By Andy Sambidge
Japanese consul general says firms facing 'serious debt problems' amid payment issues.
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".
Well, I am sure like me, many might be surprised since this article just rubs against the article published today titled "Al Habtoor chief upbeat on Dubai future" and also last weeks' article "UAE to rebound with 'greater confidence' - Prime Minister". Offcourse, Dubai must be paying these debts off to the Japanese firms, but call it coincidence or deliberate attempt to publish this articles at about the same time. The readers should not be swayed like a pendulum when they read, rather analyse what they read and make their judegement. Every individual is a responsible resident and their comments and thoughts make a difference.
Good point to note MRS, I think there is a big difference between ground facts and what "Habthoor chief" wants to see. In UAE it is very common that every week people come and comment on things without considering what is happening actually.
@MRS your comment "Every individual is a responsible resident and their comments and thoughts make a difference." is very accurate and just shows how powerful AB has become as a conduit for residents to express themselves. Good on you AB!
I guess my mother was always right when she she said "You believe 10% of what you hear and read and throw away the other 90%". This article is not suprising at the least and i assume other people in the constrcution industry can vouch for me and say they too havent been paid. What is more shocking is the comment by Al Habtoor indicating that Nakheel have manged to repay there debts. Its very amusing that Nakheel have not manged to repay there debts to us even with that debt discounted and as a consequence our owners have decided to close the Dubai branch. Furthermore if a business/individual does not manage to repay there debts they face jail, yet all the debts owed by the government developers etc do not face the same consequence.
I agree with Reality Check, many of the vendors have been offered a settlement at 50-60% of their original amt by Nakheel (and they have yet not been paid off). Also the credit notes game has been started by nakheel n emaar who did not want to build the promised property and forced the investors to move money into other developments. This is crazy.
Does anyone know the factual figures of what is actually owed by all Dubai Developers ??? It must amount to Billions of Dollars in UAE, GCC, North Africa Al Habtoor comments are totally unrealistic
I am appalled. It is such a humiliation. Why should Dubai take on its plate far more than it could ever chew. All I see are scorched shoots not green. We dont need anyone to tell us how grave the situation is because wherever you look you are reminded loud and clear TO LET CALL 04 OR 050.
I along with many others are owed money in the UAE and have not been able to collect any of the debt owed. Trying to collect money is near impossible especially since local media won't report stories on where investors or businessmen were either cheated or not paid what they are owed.
Why should we believe such news? Arent other articles saying that Dubai's problems are just exagerrations by doom merchants, and that Dubai has rebounded from the crisis?
All said and done Dubai is a my favorite place. It will come out stronger having realised the truth. It is only a matter of time that Dubai will regain its glory.