(MENAFN - The Peninsula) The Public Works Authority, Ashghal, signed agreements with Qatar Steel and Qatar National Transportation Company yesterday in order to control costs in its projects.
Signing of the contracts is a part of Ashghal's efforts to stabilize the prices of construction materials and the cost of transporting them to project sites.
"The prices of raw materials are going up. The transportation cost is also on the rise. Many contractors are being lost due to the price rise, so this initiative can help to bring in more contractors," said Ashghal CEO and Board Member, Eng. Zayed Mansoor Al Khayyarin.
Mansoor Al Khayyarin signed both the memoranda of understanding on behalf of Ashghal, while Sheikh Nasser bin Hamad al Thani, General Manager and board member of Qatar Steel, signed the deal on behalf of his company to stabilize the prices of its products.
Ali Hassan Al Mohannadi, General Manager, signed the MoU on behalf of Qatar National Transport Company to control the cost of transporting sand and similar materials from the site of production to Ashghal project sites.
The high prices have been causing financial loss to the contractors. The agreement with the suppliers will help the contractors to agree on tenders without fearing financial loss.
"The agreements will minimize the risk of the contractors. The suppliers will have to account for the extra charges and if the reasons are valid, the government will meet the extra expenses of the raw materials. This can also improve the performance in the construction sector and the structures under construction," said Eng. Ahmed Sultan Al Kuwari, Chief Operations Officer
"The agreement is for one year now and, according to the results, we will think about extending the period of agreement," he told The Peninsula.
Insufficient supply of raw materials in the market had also pushed up project costs. "Some of the cement and sand companies had problems, which have been overcome now. We also have some new companies that will be opened later. This can also help in lowering prices."
Early this year, Ashghal signed MoUs with Woqod, Qatar National Cement Company, Qatar Industrial Manufacturing Company and Qatar Quarries and Building Materials Company and National Leasing Company.