QCN April 2016 - Issue 3.4

INTERVIEW: AbduLAziz AL MuLLA Of AsTAd PrOjECT MANAGEMENT ON CONTrACTuAL CHALLENGEs - 32

issue 3.4 April 2016

Surviving

the slump

Overcoming challenges in the construction sector amid oil crisis

TECHNOLOGY

Using 3D laser scanning for construction projects

LEGAL

Things to consider before entering a joint venture

PLus

Retail Price: QAR15 / AED15

Q-BIM: An industry platform set up for BIM professionals in Qatar

16.

contents A p r i l 2 0 1 6

www.qatarconstructionnews.com

Cover Story CanterFuso FP QCN Apr 2016.pdf

1

3/14/16

9:54 AM

Kingspan Koolduct FP QCN Apr 2016.pdf

1

3/28/16

4:09 PM

The impact of the oil price dip continues to be felt in the construction Surviving sector, forcing regional the slump Overcoming challenges in the governments and project construction sector amid oil crisis owners to delay, scale down or even cancel some of their projects.

The situation is tough for construction companies, but industry experts suggest such lean periods could be better utilised to put things in order – tighten budgets, optimise operations and become more efficient, writes QCN’s deputy editor Syed Ameen Kader.

INTERVIEW: ABDULAZIZ AL MULLA OF ASTAD PROJECT MANAGEMENT ON CONTRACTUAL CHALLENGES - 32

issue 3.4 April 2016

TECHNOLOGY

Using 3D laser scanning for construction projects

LEGAL

Things to consider before entering a joint venture

PLUS

Retail Price: QAR15 / AED15

Q-BIM: An industry platform set up for BIM professionals in Qatar

Regulars

From the Editor - 6 Construction News - 10 events - 14 Legal - 36 Careers - 38 Qatar Tenders - 40

While the ongoing dip in oil price has slowed down the overall pace of construction in Qatar, projects related to the 2022 World Cup continue to be built in order to meet the immovable deadline. Pictured here is the site of Khalifa International Stadium, currently undergoing extension for the World Cup. (Image Getty Images)

25.

Technology 3D laser scanning in the construction sector One of the less publicised technologies in the construction sector, across the globe and in Qatar, is 3D laser scanning.

Although engineering and consulting firms recognise the benefits of laser scanning, they also understand it comes with a number of challenges, writes Christoph Weber of Hochtief Vicon Qatar.

28.

32.

Technical Industry Insights Adjudication: An alternative dispute The lowest-priced bid may mean resolution tool the highest input from the employer As Qatar is seeing a huge volume of construction works being executed ahead of the 2022 World Cup and for the Qatar National Vision 2030, adjudication should be considered as a tool to aid the parties in managing and resolving the majority of their disputes as they arise, writes Sam Barakat of Rider Levett Bucknall.

In an exclusive interview with QCN’s Farwa Zahra, Astad Project Management’s chief commercial officer, Abdulaziz Al Mulla discusses contractual challenges, among other technical issues, currently faced within the construction industry in Qatar and the wider region.

QCN | April 2016

publications director mohamed jaidah m.jaidah@firefly-me.com general manager joe marritt j.marritt@firefly-me.com

NEED DYNAMIC CONTENT? Print & Digital Corporate Magazines Contact Firefly Premium, Doha’s Electronic Newsletters most dynamic content providers. Commemorative & coffee table books Annual reports Sustainability reports Photography Videography Podcasts and audio content Application (apps) development Media sales Native content

executive editor miles masterson m.masterson@theedge-me.com editor farwa zahra f.zahra@theedge-me.com deputy editor ameen kader syed a.syed@firefly-me.com associate editor aparajita mukherjee a.mukherjee@theedge-me.com international sales director julia toon j.toon@firefly-me.com | +974 66880228

e-mail Roisin on premium@firefly-me.com or call +974 4434 0360 to schedule a meeting.

SANAE BOUGRIA Arabic Editor Exemplary Arabic content

JOE MARRITT General Manager Seasoned strategic director

head of business sales manu parmar m.parmar@firefly-me.com +974 33325038 deputy sales manager shalaka dhaigude s.dhaigude@firefly-me.com +974 66 26 4790 senior advertising manager UAE nesreen shalaby n.shalaby@urjuan-me.com + 971 50 719 9707

MILES MASTERSON

GENEVIEVE DIAB

Executive Editor Expert in content development

Graphic Designer Market-leading creativity

distribution & subscriptions joseph isaac j.issac@firefly-me.com production manager/senior designer srimani welagedara finaliser ron baron

ROISIN BAILEY

printer ali bin ali printing press Doha, Qatar

Account Director Exceptional customer service

firefly communications PO Box 11596, Doha , Qatar Tel: +974 44340360 / Fax: +974 44340359 www.firefly-me.com

April 2016 | QCN Firefly Premium Ad 9.3 x 21.4.indd 1

4/10/16 9:50 AM

editor’s letter

Only those construction companies that are able to strategically maintain their resources and cash flow will survive until the regional economy gains strength again.

April 2016 | QCN

The month of March concluded with some disturbing news about two incidents of fire in Doha: first in Caravan complex, which was caused by a short circuit, and the second in the underconstruction Mall of Qatar. What caused the fire on this site will be disclosed once the investigation is complete.

Although no casualty was reported at either location, incidents like these do point to the need for safer construction practices – a significant part of which comprises mechanical, electrical and plumbing works. According to Urbacon Trading and Contracting – developer of the Mall of Qatar – there were thousands of workers on site at the time of the incident, none of whom received any injuries. This, however, is just one example of safety management on site in case of an emergency.

In general, human rights organisations such as Amnesty International have expressed concerns about the overall treatment of workers – in terms of health and safety on sites and in their living facilities.

In a recent interview at Amnesty’s offices in London, Salil Shetty, secretary general, Amnesty International, highlighted the need for Qatar to improve living and working conditions for its migrant workers. “You cannot have a major sporting event like the World Cup – the world’s largest sporting event happening based, you know, completely built on labour exploitation, that’s simply unacceptable,” he said.

This is not the first time Qatar has come under negative limelight. The country has been under international media scrutiny ever since its winning bid for the 2022 World Cup. Ostensibly a challenge for now, Qatar has a chance to fix its construction practices, whether it is the treatment of labour or its contractual challenges – something we discuss

with Astad Project Management’s chief commercial officer, Abdulaziz Al Mulla, on page 32.

In our cover story on page 16, we continue to look at construction challenges from an opportunity-focused point of view. In his story Surviving the Slump, Syed Ameen Kader looks at the ongoing oil price dip that has caused a general slowdown in Qatar’s construction sector. The premise of this story is based on the concept of survival of the fittest. The economic slump provides an opportunity to construction companies to optimise their performance by reconsidering their use of resources – workers, materials and equipment.

Only those companies that are able to strategically maintain their resources and cash flow will survive until the regional economy gains strength again. For those who are able to sail through these tough times, an added incentive would remain in the form of increased efficiency and best resources for long-term success. That said, coming up with a changed corporate strategy is easier said than done. Speaking with industry experts, QCN discusses some steps key construction stakeholders can take to help the sector survive without being severely affected.

Enjoy reading QCN’s April issue, while we work towards QCN Yearbook 2016 coming out in May. To be showcased at Project Qatar, our annual publication covers key subsectors of construction, bringing together analysis, stories and interviews of industry leaders in Qatar.

To get your free copy, visit QCN’s booth at Project Qatar, taking place between May 9 and 12 at Doha Exhibition and Convention Centre.

