BY MOHAMMAD SHOEB
DOHA: With the deepening financial crisis in Europe, German companies based in Qatar are facing stiff competition from Asian rivals such as from Japan, Korea, China and India. Most European companies are faced with funding problems for big ticket projects, Chairman of the German Business Council Qatar (GBCQ), told The Peninsula recently.
“The worsening Eurozone crisis is creating a big problem even for the German companies. The biggest bottleneck for German companies to make trade or to realise projects in Qatar and the Middle East is the funding situation. Providing ‘bid-bonds’ to the clients for big infrastructure related projects such as Lusail Expressway, Doha Metro, and other multi-billion dollar projects is a big problem for the European companies”, said Boris van Thiel (pictured), at GBCQ, who is also the Managing Director at German Railway Consult, Qatar.
.In Qatar and elsewhere, usually companies that are awarded projects are required to submit bid-bonds of 5 to 10 percent of the project value to the clients. And at the moment most of the European companies, including German companies are facing problems to get bid-bonds financed via European banks.
He further added that in many cases there are companies from Far East, which are not directly required to pay fees due to some political or economic interests involved, “may be it is being done in terms of guarantees of oil and gas deliveries”, he added. “That is something German companies are suffering, but nevertheless they have very good reputation in the market in terms of reliability and quality. With these values and attitudes German companies have extremely good chances to be a part of the upcoming projects.”
However, he also suggested that the key for success lies in cooperation with leading international companies and contractors.
Asked, who are the key competitors of German companies?, he said: “In the construction sector apart from Korean, Chinese and Japanese companies, even Indian companies such as Larsen and Toubro and others are big players in the market. Even Turkish, Spanish companies can bid cheaper than German companies in many cases, as mobilizing German workforce is more expensive than sourcing people from Far East or from Turkey and Spain.”
However, he firmly believes that in terms of quality German companies still have an edge over others. “I think quality is one thing, if you pay peanuts, you get monkeys”, Boris added.
He also said that this is the biggest chance for German companies to tie up with international corporations to provide high level experts, and let the low cost labour continue to come from Far East which can deliver an acceptable level of quality at more competitive price.
Asked, if any German company has singed a deal of this sort, he said: “My Company personally is talking to companies in India and China for possible cooperation for the Metro and Rail development projects in Qatar and the Middle East region. Because Germany with only 80m people and very limited engineering experts is not sufficient by far the volume we need here in Qatar. So we need to team up with others.”
The Peninsula
