Commercial and Contracts Director
Hamad International Airport
“Why are projects in the MENA region more likely to be late and over budget?”
Everyone loves statistics and I am no killjoy to that perfectional desire. For me, a project should only incur a cost overrun in the region of 3-5% over the contract price. However, in the MENA region I have regularly seen cost overruns of 5-35% and time overruns can account for between 30-60% of the contract period.
These results can hamper project delivery, often rooted in incomplete design plans and potentially unrealistic timelines for both the design and construction phases. But with the right steps, such outcomes can be mitigated. As per the guidelines outlined in the RIBA Plan of Work 2020, here are some suggestions:
The appointed design team, comprising Project Managers, Architects, Engineers (including SAS, MEP, and Structures), and Cost Consultants, should initially focus on comprehending the client's strategic requirements. This involves understanding the business case, project budget, risks, and, most significantly, client feedback. The detail of this approach is much better guided by the Plan of Work itself, however in my experience, it is one of life’s key lessons that client feedback is often minimized, under-utilized, or weakly sought, so as to be untapped. This may be because it is not taken to the strategic height of the client organization or simply missed, however, if the project is to be a success, it is a crucial first step in the successful delivery of the project (read client) in achieving all its constituent elements of time, cost and specification. This same level of proactive and tested diligence must continue through the concept and technical design stages.
In stark contrast, design teams in the UK, America, and Europe bear a contractual obligation to deliver a design solution that addresses all risk elements. Typically, this results in comprehensive tender/contract documents that minimize cost and time overruns. Errors are known to be actionable through claims against PI insurance. Such non-MENA design teams work as independent consultants to clients, and their design output is also tested through the production of a detailed Bill of Quantities (by detailed I mean fully measured against a full design to allow fully costed post-contract change control).
Yet I do not consistently see this in the MENA region. It is my belief that MENA clients, receive designs that are to any extent incomplete, and must therefore protect themselves or pass the liability of such pre-contract design lackings via a construction contract which is supposed to transfer all design risk to a contractor, however, only builds in an inherent post contract cost and time weakness. This approach, allows a design to be launched relatively untested after the pre-contract stage, only to be delivered, into a post-contract stage, where those selfsame pre-contract weaknesses of incomplete and uncoordinated design, flawed specifications, and inadequate Bills of Quantities containing many lump sums, are surfaced by contractors, and are ultimately paid for by clients in the form of costly variations and time overruns.
To combat these challenges, a tried-and-tested solution is to engage an independent, proactive cost consultant. This consultant would measure and assemble a detailed Bill of Quantities, prompt design teams to address design gaps and formulate a robust cost control document suitable for tendering and post-contract cost control. Ultimately, this helps ensure design completeness prior to the post-contract phase, preventing costly and time-consuming corrections later on. This integrated approach also holds the design teams accountable, ultimately saving the client from potential cost and time overruns.
We are proud to announce that Mr. Elie Nehme from DGJ - Lebanon Office has won a Bronze Medal in the 6th Asian Poomsae Taekwondo Championships for under the category 40-years old, which took place in Lebanon between 14 and 19 June, 2021.