Transparency will drive the Middle East construction sector's success
Building ethical, profitable, and sustainable companies is a long process, and one with its share of challenges, but being open about how we do business will help the process along
Unless you have been extremely preoccupied over the past fortnight, you will have noticed that Facebook has been all over the news.
Late in March, the US’s Federal Trade Commission opened an investigation into the internet company over reports of what the Guardian reported as “data breaches” – an oversight that Mark Zuckerberg, Facebook’s chief executive officer, admitted in a newspaper ad was a “breach of trust”. According to a CNBC report on 10 April, Facebook share prices “have fallen about 11% over the last month” due to the controversy.
Facebook’s problems have little to do with the Middle East’s construction sector, but there are lessons that regional industry leaders must learn from the tech giant’s issues. As the Facebook case shows, transparency influences not only a company’s operations, but also its intangible assets – the most important of which, some may argue, is goodwill.
Fortunately, the region’s construction executives – and especially those in the UAE – appear to support the case for greater operational clarity. For instance, Emirates Transport (ET), the UAE’s government-owned public transport provider, revealed last week that it would digitise its procurement process. The three-year contract will see ET work with Tejari and Jaggaer to organise e-auction services, which are expected to boost transparency and competition among registered suppliers participating in ET’s tenders, WAM reported.
Technology is a time- and cost-effective way to ensure transparency, but it is not the only one, as experts have told us this year.
Abdulrahman A Khansaheb, the managing director of Khansaheb Industries, told MEP Middle East that the introduction of value-added tax (VAT) in the UAE would help to improve transparency across the country’s business sectors, adding: “Everything will be formalised and properly documented.”
Indeed, the transparency offered through routes such as technology and VAT can reap financial benefits for the industry at large. A procurement system such as ET’s could help tendering parties – developers, contractors, and consultants alike – gain a detailed understanding of how various market players price their products and services. In turn, this could lead to the creation of better costing models, and also help to create products and services that offer better value for money.
Meanwhile, as Rahul Duragkar, managing director of Emitech explained this January, VAT will help to raise market accountability, ensuring greater accuracy in the way that construction companies curate their financial documents. For growing firms such as Emitech, he added, this clarity could ease the process of receiving support from financial institutions.
There are many reasons that construction professionals should consider the adoption of initiatives that can boost organisational transparency, but it boils down to how committed a company is to long-term financial sustainability, and how highly it regards the goodwill of its clients. Building ethical, profitable, and sustainable companies is a long process, and one with its share of challenges, but being open about how we do business will help the process along.