Project quality key to driving growth and attracting investment
Experts looking for added value in project execution and delivery
Dubai, United Arab Emirates; 18 February 2018 – Projects being built today drive growth and attract investment, say organisers of the MEED Projects Awards, in association with Mashreq.
“In the short term, the projects being built today drive growth and attract visitors and investment. The sight of world-class projects being successfully delivered sends out the best possible message that this region is progressive and stable,” said Mohammad Khader al-Shouli, Senior Vice President, Mashreq Bank, headline sponsor of the programme.
Even more importantly, according to al-Shouli, is the long-term impact that many construction schemes should consider. “The projects that are being built today are laying the foundations for the future. They put in place the essential building blocks for industrial and business development. They enable happier, better functioning cities and societies. And they make the region more competitive. They also enable the region to train and develop its young people as architects, engineers, technologists and project managers,” he added.
This year, the MEED Projects Awards, in association with Mashreq, will again recognise completed schemes from around the GCC. More than 1800 projects, with a combined valued of over $130bn, according to MEED Projects, have been completed in the last year throughout the GCC.
The daunting task of evaluating the projects in consideration for the awards falls on an esteemed group of experts which comprise this year’s jury panel for the awards programme, including Abdul Rahim Sabouni, Regional Representative, The Chartered Institute of Building; Engineer Rayed Al Arashi, Council Board Member, Society of Engineers – UAE; Suzannah Newboult, Partner, DLA Piper; Faisal Alsharif, ASG, Riyadh Chamber of Commerce & Industry; Mark Jamieson, UAE Representative, Institution of Civil Engineers; Robert Jackson, Director for Middle East and Africa, Royal Institute of Chartered Surveyors (RICS); Sulaiman al-Hudhaili, Oman Representative, Society of Engineers; Engineer Masoud Al Hermi, President, Bahrain Society of Engineers; Engineer Saad Saud Muhailbi, Chairman, Kuwait Society of Engineers; and Terry Willis, Director, Middle East, Africa & CIS,
Energy Industries Council UK (Middle East Branch).
This year’s jury panel will be looking at a variety of quality considerations in evaluating submitted projects.
Jackson emphasises the need for projects owners and developers to have a strong HSE commitment and noted performance statistics provided “which then need to be coupled with clear and quantifiable outcomes from the completed project.”
Echoing the sentiments of his colleagues, Mark Jamieson is looking at the added value projects bring to the table. “I like to see that the project is not only well designed, procured and executed but that it adds value to the built environment through its construction – be it road schemes providing better or quicker access for users or a new building that delivers efficiencies or reduces carbon footprint.”
Innovation is also a major consideration that the jury panel will be looking at. DLA Piper partner Suzannah Newboult says “Demonstrating innovation in the way the project is carried out and completed is more compelling than relying on ‘world first’ buildings, structures or process plants as evidence of innovation;” while also underscoring the need for showing evidence of client satisfaction as a good measure of quality.
The projects being undertaken in the region are so ambitious and technically complex that coordinating the teams and resources need to deliver the project are hugely complex challenges. These challenges include coordinating logistics and teams, usually international in nature, solving cutting-edge technical engineering challenges, and, usually, trying to hit very tight project delivery deadlines. In addition to this, there are often changes introduced by the client or by unexpected problems, while the projects are underway. These require flexibility and ingenuity.
Lower oil prices will continue to pose a strong challenge for project owners and developers. However, this was not the case everywhere. “Despite having very few oil or gas resources of its own, Dubai actually saw an increase in the value of contracts awarded in 2017. At more than $29bn worth of deals let, the emirate recorded as many contracts awarded as the next four largest cities and regions in the GCC combined. Its success has been driven by a swathe of new project launches, a vibrant private sector, and strong demand for off-plan real estate,” said Ed James, Director of Content & Analysis, MEED Projects, the MENA region’s leading projects tracking service.
The latest data from MEED Projects show that Dubai’s positive performance helped boost the UAE’s overall performance. The nation recorded a marginal increase in annual project awards of $43bn compared with $42bn in 2016. The federation was not the only country to have witnessed projects market growth last year. Oman also grew, posting total annual contract awards of $11.6bn compared with $8.8bn the preceding year. The performance of Oman and Dubai was even more impressive given that every other GCC market fell year-on-year.
According to James, while there is room for cautious optimism in 2018 as oil rises above $70 a barrel, there is still a degree of uncertainty around the impact of VAT on the projects market. “For many project companies already working on razor-thin margins, VAT raises an added complication especially given the multitude of different building materials and products procured on any given scheme. It is still too early to tell, but if suppliers do not absorb the 5% increase, firms could find that the tax results in inflationary pressures, which in turn would eat into their margins and cashflow. This will especially be the case for any contracts signed pre-VAT implementation if the tax is not specifically accounted for in the contract terms,” James ended.
The MEED Projects Awards, in association with Mashreq, is now accepting entries for this year’s edition of the programme which will culminate in a ceremony honouring the GCC’s highest quality projects on 2nd May 2018 in Dubai. The only regional awards programme recognising completed projects for quality from design through to construction is also being supported by Al Shafar General Contracting.