Archive for the ‘Construction Claims’ Category

Crisis for Gulf Construction Companies?

Let’s take a look at what has been happening in the Gulf construction market recently.

Drake & Skull announced plans for a major restructuring after suffering losses in 2016 of AED 787M, an improvement on 2015 when they lost AED 939M. A few weeks ago 8,000 employees of the 40 year old company Saudi Oger received letters announcing that 31st July 2017 will be their last day at work. The company apparently owes $3.5Bn to Saudi banks. Arabtec needed a cash injection early this year too after announcing losses of AED 3.4Bn in 2016. In 2015 the losses were reported at AED 2.35Bn. In March last year Al Jaber missed a debt repayment of AED16.2Bn which had been put in place in 2014 to restructure the company and in August, they announced the sale of their share in ALEC and the Shangri-La Hotel Abu Dhabi to finance yet another restructuring exercise. Then there’s the fall out between Al Habtoor and Leighton, the list goes on and this is just the tip of the iceberg for the Gulf construction industry…the small sub-contractors, sub sub-contractors and suppliers don’t make news in the financial press.

What is going on with contractors in the Gulf? Is there no work?

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6 Key Actions UAE Contractors Should Take in Today’s Tough Market

UAE contractors are facing tough market conditions, with cash flow constraints and greater competition for fewer contracts placing a squeeze on margins. Expo 2020 is just around the corner now but much of the anticipated bonanza from Expo and related projects has yet to kick off. The region however still offers decent long-term fundamentals for companies prepared to ride out the current slowdown in the market.

In addition to the current slow down, UAE contractors still face pressure on cash-flow from trying to close out legacy projects, and be paid for projects delivered back in 2008-10. Many contractors are finding that market conditions in 2016 are tougher than in the previous year and most have witnessed an increase in construction disputes.

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CEES | The Secret of How to Produce a Successful Claim

In this blog I am going to share one of the secrets that we teach on our courses to help our students and attendees produce successful claims. If you are not already applying these principles, I guarantee that they will make a massive difference to your claims and to whether they will be accepted and, resolved in a timely manner.

Let’s first take a moment to think about what a claim actually is. My definition of a claim is “something that comprises an assertion of a party’s right under the terms of a contract or at law”. In other words, we are simply asking for something to which we are entitled. (more…)

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How to Calculate the Recovery of Preliminaries on a Reduced Scope of Works

I was recently contacted by a blog reader who requested some advice on a project in Qatar where the Employer omitted a large part of the Works and also wanted to deduct money from the Contractor’s preliminaries as part of the price adjustment.

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I thought that this would make an interesting case to share with the rest of our readers so, the scenario was as follows:

The Contract Price is a Fixed Price Lump Sum.

The Contract Bill of Quantities contains all-inclusive rates which include preliminaries, overheads and profit. No separate prices for preliminaries are included.

After approximately 75% of the works were completed the Employer omitted a large portion of the balance works, which will not be completed by others. (more…)

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How to Make Sure Your Claims are Accepted

If you wish to ensure that your claims are accepted, you need to bear in mind EC Harris’ (now ARCADIS) report Global Construction Disputes Report. This report cites incomplete and/or unsubstantiated claims as one of the major reasons for construction industry disputes.

A typical scenario that I have experienced on many occasions is when a contractor submits a badly prepared or ‘inadequately expressed’ claim to the engineer for evaluation and the engineer rejects the claim on the basis that the contractor has not proved his case. The engineer is quite correct to do this, because the onus is on the claimant to prove that the claim is just and in such a case, the Contractor has not done so. The Contractor, however, believing that he has good basis for the claim, then refers the matter as a dispute. (more…)

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