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Friday, October 30, 2020

Report: Qatar places Sharq Crossing project on hold

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Cultural Village Bridge
Cultural Village Bridge

Amid declining government revenues and an overheated construction sector, a report has emerged that Qatar is delaying the development of the iconic Sharq Crossing.

Dubai-based business intelligence firm MEED reported this week that delivery of the project would be postponed as Qatar starts deferring non-essential infrastructure schemes.

Qatar’s public works authority, Ashghal, did not immediately respond to questions Monday.

Pedestrian walkway for West Bay bridge.
Pedestrian walkway for West Bay bridge.

The Sharq Crossing was to be a 12-kilometer series of tunnels and bridges connecting Hamad International Airport, Katara Cultural Village and the Dafna/West Bay business district.

Along with being an architectural icon that redefined Doha’s skyline in time for the 2022 World Cup, the Sharq Crossing was expected to be capable of handling 6,000 vehicles an hour and offer some relief to commuters on the Corniche.

After some five year of discussions, plans for the project – dubbed “one of the most ambitious engineering projects ever undertaken in the Middle East” by officials – were unveiled with much fanfare in December 2013.

Construction was supposed to start this year and be completed by 2021, just before football fans started to pour into Qatar for the World Cup.

While Ashghal refused to put a price tag on the project, MEED previously estimated it would cost approximately $12 billion.

Concerns about cost overruns, delays and competition for skilled workers have reportedly prompted Qatar to reschedule a handful of major projects over the past year. However, the Sharq Crossing appears to be one of the most high-profile infrastructure initiatives to be affected to date.

News of the postponement comes a week after Qatar’s government established a ministerial committee overseeing projects of “strategic importance” and tasked with prioritizing major development initiatives and reviewing costs, among other responsibilities.

Financial concerns

ConstructionLast week, construction consultancy firm EC Harris reported that Qatar once again had the highest building costs in the Gulf in 2014.

In recent years, the push to build new homes, roads, schools and office buildings for Qatar’s rapidly growing population has strained the supply of construction material and skilled labor in the country.

Meanwhile, Qatar’s ability to absorb large cost-overruns is dwindling almost daily alongside the falling price of oil.

Qatar’s large financial reserves should help the government shoulder a period of low oil prices. However, authorities are under pressure to cut costs – likely by delaying or canceling unessential construction projects.

Adding to financial concerns surrounding the project, multiple media reports say other clients of the Spanish architect behind the Sharq Crossing have paid much more than they had expected for his projects.

Sharq CrossingThe New York Times and National Public Radio have both documented problems with the quality of Santiago Calatrava’s work as well as examples of massive cost overruns. More recently, Fast Company Design published an article under a headline asking if Calatrava had become “The World’s Most Hated Architect?

News of the delay will likely be disappointing for the companies that hoped to cash in on the project. Several firms, including Belgium-based Besix, had formed joint ventures with other contractors ahead of submitting their credentials last fall as part of a pre-qualification process.

However, a MEED editorial hailed the postponement, saying it was in the long-term interest of Qatar and its construction sector:

“Delaying the construction of the Sharq Crossing gives Doha’s already overheating construction sector some respite … Contractors fear they will have to deal with severe price inflation, materials shortages and other supply chain issues as the market attempts to deliver too much too quickly.”

It predicted that had work on the Sharq Crossing started as planned this year, tourists visiting Qatar during the 2022 World Cup would have been treated to the sight of a 12-kilometer construction project, rather than the architectural wonder officials had envisioned.

Thoughts?

38 COMMENTS

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thedrizzle96
thedrizzle96
5 years ago

Terrible news for the contractors and subcontractors abilities to get rich quick. Once again though, the journalism is a bit patchy, although oil prices are actually tied to the cost of gas, it’s not mentioned at all in the portion of the article talking about low oil prices, the actual relevance and impact that would have on a massive gas exporting country. What is mentioned, seems to be a bit doomsday! Authorities and ministries have been under pressure to restructure and budget for a few years now, it’s a bit misleading to imply that the price of oil falls and suddenly everyone is panicking and cancelling projects!

Andrew
Andrew
5 years ago
Reply to  thedrizzle96

LNG prices are often linked to oil based pricing instruments, such as the Japan Custom Cleared crude price. Some producers have decoupled LNG from crude but not many.

Broadly speaking it’s fair to say that the lower the oil price the lower the LNG price.

