Source: ArabianBusiness.com
========
One of the Japanese firms working on the Dubai Metro said on Thursday that the pace of construction has been slowed down while they negotiate with the Dubai government over delayed payments.
An official from Obayashi Corp - part of a consortium working on the Red and Green Lines - told Arabian Business that earlier reports that work had been suspended were “untrue”.
The Dow Jones newswire reported, citing Japan's business daily Nikkei, that a consortium, including Obayashi Corp, Mitsubishi Heavy Industries Ltd, Mitsubishi Corp and Kajima Corp, had decided to halt work for the time being, placing priority on talks with the Dubai government.
However, an official from Obayashi Corp said: "What we told [Nikkei] is that we are in negotiations with the client, the RTA of the Dubai government and we just slowed down the pace of the construction.
“We have been in negotiations for a long time. The slowdown is part of the strategy," the official added.
The consortium received roughly Y490 billion ($5.3bn) worth of orders to build the metro from Dubai's Roads & Transport Authority, with the work starting in 2005. But the actual construction expenses are expected to total almost twice as much, the newswire reported.
A statement from the RTA said: "The RTA confirms that the work of the DURL (Dubai Rail Link) consortium is continuing on the Dubai Metro project in keeping with the planned timeframe.
"The authority confirms its contractual commitment to the financial payments in accordance with the progress of the work on the project," the statement said. Mitsubishi Corp also declined to comment when approached by Arabian Business on Thursday.
The rail system was partially opened in September with its full completion now expected in the second half of the year when the Green Line starts operations.
Obayashi Corp is working on both the Red and Green Lines and the remaining Red Line stations were due to open next month.
When asked if the slowdown would lead to the February deadline been delayed, the Obayashi official said “it depends on how the Dubai government reacts to our slowdown.”
In December, it was reported that Japan's non-financial firms had some $7.5 billion in uncollected bills from work done in Dubai as of the end of October.
The data, excluding bank loans, was derived from a total of 18 projects worth about $15 billion and involving Japanese general contractors, trading houses and electric machinery manufacturers, the Nikkei said.
The figures included public works projects commissioned by the Dubai government, such as subway and road construction, it added.
Showing posts with label contractors. Show all posts
Showing posts with label contractors. Show all posts
Friday, 8 January 2010
Sunday, 5 July 2009
Contractors in Dubai must be paid: UK Trade Minister
From ArabianBusiness.com 5 July 09
Rumours of colossal debts owed to large foreign contracting companies by both Dubai developers and the government's development companies have been circulating ever since the tide of redundancies began. If the stories are even half true, then there are some major companies which, if they remain unpaid, could be placed in serious financial jeopardy. Lord Davies is being diplomatic, as one would expect, but the question being asked is: if a company suffers financial loss in Dubai as a result of unpaid debts, why would that company consider doing business here again assuming things ever improve? I hear that some companies have discovered to their surprise that the contracts they signed aren't worth the paper they were written on.
The same question applies to the expats who've been made redundant and have now returned to their home countries or have moved elsewhere - why would they ever return to work in Dubai?
As an aside, Limitless has closed its Dubai office, all staff who'd been working on the Arabian Canal project have been made redundant.
=========================================
The British trade minister, Lord Davies, has insisted that British contractors and suppliers in Dubai that are owed money “need to be paid”, according to a report.
Lord Davies, was on an official diplomatic visit to Abu Dhabi, The National newspaper's website reported on Saturday.
Some $636m is owed to British consultants and engineers alone in unpaid fees from work undertaken in the UAE, according to the UK's Association for Consultancy and Engineering (ACE). It was reported that the ACE had asked Lord Mandelson, the British Business Secretary, for diplomatic intervention.
The National quoted Lord Davies as saying: “I think when you have a fast-expanding economy as Dubai was and then the world slows down, inevitably it takes a little bit of time to work out some of those issues, so yes, those companies, some of them need to be paid.
“I think it’s an important issue, so I don’t want to de-emphasise it. Neither do I want to make it the big be-all and end-all.”Though the minister acknowledged the severity of the problem, he described it as a cyclical symptom of the global financial crisis that ultimately would heal itself, the daily added. He was also positive about the future economic prospects of Dubai and the UAE.Long-term economic prospects for Dubai and the rest of the Emirates were bright, he told the Abu-Dhabi based daily.
