Besix general manager Philippe Dessoy confirmed that the contractor is currently involved in the reworking of a contract to cover infrastructural work at Jumeirah Golf Estates.
“The existing contract for work was terminated and there is a new discussion going on,” he said. Dessoy confirmed the renegotiations did include the downsizing of contracts, and added that renegotiations may take “a few more months” to conclude.
Gulf Technical Construction Company executive director Saleh Muradweij said that in the case of the renegotiation of money owed, some contractors may not be able to accept a reduction.
“If they have liabilities and commitments to suppliers down the chain then they cannot afford to agree,” he said.
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“In some cases it may pay to accept the terms if the contractor has got a buffer in their contract, but I can’t assume they do because nobody works for a 30% profit.”
To avoid such a situation in future, Seward-Case said lower barriers to entry to allow for greater competition among consultants and contractors would be among the most effective.
He also called for all facets of the supply chain to adopt a more responsible approach to pricing in the future to avoid levels of inflation seen in construction costs last year.
“The supply chain should use a “bottom-up pricing approach” where the cost of the service is supplemented by a reasonable level of economic profit,” he said.
The Rics is a globally recognised organisation for professionals in the construction, real estate, land and environmental asset sectors.
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Market prices have not fallen 30% at all so where does the 30% reduction come from? Oh yes the developers started that r