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69 percent of those polled believe decisions on capital projects during construction phase marred by short-term approach
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British Business Group working on how the UK Construction Playbook can be adapted for the UAE region
Undervaluation of actual work in progress rather than delayed payment is the construction industry’s biggest challenge, said a survey conducted by the British Business Group, in which more than 70 construction heavyweights were polled during a sold-out event in Dubai.
About 67 percent of those surveyed agree works need to be valued more accurately and on a more realistic basis for the health of the industry.
Of those polled, 69 percent also believe there is a short-term approach and a lack of consideration of the whole project life cycle when making decisions on capital projects during the construction phase.
Cynthia Corby, COO Audit & Assurance COO and Middle East construction lead for Deloitte, said, “It is encouraging to see the majority of people agree with what we believe is one of the principal root causes for some of the symptoms we see in the industry today.”
“A clear focus on the whole life costs of a capital asset is critical in order to ensure assets are delivered within budget, on time, fit for purpose and fulfill the planned return on investment for the stakeholders, be that a strategic ROI or a measured financial ROI,” she added.
This focus, Corby said, ensures assets can be capitalized on the owner’s balance sheet with confidence that it will deliver the business plan with robust cash flows to support its capitalized cost and the potential to monetize the assets if and when required, be that through a sale or securitization of the asset.
She said the BBC Construction roundtable is working towards assessing how the UK Construction Playbook can be adapted for the UAE region, capturing best practice and suggesting key policies and guidance for how private and public work projects and programmes are evaluated for feasibility and funding, procured, delivered and handed over for operations – encompassing the whole life cycle of a capital project.
With over 700 members, the British Business Group Dubai and the Northern Emirates is a not-for-profit business group open to companies or individuals from the UK with business interests in the region.