The number of construction disputes in the Middle East region has increased over the past two years, reflecting the global trend, according to a study by international built asset consultancy EC Harris.
The disputes are valued at over $20 million higher than the global average, said the first ‘Global Construction Disputes Index’ released by EC Harris.
Globally, the average value of disputes handled by EC Harris was $35.1 million in 2010, with the average value in the Middle East being $56.25 million.
The highest value dispute handled in the Middle East during the course of 2010 was for $100 million, although EC Harris did work on one dispute in the Middle East where the disputed value was higher but undisclosed.
EC Harris found that disputes were lasting, on average, 8.25 months from beginning to resolution. Despite their high monetary value, this was below the global average of 9.1 months.
The research, compiled by EC Harris’s Contract Solutions team, found that a failure to properly administer the contract was the most common cause of construction dispute in 2010, demonstrating poor governance during the course of the construction project.
David Dale, head of Contract Solutions, Middle East at EC Harris said: ‘Resolving these disputes represents an extremely expensive, time consuming and often unnecessary distraction for clients and contractors alike.’