Box out | Where does the buck stop?
Cash flows and payment delays are, some would argue, a common fixture of construction industries around the globe. The Middle East’s market is no exception to this trend, but Taylor believes the regional industry has the opportunity to work together and mitigate the risks associated with delayed payments.
Responding to Construction Week’s query on which stakeholder should drive such efforts, Taylor says: “Money flows down, so [it’s important] that contractors get paid fairly for the work that they've executed. If clients are paying contractors fairly, and contractors are paying their supply chain fairly, then generally, you’ll have a successful team working together.”
Taylor says extensions of time are a particularly frustrating job aspect for contractors, because builders “never get fairly compensated for them, and variations are generally very difficult to get paid for”.
He explains: “The perfect [situation] for us would be that we can complete a project on time with minimum variations, and the project team works together to avoid an extension of time.
“Variations and changes are very much part of construction, because it's a very creative function, and you’re never going to crack it in the first round. When you physically see something, you might look at it and [realise it] doesn’t really work or function. We don’t have a problem with change – I think a contractor needs to be flexible enough [and] understand that it's important that we deliver a great end-product, because we're part of doing that with the team.
“Change will always be there. What's important is that the variation or the change gets fairly compensated for. And that's where the problem comes in.”
So how can the situation be improved, and how might the incidence of construction disputes be reduced in the regional sector? Taylor has some recommendations: “The best way to avoid disputes is to have very good dialogue with your clients, and resolve things as you go down the path of a project. If you allow issues to gather momentum and build up, then at the end of the day, it [will be] very difficult to unravel everything [because] you haven't dealt with issues as you've progressed.”
When Construction Week suggests the creation of an entity to manage – and reduce – construction disputes, Taylor adds: “I think it is a good idea for the industry to get together, but I think what is more important is that clients, contractors, and consultants get together on projects and figure out how they [will deliver] a scheme successfully on time.”