Japanese builders owed billions for Dubai work - official

PAYMENT ISSUE: Japanese companies are owed billions for work done in Dubai, including the metro system, the Japanese consul general in Dubai has said. (Getty Images)

Japanese construction companies are facing "serious debt problems" amid issues with being paid for work done in Dubai, a top ranking official has said.

Seiichi Otsuka, the Japanese consul general in Dubai, claimed firms are still owed billions of dollars on projects that include the Dubai Metro and Palm Island, UAE daily The National reported on Sunday.

Japanese builders have played a major role in Dubai’s construction boom, spearheading work on the metro and other key projects in the emirate.

“Some Japanese construction companies are facing very serious debt problems,” Otsuka told the paper. “Some companies engaged with the construction of the Metro are facing some payment issues.”

Mitsubishi Heavy Industries (MHI), the lead company for the metro contract, are among those firms affected by non-payment on contracts, the paper added.

“MHI executed the construction of the Dubai Metro and some other contracts and we are still awaiting payment,” said Koji Okamoto, the general manager of the Middle East office of MHI in Dubai. The company has contracts in the Middle East valued at $150bn.

The Japanese government has not discussed the payment issues with the Dubai Government, nor has it intervened with financial assistance to those companies affected, Otsuka said.

“We are in a position to push both sides to make an amicable solution,” he said.

Otsuka told the paper it was difficult to put a figure on the outstanding debt as some payment was due shortly.

Last month, it was reported that some UK contractors were turning down invitations to chase work in Dubai because of continuing doubts over whether they will be paid on time.

According to Nelson Ogunshakin, the chief executive of the UK Association for Consultancy and Engineering (ACE), a large number of UK firms significant number of UK firms are still owed money by struggling developers in the emirate.

In July, the UK government reiterated its call for contractors to be paid by Dubai developers – and said it was "continuing to monitor the situation".

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READERS' COMMENTS

Dubai’s economy was built on strong foundations
Posted by Paolo C, Verona, Italy on Monday 9 November 2009 at 17:17 UAE time


we were told!?? Facts are that this is only one of the stories which gets to the media in order to put pressure and shame on those who owe money and don't follow their obbligations. The reality is that out there are many contractors which don't see any money at all, and receive instead only reassurances. The debt is by far much higher than anyone can imagine and could have serious geopolitical consequences, as well as the end of an era.

Name & Shame who?
Posted by Creditor, Orlandobai, United Arab Emirates on Monday 9 November 2009 at 14:12 UAE time


Agreed TQ but the majority are actually DGE's some of whom are being merged with other equally in debt DGE's and no doubt the slate will again be wiped clean. Then the usual excuses will come out about new management, new Co, the works shouldn't have been authorised and of course bad workmanship...!! Yawn

Name & Shame who..
Posted by TQ, Dubai, UAE on Monday 9 November 2009 at 13:33 UAE time


Wouldn't say its a million $ question Ahmed....You name me a big company with govt ties and I can assure you they are on there!

I think we all know who they are, the govt just needs to be a little more grown up in sharing with us what is already common knowledge between suppliers and the media....

The list is long and distinguished, I don't think there is a company on there that we haven't heard of :)

name and shame?...who?
Posted by ahmed on Monday 9 November 2009 at 13:13 UAE time


@TQ...agreed...but name and shame who???...isnt that a million $ question??

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