Abu Dhabi said to order prompt payments to contractors, suppliers

Abu Dhabi said to order prompt payments to contractors, suppliers
Abu Dhabi Executive Council has reportedly issued the circular.
Published: 8 April 2019 - 7 a.m.
By: Jack Ball

Abu Dhabi has reportedly instructed government departments and state-owned companies to pay construction contractors and suppliers no more than 30 days of receiving a receipt of invoices.

Accoring to an Abu Dhabi Executive Council circular dated 26 March, 2019, as reported by Reuters, Abu Dhabi also asked to amend contracts as to “oblige contractors and suppliers to pay subcontractors within 30 days of receipt of government payments”.

“The government is always keen on encouraging the private sector and paying its financial dues,” the document reportedly read.

Payment delays for contractors in the Middle East remain a concern, with funding constraints on capital projects impacting cash throughout the supply chain.

According to the Middle East’s Capital Projects and Infrastructure Survey by PwC in 2018, delayed payments from clients was a major issue according to more than half of the contractors surveyed. This number was more than thrice as much as developers.

Construction Week’s inaugural Business Confidence Survey in Q3 2018, found that 60% of the 10 respondents approached to share their views said their businesses were most impact by delayed payments in Q3 2018; contract disputes and a lack of skilled labour also affected their operations during this period.

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