meed-logo

line1 line2 line3
SIGN IN / REGISTER

Middle East project disputes increasing

8 November 2023

 

The number of project disputes recorded every year in the Middle East and North Africa (Mena) is trending upwards as project activity increases and the pressure grows to execute projects on a fast-track basis.

Greater use of fast-track project models, where project execution starts before all the details of the preparatory design work are complete, can lead to a “triple whammy” of design issues that trigger disputes, according to Jad Chouman, a partner and the head of Middle East for the consultancy HKA, which specialises in risk mitigation and dispute resolution.

The three key causes of disputes related to fast-track projects are changes to the scope, design information being issued late, and incomplete designs supplied to contractors.

“In many fast-track projects, they start work before the design is 100 per cent complete,” says Chouman. “The fast-track nature of these projects is a major reason why we are seeing what we refer to as the ‘triple design whammy’.

“Owners want the projects quickly and they push the contractors to start early, and changes to the designs can cause serious problems to the projects.”

Growing pains

Due to the expanding Mena projects market, increasing project complexity and growing tendency to use fast-track project schedules, Chouman says he would not be surprised to see an upturn in the volume of project disputes every year until 2030.

“The rise in disputes related to fast-track projects is something that we’ve noticed over the past two or three years,” he says.

“The very compressed time frames for projects means that if there is disruption due to a change or a delay to an approval, the overall impact of that delay is often magnified.”

HKA also says some contractors are not fully considering the impact of the shortage of skilled labour in the region when estimating how quickly projects can be executed.

While these are all significant challenges, HKA also has reason to believe that many of the disputes could be resolved amicably.

Saudi resolution

In Saudi Arabia, Chouman says a share of future disputes could be resolved amicably because the kingdom is so focused on rapid project execution and will want to avoid projects stalling due to drawn-out legal disputes.

“In order for projects to be successful and to be completed within a reasonable time period, it is in the interest of everyone that they are resolved amicably.”

Another factor that could reduce the number of legal disputes is the increased use of more collaborative contract models.

In these contracts, the parties share the risk. The main contractor usually gets involved in the project at an earlier stage so they have a say in how the design is created.

One model increasingly used in Saudi Arabia is the early contractor involvement (ECI) model.

Under the ECI model, a single contractor is selected at an earlier stage of the design process. This may be either at the concept or detailed design stages, depending on the employer client’s preference and the level of involvement required.

A key objective of using an ECI contract and selecting a contractor early is to allow the contractor to use its knowledge and experience to influence design decisions to increase buildability or value during the process.

The contractor is appointed by the client during the first stage to perform services similar to a professional consultant.

“One of the main positive impacts that this sort of contract is likely to have is avoiding the worst kind of disputes between clients and contractors,” says Chouman.

“At the end of the day, the leadership in Saudi Arabia wants to be successful and get things done, and because of this, they are going to want to try and resolve any delays or cost overruns in a fair and amicable way.

“There is significant project momentum in Saudi Arabia and they want to maintain this positive environment.”

Arbitration centres

Dispute resolution processes have progressed significantly in several key markets in the Mena region over the past 20 years, which is having a positive impact on the projects market, according to Chouman.

He says Dubai and Abu Dhabi have developed mature arbitration processes that are competitive with international dispute resolution centres across the world.

The systems are maturing in Saudi Arabia and will soon reach a similar level.

“The development of these advanced dispute resolution centres has helped to make the UAE an attractive business hub,” says Chouman.

But while dispute resolution processes in some Mena markets parallel other world-leading hubs, the Middle East, on the whole, performs poorly in terms of project delays.

According to data collected by HKA, the average delay for projects in the Middle East is 82 per cent of the original time schedule.

This is high compared to the US, Europe, Asia and Oceania, where the average delay times are 59 per cent, 60 per cent, 63 per cent and 49 per cent.

Africa is the only continent that performs worse than the Middle East, with average project delays of 83 per cent of the original project schedule.

A key reason for the significant delays in the Middle East is the size of the projects market and complexity of the projects, says Chouman.

“It is a market with a lot of ambitious projects both in terms of size and complexity,” he says. “Additionally, the clients and contractors are also being even more optimistic with their predictions for project completion times, which is a factor.”

With the Mena region’s projects market continuing to expand rapidly, there are plenty of opportunities for contractors. However, there is also a growing scope for delays and disputes over project execution.

As the region’s biggest markets push ahead with ambitious project plans, it remains to be seen whether they have put enough thought into dispute resolution frameworks and methods to keep construction issues out of the courts.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11278295/main.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Iranian missiles hit Qatari and Kuwaiti fuel tankers

    1 April 2026

    Iranian missiles have struck fuel tankers in Gulf waters belonging to Qatar and Kuwait, as Tehran continues to target energy, industrial and logistical assets in GCC countries.

