Work on Qatar’s Dohaland continuing on schedule
Work continuing on schedule for 2016; Contracts for phase 1b to be awarded early 2011; Company is seeing lower costs, contracts not renegotiated.
October 3, 2010 3:55 by Reuters
Work on Qatar’s $5.5 billion Musheireb urban development project is proceeding on schedule and is expected to be completed in 2016, its chief executive said on Sunday.
“We’re not slowing down at all – we’re still on schedule and on target to have the last phase completed in 2016,” Dohaland CEO Issa Al Mohannadi told Reuters in an interview.
The $5.5 billion project to rebuild 35 hectares of downtown Doha is being constructed in five phases and will include hotels, retail space, residential, government and cultural buildings. It is developed by Dohaland, a subsidiary of the Qatar Foundation.
Phase 1a is currently under construction, with contracts for phase 1b to be awarded early next year, likely in the first quarter, Al Mohannadi said.
Some projects in Qatar have stalled recently due to the property market slump. In August Qatari developer Barwa Real Estate Co said it has delayed its 30 billion riyal ($8.25 billion) Al Khor project due to sluggish market conditions.
But Qatar has largely escaped the storm that pummeled neighbouring Dubai, with only minor injury due to state moves to control development of new offices, shops and homes.
Industry experts have said the Gulf state is learning lessons from Dubai’s flawed speculative building model, which imploded during the global financial crisis and saw residential prices plunge some 60 percent from their 2008 peak.
Al Mohannadi said that although the company has not renegotiated any of its contracts, it is seeing lower costs.
“Because we started work during the crisis, we’ve seen more competitive prices than three years ago. That’s one of the reasons we elected to proceed with the project,” he said.
“In general, getting financing has not been easier, but people have been more cautious about risks associated with the market. Calculating risks has become more of a focus, as well as asking why it is necessary to embark on a particular development.”
In April Dohaland awarded a 1.56 billion riyal ($429 million) contract to a consortium led by South Korea’s Hyundai Engineering and Construction Co, the final in a total of 2.2 billion riyals worth of contracts awarded for the construction of Phase 1A of the project, which will include the construction of a national archive.
(Reporting by Regan E. Doherty; Editing by Reed Stevenson)