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DUBAI, Feb 3 (Reuters) - Several Dubai-based contractors say they are owed millions of dirhams by state-linked developers and some may face bankruptcy as credit dries up and major projects are cancelled or scaled back in the former Gulf Arab boom town.

'There has been a marked increase in the number of contractors asking for help to obtain payment, including payments certified months ago on some of Dubai's largest projects,' Michael Grose, a partner at legal firm Clyde & Co LLP, in the Middle East Projects and Construction Group, told Reuters.

'Whilst there is definitely an upswing in restructuring advice, no construction businesses are coming through the door wanting to put themselves into liquidation. Yet.'

As the global financial crisis began to hit the seaside emirate late in 2008, major government-linked developers behind some of Dubai's high profile projects have put work on hold and cut jobs.

Around $75 billion worth of projects in the United Arab Emirates have been suspended or cancelled altogether according to an HSBC report issued in January.

'We have had to let go half of our staff and cut wages and it is not because we have no work, it is because we are not being paid for the work that we have completed,' a Dubai-based contractor told Reuters under the condition of anonymity.

'Contracts are not worth the paper they are written on. They don't understand that the work gets done and you have to pay for it. There is a sense among the big developers that because they are linked to the government, they can do what they want.'

In response to a Reuters query, government-linked developer Emaar Properties, the largest listed Arab developer, said payments were based on a credit cycle and other conditions and that those that qualified would be paid.

'All payments that meet the criteria have been honoured and will continue to be honoured and will continue to be cleared, in line with contractual agreements,' a spokesman said.

Government-owned Meraas said in statement sent to Reuters that payments and payment schedules in the company are an internal matter and therefore details are confidential between the company and its contractors.

OVERDUE BILLS

One deputy chief executive with a consulting firm, who had a contract terminated by a major developer, said his firm was owed several million dirhams, now overdue, and did not know when he would be paid.

'Will the government bail the industry out? Well, has the government got the money?' he said.

Dubai -- home to palm-shaped islands, an indoor ski slope and the world's tallest building -- has lured investors in droves over the past few years, but is now being hit hard by the global financial crisis.

Cranes that operated day and night before the crisis now stand motionless and many of the building sites are deserted as thousands of construction workers have been ordered to down their tools.

'Established developers or developers who have projects near completion will be in a better position than others (to make payments),' said Abeer Gouda, senior financial analyst at Global Investment House in Kuwait.

'It will depend on the developer's track record and the project itself, if it is near completion and on the location.'

State-owned Nakheel, developer of Dubai's palm-tree shaped islands, said last month it would halt work on a 1-kilometre tall building for one year.

That decision followed the suspension of work on Trump Tower, a $789.5 million project on one the palm-shaped islands, in December. The developer cut 500 jobs in November.

Meraas in December said it would review its $95 billion Jumeirah Gardens project launched at a Dubai property exhibition.

'Payments have always been a problem here, but now the problem is a bit bigger. I reckon the Dubai government would honour their payments but you might have to wait longer than usual,' said the regional director of a construction group.

'Dubai cannot afford not to honour its debt to contractors.'

Developers Nakheel and Sama Dubai did not respond to Reuters enquiries on possible delays in payments

I know this for a fact that Palm Jebel Ali is just about to be shut down. The contractors haven't been paid in months.

Just a question guys.

It's starkly obvious that two or three members of this website just post anti-emarati news articles, anything they can find about the emarites economy or society. It's done in a purely inflammatory way. All other forum members (of many nationalities, I can see) exist in reasonable harmony.

What does this rubbish all have to do with Dubai? What is the point of moderators? I thought this would be a great place to discuss our shared experiences of Dubai. Instead I just get the stink of these few bitter individuals everywhere, like cat urine.

I don't think 'freedom of speech' covers your over-tolerance of this baiting. To spoil the fun of the majority is 100 pct anti-social. We're in Dubai after all, anything can be censored.

As I said, just a question.

LOOOOOL

uaekid wrote:Just a question guys.

It's starkly obvious that two or three members of this website just post anti-emarati news articles, anything they can find about the emarites economy or society. It's done in a purely inflammatory way. All other forum members (of many nationalities, I can see) exist in reasonable harmony.

What does this rubbish all have to do with Dubai? What is the point of moderators? I thought this would be a great place to discuss our shared experiences of Dubai. Instead I just get the stink of these few bitter individuals everywhere, like cat urine.

