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Sat 23 Jan 2010 04:00 AM

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Steering Scott Wilson

CW sits down with Eddie Foster, the regional director of international consultancy firm Scott Wilson, to discuss the impact of the economic downturn, chasing payments and setting up in Saudi Arabia.

Steering Scott Wilson
Steering Scott Wilson
Scott Wilson is working as consultant on Diyar Al Muharraq in Manama, Bahrain.

CW sits down with Eddie Foster, the regional director of international consultancy firm Scott Wilson, to discuss the impact of the economic downturn, chasing payments and setting up in Saudi Arabia.

How has the last 12 months affected Scott Wilson?

It's mainly affected our operations in Dubai, but it wasn't such an upheaval because we didn't have as big operations as many of our competitors. Certainly we've had to downsize considerably in Dubai and refocus attention to Abu Dhabi and Qatar. We still intend on doing work from our Dubai office, but not on Dubai projects.

What about in Bahrain?

In Bahrain we have seen a slowdown on our projects; we haven't actually lost any projects but we've seen them go pretty slow. We're hanging in and at the moment everything is ok, but we're hoping things are going to improve this year.

Have you noticed more people coming into Bahrain in the last 12 months?

Yes definitely. Our main competitors here are Atkins, Hyder and to some extent, Parsons. But we are starting to see some other big names from Dubai come here or move over to Abu Dhabi.

Are you worried about a lack of upcoming projects in Bahrain?

It is a concern, especially for a company like ours, which has concentrated more on private development work rather than government tenders. But having said that, we are in negotiations at the moment for some new projects.  As a consultant you are right at the front end and some people are still prepared to spend money on consultancy to get the project on the shelf and a design ready to move.

Is chasing money from clients a problem at the moment?

Yes, certainly. We do still have some clients, bless them, which pay on time, but we've got more clients that don't. You've got to appreciate that the clients are having problems and if we have faith in them then we will try and work through it keeping in mind our own financial constraints.

Has it reached a point where litigation may be necessary?

We're not in litigation with anybody in the Gulf. Generally we have projects that have slowed down, we will get the money but it will take longer. In these cases we continue to work but minimise what we do until we get a return. There are a couple of cases where we've stopped work pending payment, but we're still trying to work through it with them. It is recognised that the Gulf has been badly hit and so there is a bit of patience from our board.

Does this affect new projects in terms of your due diligence and risk assessment of the client?

Yes, now we look at their balance sheets very carefully and see if they have enough cash set up for the development. The problem before was that everyone had a laissez-faire attitude and we were doing so much work that we probably didn't go as far as we could have. That's catching up to people now.

Looking back, could more thorough due diligence have prevented you getting burnt?

I don't think we have actually been burnt; there are some people that are not paying us, but at the end of the day they will pay, because you've got some very big names. You've got to hope that the Kuwaitis are going to sort out their banking system. The finance situation in Kuwait has a great bearing on the Gulf, particularly Bahrain.

Scott Wilson

The Scott Wilson Group is a global integrated design and engineering consultancy within more than 6000 staff members in 80 locations around the world.

Key regions include the UK, Asia-Pacific, Europe, India and the Middle East, with regional centres in London, Hong Kong, Warsaw, New Delhi, Bahrain and Dubai. The Bahrain office was set up in 2005.

So many people are waiting for a government stimulus package for the Kuwaiti banking system?

I think that this is a significant issue in the market. There is a lot of Kuwaiti money in Bahrain and once the government gets the Kuwaiti banking system moving again it will be good. I'm fully confident that it will happen. I don't think that they want to earn a bad reputation by defaulting on all these payments, but it's caused a bit of a cash flow problem in the market at the moment.

What about the tendering process, have you drastically dropped your prices?

Yes, and you think you've got a job and then they come back and ask you to look at the price and they know, that you know, that there's a lot of hungry people out there. We have significant experience in some sectors of the market here, so we can ask for a little premium, but certainly our prices are pretty rock bottom at the moment. When they come back and ask for additions or lower prices here and there, it hurts, but unfortunately that's the name of the game now.

Can these prices be maintained?

If we can develop into the new markets, it will give us a cushion to weather the storm here, which is what we are doing, and hope that next year will be better. Long term I see this office changing and becoming a regional base for Saudi Arabia, Kuwait and Qatar.

Did the slowdown force you to refocus elsewhere in the region?

We'd already started to view the Bahrain office as a spring board for other things particularly Saudi Arabia, Kuwait and Qatar, because we recognised that Bahrain itself is a relatively small market over the long term. Of course the slowdown has focused our efforts even more on operations in Saudi Arabia, Kuwait and Qatar. We now have representatives in all those countries and we hope to have some good news on projects there very soon. We're chasing a lot of work in Saudi Arabia.

How are you establishing yourselves in Saudi Arabia?

We're working on two fronts, as an international company working on specific project, which we've been doing on and off, for many years. The second front is to joint venture with a local entity, which we're currently in the process of formalising.

Why set up your own JV in Saudi?

As an international consultant we can look at big projects on a project by project basis. But having a JV with a Saudi company will bring us closer to the grass roots market, especially anything to do with petrochemicals. It basically opens up more doors. Our JV company will bring us into a certain area of the market that is more petrochemical related.

Is Scott Wilson, as a whole, undergoing a restructuring process?

Last year, completely independent of the recession, it was decided that Scott Wilson would move towards a more sector oriented organisation rather than being organised geographically. It doesn't mean the regions are not important but that the sectors have a bigger say in how we operate in any region. We're split into certain sectors such as environment and natural resources, highway and transportation, infrastructure and buildings and strategic consultancy, which includes marine and airport work.

What are the advantages?

One major reason is that it breaks down people working in silos, our skills and resources can be applied where necessary in the world. It will also help us tell which sectors are doing the best - these figures can be lost when reporting as a country office. This makes our growth strategies and opportunities clearer when analysing the figures. The change has not been fully implemented, it's ongoing, but by the end of the financial year we intend to be fully sectorised in the Gulf and people will be reporting along sector lines rather than us reporting as an office.

Scott Wilson is heavily involved with a number of land reclamation projects. Are environmental issues improving at all?

In the last four or five years we've seen much more focus on getting the environmental aspects, especially the marine environment, right. Five years ago people could do things that they can't get away with now because there's been a welcome strengthening of legislation. There is also much more emphasis on the consultant supervising the role of the dredging contractor and taking responsibility for it. This has improved the situation a lot.

Get to know Eddie

• Born in Yorkshire.

• Studied civil engineering at Sheffield Polytechnic, graduating in 1970.

• Spent four years in the UK consulting on motorway work.

• Left for Hong Kong in 1974 and worked for the government on several large airport contracts.

• In 1980 switched jobs to US consultancy firm Wilbur Smith to work on island projects around Hong Kong including reclamation, transport and infrastructure.

• Spent nine months in Vanuatu, conducting studies on inter-island transport improvements.

• Returned to the UK in 1989 and joined Scott Wilson.

• Was managing director of Scott Wilson's Indian office from 1998 until 2005 when he moved to Bahrain.

• Has two children: one daughter and a son

• Spends his spare time travelling to new countries with his wife, watching football and reading.

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