Qatar Rail cancels consortium’s contract on stations project

A dispute has arisen, following a decision by Qatar Railways Company (Qatar Rail) to terminate its railway stations construction contract with an international consortium.

The consortium, comprising South Korea’s Samsung C&T, Spanish company Obrascon Huarte Lain (OHL) and Qatar Building Company, had won the US$ 1.4 billion contract to build two stations, as part of the US$ 36 billion dollar Doha Metro project.

Samsung C&T held a 50% stake in the consortium, with OHL and Qatar Building taking 30% and 20% respectively.

OHL reportedly said it had recently received notification from Qatar Rail that its contract had been terminated, in which it cited “non-compliance of certain contractual obligations”.

Subsequently, Qatar Rail has appointed Consolidated Contractors Group to move forward with the project.

OHL have reportedly stated that the consortium had presented Qatar Rail with points of dispute, prior to the termination of the contract.

Under the terms of the contract, it said, the disputed points should have led to negotiation or arbitration, as opposed to the contract’s termination.

OHL further revealed its order book pending to be executed on the contract as at the end of December 2015, amounted to over US$ 284 million.

Qatar Rail stated it has acted within the terms of the contract and will take steps to protect its rights in the matter.

A spokesperson for the company said “Work will continue on the major stations project sites as planned, and discussions are under way with the subcontractors to ensure continuity.”