Top 5 Biggest Problems with Gold Diggers in Dredging

There are companies or persons in dredging that think they can make quick money in dredging. They have zero experience or knowledge about dredging and don’t own any dredging equipment. Often, they have political ties that make them think, sometimes rightly so, that they can get a dredging project. They believe that dredging is easy, you only need a CSD and you become rich.

These companies and/or people are what I call Gold Diggers.

These Gold Diggers have a detrimental effect on the broad dredging market. In today’s Knowledge Update I share with you the Top 5 Biggest Problems with Gold Diggers in Dredging.

1. They ruin the price for dredging projects

Gold Diggers seriously underestimate the difficulties of dredging and have no idea how to prepare a production estimate. Hence their bids are more of a guess than an actual estimate.

Often, they guess a very low price and hence bid a low price and get the project awarded. All the while the experienced dredging contractor knows it often is not even possible to complete the project at that price, let alone make a profit. But in the end, they don’t get the project. The serious contractor is forced to lower prices or wait for a project in which the gold diggers are not interested.

2. They ruin the projects themselves

Since the Gold Diggers don’t know the first thing about dredging they often make the project more difficult to complete instead of easier.

They start dredging and if they encounter problems, move to another piece of the project until they find the easiest part and dredge that. Once only the problem areas are left they abandon the project leaving a mess for the serious contractor that needs to clean it up.

3. Clients will hate contractors

Due to their bad experiences with Gold Diggers they come to very much distrust and often outright detest working with dredging contractors. This results in more overhead work and stricter oversight for the serious contractor.

It is also reflected in contracts for new project that come up after the bad experiences of the clients. The contracts become more sided to the clients, instead of the being somewhere in the middle ground.

4. Suppliers grow wary

To get the business suppliers are often able to provide good payment terms and sometimes can assist in financing equipment. However, when they have too much bad experiences with Gold Diggers in an area they come to generally distrust contractors from that area. That means the terms for serious contractors also deteriorate. You will need to provide more security for the supplier, or simply pay higher prices, before they will even sell you a part.

5. Bad for employees

Employees of Gold Diggers are sometimes literally picked from the street. As such a genuine Dredger Operator or any other professional in dredging is not valued as much. The contracts are shorter, the terms are bad, and the salary is low. “Why pay more for an operator that has 5 years’ experience? This new guy is cheaper.” That is the line of thinking of a Gold Digger.

 

These were the Top 5 Biggest Problems with Gold Diggers in Dredging, but there are many more. But you might be thinking: “Ok, fine, I agree. But what can we do about it?”

The source of the issue lies in the qualification standards for bidding. Clients should consider only those contractors that already own at least one dredging vessel at the time of bidding. Gold Diggers only buy the equipment after they are awarded the project, as they don’t want the risk of having a dredger and no project.

Only serious contractors that already invested in a dredger have shown they are serious about the dredging industry.

What do yo think of my proposed solution? Do you have an idea for a solution to these companies?

To your success,
Timon Vinke

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