Construction

HLG seeks $272 million in compensation from Qatari Sheikh

Contractor says Al Faisal Holding owes hundreds of millions in late payments for Doha City Centre hotel project

HLG says that it plans to take legal action internationally against Al Faisal Holding.

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Al Habtoor Leighton, the Dubai arm of the Australian contractor, is seeking more than $272 million in compensation from a prominent member of the Qatari royal family for late payments on a hotel project in Doha.

According to a Reuters report, HLG has launched a series of suits against Sheikh Faisal Bin Qassim Al Thani’s Al Faisal Holding in relation to the Doha City Centre Hotel development. Khalaf Habtoor, chairman of the Al Habtoor Group and part owner of HLG, has said that it planned to initiate legal action internationally against the Qatari company.

However, Al Faisal has countered HLG’s suits with accusations of mismanagement and a failure to take responsibility for several delays. A statement by the Qatari company said that these delays have affected the construction of several hotel towers in Doha, which were originally scheduled to be completed in 2007.

“The company wants more than a $272 million dirhams in compensation from Al Faisal,” Habtoor told Reuters.

He said the suits were in response to Al Faisal Holding’s decision to cash in a $100 million performance bond which the contractor had put up as a guarantee in a project planned to include Marriott, Renaissance and Shangri-La properties.

Sheikh Faisal Bin Qassim Al Thani is a relative of Qatar’s Emir, the ruler of the tiny Gulf Emirate, whose natural gas wealth has made it one of the world’s richest states per capita. This wealth has also funded significant investment into a raft of major infrastructure projects.

“Al Habtoor has been responsible for the construction of nine towers and hotels developed by AFH has developed in Qatar which have been beset by significant and prolonged delays over a number of years,” AFH said in a statement.

“It appears that constant changes in Al Habtoor’s management have led to the mismanagement of these contracts, and the responsibility for the severe delays should be addressed internally by the management team of Al Habtoor,” the statement quoted al-Thani as saying.

It also said that phase three of the City Centre expansion project had yet to be completed some eight years after HLG took possession of the site and that the contract had originally stipulated the project was to be completed two years after the contractor took possession of the site.

AFH said damages from the delay of the project are now in excess of $410 million and continue to accrue. It said there were a total of eight cases before the courts and that one of the cases Al Habtoor filed had been dismissed.

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