Farwa Zahra Editor

8

guest column

Q-BIM: an industry body set up by BIM professionals and experts in Qatar With the growing awareness of the need for a common and unified effort towards BIM development and delivery, industry professionals and experts have come together to form a first of its kind industry platform in Qatar, writes Allen Jay Holland.

Allen Jay Holland is BIM manager in the Design Division of KEO International Consultants, Doha.

During the past year, there has been a gradual increase in the maturity of Building Information Modelling (BIM) and related technologies in Qatar and the region.

Qatar is very unique in that the value of having projects delivered in BIM is widely recognised. BIM delivery is required for the 2022 World Cup venues, for the Doha Metro projects, for the developments currently underway in Lusail City and Katara, and virtually every major project in progress.

Qatar Rail has issued a comprehensive set of guidance documents that advances the requirements for BIM delivery.

April 2016 | QCN

Where in the past, the requests for proposal for new work included vague references such as “delivery of the project must be in BIM”, we are beginning to see more explicit definitions of client and owner expectations. Not all are realistic, but many have followed the protocols defined by the American Institute of Architects or the British Standards Institute publication of PAS 1192-2.

In the United Kingdom (UK), BIM adoption is being driven by the ‘2016 BIM Level 2 Mandate’, which requires the technology to be used for all centrally procured public sector projects. The mandate supports the UK’s 2025 Construction Strategy, which has four main goals: a 33 percent reduction in the initial cost of construction; a 50 percent reduction in the overall time; a 50 percent reduction in greenhouse gas emissions; and a 50 percent reduction in the trade gap between total exports and total imports for construction products and materials.

In the much broader United States (US) market, where the term ‘BIM’ was coined, several government agencies and private owners have driven development forward, and builders have recently surpassed designers and architects in the rate of BIM adoption, achieving a 70 percent adoption rate in 2012.

In conjunction with a recent tender for multiple stations required for the new Doha Metro system, Qatar Rail issued a comprehensive set of guidance documents that advances the requirements for BIM delivery.

Virtually every major global design and engineering consultancy is doing business in Qatar, such as AECOM, HOK, WSP, Jacobs, Atkins, Parsons, Arup, and Gensler, etcetera. These companies bring their technology advocacy to the region, along with many experienced professional staff.

Hence, there appears to be improvement in the definition of objectives, in the presence of champions and drivers as well as the availability of noteworthy publications (guides, protocols and mandates). There is also some improvement in the technological infrastructure available in the Middle East and North Africa (MENA) region.

Conversely, there has been little change in the regulatory framework, or in the presence of market-wide metrics for measurement of BIM diffusion. The development of market-specific BIM object libraries is not apparent, and the availability of education and training programmes is limited.

BIM User Day 5, which was held in November 2015 at Qatar University, demonstrated a significant increase in the interest and demand for BIM knowledge.

The conference was attended by 263 delegates from 16 countries including the MENA region, US, Europe and China.

Following the inaugural Future BIM Implementation conference in May of last year, the awareness of the need for a common and unified effort towards BIM development and delivery was recognised.

Consequently, an ad-hoc organisation, the Qatar BIM Guidelines Focus Group, was formed, and several meetings of the group have been held so far.

The group has adopted the name Q-BIM and set up a website called Q-BIM.org. Its mission is “to promote opportunities to support, connect and grow BIM standards, through lobbying, mentoring, networking, strategic alliances, and developing and recognising excellence in BIM”. Individual, corporate and group memberships can be granted to anyone who is actively involved in any aspect of BIM in Qatar.

The second annual Future BIM Implementation Conference will be held on May 11 and 12 in Doha.

Construction

News Qatar encour

building labour accommodation on BOT basis

The government has taken the initiative to build more labour cities in partnership with private companies. (Image Getty Images)

April 2016 | QCN

urages rages

construction news

11

Qatar’s recent move to allocate 23 plots of land for developing labour accommodation is not only expected to increase supply of affordable housing and improve the living conditions of workers, but to also reduce the cost of development, writes Syed Ameen Kader.

On the back of the housing shortage in the country, construction companies have had to accommodate their workers in an unorganised housing sector, which often lacks proper amenities. In a bid to mitigate this, the government has taken a decision to allocate large parcels of land across the country for the development of workers’ accommodation by the private sector on a build, operate, transfer (BOT) basis.

Nick Witty, director, Real Estate, Deloitte & Touche, Middle East, said, “The likely effects of this initiative will be to reduce both the costs of development and housing the workforce in the short term, and arguably, thereby, make the affordable housing segment more attractive to developers/investors albeit only if the land is gifted, leased or subsidised.”

The government has so far allotted 443 plots to companies in various areas of the country. The first phase of the integrated labour residential complexes in Umm Salal, involving seven sites for labour accommodation, was launched in December last year.

Mihir Shah, director, Infrastructure Advisory, KPMG, said, “By allocating 23 plots to develop labour camps, the government has made a significant step towards achieving its objective to improve expatriate construction workers’ standard of living in Qatar. There is a clear gap between the demand and supply of quality labour accommodation, which meets international standards, and the government’s initiative will help to bridge that gap.”

According to the 2010 census, Qatar had 920,000 blue-collar workers who were accommodated in multiple locations in developments of varying sizes and quality across the country. Current forecasts suggest that there could be additional demand for between 500,000 and one million beds in the run up to the 2022 World Cup. Mohamad Sheikh Al Souk, deputy general manager, Construction Development Contracting and Trading, said, “Increasing the supply will definitely lower the demand, and consequently the prices will drop.

This is a very good initiative and must be continuously monitored in order to decrease the prices.”

At the moment, he said, there are many factors contributing to the inflation in Qatar but this step will definitely lower a major portion of the cost. Terming this as a good opportunity for developers, Al Souk added that at least now they have the chance to tap into a market that is virtually nonexistent.

However, providing improved accommodation and facilities comes at a cost, which tends to be higher than what contractors are used to paying to the unorganised accommodation sector. “Absorbing this additional cost on ongoing projects could be a challenge for contractors. Appropriate policy/regulatory interventions are also required to encourage the construction industry to shift from the unorganised accommodation facilities to newly developed purposebuilt accommodation,” said Shah.

Though given current land prices across the country, it is likely that this segment will remain unattractive to developers, and it will be incumbent on the government and quasi-government developers to take a lead and perhaps subsidise accommodation.

Industry experts acknowledge that improved standards of accommodation can have a positive impact on labour productivity, which will eventually impact the construction sector as a whole.

QCN | April 2016

Construction

News

Jaidah unveils latest power solutions from LSIS

Project update: Doha Metro

Qatar Rail has reached completion of tunnelling on Doha Metro’s Green Line with the breakthrough of the tunnel boring machine (TBM) Al Messila at Education City station.

Education City is the last underground station on the Green Line before moving towards the above-ground station Al Riffa.

The milestone comes less than 10 days after Qatar Rail celebrated completion of tunnelling on the northern section of the Red Line. With the construction progress of the Green Line’s underground station at 57 percent and overall tunnelling of Doha Metro at 87 percent, the project is rapidly progressing to meet its deadline.

Tunnelling on the Doha Metro Green Line began in October 2014 with six TBMs used to complete the 22 kilometres (km) operational line which has 10 underground stations and one above ground. The Green Line will run for 19km beneath ground level and 3km above ground.

Awards

Key recent contracts awarded in Qatar •

•

The Fujita Corporation – which is undertaking the construction of the Red and Green Lines of Doha Metro’s depots – has awarded Drake & Scull Rail (DSR) a QAR340 million contract for the delivery of the first phase of the Doha Metro depots. Under the terms of agreement, DSR will undertake the supply, installation, testing and commissioning of all mechanical, electrical and plumbing building services to be provided in both the depot and stabling yard pertinent to the Red and Green lines and their associated buildings with a scheduled delivery slated for 2019. It will also be actively involved in the design verification process as a participant in the design review meetings.

