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GCC contractors come of age

Local contractors are now meeting the standards set by their international counterparts, says Rod Stewart, Hyder Consulting's regional director.

COMMENT, Human Resource

The last five years have seen a radical change in the level of activity within the regional contractor market, as the Middle East has moved forward with more and more projects on a global scale. Locally established contractors have been evolving very quickly to take their place in the international market. Projects that a few years ago would have only been bid by international contractors are now being won on equal terms by local companies who see their future on the international stage.

These local contractors have very quickly realised that if they wanted to share in their home market's rapid expansion then they have to move away from some of the traditional behaviours and paradigms of regional contracting, which had been acceptable, or "good enough" in the past.

There are several signs that demonstrate this "coming of age". One indicator of this willingness to change has been an increased interest in new forms of procurement, including partnering frameworks, where the traditional approach of the client and contractor being on opposing sides has been turned on its head. In a growing number of cases, both parties have agreed to work together in an open and mutually beneficial way to achieve the common goal of constructing a project on time and to budget. A further step down this road would be to incorporate design consultants in similar long-term frameworks. Design and build options are also being taken up with greater enthusiasm now, allowing local contractors the chance to influence the design process at an earlier stage.

Another significant improvement has been in regional health and safety awareness and procedures. The big local players in the region have started to promote safety to international standards now, with good results. Of course, we can never be complacent, but I am convinced that there is a higher calibre of health and safety management happening in the market than in previous years, despite the growing pressure on resources.

But the situation is not all healthy. With the continuing exponential growth in construction activity, there is a limit to what the best local contractors can absorb, and inevitably, less experienced organisations will start to pick up contracts that they are poorly equipped to handle. It is a matter of time, I suppose, until these less experienced contractors gain sufficient expertise to raise their game. Until then, however, we shall see a fair number of projects that do not achieve all their targets of quality, programme, budget or safety. One possible solution to this mismatch would be to introduce stronger prequalification criteria, with an increased emphasis by all clients on rigorous grading of contracting capability, accepting that this will have an effect of slowing down the rate of construction, and probably increasing prices. Quality and safety do not have to be compromised though.

Alternatively, more emphasis on introducing new technology, with smarter, less labour-intensive working practices (together with the need for skills transfer) should be considered in these times when skilled or semi-skilled labour is increasingly at a premium.

With this growth in the maturity of regional contracting standards, I start to question the value of traditional forms of quality control that have been the norm in this region for so long. The idea that a consultant is always needed to fully "supervise" construction is one which must have a limited value for the future.

In the developed markets of Europe and Australia, it is accepted that mature QA procedures are available and appropriate for good contractors (who are ISO 9002 qualified) to self-certify the quality of their own work. To my knowledge, the first local contractor achieved ISO 9002 certification back in 1996, and many others have since followed.

Either we start to trust and simply audit local contractors working methods, or we shall continue to extend our limited regional resources in wasteful "checking" of others work. This may raise a few eyebrows - a consultant proposing to reduce the volume of supervision services carried out, for example - but I genuinely believe that such supervision is seen as a necessary evil, rather than adding value, and is not making best use of the industry's limited engineering resources.

The next steps that we are starting to witness are the regional expansion of local contractors into the wider construction market place. In these times of globalisation, nothing stands still.

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