'Financial indiscipline' why GCC contractors fail
'The biggest of contracting companies' fail due to the lack of solid financial practices, the chairman and CEO of UAE contractor Beaver Gulf tells Construction Week
GCC contractors must strategise to avoid failures amidst slow economic conditions, an industry peer said.
Reduced petrodollars have led to spending cuts and a slowdown in business, the impact of which has been felt by contractors in the region.
It is key to maintain realistic financial records and targets in such critical economic conditions, Rajesh Kumar Krishna, CEO and chairman of UAE contracting firm Beaver Gulf, told Construction Week.
He continued: "The biggest of the contracting companies fail not because of technical reasons, but because of financial indiscipline.
"At Beaver Gulf, we [implement] solid financial discipline practices and maintain proper cash flows and payment records with our suppliers and subcontractors.
"Therefore, going up to any value or volume of work in construction is not difficult, because according to the projects you have, you can add up your resources, whether it is on your engineering side or workmen.
"But what you need to maintain and follow is a very strict financial discipline."
Beaver Gulf is working with UAE developer Nshama on the latter's Town Square project in Dubai.