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Middle East faces heaviest construction and infrastructure delays


Construction and infrastructure projects are synonymous with the Middle East, but this recent HKA report suggests that, of all the major regions across the world, it runs the highest risk of overruns on costs and delivery.  The average claim per project stands at $154m – over one third of project expenditure.

However while it may be logical to draw some concern from the headline figures, there is plenty of reason for optimism under the surface.

There may be delays – mostly from changes in scope or design as projects evolve – but the commitment to major infrastructure projects and the number of project launches continues to grow. That fact alone is cause for optimism in respect to further economic growth in the region. That growth is driven in large part by Qatar’s leveraging of the World Cup and Saudi’s huge investment in smart city infrastructure such as Neom. Both aim to rival Dubai as the region’s hotspot for tourism and business in the coming years.

That is good long-term news for the construction firms themselves, but also management consultancy firms, the local real estate and recruitment markets and the myriad of connected sectors such as tech, financial services, telecoms and more.

The headline focus on the Middle East is also a tad misleading as similar issues exist across the world – both the developed and developing. The skills deficit caused by the Covid-19 pandemic has also put greater pressure on the Middle East than perhaps any other region given its traditional reliance on expatriate workers at all levels.  Deficient workmanship is apparently a greater cause for concern across Europe and the Americas. 

According to the HKA report, collaboration is growing in the region with regards to lessons being learnt and making improvements.  It can also be argued that the pandemic represents temporary issues, and so this snapshot of the global construction market is exactly that – a snapshot.  A moment in time. The broader long-term outlook is a positive one – particularly for the Middle East.

- by Tariq Siraj

Posted by: Beament Leslie Thomas