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Sun 30 Dec 2007 04:00 AM

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Buying cheap is a false economy

Hugo Berger and Christopher Sell look at the long-term costs of opting for cheap, second-hand equipment.

Exhibitors at Big 5 PMV last month warned contractors in the Middle East that buying cheap machinery and equipment could lead to heavy losses in the long-term.

Firms exhibiting in the PMV sector have said that investing in good-quality equipment would also reduce downtime, a key cost factor in any operation.

"If you buy cheap at the beginning of a project, you will pay heavily by the end," said Jurgen Heimsch, sales director of German PMV company, Putzmeister.

The important thing to remember is that the equipment is being used every day on the site. So by buying quality equipment, you minimise downtime and save money.

"The important thing to remember is that the equipment is being used every day on the site. So by buying quality equipment, you minimise downtime and save money."

Some companies have claimed that the regional construction industry is being swamped with outdated, worn-out equipment from Europe.

"The equipment is coming to the Middle East in bad condition in terms of the engines, the gear boxes and the tyres," said George Annish, general manager of Qatar-based dealer Al Hamed Automobiles.

Annish added that buying cheap, second-hand equipment endangers workers, while constant repairs and replacement parts cause a project's costs to soar.
"Buying a new piece of equipment may seem like an expensive investment, but if you're buying second-hand, you're taking a risk.

Despite the large rental and second-hand market within the industry, Ninan George, marketing manager for Sharjah-based Al Wasit Machinery Trading feels that firms are beginning to see the advantages of buying new equipment. He estimated that 60% of purchases were new.

Contractors are also beginning to closely monitor the qualifications of those operating machinery and equipment.

"In the past year, we discovered that some operators who had learnt on light equipment were operating heavy equipment," said Philippe Kohl, plant manager, Besix.

"But we need to make sure they have the proper license to do the job. We have more than 1 000 drivers and operators in our company and we have a database where we follow very closely the qualifications of these operators and the equipment they are able to operate."

One of the biggest challenges facing contractors is finding skilled operators and drivers.

"We've had an increase of over 50% in the number of operators and drivers we employ and we are still really struggling to find skilled operators," added Kohl.

This is the first year that the PMV sector formed part of the Big 5 show. While response was low-key exhibitors were optimistic about the future with the sector is expected to grow 15-20% over the next five years as contractors invest in the additional machinery needed to complete the ongoing and planned projects.

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