Why resisting the lure of the 2022 World Cup might be good news for your business

Alastair Stewart

There might be more than a dollop of sour grapes when it comes to Brits (or at least English) condemning Qatar’s World Cup preparations. After all, the awarding (and likely rescheduling) of the 2022 tournament was part of the decision making process that also saw England losing out to the equally loaded Russians, all against an oft-reported atmosphere of general whiffyness. (Rod Liddle in the Sunday Times is an outspoken observer of FIFA’s machinations.)

With that proviso, British companies working in the world’s richest country per capita may soon find that making a profit may become harder than English fans finding a pint of lager in the desert state. This is not new: even before the deaths of 44 Nepalese workers mid-year, fears were mounting that foreign contractors and consultants had signed up for projects on potentially crippling terms.

My 4 February column for Building, written after a trip to the region, referred to this: many companies had rushed into the emirate in leaner times, accepting fixed-price terms on relatively thin margins, without fully considering the potential cost inflation or hard-nosed wording of contracts. With the eyes of the world (especially vengeful UK journalists) focused on the scandalous conditions facing migrant workers, it is likely that already mounting costs will escalate even further.

With the threat of legal action coming from all directions (see today’s Building), there is likely to be a significant additional cost for more comprehensive monitoring of conditions along the entire supply chain. And don’t expect the client to volunteer to meet it.

The likely moving of the contest to the winter could also bring with it unintended project consequences and that usually means unintended costs.

The bottom line is that, if you’re already working there, the QSs should scrutinise budgets with an even finer-toothed comb … and get a lawyer. If you’re not there but considering the Middle East, there’s plenty of work in Abu Dhabi or a now slightly more sensible Dubai.

Alastair Stewart is Construction & Property Analyst at Progressive Research. Follow him on Twitter @BuildInsight