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
  • GCC reviews first phase of water interconnection study

    17 August 2026

    The GCC General Secretariat has completed the first phase of a study examining the feasibility of developing water interconnection projects between GCC member states.

    A two-day workshop reviewing the study’s findings concluded on 12 August at the headquarters of the GCC Interconnection Authority (GCCIA) in Dammam, Saudi Arabia.

    The GCC General Secretariat organised the workshop in cooperation with GCCIA, with representatives from relevant authorities and experts in water, infrastructure and water security taking part.

    Participants reviewed the first phase findings, including an assessment of existing water supply infrastructure and the actual water needs of GCC member states. They also discussed the technical requirements and data needed to complete the study.

    The study is intended to identify practical options and feasible solutions for developing a regional water interconnection network. This includes establishing an implementation roadmap.

    The initiative aims to improve the GCC states’ ability to respond to emergencies and crises and support continuity of water supplies.

    First meeting

    The workshop followed a virtual meeting on 22 July between the GCC General Secretariat and Saudi Arabia’s water authorities as part of the study.

    That meeting, which also involved consultancy Artelia, reviewed the study’s methodology and implementation stages. These include assessing existing water systems across GCC states, their resilience and emergency readiness, and developing technical options for bilateral water interconnection projects.

    In Saudi Arabia, the study is focused primarily on the Eastern Province and Riyadh. It is assessing water production and desalination facilities, transmission pipelines, strategic reservoirs, pumping stations and existing and planned projects.

    The study is also examining potential bilateral connections between Saudi Arabia and Bahrain, Kuwait and Qatar, as well as the possibility of a connection with the UAE.

    The 22 July meeting also discussed potential connection points and routes, water flow directions and the possibility of designing interconnection pipelines to operate in both directions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18802726/main.jpg
    Mark Dowdall
  • Neom’s next phase is crucial to green hydrogen pipeline

    17 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The completion of construction at Neom Green Hydrogen comes at an important point for Saudi Arabia’s wider hydrogen ambitions.

    The project has already shown that a large green hydrogen scheme can secure financing by reaching financial close in 2023 with long-term offtake from Air Products.

    With the facility now moving into commissioning ahead of a targeted commercial operations date next year, Neom could soon give lenders and developers real evidence on the performance, costs and risks of a large-scale green hydrogen project.

    That could be important for projects still moving through development. Acwa’s Yanbu Green Hydrogen Hub, for example, is targeting commercial operations in 2030.

    The project has brought in Germany’s EnBW as a co-developer and minority investor and Japan’s Itochu as a co-developer, investor and offtaker. Acwa is targeting production of 2.5 million tonnes a year of green ammonia from the hub.

    Saudi Arabia is also putting more of the framework around the industry in place. In July, the government granted Acwa exclusive rights to export green hydrogen produced in the kingdom along with its derivatives, including green ammonia, methanol and fuels.

    However, partnerships and policy support alone will not remove the commercial questions facing projects. Yanbu still needs to progress through development and secure the financing needed to move into construction.

    Neom’s financing structure and 30-year offtake may be specific to the project, but its operating performance should give future developers and lenders a clearer reference point for assessing production, reliability and costs.

    While Neom will not make the next projects bankable on its own, if it stays on track and performs as expected, it could give lenders a stronger basis for assessing projects that follow. In the long-run, this could be one of its most important contributions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800285/main.jpg
    Mark Dowdall
  • Five bid for King Salman Bay construction work

    17 August 2026

     

    Five teams have submitted bids for the contract covering the marine infrastructure works at King Salman Bay on the Red Sea coast, north of Jeddah.

    MEED understands that the bids were submitted on 31 July.

    The bidders include:

    • Deme / Archirodon (Belgium/Netherlands)
    • ⁠Van Oord (Netherlands)
    • ⁠Abdulmohsen Altamimi / NMDC Group (local/UAE)
    • ⁠Urbacon / Negida Contracting  (Qatar/Egypt )
    • ⁠Modern Building Leaders / China Harbour (local/China)

    The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres.

    King Salman Bay is expected to be a waterfront development that aims to reshape the city’s northern Red Sea frontage into a mixed-use destination, anchored by public-realm improvements and leisure-led development.

    Saudi gigaproject developer Red Sea Global (RSG) is developing the project.

    The latest development follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a materials recycling facility, a transfer station, an administration building and a vehicle maintenance building.

    In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800910/main.jpg
    Yasir Iqbal
  • PDO allows more time for Al-Ghubar field project prices

    17 August 2026

     

    Petroleum Development Oman (PDO) has allowed contractors additional time to prepare commercial bids for a project to build a new facility to handle additional oil production from the Al-Ghubar field in the sultanate.

    The Al-Ghubar field is located in the Ghaba Salt Basin at Qarn Alam, within majority state-owned PDO’s Block 6 concession area.

    The Al-Ghubar gas-oil gravity drainage (GOGD) facility will be designed as a sour (hydrogen sulphide) facility and is expected to handle maximum oil production of 1,800 standard cubic metres a day (cm/d), a maximum total water flow rate of 10,421 standard cm/d, and maximum gas lift of 256,934 standard cm/d. Production from the planned Al-Ghubar GOGD facility will be exported to PDO’s main oil line.

