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Mon 6 Jul 2009 11:32 PM

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Barwa Real Estate terminates contract with Panceltica

Qatar property developer says it will now deal directly with sub-contractors.

Qatar’s second-largest property developer, Barwa Real Estate, said on Monday it has terminated its contract with Panceltica Holdings Ltd., the main contractor for Barwa’s Sailya housing compound.News agency Bloomberg said the company will sign new agreements directly with the sub-contractors on the project, according to a release posted on the Qatar Exchange web site.

Barwa said last month that the Sailya project won’t be completed in July as planned because of ''financial challenges'' faced by Panceltica.

The project will be delivered in the final quarter of this year, Barwa said Monday.

On June 28 Gulf Times reported that the standoff between Barwa and Panceltica Holdings unit, Panceltica Qatar, had left some 50 subcontractors and suppliers, as well as thousands of labourers, in the lurch.

The affected parties said Panceltica Qatar owes them close to QR120m in outstanding invoices for material and executed work since November 2008.

On June 29 Al Sharq newspaper reported Barwa was considering a takeover of Panceltica Holdings.

The newspaper said the acquisition of the firm is one of three options being considered - other options being to invest in Panceltica Holdings directly or acquiring the management of the company without investing.

On June 18, Barwa said it had given a revolving credit facility to a company controlled by Barry Tannenbaum, who is now being investigated for running a $1.8bn Ponzi scheme.  

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