DOHA: Qatar must explore non-banking funding resources for its large-scale infrastructure projects. Banks are increasingly becoming reluctant to lend long-term for projects. With stiffer banking regulation in the Middle East, it is time for the region to look for capital outside the banking system, said an expert.
Attending a panel discussion at The Eversheds Conference on “Opportunities and challenges in major capital projects in Qatar”, Jitesh Shah, Director, PwC, Doha noted there is huge pool of capital available outside the banking system. Banking sector still dominates financing of infrastructure projects. But it is clear that many banks which have provided the bulk of private project finance through long-term loans have steadily reduced their exposure to the long-term infrastructure market, he said.
Jitesh said there is ample opportunity for private sector to provide infrastructure financing via project bonds and non-banking lending. The trend is gathering momentum cross the global economies. “We see a range of tranches across the Middle East region, including Qatar,” he said.
Dr Marwan Musleh, General Counsel and Corporate secretary, RasGas, who shared the ‘client’s perspective on contractual challenges in mega projects’, said the challenges being faced by the oil and gas projects are many and varied. “Time is important for the sector…Change in energy prices is critical… which party bears the risk is key...,” he said.
Speaking on procurement challenges in the region, Gurmeet Kaur, Head of Projects, Eversheds, UAE noted stiffer procurement laws are a problem in the region. “Short lending period is a challenge. The laws are drafted. There is no scope for modification of prices, once the tender is submitted. You need to go by the price put in the tender form. There is a tendency to push risk to the contractor”, she said.
Gareth O’Brien, Director of Trade and Investment, British Embassy, Doha said the positive contribution the construction industry had played in the development of Qatar. Michael Kenyon, Managing Director of Navigant shared his insight on the application of risk management practice and procedure to maximise project outcomes. Adrian Sender, Head of Corporate Finance at Doha Bank, shared his knowledge on GCC project financing and the opportunities available for Qatar.
Senior members of the Eversheds team spoke on the salient legal points of construction projects. Partner Richard Ward and Senior Associate Nick Pinder shared their expertise on effective dispute resolution which focuses on minimising disruption to major projects. Dani Kabbani, the Managing Partner for Qatar spoke. The Peninsula