    Following receipt of the technical bids for the project in July, PDO granted contractors additional time – until 16 August – to submit commercial bids for the project, MEED recently reported.

    The project operator has now extended the deadline for submitting commercial bids to 1 September, sources told MEED.

    PDO floated the tender for the Al-Ghubar GOGD facility project in March, setting an initial bid submission deadline of 4 May, MEED previously reported.

    PDO later extended the deadlines for submission of technical and commercial bids to 26 July and 7 August, respectively. Contractors submitted technical proposals by the revised deadline, according to sources.

    The following contractors, among others, are understood to be bidding for the project:

    • Archirodon (Greece)
    • Engineering for the Petroleum & Process Industries (Egypt) / Petrojet (Egypt)
    • Jereh (China)
    • Kent (UAE)
    • Larsen & Toubro Energy Hydrocarbon (India)

    The scope of work on the Al-Ghubar GOGD facility project covers the engineering, procurement and construction (EPC) of the following:

    • On-plot scope consists of:
      • Production separator  
      • Test separator  
      • Concentric wash tank
      • Wet oil pump
      • Water bath heater
      • Surge tank
      • Gas injection/gas lift compressor (centrifugal)
      • Utilities (Instrument Air compressors, chemical injection skids, drain system, vent system) 
      • Suction scrubber
      • Air coolers
      • Discharge scrubbers
      • Condensate flash drum
      • Atmospheric pressure knock-out drum 
      • Flare system
      • Gas heater
      • Water disposal pump
      • Oil shipping pump
      • New 132kV substation and plant substation (housing 6.6kV & 415-Volt switchboard)
      • New control room
         
    • Off-plot scope consists of:
      • Off-plot pipeline network (bulk header, test header, gathering infrastructure/ gathering line header, instrument air header, water disposal header)
      • Two remote manifold stations 
      • Tie-in connection to main oil line
      • Tie-in to gas network pipeline

    PDO previously intended to tender the Al-Ghubar GOGD project under its framework structure with selected EPC contractors, but eventually tendered it separately.

    PDO is the operator of the Block 6 hydrocarbons concession in Oman, which is the sultanate’s largest and most prolific concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields, with PDO producing a total of approximately 680,000 barrels a day (b/d) of oil and condensates from those fields.

    The Omani government holds a 60% stake in PDO through Energy Development Oman (EDO). The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s state-owned PTTEP (2%).

    ALSO READ: PDO floats tender for major flare gas monetisation scheme
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18799485/main.jpg
    Indrajit Sen
  • L’imad eyes full takeover of AD Ports Group

    17 August 2026

    Abu Dhabi’s sovereign investor, L’imad Holding, has announced its intention to take full ownership of AD Ports Group by offering to acquire the remaining 24.6% of its publicly listed shares through a voluntary, conditional, all-cash tender offer.

    The bid will be launched via L’imad’s wholly owned unit, Abu Dhabi Developmental Holding Company (ADQ), which already controls 75.42% of AD Ports Group. The offer seeks to acquire 100% of the issued and paid-up share capital and take the port operator private.

    Shareholders would be offered AED6.25 per share in cash. L’imad said the offer provides investors with “an attractive opportunity to realise certain and immediate value”.

    Based on the proposed terms, the transaction values the remaining free float at about AED31.8bn ($8.66bn).

    Rothschild & Co’s local office has been appointed financial adviser.

    Emirates NBD Bank and First Abu Dhabi Bank will act as joint lead receiving banks, while Emirates NBD Capital and First Abu Dhabi Bank will serve as joint lead managers.

    Cairo-headquartered EFG Hermes has been appointed co-lead manager, and UK-based Allen Overy Shearman Sterling is acting as legal adviser.

    The move comes shortly after AD Ports Group posted its strongest quarterly performance to date, reporting an 88% increase in second-quarter net profit to AED836m ($227m).

    Revenue for the second quarter of this year rose 47% to $2bn, supported by gains across maritime and shipping, economic cities and free zones, and logistics.

    In January, Abu Dhabi approved plans to consolidate ADQ’s investment portfolio into L’imad Holding under the chairmanship of Abu Dhabi Crown Prince Sheikh Khaled Bin Mohamed Bin Zayed Al-Nahyan.

    L’imad has been mandated to build, develop and manage a diversified portfolio of assets and projects in priority sectors in the UAE and internationally, with a focus on infrastructure and real estate, financial services, and asset and investment management.

    Once fully consolidated, the platform will encompass more than 25 investment companies and platforms, alongside over 250 subsidiaries.

    L’imad’s portfolio includes Taqa (utilities and power), Modon Properties (real estate), Etihad Airways (aviation), PureHealth (healthcare), Etihad Rail (transport infrastructure), Wio Bank (digital finance), AD Ports (logistics and maritime trade), McLaren (motorsport) and Louis Dreyfus (agricultural commodities).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18798489/main.jpg
    Yasir Iqbal