Barwa pays off Panceltica dues

Barwa has paid up most of the subcontractors’ dues owed to them by the now-defunct main contractor, Panceltica. Some 50 subcontractors of the Barwa Housing Programme’s Sailiya project expressed their gratitude to the company for the payments owed to them.

The Barwa move has infused fresh confidence and a new vigour among Qatar’s sub-contractors, who play a major role in the country’s ambitious development projects.

Having waited for over 18 months, the majority of the 50-plus subcontractors of BHP’s Sailiya project have received their outstanding bills running into millions of riyals, sources said yesterday.

Owed up to QR120mn by the now defunct Panceltica - a subsidiary of UK-based Panceltica Holdings Ltd, the main contractor to Barwa for the budget housing project, the subcontractors had their money stuck as a result of a standoff between Panceltica and Barwa.

“This payoff by Barwa comes as a huge relief to hundreds of my workers, families, creditors and has literally saved me from going totally bust,” one hardware and plumbing supplier who was owed over QR1.6mn told Gulf Times yesterday.

“My five-year-old business was on the verge of disappearing and I was surviving after selling off my last property back home,” the subcontractor added. Another subcontractor said: “Barwa was so kind they even gave me the 20 dirhams that my final balance sheet showed.

That’s some commitment to the developer community considering this whole fiasco wasn’t even their fault to begin with.” Gulf Times first published the plight of the subcontractors on June 30. On December 13, Barwa had said it had begun paying the outstanding amounts to subcontractors who had completed their work on the project after Panceltica became insolvent in July and was subsequently liquidated. “Barwa had no obligation to these subcontractors, however, it believed this move would be necessary for the completion of the project in the best technical conditions,” a spokesman said.

A week later, on July 6, Barwa held a press conference during which vice chairman Hitmi bin Ali al-Hitmi said:

“We have terminated the construction contract with BHP Sailiya main contractor (Panceltica) and have received the project as it is.”

It has also been decided to immediately pay for all financial receivables (certified invoices) from the main contractor to their subcontractors from the project budget.”

The process, according to Barwa, took some time due to the detailed financial and legal process that followed the demise of Panceltica, “in conjunction with auditors and liquidators to ensure only subcontractors who had delivered work were compensated.”

Some subcontractors yesterday said while most have received the money as of last week, some are still engaged in the process of getting it this week.

Others said they would also like to see whether they will get their retention.

Retention, in construction contracts is the withholding of 5-10% (subject to contracts) of the money by the client and is only cleared after a mutually-signed period of time (say 400 days) to ensure the project received the same products and services that contractors promised.

Built on two separate plots in West Sailya and Mesaimeer, BHP will have a total of 31 buildings per plot with a total of 992 apartments each.

The BHP Mesaimeer was handed over to tenants on March 1.