“It’s an international phenomenon, it’s not just a Dubai phenomenon. People are owed money and they have to be paid. But on the other hand, let’s not move from that to saying Dubai is somehow finished. That’s just not the case."
“I think in the UK these images flash that all the expats are leaving and business is dying. I just don’t think it’s true. Is there a correction going on? Absolutely. Is it a painful one? Yes. But has Dubai got great medium- to long-term prospects? Yes, absolutely,” The National quoted Lord Davies as saying.
Rumours of colossal debts owed to large foreign contracting companies by both Dubai developers and the government's development companies have been circulating ever since the tide of redundancies began. If the stories are even half true, then there are some major companies which, if they remain unpaid, could be placed in serious financial jeopardy. Lord Davies is being diplomatic, as one would expect, but the question being asked is: if a company suffers financial loss in Dubai as a result of unpaid debts, why would that company consider doing business here again assuming things ever improve? I hear that some companies have discovered to their surprise that the contracts they signed aren't worth the paper they were written on.
The same question applies to the expats who've been made redundant and have now returned to their home countries or have moved elsewhere - why would they ever return to work in Dubai?
As an aside, Limitless has closed its Dubai office, all staff who'd been working on the Arabian Canal project have been made redundant.
=========================================
The British trade minister, Lord Davies, has insisted that British contractors and suppliers in Dubai that are owed money “need to be paid”, according to a report.
Lord Davies, was on an official diplomatic visit to Abu Dhabi, The National newspaper's website reported on Saturday.
Some $636m is owed to British consultants and engineers alone in unpaid fees from work undertaken in the UAE, according to the UK's Association for Consultancy and Engineering (ACE). It was reported that the ACE had asked Lord Mandelson, the British Business Secretary, for diplomatic intervention.
The National quoted Lord Davies as saying: “I think when you have a fast-expanding economy as Dubai was and then the world slows down, inevitably it takes a little bit of time to work out some of those issues, so yes, those companies, some of them need to be paid.
“I think it’s an important issue, so I don’t want to de-emphasise it. Neither do I want to make it the big be-all and end-all.”Though the minister acknowledged the severity of the problem, he described it as a cyclical symptom of the global financial crisis that ultimately would heal itself, the daily added. He was also positive about the future economic prospects of Dubai and the UAE.Long-term economic prospects for Dubai and the rest of the Emirates were bright, he told the Abu-Dhabi based daily.
“It’s an international phenomenon, it’s not just a Dubai phenomenon. People are owed money and they have to be paid. But on the other hand, let’s not move from that to saying Dubai is somehow finished. That’s just not the case."
“I think in the UK these images flash that all the expats are leaving and business is dying. I just don’t think it’s true. Is there a correction going on? Absolutely. Is it a painful one? Yes. But has Dubai got great medium- to long-term prospects? Yes, absolutely,” The National quoted Lord Davies as saying.
Wednesday, 27 May 2009
Legal firm sees sharp rise in UAE contract disputes
From ArabianBusiness.com, 25 May 09
This is a story to watch as there are rumours circulating in Dubai (Rumour Central of the Entire World) of huge, almost mind-boggling, amounts of money owed to contractors and construction companies by quasi-government development companies. Aside from industry publications, discussion of the level of debt owed to the companies has received little attention here, probably because its bad news so its just passed off by the media here as "a misunderstanding". The flow-on effects of the cancelled, sorry "postponed", projects and the resultant job losses, actual and looming, are the focus of many expats' attention.
How long can these companies continue to carry the debts? There is also an effect on the Dubai economy as a whole: If the big guys aren't being paid, they aren't paying their sub-contractors who then can't pay their workers who then aren't spending in the shops etc etc. Its a big circle.
If the written contracts prove to be so full of holes you could shoot pumpkins through them and attempts at reasonable negotiation fail, what options are left to the companies to recover the debt or part of it, except to litigate? Does the threat of "you'll never work in this town again" really mean anything any more or has it become, for some, wishful thinking?
------------------------------------------------
There has been a sharp rise in litigation cases in the UAE resulting from contractors not being paid, law firm Al Tamimi said on Monday.