Red Sea Housing Services Company has announced the signing of a contract with Daruna to construct an integrated workers accommodations community in Qatar. The value of the project is QAR144 million, which involves the complete construction of the infrastructure to support the utility requirements for the community, which will accommodate more than 4000 tenants. Facilities within the community include accommodation blocks, indoor and outdoor recreation, mini-markets, police/security station, bank, clinic and other miscellaneous outlets.

April 2016 | QCN

(L to R) Altug Okay, general manager, Electrical Division, Jaidah Motors and Trading Company; Sung Jun Park, general manager, overseas sales department, Power Distribution Business Group, LSIS; and SangHun Lee, managing director, LSIS during the LSIS product launch seminar in Doha.

Jaidah Electrical, one of the leading distributors of electrical supplies in Qatar, recently held a product launch seminar for LSIS products in Doha where a wide range of electric power solutions were displayed to key industry professionals, consultants and engineers from private and government sectors.

LSIS, with whom Jaidah Electrical has a business and distribution partnership, is a Korean power solution company with their regional headquarters based in the United Arab Emirates.

This was an occasion to make the Qatari market aware of latest electrical solutions offered, specifically in the low and medium voltage segments, highlighting some of the new products such as electronic metre, switchgear, transformers and integrated protection and monitoring equipment. LSIS also manufactures high and ultra-high voltage products and all products are fully certified by all major agencies.

The event was attended by key officials from both the companies, including Altug Okay, general manager, Electrical Division, Jaidah Motors and Trading Company.; SangHun Lee, managing director, LSIS; and Sung Jun Park, general manager, overseas sales department, Power Distribution Business Group, LSIS. Francisco Cerdeira, technical manager, Power Action Gulf, left, with Samir Far, director to chairman’s office, Jaidah Group and Altug Okay during the LSIS event in Doha.

construction news

Qatar Automobiles Company to supply Liderkit products in Qatar

Senior representatives of Liderkit and Qatar Automobiles Company during the signing of the distribution agreement at Liderkit facilities in Spain.

Qatar Automobiles Company has recently signed an agreement with Liderkit as the exclusive distributor for its entire range of products in Qatar.

The meeting which took place last month in Jaen, south of Spain, concluded the yearlong negotiations with the Spanish manufacturer with the first shipment arriving in Qatar this year.

Liderkit Group manufactures a diverse variety of vehicle bodies in kits (aluminum, polyester, sandwich, plywood, isothermal, fridge box bodies and car recovery platforms), which are distributed in kit form to be mounted on the vehicle chassis. This means that any requirements by the customer can be produced to their specifications, with quick assembly and high-quality standards.

This high effectiveness of the production capacity of Liderkit is due to a production system, which combines all the stages in the development of the product, allowing manufacturing of orders in a short period of time.

Liderkit Group is composed of more than 180 employees and is present in more than 30 countries all around the globe.

Its exports represent 75 percent of the total turnover.

13

Construction of General Cleanliness Buildings Complex reaches completion

General view of the General Cleanliness Complex. (Image Ashghal)

The Public Works Authority (Ashghal) announced the completion of the General Cleanliness Buildings Complex in Doha Industrial Area, which is one of Ashghal’s most significant integrated services projects.

The project is soon to be delivered to the Ministry of Municipality and Environment – General Cleanness Department and Administrative Services Department.

The project consists of areas for workers’ accommodation, employee families’ accommodation, administrative and services buildings, trucks parking, and maintenance services, vehicle wash and fuel station. The project also includes entertainment and commercial areas for workers, sports facilities and green areas.

Moving towards Phenolic ductwork Governments across the globe are setting targets to reduce emissions and tackle climate change. The move towards energy efficient products to help meet those targets is gathering momentum in the heating, ventilation and airconditioning (HVAC) industry.

As the demand for better performing HVAC ductwork systems increases, pre-insulated phenolic ductwork is rapidly becoming the norm in many countries across the world. Sheet Metal and Air Conditioning Contractors’ National Association’s (SMACNA) new standard, the SMACNA Phenolic Duct Construction Standard (PDCS), confirms its place in the industry as a mainstream modern solution.

The Kingspan KoolDuct System has been verified by SMACNA, and qualifies as an acceptable alternative to the SMACNA/ American National Standards Institute (ANSI) Phenolic Duct Construction Standards, 1st edition.

The published SMACNA PDCS provides detailed information and guidance on all aspects of pre-insulated phenolic ductwork fabrication, from fire performance requirements, to detailing the specific thickness of the product to be used to achieve a certain R-value.

QCN | April 2016

News Events Construction

11 – 12 April

18 – 19 April

16 – 19 May

Arab Future Cities Summit

Smart Parking Qatar

World Stadium Congress

InterContinental Hotel – The City

The Ritz-Carlton

13 – 16 April

Qatar Pool and Spa Exhibition

Westin Doha Hotel and Spa

26 – 28 April

Cityscape Qatar Doha Exhibition and Convention Centre

Doha Exhibition Center

13 – 16 April

9 – 10 May

LightingTech Qatar City Centre Rotana Doha Cooling, Heating, Refrigeration, 11 – 12 May Ventilation Future BIM and Insulation International Exhibition Implementation Doha Exhibition Center

InterContinental Hotel – The City

9 – 12 May

International Conference on Civil and Architectural Engineering La Villa Palace

24 – 26 May

Qatar International Exhibition for Transport & Logistics Doha Exhibition Center

May 22- 25

Project Qatar Exhibition area at Project Qatar 2015.

Project Qatar 2016, the 13th International Construction Technology and Building Materials Exhibition, will be taking place at the Doha Exhibition and Convention Centre. The event aims to attract key buyers and industry leaders looking for the most up-to-date technology and state-of-the-art equipment available in the market. The show provides a platform for buyers and suppliers to make contacts and drive future developments in Qatar’s multi-billion riyal construction sector.

April 2016 | QCN

18 – 19 May

6th Annual Underground Infrastructure and Deep Foundations Qatar For Qatar, it is essential to understand the latest methodologies and technology that will ensure the timely and cost-effective delivery of underground projects. The 6th Underground Infrastructure and Deep Foundations Qatar Conference aims to illustrate innovative solutions to underground infrastructure and deep foundations through presentations, panels and workshop days. The event will be held at InterContinental Doha.

Surviving the Overcoming challenges in c The impact of the oil price dip continues to be felt in the construction sector in the form of weakening spending powers and liquidity crunch in the market, forcing regional governments and project owners to delay, scale down or even cancel some of their projects. Although the situation is tough for most construction companies, industry experts suggest such lean periods could be better utilised to put things in order – tighten budgets, optimise operations and become more efficient, but most importantly, not to act in haste. By Syed Ameen Kader

Just like other regional countries, Qatar’s construction sector has been impacted by the oil price dip, making it difficult for companies and contractors to perform due to a liquidity crunch in the market.

April 2016 | QCN

slump: construction amid oil crisis

QCN | April 2016

18

cover story

I

n reaction to the oil price dip and its subsequent impact on finances, construction companies and contractors are looking to take measures that will help them overcome this difficult phase.

However, the question is what is the best possible way to react to this situation?

What should be the strategy, and what measures or steps need to be taken in the short term and long term?