Scarletti
Scarletti
5 years ago
Reply to  thedrizzle96

its not the contractors that are getting rich quick out of Qatar – their margins are squeezed stupidly low, and Qatar keeps buying the cheapest, not the best solution.. it is the layers of management, and delayed decision making and changes that cost Qatar dearly

Mohammed Albanai
Mohammed Albanai
5 years ago
Reply to  Scarletti

“its not the contractors that are getting rich quick out of Qatar”

hahahahahah, contractors in oil and gas are make a $hit ton, especially considering projects in the middle east end up costing more than in other regions despite (possibly because of) the cheap unskilled labour

Anonymouse
Anonymouse
5 years ago

No possibly about it, it is because of; oh most definitely because of…

Cerebus
Cerebus
5 years ago

It may come as a shock, but the highest paying job out of college is Petroleum Engineer. They make this much because that is the market demand for a job skill that people simply are not going into. The pay is not because the greedy oil and gas workers but just the result of the supply and demand of the labor market. They make lots of money no matter where they are in the world. Well, unless they are brown people from the subcontinent or Africa, then here is their only option and they are paid squat and treated like dirt.

DavidRSS8
DavidRSS8
5 years ago
Reply to  thedrizzle96

It’s not that misleading, but I take your point. It will be much more a case of new projects and projects in initial planning stages being postponed or cancelled. This is the first of many, many projects. This will dampen some of the impact, but be in no doubt that a sustained period of low oil prices will be disastrous in terms of infrastructure, health care and education (basically what governments spend money on). All at a time when Qatar is attempting to accelerate infrastructural development.

It’s likely that oil prices will remain low for the next few years, especially as a number of countries (including the UAE) are considering INCREASING production to make up the shortfall. Cash reserves will soften the blow, but not for that long. Serious cutbacks are inevitable.

Anonymouse
Anonymouse
5 years ago

Mmmm, the cost-cutting and down-sizing has been going on for a bit, that’s true. I didn’t read the article as being misleading, just emphasizing the focus on frivolous projects that has been given new urgency with the oil price plunge. True enough though, a paragraph or two summarizing the link between oil and gas prices, Qatar’s budget deficit forecast and history, etc, etc would have given more substance to the article, but then we have no idea what the word limit or editorial instructions were.

Cerebus
Cerebus
5 years ago

I feel almost blindsided by this….I mean who really saw it coming?

Scarletti
Scarletti
5 years ago
Reply to  Cerebus

really ? it was never a cost effective or sensible solution, and therefore prime for the chop – Doha is becoming like Dubai just before the bubble burst – all grand schemes and models but nothing happening .

Anonymouse
Anonymouse
5 years ago
Reply to  Scarletti

Think that Cerebus was being a bit tongue in cheek.

Ali
Ali
5 years ago
Reply to  Scarletti

I don’t know where you guys get the misconception about “Doha is becoming like Dubai” from. When both cities are going in completely different directions!
Dubai was built on a sustainable infrastructure and proper urban planning, Doha is built on a spider web.
Dubai has 6 lane highways, Doha has 3 lane highway.
Dubai completely relies on real estate and businesses, Doha relies on Oil & Gas plus greedy contractors.
Dubai talks money, Doha talks wasta.
Dubai is a touristic country, Qatar is preserving culture.
Dubai brings entertainers for concerts, Doha brings sporting events.
Dubai allows you to grow in career, Doha kills your career.
Dubai applies thinking outside the box, Doha applies google translate (not talking about small businesses but big ones like the “Handball association” and their slogan “The Game of Fast”).
etc… etc…
So you might wanna do some fact checking before you go around accusing Doha of being like Dubai.

Enceladus
Enceladus
5 years ago
Reply to  Ali

Accurate and elaborated description indeed. Doha doesn’t even know where to go. I can’t stop laughing when I see “the game of fast” on the street.

fullmoon07
fullmoon07
5 years ago
Reply to  Enceladus

me too!

Asinine Thinker
Asinine Thinker
5 years ago
Reply to  Ali

Hahaha, you strike to the point. Yes Doha is not being like Dubai, addendum: “Doha is trying too hard to be like Dubai, and its futile attempt to appear cool while doing it is hilarious!”

desertCard
desertCard
5 years ago
Reply to  Ali

Doha does sporting events… just not very well.

DavidRSS8
DavidRSS8
5 years ago
Reply to  Cerebus

Even the Gulf Times printed an article about Qatar likely running a budget deficit . . .

