As the GCC power and water utilities sector continues to expand amidst exponential growth in demand, engineering, procurement, and construction (EPC) firms equally continue to grapple with a multitude of challenges that impact their operations and project outcomes.
A recent LinkedIn poll conducted by Utilities Middle East sheds light on the primary hurdles faced by EPC companies operating in the GCC region. With responses from industry professionals, the survey outlines the following as the top most challenges confronted by these firms on a daily basis:
Regulatory compliance is a dominant concern
Topping the list of challenges, regulatory compliance emerges as a persistent concern for power and water utilities EPCs, garnering 43% of the responses.
Traversing through a myriad of regulations, standards, and guidelines imposed by governmental bodies demands meticulous attention to detail and unwavering adherence to compliance protocols.
From environmental regulations to safety standards, EPC firms must ensure that their projects align seamlessly with regulatory requirements to avoid penalties, delays, and reputational risks.
Labour and material shortage
In a marketplace marked by rapid urbanisation and infrastructure development, the demand for skilled labour and quality materials often outpaces the available supply. Approximately 14% of respondents cite labour and material shortages as a key challenge.
Recruiting skilled professionals and sourcing high-quality materials pose significant hurdles that EPC companies must overcome to ensure project success.
Addressing this challenge requires innovative strategies, including workforce development initiatives, strategic partnerships, and supply chain diversification efforts.
Supply chain disruptions
Supply chain disruptions, another concern voiced by 14% of respondents, present a formidable obstacle to project continuity and efficiency.
From geopolitical tensions to natural disasters and global pandemics, an array of factors can disrupt the seamless flow of materials, equipment, and services essential for project execution.
EPC firms must proactively mitigate supply chain risks by fostering resilient supplier relationships, implementing contingency plans, and embracing digital technologies that enhance supply chain visibility and agility.
Fluctuating project budgets
Rounding out the list of challenges, fluctuating project budgets is considered a pressing concern for 29% of respondents. In an environment characterised by economic volatility, currency fluctuations, and evolving market dynamics, accurately forecasting project costs poses a significant challenge for EPC firms.
Budget overruns can undermine profitability, erode stakeholder confidence, and jeopardise project viability.
To mitigate financial risks, EPC companies must implement robust cost estimation methodologies, exercise prudent financial management practices, and maintain open lines of communication with project stakeholders.
Strategies for success to address challenges head-on
Despite the formidable challenges encountered by power and water utilities EPCs in the GCC, proactive strategies and innovative approaches can empower firms to navigate uncertainties and achieve operational excellence.
By embracing technology-driven solutions, fostering strategic partnerships, and prioritizing risk management, EPC companies can surmount regulatory, labour, supply chain, and financial challenges, positioning themselves for long-term success and sustainability.
Through the above insights, industry stakeholders can collaborate to develop tailored solutions and foster an environment conducive to growth, resilience, and prosperity in the GCC’s utilities sector.
