WORLDNEWS
8
GLOBAL
Major dispute values
grew+1.2% in2013
Report points to the rising value of disputes, the
first ‘mega disputes’, but a fall in the average time
taken to resolve disagreements.
T
he average value of disputes onmajor construction projects increased
+1.2% last year toUS$32.1million, according to consultant Arcadis.
The company added that last year saw the first ever US$ 1 billion+
disputes in the industry, with Arcadis working on three ‘mega disputes’,
including the PanamaCanal expansionproject.
According to
Global Construction Disputes: Getting the Basics Right
, the
fourth annual report by Arcadis on this topic, dispute values were the
highest inAsia last year at an average ofUS$ 41.9million, closely followed
by the Middle East at US$ 40.9 million. In the US, dispute values more
than tripled compared to last year, to US$ 34.3 million, and also rose in
theUK to their highest value since the report started atUS$ 27.9million.
The report also said disputes took, on average, less time to resolve in
2013 at 11.8months, down from 12.8months in 2012.They took longest
to resolve in the Middle East and US at 13.9 months and 13.7 months
respectively. Disputes in Continental Europe tended to be resolved the
quickest at 6.5months.
The research found that themost common causes of constructiondisputes
related to the administration of contracts.The top five causes in 2013were
failure to properly administer the contract, failure to understand and/or
comply with its contractual obligations, incomplete design information or
employer requirements, failure tomake interimawardsonextensionsof time
and compensation and poorly drafted or incomplete and unsubstantiated
claims.
Party to party negotiation was deemed the most popular method
of alternative dispute resolution in 2013, followed by arbitration and
adjudication.
MEXICO
Lorenzo Zambrano (pictured), chairman&CEO of Cemex, died of a
heart attack inMadrid, Spain onMay 12, aged 70. He joinedCemex in 1968
and held several positions before being named director of operations in 1981.
In 1985 hewas appointedCEO and in 1995was elected chairman of the
board of directors. He served a total of 35 years as a director of the company,
having first taken a seat on the board in 1979.
Following his death, Cemex split
the role of chairman andCEO.
Executive vice president, Fernando
Gonzalez has assumed the role of
CEO andRogelio Zambrano, a long-
standing boardmember and cousin
of the late Lorenzo Zambrano has
been named chairman.
The company has also reorganised
its corporate and staff functions
into six divisions, each under and
executive vice president, four of
which are new appointments. The
company’s six regional presidencies
remain unchanged, with these
executives continuing to report
directly to the CEO.
international
construction
june 2014
BRAZIL
Penalties
confirmed
Brazil’s Administrative Council
for Economic Defence (CADE)
has confirmed fines totalling
BRL 3.1 billion (US$ 1.4 billion)
and a series of forced divestments
for six producers and three trade
associations in the cement industry.
Reporting
commissioner,
Alessandro Octaviani, claimed
said the cartel had been active in
the Brazilian cement and concrete
market for 20 years and had fixed
prices and sales volumes, set up
market sharing agreements and
allocated customers to different
cartel members. The body of
evidence is said to include emails,
notes and several documents seized
during raids carried out in 2007.
The companies implicated in the
cartel are Votorantim, Camargo
Corrêa, Cimpor, Holcim, Itabira
andLafarge. Lafarge hadpreviously
settled its involvement with
CADE through the negotiation
of divestments and a fine. Since
the case started Camargo Corrêa
and Cimpor have merged to form
InterCement.
A statement from Holcim,
which received a BRL 508 million
(US$ 228 million) fine said, “The
company reinforces that it acts
lawfully and in accordancewith fair
competition rules and practices.
Holcim Brazil will pursue all
available legal steps to defend its
position.”
Votorantim, the most heavily
penalised of the companies, is also
reported to be planning an appeal
against the ruling.
In addition to the fines, CADE
has imposed the mandatory
divestment of 20% of production
capacity in the regions in which
any of the six companies ownmore
than one plant. The buyer is not
allowed to be another member of
the cartel and the ruling applies
to all shareholdings in plants,
includingminority interests.
CADE said the 20% was the
minimum market share a new
competitor would need to enable
effective competition. The named
companies are also barred from
making any acquisitions in the
cement sector for five years.
US
Construction
upagain in
The value of construction put in
place in the US was up +8.6% in
the 12 months to April, compared
to 12 months previously, at
US$ 954 billion, according to the
USCensusBureau.Themarketwas
also up +0.2% on March 2014’s
figure of US$ 952 billion, a third
straightmonth of gains.
The private sector led the way,
with the value of commercially
funded construction up +11.7%
compared to a year ago at
US$687billion– about 72% of all
construction.
Private residential construction
was up +16.3% compared to a year
ago, to US$ 383 billion, and there
were also double-digit gains in the
lodging, office, communication
and conservation & development
private non-residential categories.
On the down side, therewere drops
in private construction relating to
health care, public safety, power
andwater supply.
Meanwhile, public construction
output was up just +1.2%
compared to a year ago, atUS$267
billion.This was due to increases in
construction related to education,
aswell as the power andhighway&
street categories. Most other areas
of public construction were down
compared to a year ago.
Commenting on the results,
Associated General Contractors of
America (AGC) chief economist
Ken Simonson said, “Residential,
private non-residential and public
construction spending all have
areas of strengthbut alsopockets of
weakness. While the overall trend
remains more positive than last
year, growth is likely to be spotty
for the foreseeable future.”
Separately, the PCA – formerly
the PortlandCement Association –
forecasts US cement consumption
will increase +7.9% this year,
almost double last year’s growth.
PCA chief economist and group
vicepresidentEdwardSullivan said,
“There is considerable evidence
that the economy’s growth path
has softened during the past several
months, but we believe that the
underlying economic fundamentals
are stronger than the data suggest.”