I don't think 'freedom of speech' covers your over-tolerance of this baiting. To spoil the fun of the majority is 100 pct anti-social. We're in Dubai after all, anything can be censored.

As I said, just a question.

LOOOOOL

UAEkid,

is this any different to you continually posting up "trash" articles on the UK? NO.

Sadly, what is happeneing out there in the construction industry is a FACT, stop putting your head in the sand and face up to what is happening.

He is desparately trying to be funny and justifying his existence. But it ain't working.

well well well another guy from UK.. the more the joy. my friend unlike you guys I only go with experts facts not views, now if you wana call the UK media article trash well it is a trash from your country, I didn't make anything up, so if you don't like it take it with them.

and UAE is doing and will keep doing just fine and it doesn't matter how many threads you post and when the day will come for this country economy to go down, you will be the first to get effected and sent back home where you will be jobless

I hope all those island projects fail and get submerged

When you make castles out of nothing, at some time reality will come knocking on your door.

Dubai was just a fantasy land. the tallest and biggest.....

UAE Kid,
Listen !! K Dog has put up a REUTERS report. Are you saying that the world's leading News Agency is telling lies??
The TRUTH will come out, kid!! You will NEVER stifle it !! This looks very bad for Dubai. I cannot understand a country that has embarked on a such a phenomenal building spree , like a drunken man , if it could not PAY for it.
You are the country that despises alcohol [ at least as a religious belief] , yet your FINANCIAL JUDGMENT is far less sound than in countries where people get drunk now and again !! A SOBERING thought!!

If those contractors are not paid, Dubai will never live down the shame. What were they thinking of in Dubai when they instigated so many mega-projects and then paid THEIR OWN PEOPLE TO BE IDLE AND
WORK-SHY !! ???

Who do you think you are? A decent person PAYS HIS DEBTS!! Companies need to be paid REGULARLY. They should be paid every month.......two months at the most!! Otherwise they go under.

If Abu Dhabi is going to sort out Dubai's debts , it had better do so fairly soon. Otherwise bad publicity and news of unfinished projects and bad investments is going to spread around the world WITHIN DAYS.

If you have UNFINISHED PROJECTS , who is going to go to Dubai on holiday? People don't want to holiday on a BUILDING SITE!!

Look here, kid!! Your country seems to have gone mad with its spending. As soon as you had Burj Dubai , the tallest building in the world........YOU HAD TO BEAT THAT WITH AL BURJ !! WHY ????
What sort of thought process is THAT if you could not afford it ?
Why not ESTABLISH WHAT YOU ALREADY HAD .....FIRST??
FILL THE OFFICES AND APARTMENTS BEFORE EMBARKING ON MORE AND MORE AND MORE AND MORE!!

Any fool can SPEND someone else's money !! However, any decent business PAYS ITS DEBTS!!
I can see this Dubai DREAM rapidly turning into a nightmare unless Abu Dhabi RESTORES CONFIDENCE AND RESPECTABILITY. People will be frightened of visiting Dubai ......both on business and vacation.....if Dubai RENEGES ON ITS DEBTS!!

THEN you will have a MAJOR , MAJOR problem!!
A half-finished ghost town with a tarnished reputation !!

I hope for the sake of Dubai.....AND THE UAE.......that Abu Dhabi can sort this out pronto!

So kid, you don't like news stories that talk about negative economic news in the UAE, but you have no problem posting the following threads that talk about negative economic news in the UK...

UK economy will shrink faster than rest of the developed world, IMF predicts. http://dubaiforums.com/viewtopic.php?p= ... ht=#261078

British investors are the top in AD http://dubaiforums.com/viewtopic.php?p= ... ht=#261030

UK unemployment soaring http://dubaiforums.com/viewtopic.php?p= ... ht=#261028

UK production shrank at a rapid pace http://dubaiforums.com/viewtopic.php?p= ... ht=#261026

UK, Company insolvencies surge http://dubaiforums.com/viewtopic.php?p= ... ht=#261023

Britain facing major currency collapse, bankruptcy http://dubaiforums.com/viewtopic.php?t= ... sc&start=0

so are we talking UAE or Dubai here ? I don't care much for Dubai believe me neither their construction , it is mostly western money laundry and what is it I got to lose when things get cheaper here, finally I'll be able to buy my summer beach house LOOOL

but I'm firing back cuz ppl here are being sarcasm about it, hate that.

