18
ANALYSIS
Dispute resolution
Streamlining dispute resolution is the way forward
MIDDLE EAST
Juan Sáez and Richard Scott from Accuracy warn that construction companies need to avoid burdensome dispute process and apply pragmatism before its too late
I
f you are expecting an article that points at COVID-19 for the troubles in the Middle East construction market, this is not it. Even before COVID-19 emerged, contractors had little wiggle room to absorb even moderate levels of risk, with the region already a petri-dish for international companies engaged in a dangerous contest to deliver more projects at often razor-thin margins. But it is fair to say that COVID-19 could not have been less timely. The projects market in the largest countries in the region had already begun shifting away from the private sector to governmentbacked infrastructure schemes, driven by an oversupplied real estate market. Throw into the mix the mounting pressure on government spending
July-August 2020 | MEConstructionNews.com
Rising concerns The adversarial nature of construction contracts and the lack of cash flow could trigger a new wave of disputes within the regional industry.
50%
New project awards in the region are down by 50% y-o-y
this year thanks to lower oil prices and COVID-19, and there is no surprise that this explosive cocktail is at the top of the agenda for many decision-makers within governments, ministries and authorities. New project awards in the region are down by over 50% year-on-year. As lockdown measures relax in the Middle East and abroad, supply chain disruptions continue to materialise, placing contractors in a testing position. “The adversarial nature of many construction contracts and the current lack of cash flow is a perilous recipe that is triggering a new wave of disputes between owners, main contractors and subcontractors,” says Juan Sáez, director in Dubai with consulting firm Accuracy. Contractors are becoming impatient