Mohamad Sheikh Al Souk, deputy general manager, Construction Development Contracting and Trading, says that Qatar, being one of the smallest countries in the region, could use it to its advantage when it comes to taking quick measures. “It’s actually one of the biggest advantages of the country because now if you want to take this particular time to fix things, you have the best setup and it is much easier to control. If you are going to do things for improvement, it will take less time and effort. The effect will be much faster when you do it in a country such as Qatar, as opposed to any other regional state that is larger, hence requires more capital cost,” he says.

Of course, the oil price dip has made things more difficult, but the problem is not restricted to that alone. The construction sector has its own long-standing challenges, which have been hurting companies for quite sometime. One can assume that the situation has only worsened due to current economic realities.

The biggest challenge for companies in the Gulf region and more so in Qatar so far has been the rising cost of construction and inflation. Adrian Camps, who is a chartered surveyor and country manager for Chestertons in Qatar, says inflation and high construction costs are a major issue for most organisations within Qatar. “High costs feed inflation and it becomes a vicious circle. Construction costs in Qatar tend to be high because it is a limited market since few materials are manufactured locally and have to be imported,” he explains.

However, Christopher Seymour, head of Middle East markets at Arcadis, says that the dramatic reduction in commodities’ costs over the last 18 months and also the slowing of a number of programmes in the Middle East have reduced the pressure on tender prices, and hence the doubledigit construction inflation of recent times is a thing of the past – at least for now.

April 2016 | QCN

“The world is, however, a volatile place as demonstrated by the recent 20 percent spike in iron ore in a single day, and hence contractors have to factor in that volatility,” he cautions. Coupled with this is the need for considerable volumes of infrastructure spending in the next few years to satisfy not just the 2022 World Cup but also the associated assets related to the same event. “We, therefore, see a stabilising of pricing in 2016 with a return to some upward movement potentially in 201718,” says Seymour.

Availability of construction raw materials has been an issue in Qatar as port capacity was limited. This meant that the import of some basic building materials experienced backlogs and bottlenecks which drove prices up. Furthermore, the lack of suitable warehouse and industrial accommodation introduced further costs and difficulties.

With additional port capacity coming on stream with the opening of the New Doha Port, combined with the likely reduction in demand for most materials, Camps anticipates the situation to ease in 2016.

In order to reduce the cost of idle equipment, companies can lend them to other contractors on rent.

cover story

The slowdown in the market is beginning to be reflected in reduced rents, particularly for new buildings, and companies may find that they can make substantial cost savings by moving to cheaper premises or renegotiating with their existing landlords.

19

The construction materials market has been very volatile as demonstrated by the recent 20 percent spike in iron ore in a single day.

“This will be combined with large new building programmes for industrial and factory accommodation, which will help ease the accommodation problems and reduce costs. Some areas are likely to be combined with free-zone initiatives which will ease the import of materials and should help to drive costs down,” he says.

In addition to raw materials, energy costs are a sizable component of building costs, and while in a number of regions fuel has been subsidised, materials imported from outside the region have been produced in areas where exceptionally high energy costs have been the norm. However, Camps adds, falling energy costs outside the region should help reduce the cost of most imported materials.

Besides the material costs, Qatar’s high real estate prices have only added to this inflation problem as renting warehouses or providing accommodation to employees is one of the costliest things to do in Qatar.

“When we talk about inflation, it is besides other things related to wages and costs of hiring people – something that is mainly attributed to real estate.

Unfortunately, it has been on the rise since long. It is only now that the rent has started to fall a bit, because the prices had inflated to a point where it became absolutely not feasible for any of the owners or landlords to build anything,” says Al Souk.

To deal with this problem, he suggests that the government could give out a large and substantial amount of land that can be used for developing temporary buildings for

If Qatar wants to take this particular time of economic slowdown to fix things, it has the best setup and it is much easier to control given the country’s small size, says Mohamad Sheikh Al Souk, deputy general manager, Construction Development Contracting and Trading.

QCN | April 2016

20

cover story

a few years where people can accommodate their labourers.

Reacting to the situation Given these realities, low oil price has clearly had a substantial effect on the region in different ways. Governments and corporations have found their incomes reduced and are able to spend less on projects. The reduced government and corporate spending has an overall effect on the economy with many firms suffering from reduced cash flow and payment delays.

The initial reaction is similar in government departments and organisations around the world – to reduce costs and part of this inevitably means reducing headcount.

Seymour suggests that companies operating here should plan for the future and take a long-term view of the Middle East. “Investing now in talent and innovation will pay dividends in later years and will also pay back to the communities within which we work,” he says.

It is clear that all firms will need to reduce costs, but Camps says this does not necessarily mean large-scale redundancies.

In some cases, the productivity of one highly-paid worker may be three or four times higher than that of lower-paid workers. In such a scenario, letting higherpaid workers go may not be the most costeffective solution.

“Where an organisation loses its qualified staff, it may not be able to interface properly with existing and new clients for future projects. This may adversely affect long-term income prospects,” says Camps, who fears that a number of firms in the region will achieve a headcount reduction without carrying out a thorough evaluation of the workforce and their skills and relating this to future tasks. “While this will achieve a quick cost reduction, it may cause damage to firms’ abilities in the long term and make them less competitive,” he warns.

Al Souk agrees that it is an expensive exercise to lay off staff and then re-employ them because the learning curve takes a long time. “It takes a while to bring someone to the company, put them there, train them, and familiarise them with the system. From our experience, it takes at least six to seven months. That means you would not expect any immediate or proper April 2016 | QCN

efficiency out of this employee for at least another six months,” he says.

As parts of the measures, Al Souk suggests, big regional companies with multiple branches should be allowed to move their employees freely from one project to another across the region.

“One of the things that could be of great advantage is to be able to shuffle your workers and staff around the region on a temporary basis – for three, six, nine, or 12 months – without having to hire new staff and pay high capital costs in terms of fees,” he says.

Laying off workers without thorough evaluation may mean increased costs in the long term. Pictured here are workers at the site of Khalifa International Stadium, Doha. (Image Getty Images)

cover story Possible measures

The biggest challenge for companies in the Gulf region and more so in Qatar so far has been the rising cost of construction and inflation.

In addition to adopting a rational approach while deciding on headcount reduction, construction companies can take a number of other cost-effective measures.

Since there has traditionally been high liquidity in the region, many firms have invested heavily in their own capital equipment, rather than renting it when needed. The repercussion of that is highcost equipment lying idle in the lean season. To avoid such a situation, Camps suggests that larger players in the market could consider forming a cooperative or joint company and provide key pieces of equipment to the company and dispose of surplus equipment.

“The company would act as an outsourced provider of equipment, which would then be rented by the operator when needed,” he explains.

Property is another major cost for companies, either in terms of capital invested or through rent paid on office, warehouse and staff accommodation. The slowdown in the market is beginning to be reflected in reduced rents, particularly for new buildings, and companies may find that they can make substantial cost savings by moving to cheaper premises or renegotiating with their existing landlords.

“For companies that own properties, a sale and leaseback of their premises may help free up cash for investment in the business, without the disruption of moving premises. The building owner/occupier will grant himself a lease of his building and then sell this to investors in the market,” says Camps.

From a developer’s point of view, while the real estate market is softening, wellconceived schemes in the right locations could still be viable to build. Industry experts see the current market conditions as an indication of a maturing landscape than the boom-bust cycle of previous years.

“Any developer should be well advised to review their development model prior to commitment to ensure that expected returns are still at the level that their investors are expecting – and this is the same whether the market is up or down,” says Seymour.

