‘Talent vacuum’ posing threat to Qatar project deadlines
Qatar is struggling to recruit and retain skilled experts who can help deliver on its many planned infrastructure projects over the next several years, according to a new report by international consulting and accounting firm PwC.
The ensuing “capacity crunch,” which is also being experienced in the UAE and Saudi Arabia, will make it difficult for projects to be delivered on time unless radical changes are made to management styles.
In the second edition of the Building Beyond Ambition: Middle East Capital Projects & Infrastructure Survey for June 2014, PwC states:
“Organisations delivering complex and iconic projects need to rethink how they govern and oversee project delivery, building delivery units that are agile, empowered and able to make decisions effectively. Failure to do so risks these projects being mired in delays and disputes.”
PwC experts surveyed 130 of the region’s most prominent project owners, developers, contractors advisors, and financiers during the month of April to assess their confidence of the year ahead.
While three quarters of business leaders said they expected spending to increase in the coming year as Qatar prepares to host the 2022 World Cup and the UAE gets set for the Dubai Expo in 2020, the report found “acute” capacity constraints facing the region’s mega-projects.
Qatar is feverishly working to build and overhaul at least eight stadiums ahead of the conduct extensive road improvements, create a metro and light-rail system and develop a new city in Lusail, as well as a new port.
A shortage of skilled manpower may be one of the biggest impediments to delivering these projects on time, according to those who spoke to PwC.
More than half (54 percent) of business owners and 43 percent of contractors said this was their top challenge for the coming year:
“While the Middle East may well have the ambition and political imperative to embark on the projects planned in the region, the key limiting factor and potential crisis point is around people.”
As the number of big projects increase internationally, the report states that money alone is not the only consideration for expert workers.
Skilled expats who are being sought after also consider the available healthcare and education facilities, and whether they will have a good quality of life if they relocate.
Qatar is cited as one of the top three countries, along with UAE and Bahrain, where the availability of skilled resources is considered the biggest external challenge.
The findings of this report chime with the latest statistics released last week by Qatar’s Ministry of Development, Planning and Statistics (MDPS), which concluded that the proportion of highly-skilled workers in the country declined between 2008 and 2012.
This is despite significant state efforts to expand and develop Qatar’s knowledge-based industries, as it attempts to diversity its economy away from oil and gas.
To avoid a talent vacuum, businesses should focus on trying to retaining their experts by giving them chances to develop and progress in their roles, the report stated.
Another problem is poor decision-making on behalf of those managing the projects. More than half (54 percent) of those questioned cited it as a key reason why developments were falling behind schedule.
Critical of the common client structure in the region, the report describes the status quo as “power-lite,” saying it contributes to delays and makes projects go over-budget:
“A lack of experience at a senior level to oversee large, complex projects and their contractors, also creates problems.
When combined with relatively weak governance structures and a lack of delegation, it leads to delays in decision-making, last-minute variations, poorly defined scope or inadequate designs and a lack of oversight.”
Fewer projects across the region are being canceled these days, according to the report. But delays are commonplace – some 95 percent of those questioned said they suffered some delay, with nearly half (44 percent) admitting their projects were behind by six or more months.
This is worse than the situation two years ago, where PwC’s first report found that 90 percent had reported delays, with 34 percent saying the delays were six months or more.
At that time, as is now, a lack of funding was cited as one of the reasons, with 45 percent of respondents saying this year that this had led to their project being delayed or deferred.
Projects are also now more likely to run over-budget. Some 71 percent reported an overspend this year, compared to 63 percent in 2012.
Disputes are also more likely to take place, with 62 percent of business leaders admitting they were in dispute last year or expect to be in the coming year.
Here’s the full 2014 report: