Owning own machinery key to Senk Kurdistan growth
Erbil, Iraq-based Senk Group says that running its own fleet of equipment in Iraq is helping it win contracts in the developing Kurdistan market. Talking to marcopolis.net, Senk Group partner Rebaz Zedbagi said the contractor goes into the tender process by offering the “lowest reasonable price”. “It is a challenge for us to come up with […]
The Iraq contract market is dominated by low priced contractors
Erbil, Iraq-based Senk Group says that running its own fleet of equipment in Iraq is helping it win contracts in the developing Kurdistan market.
Talking to marcopolis.net, Senk Group partner Rebaz Zedbagi said the contractor goes into the tender process by offering the “lowest reasonable price”.
“It is a challenge for us to come up with a low but reasonable price because we cannot be too expensive,” he told the France-based news agency. “Thus we are trying to have the lowest possible price but we are, at the same time, keeping our eyes on the quality. It is very difficult for us to reach this equilibrium of having low price and good quality at the same time. However, we have partially solved this issue – we have our own machinery. Having this machinery helps us to offer lower price.
He added: “I think the government should slightly amend the bidding process because the pricing is quite challenging at the moment. Sometimes there are companies who win the project even though they don’t deserve it. They only win it thanks to the lower price they proposed. I think the government should examine more the qualification, breakdown and the proposed price of the companies within the bidding process. I’m not saying they should give the project to a company with a higher price; however, the price should not be their main concern. Each element like the age of the company, their references, how much resources they have, qualification, their bank guarantee, the breakdown of each item etc. should have the same influence in their decision-making.”
In a insightful interview he said that once the project is underway other challenges arise during the implementation of a project.
“We have a liquidity challenge; we usually don’t have enough liquidity. We always spend a lot of money on the construction of infrastructure in very short time. The problem is it takes time to get the money back from the government. If you are lucky, it will take a month, otherwise it takes two months or more. Imagine a construction company works two months, then it makes the payment and it gets the payment back in two months, so in the end it all takes four months and a lot of money. All construction companies in Kurdistan face this challenge. Senk Group suffers less thanks to our own machinery. We usually owe the market the fuel and raw materials. Yet whenever we don’t have money we face problems with our sub-contractors and this is not good for our image at all.”
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