Although Qatar is among the bestcapitalised countries in the Middle East with stronger reserves than some of the Gulf Cooperation Council neighbour’s,

21

Seymour says, liquidity at a local banking level is tightening, and local developers will be finding securing funding an increasing challenge. “This market effect drives good quality schemes forward since they will be considered good business when it comes to funding decisions improving the overall quality of the location,” he adds.

Another step that companies can take is to concentrate on their core business and delegate or outsource the remainder.

In fact, outsourcing of non-core activities is done to a certain extent by nearly every organisation in the region. Often office cleaners and security guards are provided by a third-party company rather than directly employed. While the unit rate with outsourcing may be higher than the cost of an individual employee, companies who outsource benefit from paying for what they use. The outsourcing company can benefit by making more efficient use of the outsourced resources, using them to service different clients so that they are fully occupied.

“Where an organisation loses its qualified staff, it may not be able to interface properly with existing and new clients for future projects. This may adversely affect long-term income prospects,” says Adrian Camps, chartered surveyor and country manager, Chestertons, Qatar.

QCN | April 2016

22

cover story

“Investing now in talent and innovation will pay dividends in later years, and will also pay back to the communities within which we work,” says Christopher Seymour, head of Middle East markets, Arcadis.

While many companies may be nervous about outsourcing for some more technical areas, Camps says, this can often be solved by the outsourcing company taking on some key people in their existing workforce. “This has the dual benefit of retaining the knowledge and skills, while reducing the payroll,” he adds.

For property owners, who let out buildings, industry experts suggest it is a good time to improve their tenant offer.

They can take advantage of reduced costs to refurbish and upgrade their buildings in order to maximise returns.

April 2016 | QCN

For other companies, survival is about improving customer satisfaction and streamlining service lines, introducing efficiencies wherever possible. Gaining new customers is much more expensive than retaining existing ones, and increasing customer service levels will help ensure that customers are not lost to competitors.

“The markets will fluctuate – they always have – but the continuing maturity and sophistication of the region will tend to reduce the scale of those fluctuations as the markets become more diverse relying less on hydrocarbons and more on global trade,” concludes Seymour of Arcadis.

Although there has been some slowdown in Qatar’s construction market, projects that are related to the 2022 World Cup continue to be built in order to meet the fixed deadline.

(Image Getty Images)

technology

25

planning for 3D laser scanning in the construction sector For relatively less complex projects, such as those built for residential purposes, implementation of 3D laser scanning requires less effort while providing a high level of efficiency.

While Qatar is making some good progress in the adoption of latest technologies such as Building Information Modelling (BIM), custom-designed apps and cloud, one of the less publicised technologies in the construction sector is 3D laser scanning. Although engineering and consulting firms recognise the benefits of laser scanning, they also understand it comes with a number of challenges that a laser scanning team has to deal with on almost every project. Thus, advance planning not only saves time, cost and effort, but also increases reliability, quality and value, writes Christoph Weber of Hochtief Vicon Qatar.

L

aser scanning technology has been around since the 1960s. However, it only entered the engineering industry in the late 1990s. Since then, it has evolved from being a technology for researchers and high-end use cases to a technology that surveyors, architects and engineers are actively using for practical applications in their projects.

For the last few years, 3D laser scanning has been actively tested on many projects across the world for surveying, mapping, enhancing the design process, reducing errors in the data collection process and documenting

as-built conditions of the facilities.

These experiences have shown that although the laser scanning technology can be used for adding value to various processes in the project lifecycle, it also requires careful planning, understanding and execution in order to achieve its full potential.

Plan your scan Construction projects could be of varying complexities. The nature of the project and the end purpose of the laser scanning affect the process the most.

For residential or commercial facilities QCN | April 2016

26

technology

where spatial complexities are minimal, laser scanning can be executed with less effort and higher efficiency. Industrial buildings with high mechanical, electrical and plumbing (MEP) installations or projects with complex architectural geometries can take much longer and require more effort during planning as well as execution. Hence, it is important to plan for the accessibility of each space required for scanning. Some spaces such as operational buildings, tunnels, mechanical shafts, and spaces on extremely low or high heights could be difficult for the laser scanning personnel to access.

Sufficient resources, permission and equipment need to be organised in advance to facilitate the team to access such complex situations.

Some scanners allow capturing the geo-coordinates of the site while scanning. This supports the process of developing the real world applications for the scans more accurately. If the scanner does not have this feature, it is essential that a surveyor has been appointed in the project to provide the geo-coordinates of the site which can then be integrated with the laser scans.

After the scanning, all scans require registration – a process that stitches one scan with the other in a correct location.

To correctly register scans, ‘targets’ or ‘markers’ are used onsite that can distinctly be recognised during postprocessing of scans. Understanding the differences in the target types and the conditions, under which they function best, is crucial during the planning phase as the choice will impact on the overall effort and the results.

One of the challenges so far is also the large file size of the resulting point database which could consume hundreds of gigabytes of memory space. Sharing this database among team members located in different parts of the world could be a time-consuming effort that requires careful planning. It is then necessary to decide very early on the software/tools to process the scans and provide the output in a format that can be re-used by other software systems.

Interoperability can also be increased among project participants by choosing the software that allows exporting the point database into multiple formats.

April 2016 | QCN

For the last few years, 3D laser scanning has been actively tested on many projects across the world for surveying, mapping, enhancing the design process, reducing errors in the data collection process and documenting as-built conditions of the facilities.

Lessons learnt As the technology evolves, so does the experience. Companies, such as Hochtief ViCon, have executed laser scanning of various large and complex facilities. In our case, laser scanning is carried out for providing as-built documentation and integrating it with Building Information Modelling. The experience that we have made shows us that planning is extremely important in the laser-scanning process. Limited timeframe, difficult site conditions, coordination between project teams, availability of right resources and tools, requirement of permits for accessibility, the limitations of technology and the difficulties of interoperability are some of the challenges that the laser scanning team must deal with on almost every project. Thus, keeping these challenges in mind and planning them ahead not only saves time, cost and effort but also increases reliability, quality and value in the end result.

Christoph Weber is the managing director of Hochtief Vicon Qatar.

28

technical

Adjudication: An alternative dispute resolution tool for construction companies As Qatar is seeing a large volume of construction being executed ahead of the 2022 World Cup and for the Qatar National Vision 2030, adjudication should be considered as a tool to aid the parties in managing and resolving the majority of their disputes as they arise, writes Sam Barakat of Rider Levett Bucknall.

Throughout the project, there should be a conscious effort by all parties to reduce the amount of unresolved differences or ongoing disputes among them.

April 2016 | QCN

technical

Q

atar is entering into a challenging phase in its road towards the delivery of the 2022 World Cup and the delivery of its Qatar National Vision 2030. The unusually high volume of works to be completed – and the fast approaching and fixed deadlines – bring immediate challenges to the construction market.

These challenges must now also be delivered within a market that must adapt to the new economic realities of a lower oil price and the subsequent budget pressures that this brings. This will normally have a significant impact on project strategies, feasibility expectations and access to working capital for stakeholders within the construction market. These new pressures may increase the difficulties many face in maintaining a healthy and consistent cash flow throughout the construction period.

Successful delivery of these projects will require the effective collaboration of all stakeholders involved. This will be most effective within a project environment where parties can worry less about protecting their commercial interest and focus more on the completion of the works required. Much of the responsibility for the fostering of such an environment will fall with the employer (as well as the concerned authorities). This will include the use of contractual mechanisms and dispute resolution tools.

