Corruption and political instability make working on infrastructure a 'high risk' project for contractors
Report raises doubts about whether Qatar will be able to host 2022 World Cup
A new report into preparations for the 2022 World Cup in Qatar says there is a growing possibility that the country will not host the tournament at all.
A "risk report" by management consultants Cornerstone Global assessed the impact of the rift between Qatar and the four countries — Saudi Arabia, the UAE, Bahrain and Egypt — that broke off economic, transport and diplomatic ties with the emirate in June.
The report warns construction companies working on what will be the most expensive World Cup, with a $200 billion infrastructure programme, that it is a "high-risk project" and says "tournament insiders and regional experts have both stated to us that it is far from certain Doha will actually host the tournament."
Entitled Qatar in focus: Is the Fifa World Cup 2022 in danger? the study by Cornerstone Global states the political risk is significant enough for Western diplomats to express privately their doubts about whether the tournament can take place as planned.
"The reasons for this are many and include open allegations of corruption — both in the bidding process and in the infrastructure development," the report said. "There are numerous reports coming out of Doha confirming increased political dissent from local tribes, who make up the majority of the local population."
The possibility of instability within Qatar meant those working on, or seeking contracts for World Cup infrastructure were at greater risk of not getting paid with "no realistic ability to enforce any legal contracts."
Contractors are increasingly turning to international arbitration to force Qatari authorities to pay for completed work. In 2015, about 30 cases involving Qatar went to the International Chamber of Commerce arbitration body, whereas in the ten years before 2015, only five did.
"Given the current political situation … it is certainly possible that the tournament will not be held in Qatar. Any cancellation of Qatar hosting the World Cup 2022 will likely be abrupt and will leave contractors involved in a precarious situation that may not be easily resolved."
Sources working in construction told the Cornerstone Global researchers that "whilst not panicking yet" contractors are feeling the effects of the border closures, which have made logistics more complicated and — according to five project managers interviewed for the report — 20 to 25 per cent more costly. By August, building projects were a month behind schedule.
The researchers also revealed, "Sources within the project have indicated that several members of the Qatar 2022 Supreme Committee have threatened to resign over excessive interference by senior officials on spending and allegations of corruption."
Qatar accused the authors of the report of having "an affiliation" to the countries that imposed the boycott.
But Ghanem Nuseibeh, founder of Cornerstone Global and a visiting fellow at King's College, London vehemently denied any connection. "Absolutely not. No one in Saudi Arabia, the UAE or anywhere in the Gulf had any input at all — neither funding it [the report] nor commissioning it nor paying for it nor benefiting from it in any way at all, as far as I'm concerned. That is pure speculation [by Qatar]. No one outside of the UK and Europe had any input into that report or any interest in it," he said.
He readily acknowledged expressing personal views on Twitter, but insisted the report is "very objective, very impartial."
Nor was the report commissioned by any group or individual, he added, but was simply part of the service the company provides for clients. "It was aimed at a Western audience, Western corporates who wish to expand their work on the project," he said.
"They [the Qataris] haven't actually refuted or denied any of the findings over the report," Mr Nuseibeh added. "The report was written based on extensive on the ground research, talking to people who are involved with it. The nature of political and economic risk reports is that you highlight problems rather than doing a PR exercise. They haven’t commented on the actual findings, which I find actually confirms the suspicions or conclusions that we reached after almost three-and-a-half months of research"
Mr Nuseibeh pointed out that his company's first report on the Qatar World Cup in 2011 endorsed the event, which was still on the company website.
"A couple of years later, we wrote another article, which I co-authored, when the corruption allegations started cropping up, saying that if Qataris wanted to succeed, they needed to come clean about those allegations, and to speak to others in the region — including the UAE — to see if they could do some sort of a co-host to strengthen their position. That was in 2013-14," Mr Nuseibeh said.
"In 2014, I wrote an article for Harvard, again on the corruption issues, and again suggesting ways in which Qatar could essentially save the day, because the risk has been increasing over the years since they’ve been awarded the World Cup. And then of course, you have this latest report. So we’ve been publicly following and talking about it for six or seven years, and the risk has been piling up. It’s nothing to do with personal opinions. The risk has increased significantly to a point where our clients, who are based predominantly in the UK and Europe, need to know that if they want to enter a contract in Qatar for the Fifa bid, they need to be aware of the risks.
"What the report aims to do is highlight those risks for anyone who wants to go there. The report doesn’t say 'the world cup is going to be cancelled.' It simply says there is an increased political risk of that happening. And secondly, it highlights risks that have become commonplace."
The Qatar 2022 Supreme Committee for Delivery and Legacy said there was "absolutely no risk to the future of the first World Cup in the Middle East." However in a recent interview, the secretary general of the committee, Hassan Al Thawadi said there had been "some minimal increase" because of having to establish alternative supply chains."