Cash flow has been a significant challenge for construction companies in 2018. During the year, numerous business leaders have told Construction Week that this issue has been exacerbated by the problem of delayed payments.
Andrew Greaves, partner and head of GCC at Addleshaw Goddard (Middle East), told Construction Week earlier this year that liquidity remains a hurdle for construction companies in the UAE and across the region.
“The main challenges and opportunities for the construction industry revolve around a tightening-liquidity environment in the market, which is likely to lead to a greater consideration and use of alternative funding structures such as public-private partnerships and export finance and, perhaps, a more active claims market,” Greaves said ahead of Construction Week’s Leaders in Construction Summit UAE 2018, held in Dubai this September.
Greaves’s comments followed similar views expressed by Sanctum Consult’s chief executive officer a year ago. In September 2017, Craig Beeson told Construction Week that it was “apparent that all actors across the value chain” were facing difficulties related to cash flow. He added that this trend could be driven by oil-price fluctuations or “increased cautiousness from financial institutions” at the time, noting that “a lack of proper and effective contract management” could also be one of the factors causing regional liquidity problems.
Indeed, efficient control is a pivotal point for solid contracting businesses. Project outcomes are informed by the input – of cost, time, and talent – made by their stakeholders and, as Andrew Skudder, chief executive officer of CCS explains, “control is at the heart of profitability when it comes to construction”.
Speaking to Construction Week, Skudder continues: “Construction performance and progress cannot be monitored on financial data alone, and engineering information is just as – if not more – critical. Engineering control includes generating and managing allowable and actual quantities of resources, wastage, manhours of labour, production of equipment, and time for construction activities.”
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