Uncertainty grows over multibillion-dollar Qatar projects, deals

JEDDAH/LONDON: The diplomatic crisis engulfing Qatar is likely to derail many of its multibillion-dollar projects and financial deals, according to bankers and legal experts.

On June 5, the Anti-Terror Quarter (ATQ) — comprising Saudi Arabia, the UAE, Bahrain and Egypt — severed ties with Qatar, alleging support for terror groups. Flights and shipping were disrupted, and the road link to Saudi Arabia was closed.

That has caused widespread disruption to the construction sector, and has even cast doubts over Qatar’s ability to host the 2022 FIFA World Cup.

Construction lawyers expect the boycott to unleash a tangled web of contractual disputes and court cases for what was already perceived as a challenging market by some international construction groups.

“It will have an impact in two respects. First, there’s the human factor, which means Qatar ceases to be as attractive a place as it may have been perceived in the past,” said Andrew MacCuish, a partner at Kennedys, the international law firm.

“The second impact is in relation to the supply of material. Shipping by sea is still available, although Qatari-flagged ships can’t call at Fujairah in the UAE, and vessels from Qatar or sailing direct to Qatar are banned. Similar restrictions apply in respect of the port of Jebel Ali.”

The diplomatic crisis is also being cited as the main reason for the indefinite postponement of the refinancing of a $1 billion loan by Doha Festival City, a retail and hospitality complex.

Sanctions against Qatar mean non-Qatari banks will not participate in the refinancing deal, Reuters reported a senior banker in Doha as saying.