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Mon 28 Jul 2014 10:57 AM

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Spanish firm set to sue Qatar Foundation over health project

OHL says to take legal action after it was sacked as one of the contractors on $2.3bn Sidra Medical and Research Centre project

Spanish firm set to sue Qatar Foundation over health project
The Sidra Medical and Research Centre project.

Spanish-based contractor OHL has said it will sue Qatar Foundation after it was sacked as one of the main contractors on the $2.3 billion Sidra Medical and Research Centre project.

The construction company was originally awarded the contract in February 2008 as part of a joint venture with Cypriot firm Contras, with an original completion date set of 2011.

The project has been besieged with delays, culminating with the client, Qatar Foundation, firing the pair last week.

In a statement to the London Stock Exchange, OHL’s vice-secretary of the Board of Directors, Jose Maria Cuvillo Peman, said Qatar Foundation has terminated because it believed the contractor had not fulfilled its contractual obligations in regards to “the pace of the works and delivery deadlines”.

OHL has contested this saying: “According to the current estimations, the degree of completion in the execution of the contract is of around 95 percent, with the final delivery to the client being scheduled in the first quarter of 2015.”

Peman went on to say that the contractor would look to take legal action against the client.

“OHL considers that the reasons given by the client lack of any legitimate grounds, and consequently intends to activate through the consortium the mechanisms set out in the contract to claim before the International Chamber of Commerce (ICC) based in London, through arbitration the effective protection of its interests,” said the statement.

He also reassured stakeholders and the stock exchange that OHL would not suffer financially as a result of either the loss of the contract or any legal action.

Qatar Foundation has since replaced OHL and Contras with a new joint venture between local contractor Midmac and Consolidated Contractors Company to finish off the project.

In a statement, Qatar Foundation said: "MIDMAC is one of Qatar’s largest contracting organizations, while CCC is one of the biggest and most well-regarded engineering and construction companies in the Middle East region. Both companies have proven track records in delivering vast and challenging projects."

It said they would start work on the project "imminently".

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