The total value of disputes relating to major construction projects in Middle East increased significantly to $76.7 million in 2014 compared to the previous year, Arcadis, the global natural and built asset design and consultancy firm.
This represents the highest value increase in Middle East disputes since 2011, dipping by 31.8 per cent from $112.5 million in 2011 to $76.7 million in 2014.
The region saw a number of high value claims being initiated for projects undertaken in 2008 and 2009 due to money made available to pursue those claims, stated the expert in its report “Global Construction Disputes: The Higher the Stakes, the Bigger the Risk.”
This is Arcadis’ fifth annual study into the duration, value, common causes and methods of resolution of construction disputes across the globe.
The report found that construction dispute values were the highest in Asia at $85.6 million where values more than doubled, closely followed by the Middle East at $76.7 million. However, in the North America and the UK, dispute values dipped to $29.6 million and $27 million respectively, the report added.
The research found that the most common causes of construction disputes in the Middle East related to the administration of contracts. The top three causes in 2014 were failure to properly administer the contract; poorly drafted or incomplete and unsubstantiated claims and a biased PM or engineer.
The transportation sector witnessed the largest number of disputes in 2014, followed by social infrastructure and real estate.
