culture preparedness for undertaking construction projects in Emirates, from an Australian contractors perspective. not from technical perspective, but from cultural perspective

Microsoft Word - Report
Australian contractors undertaking construction projects in
Emirates: Major challenges and their responses
Background: -
Over the last decade, major construction projects have increasingly arisen in
countries or regions that lack specialist, expert construction contractors, suppliers
and consultants. Steps are being taken by governments in the Middle East, Eastern
Europe, China, India and developing markets to address national infrastructure
deficits, and by so doing, are creating new regions of booming construction demand.
When coupled with anaemic growth in developed markets such as the United
Kingdom, the USA and Western Europe, foreign markets present attractive
opportunities to the global construction industry. However, foreign markets are
littered with the cautionary tales of international contractors and consultants that
have failed to grasp the intricacies and risks of operating in a new environment and
have failed to capitalise on the opportunities available. By identifying the classes of
isks, and undertaking detailed analysis, ranking and mitigation of relevant
jurisdictional risks, participants in international construction projects will increase the
likelihood of project success and commercial longevity in the new jurisdiction.
Construction is a significant global industry with reports valuing the industry between
USD 2.27 trillion and USD 7.5 trillion. It has been suggested that global construction
cu
ently accounts for 13.4% of world output, estimated to increase to 14.6% by
2020. Despite the cumulative size and value of the industry, construction remains a
high-risk enterprise. Competition among contractors is keen and profit margins are
thin. Cash flow is the lifeblood of the industry and the smallest of payment delays
has the ability to disrupt and expose the entire supply chain to significant hardship.
Insolvency is common, with the construction industry representing the single largest
category of insolvencies in many countries. Project delivery risks are omnipresent
and in many developed markets questions remain as to the continued flow of
projects in light of fiscal deficits and soft private sector demand. It is within this
environment that 'international construction' has become a trend used...