    A fuel oil tanker chartered by QatarEnergy, named Aqua 1, was struck by missiles in Qatar’s northern territorial waters in the early hours of 1 April, the company said in a statement.

    “None of the crew members on board were injured, and there is no impact on the environment as a result of this incident,” QatarEnergy said.

    Earlier, on 31 March,  said one of its very large crude carriers, Al-Salmi, caught fire after being hit by an Iranian missile while anchored in UAE waters just outside Dubai.

    The vessel’s crew, with support from UAE authorities, extinguished the fire by 04:26 Kuwait time on 31 March, KPC said. It added that all 24 crew members were safe and that no oil spill or environmental damage occurred.

    “KPC is continuing to assess the damage in coordination with relevant authorities,” the Kuwaiti state energy conglomerate said.

    ALSO READ: Iran strikes Gulf aluminium assets after hits on its steel sector
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16217670/main4010.jpg
    Indrajit Sen
  • One killed and one injured in drone attacks on the UAE

    1 April 2026

    Debris falling from Iranian drones intercepted by the UAE’s air defence systems has killed one person in the emirate of Fujairah and injured another in Umm Al-Quwain in two separate incidents on 1 April.

    A successful interception of a drone by UAE air defence forces resulted in debris falling on a farm in Fujairah, leading to the death of a Bangladeshi national.

    The latest fatality brings the total death toll in the UAE since the start of the US-Israel-Iran war to 12. Most of the deaths have been caused by falling debris following interceptions. Among the deceased are two members of the UAE armed forces who died while performing their duties, as well as a Moroccan civilian contracted by the armed forces.

    The remaining victims were of Bangladeshi, Indian, Nepali, Pakistani and Palestinian nationalities.

    Hours after the Fujairah incident, authorities in Umm Al-Quwain confirmed that an Indian national was injured when debris from an intercepted drone fell in the emirate.

    In a statement posted on its official social media channels, the Umm Al-Quwain government media office said the incident occurred near an industrial facility in the Umm Al-Thuoob area, after air defence systems successfully intercepted an unmanned aerial vehicle (UAV).

    Meanwhile, the latest data from the UAE Ministry of Defence, released on 31 March, showed that air defence systems had engaged 36 UAVs, four cruise missiles and eight ballistic missiles in the previous 24 hours. Cumulatively, authorities said 1,977 drones, 19 cruise missiles and 433 ballistic missiles have been intercepted since the onset of the war on 28 February.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16218126/main.jpg
    Indrajit Sen
  • Contractors submit Al-Maktoum airport superstructure bids

    1 April 2026

     

    Dubai Aviation Engineering Projects (DAEP) received proposals on 31 March from contractors for three packages covering superstructure works for the first phase of the expansion of Al-Maktoum International airport.

    MEED understands that the selected contractor will undertake superstructure works on three packages:

    • West Terminal and concourse one
    • Concourse two
    • Concourse three

    Construction on these packages began in November last year, when DAEP formally selected a contractor to deliver the substructure works.

    According to an official description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level, 800,000-square-metre facility with an annual capacity of 45 million passengers.

    It will be the second of three terminals at Al-Maktoum International airport, linked to the airside by a 14-station automated people-mover (APM) system.

    In August last year, MEED exclusively reported that DAEP had received bids from firms to build the APM at the airport. 

    The system will run under the apron of the entire airfield and the airport’s terminals. It will consist of several tracks, taking passengers from the terminals to the concourses.

    Four underground stations will be built as part of the first phase. The overall plan includes 14 stations across the airport.

    The airport’s construction is planned to be undertaken in three phases. The airport will cover an area of 70 square kilometres (sq km) south of Dubai and will have five parallel runways, five terminal buildings and 400 aircraft gates.

    It will be five times the size of the existing Dubai International airport and will have the world’s largest passenger-handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.

    Construction progress

    Construction on the first phase has already begun. In May last year, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal are also ongoing and are being undertaken by Abu Dhabi-based Tristar E&C.

    Construction on the project’s first phase is expected to be completed by 2032.

    The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    The statement added that the project will create housing demand for 1 million people around the airport.

    In September 2024, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    Project history

    The expansion of Al-Maktoum International, also known as Dubai World Central (DWC), is a long-standing project. It was officially launched in 2014, with a different design from the one approved in April 2024. At that time, it involved building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year.

    An initial phase, due to be completed in 2030, involved increasing the airport’s capacity to 130 million passengers a year. The development was to cover an area of 56 sq km.

