Qatar Airways is filing a $600m legal claim against a contractor for delay in opening New Doha International Airport (NDIA).
Lindner Depa Interiors (LDI), the German-Dubai joint venture contracting company, has caused a significant delay to the opening of NDIA by up to a year, Qatar Airways said here yesterday.
LDI had undertaken to complete the construction of 19 airport lounges at NDIA by the summer of 2012 in a contract worth over $ 250m, but failed to complete the project on time. The airport was due to have opened in December 2012.
Qatar Airways, set to be the airport operator, said LDI had badly defaulted with the delayed airport opening seriously affecting the airline’s expansion plans, causing huge revenue losses, increased construction costs and delay penalties, and more importantly, inconveniencing passengers.
LDI was described as having performed extremely poorly in executing the project and failing to meet construction targets.
The $15.5bn new state-of-the-art airport, which will have Qatar Airways as its primary customer and operator, is now expected to open in the second half of 2013. The new facility is destined to be an iconic world-class airport that is expected to set high standards in excellence. Had it been completed on time, the new airport would have accommodated the rapid expansion of Qatar’ Airways.
Qatar Airways Chief Executive Officer Akbar Al Baker cited ‘extreme poor performance’ and inability to execute the work within the time required for the project as the reasons for LDI’s contract being terminated, resulting in the legal action estimated at up to $600m now being taken.
“We are extremely disappointed by the poor performance of LDI which has failed to carry out the contract in a timely manner which in turn has forced a delay of the opening of the New Doha International Airport by nearly a year,” said Al Baker.
“We have been badly affected as an airline with the delay impacting Qatar Airways’ expansion plans that include new aircraft deliveries and opening up new routes at the rate we want to and more importantly causing a lot of inconvenience to our passengers in addition to the revenue losses to the airline and its subsidiaries.
“Our subsidiaries have been also affected by this delay including Qatar Duty Free, the food outlets and the ground handling which had a negative impact on the revenues of the airline.
Added Al Baker: “The current airport we are operating from is already full to capacity with virtually no room to grow. We relied on moving to our new home, the New Doha International Airport this month, but this has not happened.”
Operational trials of the new airport have been ongoing since the summer as everything was in place, but incomplete airport lounges proved a serious setback. Phase One of NDIA is slated to handle over 28 million passengers in a year, with the capacity expected to more than double by the time the airport is fully operational in 2018. Further claims against LDI are expected from other entities affected by the delay.
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