< PreviousHIGHEST RECORDED VALUE OF AWARDED CONTRACTS $23.6BN TOTAL VALUE OF AWARDED CONTRACTS IN 2022 $51.3BN % INCREASE IN VALUE OF AWARDED CONTRACTS 35% % INCREASE IN GROWTH OF REAL ESTATE MARKET 637% % ACCOUNTED FOR REAL ESTATE PROJECTS IN 2022 33% $19.1BN TOTAL VALUE OF AWARDED CONTRACTS IN Q4 2022 8 JUNE 2023 | STAT OF THE MONTH | SAUDI’S CONSTRUCTION SECTOR BOOMS WITH $51BN IN CONTRACTS AWARDED IN 2022 According to a report by the US- Saudi Business Council, the Saudi Arabian construction sector experienced significant growth last year, with the value of awarded contracts returning to pre-pandemic levels. The report reveals that the total value of awarded contracts in 2022 was $51.3 billion. The real estate sector accounted for the largest share of construction spending, while NEOM was the region that received the highest investment.There was a 35% increase in the value of awarded contracts last year as compared to the previous year. The report shows that during the final three months of last year, the value of awarded contracts in Saudi Arabia skyrocketed to $19.1 billion, representing 37% of the total awards for the year. This surge marked the highest value of awarded contracts in a quarter in nearly seven years, with the last highest value of $23.6 billion being recorded in the first quarter of 2015. During Q4 of 2022, the real estate sector received $10.4 billion from 33 contracts, making it the highest-grossing sector by quarter in 2022. The surge in the real estate sector was primarily driven by the residential real estate market, which experienced a quarter-on-quarter growth of SR25.3 billion ($6.7 billion), representing a 637% increase, and a year-on-year growth of $7.4 billion, or a staggering 1,721% increase. This was the highest tally by quarter for the residential real estate market since Q1 2015 when it reached $8.9 billion. Overall, the real estate sector in Saudi Arabia grew by $7 billion. For the year, the real estate sector achieved the highest tally in awarded contracts with $16.8 billion, which was SR42.2 billion ($11.3 billion) or 202% greater than 2021. In Q4 2022, the value of awarded contracts in Saudi Arabia skyrocketed to $19.1 billion In Q2 2022, the real estate sector received $10.4bnRAKCERAMICS.COM Imagine a space where your inspiration can run free. A world that tells your own story, every single day. At RAK Ceramics we help create the perfect living space, for you and your loved ones. Imagine your space. IMAGINE YOUR SPACE| CITY FOCUS | 10 JUNE 2023 OMAN PLANS FOR 40 TOURISM PROJECTS BY 2025 Oman has ambitious plans to enhance its adventure tourism industry by developing 40 new projects by 2025. The projects include developing a cable car in the Botanical Garden and installing zip lines in Wadi Darbat, Dhofar for khareef season. Recently, a zip line in Musandam was inaugurated and a suspension bridge is being built in Wadi Shab in Ash Sharqiyah South Governorate. To further promote adventure tourism, the ministry is planning to create mountain trails in Hawar village in Wadi Bani Khalid and Wadi al Arbaeen, both known for their perpetual springs. Additionally, the Ministry of Heritage and Tourism is working on paving a road to Al Sogara, a mountain side village in Jabal Akhdar that is home to a heritage inn and is a popular tourist destination. Local SMEs will have the opportunity to operate these facilities, which will have a positive impact on the community. As part of its plan to promote adventure tourism, the ministry aims to pave a total of 15 mountain trails, with a majority located in the Hajar Mountains, including Jabal Shams, Jabal Akhdar, and Wadi Bani Awf. Moreover, 37 new mountain trails suitable for adventure activities have been discovered by youth teams, and are now authorised for use. Presently, there are 53 approved mountain trails in Oman. While Oman boasts many stunning caves, establishing recreational facilities requires in-depth studies, technical consultations, and substantial funding. Nonetheless, the ministry is currently evaluating various sites for their potential as adventure tourism destinations. Oman’s plan to enhance adventure tourism is expected to boost the country’s tourism industry and economy by attracting more visitors. By creating a more diverse range of experiences for tourists, the ministry’s efforts will further enhance Oman’s reputation as a premier tourist destination in the region. The projects include developing a cable car in the Oman Botanical Garden and installing zip lines in Wadi Darbat, Dhofar for khareef season The ministry aims to pave a total of 15 mountain trails| PROJECTS | 12 JUNE 2023 PROJECT LAUNCH Construction Week Middle East previews two new luxury living concepts launched in Dubai Designed by Gensler Architects, DG1 is Dar Global’s luxury living concept located in Business Bay. The 20-storey tower consists of 221 units, catering to diverse living preferences. According to Dar Global’s CEO, DG1 “represents the company’s vision of luxury living, combining sophisticated design and remarkable craftsmanship.” DG1 - DAR GLOBAL Located just outside Dubai, Azizi Vista will boast studios, one bedroom apartments, and two-bedroom residences. It will also feature planned social areas, two swimming pools, dedicated children’s play areas, yoga areas, BBQ areas, and more. Units will start from $159,400, with 40/60 payment plans. The project is scheduled for completion by Q4 2024. AZIZI VISTA - AZIZI DEVELOPMENTSLeading the change towards a more sustainable future Uplifting communities, improving access, sustaining our planet – we partner with clients to turn ambitions into actions.14 JUNE 2023 | A DAY IN THE LIFE | A DAY IN THE LIFE OF MOUNIA BEDRAN DIRECTOR - CENTRE OF EXCELLENCE, KHATIB & ALAMI 6:15am: I wake up early to spend some time with my teenage daughter, chatting about the day ahead, before she catches her bus to school. Next, I take my morning coffee with my husband, and I read the headlines of a couple of online newspapers to which I’m subscribed. Then, a quick morning call to my mom, and I’m ready to head to work. 8:00am: I start my day at work by checking and replying to emails, as well as planning and prioritising my day. 9:00am: As the Digital Services (DS) operations are centralised, I follow up with my teams in Lebanon and other K&A branch offices by holding stand-up meetings (both physically and over MS Teams) to discuss key ongoing projects. 11:00am: This time of day varies and is dynamic. I occasionally participate in online meetings with clients, the majority of whom are in Riyadh, and, more recently, in Oman. On other days, I focus on the deliverables for my consulting work, which include developing strategies, capacity-building plans, and roadmaps. I also review and baseline DS’s project budgets during initial project planning. Before submissions, I audit and review a number of important deliverables and solutions in order to maintain the same standards and quality of services throughout all office locations. As my “door” is always open to all the DS staff, I spend a lot of time answering calls, guiding the team, resolving their issues, and finding solutions to their problems. 4:00pm: Curiosity towards the tech world is the magic ingredient that helps us stay abreast of the latest technologies and innovations, and keeps a competitive edge in our “Digital Services”. At this point of the day, client meetings are scarce, so this is when we plan the new products and solution demonstrations. 5:30pm: I leave the office. On my way home, I take time to catch up on calls that I have missed while at the office. This usually includes one-on- one WhatsApp calls or MS Teams calls. 6:30pm: Once I reach home, I prepare the needed for an early family dinner. 7:30pm: I’ve been singing in a choir for more than two years now – twice a week – and my daughter is the drummer of the group. Otherwise, I spend some time gardening, watering the lawn, or reading new recipes as I love cooking. 9:30pm: I check my emails to see if there is anything urgent I need to take care of or to respond to emails from our partners in the USA – just to speed up the conversation because of the time difference. 10:00pm: I watch my favourite TV series with my family before going to bed. conversation because of the time difference.TOLL FREE 800 GLAZE (45293)TOLL FREE 800 GLAZE (45293) | TEL: +971 6 5353 123 (SHARJAH)TEL: +971 6 5353 123 (SHARJAH) | TEL: +971 2 5502 390 (ABU DHABI)TEL: +971 2 5502 390 (ABU DHABI) | MAIL: info@glaze.ae MAIL: info@glaze.ae www .glaze.ae UAE’s Largest marble importer GLAZE Granite & Marbles announces partnership with XTONE, as the sole distributor. XTONE by Porcelanosa are high end Sintered with XTONE, as the sole distributor. XTONE by Porcelanosa are high end Sintered partners with XTONE by Porcelanosa 160 160 360 6mm 12mm 20mm| COMMENT | 16 JUNE 2023 DISPUTE AVOIDANCE STRATEGIES FOR MEGA PROJECTS Aytug Ozkan, Director at TBH Middle East, emphasizes the signi cance of dispute avoidance and shares strategies to mitigate con icts in mega construction projects in the region Construction projects, by their very nature, are complex and multifaceted undertakings that involve numerous stakeholders, intricate processes, and significant resources. Therefore, expecting construction projects to run perfectly without any challenges or disputes is unrealistic. In the Middle East, particularly in the Kingdom of Saudi Arabia, with the increasing size and complexity of construction projects, we expect a rise in the number of disputes. In order to ensure successful project delivery, it is essential to prioritise dispute avoidance and adopt proactive measures. Sources of disputes The most common sources of disputes include design deficiencies or errors, changes in project scope, delays in the project schedule, payment issues, and contractual disagreements. Changes in project scope can arise due to incomplete design, unforeseen site conditions, or changing client requirements. Design deficiencies or errors can lead to disputes regarding responsibility and additional costs. Likewise, delays in the project schedule, whether caused by poor planning or unforeseen circumstances, can create tensions between the parties. Payment issues, such as disputes over the cost of revised or additional works, payment terms or delayed payments, can also escalate into disputes. Furthermore, disagreements over contract interpretation, terms and conditions can result in legal disputes. Therefore, project stakeholders must address these common causes proactively, minimising the likelihood of disputes and promoting successful