Land of opportunity?
Sheer need will keep pushing the region's utilities
A sense of frantic pace left the region months ago. Summer’s onset could easily have you believe it is some way from returning. However, some fundamental needs remain in play in the region’s utility sector.
As seasonal peak loads are reached during the scorching heat of August, it is worth remembering that capacity expansion is still coming second in the race with demand. There are billions of dollars worth of projects under way, from the earliest bid stages through to the close of construction, all aimed at pushing capacity into first place.
Governments have pledged significant investment for power and water projects to make this happen. Buying their way out of a recession may turn out to be a happy side effect; utilties are not the only area of infrastructure to benefit from investment. Wiley operators are also taking advantage of the opportunity to get a lower bid from contractors, as key material costs reduce from their 2008 peaks.
While the global financial storm is proving a stern test for the GCC’s contractors, leaving them feeling battered by the economic headwind, the sturdier businesses among them have adapted. Where business may have dropped off in one location, it is still available in others, just a bit further away.
Traditional revenue streams have also shifted. For instance, some equipment rental firms are doing well simply because their clients would once have bought the equipment they are now leasing instead. Other companies are working harder for new business and adapting what they offer to suit the current climate.
Whatever the process involved, while these conditions prevail it may be painful, but leaner, meaner and perhaps wiser businesses, with a new eye for opportunity, are emerging.