Leaders In Construction

A couple of days ago I attended the 10th Annual Leaders in Construction Summit held at the Le Meridien Hotel in Dubai, hosted by Construction Week. The event raised several interesting discussion points for the Gulf region’s construction businesses.

One thing I couldn’t ignore from panel discussions and chats with other attendees at the summit was that it seems the current international construction market is saturated with negative opinion and very little optimism. Of course, I wasn’t at all surprised, especially in our region which is one long roller coaster ride and facing huge challenges.

But is it all doom and gloom? I believe now is the time to start thinking more positively about our industry because there are still exciting times ahead.

During the event, it was said by a very well-respected fellow industry colleague that: “Any company surviving in this market that is continuing to win work and deliver projects with limited cash issues, must be doing something right. Therefore, they should continue to do so and build on this.’’

I certainly am very proud of the McLaren Team performance, progression and reputation here in the UAE as we celebrate 10 years in the region this year and we must continue to build on our success.

There were common and consistent themes of slow market movement in the Gulf region i.e. the lack of decision making on projects and of course payment delays and non-payment issues. However, it was truly welcome when discussions were held on the positive news that the Abu Dhabi Government is fully supporting contractors with faster payment process through recently issued regulations. Although this is limited to certain projects and contractual requirements, at least it is a step in the right direction and proves that they are acutely aware of the issues we face.

It was also extremely encouraging to hear that despite the current challenges, in line with the McLaren ethos, other companies still value the importance of looking after their employees and ensuring retention of the same wherever possible.  I believe that without strong and dedicated staff, businesses lack the ingenuity and determination to get through these tougher times.

I was pleased to hear like-minded companies realising the importance of momentum in staff training and development and general upskilling of employees through this period. This is definitely not something that should be taken for granted or overlooked. If training is thought about carefully, it can be managed economically and provide construction professionals for the future with meaningful routes of progression, a sense of value and recognised achievement.

Finally – a note on procurement routes in the UAE. At McLaren, we are embedded in strong partnerships with our customers, working in a collaborative and transparent manner - and have been for some time. This has not been common practice in the region to date.  However, there does seem to be a slight shift in the market by where procurement is transforming in to a two-stage process or a partnering arrangement. This is a much more collaborative approach where businesses are open to working with a single main contractor as a valued partner from the design stage.

It is well-documented that projects are far more successful if they are managed in this collaborative way, with each of the organisations fully bought-in to the project and its key drivers. Risk is shared and elements of the design, build and maintenance are understood from the outset. This means gaining insight of financial and technical inclusions and exclusions, comprehending how to mitigate risks and building a trusted relationship at each stage of the project.

I’m not suggesting that the industry will ever completely eradicate the ‘race to the bottom’ or  ‘lowest price wins’ model (without fully understanding the price on some occasions) that has been prevalent here for years, but our current and some of our potential customers do seem to be considering the value of a trusted and embedded construction partner.

It is the ability to bring in an experienced and committed team, which includes a quality, reliable and fully capable supply chain at the earliest stage that will pay dividends and ensure successful delivery of projects in the region.

From McLaren’s experience on collaborative, two-stage procurement projects with our customers, we have found that project timescales have been significantly reduced. We are achieving expedited site commencement dates, risks are mitigated or even removed entirely, overall project costs can be reduced and ultimately, the strong partnerships result in repeat business and happy customers.

Despite all of the external factors, if the construction industry in the Gulf can just stay positive, continue to build strong relationships and bring the principles of two-stage or partnered procurement to the fore, the future might still look bright and quality projects can still be delivered in a better way.