Region could be heading towards fourth dispute cycle since 2009

Baker McKenzie Habib Al Mulla’s Andrew Mackenzie says traditional method of tendering is “being seen as not fit-for-purpose”

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Baker McKenzie Habib Al Mulla’s recently installed partner Andrew Mackenzie has told Big Project Middle East magazine that he believes the region’s construction sector could be heading towards its fourth dispute cycle since 2009.

“2017 was quiet, but again, without sounding too corny, it was perhaps too quiet! People were battening down the hatches. Clients certainly said that to me. They just wanted to get through 2017 and hope that 2018 would bring more growth. But tie that in with the oil price rise, and tie that in with the increase in liquidity, which will slowly return to the market, and I think we’re going to see people get a bit more prone to launch formal proceedings.”

Mackenzie told the magazine he does see positive developments on the horizon.

“Dubai Properties has actually put out a call-out for a contractor-led framework [for tendering]. Basically, the old traditional form of tendering is seen as outdated, outmoded and generally not fit for purpose. It generally leaves the contractor exposed, which ultimately leaves the developer being unable to complete. I think Dubai Properties and Nakheel have felt that most keenly, and so it’s slightly more contractor-led at the moment.

“I think the fact that developers like Dubai Properties are prepared to look at it seriously is a good indicator that a quasi-government entity is thinking to itself, ‘Do we just want to carry on as normal?’ They’ll ultimately come out the better party, but you compare it to Emaar’s model, where they adopted an approach to the market focused on completing specific projects and delivering for its customers, and not getting entangled in big, hefty disputes.”

Read the full interview here:

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