Ground force

While money trickles back in to the construction industry after a tough couple of years, piling and foundation companies are still treading water.

“The first part of the year was very difficult. We seemed to spend the whole time filling out papers and tenders, with very short closing dates, and not really having many of them convert into contracts. Decisions get delayed, or something else happens,” he said.

While the company has enough work to see it through tight times, Khan says some contracts aren't due to start until next year or even 2015.

A reduction in the availability of work has also led to other contract related pressures – not the least of which are time constraints and penalties that come from failing to meet deadlines.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

“I thought that a recession would mean that everything would slow down and people would take time to do things at a reasonable pace – but the opposite is the case. Clients are squeezing contractors to get things done faster.

I don’t know whether it’s pressures from the banks, or where it’s coming from. I don’t understand the logic,” Khan said.

While other construction jobs can be solved by pouring manpower and machinery in to it, piling and foundation work often has physical constraints that limits the amount of work that can be done.

Restricted work sites often means that only one piling rig can be used, so contractors can’t simply throw men and machinery at a job to hit tight deadlines.

“Not every job is like the Palm Deira [with wide open spaces and room for several piling rigs]. Most are very restricted on space,” Kahn said.

Another area contractors are feeling pressure is in a lack of understanding from some clients over the amount of time it takes regulatory bodies to approve plans.

“I can’t blame regulatory bodies for that. They’re looking at something that’s been worked on for several months for the first time, and time needs to be given for this to happen.

We have to plan around this, but it’s unfair on contractors to be nailed for any delays that are out of their hands. Clients need to try and understand what is involved,” Khan said.

So far, Keller Grundbau has weathered the downturn without downsizing. Contracts in the petrol chemical industry in Abu Dhabi, and others throughout the UAE have kept the company bouyant and, with the promise of more work in the second half of 2010, Kahn says staff are taking holidays now in anticipation of a better few months ahead.

“At the moment, it’s just a matter of working out how to support the company and survive until then,” Khan said.

Piling profits in a tight industry
The profits from piling and foundation work come from selling concrete and steel at small mark-ups, with little room for movement. But, with the pressure mounting on businesses to ensure the company remains busy, some firms are operating on exceptionally thin margins.

“You get a sense of how smaller businesses are suffering from the kinds of prices they’re offering,” said Shad Asif Khan, Keller Grundbau Gmbh’s general manager said.

“We’re at a slight advantage in that we have a lot of experience, so tend to be shortlisted for contracts, but it’s still tough. Clients are really enjoying this time,” Khan said.