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Mon 28 May 2012 06:18 PM

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MidEast construction disputes double in value

Average value of regional new-build disputes hits $112m compared to $56m in 2010

MidEast construction disputes double in value
GCC construction, Middle East construction

The average value of disputes in the Middle East construction industry more than doubled in 2011, according to consultancy EC Harris.

While the average value of disputes fell around the world, the Middle East bucked the trend, with disputes having an average value of $112.5m, compared to $56.25m in 2010.

EC Harris said the highest value dispute handled during 2011 was for $350m on a project in the Middle East, without giving any further details.

EC Harris found that construction disputes in the Middle East lasted, on average, nine months in 2011, compared to 8.25 months the previous year.

This was one of the lowest in the report, with only the UK seeing a quicker resolution of disputes at 8.7 months, EC Harris said in a statement issued on Monday.

By contract, disputes in the US took the longest to resolve at 14.4 months, with the global average being 10.6 months.

David Dale, head of contract solutions, Middle East at EC Harris, said: "The Middle East saw a flood of major disputes last year. Over the past few years we have seen a reluctance to settle in the Gulf region, but this has been replaced by a stronger desire to do business and resolve disputes as the economies strengthen.

"On the whole, however, disputes are still costing the industry time and money. Focusing on avoiding the dispute from the outset through better mitigation and contract design is always the better option."

The average value of construction disputes fell globally to $32.2m in 2011 from $35.1m in 2010.

As well as the Middle East, the UK and Europe saw dispute values rise, albeit by smaller amounts.

Dispute values fell in Asia and the US, with the US seeing the most dramatic fall from $64.5m in 2010 down to $10.5m in 2011, which was largely due to the generally depressed construction market in the US.

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