The construction industry in the Middle East and North Africa (MENA) region is at risk of more disputes with the rapid increase in mega projects. According to recent research, contractors and developers operating in the region anticipate an increase in construction project disputes over the next three years. The biggest reasons for this include changes in project scope, cost overruns and delivery delays.
Especially in countries hosting large-scale projects, such as Saudi Arabia, the risk of disputes increases due to high costs and tight timelines. According to consulting firm HKA's 2024 report, projects in the MENA region experience more delays than the global average. The report highlights that design changes are the most common cause of disputes. In addition, incomplete planning of some phases to fast-track projects, communication problems between contractors and uncertainties in contracting processes are also among the factors that trigger disputes.
Arbitration is of great importance in resolving such disputes. However, experts emphasize the need to speed up arbitration processes in MENA and increase the enforceability of awards. The region's arbitration centers should adopt international standards and develop more effective communication with foreign parties to improve resolution processes. Establishing a more robust legal framework for the construction sector could contribute to the smooth progress of projects.
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