Strategies and Guidelines for a US-based Contractor to reach out for Middle East Construction Market

1. BCN 5776 International Construction Business Management
Assignment 2:
Construction of the Burj Dubai Skyscraper, Dubai, UAE
By
Siddharth Mantri

2. International Projects like Construction of Burj Dubai always requires a variety of aspects to
think over. Careful study of these aspects pertaining to the project is the backbone of a timely-
completed project. In order to successfully finish the project Burj Dubai, we need to prepare for
the following facts:
1. The most important thing for an International Construction project to be successful is to
understand the objectives of owner behind the Project. The design, construction and
management team need to understand the functionality of the billion dollar structure. The
team might need to identify few areas of projects which cannot be compromised regardless of
the circumstances and need to plan the project around that.
2. As an US-based firm, we need to accept our unawareness about the construction industry in
UAE. Thus, we might need to tie-up with a potential local construction firm in order to get
familiarized with the local industry and construction regulations. The selected firm need to be
assigned the work of getting the permits and inform about the mandatory construction
regulations.
3. As the construction is quite complex, the project will require bunch of skilled labors. We
need to make sure the adequate availability of required labors during the life-span of the
project. Company also needs to gather information regarding the potential specialty sub-
contractors for different works. We might even require the help of the local construction
partner for this.
4. A large portion of the labor force brought in Dubai is from Pakistan, India and Afghanistan.
Study regarding the behavior, work mentality and efficiency of the labor community by the
Project Manager or the Supervisor can help in achieving greater productivity.
5. As the project has to be constructed at Dubai, the various construction measures, construction
regulations, design codes, safety measures, quality measures has to be closely studied.
6. Dubai being the Islamic region, the effect of sociocultural environment on the construction
has to be considered. Work on Thursdays and Fridays might have to be abandoned and work
intervals might have to be provided for the prayers every day.

3. 7. According to the scale of the project, various construction materials need to be imported
from across the world. List of such materials along with their manufacturing location has to
prepare well before time to schedule the delivery at appropriate time.
8. We need to understand about the probable dispute resolution alternatives if unfortunately
project leads to that. The justice system in Dubai is largely dependent on Islamic Sharia (part
of Islamic holy book ‘Quran’). Dubai operate as largely patriarchal society, headed and
administered by family of rulers. The magistracy is more likely to favor the local people at
times of litigation. Thus, alternatives like arbitration or mediation should be more preferable.
The legal team needs to take into consideration all these important facts.
9. As an US-based firm working in Dubai, the accounting team has to understand the taxation
policies of US as well as Dubai. There are policies through which we can take benefits of
minimizing the taxes.
10. We also need to concentrate on the payment clauses in the contract. The mode of the
payments along with the mobilization cost are the important aspects to be taken into
consideration while preparing the contract.
11. One of the most important aspects in International Construction Projects is the exchange rate
fluctuations. These clauses will be depending upon company’s future plans about expanding
business in Dubai or in UAE after finishing this project. Appropriate currency clauses has to
be incorporated within the contract to avoid the losses due to exchange rate fluctuations. The
exchange rates between UAE Dirham and US dollar is quite stable, thus the transactions for
goods and services for the project from both the countries shall not affect significantly as far
as exchange rates are concerned. But the transactions for the goods and services from other
countries are vulnerable to losses due to unstable exchange rates. The cost management team
needs to analyze all these future probable transactions meticulously and decide appropriate
payment clauses.
12. An adequate insurance coverage against the confiscation, disputes, etc. has to be taken to get
protected on foreign soil.
13. The employees which are going to work in Dubai needs to understand about the local culture,
community behavior and other likes and dislikes of society. All these will help their stay in
Dubai more comfortable.