Low competition is an important business element as the regional MEP sector struggles with liquidity, Papakonstantinou says: “It is a known challenge, and it has been difficult for the past few years. All contractors are facing an imbalance in the contract terms – [...] between the terms for the client versus the terms for the contractors.
“There is not enough work in the market. It is still a buyer’s market and there are a lot of contractors taking on contracts with clauses that are not equitable. We are trying as much as possible to push back on certain key clauses in contracts, but it is certainly not something Plafond can do by itself – it is a market- wide phenomenon.”
An improvement in the liquidity situation is under way, but progress is slow, Plafond’s chief says: “At the end of the day, your salaries get paid at the same time every month and you know your material supplies are tied to a letter of credit or a post-dated cheque.
“Our outflows are quite predictable, but our inflows are, unfortunately, unpredictable at times. It is a common problem for all contractors, and entire sectors across the industry. Hopefully, with the industry picking up, things will improve.”
Processes and projects
Papakonstantinou says Plafond is currently implementing the complete fit-out and MEP programme for Dubai’s The Opus. The shell-and-core project was handed over by Multiplex to client Omniyat, which directly contracted Plafond for the job.
“For us, Omniyat is a big client,” he adds. “We have several projects with them, and share a very good relationship.
“We are also completing the MEP works for the new HSBC headquarters, a 20-storey building situated on Emaar Square. Again, Multiplex is main contractor for that development.”
Plafond is also working on the full MEP and ceiling package for the residential building, One Palm by Omniyat.
“Generally, we are fortunate to have good clients,” he continues. “We maintain good relationships with them [...]. Probably 80% of our work is from repeat clients.”
One of Plafond’s more luxurious and challenging hospitality projects was the five-star Palazzo Versace Dubai, which involved a complete fit-out of its 218 hotel rooms. Papakonstantinou says that the Opus will be a similarly challenging project.
“The Opus, designed by Zaha Hadid, will be a challenging project as there is not a single straight line [in that building],” he explains.
“We are looking forward to working on the project. It is due for completion early next year.”
The road ahead
As Plafond’s portfolio expands, so too will the need for it to collaborate with key project stakeholders. Papakonstantinou says this is the key to a project functioning as expected, but is quick to admit that in some cases, a lack of trust within the project team can lead to all members becoming “polarised”.
He explains: “[In such a situation], everybody pre-emptively assumes that the other party is out to hurt them. This just sets the wrong tone for the project.”
To exemplify this view, he points to the Etihad Airways contract that Plafond – owned by The Emirates Group – features in its portfolio: “We have worked with Etihad for the past 10 years, delivering a lot of lounges, trading facilities, travel monitoring, and [other services] for its team. They told us what they wanted, and we delivered it. They did not micromanage us.”
“We waste so much time and energy on the wrong things, rather than focusing on what we all enjoy doing, which is to build and construct. Relationships and trust are important.”