Lack of transparency elevates Qatari construction costs

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Lack of transparency elevates Qatari construction costs

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UCC highlights the knock-on effect of absent details and a lack of timeframes in Qatar’s tendering process

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Qatar could be forgiven for thinking that the fierce competition for its projected infrastructure projects creates the ideal environment for government bodies to dictate the terms of their tendering processes, but UrbaCon Trading & Contracting (UCC) highlights the risk of keeping contractors in the perpetual dark.

Submitting tender documents for large projects can involve a lot of time and money on the part of the contractor, and a lack of provision of detailed project specifications and timelines for the evaluation of bids serves only to muddle an already complex process.

Mohamed Moataz AlKhayat, CEO of UCC, notes: “Since the majority of these public projects are design and build, the submitted proposal requires a concept design and the hiring of an international consultant, so it costs time, money, and a lot of effort to assemble the tender documents, perhaps over two or three months.”

Submissions might then be followed by six months of silence, and contractors can even find themselves discovering the results of the process in news announcing the award of the project to another party.

Dr. Basim Ibrahim Mohammed, deputy MD of business development at UCC, says: “Everybody, not just me, is saying that there is poor transparency. Qatar is unique in the Gulf region in opening the bids in secret, and there is little respect to the contractor who contributed and submitted a bid – they do not list the bidders or their figures; they are not obliged to accept any of the bids; and you cannot protest.”

Further to this many of the clients are not even transparent enough to tell the bidders even about some of the basic details of their plans or when they are going to announce the award or commence construction.

Since these bids require specific CVs – for the project director, geotechnical engineer, everybody senior – this locks these people to a specific project, and with prolonged delays this presents a dilemma.

Dr. Mohammed adds: “On a recent submission we asked whether underground utilities needed to relocated, and the reply was that there was no information, but that the contractor would be responsible. However, this is very vague – sometimes this will cost you 20-50 million, and an added 6-12 months of time.”

Ramez AlKhayat, MD of UCC, comments: “It is harming Qatar right now, because astute contractors are applying a factor of safety when estimating bids – the only way you can capitalise on this risk is to allow something, and this is inflating construction rates in Qatar relative to the other countries Gulf region.”

While the scale of projects in Qatar and the volume of the public projects being tendered no doubt tests the government’s ability to process submissions in a consistently timely manner, more transparent processes would ultimately allow contractors to reduce their safety margins and of course their prices.

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Further information about UrbaCon Trading & Contracting

UrbaCon Trading & Contracting is a design and construction services company based in Doha, Qatar. Providing program and project management through to design build and general contracting, UrbaCon is currently working on the 388,000m2 Mall of Qatar as well as the Salwa Resort Hotel.

www.urbacon-intl.com