Most forms of contracts used in Qatar trace their origin to the International Federation of Consulting Engineers (FIDIC) suite of contracts. Yet these terms and conditions are amended substantially by a set of special conditions. Employers within Qatar have, over the years, made genuine attempts to improve their contract forms. However, the final drafts on the market are still considered by many to remain imbalanced in favour of the employers.

The essential two questions to be addressed are as follows: (1) Are the parties reasonably protected under the contract or the Law; and (2) Are differences or disputes between the parties being resolved in a reasonable time?

Employers in Qatar have continued generally to favour the traditional

approach of contracting. I would describe this approach as a vertical contractual relationship between the parties. This relationship has a tendency to push much of the risk down the supply chain. Such an approach is often unsuitable in reacting efficiently to changes or challenges arising throughout a construction project. This can often lead to delays in the resolution of project issues, that is a common cause of cash flow difficulties. Without a sustainable cash flow supporting the supply chain, these relationships have a tendency to exacerbate the friction between the parties.

With the immovable deadlines associated with the 2022 World Cup approaching fast, it may be counterproductive for employers to experiment now with reformed forms of contract. What could be done instead is for the parties to administer their contracts liberally, keeping in mind the importance of maintaining positive relationships between the parties involved in the project. At the very least, throughout the project, there should be a conscious effort by all parties to reduce the amount of unresolved differences or ongoing disputes among them. Adjudication as an alternative dispute resolution tool is designed to achieve just that.

The recognition that adjudication can play an important role in streamlining the Qatar construction market is not new to the country. The Qatar International Court and Dispute Resolution Centre (QICDRC) has spent substantial time and effort in preparing draft adjudication rules for implementation within the local market.

Some of the key features of these rules are as follows: • Disputes dealt with by either a sole adjudicator or a panel of three adjudicators.

• Strict timetable for submission of documents and issue of a decision.

Each pleading to be supported by documentation limited to two-lever arch files.

• The decision is to be reached and delivered within 60 days. If the adjudicator fails to achieve this, they are deemed to have forfeited their right to payment. An extension can be granted if all parties agree or, in exceptional circumstances, by QICDRC.

29

Adjudication will not be effective if it is perceived by the parties to be a fighting arena where there is only one winner, and the other party is a loser.

QCN | April 2016

30

technical

Construction work underway on a building in the sporting compound of Aspire Zone in Doha. Successful delivery of these projects will require the effective collaboration of all stakeholders involved. (Image Arabian Eye/ Corbis)

The Qatar International Court and Dispute Resolution Centre has spent substantial time and effort in preparing draft adjudication rules for implementation within the local market.

April 2016 | QCN

• Adjudicator’s decision is binding on an interim basis and enforceable through the Qatar International Court (QIC) with cases being heard by a designated, specialist construction judge. The QIC is a national court of Qatar which is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.

• Very limited scope for appeals against adjudicator’s decisions (serious irregularity or breach of the law).

Unfortunately, at the time of writing, the QICDRC draft adjudication rules have not been legislated, nor are there clear signs as to when these rules will be made into a legislation in the near future. Without the legislation support provided by the Qatari courts, the referral to adjudication becomes voluntary, and it takes away the advantage of having a local Qatari Court to supervise the process.

Nevertheless, in cases where the employer is a government entity, existing tender laws allow the submission of voluntary adjudication or arbitration, provided that permission is granted from the Ministry of Finance, Qatar.

In addition to the adjudication options discussed above, there remain other options in the market that the parties may wish to adopt to suit their needs.

One example is the dispute board rules

adopted by the FIDIC suites of contract. A decision by a dispute board is contractually binding until appealed in local courts or through arbitration.

The popularity and use of dispute boards has been slow in the Middle East market.

The cautious uptake of this may be the result of some bad examples of the process where the parties had little control over the conduct of the proceeding and it turned into a long and costly process.

This should not discourage the consideration of this mechanism as a potentially effective process for dispute resolution.

As mentioned previously, the parties must remain focused on the reasons and objectives that lead them to adopting these processes to begin with. Adjudication will not be effective if it is perceived by the parties to be a fighting arena where there is only one winner (and the other party a loser). Adjudication should be considered as a tool to aid the parties in managing and resolving the majority of their disputes as they arise – with minimum interruption to the operation of the project.

This can be done by the guidance of impartial and experienced adjudicator(s) or dispute board members.

Sam Barakat is the director of the Qatar branch of Rider Levett Bucknall. He is responsible for dispute prevention and resolution advisory services.

sector name | banner heading

a qatari magazine dedicated to the country’s booming construction industry

smartphone and tablet optimised.

www.qatarconstructionnews.com

The Edge | 1

32

section insights industry

The lowest-priced bid may me the employer Following Astad Project Management’s active participation in recent industry events across the region, the company’s chief commercial officer, Abdulaziz Al Mulla was at C5 Forum for Major Projects and Infrastructure Qatar, where he highlighted major flaws and issues with the current contractual culture in the Gulf Cooperation Council. In an exclusive interview with QCN’s Farwa Zahra, Al Mulla discusses contractual challenges currently faced within the construction industry in Qatar and the wider region.

In Qatar, what are the major reasons behind disputes arising between contractors and clients?

There are a number of reasons why disputes arise between contractors and clients. More often than not, the contractor and the employer are considered to be adversaries rather than partners. This is a phenomenon in Qatar and the wider region. There is a lack of trust between concerned parties from the outset of a project.

With time, this can lead to a lack of communication throughout the different phases of a project, provoke defensive stances, and perpetuate a culture of blame.

Secondly, there is the issue of lowest price bids and the frequent use of lump-sum contracts. It is important to have price certainty for projects, and lump-sum contracts are a way to achieve that. However, these contracts put major pressure on the employer to scope the work correctly.

If the scope is not fully defined and written down clearly, then issues including delays and extra costs will arise. The principle of lowest price not being equal to lowest cost must be considered. In certain instances, the lowest-priced bid may mean the highest input from the employer.

Employers need to realise that a

April 2016 | QCN

“Most projects do not meet planned deadlines and budgets and the employer is not fully informed of risk and its potential impact, particularly at the time that proposed variations are being considered,” says Abdulaziz Al Mulla – Astad Project Management’s chief commercial officer.

industry insights

33

ean the highest input from

lump-sum bid, with the majority of the risk being assumed by the contractor, does not come cheap as risk premiums can be very high.

Furthermore, there is a lack of advice to employers on the risk and its potential impact on a project. A successful project is one that is built on time, to the required quality, and within budget – this is rare in Qatar and the region. Most projects do not meet planned deadlines and budgets and the employer is not fully informed of the risk and its possible repercussions, particularly at the time that proposed variations are being considered. This can then in turn lead to a lowering of quality as the client realises that he cannot afford the full cost of the changes as well as the impact of those changes on the programme and the scheduled date of

completion.

Qatar is one of the most expensive countries in the world to undertake construction projects, with an excess of 20 percent risk premiums in tenders.

The risk is usually apportioned to the contractor. Contractors will assume risk if the contract requires them to, or if it is in their interest to do so, but they will deal with this risk within their pricing and programming of the work.

Among Astad Project Management’s major projects in Qatar is the Qatar Science and Technology Park, pictured here. (Image Getty Images)

“A successful project is one that is built on What are some of the ways to time, to the required overcome these disputes? quality, and within Employers need to start considering other budget – this is rare procurement options, which involve risk sharing, such as target contracts. In in Qatar and the some countries, there is significant use of region.” partnering contracts and Early Contractor Involvement (ECI). These contracts

QCN | April 2016

34

industry insights

require early collaboration between involved parties to fully investigate project issues such as buildability, value engineering and risk, which can affect the successful outcome of a project.

