Four-fifths of respondents report delays; two in three expect funding restraints to continue into 2013
Despite the significant investment into mega projects in the Gulf, most industry insiders have faced delivery delays and cost overruns, according to the results of a survey carried out by PricewaterhouseCoopers (PwC).
The report indicated that 80 percent of respondents said that the project they were working on had suffered a delay, with 46 percent saying that it was in excess of six months. Only 36 percent of respondents reported that their projects had been completed on or under budget.
Over half of respondents said that their projects had been delayed, scaled down, or cancelled due to funding constraints, the report added. Furthermore, two in three respondents expect restrictions to continue into 2013 - and over 60 percent of respondents expect their projects to be funded, at least in part, by the private sector.
More positively, 66 percent of those replying to the survey said they had invested US$100m or more on major projects in 2012, and 72 percent said this figure would increase next year.
“Governance, accuracy and completeness of reporting will dominate the areas of focus of senior management for 2013. Whilst reporting is regular, there appear to be concerns around its transparency and accuracy", said Charles Lloyd, a partner at PwC.
"Another issue facing projects in the Middle East is the availability of funding for major projects. Difficulties in the euro zone financial markets have reduced the availability of traditional project finance funding sources and led many sponsors to explore alternative funding sources."
The report indicated that the UAE and Qatar were the primary markets for investment in capital projects and infrastructure, followed by Egypt and Saudi Arabia.