The sense that Saudi Arabia is the place to be doing business was the most overriding impression from last month’s Arabian Power and Water summit.
As the speakers came off-stage small huddles gathered round the Saudi delegates and they weren’t all journalists. The keenness to see and be seen was the most startling thing at what was, in reality, just another industry event.
At issue among the various private sector representatives was the use of Chinese contractors. The usual argument of quality versus price was had and some were adamant that using Chinese contractors will never work out.
People used to say the same thing about Korean companies and Japanese ones before them. Apparently the lesson has yet to be learned. As one astute delegate pointed out, China has thousands of MW of power capacity that seems to be working just fine, so the country’s contractors know what is required to make a successful project. Also, let’s not forget that some of these same contractors have created the Three Gorges dam, one of the world’s largest infrastructure undertakings.
The development China has experienced is one of the few examples that rival the speed of change seen in this region. The scale is something different again. Even the most rudimentary mathematics adds up to an enormous number of skilled and experienced people ready to be deployed on infrastructure projects. Local arms of European EPC contractors please take note: saying you will produce better quality results will work for a while, but in a few years, your shareholders and customers will want a better answer.
In the meantime, local developers can expect to see some price competition in the medium term. Lead times might get a trim too.
The question for contractors is straightforward: the Chinese are coming, what will you do?
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