‘Winging it’ in a saturated market

I knew there was money in roads from a very young age, when I first saw the scary-looking man at the front door asking: “Can I tarmac your drive ma’am?” Dad went on to do very well in the asphalting business. So it came as no surprise years later to hear that road construction here in Dubai is equally lucrative for the contractors involved in the industry.

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By  Sean Cronin Published  October 29, 2005

|~||~||~|I knew there was money in roads from a very young age, when I first saw the scary-looking man at the front door asking: “Can I tarmac your drive ma’am?” Dad went on to do very well in the asphalting business. So it came as no surprise years later to hear that road construction here in Dubai is equally lucrative for the contractors involved in the industry. Of course nowadays they have rollers, vibrating compactors and all sorts of fancy aggregates to ensure a smooth bitumen wearing course, whereas Dad always preferred to use the back of a shovel to apply it. “That way it allows the grass to breathe,” is what he used to tell his slightly unsure-looking clients. But I digress. Road construction in Dubai is now big business. At the same time, the number of road contractors capable of handling large jobs is relatively small. It is a situation that most contractors in other less buoyant construction markets would be envious of; but it leaves clients like Dubai Municipality in a bit of a predicament. There are too many roads to build and not enough contractors to build them. The authority will let road contracts worth almost one billion dollars over the next year, so there is a pressing need to boost capacity in the sector. It’s not just a problem in Dubai. The over-heating Qatari construction industry is also causing problems for public sector clients. In more mature construction industries, the historical approach may have been to take a job on zero or even negative margin, in the hope of making a profit on claims. The technical term in the industry for this style of contracting is ‘winging it’. But it seems that many clients in the Middle East are unwilling to play the claims game. You have to look no further than Dubai Airport to see that is true. In this market, excessive claims equals bad reputation, equals no more work for you mate! That seems to be the equation, and that is one reason why road contractors here are unwilling to take on risky jobs that might end in tears. They should take a leaf out of Dad’s book. All of his jobs ended in tears — mainly his clients, admittedly — but he never let that bother him. Sean Cronin Editor||**||

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