The MENA region’s capital and infrastructure projects are currently negotiating a perilous market landscape as many projects are cancelled or temporarily placed on hold, according to a PwC report.
But the report, Middle East Capital Projects and Infrastructure Survey, found delayed payments from clients continued to be the biggest external challenge for respondents, cited by 57%.
The survey covered 94 organisations based in the Middle East and involved project owners, developers, contractors, external advisors and financiers. More than half of those surveyed were at senior executive level or above while 22% were in C-suite positions.
The report said the survey was conducted between February and April 2020, both before and during the coronavirus pandemic, and it captured the “evolving sentiment of industry leaders as the pandemic progressively influenced their strategic thinking”.
Responses concerning delayed payments did not change significantly either before or after the pandemic had begun to wreak havoc on Middle Eastern economies, underlining this was an enduring issue, the report said.
Other major external challenges were market volatility, cited by 50%, client decision-making (44%) availability of skilled talent (44%) political instability (38%) and availability of financing (35%).
Almost a third (30%) cited attracting the right suppliers as a major external challenge, followed by contractual disputes (24%) and supply chain capacity or performance (23%).
Half (52%) said risk and change management was one of their five most pressing internal challenges, followed by financial performance (40%) and funding and financing (37%).
The coronavirus pandemic had encouraged organisations to digitalise functions and operations and 29% believed digital innovation would transform the infrastructure market over the next two years, while 38% said it would bring significant change.
Two-thirds (66%) of those surveyed in March identified artificial intelligence and machine learning in their top five technologies to disrupt the infrastructure market in the next two years, compared with just 50% in the pre-Covid sample.
“The Covid-19 pandemic, coinciding with falling oil prices, is forcing organisations across the region to address industry issues that were already significant when we conducted our previous survey in 2018,” said the report.
“What has changed is that these challenges must be tackled in what is an unprecedented economic downturn, where survival will depend on making the correct strategic decisions and knowing where to prioritise and reallocate capital. This represents a major challenge.”
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