A ‘Construction Contracts Act’ to codify payment and adjudication processes was the primary notion to come from a recent white paper published UAE Construction Think Tank.
The document comprises 15 recommendations to improve the construction industry, citing a need for vetting of contractors before they begin the tender process, the issuing of permanent or semi-permanent visas to engineers based on experience, and the establishment of a ‘development board’ to help co-ordinate the industry’s work with authorities.
While the value of construction disputes in the Middle East has plummeted, the average time it takes to reach a resolution has also shifted, with the typical claimant waiting over a year-and-a-half for a payout.
The ninth edition of Arcadis’ Global Construction Disputes Report showed a significant reduction in outstanding payments from $91million to $56.7m between 2017 and 2018.
The global average fell from $43.4m to $33m in the same period.
But claimants are being made to wait longer than at any point since 2010, with the average wait time for a resolution now clocking the 20 month mark.
“One of the biggest problems that this industry has is a one-side contract,” Mohammad Khader Al Shouli, managing director and head of contracting finance at Mashreq Bank was quoted as saying by The National.
“The risks are always passed on to the contractor and that executing supply chain.”
“It doesn’t become a collaborative process. It is a master-servant or slave type of relationship. In good times, when there is abundance of money or work, people are happy with it.
“But all of the problems in that type of relationship appear where there is distrust.
“The owners have absolutely power that is unjustified sometimes.”