German contractor expects hefty losses on Doha road project

10 September 2009

Dispute is the second between an international contractor and Ashghal

Germany’s Bilfinger Berger (BB) expects its QR1bn ($274m) road construction contract with Qatar’s Public Works Authority (Ashghal) will be terminated.

BB won the contract for the first two phases on the Doha expressway project in December 2005 in joint venture with the UAE’s Al-Hamed Development & Construction. The contract was one of the first to be awarded as part of Ashghal’s multi-billion-dollar roads upgrade programme.

According to a statement posted on the contractor’s website Ashghal is not willing to settle outstanding debts running into hundreds of millions of Euros.

The company adds that the debts come from extensive delays that Ashghal is responsible for. BB says the project will now take more than four years to complete. The original construction period was two years.

BB says it expects a lengthy legal dispute in the local courts and the outcome of the proceedings is uncertain. The company has made a provision of EUR80m as a precaution, which reduce its 2009 earnings.

The dispute is not the first on one of Ashghal’s road projects. Malaysia’s UEM claims it has not been paid in full by Ashghal after completing the 81-kilometre-long Salwa Road project last year (MEED 10:9:09).

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