The urgent need to install the infrastructure required to support the region’s economic development means government-backed power, water, transport and energy projects will become the principal drivers of the region’s project sector in 2008.
But to deliver these projects, governments must reform the way schemes are implemented. The region’s chronic lack of capacity means major projects are being delayed because equipment, materials and manpower cannot be obtained within the timescales fixed by clients.
Clients must be more realistic about deadlines. Simply throwing money at projects to ensure delivery meets completion dates fuels inflation by further pushing up supply costs, while forcing unrealistic project schedules risks alienating suppliers who can choose which projects to take on.
Investment in infrastructure is essential, but so is ensuring that the timescales are realistic enough to ensure contractors do not drop out before signing on the dotted line.
Muscat’s decision this week to extend the tender period on government schemes is a sensible move that should be replicated by other governments.
Moving into 2008, the demand for infrastructure and investment in projects is not slowing, but the timescale for their delivery should.