A re-look at Dubai Metro payment schedule

Dubai:  Defaults on payments and debt re-structuring by some clients in Dubai were causes of concern for Japanese companies doing business here.

However, these concerns are easing with payment re-scheduling and better negotiations with clients, said top Japanese company officials.

Last May the Dubai government gave Mitsubishi Heavy Industries, the Japanese leader in the consortium that is building the Dubai Metro, a “guarantee” that the RTA would resume its payments to MHI, said Seiwa Ito, the company’s deputy general manager.

Realistic guarantees

“There was some delay in the payment schedule set with the RTA when money was low a year ago,” he said. “We were concerned about the payment schedule and the project execution, us and other Japanese companies.”

With re-scheduled payments coming in, the company is more confident now about working here, he said.

The global recession has also made it much easier for Japanese businesses to work with big clients.

“We can talk more common sense now and get more realistic guarantees [on payments],” said Mohammad Ameen Osman, General Manager of Dev-elopment at Hitachi Plant Technology, which is involved in contracting and sewage solutions projects here.

Prior to the downturn there was a gap between big clients and the contractor, he said.

“In the past we couldn’t ask for guarantees. It was difficult to ask for a clause in the contract, it was a take it or leave it deal,” he said.

Now both parties are willing to work together to minimise risk, even if that means negotiating the contract, so that the “project is safely delivered” and the “contract is safely paid,” he said.

Clients in both the private and public sectors have become more realistic and fair players, Osman added.

“We won’t just book any project that pops up in Dubai, but we’ll assess it.”

Representatives of the Japanese Business Council, the Japanese External Trade Organisation (JETRO), Japanese companies operating in Dubai, and the Japanese Consulate-General gathered at the third quarterly Country Focus Briefing on UAE trade ties with Japan organised by the Dubai Chamber of Commerce and Industry yesterday.