Making it in Qatar's construction sector: survival of the fittest?
Many small and medium contracting firms are apparently fighting for survival due to the stiff competition in Qatar’s construction sector.
Gulf Times has learnt that some companies, which have survived all these years just by supplying workers for major projects, are now unable to continue any further as they do not land adequate number of works to maintain their staff.
While the operators of some of these companies have started trying their hand at related businesses, others want to wind up their activities in the face of cutthroat competition in a market where several players are vying for space.
Several small-time manpower firms employing between 200 and 400 workers have shut down in recent months owing primarily to a cash crunch, it is learnt.
It is also understood that the owners of some of them are ready to change the sponsorship of their employees to other companies that require workers for their projects.
According to sources, “delays” in receiving payments has hit the daily operations of several small and medium firms, which are in no position to effectively meet their rising overheads, including interest on overdrafts, staff salaries, rents for accommodation and other expenses.
Further, it has been found that the operators of some small manpower firms have sent their families home due to the absence of adequate cash flow to their companies.
A senior engineer in charge of some major ongoing infrastructural projects in different parts of Doha said though there is a growing demand for workers at different levels, contractors are unable to supply labourers in adequate numbers as many of them are facing financial problems.
There have been reports of “delays” in payments in construction and related firms and some of the embassies are also said to be receiving complaints in this regard from their nationals, it is
“Only resourceful companies with a good track record are given loans by banks while others have to run from pillar to post to meet their growing expenses,” said the engineer, adding that allegations of “scams” at intervals in the construction industry also affect the credibility of small and medium firms.
Many of these companies are operating on wafer-thin margins and alleged cheating cases like the one involving a firm in New Wakrah can cause severe damage to them as well, explained the engineer.
The firm has been accused of duping a number of suppliers of millions of riyals.
- 'Selective softening': How Dubai's stabilizing property prices are in no way inclusive
- Abu Dhabi's Louvre: how far has it come and how far will it go?
- Saudi Arabia is getting creative about tacking its housing shortage
- Call it twisted, but it's actually cheaper to buy than rent property in Dubai
- Crowded by Gulf wealth? Locals forced out of London's property investment