Minnows against the mighty

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SOLVEABLE PUZZLE: Paul Taylor of HBJ Gateley Wareing believes there’s a solution for the problems of subcontractors.

The UAE's construction sector is so large that one could imagine any company looking for a share would find easy pickings.

With the industry experiencing double-digit growth almost every year and new mega-projects being announced all the time, it may be hard to believe this is not the case.

But the owners of companies and legal experts say that the smaller firms are finding it difficult to compete.

The exact figures do not exist, but Construction Week spoke to a number of contractors and subcontractors who had heard there were a large number of firms which had gone insolvent.

One told of a specialist subcontractor who completed some high-quality interior work on a shopping mall.

Two years after it was finished the company hadn't been paid and was facing going under.

This case was not unique.

One subcontractor said: "I know of at least five companies which have gone under in the last year.

"We are at the mercy of the main contractor. We live under a constant threat.

"They have so much power we cannot fight them.

"If there is a problem with getting paid, the contractors can find a way out, but the subcontractors are the ones who end up going under.

But the managing director of one contracting firm, who asked not to be named, had a differing opinion.

He says: "It is very difficult to find a small subcontractor who you can rely on these days in Dubai.

He says he had also heard of a number of the smaller firms - those which employ less than about 50 people - going out of business last year.

He says: "Usually these small subcontractors are using illegal workers. And since the amnesty last year, many of them shut down or reduced their activities a lot. Because they are small they do not get work permits for their people.

But the intense pace of construction and the big workloads meant that the smaller firms had to be employed.

He adds: "You try to use the bigger subcontractors if you can. They are reliable, but they are overbooked and over-stretched because it is such a busy time for them.

"You don't get an appropriate response from them. They will not give you a price because they are overworked.

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