Arabtec is meeting with high-level government officials this week to discuss payment plans for its construction projects, which have faltered as a result of the global crisis, the firm’s CEO revealed on Saturday.
CEO of the Dubai-based construction firm, Riad Kamal, said a similar meeting with Dubai government officials had been held at the beginning of the year and had kick-started payments again.
“We did that in January and the response was great from the government of Dubai,” said Kamal in an interview with UAE daily Emirates Business.
“Payments started flowing in during the months of February and March in a satisfactory way. However, the board decided in its meeting on Wednesday that another meeting is due,” he added.
Kamal was speaking after Arabtec posted a 30 percent decline in profits for the first-quarter of 2009, with profits dropping to AED161m compared with AED231.4m for Q1 last year.
The slowdown in Dubai’s construction industry, as a result of the global economic crisis has impacted on the firm.
The group’s current order book stands at AED28.4bn, which includes the Okhta project in Russia, which has faced delay but should be back on track by May 27.
Meanwhile, the company also recently announced that it is seeking opportunities in Saudi Arabia and North Africa to help it weather the current economic downturn.
“We are looking at a couple of projects in Algeria, Saudi Arabia and Libya. In the next six months we should be able to divert a lot of our resources, which will become available from the Dubai market,” Kamal said
“We feel quite secure that the money is going to come eventually. We are very optimistic about the company’s expansion plans for 2009 onwards target Saudi Arabia, Libya and Algeria “he added.
Arabtec’s projected turnover for the first year in Saudi Arabia is in excess of SR1.5bn rising to SR5bn within three years.
It has set up a joint venture in Saudi Arabia where the new entity is 45 per cent owned by Arabtec, with 35 per cent taken by CPC Services, a member of the Saudi Binladin Group, and 20 per cent by Prime International Group Services.
The firm is also expecting to be awarded contracts worth about AED4.5bn in Abu Dhabi
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