Qatar Contractors Forum and awards ceremony to be held in October this year.
Terming inflation as a “serious issue” in Qatar, Mohamed Sheikh al-Souk, deputy general manager, Construction Development Contracting and Trading, said: “Since there is so much demand and the infrastructure here has not quite caught up yet, there are always very high costs associated with the growth of any company such as high rent and consequently high wages”.
Another major challenge highlighted by him was the difficulty in obtaining financial support from Qatari banks due to “ever more restrictive” regulations, a problem that has “knock-on effects” for the industry at large.
“It is extremely difficult to obtain banking services from local banks because they have raised their requirements in such a way that it is now more difficult than ever,” he said, adding this directly affected the progress of work because lack of banking facilities “negatively” impacted on the cash flow, implying lesser ability to maintain the momentum of projects through timely payments and material sourcing.
“The scale of the construction boom in Qatar has brought significant difficulties along with a host of fresh opportunities,” he noted.
Despite global concerns on weak oil prices, Qatar appears undeterred in its expansion programme. Driven by the FIFA World Cup 2022 and Qatar National Vision 2030, the country is investing over $200bn in construction projects by 2022.
The speed of progression for contractors in Qatar was not helped by the lack of available work visas from the government for certain nationalities, al-Souk said.
“Ultimately, this shortage of visas combined with a lack of proper capability testing has led to a situation where construction projects are being delayed due to a shortfall of skilled engineers,” he said, highlighting the lack of proper system to test the capabilities of prospective engineers before they are assigned work.
The test undertaken by the Ministry of Municipality and Urban Planning (MMUP) to provide engineers’ classification is very generic and not sufficient to decide whether an engineer is sufficiently qualified or not, according to him.
Echoing similar lines, Mark Rudman, former regional director of Faithful and Gould, highlighted the difficulty in securing appropriately qualified and experienced staff in Qatar since professional qualifications such as RICS accreditation from the likes of MMUP are not recognised by contractors as sufficient indicators of suitability.
Moreover, he said “delayed payment is all too common and it affects the whole of the supply chain, it is almost taken for granted that the contract terms will be ignored or only used when convenient.”
