Dubai: As solutions go, this one's deceptively simple, both in conception and, by the sound of it, in its implementation. It is so simple it raises the question as to why no one has thought about it before.
Dubai-based Belhasa Projects is working on a process where all the small-ticket monies owed by individual clients can be paid with credit cards on new monthly service contracts.
In just one step, the company, which offers facilities and maintenance, among a broad range of services, hopes to resolve the issue of mounting payment delays and the difficulty of having to chase them.
"More often than not, smaller debts take up most of credit control's time and places us in a position where we have to keep hassling clients, invariably high net worth homeowners, who use us for the upkeep of their properties," said Greg Garner, CEO of Belhasa Projects. "It isn't the best situation to be in and we are always at risk of disenfranchising the clients. By creating a platform where payments can be made through credit cards for the monthly service contracts, we are removing several layers of issues. It's simple and direct," he added.
The company is in advanced negotiations with an agency which would in turn deal with the banks to smooth out the processes involved in making the new system work. Already it's been tested prior to the launch and has won all-round approval. If all goes according to plan, the rollout could be imminent.
Garner does not foresee a lot of cost savings from the initiative, but emphasises that it will free-up more time for the company to chase after higher value payments. "And, honestly, that's where the meat and gravy is," he said.
The first half of the year has been kind to the company in terms of projects won as well as ones that are on-going. Recently, it capped the good run by securing a Dh22 million ‘aqua-scape' contract from a major hotel development on the Palm Jumeirah. The project involves creating water elements in the area and work will start in the fourth quarter and take up to 12 months to finish.
"The rut has stopped and projects are once again coming through, albeit at a much slower rate, and contractor margins are under pressure," Garner added. "But the best part in this is a sustainable run and these are all well-funded and quality projects."
Best quarter
In fact, the third quarter was the best Belhasa Projects has enjoyed. There are around 400 projects, both active and those about to start, on its books. In these troubled times, these are numbers any sub-contractor would be pleased with. It also helps that the company did not confine its operational reach to just a single market. Its expanding portfolio of projects in Qatar has helped, as did those from Abu Dhabi.
Its recent activity has been such that the company, which has a work force of just over 3,000 people, has again contracted outside labour to get its work done, particularly for the projects in Abu Dhabi.
Have payment delays been an issue on the major projects? "Historically, we have worked on an advance fee and then taken payment on reaching certain progress milestones," said Garner. "If those payments do not come, work stops.
"Moreover, we have always treated the credit control function as if we were in a recession. The discipline helped when the industry actually went through one."
Now with the new monthly service agreements and the credit card payments, Belhasa Projects has more time to focus on other pressing issues.
Growth strategy
After having gained traction in Qatar, Belhasa Projects is looking with renewed confidence at potential overseas opportunities. Bahrain and Kuwait are cited as good projects, as is Iraq.
"It's part of the insulation process of not being confined to a single market," said Greg Garner, CEO. "We have also had interest coming from Kazakhstan, and have done consultancy work from here on some projects. The cash was paid up front.
New markets always offer good prospects, but we must do so through the right partners." The scope of the activities taken on by Belhasa Projects, which has been in operation for 30 years, could include soft and hard landscaping work, pools and aqua parks, MEP works and, more recently, desalination and waste water treatment.