Speaking on the sidelines of an Al Tamimi seminar about financial and legal recovery strategies for creditors and stakeholders in Dubai, Raza Mithani, a senior advocate at Al Tamimi told Arabian Business: "We are seeing a huge upturn in the amount of litigation that is coming through which suggests amongst other things that a number of contractors are not being paid."
"In addition we are experiencing a significant rise in arbitration work across a variety of sectors. Presently we are dealing with a range of claims worth from hundreds of millions of dirhams to hundreds of millions of US dollars," he said.
"We are dealing with a number of truly massive claims which we believe to probably be some of the largest ever arbitrated in the UAE."
Arbitration is a legal process for resolving disputes outside the courts.
Severe liquidity conditions and a property downturn triggered by the global crisis has left many contractors and consultants in mainly the construction and real estate sectors owed millions of dirhams.
Almost $636m is owed to British consultants and engineers in unpaid fees from work undertaken in the UAE, according to the UK’s Association for Consultancy and Engineering (ACE).
WS Atkins, the engineering consultancy that designed the Burj Al Arab, said it was owed $39.7m that should have been paid in the first quarter by developers in the Middle East.
Evidence is also mounting that UAE companies who are not paying their customers are in “serious trouble”, said Gary Watts, head of the corporate commercial department at Dubai- based Al Tamimi – the largest law firm in the Middle East.
“It has become obvious that some people are tight with releasing cash, and other people are in serious trouble – they do not have the cash to release and they do not have the resources to meet their commitments,” he said.
Watts said that ‘an abrupt interruption of cash flowing around the system’ had put companies in the position of not being able to pay their contractors and consultants.
This is a story to watch as there are rumours circulating in Dubai (Rumour Central of the Entire World) of huge, almost mind-boggling, amounts of money owed to contractors and construction companies by quasi-government development companies. Aside from industry publications, discussion of the level of debt owed to the companies has received little attention here, probably because its bad news so its just passed off by the media here as "a misunderstanding". The flow-on effects of the cancelled, sorry "postponed", projects and the resultant job losses, actual and looming, are the focus of many expats' attention.
How long can these companies continue to carry the debts? There is also an effect on the Dubai economy as a whole: If the big guys aren't being paid, they aren't paying their sub-contractors who then can't pay their workers who then aren't spending in the shops etc etc. Its a big circle.
If the written contracts prove to be so full of holes you could shoot pumpkins through them and attempts at reasonable negotiation fail, what options are left to the companies to recover the debt or part of it, except to litigate? Does the threat of "you'll never work in this town again" really mean anything any more or has it become, for some, wishful thinking?
------------------------------------------------
There has been a sharp rise in litigation cases in the UAE resulting from contractors not being paid, law firm Al Tamimi said on Monday.
Speaking on the sidelines of an Al Tamimi seminar about financial and legal recovery strategies for creditors and stakeholders in Dubai, Raza Mithani, a senior advocate at Al Tamimi told Arabian Business: "We are seeing a huge upturn in the amount of litigation that is coming through which suggests amongst other things that a number of contractors are not being paid."
"In addition we are experiencing a significant rise in arbitration work across a variety of sectors. Presently we are dealing with a range of claims worth from hundreds of millions of dirhams to hundreds of millions of US dollars," he said.
"We are dealing with a number of truly massive claims which we believe to probably be some of the largest ever arbitrated in the UAE."
Arbitration is a legal process for resolving disputes outside the courts.
Severe liquidity conditions and a property downturn triggered by the global crisis has left many contractors and consultants in mainly the construction and real estate sectors owed millions of dirhams.
Almost $636m is owed to British consultants and engineers in unpaid fees from work undertaken in the UAE, according to the UK’s Association for Consultancy and Engineering (ACE).
WS Atkins, the engineering consultancy that designed the Burj Al Arab, said it was owed $39.7m that should have been paid in the first quarter by developers in the Middle East.
Evidence is also mounting that UAE companies who are not paying their customers are in “serious trouble”, said Gary Watts, head of the corporate commercial department at Dubai- based Al Tamimi – the largest law firm in the Middle East.
“It has become obvious that some people are tight with releasing cash, and other people are in serious trouble – they do not have the cash to release and they do not have the resources to meet their commitments,” he said.
Watts said that ‘an abrupt interruption of cash flowing around the system’ had put companies in the position of not being able to pay their contractors and consultants.
Subscribe to:
Posts (Atom)