Insights from Benjamin Highfield, HKA Partner, Regional CEO, Asia Pacific, on these two major construction and engineering markets.

An acknowledged dispute resolution expert known for his work across the Middle East, Ben Highfield took on the role of global risk mitigation consultancy HKA’s operations in Asia Pacific. But, regardless of their commonalities and differences, the two markets are so closely entwined, he’ll not be quitting his Dubai base anytime soon, Ben tells Middle East Consultant.

With such a strong track record in the Gulf, how did it feel moving on from this market as you took over responsibility for HKA in Asia Pacific?

I would have mixed feelings about leaving the Middle East behind, especially at such an exciting time. But I’m still closely involved with clients operating here and will continue to be, even as Regional CEO for Asia Pacific.

Dubai has been my home for 16 years. The first three I spent with consultants High-Point Rendel working on the Dubai Metro. Then, I built my career with HKA after joining its former parent company, Hill International, in 2010.

As a Senior Consultant specialising in delay and quantum claims analysis, I soon realised I had an acumen for client care and could bring work into the business. It started with Japanese contractors delivering major projects in the UAE.

Over the next few years, I was promoted several times and, by 2014, to Senior Vice-President. I was ambitious, saw the huge potential of the Saudi Arabia market, and was appointed Country Manager. From nothing, we developed relationships with the most significant players and became involved in massive infrastructure projects such as King Abdullah Economic City, the Financial District, and Haramain high-speed railway.

Because of this Saudi success, I was asked to take over Qatar as Country Manager, turning around what was a loss-making business in 2014-15.

Some of our biggest deals back then were with Korean and Japanese contractors and, later, Chinese companies. This nexus between the Middle East and Asia has become increasingly important. Seoul, Tokyo and Beijing are the engines of construction in many other parts of the world.

India’s contractors are also spreading their wings, and their domestic market is booming. So, as well as being my home, Dubai is strategically positioned for supporting our client bases in Asia Pacific and India while also working closely with HKA colleagues in the Middle East who also serve projects being delivered by those same clients.

What are the main challenges you face as Regional CEO Asia Pacific?

The region is very diverse, culturally, and national markets have their own dynamics.

My role has also changed significantly. As Continent Head of Asia, I continued mainly as a work winner, as in the Middle East. Transitioning over the last 12 months to Regional CEO was a new challenge. As well as fulfilling my responsibilities to clients, I lead a growing business and a bigger team across a much larger territory.

My role is to join the dots between our clients’ needs and our people’s capabilities. We restructured the Asia Pacific business and have a highly skilled and flexible team led by four Partners who are from the region.

Managing and motivating people demands great emotional intelligence, and it is an essential part of nurturing and sustaining a collaborative culture, which is crucial. We recruit not just on capabilities but also behaviours. It does not matter where you’re from, your nationality or ethnicity. As well as being highly capable, will you be collaborative and open yourself up to peer review? We know that people from different backgrounds and cultures bring their own ideas and experiences to the table. A diverse team is stronger, and that’s what our Asia Pacific team looks like.

That collaborative way of working extends between teams as well as within them. We have a very effective alliance with our HKA colleagues in the Middle East. Our regional operations are not franchises protecting their own interests. They collaborate really well and ensure consistent quality for clients. So, I still work with many of the same outstanding people and clients, but in different locations across Asia, while also being on the ground in the region where many of their big projects are.

How do the different cultures and ways of working in Asia Pacific influence dispute resolution?

There are many commonalities as well as contrasts between the two regions. The scale of projects is not dissimilar, though, in Asia, designs tend to be more practical and less lavish than the landmark statements enabled by sovereign wealth funds. The approaches to contracting are also similar, and there is the same tendency to fast-track projects.

The Middle East relies more on imported labour, which can give rise to workforce problems, whereas most workers in Asia Pacific tend to be indigenous. Disputes are also more common in the Gulf. The cultural preference in Asia is for negotiation, leading to amicable settlement. But both regions are moving towards arbitration, which accounts for a growing share of dispute resolution.

Compared with their domestic markets, Asian contractors are competing against a wider range of international firms in the Middle East. And, due to the fallout from COVID-19 and economic conditions, cash is tight in Asia Pacific and clients are cost-conscious.

So, we have to demonstrate how we generate real value –through all our services, not just Construction Claims and Expert Services. Our other work streams are Forensic Technical Expert Services, Forensic Accounting and Commercial Damages, and Project Advisory Services. In every case, we provide the sound and impartial advice clients need to make the right decisions. We are trusted advisors, not providers of commoditised consultancy services. Rather than transactional relationships, we build strong, ongoing partnerships with our clients.

And HKA’s strong track record puts us in a good place to manage current economic challenges. Asia Pacific also has a healthy pipeline of infrastructure and capital projects.

