Sub-contractors and suppliers dealing with Arabtec are facing "significant impact" on their businesses amid plans to liquidate the construction giant, according to the chairman of a UAE-based law firm.
Abdulla Alawadi, chairman of the law firm Abdulla Alawadi & Associates, also said the liquidation of Arabtec would add to the "chaos" that developers are already having to deal with amid the ongoing coronavirus pandemic.
"From the perspective of developers, it is obvious that liquidation of this magnitude coupled with the challenges posed by the pandemic has created a state of chaos in different aspects," he said.
"Firstly, payments from developers to contractors/subcontractors are in constant scarcity or have even completely stopped. Secondly, the reduction of the headcount of construction workers made it even harder to deliver projects on time. Thirdly, there are other procedural aspects that forced itself onto the scene and obstructed the delivery of units to purchasers, such as the VAT on developers, which could amount to millions of dirhams for major developers,” he added.
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