I am pleased to report the results of PwC Middle East’s 2018 Capital Projects and Infrastructure Survey - ‘An industry under pressure to reform’.
Since we conducted our last survey in 2016, we have seen oil prices recover slightly, opening at the start of 2018 at its highest level since 2014. Despite this, governments and industry continue to face challenges and pressure to perform and deliver “more for less”. Without continuous change and improvement to the way projects are procured, financed and delivered it will be increasingly difficult for clients and the supply chain to extract value from these contracts in a sustainable manner.
Stress on contract prices, working capital and cashflow have hurt many regional and international players who operate in the Middle East, and in some cases the consequences have been very serious. What this tells us is that the industry needs to evolve. This can be done through the entry of new competitors, new technologies or changes to regulation to facilitate the delivery of capex programmes. The capital projects and infrastructure market has often been singled out as being ripe for “disruption” due to its resource and capital intensive nature.
The industry is taking steps in the right direction with increased focus on collaboration and innovation. We have seen this in Dubai where BIM (a building information modelling software) is mandated on government projects, providing a platform for collaboration and efficient working from the inception of a project through to operation and maintenance.