As I mentioned, India is a very exciting market with a booming economy. HKA is heavily involved in rail and power projects there and in Indonesia and the Philippines, where we have a lot of experience. As well as oil and gas, there are many renewable energy projects in the pipeline, including solar and wind power. We are engaged in Taiwan and Singapore. Australia is resource-rich and another hot market where demand still outstrips local capacity.

What does the advent of Saudi Arabia’s gigaprojects mean for this and other regions?

They will have far-reaching repercussions. First, many of the contractors involved are Chinese, Korean or from other parts of Asia. This will further reinforce the connections between the two regions and our engagement with existing and new clients.

The implications for capacity and supply chains are also huge. Rolling out all gigaprojects at once is overheating the Middle East market, but the effects are felt in Asia too, in local markets and in the workload of its internationally active contractors. The whole supply chain is heavily reliant on Asian producers, more so than any other region.

Many projects worldwide are impacted to some extent by higher materials prices, supply bottlenecks and delays. You could say that gigaprojects involve just about every region while also driving change in contracting practices in the Middle Eastern market.

Asia Pacific has major arbitration centres, including SIAC, HKIAC, KLIA and BIAC. How do these compare with those in the Middle East, such as DIAC, Saudi, etc?

Arbitration continues to grow in both regions. Singapore International Arbitration Centre (SIAC) and the Hong Kong International Arbitration Centre (HKIAC) used to have equal shares in the Asia market. However, with the enactment of the Hong Kong national security law, SIAC has increased in popularity and appears to be taking market share from the traditional European centres.

The perception is that Singapore is where you want to arbitrate. It tends to be more cost-effective than European centres but relies on a very similar pool of arbitrators – large cases are dominated by UK-based barristers. There is an abundance of exceptional lawyers in Singapore for the administration of arbitrations.

Beijing has more arbitrations than any other centre in the world, but it’s overlooked because they are largely China-based cases. To give you an idea of the scale of interest in Beijing, when I gave a presentation at a webinar event there, 22,000 people logged on! This Chinese workforce is prepared to upskill. What’s more, there’s a strong focus on impartiality and professionalism. However, the range of facilities is not quite up to the mark yet, and there’s the language barrier, unlike in Singapore, where English is the lingua franca.

During my time in the Middle East, the appetite for arbitration has increased steadily, notwithstanding the unexpected abolition of the DIFC-LCIA centre’s administering body; this will also have increased the number of parties referring matters to SIAC.

The Middle East is moving away from amicable settlement. As governments crack down on corruption, parties to public contracts are nervous about settling amicably, preferring to place decisions in the hands of a third party.

Asia still has a strong cultural predisposition to amicable settlement. The region, however, is trying to move forward with other alternatives for dispute resolution – such as adjudication – in a way not seen in the Middle East. From its roots in English legislation, ostensibly to reduce subcontractor bankruptcy, adjudication has gained traction, particularly in Singapore and Malaysia.

There are few other statutory alternatives to arbitration and litigation in the Middle East. However, there is growth in the use of independent expert determination, where the parties appoint a third-party consultancy or law firm to recommend a fair settlement.

We’re also involved in many industries besides construction and beyond oil and gas, power and utilities – from aerospace and defence, telecoms, media and technology to financial services, manufacturing, healthcare and life sciences, and others. For example, our forensic accounting and commercial damages team recently worked on a very large crypto case.

Do you see HKA becoming increasingly proactive by providing services at the earliest possible stage in negotiations?

Not just in negotiations, we can and do make incisive contributions before work even begins – in the preconstruction and planning phases.

Our Project Advisory Services are a significant part of the HKA business in Asia Pacific. My colleagues help clients set up their projects to succeed. With our deep understanding of what goes wrong on projects, we are best placed to advise contracting parties on mitigating risk and minimising claims and disputes.

In Australia and New Zealand, for example, HKA supports national and state governments and utilities in areas ranging from engagement with the market and procurement strategies to project planning and controls.

Other clients in the Asia Pacific region also understand the value of upfront investment in their projects. In China, for example, we are advising a major chemical company on how to de-risk a US$20 billion development by reviewing its systems for procurement, monitoring works, and managing interfaces between works packages.

An Indian contractor with whom I’ve worked in the past has won $US8 billion worth of contracts in Nigeria and Saudi Arabia. They asked me how HKA could help them manage this huge increase in their workload as effectively as possible.

As markets mature and project complexity increases, I expect this trend of earlier engagement to continue. Our advisory services are also being rolled out in the Middle East to support preparations for Saudi Vision 2030 gigaprojects.

More widely, HKA also shares knowledge learned from our work on distressed projects with the global construction and engineering industry. Our CRUX integrated research programme analyses the causes of claims and disputes worldwide and by region. We publish the results annually in our CRUX Insight Report. Anyone can interrogate our unparalleled dataset through the free-to-use CRUX Interactive Dashboard. Our data specialists help clients calibrate risks in various sectors and new markets and benchmark performance against various parameters.

CRUX is unique, but part of our purpose at HKA is to help clients make the right decisions for better commercial and project outcomes.