Clients, consultants and contractors urged to join forces

14 May 2013

Alternative forms of procurement would promote teamwork between clients, consultants and contractors

Clients, consultants and contractors should work more closely to help improve the efficiency of the region’s construction industry, companies said at MEED’s Arabian World Construction Summit (AWCS) in Abu Dhabi on 14 May.

In a market where margins are slim and deadlines are tight, firms should work together as a team when delivering projects. “It tends to be adversarial when it should be a team,” says Steve Miller, senior vice-president, business development at Indian conglomerate Shapoorji Pallonji.

There is mistrust from all parties. “It is unfortunate, but there is mistrust. Clients think the contractors are making too much money,” says Philippe Dessoy, general manager, Middle East at UAE firm Six Construct.

Good relations with clients can help promote trust, but that is not always easy. “Maintaining relationships with clients is crucial,” said Dessoy. “People move regularly, so they are difficult to maintain.”

A transition workforce does create opportunities. “We have a client in Jeddah that we used to know working in the UAE,” said Miller.

Alternative procurement methods could also enhance trust and collaboration. “There is an increasing use of various forms of procurement. Ten years ago, you rarely saw a design and build contract, for example,” said Terry Bradbury, senior director of UK-headquartered Atkins. “We are seeing a move within client bodies to explore alternative forms of contract and that is very positive.”

Contractors expect more projects to be delivered using design and build contracts in the future.” In the next year, 40 per cent of our work [in the region] will be design and build,” said Miller. “Last year, it was about 5 per cent and most of that was in North Africa.”

With more than $70bn of projects planned ahead of football’s Fifa World Cup in 2022, contractors expect Qatar to be the market where alternative forms of procurement are most applicable to improve efficiencies and make project more attractive to construction companies. “Qatar has the potential,” said Dessoy. “The market could become flooded with contracts ahead of the World Cup, so it could possibly be used there.”

Clients still prefer to tender contracts on a fixed-price lump sum basis as contractors have been prepared to compete aggressively for work since 2009. As that appetite wanes and the volume of work available slowly increases that will change, but it will take time. “We can’t expect behaviour to change overnight,” says Bradbury. “We all have to be proactive.”

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