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Sat 4 Jul 2009 03:55 PM

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UK contractors in Dubai must be paid - UK trade minister

UK minister positive on long-term economic prospects for Dubai, UAE - paper.

UK contractors in Dubai must be paid - UK trade minister
DIPLOMATIC TALK: Lord Davies, was on an official diplomatic visit to Abu Dhabi. (Getty Images)

The British trade minister, Lord Davies, has insisted that British contractors and suppliers in Dubai that are owed money “need to be paid”, according to a report.Lord Davies, was on an official diplomatic visit to Abu Dhabi, The National newspaper's website reported on Saturday.

Some $636m is owed to British consultants and engineers alone in unpaid fees from work undertaken in the UAE, according to the UK's Association for Consultancy and Engineering (ACE). It was reported that the ACE had asked Lord Mandelson, the British Business Secretary, for diplomatic intervention.

The National quoted Lord Davies as saying: “I think when you have a fast-expanding economy as Dubai was and then the world slows down, inevitably it takes a little bit of time to work out some of those issues, so yes, those companies, some of them need to be paid.

“I think it’s an important issue, so I don’t want to de-emphasise it. Neither do I want to make it the big be-all and end-all.”

Though the minister acknowledged the severity of the problem, he described it as a cyclical symptom of the global financial crisis that ultimately would heal itself, the daily added. He was also positive about the future economic prospects of Dubai and the UAE.

Long-term economic prospects for Dubai and the rest of the Emirates were bright, he told the Abu-Dhabi based daily.

“It’s an international phenomenon, it’s not just a Dubai phenomenon. People are owed money and they have to be paid. But on the other hand, let’s not move from that to saying Dubai is somehow finished. That’s just not the case."

“I think in the UK these images flash that all the expats are leaving and business is dying. I just don’t think it’s true. Is there a correction going on? Absolutely. Is it a painful one? Yes. But has Dubai got great medium- to long-term prospects? Yes, absolutely,” The National quoted Lord Davies as saying.

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Puck 11 years ago

What's wrong with 30 or 50 fils on the dirham? They should take it and be happy.

Nick 11 years ago

Puck - i do hope you are joking - 30 / 50% of what is owed woudl present a loss for most consultants who have carried out work based on contracts they have signed with entities on the basis that these contracts would be honoured. If these entities do not pay, then what will happen when the market picks up elsewhere in the world - do you think that international consultants (whom are responsible for building dubai economically and physically) will come back knowing that they wont be paid. I doubt they will. Failure to pay the full amount properly owed by these entities is putting the future of Dubai at risk. Some consultants are as yet unwilling to take the matter to court as they believe this will signal their end to working in the UAE - but one or two will do so - and the courts will be srcutinised carefully and the world will be watching.

JP 11 years ago

Agreeing on discount is one thing and getting paid is another thing. If some one is offered cash against agreeing to a discount, then its fine to some extent. But is it happening?

Geriant 11 years ago

How charming of Lord Davies to spring to the support of hapless UK contractors. That half the contracts were at inflated prices because of the "no tomorrow" mood prevailing at the time of their signing should not go unnoticed. But it is wonderful to see a Labour peer earning his keep by patronising the locals in the same breath as begging for his countrymen to get their just wages. Then he is quoted as saying: "Yes. But has Dubai got great medium- to long-term prospects? Yes, absolutely."

Nick 11 years ago

its not the same as agreeing to a discount for cash before you have started the work. In these instances work has been undertaken and money is due. Asking for a reduction at this point in order to procure payment is wrong - a contract has been made and one party has honoured it. These entities are not sticking to their promises and instead are relying on the fact that they think they are immune to legal action.

Doug 11 years ago

The UAE should pay up what it agreed. Let's look at this slightly differently. Say I took a loan from a bank and then a few months later said to my bank manager "Hey, I can't afford to pay off my loan. Tell you what, I'll pay you half what I owe you and we'll call it quits, shall we?" Yeah, that wouldn't work. Why on earth any business operating here feels the rules should be any different is beyond me. This sort of behaviour will give Dubai a very bad name and suddenly all the pretty buildings that the locals want building to show off to the world won't have any contractors willing to build them.

Mounir 11 years ago

1) this is an internal matter of the UAE which is a sovereign independant state. 2) when you go into business, you take risks. people all over the world did not get paid fully 3) being paid partially by a client is better than waiting for that client to go to bankruptcy and get paid peanuts. this is how its done in the UK, US, Canada and other places; should the UAE demand that emirati companies get paid fully in those countries?

Owed lots 11 years ago

Obviously Mr Mounir is not owned any money by these Entities nor has he had to find money from everywhere and anywhere to keep paying salaries despite these entities promising payment after discounts. Mounir - keep taking you salary and maybe one day you will know how it feels!

Doug 11 years ago

Fine Mounir. Don't pay the UK companies. Don't follow the advice of the Prophet (PBUH) where he says you should pay your worker before the sweat on his brow has dried. Let's see how far that gets the UAE. You can't exist in this little bubble where it's one rule for the UAE and one for everyone else because I guarantee you that no-one will come to work in Dubai ever again. There'll be no contractors to build any of the projects the UAE is dependent on. In the end, not paying your bills will hurt you a lot more in the long run and damage the good name of the UAE.

Mounir 2 11 years ago

Mounir, well said. I think the British Authorities should not intervene in this country's economics. They have far bigger and far more serious issues in their govt. They should see a mirror before poitning fingers at others. UAE is a sovereign country and yes, it has faced financial issues due to the slowdown, but so have all other countries, its GLOBAL, not domestic and al hamdillah by the grace of God, GCC, specifically UAE and KSA are the least effected, though that does not mean its not effected. I think Mr. Davies should mind British wages and salary issues which are FAR more serious and STOP intervening in other country's economics. Mr. Davies might be a "lord" in his office, not here. There are laws here and proper channels to appeal for any mishappenings. My opinion to this is that UK, once AGAIN, wants to create a negative publicity for the UAE as they have been doing since the start of this year because they need to feel good mentally that out in the world there are ppl worse off, which is not the case definitely but is being tried to be portrayed in such a manner for the British to feel "happy" and "content" while they lose millions of jobs there and so that they, UK public, would feel a little bit better when they see in their papers those lies about GCC and the UAE. It has become a political game, cant anyone see it? Leav UAE alone and let it deal with the crisis, it needs not any intervention, it is a sovereign country and has its own laws. Please!!!