Employers also need to realise that contractors have a huge knowledge of the industry. It is their business to understand construction.

Therefore, why pay more for the contractor to keep all that knowledge to themselves when you could actually save money and benefit from their knowledge?

Risk apportionment, sharing logistical issues such as early ordering and delivery of critical materials, and the procurement of appropriate equipment should all be considered as matters that could affect the project and/ or arise as claims later.

But this cannot be done by just a few pioneers trying

“If the current contractual culture continues, the employers will lose significantly. It is the employers’ projects that will be delayed, and they will also pay the extra cost.”

April 2016 | QCN

to change the industry. Maybe it also calls for some ‘top down’ government intervention to issue a mandate for the Qatar construction industry to ‘look in the mirror’, and to change its practices. This has happened in many other countries.

Construction contracts in Qatar are often in favour of the employer. What are some of the areas that should be focused on in order to make these contracts more balanced?

First of all, there needs to be a mindset, a cultural shift, beyond mere words on paper. The industry must collectively look at how we can all make ourselves more aligned to best practice. Yes, of course we can look to employers to play their part, but it is not just about employers, one or two forward-thinking employers or consultants will perhaps make people think about what we do and how we do it, but they cannot change the culture of our whole industry. It is about all the parties

playing their part to make the industry a better, and of course, a safer place to work.

The employers should stop treating their contractors as adversaries and start treating them as partners. This can happen by promoting early involvement of contractors in projects, as a single example.

Contractors themselves should also consider their relationships as part of the process, by rethinking their supply chain, whether it is their subcontractors, their suppliers, or other specialists. We can all play our part.

Apart from the central evaluation system, has Qatar developed any homegrown solutions to improve construction practices?

We at Astad are in the midst of developing a solution that we will share with the market very soon. We have produced our very own ‘Suite of Contracts’, and we are

industry insights

“The employers should stop treating their contractors as adversaries, and start treating them as partners. This can happen by promoting early involvement of contractors in projects.”

Pictured here is Qatar Faculty of Islamic Studies – an award-winning project of Astad Project Management in Qatar. (Image FotoArabia)

encouraging our current employers to use them, while also discussing their use with our potential employers and other employers throughout Qatar and the region. The suite is made up of templates for construction contracts, design-and-build contracts, design services contracts, and professional services contracts.

The Astad’s inclusive suite of contracts was developed as a result of lessons learned from the unique types of contractual challenges we faced within the construction industry in this region. We hope they will be an invaluable addition to the existing forms of contracts currently used in the market, but with some

distinct features. For instance, they take into account challenges faced in the Qatar construction industry with ways and means to address these issues and avoid them as much as possible. This has been prepared with the mindset to give employers and other stakeholders a comprehensive document with full front-end terms and conditions, appendices and annexures. Most importantly, the contracts call for fairness and equality between parties.

Would you say that this balanced approach to all parties in the Astad Suite of Contracts will end up being biased towards the contractor?

The Astad Suite of Contracts will provide a fair process to all parties to ensure that eventually all of the involved parties are winners.

As mentioned earlier, the current contracts do not provide what is considered to be best practices to the parties involved in the process of construction due to various reasons that are specific to the employers,

35

which in turn backfire on the employers and harms their project.

If the current contractual culture continues, the employers will lose significantly. It is the employers’ projects that will be delayed, and they will also pay the extra cost that is caused by them offloading all the risk onto the contractors. The Astad Suite of Contracts will not be biased towards the contractor, it is simply fairer and biased towards the best delivery of the project-based on international best practice to guarantee the best circumstances to achieve the employer’s vision.

We have recently heard that Astad is undergoing an expansion.

What can you tell us about the motivation for such expansion, and how will this affect your operations in the future?

We have recently expanded our operations internationally with the launch of Astad International, which is the international arm of Astad. The motivation behind this expansion comes from the accumulated experience we have in Qatar. We are a major project management company with a portfolio of projects that reflects our teams’ innovation, such as Education City, the National Museum of Qatar, Lusail Sports Arena, and many other prestigious projects in Qatar. We believe the experience, knowledge, and excellence that we have built in Qatar over the years will prove to be beneficial to clients around the world.

This expansion will have positive effects on our operations as our portfolio will continue to grow, adding to our history of delivering complex and iconic buildings and infrastructure projects.

QCN | April 2016

36

legal

Unincorporated joint ventures: What precautions need to be taken Pamela McDonald of Pinsent Masons explains different types of joint ventures (JV) and important considerations companies should make before deciding on a JV structure in Qatar.

J

oint ventures (JVs) are a common corporate structure chosen by contractors in Qatar. Two companies interested in pursuing a project together, usually because of the scale of the project, often form a JV to increase their chances of being awarded the contract and to share the cost and risk of performing it. The JV structure provides companies with the opportunity to bid for projects they would not otherwise have been technically or financially capable of tendering for.

Types of JV

operations. The process of incorporating a company in Qatar can be extensive.

Foreign companies wishing to be incorporated may need to comply with both the Foreign Investment Law and the Commercial Companies Law. This may involve production of documents such as approved Memorandum and Articles of Association (in Arabic), foreign parent companies’ notarised constitutional documents, bank letters confirming funds, a certificate of registration, commercial registration documents and municipal licences.

UJVs are often seen as more attractive commercial vehicles since they enable companies to join together without incurring the substantial incorporation costs and the lengthy process of incorporating which apply to IJVs. Parties instead produce a bespoke contract (the ‘JV Agreement’) which governs their specific relationship and include whatever contract terms they wish, without being restrained by corporate law requirements and rules of Ministries in Qatar which IJVs must abide by.

Qatari law recognises particular forms of companies and sets out the rules that apply to each of them. Article 4 of Law No. 11 of 2015 (the ‘Commercial Companies Law’) reads as follows: “A company which is established in Qatar must take any of the following forms: 1. Joint Partnership Company; 2. Limited Partnership Company; 3. Particular Partnership Company (Mahasa Company); 4. Public Shareholding Company; 5. Private Shareholding Company; 6. Equities Partnership Company; and 7. Limited Liability Company.”

Considerations when deciding on a JV structure

Article 5 provides that ‘any company that does not take one of the forms referred to in the preceding Article shall be void, and the persons who contract in its name shall be personally and jointly liable for commitments resulting from the execution of such a contract’.

JVs in Qatar can therefore take two forms; they can be incorporated (IJV) or unincorporated (UJV). The fundamental difference is that an IJV is recognised by the Commercial Companies Law as being an independent legal entity, while a UJV is not. A UJV is a contractual arrangement.

IJVs are essentially a special purpose vehicle owned by the IJV participants to hold the JV property and conduct JV

Whether two companies choose to formally incorporate as a JV or not may be dictated by the requirements of the project they are tendering for. Often, contractors invited to bid for a project will be required to be incorporated if they are in a JV arrangement. However, many public tenders in Qatar do not require this and indeed several current high-profile projects are being built by UJVs. Factors which may influence this decision include how much flexibility each of the JV entities wants, the liability each party is willing to accept, and the urgency with which the parties wish to begin operating. Tax considerations also usually feature in the decision as UJV entities are treated independently for

April 2016 | QCN

tax purposes and unlike IJVs, can offset their losses against income from other businesses outside the JV.

Complexities faced by UJVs in dispute While UJVs may appear a simple, hasslefree corporate structure, they are not without their complexities. One difficult issue which can arise is in relation to disputes. Where a UJV is being sued, there is often confusion on the part of the claimant (that is the entity suing the UJV; for example, the employer or a sub-contractor, if the UJV is the main contractor) as to who the respondent should be (that is who the claim should be issued against). Sometimes the claimant names the individual JV entities, sometimes only the UJV and sometimes all three entitles (the UJV and each of the JV entities separately).

