Exclusive Interview: Eddie Foster

Eddie Foster, the regional director of international consultancy firm Scott Wilson.
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CW sits down with Eddie Foster, the regional director of international consultancy firm Scott Wilson, to discuss the impact of the economic downturn, chasing payments and setting up in Saudi arabia.

How has the last 12 months affected Scott Wilson?
It’s mainly affected our operations in Dubai, but it wasn’t such an upheaval because we didn’t have as big operations as many of our competitors. Certainly we’ve had to downsize considerably in Dubai and refocus attention to Abu Dhabi and Qatar. We still intend on doing work from our Dubai office, but not on Dubai projects.

What about in Bahrain?
In Bahrain we have seen a slowdown on our projects; we haven’t actually lost any projects but we’ve seen them go pretty slow. We’re hanging in and at the moment everything is ok, but we’re hoping things are going to improve this year.

Have you noticed more people coming into Bahrain in the last 12 months?
Yes definitely. Our main competitors here are Atkins, Hyder and to some extent, Parsons. But we are starting to see some other big names from Dubai come here or move over to Abu Dhabi.

Are you worried about a lack of upcoming projects in Bahrain?
It is a concern, especially for a company like ours, which has concentrated more on private development work rather than government tenders. But having said that, we are in negotiations at the moment for some new projects. As a consultant you are right at the front end and some people are still prepared to spend money on consultancy to get the project on the shelf and a design ready to move.

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Is chasing money from clients a problem at the moment?
Yes, certainly. We do still have some clients, bless them, which pay on time, but we’ve got more clients that don’t. You’ve got to appreciate that the clients are having problems and if we have faith in them then we will try and work through it keeping in mind our own financial constraints.

Has it reached a point where litigation may be necessary?
We’re not in litigation with anybody in the Gulf. Generally we have projects that have slowed down, we will get the money but it will take longer. In these cases we continue to work but minimise what we do until we get a return. There are a couple of cases where we’ve stopped work pending payment, but we’re still trying to work through it with them. It is recognised that the Gulf has been badly hit and so there is a bit of patience from our board.

Does this affect new projects in terms of your due diligence and risk assessment of the client?
Yes, now we look at their balance sheets very carefully and see if they have enough cash set up for the development. The problem before was that everyone had a laissez-faire attitude and we were doing so much work that we probably didn’t go as far as we could have. That’s catching up to people now.

Looking back, could more thorough due diligence have prevented you getting burnt?
I don’t think we have actually been burnt; there are some people that are not paying us, but at the end of the day they will pay, because you’ve got some very big names. You’ve got to hope that the Kuwaitis are going to sort out their banking system. The finance situation in Kuwait has a great bearing on the Gulf, particularly Bahrain.

So many people are waiting for a government stimulus package for the Kuwaiti banking system?
I think that this is a significant issue in the market. There is a lot of Kuwaiti money in Bahrain and once the government gets the Kuwaiti banking system moving again it will be good. I’m fully confident that it will happen. I don’t think that they want to earn a bad reputation by defaulting on all these payments, but it’s caused a bit of a cash flow problem in the market at
the moment.

What about the tendering process, have you drastically dropped your prices?
Yes, and you think you’ve got a job and then they come back and ask you to look at the price and they know, that you know, that there’s a lot of hungry people out there. We have significant experience in some sectors of the market here, so we can ask for a little premium, but certainly our prices are pretty rock bottom at the moment. When they come back and ask for additions or lower prices here and there, it hurts, but unfortunately that’s the name of the game now.