By Zainab Fattah and Haris Anwar www.bloomberg.com
Nov. 8 (Bloomberg) — Dubai companies, including Nakheel PJSC, owe billions of dollars to Japanese companies who worked on projects such as the emirate’s metro and Palm Island, the National said, citing Japanese Consul General Seiichi Otsuka.
Some Japanese construction companies are facing serious problems as Dubai-based firms can’t pay their bills, Otsuka was quoted as saying by the Abu Dhabi-based newspaper. Mitsubishi Heavy Industries Ltd. and Taisei Corp. are among those affected by the non-payments, the National reported.
Mitsubishi Heavy Industries spokesman Hideo Ikuno declined to comment when contacted by Bloomberg News. Calls to Taisei, Mitsubishi Corp., Obayashi Corp. and Kajima Corp. were not answered. Calls to Japan’s consulate in Dubai weren’t returned.
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 percent to 35 percent on outstanding invoices. Calls and e-mails to Nakheel today seeking comment were not returned.
Dubai developers have been struggling as the credit crisis crimped mortgage lending and speculators fled. Property prices slumped 52 percent from their peak, Deutsche Bank AG said on Nov. 5.
Dubai, which set up a $20 billon fund to help state-related companies through the crisis, will probably raise the second $10 billion for the program in November, Emaar Properties PJSC chairman said last month. Nakheel received funds from a $10 billion support program to help it cope with the credit crisis.
Getting paid in Dubai remains “challenging,” Al Habtoor Leighton Group, the construction company partly owned by Australia’s largest builder, said in August.
Ziad Makhzoumi, chief financial officer of Arabtec Holding PJSC, said the company is collecting payments, but not “as quickly as we did before.”
To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net
