This article is extracted from the report 'Removing Waste from UAE Construction'

With project growth slowing in the UAE, the schemes that ultimately progress past the design stage will have to be executed in a way that drives cost efficiency for owners. For some project teams, however, this is easier said than done. 

UK consultancy Capital Economics has cut its GDP growth expectations for the Middle East and North Africa region by 0.5-2 per cent. The largest drop is the UAE’s 2 per cent decline, and Capital Economics says the country’s economy would “do no more than stagnate this year”.

As the cash crunch intensifies, it is likely fewer projects will come online in the UAE over the next 12 months. Regional projects tracker MEED Projects shows the country has 1,483 projects worth a total of $474.4bn in the execution phase, with 305 developments totalling $90.1bn under design or study. 

Some market experts believe owners must start projects with more clarity than is currently the case with local construction schemes. 

The trend of starting construction before design works have been fully completed is viewed as a major hindrance to effective collaboration. 

Project owners will argue design updates during construction are not only a non-issue, but also necessary to ensure their development is optimised based on changing site conditions. However, design revisions mean the project team has fewer chances and less time to find collaboration opportunities that can drive efficiency gains. 

It is also important to have a top-down approach to minimising waste through collaboration, not just internally but across the industry. Influential contractors and developers can play a pivotal role here. 

Paperless strategy

UAE-based contractor Alec’s work on the Dubai Hills mall project involved driving a paperless strategy for the development team. 

CEO Kez Taylor told local media in June 2018 that Alec implemented a plan to cut down paper wastage during the mall’s construction. He explained how a platform was formed to facilitate documentation and communication within the project team, and all project stakeholders were encouraged to buy into the plan. 

Similarly, Alec also advised on the solar panels that were installed to power the mall. 

Alec’s inputs helped cut down material wastage on the project. It also capitalised on an opportunity that led to savings for the team. 

It is also important to have a top-down approach to minimising waste through collaboration, not just internally but across the industry.

Such a change requires that contractors have the pull to influence client decisions and enough time to execute efficiency measures. Most builders instead find themselves weighed down by the risk of late payments, contractual disputes and clients wary of experimentation. 

The situation is only made more challenging by the problems related to hiring in the local industry. 

Mismanaged appointments are also perceived by some industry professionals as being a roadblock to collaboration. A Dubai-based contractor says some clients have, in the past few years, filled procurement department roles with under-skilled professionals who tend to prioritise cost savings over greater returns. 

For example, the contractor explained, some procurement professionals prefer to award packages to contractors that quote the lowest price, even if their technical bid and track record were of poor quality. 

This practice is largely driven by employer pressure to show savings, regardless of whether it would benefit the project in the long term. 

As the job market becomes more challenging due to slow project activity, procurement executives choose to appease their employer with pre-construction savings instead of picking qualified contractors that may quote a higher bid but offer better quality products and services. 

In such conditions, it is extremely unrealistic for construction contractors to offer suggestions that can cut waste through material specifications, work schedules or engineering plans.

Crucial skills

Equally problematic, as one international consultant explained, is the practice of maintaining an in-house project management office (PMO) instead of outsourcing the role. A senior consultant based in Dubai says employers often build their PMOs up with engineers that do not have the requisite qualification to efficiently deliver projects. 

As the job market becomes more challenging due to slow project activity, procurement executives choose to appease their employer with pre-construction savings instead of picking qualified contractors that may quote a higher bid but offer better quality products and services. 

This results in some specialised project management functions, such as goal-setting, being inadequately delivered. Meanwhile, other tasks that should be shouldered by PMOs, such as project training, tend to get ignored almost entirely. 

The senior consultant says hiring the right PMO is essential to reduce time wastage, which remains a critical challenge on most megaprojects in the GCC and also causes significant budgetary overruns. 

A project schedule established and managed by a specialised PMO may be more exacting for the employer and contractor in some ways, but is also likely to be more realistic and deliver better results than a timeline set by engineers that have been moved into project management roles, the consultant argues. 

There is no dearth of collaboration software or strategies in the UAE’s construction industry. Top-tier clients, consultants and contractors agree working together can help deliver more efficient projects. 

It is now a question of finding the most financially viable way of doing so.

This report is produced under the MEED Mashreq Construction Partnership.To learn more about the report or the partnership, log on to: www.meedmashreqindustryinsight.com