DUBAI: Total value of contracts placed in the Gulf Cooperation Council (GCC) will rise to $172 billion in 2015, which is higher than in 2014 and a new record for the region, according to the forecast of Ed James, MEED projects content and analysis director.
Projects industry experts have told MEED GCC projects that market will continue to grow in 2015 despite low oil prices and evidence that government clients are deferring investment plans. This is good news for the market which feared major reductions in government spending on projects in 2015. The forecast means that demand for material and skills will continue to grow. This will test the capacity of the supply chain to meet the needs of the construction industry.
“The scale and quality of the GCC construction boom is reflected in the growing number of top-quality infrastructure, building and industrial projects being completed across the region,” says Edmund O’Sullivan, MEED Quality Awards for Projects judges panel chairman.
“It is also measured by the very impressive finished projects nominated for the fifth annual MEED Quality Awards for Projects which will be announced and presented in Dubai on 27 May.”
“This shows that the GCC construction industry and its clients have the capacity to tackle challenges that would be insurmountable in most other parts of the world,” O’Sullivan adds. “It is now facing testing times but I am confident from what I am seeing that all sides of the market recognise more comprehensively than ever before that the right answer is greater collaboration across the supply chain and between clients and suppliers,” he added.
Saudi Arabia is the region’s biggest project market. Construction leaders say the kingdom’s building boom will compound longstanding challenges the industry faces.
“There are a number of issues facing the construction industry in Saudi Arabia,” says Faisal Alsharif, assistant secretary general for projects at the Riyadh Chamber of Commerce and Industry.
“Rapid changes in regulations and policies are a major challenge facing investors and contractors involved in these projects. Finance is a major issue as well, with payments delays making cash-flow planning and management a real challenge.” “Human resource shortages are another big issue and not only in projects,” he added. “But it is clearer in projects. The lack of adequate and qualified labour and technicians can result in project failure in the form of cost and time overruns.”
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