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UAE MEP contractors optimistic despite lack of 20% growth

by Fatima De La Cerna on May 13, 2018


Panellists at the MEP UAE Conference 2018 talked about growth and challenges in the MEP sector.
Panellists at the MEP UAE Conference 2018 talked about growth and challenges in the MEP sector.
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Faisal Jassim's Messaykeh urged MEP contractors to make sure that communication channels with developers and main contractors stay open during the duration of a project, emphasising that the execution of a job should be everyone’s focus, with payment being a given.

Raising a similar point, the managing director of Plafond, Dimitri Papakonstantinou, commented: “Cash should not even be something to discuss. We should be talking about how we can be better at what we do.”

READ: MEP market to grow by 20%, expert forecasts

Ideally, MEP contractors should not be expected to worry about the financing of a project, he said: “Clients should be financing their projects, because they are the ones developing them. We are just providing a service.”

Papakonstantinou, observing that there’s “a much simpler way of doing things”, revealed that even though his company has had no trouble when it comes to getting monthly payments for projects, it has “a lot of cash tied up in variations”.

“Going forward, there are [contract] clauses that we will request,” said Papakonstantinou. “[And] we’ll have to walk away from certain projects.”

James L Williams (JLW) Middle East, unlike other MEP companies operating in the UAE market, is having a good year, according to the firm’s chief operating officer, Ramy Boufarhat.

“I don’t think there’s a massive growth in the construction industry at the moment, but [the MEP] industry is getting smaller,” he explained. “There are some players that have [folded] or decided to leave this region.

“The market has become consolidated, so for us there is growth. We see what’s happening as positive – cash flow is positive.”

The decreasing number of players in the MEP contracting market is not the only reason behind JLW’s positive performance, said Boufarhat, revealing that the company has set up clauses in project contracts designed to protect the firm from payment-related issues.

He elaborated: “We have a clause in the contract [that allows us] to slow down due to lack of payment. If you don’t pay us, we slow down.”

JLW also includes a determination clause that helps the company escalate claims, said Boufarhat, adding: “We invite the entire MEP market to do the same.”

The MEP UAE Conference 2018 was held in Dubai on 9 May, 2018. Visit ConstructionWeekOnline's sister title, MEPMiddleEast.com, for full coverage of the event.



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