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Sat 29 Dec 2012 11:54 AM

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Qatar Air launches $600m airport legal claim

Action to be taken against contractor as New Doha International Airport opening faces major delay

Qatar Air launches $600m airport legal claim
Qatar Airways CEO Akbar Al Baker.

Qatar Airways said on Saturday it will file a $600m legal claim against German Emirati joint venture construction company Lindner Depa Interiors (LDI) for causing a significant delay to the opening of the New Doha International Airport by up to a year.

The Gulf carrier said in a statement that LDI had undertaken to complete the construction of 19 airport lounges by the summer of 2012 in a contract worth over $250m, but failed to complete the project on time.

The $15.5bn airport was due to have opened this month but has now been put back to the second half of 2013.

Qatar Airways, set to be the airport operator, claimed LDI had "badly defaulted" with the delayed airport opening seriously affecting the airline’s expansion plans, causing huge revenue losses, increased construction costs and delay penalties, and more importantly, inconveniencing passengers.

LDI was described as having performed "extremely poorly" in executing the project and failing to meet construction targets.

The current Doha International Airport handles almost 20 million passengers a year, with over 80 percent of the passenger traffic generated by Qatar Airways alone.

Qatar Airways CEO Akbar Al Baker cited "extreme poor performance" and inability to execute the work within the time required for the project as the reasons for LDI’s contract being terminated, resulting in the legal action now being taken.

“We are extremely disappointed by the poor performance of LDI which has failed to carry out the contract in a timely manner which in turn has forced a delay of the opening of the New Doha International Airport by nearly a year,” said Al Baker.

“We have been badly affected as an airline with the delay impacting Qatar Airways’ expansion plans that include new aircraft deliveries and opening up new routes at the rate we want to and more importantly causing a lot of inconvenience to our passengers in addition to the revenue losses to the airline and its subsidiaries.

“Our subsidiaries have been also affected by this delay including Qatar Duty Free, the food outlets and the ground handling which had a negative impact on the revenues of the airline."

He added: “The current airport we are operating from is already full to capacity with virtually no room to grow. We relied on moving to our new home, the New Doha International Airport this month, but this has not happened.

“Operational trials of the new airport have been ongoing since the summer as everything was in place, but incomplete airport lounges proved a serious setback.”

Phase one of NDIA is slated to handle over 28 million passengers a year, with the capacity expected to more than double by the time the airport is fully operational in 2018.

Al Baker added that further claims against LDI were expected from other entities affected by this delay.

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Qatari 6 years ago

I wonder how much QA's rivals payed Lindner Depa Interiors (LDI) for causing the delay to effect the airline’s expansion.

Solo 6 years ago

Dearest Qatari - while you sound like an educated and sane person, I cant resist but to find your theory whom conspirators are Germany's Linder -involved in key terminals like Frankfurt, Shanghai and Heathrow to name few) and DEPA (Burj Khalifa, Burj Al Arab, etc) along with an anonymous arch rival somewhat amusing.

The fact is that the QA's New Doha International Airport doesn't compete but compliments regional terminals. To give you an idea, Emirates' 1&3 terminals capacity (excluding the New Al Maktoum Airport-largest and most expensive aerotropolis in the world) is over 200 million passengers today, compared to NDIA's 50 million at full capacity and upon completion of its 3rd phase in 2015 (Insha' Allah)

Gulf Pastry 6 years ago

Is Qatar Airways the owner of the airport? If not, unless there was a collateral warranty by LDI to Qatar Airways, QA would need to claim their losses from NDIA management / owner; who would in return claim for such losses from LDI.

In almost all construction projects, delay in project delivery is almost a norm. And, in most of the time, many parties in the project would have been able to identify the causes of delay in time and take action to minimise the impact of such delays. In this case, not only the contractor, but the client's consultants should have been able to foresee the delay and advised the client to take remedial action before it become too late (which is now the case).

I believe the contractor would have already been subjected to Liquidated Damages (which is the loss compensation made by the contractor to the client per day, in the event of delay in delivery). To claim all the commercial losses on the contractor will only scare away all construction players from Qatar

Arjun 6 years ago

Who cares the WC is still ten years away my friends.....slow & steady wins the race. Dont try to compare what you not are anyway. Just finish the job if you want to. We are ever ready to visit when 2022 happens.

Ebrahim Latter 6 years ago

Akbar Al Baker is indeed a noisy, challenging character whereby ever other day he seems to be firmly and very publicly threatening all and sundry with some issue or other and most probably he has grounds, but in this case, Qatar Airways really has no business poking its nose in other than it's freedom to display displeasure at the delays.
But on a completely different note, a man of his credentials and fearless approach could be very useful if the GCC ever becomes 'ONE' unit. Might I suggest that with Baker's conviction and penchant for and advocacy of justice, he might take on the role of Traffic Police Bwana and actually enforce laws across the various states, quite possibly saving thousands of lives and calling to book the absolutely blatantly dangerous, thoroughly inconsiderate, wholly ignorant disregard for any road decency or safety in our countries. Just a thought!

SA1 6 years ago

If I remember correctly LDI's contract was terminated a year back, so why NDIA failed to appoint a new contractor in time?

And if fit-out at lounges is the only item pending as per CEO's comment, this is not a major item in the entire Airport development.

Depa has done very complex works in past and is a well known contractor with good experience....it is the NDAI experience that needs to be reviewed

Richard Mullane 6 years ago

Big deal, Qatar needs to learn their money will not always buy them favour. LDI has lodged a legitimate claim against the Qatari's and has been 'bullied' into dropping all claims for delay / damages etc which of course they will not accept.
Good luck LDI and all contractors working for the Qatari's.

procan 6 years ago

Al Baker... you are responsible, fix this now quit your wining. You were quick to blame others when they endured problems. Now you got one and no one to blame but yourself.

Philistine 6 years ago

Akbar Al Baker heads NDIA in addition to 10 (ten) other government companies- that include Qatar Airways.

J Smith 6 years ago

Isn't the problem that the Airport has failed on a much larger scale than Berlin.

Let's not forget this airport was supposed to be open in 2010 not 2012. A recent visit to the airport confirmed that it certainly WON'T be open in 2013. Although the shell is finished the interior is very far from finished. Then of course there is the question of who will complete these lounges that LDI was supposed to complete.

As stated now in another article today, LDI could not complete the contract due to a 9 month delay to the delivery of the site. There are internal fit out contractors, there contract did not include building the airport, they expected to find a shell to build around and had to wait 9 months for that shell to be completed.

The delays at NDIA are Al Bakker's fault. Worse still the Airport is now not even big enough for Qatar Airlines as the plans are now 10 years old.