A boom in the spending on massive infrastructure projects across the Middle East is likely to continue but those running the programmes will face big demands, says a new report.
The report, GCC Powers of Construction by accountancy firm Deloitte, focuses on how the mega projects can overcome the challenges facing them and be delivered on time and budget.
The report highlights that the Gulf Cooperation Council region is lacking in infrastructure and the massive projects funded by oil income will continue but with many countries facing a range of different problems the people running the schemes – who are often expats – will face fresh challenges.
The countries involved are looking to maintain their spending by essentially getting more for less, says Deloitte.
Those signing the cheques are also looking for greater transparency on how the money is spent and for contractors to improve their performance by looking at how they can boost performance and improve costs.
Infrastructure investment
Andrew Jeffrey, a director with Deloitte’s corporate finance section, says: “Contractors can leverage better internal controls to deliver more for less while retaining or even improving profitability.
“Contractors should be looking at ways to make savings, reduce risks and improve opportunities for themselves by engaging more intelligently with their clients.”
On the whole, says the report, many in the construction industry in the GCC region are optimistic for investment in 2013.
Indeed, investment in infrastructure and capital projects is growing rapidly with many countries spending huge amounts without necessarily looking for ‘pay back’.
However, it is becoming increasingly apparent that many of the countries are coming under pressure to save costs and boost revenue while pushing for a demanding infrastructure agenda.
Significant investment
Contractors play a key role in running these projects, says the report.
Deloitte’s Cynthia Corby, an audit partner, says: “Over the coming years across the GCC region there will be significant investment for major infrastructure programmes which will lead to contractors, clients and consultants alike having to rethink how they engage with each other if they are going to realise the benefits that each brings to the process.”
The report also flags up some of the projects being undertaken in the region and points to the biggest construction sector as the United Arab Emirates, which was worth around £10.5 billion last year – 4% more than the contracts awarded in Saudi Arabia.
However, the biggest single deal was awarded in Saudi to expand the Masjid al-Haram mosque in Medina and that was worth nearly £1 billion.
