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Constructing stadiums for Qatar 2022: issues for contractors

ANALYSIS: With the main contractors appointed and construction works well underway, the stadiums which will host the 2022 World Cup are beginning to take shape.10 Oct 2018

The main contractors of these stadiums will encounter challenges in the lead up to 2022. These include completing on time, including enough time to accommodate any planned test events; budget constraints; and the need to produce a stadium which satisfies the official FIFA Technical Requirements and is tournament ready.

Now the World Cup in Russia has come to an end, Qatar is likely to attract more attention from FIFA. There is also a risk that FIFA's Technical Requirements, currently on the 2011 5th edition, may be updated to reflect any lessons learned from the 2018 World Cup. If FIFA's technical and security requirements are updated between now and the tournament, it may not be clear whether the contractor or the employer bears the risk of any changes.

Most of the design work for the stadiums is either complete or close to completion, and the construction phase is at its busiest. In most cases, the commercial bargaining power of the contractors will be strong as the employer, Qatar's Supreme Committee for Delivery & Legacy (SC), is keen to see the stadiums delivered on time and without delay.

The contractors may have already encountered circumstances or events giving rise to contractual entitlements which will need pursuing if they are to be preserved. Contractors will also want their claims to be honoured to avoid cash-flow difficulties. If relationships between the contracting parties are to be maintained in a healthy way, leverage will be weighted towards the contractors.

Given current economic conditions, the stadiums will have undergone value engineering exercises before construction works can begin, as is becoming common for many Qatari projects. The idea of value engineering is to review the requirements of the project and propose more affordable solutions. However, where changes are proposed, this too may lead to disputes between the contractor and employer:

  • it may not be clear which designs have been accepted, especially if they have been value engineered to make significant savings. Check that the contract documents are clear, especially on what has been offered by the bidding contractor and what has been accepted by the SC;
  • make sure it is clear which parts of the design have been changed, and how the value of the instruction will be assessed if the engineer has issued instructions to modify design work. Employer clients often fail to appreciate the impact modifications may have on previously-agreed design work particularly under a design and build contract, which involves the contractor taking overall responsibility for design risk;
  • check there are no conflicting provisions within the contract documents, especially between the contractor's proposed value engineering solution and the original contract specifications and drawings. The priority clause may not always offer satisfactory solutions.

Finally, contractors must be aware of their ever-changing interfacing obligations. The new stadiums, venues and facilities will need to integrate with the ongoing infrastructure being built in and around Qatar. This will be challenging, and contractors will need to focus on stakeholder management to ensure project success.

Paul Prescott is a construction expert at Pinsent Masons, the law firm behind Out-Law.com.