Inflation in Qatar : Self inflicted ?

Inflation in Qatar could delay 2022 World Cup stadiums construction works

High construction costs, shortage of skilled manpower coupled with a deficient system of building professional capabilities assessment and a certain heavy handed mainly local banking environment are hindering growth.  As a matter of fact, the country’s construction sector accounts for an important component of the whole economy’s growth.

Construction Development Contracting and Trading a member of the Investment Holding Group of Qatar http://ihgqatar.com together with IQPC (International Quality and Productivity Centre) http://www.iqpc.com/Global/ and a former member of Faithful and Gould https://www.fgould.com/middle-east/, conjointly reviewed the country’s construction sector situation and arrived at a productivity report that is summarised below.

High demand for basic buildings and accompanying infrastructural services have not been settled yet in terms of contractual arrangements, etc.  For many, “The scale of the construction boom in Qatar has brought significant difficulties along however with lots of fresh opportunities,” local daily Gulf Times noted the experts in the sector as saying.

For instance, the $200bn that Qatar is investing in preparation for World Cup 2022 and its National Vision 2030, was found to potentially be hindered by the lack of local manpower and professionals in the regional building sector.

Moreover, work progress for contractors in Qatar was definitely not helped by the lack of available work visas from the government for certain nationalities; this shortage of visas for skilled manpower from certain countries and lack of an unambiguous institutional system to test the capabilities of prospective engineers rank as the most handicapping element for all contractors in their construction projects that are being delayed due to a shortfall of skilled engineers.

As well known by all, inflation could be a “serious” issue for the construction industry in Qatar and the “restrictive” local banking system norms have generally “knock-on” effects on the industry in Qatar, which, otherwise, hosts fresh opportunities, according to an another study.

These were reported by IQPC, based on inputs from experts in the construction sector, ahead of Qatar Contractors Forum and awards ceremony to be held in October this year.

Despite global concerns on weak oil prices, Qatar appears nevertheless undeterred in its expansion programme.  Driven by the FIFA World Cup 2022 and its National Vision 2030, the country seems to be investing in construction projects without however appropriately putting all the necessary fundamentals into place.

The report asserts that the recently introduced test undertaken by the Ministry of Municipality and Urban Planning (MMUP) to provide for an engineers’ classification is very generic and not sufficient to decide whether an engineer is sufficiently qualified or not.

Similarly, RICS accreditation from the likes of the MMUP’s could not be recognised by contractors as sufficient indicators of suitability.  This latter institution already burdened by all projects planning, follow up, inspections and control of projects implementation is believed to be itself undermanned and / or populated by low quality technical staff and managerial officers.

Moreover, the report adds “delayed payment is all too common and it affects the whole of the supply chain, it is almost taken for granted that the contract terms will be ignored or only used when convenient.”

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