    Progress on the project slipped as the region grappled with the impact of lower oil prices and Dubai focused on developing the Expo 2020 site. Tendering for work on the project then stalled with the onset of the Covid-19 pandemic in early 2020.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16215664/main.jpg
    Yasir Iqbal
  • Drone strikes Kuwait International airport

    1 April 2026

    Register for MEED’s 14-day trial access 

    Kuwait International airport was hit by further drone attacks on Wednesday, with strikes on fuel tanks sparking a major fire.

    Kuwait’s state news agency Kuna said the attack caused significant damage to fuel tanks belonging to Kuwait Aviation Fuelling Company. No casualties were reported.

    This was the second reported incident at the airport in recent days. Local media reported that the airport was attacked on 28 March by multiple drones, causing significant damage to its radar system.

    The airport is currently undergoing expansion works that are expected to be completed by 2027, as MEED reported previously.

    Project execution of the second terminal began in 2017, with the completion date pushed back from the original 2022 target.

    The second terminal project consists of three packages.

    These are:

    • Package 1: Main works – $4,329m
    • Package 2: Multistorey car park building, connection roads, bridges and landscaping works – $550m
    • Package 3: Aircraft parking, runways and service buildings – $950m

    Turkiye’s Limak Holding is executing the main works.

    The terminal building was designed by Foster+Partners and Gulf Consult.

    Spanish firm Ineco is providing the project management services for the new terminal building and the airfield.

    The scope of the main package includes the new terminal building, a building for cooling and electricity supply facilities, and a building for the water supply and the future Automatic People Mover (APM) connection to the satellite building.

    The terminal building will be three times the size of the original building and will have 36 boarding gates.

    The building will cover more than 700,000 square metres and have five floors, one of which will be underground.

    It will have the capacity, at maximum service level, for 25 million passengers a year once the first phase has been completed and up to 50 million passengers after further phases are completed.

    The second package of works includes a new car park with approximately 5,000 parking spaces, connected to the new passenger terminal.

    It also includes all new access roads to the airport and landscaping.

    The scope of the third package comprises the main platform, new taxiways and several tunnels, including one under the platform between the terminal building and the future cargo area of the airport.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16216797/main.png
    Yasir Iqbal
  • Saudi Arabia’s Sadara halts chemical production

    1 April 2026

    Register for MEED’s 14-day trial access 

    Sadara Chemical Company (Sadara), the Saudi Aramco-Dow Chemical joint venture producing petrochemicals and specialty chemicals, has announced a temporary shutdown of production, citing ongoing supply chain disruptions.

    Sadara operates a sprawling chemical production complex in Jubail in Saudi Arabia’s Eastern Province, with a total output capacity of more than 3 million metric tonnes a year. Aramco and Dow established the Sadara petrochemicals complex – estimated to have cost $13bn – in 2016.

    The suspension was announced in a filing on the Saudi Exchange (Tadawul) by Sadara Basic ​Services, which issues sukuk, or Islamic bonds, ​for its parent. “The shutdown was successfully completed in accordance with Sadara’s high safety standards and in a manner that safeguards operations and reduces risk,” the entity said in its filing on 31 March. 

    “Sadara cannot provide, at the present ‌time, ⁠an estimate for the return to production, as this is contingent on domestic and international factors,” it said, ​adding ​the shutdown ⁠is expected to impact this year’s financial results.

    The month-long war between Israel, the US and Iran has spread across the Middle East, disrupting energy supplies and threatening the global economy, as Tehran has responded to US and Israeli attacks by targeting regional energy and industrial infrastructure, as well as shipping.

    ALSO READ: Sultan Al-Jaber calls Strait of Hormuz blockade “economic terrorism”

    Separately, Sadara, in another Tadawul filing on 31 March, announced a net loss of SR5,793bn ($1.54bn) for the full year 2025, a further decline of about 40% compared to 2024. The company’s revenue in 2025 fell by about 15% year-on-year to $2.63bn.

    The chemicals producer attributed the deepening of its losses in 2025 to a reduction in sales volumes, “which resulted from unplanned operational events and extended maintenance activities that temporarily impacted production availability”.

    Sadara also pinned its augmented losses to “margin compression, and higher fixed costs associated with unplanned operational events and extended maintenance activities.

    “In addition, the company experienced lower average selling prices across certain portfolio lines, which further contributed to the overall decrease in revenue,” Sadara said in the disclosure.

    In addition, “the net loss for 2025 increased compared to 2024, mainly due to an accounting adjustment related to a debt modification that had a favourable impact on the prior year’s results,” the company added.

    ALSO READ: Sabic registers $6.87bn net loss in 2025

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16215635/main2446.jpg
    Indrajit Sen