CONSTRUCTION STRATEGIES
carried out in Asia Pacific and those emerging markets . We ’ ve also seen major growth from Latin America where we ’ ve got businesses in Brazil , Panama , Chile and in Mexico .” It is a trend that is allowing companies greater opportunities , but new entrants to new markets have raised alarm bells in the construction industry in the past . Hunt says that trend , combined with the myriad of ‘ mega projects ’ coming online have quite probably raised the risk in the sector , citing one very recent example . “ Clients are looking for contractors to enter into contracts on more of a lump sum basis and looking to transfer that risk to the contractors . And we ’ ve only got to see from the demise of Carillion that these contracts are very risky . Because the margins are low and , in some instances , I think , contractors are bidding on margins that are close to zero and are hoping to get their money back in claims if you like . That ’ s a real challenge for our industry generally across the world .” The debate over the distribution of risk is one that has shaped the construction conversation for many years . Addressing the issue , Hunt says that he has long advised clients to use the contract they sign as a tool to avoid disputes . “ A contract is an agreement that is entered into between the two parties as we know , but is very rarely used as a proactive tool to manage and avoid disputes on a project and to manage risk ,” he reveals . “ The contract is a mechanism allowing people to value changes in time and changes in money . And yet very rarely do the major contractors and even the subcontractors apply the contract , because most of them assume if they follow the contract that they ’ re going to fall out with the employer . “ I keep saying to people that the contract is a tool at their disposal that should be used like a budget to set up a project that suits all parties . It amazes me that we still have in the industry where contractors and employers don ’ t really utilise contracts . It ’ s simply a case that it ’ s quite often drafted and it costs a lot of money to draft it with lawyers on both sides , so it ’ s put to one side when really it should be a vital component .” In some markets it is accepted
14 March 2018