The Challenges of Mega Infrastructure Projects in the EMEA area

Presentation

EVENT 2: A dedicated project and project financing panel will showcase the issues and challenges of Mega Infrastructure Projects in the EMEA area and how disputes are managed between stakeholders in practice.

10h30 – registration. Coffee break before event.
11h-12h30 – Panel 2 presentation.

THEME: The Challenges of Mega Infrastructure Projects in the EMEA area

SUMMARY:

This year, Junction will host a panel on the theme “The Challenges of Mega Infrastructure Projects in the EMEA area”.

Mega infrastructure projects in Africa and the Middle East can be transformative for a region, but disputes during construction are a major hurdle. On this occasion, it will be highlighted how the disputes may arise and are managed, and how traditional dispute resolution mechanisms (such as arbitration) are handled.

Here are some of the key challenges:

1/ Financing and Cost Overruns:

(i) Fluctuating Costs: Unpredictable economic conditions can cause material and labor costs to surge, leading to disagreements between contractors and governments over budgets.

(ii) Cash Flow Issues: Large upfront costs and delays in payments can strain contractors, making it difficult to complete projects.

(iii) Planning and Coordination

2/ Complexities: Mega-projects involve numerous stakeholders with varying interests. Coordinating them effectively and navigating cultural differences can be a challenge.

3/ Scope Creep: Changes to the project design mid-construction can lead to disputes about who is responsible for additional costs and delays.

4/ Legal and Regulatory Issues:

(i) Fragile States: Political instability in some regions can make it difficult to enforce contracts and resolve disputes fairly.

(ii) Uneven Legal Systems: The legal frameworks for construction projects can vary significantly between countries, making it hard to find common ground when disagreements arise.

WORKING TOPICS:

Our Panel will be exchanging on the lessons learns from their different PPP Projects (including during the construction phase), in particular:

(i) What kind of events are typically leading to a dispute between the Parties?

(ii) What is the place of the arbitration clause and dispute resolution mechanism? Are the traditional dispute resolution mechanisms aligned with the expectations of Mega Infrastructure Projects’ stakeholders?

(iii) How are stakeholders handling/managing arbitration and/or claims?

(iv) Costs and delays during the construction phase.