Keppel subsidiary starts arbitration for $172.6m claim over Qatar project

This is in connection with the Doha North Sewage Treatment Works project.

Keppel Corporation Limited's wholly-owned subsidiary Keppel Seghers Engineering Singapore Pte Ltd (KSES) on Tuesday filed a request for arbitration with the International Chamber of Commerce in Paris against the Qatar Public Works Authority (PWA).

In a statement, Keppel said this is in connection with the contract dated 9 December 2007 where KSES was appointed by the PWA for the design, buil, operation, and maintenance of the Doha North Sewage Treatment Works project.

The claim amount was estimated at around $172.6m with interest but does not include yet the claim of KSES for prolongation costs and other delay-related costs under the contract which have yet to be determined.

KSES, a wholly-owned subsidiary of Keppel Infrastructure Holdings Pte Ltd, expect the proceeding to take at least three years to complete, adding that it intends to continue to engage with the PWA in amicable settlement discussions to resolve the claim after the arbitration filing. 

The project, which included sewerage treatment, water reuse and sludge treatment facilities was handed over in phases to the PWA from 2015 through 2017. 

This was in the operation and maintenance phase when the PWA terminated the contract in July 2020 after implementing a new framework contract for the operation and maintenance of the sewer network and associated assets in Qatar, Keppel said.

Keppel Infrastructure does not expect the arbitration to have a material impact on its operations and financial performance in the current financial year. Keppel Corporation, likewise, does expect the filing to have a material impact on the earnings per share and net tangible asset per share for the current financial year.