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The fu­ture of Mid­dle East con­struc­tion re­lies on clients and con­trac­tors work­ing to­gether to im­prove con­tract ten­der­ing and pric­ing prac­tices, as CSCEC ME’s YuTao ex­plains


Yu Tao, pres­i­dent and chief ex­ec­u­tive of­fi­cer of China State Con­struc­tion En­gi­neer­ing Cor­po­ra­tion Mid­dle East (CSCEC ME), re­fuses to slow down in Q4 2018, de­spite the growth his team has recorded this year. Tao, who was ranked in sec­ond place in the 2018 Con­struc­tion Week Power 100 list, led the Chi­nese con­tract­ing gi­ant to new con­tracts worth $1.6bn ( AED6bn) in the first half of 2018, achiev­ing much of the firm’s or­der book tar­get for the year.

With 2017 rev­enues of $750m (AED2.8bn), the com­pany has been en­gaged in projects such as the 150,000m ² Sil­i­con Park, a smart city project at Dubai Sil­i­con Oa­sis; the steel works at Abu Dhabi In­ter­na­tional Air­port’s Mid­field Ter­mi­nal Build­ing; the new head­quar­ters for the Na­tional Bank of Kuwait, lo­cated in Kuwait City’s cen­tral busi­ness district; and the UAE’s iconic Dubai Wa­ter Canal, which opened in 2016.

Tao tells Con­struc­tion Week that while his team is “a bit re­laxed” thanks to its bil­lion- dol­lar or­der book for the year, the Chi­nese gov­ern­ment- owned com­pany will con­tinue to be se­lec­tive about – and com­mit­ted to – the work it de­liv­ers, in 2018 and beyond. On the side- lines of the Lead­ers in Con­struc­tion Sum­mit UAE 2017, Tao told Con­struc­tion Week that the in­dus­try lacks “syn­ergy”, and that stake­hold­ers are so fo­cused on their own in­ter­ests that they end up dis­re­gard­ing what is best for the projects they are work­ing on. Al­most a year later, Tao says that the in­dus­try “is still very chal­leng­ing”, adding that his firm still faces “great dif­fi­culty on cer­tain projects”.

He con­tin­ues: “For some rea­son, the pay­ments are very slow. Of­ten, clients cre­ate vari­a­tions, and it takes a long time to con­clude and get paid for the vari­a­tion. In be­tween, we may al­ready have spent the money, so the whole sup­ply chain – in­clud­ing the main con­trac­tor, sub- con­trac­tors, and sup­pli­ers – will all suf­fer. I think we need a change, and we have to un­der­stand the project is not only the ‘ baby’ of the main con­trac­tor – it also be­longs to the client and the con­sul­tant.”

This year, the is­sue of vari­a­tions and pay­ment de­lays in the Mid­dle East has been a fo­cus for the en­tire con­struc­tion sec­tor. For in­stance, ALEC’s Kez Tay­lor – ranked num­ber one in the 2018 Con­struc­tion Week Power 100 – also voiced his con­cerns re­gard­ing these mar­ket chal­lenges, and ex­plained that greater col­lab­o­ra­tion is re­quired to re­solve the prob­lems.

With two of the Mid­dle East’s most in­flu­en­tial con­struc­tion lead­ers ex­press­ing their con­cern about pay­ment de­lays, what can be done to im­prove the sit­u­a­tion? Let en­gi­neers be en­gi­neers, Tao rec­om­mends.

“Some­times, I [feel] I am no longer a con­trac­tor, be­cause a lot of my time is spent re­solv­ing dis­putes and get­ting money back,” he ex­plains. “At the end of the day, I do not think the client will save money, con­trac­tors will main­tain qual­ity, or the project will be de­liv­ered on time – it is the com­pletely wrong ap­proach,” Tao says.

“[ Clients] get all the profit mar­gins they can out of you, give you all the risk, and still want you to per­form as a top- class con­trac­tor. How is that pos­si­ble?”


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