UAE Property Developers Failing to pay British Contractors

A number of British contractors in the UAE have not been paid by the local developers – some are as much as six months in arrears and the British business secretary, Lord Mandelson has approached Dubai and Abu Dhabi’s  rulers Sheikh Mohammed bin Rashid Al Maktoum of Dubai, and Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi for assurances that the situtuation will be remedied.

Mandelson said: “I have had concern expressed to me about delayed payments. Nobody thinks that anyone in Dubai or Abu Dhabi is going to default, and people understand the delay, but what they want is reassurance that the delay will not become permanent and that bills will be paid because these are contractors employing very large quantities of labour.”

Dubai received a $10bn loan from the UAE’s federal government last month as part of a $20bn bond issue made by the emirate and funds are expected to start being disbursed to government-linked companies in the next few weeks. Despite all the various developers having different names and companies, almost every large development company in Dubai is actually government owned,  and hopefully some of this money will eventually find it’s way down the food chain to the contractors.

Oddly, Abu Dhabi has also failed to pay contractors, despit the fact that Abu Dhabi holds 95% of the UAE’s oil reserves and is supposedly cash-rich at the moment, which leads us to suspect that the current crisis in the UAE is far worse than anyone is admitting to.