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| Middle East construction boom risks to peak between 2014-19 The Middle East is set to experience unparalleled construction activity over the next two decades but must be prepared for the complex infrastructure challenges that come with major programme delivery, says ARCADIS in its latest study: 'Middle East major construction programmes – mitigating the risk'. The new report by the global built asset consultancy found that across the Gulf Cooperation Council region (GCC), in excess of 117 major programmes – defined as programmes totalling more than USD$1 billion and delivered in a relatively short period of time – are planned for completion by 2030 costing more than $1 trillion. However, the completion of these ambitious development plans come with a number of risks that could result in programme failure for some. A number of solutions to help mitigate such risks are outlined in the ARCADIS report which focuses on planned major programmes across six Middle East countries forecasted for construction between 2014 to 2019. The countries covered are UAE, Qatar, Kingdom of Saudi Arabia, Oman, Kuwait and Iraq. Alistair Kirk, Head of Infrastructure, Industry and Utilities, Middle East at ARCADIS, commented: "The Middle East is experiencing unparalleled economic and social development due to the large volume of mega projects planned and underway. These programmes, particularly the more ambitious mega cities, are at the forefront of these enormous infrastructure developments which will bring diversification, foreign and domestic investment and job creation on an unparalleled scale. However, with demand currently outstripping supply for human capital and material resources, there is risk of inflationary rises to secure resources in a very competitive and intense market. But with joined-up, collective thinking, governments, developers and contractors can ensure all major programmes in the region can be delivered on time, on budget and to the required quality." The big squeeze on resources With in-excess of $640 billion to be spent in the next six years on major programmes, not including other infrastructure and project commitments in the region (those under $1 billion in value), there is risk and pressure on human resource requirements including: demand for labour and labour challenges; capability; capacity and supply chain challenges; materials; and contracts and procurement. Each country has its own resource challenges but throughout the GCC region contractors and the supply chain will need to source and process visa arrangements to accommodate 1.2 million construction workers during the peak development period of 2014 to 2019 alone. Some local contractors are not experienced at delivering the scale of the projects proposed and so combining the skills of local and international companies will be key to addressing such potential barriers. Another consideration outlined in the ARCADIS report is to develop training and skills academies to support the growth in labour and attract the best expats and migrant labour. Up-skilling workers will impact salary and benefits but will attract the best talent for a more sustainable workforce who can deliver quality programmes. Fundamentally, by taking action now through a co-ordinated national approach to employment policies and bureaucracy, major developments will be more successful in remaining competitive while keeping to strict delivery schedules. Addressing the logistics and materials challenge From 2014, there will be an exponential growth in demand for plant, materials and equipment hire during the GCC development peak, estimated at nearly a trillion dollars. This will result in mass importation of key construction materials which may lead to heavily loaded distribution routes and bottlenecks in the supply chain. The report highlights that by prioritising transport programmes and coordinating the network to meet the logistical challenges of importation, countries will achieve the required balance between construction vehicles, general traffic and a steady port capacity for a successful supply chain. Supporting infrastructure to deliver success Playing host to global events such as the FIFA World Cup 2022 in Qatar, will see the GCC region committing almost two thirds of construction spend between 2013 and 2016 - with a peak of $144 billion in construction in 2016. In order to accommodate such mass development, a supporting infrastructure must be in place prior to commencement. From housing, to accommodate the influx of labour, physical infrastructure such as roads, airport and rail links, to employee facilities including housing, school and health facilities – a solid supporting infrastructure is vital to the success of any major development. The ARCADIS report highlights that countries that are proactive in the provision of enabling infrastructure that will stretch over a long period are at much less risk of programme slippage than countries with little supporting infrastructure. Robust management approach to plan and control the work Alistair Kirk continued: "Setting up a Portfolio Management Office, or PMO, can have a positive impact through enabling the team to address the initial strategic, technical and delivery priorities faced when delivering a major programme. Adopting this portfolio management approach through a PMO helps to ensure improved efficiency, certainty, speed and control of the overall support required by a Client." write your comments about the article :: © 2013 Construction News :: home page |