GCC construction sector must adapt to deliver large projects: Deloitte

Changing the contracting environment in the GCC to have a more balanced approach to risks and rewards will not only make pricing more sensible, it will also enable more efficient and effective delivery of large capital projects for owners.

The report titled, '2018 edition of the annual GCC Powers of Construction' by Deloitte, noted that this shift will not be easy, and requires the commitment of everybody in the industry, but it has the potential to be hugely beneficial and rewarding for all involved.

“As developers look for ways to build assets at a cost that’s recoverable through acceptable returns on investment (ROI), there has to be more focus on the whole‑life cost rather than just the initial capital cost. This paradigm shift will drive the change required in terms and conditions and a collaborative approach between stakeholders,” Cynthia Corby, Audit Partner and Construction Leader, Deloitte Middle East, said.

The report also stated that delivering the GCC states’ ambitious national visions demands a more sophisticated contracting environment.

“Market participants are eager to see positive change in the industry – not least through

more‑balanced contractual relationships; greater stakeholder collaboration focused on delivery; a sensible approach to risk allocation; quicker ways to resolve disputes; innovative delivery models; and the adoption of global standards that will prove attractive to international project financiers and investors,” it added.