Dubai
The Middle East construction sector seems to be doing better in settling disputes than at any time in the recent past. If so, it will be a welcome respite from contractors and project owners getting bogged down by distractions.
The average value of disputes in the region’s construction sector was estimated at $56 million as of end 2016, according to a report by Arcadis, the consultancy. That is against the $82 million in 2015 and $76.7 million in 2014. (In comparison, the global average for the construction sector has been around $46 million.)
But over the last year, the average length of time needed to resolve a dispute in the Middle East dropped to 13.7 months, 10 per cent quicker than in the two previous years, and less than the global average.
But, ongoing liquidity issues in the market has seen an “increase in the number of claims submitted”, according to Arcadis. And “basic contract issues remain the root cause of many of the disputes that materialise across the region”, it added.
According to Rob Nelson-Williams, Regional Head of Contract Solutions at Arcadis M.E., “this trend towards swifter resolution … helps to improve liquidity across the wider supply chain. In a tight market, we’re seeing an increase in the number of claims submitted as contractors take a tougher approach to entitlements to help protect their cash flow position.”