MIMH
MIMH
5 years ago

Where did this statement come from? The fairies in the desert?!?! Maybe someone was sitting in the rain when it was “pouring”

“Construction was supposed to start this year and be completed by 2021, just before football fans started to pour into Qatar for the World Cup.”

leading
leading
5 years ago

Add a ferry service from wakra to west bay for office goers, half of problems might be solved instantly

A_qtr
A_qtr
5 years ago

The one project we need

mohawk
mohawk
5 years ago

lol woohaw 13 bil dollars project. A longest bridge in the world is 26 miles build middle sea in China .it is only cost 4 bil dollars .lol

sadam
sadam
5 years ago
Reply to  mohawk

c’mon man, we all know what happens next, its gonna rust real soon.

Anonymouse
Anonymouse
5 years ago
Reply to  sadam

Confederation bridge in Canada is also 12 KM and cost 1 billion C$ to build between 93 and 97. That is only about 1.5 billion of today’s C$, which is about 1.25 billion American. Methinks that the estimate for this bridge is way inflated.

Bo
Bo
5 years ago
Reply to  Anonymouse

Yeah but those are bridges, this is art…

I haven’t looked at the bridges you have mentioned (and can’t be bothered to Google them…) but do they also include vast tunneling sections? I’m not saying that it is not over-priced, but I’m going to hazard a guess that that might be comparing apples with potatoes?

Anonymouse
Anonymouse
5 years ago
Reply to  Bo

I will grant you that it is more utilitarian, though by no means ugly. No, little tunnelling, but a freeze-thaw cycle, shipping lanes, fish migration and general North Atlantic weather conditions from the mainland to the island, with no intermediary land masses. I can’t imagine that the construction conditions were substantially easier than the Sharq project.

SullyofDoha
SullyofDoha
5 years ago
Reply to  Anonymouse

Maybe Qatar could just buy the bridge from Canada 😉

Anonymouse
Anonymouse
5 years ago
Reply to  SullyofDoha

For further shipping to less privileged countries when it is no longer wanted?

SullyofDoha
SullyofDoha
5 years ago
Reply to  Anonymouse

If I can use that in bid, sure, why not. However, I trust you won’t call me on it if I backtrack later. 😉

Anonymouse
Anonymouse
5 years ago
Reply to  SullyofDoha

No prob. You’ll be able to reduce the specs of it after the fact too.

my_lazycat
my_lazycat
5 years ago
Reply to  SullyofDoha

haha! you made me guffaw on this one 🙂

mohawk
mohawk
5 years ago
Reply to  Anonymouse

Very well said . Also work force is way in Canada than Qatar. millau viaduct bridge in France cost only 4 bil euro. bridge designer is michel virlogeux who is one best structural engineer in the world . alshraq project is way overpriced .

Yacine
Yacine
5 years ago

As someone said in one of the comments, this is what we call a frivolous project. With 12 billion dollars (that is 40 billion riyals!) you can build two nuclear reactors, or even better, tens of world-class hospitals, universities and schools, that the country desperately needs.

Scarletti
Scarletti
5 years ago
Reply to  Yacine

12 billion ! – I think you can double that as an out-turn forecast !

Ali
Ali
5 years ago

“After some five year of discussions, plans for the project?” It takes them 5 years to discuss? no wonder why everything takes time here. If they would’ve invested money in building this crossing rather than fixing roads every year or building the empty skyscrapers in Dafna, it would have been more valuable and essential for the future.

Coco
Coco
5 years ago

Knowing the amount of “effort” put forth by most contractors, that would’ve one road I would’ve been hesitant to take. Anyone has any updates about the park/zoo project that was supposedly going on? I remember reading something about it a while back. I was kind of looking forward to that although I’m not a great fan of zoos.

The Reporter
The Reporter
5 years ago

“Construction was supposed to start this year?” That may have been the plan 5 years ago, but even if given the go-ahead today it wouldn’t start construction before 2018. There is no design – it is still just a few pretty architects impressions.

Mr. B
5 years ago

One casualty of the price war between Arabian oil producers and America’s shale men. Qatar will ride it out in relative comfort, but the watchword of the next ten years will likely be “prudence.” That will be an adjustment for some, but to be honest, it’s long overdue for the region.

max
max
5 years ago

start the small boats (abra) that they use in dubai creek. it will reduce some traffic on roads.

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