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PwC: Fewer Middle East infra projects delayed in 2018

Instances of projects being delayed for one to six months have dropped by 9% over the past year, with delays shorter than one month reducing by 12% between 2012 and 2018

Delays spanning less than a month have recorded a 12% drop between 2012 and 2018 in the Middle East.
Delays spanning less than a month have recorded a 12% drop between 2012 and 2018 in the Middle East.

Infrastructure project delays are reducing in the Middle East, a new survey has found. 

The incidence of schemes being delayed for one to six months reduced by 9% over the past year, while cases of project delays spanning longer than six months have reduced by 13%. 

Delays spanning less than a month have recorded a 12% drop between 2012 and 2018. 

In the contemporary construction environment, delays and cost overruns face "a constant challenge" in scope changes. 

READ: Middle East infra contractors face payment delays in 2018

PwC Middle East's Capital Projects and Infrastructure Survey revealed that the situation appears to be improving. 

Out of a base of 91 respondents, only 46% stated poorly defined scope or inadequate design as a cause of cost hikes, compared to 60% in 2016. 

However, from a base of 88 respondents, 30% said their projects exceeded the budget by 10-50%.

In 2014, 25% of respondents said their projects were over budget by 10-50%, while 6% claimed their projects were more than 50% over their budget. 

PwC Middle East said "the persistent problem of scope" underscores the need to improve "the skills of those commissioning major capital projects". 

Its report added: "Poor and inconsistent procurement practices at national and municipal levels also contribute to cost overruns and contract variations." 

Additionally, PwC Middle East recommended that public-private partnership (PPP), or a similar model, is used for tendering in terms of both capital and operating expenditure.

"PPP-style competitive tendering, underpinned with long term fixed pricing, needs to become more prevalent before governments start to control spiraling costs and manage delivery risk." 

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Construction Week - Issue 745
Jun 30, 2019