project completion. The importance of dispute avoidance in mega construction projects and insights on strategies to mitigate potential conflicts can be summarised as follows: 1. THE RISE OF CONSTRUCTION DISPUTES: In recent years, the construction industry in the region has witnessed a significant increase in disputes, making avoidance strategies even more important. The increase in the number of disputes in the construction industry can be attributed to several factors. First, construction projects are becoming increasingly complex, involving multiple stakeholders, intricate designs, and advanced technologies. Mega projects in the region are examples of ambitious ventures that involve numerous designers, contractors, and subcontractors working together on tight schedules, each with their own interests and priorities. This complexity introduces a higher risk of miscommunication, conflicting objectives, and coordination challenges, which can lead to disputes. Second, the competitive nature of the industry often results in tight schedules, cost pressures, and the need to meet demanding client expectations. In such high-pressure environments, there is a greater likelihood of errors, delays, and disagreements arising during the project execution, leading to disputes. Third, due to time pressures, the contractors are procured based on incomplete designs resulting in changes in project scope during construction. If not properly managed and documented, these changes can create disputes over additional costs, delays, and responsibility for design deficiencies. Moreover, financial considerations play a significant role. As a result, the financial impact of disputes can be substantial, and some parties may engage in disputes as a strategic manoeuvre to secure a more favourable financial outcome. 2. SHIFTING FROM ‘HANDSHAKE AGREEMENTS’: In the past, dispute resolution often relied on informal or “handshake” agreements between the parties involved. However, in today’s complex construction landscape, such agreements are becoming less common, meaning clearer avoidance strategies are required. Mega projects in the | COMMENT | JUNE 2023 17 Aytug Ozkan, Director, TBH Middle East region involve significant investments necessitating the development of clear and comprehensive contracts. These contracts should account for the specific challenges and interfaces in mega projects, outlining the roles, responsibilities, and expectations of all parties involved. By clearly defining these parameters, potential conflicts can be mitigated. 3. COST AND TIME IMPLICATIONS OF DISPUTES: Disputes in construction projects can have severe financial and time implications. With their massive budgets and ambitious timelines, mega projects are particularly vulnerable to such consequences. Delays, conflicts, and disruptions in these projects can lead to substantial financial losses and damage the reputation of all parties involved. Recognising the potential impact of disputes, stakeholders must prioritise dispute avoidance at an early stage to protect their investments and ensure the timely completion of mega projects. Dispute resolution processes, such as arbitration or litigation, often involve substantial costs. Hiring lawyers, conducting investigations, preparing documentation, and attending hearings can incur significant expenses. In contrast, dispute avoidance strategies focus on proactive measures to prevent conflicts from escalating to legal disputes at an early stage, thereby avoiding these additional costs. 4. PREVENTION AS THE BEST CURE: Prevention is often regarded as the best cure when it comes to construction disputes, and this holds true for mega projects in the region as well. By implementing proactive measures, industry professionals can minimise the likelihood of disputes. This includes engaging in thorough project planning, implementing operational risk and change management procedures, conducting regular and effective communication among all stakeholders, and documenting all decisions and changes. Taking a proactive approach to dispute avoidance helps build a foundation of trust and collaboration among project participants. 5. INSURANCE POLICY THROUGH COLLABORATION: To enhance dispute avoidance efforts in mega projects, involving all relevant parties in formulating strategies is crucial. Collaboration among designers, contractors, subcontractors, and legal advisors can significantly contribute to identifying potential risks and implementing effective policies and procedures. Professionals who specialise in construction disputes can provide valuable insights and advice, helping stakeholders develop robust strategies to proactively address conflicts. Disputes are an unfortunate reality in complex construction projects, but they can be avoided or minimised through proactive measures, which include clear and well-defined contracts, recognising the unique challenges and interfaces in mega projects, understanding the changing context of construction agreements, and recognising the cost and time implications of disputes. In addition, collaboration among all parties involved and seeking advice from experts like TBH, can significantly contribute to successful dispute avoidance and ensure the timely completion of mega projects. Time and cost impact of dispute resolutionNext >