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Qatar seeks more transparency in tendering and bidding

10 Jul 12 Foreign companies wanting to land lucrative infrastructure projects in Qatar will need to reconsider their approach to the tender process, according to speakers at the MEED Qatar Infrastructure Projects conference in London last week.

The Links Group managing director Stuart Curtis
The Links Group managing director Stuart Curtis

Participating speakers agreed international contractors need to be more strategic about their business development practices in the Gulf state and act more transparently throughout the bid phase to improve tender conversion rates.  

“With more than US$70 billion (£45bn) worth of major projects to be awarded until 2022, Qatar remains one of the most robust global markets for construction companies. However, tendering for the major contracts will require more transparency on the part of contractors as the Gulf state seeks to appoint partners that can satisfy the technical and financial requirements of each project while showing their genuine commitment to the National Vision 2030,” said Stuart Curtis, group managing director of the Links Group.

Another speaker was Ian Lyne, director of development strategy, Place Dynamix (Middle East) and previously project manager of the multi-disciplinary team responsible for the preparation of the Qatar National Master Plan. He said that procurement in the Gulf state has slowed as it re-evaluates development priorities ahead of the 2022 FIFA World Cup. However, he says Qatari clients are using this period of reflection to ensure they bring in the right expertise to deliver their massive infrastructure projects on time and to specification with minimal risk of additional contractual claims.

The New Doha Port, for example, has moved its tender and bid process online in an effort to make the tender process more efficient, competitive and to improve the overall quality of submissions. All details of past, current and future tender packages are now available on its website. The authority also publishes the names of all companies who apply for prequalification as well as the names of those who get shortlisted.

“We are trying to improve transparency between the client and bidders,” explained engineer Nabeel Mohammed A R Al Buenain, project executive director, New Doha Port. “Some companies have complained to us about publishing their names when they have not prequalified, but we believe this creates a more competitive and fair marketplace. There are six criteria which bidders must satisfy before tendering for our projects. They must have acceptable cash flow, experience in the field, the right equipment, skills and staff and be committed to the project and Qatar. It is very important that submissions demonstrate capability in each of these areas.”

While New Doha Port’s tender portal has received some criticism from contractors, James Brenan from law firm Herbert Smith says it is an approach clients have to adopt in order to attract world class contractors.

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“What we have now is a cultural disconnection between clients and companies. Contractors need to change the way they approach a deal, adding more value beyond contractual communications by bringing new ideas and being innovative. Companies have to manage the client relationship as much as the contract. It can mean the difference between succeeding and losing the bid,” said Brenan.

The Links Group says Qatar’s shift towards transparency can play to British companies’ advantage.

“Qatar is undergoing a mindset shift to get what they want, on time, with quality and to the right specification. This move towards a transparent tender market is not necessarily an issue for larger British contractors who already have to comply with strict regulation and due diligence policies mandated by their government and company boards,” said Curtis.  

“Foreign companies often like to wait until they win a contract before incorporating a commercial presence overseas. But this approach no longer carries favour with Qatari clients. They want to know the foreign company is committed to the long term development of Qatar and are serious about investing in their country’s growth,” said Wayne Merrick, general manager – Qatar, the Links Group.

Albert Assad Maloof, managing partner, Infrastructure Advisors Middle East, agreed. “Often the reason why some companies are unsuccessful in the bid is because they don’t know the environment or they don’t have the right local partner. It is so important to get established correctly on the ground,” he said.

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