What were the key highlights for Descon in 2011? What is your outlook for the year ahead?
RASHID: 2011 was quite challenging for us, particularly keeping in consideration that Descon was not having so much business in early 2011. We secured two major projects. Our remarkable achievement in 2011 was that we succeeded in completing over 18.7m man-hours LTI-free when we successfully completed the Pearl GTL project. From a safety perspective, this was a remarkable achievement. Within Qatar we completed 52m man-hours without LTI as Descon Engineering Qatar over the last 3 years. That is a remarkable achievement, particularly from the Gulf point of view, and particularly from the Qatar construction industry point of view as this is an extremely safety conscious country. This achievement was highly recognized. There are many other things. But of course I would say the significant events were that we secured business and that we completed a remarkable project, which is Shell’s Pearl GTL project. We completed that project with that kind of safety standard, which was widely recognized.
What major projects do you have under way or coming up in Qatar?
RASHID: As Descon, we are a pretty diversified company. But here in Qatar, where we are working for the last 10 years, we are mostly focusing on plant services and maintenance, and electromechanical construction in the O&G sector. In the near future, there are not so many projects in electromechanical construction coming up. There are a few; there are the Qatar Steel and Laffan Refinery expansions and the Dolphin EGC project. Now, we are focusing more on the infrastructure side. On the other hand, we are still focusing on the traditional plant services business. In plant services, in my opinion, we are leading the market, although not with a major margin. We are quite confident that in the next year we will secure major shutdowns and we will be able to get a further edge in the plant services and shutdowns.
What specific challenges do infrastructure projects present for Descon?
RASHID: Entering into the infrastructure business is a major change for Descon in Qatar, not for Descon as a whole because Descon as a company is operating in many Gulf areas, such as Abu Dhabi, Saudi Arabia, Kuwait, and of course Pakistan. Infrastructure is not a new thing for us, but in Qatar it is a new thing. The good thing is that we have a lot of expertise. The difficult thing is that we are not so much familiar with the quality requirements and with the specific requirements in Qatar. So we are considering entering into a JV arrangement with a more reputable Western or European company. Maybe initially we will lose a little money or may not be able to make a profit, but definitely this is the only way to move forward. The challenges are there, but you know, business is nothing but taking some calculated risks, knowing our competitors and our customers and that’s all.
What are the key challenges the construction sector will face over the coming years?
RASHID: For the construction companies, the major challenge is that competition is increasing and it is not very easy to cope with the increasing competition. Although the global recession has reduced the cost of human resources to some extent, the increasing competition will not be very easy to cope with for companies because companies are coming from all across the world. It looks like the only area where construction is being done is Qatar, which may not be precisely true, but the focus is Qatar. So this is the biggest challenge. With so many infrastructure activities taking place in this country, and the fact that the size of the country is very small, there is already a logistics problems with traffic jams, not being able to move, and there being so many roads coming up, so many bridges, etc. So definitely that will create a serious problem with logistics and commuting from one area to another may be difficult. Infrastructure is a business where a lot of material moves and a lot of manpower comes. I don’t know exactly whether everything is in order to take that pressure because billions and billions of dollars are going to be spent. But as a contractor, my worry is increasing competition. So we have to get ourselves ready, we have to re-look at our costs, we have to improve our efficiencies, we have to find better sources of materials, and those kinds of things.
How does the Qatari market compare to other markets in the region?
RASHID: I would say that the UAE is slightly slowing down. They are also cutting their budgets. Saudi Arabia is very stable; I don’t think there is any decline. But Qatar is going up. Unfortunately, not in that specific part of the business which we call the oil and gas electromechanical, but overall as a country. Qatar is the fastest growing economy. But Qatar has its own challenges because the pace of progress which Qatar is witnessing now, that requires its own infrastructure on the State level. Billions and billions of dollars of activities are ultimately controlled by the government and government nominated departments. Qatar is different in the pace of development. Qatar is different in that it always looks for something which is unique. For example, if they build a building, the building should be unique, which is good and which I like and they can afford so they can desire such things. But the pace is very fast compared to other countries. The targets that the Qatar government has set are very clear.
For the construction companies, the major challenge is that competition is increasing and it is not very easy to cope with the increasing competition. Although the global recession has reduced the cost of human resources to some extent, the increasing competition will not be very easy to cope with for companies because companies are coming from all across the world.
Qatar is focusing more on education, and particularly the education of women. I spent 4 or 5 years in Saudi Arabia, and they are spending a lot of money on education too. But the way Qatar is spending money on education; it shows that it is something that they really want, that this nation becomes highly educated, particularly when the focus is on women. That is something that I really admire because if you educate your women, you are educating the whole nation and that is something for the long-term. An educated man may be a short-term benefit but an educated woman is a long-term benefit that you’re getting. So this is another difference which I've noticed here.