Given the UJV structure does not have a corporate legal status in Qatar, this issue has led to courts and arbitral tribunals being required to grapple with jurisdictional challenges at the preliminary stages of the dispute in relation to who the correct respondent should be. Correct resolution of the issue is important because it could lead enforcement issues if the entity against whom the award can be enforced has no assets.

Pamela McDonald is an associate at Pinsent Masons’ Doha office.

38

careers

Your checklist to career success in 2016 In the business world, things are changing at an unprecedented rate, and it is imperative that you become increasingly proactive in plotting a career development plan to match the pace.

It was not so long ago that specialisation was key and a career at the same company doing the same thing over and over would be rewarded over the long term. In today’s fast-moving, highly unpredictable market, it is becoming increasingly clear that the old model for career success is broken, and a new model is being forged.

Here, the career experts at Bayt. com give you a few pointers to help you achieve career success this year.

1. Read more books This is the time to ask yourself what books you have never had time to read, and to explore all the must-read lists related to your career or areas of interest outside of work. New books may open your eyes to opportunities and skills that may greatly influence your career and life in a positive way. According to the Bayt.com Happiness and Personal Fulfillment in the Middle East and North Africa poll from August 2015, 27 percent of professionals in the region prefer to spend their free time reading above all else, and 41 percent of them say that reading enriches them personally and professionally.

2. Grow your network Many jobs and business leads are ultimately found and sealed through online and offline networking, so it helps to ensure that you are regularly present at the leading industry and career events, which fill the calendar year, as well as on-the-top regional online forums and peer group boards, such as Bayt.com Specialties. These forums allow you to meet top industry practitioners, gain insights about peers and competitors, and to remain top of mind with prospective clients and employers. They also enable you

April 2016 | QCN

to get further essential recognition, recommendations and referrals in your field.

3. Learn new skills According to the Bayt.com Learning in the Middle East and North Africa poll, March 2015, 97 percent of professionals in the region are dedicated to lifelong learning, and 54 percent of them consider themselves to be at the top of their game when it comes to industry-related learning.

Whether it is a life skill or language or career-related technical skills which you may be missing, there are ample opportunities for the hungry mind to indulge in further learning.

4. Change your habits It is never too late to drop habits that are counterproductive to you: from sleeping and eating too much or too little, to living unhealthily and having little work-life balance. A third of respondents in the Bayt.com Happiness and Personal Fulfillment in the Middle East and North Africa poll say that having a better life-work balance would help them to feel more fulfilled overall. Make a list of habits you would like to change this year and put yourself in a reasonable timeframe to achieve your goals.

5. Understand your earning potential Before you start accepting job offers, it is helpful to know what salary structures and trends exist locally and what your peers with similar skills at a similar career level are earning. This is easily done on leading salary comparison tools, such as the Bayt.com Salaries platform, which has very detailed salary comparisons for all manner of professional roles across the region.

Qatar careers in numbers

43%

of Qatar respondents expect the country’s overall economy to improve in the near future.

33%

of employed Qatar respondents expect the number of employees in their organisation to increase in the next six months.

52%

of companies hiring in Qatar will be looking for ‘team leaders/supervisors’.

44%

will be looking for ‘mid-career professionals with no managerial responsibilities’.

30%

will be looking for ‘managers’.

30%

will be searching for ‘entry-level candidates with no managerial responsibilities’.

Source: The Bayt.com Middle East Job Index survey, February 2016, Bayt.com Middle East Consumer Confidence Index survey, March 2016.

QCN is international

International Sales Representatives Asia Sonney Media Networks Tel: +852-2783-1603 / +8522151-2351 E-mail : hemant@sonneymedia.com

QCN currently has a growing network of international media sales representatives across numerous jurisdictions. To reach Qatar’s thriving construction market from any location, please contact your closest representative to inquire about advertising in QCN, Qatar’s Construction Magazine.

For sales enquiries please contact: International Sales Director:

Julia Toon

Tel: +974 66880228 E-mail: j.toon@firefly-me.com United Arab Emirates Senior Advertising Manager UAE :

Nesreen Shalaby

Tel: +971 50 719 9707 E-mail: n.shalaby@urjuan-me.com Qatar Head of Business Sales:

Manu Parmar

Tel: +974 33325038 E-mail: m.parmar@firefly-me.com

India Media Star Pvt Ltd Tel: +91 22 42202103 E-mail: ravi@mediastar.co.in Australia & New Zealand The Media Machine Tel: +61 89 447 2734 E-mail: okeeffekev@bigpond.com Germany IMV Internationale Medien Vermarktung GmbH Tel: +49 8151 550 8959 E-mail: w.jaeger@imv-media.com Turkey Media Ltd Tel: +90 212 275 84 33 E-mail: tanbilge@medialtd.com.tr United Kingdom & Ireland Smyth International Media Representatives Tel: +44 (0) 208 446 6400 E-mail : jo@smyth-international.com

France Mediactiv Tel : +331 5688 2080 E-mail : info@mediactiv.com Switzerland Mediactiv Tel : +41 22 779 1289 E-mail : info@mediactiv.com Italy Mediactiv Tel : +39 02 58 322149 E-mail : info@mediactiv.com Benelux Mediactiv Tel : +32 2 335 1063 E-mail : info@mediactiv.com Seoul, Korea YJP & Valued Media Co., Ltd Tel: +82-2-3789-6888 E-mail : hi@YJPvm.kr USA WorldMedia Tel: +1-212-244-5610 E-mail: melissaworrell@worldmediaonline.com

www.QatarTenders.com tender name

description

client

Mechanical Wireline Services

Provision of mechanical wireline services

RasGas Company Limited

–

5/8/16

Treated Industrial Water Recovery & Reuse Services

EPIC of recovery and reuse of treated industrial water project

Qatar Chemical Company Limited

275

5/8/16

Handling Facilities O&M

Operation, maintenance and management of bulk materials handling facilities

Qatar Primary Materials Company

4121

5/1/16

Road Improvement Works

Road improvement works in access road to schools

Public Works Authority (Ashghal)

412

4/26/16

Road Improvement Works

Road improvement works for junctions and roundabout in various areas of greater Doha phase

Public Works Authority (Ashghal)

1099

4/26/16

Fire Fighting

Design, supply, installation, testing and commissioning for fire fighting at substation and redundant cylinders at control building

Qatar Fuel Company (Woqod)

137

4/25/16

Fire Detection Maintenance

Carrying out maintenance of fire detection and suppression system

Aspire Zone Foundation

137

4/19/16

Waste Water Treatment Plant Revamp Works

Procurement, field engineering and construction work for revamping of an existing waste water treatment plant

Qatar Fuel Additives Company (QAFAC)

82

4/17/16

Pilot Cable Fault Location and Repair Services

Carrying out pilot cable fault location and repair works

Qatar General Electricity & Water Corporation (Kahramaa)

824

4/14/16

Chiller Package – LLDPE Plant

Engineering, procurement, construction and commissioning services for chiller package for a LLDPE plant

Qatar Petrochemical Company Limited (QAPCO)

275

4/14/16

Conveyor Belt and Rollers Replacement

Replacement of conveyor belt and rollers

Qatar Gas Operating Company Ltd.

137

4/11/16

Shutdown Maintenance Works

Carrying out shutdown maintenance works for a plant

Qatar Petroleum

137

4/10/16

April 2016 | QCN

Fee(USD)

Closing (m/d/y)