Singular GCC railway authority ‘needed to look into standards’

While the proposed GCC-wide rail network will bring tremendous benefits to the Middle East, the daunting challenge of setting up a singular authority for standards and co-ordination needs to be addressed, officials from law firm Norton Rose said yesterday.

Speaking at a Society of Construction Law – Gulf (SCL)’s Doha event held at the Qatar Financial Centre, partner at Norton Rose Donald Warnock said co-ordination is particularly important as each of the GCC countries with plans for a railway is employing different models.

“The GCC rail network is a fantastic benefit to the Middle East… the challenge is (an) authority to set up standards,” Warnock said, while pointing out that it is not clear whether local state laws will apply when borders are crossed.

“There is a 2011 report (to come out), which is going to look into the establishment of a GCC rail authority and that will be looking at standardisation and co-ordination, and will hopefully lead to a top-down review, which is what we had in Europe,” Warnock said.

The ever-expanding SCL-Gulf works to promote the study and understanding of construction law amongst all those involved in the construction industry in the region.

In Qatar, there are five principal rail projects: a high-speed rail-link to Bahrain across the Friendship Causeway, Ras Laffan to Mesaieed freight and passenger link, Doha-Saudi Arabia link to the GCC network, Doha City Metro, and the West Bay and Lusail people mover networks.

According to the lawyer, the Qatari model is led by the government where Qatari Diar (51%) and Deutsche Bahn International (49%) are responsible for managing, design and construction as well as the implementation of the entire project.

“My understanding is that the procurement will begin in June 2011 and construction is due to commence in 2012,” he said.

For the sake of consideration, the Kuwaiti model is a public-private-partnership (PPP) where the government, IPO investors and selected developers will have 10%, 50% and 40% stakes respectively, he said.

“The approach adopted here (in Qatar) is not the traditional PPP like in Kuwait. There will be a range of likely contractual issues, not least the interface issues in the project,” Warnock said.

These range from general risk profile, payment, and site risk to insurance, permits, termination, and limit on liability, he said.

Site risk, for example, Warnock pointed out will be of great consideration to the contractors, or whether environmental permits will be a contractor’s responsibility.

“My understanding is that most contracts here are subject to the Qatari law and courts, and that Qatari courts are a fairly decent place to resolve. The one question mark is the competency of the judges on technical issues who tend to appoint a technical expert who may be closer to a party you are in conflict with,” Warnock said.

Based on other rail projects around the world, the official said, the ones to be carried out in the region are also politically-sensitive, and a contractor should also be wary of political interferences, which generally lead to a slowdown.

Norton Rose partner Martin Preston also spoke. The session was chaired by Julie Tuck of law-firm SNR Denton Qatar.

Photocaption: Tuck (centre) chairing the event as Warnock (left) and Preston look on