31 December 2007
Construction costs at the New Doha International Airport have increased by one hundred per cent, rising from initial estimates of $5.5 billion (Dh20bn) to $11bn, according to a senior official at Qatar Airways.
During a press conference in India, Qatar Airways CEO Akbar Al Baker made a passing reference to the large increase. The airline will relocate its headquarters and training facilities to the new airport upon completion.
A senior Qatar Airways official told Emirates Business that the reason behind the increase in cost can also be attributed to design and architectural complications.
"The cost also went up because designs had to be changed and modified," said the official
No officials of Bechtel, the main contracting firm involved in the project were available for comment.
Building costs are climbing all across the Gulf, especially in the UAE, driven by increases in global prices for inputs. Costs are expected to go up by 20 per cent in 2008 as a result of growing inflation, material costs and increasing staff salaries.
Over the past year, prices of raw materials - including cement and rebar - have increased by 15 to 20 per cent in the UAE.
The price shocks are causing projects to increase their budgets. Saudi Arabia Mining Company in September said a phosphate venture it is developing with Sabic would cost $5.6bn, 62 per cent more than estimated. And Norway's Norsk Hydro said the price tag on an aluminium smelter it is building with Qatar Petroleum had risen by 86 per cent.
Soaring prices of basic construction materials, their scare supply in the region, and increasing costs associated with attracting and importing skilled manpower are behind the budget hike, according to a report in Doha-based The Peninsula.
"The increase is mainly due to the crisis with raw materials. Countries like China and India are sucking up essentials like aluminium and steel. And cement availability continues to be a problem here," it said.
The rising cost of living in the Gulf was also blamed for having an adverse effect on the project.
"Unskilled manpower is easy to get but the problem arises when it comes to bringing in trained professionals, for management and supervisory roles," the newspaper added.
Construction costs at the New Doha International Airport have increased by one hundred per cent, rising from initial estimates of $5.5 billion (Dh20bn) to $11bn, according to a senior official at Qatar Airways.
During a press conference in India, Qatar Airways CEO Akbar Al Baker made a passing reference to the large increase. The airline will relocate its headquarters and training facilities to the new airport upon completion.
A senior Qatar Airways official told Emirates Business that the reason behind the increase in cost can also be attributed to design and architectural complications.
"The cost also went up because designs had to be changed and modified," said the official
No officials of Bechtel, the main contracting firm involved in the project were available for comment.
Building costs are climbing all across the Gulf, especially in the UAE, driven by increases in global prices for inputs. Costs are expected to go up by 20 per cent in 2008 as a result of growing inflation, material costs and increasing staff salaries.
Over the past year, prices of raw materials - including cement and rebar - have increased by 15 to 20 per cent in the UAE.
The price shocks are causing projects to increase their budgets. Saudi Arabia Mining Company in September said a phosphate venture it is developing with Sabic would cost $5.6bn, 62 per cent more than estimated. And Norway's Norsk Hydro said the price tag on an aluminium smelter it is building with Qatar Petroleum had risen by 86 per cent.
Soaring prices of basic construction materials, their scare supply in the region, and increasing costs associated with attracting and importing skilled manpower are behind the budget hike, according to a report in Doha-based The Peninsula.
"The increase is mainly due to the crisis with raw materials. Countries like China and India are sucking up essentials like aluminium and steel. And cement availability continues to be a problem here," it said.
The rising cost of living in the Gulf was also blamed for having an adverse effect on the project.
"Unskilled manpower is easy to get but the problem arises when it comes to bringing in trained professionals, for management and supervisory roles," the newspaper added.
By Joseph George
© Emirates Business 24/7 2007
