DOHA: A significant number of businesses (nearly 50 percent) in the region, including Qatar and the UAE, are facing difficulties in finding and retaining skilled manpower to deliver big ticket projects on time, especially those related to 2022 Fifa World Cup and World Expo 2020, according to the findings of PwC’s latest survey.
The PwC’s second edition of the Middle East capital project and infrastructure survey, which was launched yesterday, about 54 percent of business owners and 43 percent of contractors in the region consider the availability of skilled people as a top challenge in the coming year. They are facing difficulty in finding, attracting and retaining enough skilled and experienced manpower people to deliver big, complex projects.
The survey also finds a renewed optimism with 75 percent of respondents expecting an increase in spending in the coming 12 months. This is largely driven by mega events, Qatar 2022 World Cup and 2020 World Expo (Dubai), as well as increased spending on social infrastructure including housing, education and healthcare. However, this is only half the story; the results show that there is a ‘capacity crunch’ looming on the horizon — in other words, market capacity is failing to keep pace with demand. PwC say there are two fundamental areas that will limit the ability to progress with project plans: people and financial resources.
There are already signs that these capacity constraints are beginning to impact project delivery — 95 percent of respondents say their projects are delayed, with a staggering 45 percent delayed by more than six months. However, client decision-making is also a big concern, with 35 percent of contractors citing it as the greatest challenge they face delivering projects. “While our survey shows a good dose of optimism, there is a capacity crunch looming which threatens the delivery of projects. It is already having an impact, as we are beginning to see more delays on projects that are underway,” said Stephen Anderson, PwC’s Leader of Capital Projects and Infrastructure in the Middle East. “Broadly speaking, these problems have been apparent in our region’s infrastructure sector for several years, but the increase in activity is making them more acute.”
The ability to find skilled people — both in terms of quality and volume — was identified as a key challenge for both project owners and contractors. Difficulties securing funding are also expected to lead to project delays — our survey suggests that there simply isn’t enough funding available. The sheer scale of commitments is making private sector finance a more attractive, and indeed necessary, option for funding infrastructure projects.
Respondents identified the UAE as their top target for investing in capital projects and infrastructure, closely followed by Qatar and Saudi Arabia. Strong economic growth and budget surpluses in these countries provide the backbone for ambitious spending plans, as their governments continue to invest in economic diversification while at the same time spending to maintain or expand hydrocarbon and downstream petrochemical production.
The Peninsula
