The GCC’s trillion-dollar construction sector is rich with growth opportunities, but its megaprojects need improved contract procurement strategies to succeed
The G CC construction industry’ s definition of‘ procurement’ is in need of a thorough revamp, Construction Week’s interactions with top companies and chief executive officers have indicated in 2018. This exercise, challenging though it may seem, could result in greater productivity and cost savings, both of which are highly sought-after by regional construction leaders. More importantly, re defining the meaning of procurement could also help the Gulf’ s vital contracting sector avoid payment delays and construction disputes.
ALEC’s Kez Taylor, China State Construction Engineering Corporation Middle East’ s Yu Tao, and Laing O’ Rourke Middle East’ s Mark Andrews are some of the many contractors, consultants, and analysts that have outlined the importance of contract formulation in discussions with
Construction Week during the course of this year (page29).
These are prominent industry veterans calling for an essential industry-wide change, but they are not the only supporters of this positive disruption. Lawyers and legal experts, in their interaction sat the Construction Week: Dispute Resolution Question Time seminars in Dubai( March 2018) and A bu D ha bi( October 2018) have also highlighted the need for better-drafted contracts to boost efficiencies( page 92).
Market experts that Construction Week has interacted within 2018 agree that the on us to improve contracts lies with clients. Their suggestions for developers include revisiting the language of a typical construction contract, ensuring that it is fair to the contractor, and unifying the document’ s guidelines–regardless of whether it isled by the region ally popular Fidic, or equally ubiquitous global formats such as Rib a, New Engineering Contract, and Joint Contracts Tribunal.
At the heart of these ideas is the understanding that employer tendering processes must improve. Tenders must be realistic in terms of their costs and time lines, and developers must foster a bidding environment that curbs under cutting and price wars, contracting and legal professionals have told Construction Week.
The regional construction sector is already familiar with e-procurement processes and their benefits, such as greater transparency and business clarity. Digit is at ion is rapidly making strides in the local construction sector, and some real estate giants in the Gulf, such as Sharjah’ s Shurooq, are us inge-tendering platforms to stream line their procurement operations.
The creation of an ideal procurement environment will require a shift in mind set from all industry professionals, and may take sometime to be achieved. However, the Gulf’ s clients, contractors, and consultants have a healthy track record of innovating and adapting to change, so the wait may well be a short one.
“Tenders must be realistic in terms of their costs and timelines, and developers must foster a bidding environment that curbs undercutting and price wars.”