The Middle East booms and so do dodgy clients

Over the next three years more than $200 billion worth of new projects will be awarded in the Middle East, part of a boom in new infrastructure and real estate projects not seen since the 1970s oil boom.

This is one reason why the audience of this website AME Info is up by 40% year-on-year, and it is also the rationale for the launch of the new Middle East Economic Digest service, www.meedprojects this week.

According to MEED out of $212 billion worth of projects committed so far in the region, less that 10% of contracts have been awarded. This year $35 billion in new work will be tendered, 40% up on last year, and 300% up on 2002.

This is a good old fashioned oil boom, and a huge investment for the GCC economies whose total combined annual GDP is only $400 billion and that after a staggering increase in oil revenues this year.

However, the terms of trade have swung dramatically in favour of the Middle East over the past few years thanks to an upward spiral in oil prices. There seems no end in sight either. Most oil analysts believe that even $30 per barrel oil prices may now be a thing of the past because of booming Asian demand.

There is always a tendency to spend money when you have got it, though it has to be admitted that Oil States have been pretty slow to react to their changing fortunes. No longer, it seems. The new mantra is spend, spend, spend, and those companies that pitch well in this booming market have a lot to go for.

It is, as ever, a matter of being selective. You still need to ask, 'Who are we really doing business with?', 'Will we get paid, and when will we get paid?' In a boom it is all too easy to take on a big contract that ends up by bankrupting the contractor through late or non-payment.

MEED is to be congratulated for its new online service, www.meedprojects.com which provides up-to-the-minute data on 1,000 projects worth more than $50 million in the GCC countries, Iran and Iraq. Most of the opportunities are in either oil and gas related infrastructure work or real estate development.

This is not expensive at $3,000 a subscription if you are successful in landing a contract. But another tip would be to employ a reputable credit agency to check-out your client to ensure that your new contract is a blessing and not a curse.