The Fifth Annual CRUX Insight Report on global construction claims and disputes was published yesterday.
The report, published by HKA – the world’s leading risk mitigation and dispute resolution consultancy – analyses over 1,600 construction projects in 100 countries, valued at more than $2 trillion.
It reveals that major capital construction projects are facing significant overruns in costs and delivery, with claims exceeding $80 billion in value and overruns totaling 840 years.
Key findings globally are that:
• On average, costs claimed in disputes amounted to $98.7 million per project and more than a third of their capital expenditure (35.1% of CAPEX).
• Projects faced even heavier losses in time. Claimed time extensions average 16.5 months – equivalent to 68.6% of the original planned project duration.
• Conflicts over contract interpretation, design failings and change in scope plague projects, with some notable variations in regions and industries.
• Projects in the Middle East are prone to the worst delays (83.1% of schedule duration), while contentious costs in Europe (at 38.3% of CAPEX) exceeded the global average.
In the Americas, the report analyses over 500 projects with an average CAPEX value of $669 million. Here, claimed costs are more than a third of the average project CAPEX and deficient workmanship was a far more significant cause of contention in Europe and the Americas than in other regions – on 23.2% and 20.3% of projects, respectively.
The interactive dashboard showing the report’s data as well as the full report can be viewed and downloaded on these links: