ACE chief executive Nelson Ogunshakin and ACE international business manager Naomi Bari visited ACE member firms in the United Arab Emirates (UAE) while attending the Arabian World Construction summit in Abu Dhabi last month.

The ACE team also attended the ACE Middle East Group (MEG) meeting which was held in Abu Dhabi. The group discussed the current state of the industry and gave an update on the recent developments in regards to the non payment issues. The regional grouping welcomed new members including a member of the Spanish ACE sister organisation, and also set up a core steering group which will be driving forward the overall group agenda including the next ACE GCC Conference to be held in Abu Dhabi this October 17-18 at the Sheraton Corniche Hotel.

The visiting ACE team, ACE MEG chair, Ian Clarke and ACE MEG secretary, Simon Harden had the opportunity to meet with influential key clients and stake holders at government and industry level during the visit to the UAE. The meetings were very productive and gave an excellent platform for ACE to discuss the best way forward to improve current UK consultancy and engineering business relations across UAE.

Nelson, Ian and Naomi also met with HM UK Ambassador to Abu Dhabi, Dominic Jermey, who will be opening the next ACE GCC conference this October. The Ambassador was updated on the actives of ACE in the Middle East and will continue to liaise with the ACE Regional Group to support the UK companies within the industry in the UAE.

Nelson also visited Riyadh in Saudi Arabia and engaged with ACE members involved in the huge scale of activities in Saudi Arabia. The country is still booming with numerous construction work and an impressive number of ACE members involved in the delivery of iconic structures such as the new Riyadh financial centre commissioned to Buro Happold and Scott Wilson’s involvement in the rail project. ACE has been in continuous dialogue with the Saudi Council of Engineers to establish a platform for ACE to further engage with key local clients and government officials.

The Conservative Party is considering how to produce significant savings at a local government level.  Their plans call for an immediate renegotiation of contracts with major suppliers to achieve up to £3 billion in cost reductions. This would not only slow down the procurement process, but may also result in high cost litigation which would not be good for revitalising the UK economy.

ACE recognises the need to make efficiencies in public sector spending, but feels that headline cost cutting will not achieve the required savings.  Delaying or cancelling contracts may result in higher costs overall, for example through litigation or repetition of existing work.

Furthermore, local authorities have entered into long term commercial relationships in areas such as highways maintenance.  As some local authority officials have observed, renegotiating these deals could be a time-consuming and costly process.

ACE has argued that meaningful efficiencies can only be achieved through structural reforms of project management and procurement practices.  The aim should be to reduce waste and duplication, and to overcome regulatory barriers to efficient delivery.

Rather than blanket renegotiation of contracts, the public sector should work closely with industry to explore how greater value can be delivered for taxpayers’ money in a partnering approach. Successful projects such as the East London Line redevelopment should be a catalyst for the reform of public sector project delivery.

Nelson Ogunshakin, ACE chief executive, said: “The consultancy and engineering sector is ready to rise to the challenge of the post-recession economy, but the challenges can only be met by real partnership between the public sector and the supply chain.  ACE’s Regional Committees and Local Government Sector Interest Group have already had discussions with the Shadow Minister for Local Government and we will happily continue to engage with local and national government after the election to explore what is possible in terms of procurement efficiency and achieving more value for less cost.”

“The initial sum of outstanding debts owed to ACE members in the UAE when the issue first arose in April was around £400 million.

Since the last visit of ACE to the region in October, the sum of debts owed to ACE members remains in excess of 50 per cent of this, at around £250 million.

In terms of the number of ACE members affected, ACE has approximately 800 member firms with around 50 per cent of these having worked in the UAE and across the GCC. Of those who have worked in the UAE, around 30 per cent of these are still affected.

The UK engineering and consultancy industry in general has had a long standing relationship with the UAE and across the GCC and believes that the Dubai entities will honour the obligation owed to our industry.

ACE has already communicated with relevant UK government departments and ministers and has been assured that the matter is being dealt with, with representations being made by the UK government to the Dubai ruling party.

ACE is also aware that a high level delegation from the UAE including Sheikh Mohammed bin Rashid al-Maktoum visited the UK last week with positive discussions being held.

The current restructuring of the Dubai Sovereign companies taking place is to find a better way to finance outstanding and future investment and ACE is confident that this will be the outcome.

So far, some payments have been made to some ACE member firms. But, the challenge does remain for the Dubai entities to make sure that payments are made as efficiently and quickly as is possible.

ACE is prepared to work in the long term with all relevant parties in the Dubai, as well as with the UK Government and key clients in Dubai to resolve this payment issue.

ACE intends to stay in continuing dialogue with the UK Government and monitor the ongoing feedback from our members.”

Nelson Ogunshakin, Chief Executive