Issues with outsourcing trade contracts in the Middle East

Within the Middle Eastern energy sector, it is common practice for large scale construction to involve several contractors working together on different specialist areas to complete the project.

For example, an oil firm such as Aramco would need several different outsourced contractors to complete construction of a new pipeline.

These outsourced companies can provide anything from specialist hardware used to construct the project through to service assistance and legal aid in wrangling out negotiations.

The reason these contracts are so common is that they are very specialist jobs and so require extra expertise in the field in order to negotiate potential risks and obstacles.

Such is the scale of these types of development that firms are required to be hired for safety inspectors, site managers, security and transportation of materials.

With thousands of elements all working in unison, projects are often broken down into segments to allow one person to be accountable for one aspect of the build.

The difficulties lie in choosing the right contractor who is capable of delivering your requirements on budget and to the standards you expect.

Reputation is a huge aspect of outsourcing contracts. If you’re firm is to stand a chance of winning a lucrative contract it needs to be a trustworthy source and the best way of ensuring that is through a well maintained reputation.

Similarly, in such economic times, smaller firms may be struggling and if they go into liquidation it could lead to disruptions and unforeseen delays in any construction or trade project.

Of course, there are benefits of outsourcing services. Your firm may not be specialised enough to carry out a particular part of the project or it could need access to specialist equipment.

Outsourcing allows a company to bring in new ideas and services on a temporary basis as and means it saves money by not having to employ or purchase the equipment, which it wouldn’t need once the work in completed.

Outsourcing plays a crucial role in many industries across the Middle East and multi-million dollar contracts are exchanged regularly making it an extremely lucrative sector to enter.

Agriculture in Egypt

The Nile Delta has been one of the most agriculturally prolific places in the world and has been the leading producer of food among Arab nations since ancient times.

The land surrounding the Nile, which floods annually, produces a large variety of produce including cereals, fruit and vegetables, as well as cash crops such as the world famous Egyptian cotton.

This has attracted investment from around the world and businessmen such as Fahad Al Tamimi are actively involved in several agricultural projects in the area, exporting produce to the lucrative EU market.

The Nile is crucial to agriculture in Egypt and the other countries it flows through as there is very little rain. The Nile is still Egypt's only considerable source of fresh water and has been for thousands of years since the ancient Egyptians used it.

Whereas in the past, Egyptians relied on tidal flows and flooding to supply irrigation ditches with water, modern techniques use a network of ditches and catch basins to ensure the central government can guarantee abundant supplies of food all year round.

The river stretches 750 miles from the town of Aswan, near the Sudanese border, to the Mediterranean. The valley cuts through rocky highlands from Aswan to Cairo and at its widest point is only nine miles across.

The Nile forms a V, north of Cairo, forming a flat, green and fertile delta. There are six million acres of cultivated land surrounding the Nile making up only 3.5 percent of Egypt's total area of 385,200 square miles.

Although there are now about 25,000 tractors in Egypt, the majority of the agricultural work is still performed by hand, using the same types of tools as ancient times and which are on display Egyptian Museum. Farmers still turn water screws by hand and animal-powered water wheels are still a common sight in Egypt.

The largest difference between ancient and modern agriculture in the area is due to the building of the Aswan High Dam in 1965. The ancient system of collecting flood-waters in basins for irrigation has been replaced with a network of canals and smaller ditches to provide three consecutive cropping seasons every year.

One issue with agriculture in the area is the growing population it must support. In 1907 Egypt's population was 11 million and over six million acres was used for arable farming. The same six million acres must now support a population that is now almost 40 million.

The Middle East Energy Industries Have Enormous Investment Opportunity

The most part of the Arab region has huge storage of natural resources and concerns of oil wealth distribution to that sector are beginning to be raised. The region’s largest opportunities lie with Saudi Arabia Ghawar Oil Field  where the government is focused on a country wide investment in the oil industry that is set to diversify the income streams of the nation. It might bring liberation from the various issues that are responsible for the unstable condition in some parts of the region. Annual investments have been well above $500b although these are strained by rapid economic and population growth in the region.  The fundamentals of the growth of scarcity for energy solutions like oil and welfare are the major drivers behind this boom in the energy industries.

Drawing the focus to Kuwait, a large amount of oil and other energy resources are present there. It helped the economy of Kuwait. Therefore, they are now preparing themselves for the world cup to be hosted in 2020. The supply challenges that are anticipated are evident and in this regard the rest of the region is likely to benefit immensely from this. UAE ‘will see a steady increase in investment in publicly funded energy companies and also to a lesser extent the private funded companies. Take this for instance, though recent investments in the energy industries the occupancy reached 57.8% in 2012 driving further investment in the energy sector.

