PR93307

PHILADELPHIA, Nov. 29, 2021 /PRNewswire=KYODO JBN/ --

The astounding scale of cash and time lost on construction and engineering

projects around the globe is revealed in a new analysis of claims and disputes

from HKA (

https://c212.net/c/link/?t=0&l=en&o=3371599-1&h=4272240841&u=https%3A%2F%2Fwww.hka.com%2F&a=HKA

), a leading global consultancy in risk mitigation and dispute resolution with

over 1000 experts, consultants and advisors across 40 offices in 15 countries.  

Logo - https://mma.prnewswire.com/media/1572488/hka_Logo.jpg

CRUX Insight 2021 (

https://c212.net/c/link/?t=0&l=en&o=3371599-1&h=466164662&u=http%3A%2F%2Fwww.hka.com%2F2021-crux-insight-operating-in-uncertain-times&a=CRUX+Insight+2021

) distills real-world intelligence on more than 1,400 projects across 94

countries to identify the primary causes of overruns approaching half of

projects' capital value and three quarters of their scheduled programmes.

The fourth annual CRUX report combines a regional analysis of this unique

knowledge bank with actionable insights from industry-leading consultants.

CRUX 2021 facts and findings

Headline statistics include:

    -- 1,401 projects analysed

    -- $2 trillion – combined capital expenditure

    -- $73 billion – total value of claims

    -- $100 million – the average disputed costs per project

    -- 46.3% – the value of claims as a proportion of planned cost

    -- 17 months – the average time extension claimed

    -- 71.4% – the typical prolongation for programmes

    -- 750 years – the cumulative overruns faced by all projects

The dominant drivers of claims and disputes are: changes in scope, conflicting

interpretation of contracts, design failures, and mismanagement of

subcontractors.

COVID-19 has caused additional disruption, restricting access to sites and

labour, constricting cashflow, and exposing the limitations of contract

provisions on force majeure and changes in law.

Beyond Covid, CRUX Insight reports that skills shortages, supply chain

disruption, cost inflation, increased market volatility, and the climate crisis

are increasing the potential for conflict on projects:

    -- Skills: Over a third of projects (35.6%) were hindered by skills and

       experience gaps, and associated workmanship deficiencies

    -- Supplies: Late delivery of materials and equipment impacted one in nine

       projects (11.3%) (even before the report's August 2021 cut-off and

       ongoing global materials shortages)

    -- Climate: A tenth of projects (10.3%) were affected by exceptionally

       adverse weather. Like other global uncertainties, the climate emergency

       requires recalibration of capital project delivery risks.

"Capital projects are haemorrhaging billions of dollars each year to recurrent,

predictable and often avoidable claims and disputes," said Renny Borhan, CEO of

HKA. "CRUX Insight 2021 not only diagnoses these failings and quantifies the

impacts, but also identifies corrective actions to stem these losses. Project

stakeholders and the industry can learn lessons from CRUX to operate more

effectively amid this heightened uncertainty."

SOURCE  HKA

Media contact: Josephine Guckian – josephineguckian@hka.com