Michelle Metz and Paul Cacchioli analyse the impacts, causes and cures of capital project disputes.
Contract terms allocate risk, whether or not all parties fully grasp how, while shaping the claims and disputes that all too often follow. On major capital projects worldwide, the impacts are quantified in the Fifth Annual CRUX Insight Report.
HKA consultants investigated 1,600 projects worth more than $2.13 trillion across 100 countries over a five-year period up to the end of July 2022. Analysis of their findings shows sums in dispute amounted, on average, to more than a third (35.1 per cent) of capital expenditure per project. Claimed extensions of time would prolong schedules by more than two thirds (68.6 per cent), typically adding 16.5 months to programmes.
No less significant is the diagnosis of the underlying causes. ...