Disputes costing construction US$73 billion
By Andy Brown29 November 2021
A new report from global consultancy HKA has revealed that the total value of claims and disputes for large infrastructure projects, also known as capital projects, around the world is US$73 billion and that, when added all together, it leads to delays of around 750 years.
The fourth annual CRUX report from HKA showed that capital projects are losing billions of dollars each year to recurrent, predictable and often avoidable claims and disputes.
The report, which analysed data from 1,400 projects in 94 countries, found that the main causes of claims and disputes are: changes in scope, conflicting interpretation of contracts, design failures, and mismanagement of subcontractors.
The average disputed costs per project was US$100m and disputes typically prolonged scheduled construction programmes by 71%.
The report revealed that the uncertainties brought on by the Covid-19 pandemic had led to an increase in disputes, as had the lack of skilled workers, supply chain problems and rising materials costs – all issues well known in the construction industry.
It added that 10% of projects were impacted by exceptionally adverse weather, a figure that is likely to increase in the future.