The abrupt rise in steel prices might hit the ongoing projects hard. The projects might be delayed or stopped altogether, the Qatar Engineering Society has warned.
Society’s chairman, Ahmed Al Julu, has said the price rise might lead to court cases as contractors might look for unjustified means to recover their losses from project owners.
The contractors might delay the projects or stop work altogether, he told Al Sharq in an interview. The contracting sector would be a major sufferer of the steel price rise.
This is because the contractors have signed ‘fixed’ contracts with project owners with the scope for raising the prices originally quoted being nil. Al Julu said contractors must always add a clause in their agreements with project owners that the prices would subject to change depending on supply and demand of basic construction materials.
A price review clause should be included in contracting deals to take care of price fluctuations of construction materials, a developer, meanwhile, told the daily.
Developers and contractors mostly agree that major price escalations as far as building materials are concerned would hit real estate projects. The best example is steel whose prices have risen twice in recent times. Steel is now available for QR2,995 per ton due to steel pellets ( a key raw material) becoming costlier. Their rates rose 20 percent in the international market, said a contracting company owner, Jaber Al Marri.
He is, however, of the opinion that expensive steel would not leave any major adverse impact on the contracting sector because the prices are fluctuating only between 15 to 20 percent. The contractors, he said, quote the rates for projects keeping in mind price fluctuations in future. Meanwhile, the owner of another contracting Company, Khalid Fahad, was also critical of the price rise and said the rates had been increased without any prior notice.