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Matthew Walker, partner at K&L Gates Qatar speaks to Big Project ME about the construction sector in Qatar, the challenges of contracting in the GCC, and why Dubai is the market leader in dispute resolution.
What is the current state of Qatar’s construction market?
The Qatari market appears to be relatively buoyant. A large number of people are still coming to the country – of course, many form part of a large migrant labour force, but there are also significant numbers of highly qualified construction professionals, such as project managers, engineers and so on.
Ashghal (Ministry of Public Works – Qatar) has recently announced or awarded a number of new infrastructural projects, such as the Idris sewer and the Sharq crossing. Various contracts have been awarded for the underground civil works on Qatar Rail too. There’s a feeling of optimism in the market owing to such large-scale projects behind handed out and driven by the government.
What are the challenges faced by contractors in the region?
Contracting in the GCC is generally very demanding and competitive; margins here are tighter than in some other markets in the world. Contracts can be tough to undertake and complete in the region, so the construction market here is not one for the faint-hearted. But the pipeline of projects which are either already known about or which are anticipated to be awarded is what makes the region such a magnet for international contracting and consulting companies.
How convenient are dispute resolution systems across the GCC?
From a dispute resolution perspective, Qatar is still working towards achieving what Dubai has, in terms of structures, organisations and set-up. The DIFC in Dubai is particularly notable in its operation and in the way it works. However, Qatar is ambitious and has plans to transform itself into a renowned dispute resolution center for the region.
Qatar can certainly take considerable inspiration and motivation from the experience that Dubai has had. Most practitioners in the region would recognise Dubai as a regional market leader in dispute resolution. But we remain very keen to work with relevant authorities in Qatar to provide them with all of our assistance and experience to help them in their design and development of such measures they consider to be appropriate for the Qatari market.
Does the legislative system in Qatar supplement the rate of construction in the country?
I have worked in dispute resolution in Qatar, and have been involved in dispute resolution in Dubai and Saudi Arabia. Each market is different, as is expected, of course. Qatari authorities have been considering the implementation of a construction adjudication system that is universally understandable to lawyers from common law jurisdictions.
Many feel that such a programme would greatly benefit the construction industry here. One of the key benefits of the implementation of such a system here would be that various procedural costs, by way of time and money, could be reduced or avoided, such as through fast-tracking paperwork and procedures, making for smoother payment systems and so on.
How do you estimate Qatar’s construction market will behave over the next decade?
The size of future projects planned in the region is huge, and Qatar is no exception to that. The FIFA World Cup 2022 is, in a way, merely a staging post for the country to deliver the Qatar National Vision (QNV) 2030, which is why the pipeline of new construction and infrastructure projects appears so reliable. That is what Qatar is working towards – and it is worth noting that the target of the QNV is still 16 years away. That time-frame is both a realistic and an encouraging time-horizon in which a country can develop its markets and attract appropriate international players to operate within its parameters.
QNV 2030 will ensure the country’s future economy is balanced, by reducing Qatar’s overreliance on hydrocarbons and by promoting and establishing other sources of income and revenue-generation. All the GCC’s projects, individually and cumulatively, are promising and have great potential for growth. This will almost certainly make for more visitors and residents in the countries in the next 10-15 years – and we look forward to Qatar being a key player in the region’s growth.