So, are we talking your hypocrisy here or not?

kanelli wrote:So, are we talking your hypocrisy here or not?

Sounds about right K

Well said RedKite

Uaekid, stop being oversensitive and defensive - it is not a nationality issue although you are making it into one. Anyone can see the problems in Dubai and UAE.

In one way it is no different from the rest of the worl in that there is a huge economic problem, but you must admit that the cause of the problem is unique to Dubai.

... and stop thinking that everything anyone posts on this website is anti-Emirati. People are entitled to their opinion.

I don't see how this is anti-emirati. It is an economic report. I've been here three years and had only one ant-emirati comment made to me and that was from a lebanese woman not a westerner.

UAEkid We're here we like your country we like you, we're just as unhappy about the current ECONOMIC situation as everyone else. Don't take news reports so personally

scarlet wrote:I've been here three years and had only one anti-emirati comment made to me and that was from a lebanese woman not a westerner.

I'm not surprised - Lebbo identity crisis.

A lot Lebanese spend too much time saying, 'we're not really Arabs,' and try to behave/appear western.

Del wrote:

scarlet wrote:I've been here three years and had only one anti-emirati comment made to me and that was from a lebanese woman not a westerner.

I'm not surprised - Lebbo identity crisis.

A lot Lebanese spend too much time saying, 'we're not really Arabs,' and try to behave/appear western.

Well they are Arabs (Kelna 3rab) in the Gulf, and when in Europe, they become French, and when in North America they say "we are actually Phoenicians"

Well, that’s not all. Even the Persian Gulf which they like to call Arabian Gulf is Persian again in the papers. Despite all the money they paid to change it. And it looks like Abu Dhabi will not bail out all of the companies here. I heard Iran may take back these small Emirates as they once belonged to Iran.

That should cheer up uaekid.

K-dog, do you have a source for that Palm Jebel Ali project gone shut?

And what is the completion status of that project?

Good article guys. Facing reality and we all know now, how biased UAE kids views are towards the English in particular. Enlightening topic for me.

RobbyG wrote:K-dog, do you have a source for that Palm Jebel Ali project gone shut?

And what is the completion status of that project?

Good article guys. Facing reality and we all know now, how biased UAE kids views are towards the English in particular. Enlightening topic for me.

RobbyG. I'm on PJA. The Contractors haven't been paid for over 4 months now. Some have already quit, the rest are extremely frustrated. Stay tuned for some major update early next week. I'll keep ya posted.

I've also heard that the lawyers have not been paid for over a year (from a source working in that particular international firm). Pretty scary when you consider that that particular client is one of the firm's main generator of income.

Nakheel has been laying people off 10-15/day on average for the last 2 weeks.

Anyone know anything about Emaar's situation? Like most things at the moment, rumour, speculation, conjecture but very little in the press.

Emaar had some lay offs to but they have been able to relocate a lot of their staff to other countries e-g Saudi.

K-Dog wrote:Nakheel has been laying people off 10-15/day on average for the last 2 weeks.

Holy crap!

K-Dog, can you post the whole article, I can't log into the site for some reason

Ta

ouch

I have said it elsewhere. Nakheel needs to pay its debts ,along with Dubai. They cannot expect international companies to wait MONTHS for their money. Why on Earth did Emaar and Nakheel EMBARK ON SO MANY HUGE PROJECTS??? They must have thought there was a bottomless pit of money SOMEWHERE .......well it's NOT IN THE WEST!!

Abu Dhabi needs to sort Dubai out and finish projects that NEED finishing.

Why build SO MANY PALM ISLANDS ? Why build TALLER AND TALLER ??
Are they phallic symbols ?? Or merely a C*CK UP!!??? [ Excuse the pun!!]

RedKite wrote:I have said it elsewhere. Nakheel needs to pay its debts ,along with Dubai. They cannot expect international companies to wait MONTHS for their money. Why on Earth did Emaar and Nakheel EMBARK ON SO MANY HUGE PROJECTS??? T

Many of us raised similar questions 2 years back, we were told we were unambitious and without vision, while Emaar were "visionary geniuses" with "ambition"

Ah this too much


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