Building beyond ambition

Middle East Capital Projects & Infrastructure Survey

We asked 130 of our region’s most prominent project owners, developers, contractors advisors, and financiers to tell us their views on their industry. What’s their experience on the ground? How confident are they? Are they seeing more disputes? What are the delivery issues they face? Can they access funding?

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Key findings

Spending increasing

 

75 percent expect an increase in spending in the coming 12 months. This is largely driven by mega events, including Dubai Expo 2020 and Qatar World Cup 2022, as well as increased spending on social infrastructure including housing, education and healthcare.

 

Fewer cancellations

 

There has been a significant reduction in the number of projects being scaled back or cancelled due to funding constraints, down 14% from our last survey 18 months ago, with respondents expecting this trend to continue into the next year.

 

Investment focus

 

UAE, Qatar and Saudi Arabia are the top three countries for infrastructure investment.

 

Client decision making

 

Is cited as the most significant concern, with 55 percent of respondents saying it is the biggest challenge they face in relation to projects.

 

Funding gap

 

Private finance is expected to play a greater role in funding projects, with 83 percent of respondents stressing the importance of the private sector in financing projects. 41 percent think that PPPs increase the likelihood of delivering capital projects on time, however, nearly 25 percent also complained that PPPs complicate the delivery of capital projects.

 

People – not enough to go round

 

Skills shortage and increased competition is creating a big problem. In short, it’s becoming more and more difficult to attract and retain enough of the right people with the skills and experience at all levels required to deliver large, complex projects.

 

 

The result

More delivery delay 95 percent of respondents say their projects are delayed, with a staggering 45 percent delayed by more than 6 months. Likewise, 71 percent tell us that their projects are over budget.

More financial constraints and disputes Whilst fewer projects are being scaled back or cancelled due to funding issues, the number of projects being postponed is on the rise – 45 percent of respondents said projects had been deferred or delayed, up 30 percent from our last survey. 37 percent cited contractual disputes as key external challenge to project delivery, second only to client decision making.