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Grace period for new wage payment system in Qatar expires next week As the initial deadline to implement a new electronic salary payment system in Qatar approaches, several questions remain about the logistics of the process.According to a new law signed by Qatar’s Emir in February, companies will soon be required to pay their employees through direct bank transfers…

Qatar’s construction sector most robust in GCC, World Cup or not Fueled by major infrastructure and real estate projects, Qatar’s construction sector is expected to grow by an average of 10 percent a year until 2025 – making it the strongest in the GCC, according to a new report.In an industry trend analysis released this week, BMI Research noted that the sector’…

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Qatar Construction sector faces tough challenges. | Welcome to TFC's News Section Qatar Construction sector faces tough challenges. August 5, 2015News UpdatesAkhtar Raza DOHA: Delayed payment, conservative banking practices and a lack of qualified professionals are posing serious challenges to the contractors in Qatar’s construction sector, according to top professionals in the f…

Construction sector faces tough challenges: Report

DOHA: Delayed payment, conservative banking practices and a lack of qualified professionals are posing serious challenges to the contractors in Qatar’s construction sector, according to top professionals in the field. The construction boom in Qatar has brought significant difficulties along with a host of fresh opportunities, they said.

The 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. “It is becoming more difficult as there are no visas that can be obtained from the government from the nationalities that are in demand here like India, Bangladesh etc,” the Qatar Contractors Forum quoted a top industry leader as saying in a document published by it in the run-up to the Qatar Contractors Forum & Awards scheduled to be held in Doha in October, 2015.

There is no proper system to test the capabilities of prospective engineers before they are assigned work. The test performed 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, he said.

Another major challenge highlighted by the industry leaders was the difficulty in obtaining financial support from Qatari banks, 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. This directly affects the progress of work because it negatively impacts your cash flow, meaning that you are less able to maintain the momentum of your projects through timely payments, material sourcing etc,” he said.

The biggest challenge is the growing competition contractors face in the construction sector as international companies are drawn to Qatar and its lucrative opportunities. Highlighting the problems faced by contractors, a former regional director of another leading firm said that there was difficulty in getting qualified and experienced professionals. Small companies are finding it difficult to compete.

Delayed payments is all too common and it affects the whole supply chain and it is almost taken for granted that the contract terms will be ignored or only used when convenient, he said.

“There is a duality of the construction boom in Qatar. On one hand, its rapid rise means massive potential to secure lucrative contracts but on the other, the proper adjustments have not yet been made to the banking and regulatory systems to promote swift and secure payments.”

“This in turn is leading to a dangerous precedent being set, where delivery on agreed project phases is delayed practically from the start as the expectation of delayed payments slows each and every step of the construction process”, he said. The challenges faced by the contractors will be debated threadbare in “Qatar Contractors Forum & Awards,” scheduled to be held from October 19-20, 2015. 

http://thepeninsulaqatar.com/news/qatar/349297/construction-sector-faces-tough-challenges-report

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