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Japanese firms are owed billions in Dubai
Source: BI-ME and media reports , Author: BI-ME staff
Posted: Mon November 9, 2009 12:15 am
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UAE. Dubai companies owe billions of dollars to Japanese companies who worked on projects such as the emirate’s metro and Palm Island, the National reported, citing the Japanese Consul General Seiichi Otsuka.

“Some Japanese construction companies are facing very serious debt problems as Dubai can’t pay,” said Seiichi Otsuka, the Japanese consul general in Dubai. “Some companies engaged with the construction of the Metro are facing some payment issues.” He said companies were also owed money by Nakheel.

Mitsubishi Heavy Industries (MHI), a part of the giant Mitsubishi Group, and Taisei Corporation, one of Japan’s largest contractors, are among those firms affected by non-payment on contracts that date back years in some cases.

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

Taisei is believed to be owed several billion dollars across a number of projects in Dubai and elsewhere outside the UAE.

The company is still awaiting payment from the Roads and Transport Authority (RTA) for completed projects including Doha Road near the Burj Dubai and the Arabian Ranches interchange. It is owed funds from Nakheel for the Gateway Towers and vehicular tunnel projects on Palm Jumeirah, in addition to several infrastructure schemes on Palm Jebel Ali and Almas Tower at Jumeirah Lake Towers, according to The National.

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. “So far, we have not been officially requested by the Dubai Government to explore so-called public financing. But if they try to involve the [Japanese] government we would have to give serious consideration to such a request.”

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

Nelson Ogunshakin, head of Britain’s Association for Consultancy and Engineering, said in May that Nakheel had asked a number of consultants to accept discounts of 25% to 35% on outstanding invoices. 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: February 9, 2010
UAE. Location and quality are driving apartment prices; while average prices decreased, select communities, including Palm Jumeirah and Downtown Burj Dubai, experienced slight increases according to Landmark Advisory's latest quarterly report.
date:Posted: February 8, 2010
INTERNATIONAL. Trying to achieve financial goals by pouring all of one's assets into emerging markets today, telecommunications tomorrow, and Japanese small-cap stocks next week is not a guarantee for achieving a sound financial plan.
date:Posted: February 8, 2010
INTERNATIONAL. The latest survey shows 46% of respondents expect their business travel to increase, marking a rise by 22 points compared with figures of the same period in 2009.