Beyond the Gulf opportunities exist, but only for those willing to commit and see their investment through their respective cycles. The wider Middle East region has dynamic investment opportunities with Iraq and Libya being some of the two most outstanding examples in that area. Oil industries in Iraq are again on the rise and ministers and other government officials have been invited investor to participate in the process. Competition for the traditional American companies has been very stiff and in this regard, other powers like the European countries have been pushing hard into the market with a competitive edge in their pricing. This therefore implies that the Western Countries have to come to speed with themselves and the kind of quality they are going to offer in order to stay in the loop as top energy providers in this region.

Western economies that are heavily indebted, this can be a way to raise and recover from such a situation considering the Middle East is highly liquid because of its trade in oil. Conclusively there are challenges that are brought about by investment, in spite of the political risks of the Middle East, and it is a matter of cost and benefit analysis of the investment. The most important thing is that the middle east energy industries have got plenty of opportunities.

Implications of Infrastructure Regulation Codes in the Middle East

Every region wants to develop its own infrastructure regulation codes to establish sustainable infrastructures through it. In the past year the infrastructure ARABIA Summit conference held from 22 April for four days, saw the presentation of a White Paper exploring the various opportunities and limitations that have been involved with the infrastructure industry some of which are in existence today.

Violence and its impacts on the stability of the Middle East have been on declining rapidly with sustainability arising in most discussions pertaining to the agendas of government. But the possibility of implementation is a key point here. Several speakers on that forum pointed out that the energy code currently being phased into the industry in Abu Dhabi was the best and reiterated that the nation was on course to meeting the UN’s Green Buildings target for extremely hot climates. 

Water balance has become an issue of importance as well in the region and playing as the key in the sustainable design phase. Overall, carbon emissions pertaining to the sustainability agenda, has the majority of it being water, electricity and energy related. For the region to therefore attain a level of carbon emission targets that have been set by the Copenhagen, it is vital to cut down on the use of the above mentioned elements, especially on energy.  Each country has its own set of targets and they are to be attained by 2020. The UAE is amongst the top emitters of carbon gases in the world emitting about 30 carbon tonnes a year, per individual. There is a need to act upon these issues and with the UAE committed to driving down it’s emission levels and introducing initiatives, these will go a long way  in setting a benchmark for sustainable  building and communities.  Tests were conducted and implementation of proper designs is being ensured by timely inspections of the authorities. These tests are being centralized with a central lab being built.

Understanding these codes in the region allows the nation’s infrastructure industry as a whole to understand the way these apply to this region and help develop designs in infrastructure that can match up sustainable agendas and these good designs can save money by up to twenty percent.

The Little Known Minerals in the Middle East

Apart from the oil and gas reserves found in the Middle East, there are some minerals of repute which are also among the foreign exchange earners. There are a number of countries within the region which are busy developing their mining industries to cater for the upsurge in the demand for minerals which are also available. For some time Saudi Arabia has been known for its gold that fetches good prices in the world market apart from the well-known oil.

Other countries that have recently ventured into mining include but are not limited to Egypt, Iran and Saudi Arabia. Egypt has an array of mineral resources. Notable among them is a stone known as tantalite and Egypt ranks number 4 in terms of the deposits of tantalite in its territory. Egypt also has deposits of coal as well as gold. It also had deposits of iron ore, phosphates, and salt which is almost depleted.

Iran is another country within this region with a notable number of mineral resources. As a matter of fact Iran ranks number 15 about the mineral deposits in its territory. It has more than 68 types of minerals, 37 billion tons of undoubted reserves with more than 57 billion of possible reserves. Despite all these wonderful news about these reserves, Iran has not developed its infrastructure in the field of mining industry. The heavy involvement in nuclear energy development can be one of the major reasons for Iran. 

Saudi Arabia is another major player when it comes to the mining industry. It has one of the largest deposits of phosphates in the world. Saudi Arabia also boasts of the largest reserves of gold some of which comes from the famous mines referred to as King Solomon’s mines. A lot of work is underway as experts believe that there is a potential for the existence of other minerals. Companies from the Americas, Europe and Oceania regions have been busy fighting for tenders for exploration in Saudi Arabia. This, the experts say will bear fruit in the near future. Saudi Arabia as well as the other countries of the Middle East region will soon hit the headlines again.