One of the notable things about the recent UAE Leaders in Construction conference was the general air of optimism about the health of the construction sector in the region. This was in marked contrast to previous conferences and I suspect it arises from two key factors.
The first of these is clearly the general indications that the global economy is beginning to recover.
The second, which is more specific to the GCC region, is that there are some very significant construction projects on the horizon – such as Mohammed Bin Rashid City, Qatar 2022 as well as the prospect of the UAE hosting Expo2020.
In parallel, it’s also interesting to note the growing popularity of joint ventures (JVs) for delivering these huge projects – something that was observed by Mark Andrews COO of Arabtec Holding: “Opportunities for diversification, joint ventures and new global markets were being explored”, he reported.
And there are very clear advantages to exploring the use of JVs in this way.
“Forming a joint venture with an experienced partner can prove to be the best way of exploring new markets,” observed Anil Ray from the Arabian Construction Company.
One of the challenges with JVs, however, is how to manage the costs of a project when more than one entity is involved.
Causeway Project Accounting (CPA) has been designed to support JVs by providing an intuitive project cost & programme management platform that is able to operate independently of the existing back office systems of the JV companies.
In fact, two of the projects we were involved with soon after we started operating in the Middle East used Causeway Project Accounting for the management of project costs.
Al Raha Beach development with the JV of Aldar and Laing O’Rourke and also the construction of the new Al Mafraq Hospital with JV members Murray & Roberts and Habtoor Leighton Group. Both projects are using Causeway to provide the detailed commercial management needs these projects required – with integration into existing ERP solutions.
As future projects become tendered and awarded we believe we will see considerably more use of JVs as construction partners, so it will be important for the major players in the region to ensure they have the right project cost & programme management tools in place, such as Causeway.