Project related finance for construction contractors operating in the United Arab Emirates
Demand for construction Project Finance has developed in recent years asconstruction projects have become more elaborate requiring more expensive andspecialised technologies for their execution.Contractors' involvement with banks when operating in the United Arab Emiratesusually starts at the bidding stage with the issue of bid bonds. This develops intolarger commitments following their request' for performance bonds and financefacilities when they are awarded the contracts.The aim of this researchi s to investigate lending banks' assessmentso f contractorsoperating in the UAE, and the latter's financial requirements in order to executevarious construction projects. It further aims to reconcile the needs of theconstruction contractor to those of the lending banks and arrive at an acceptable levelof risk sharing and reward.A method of research has been adopted which includes a literature review, interviewswith selected bankers and contractors, the development of case studies, and a fieldsurvey by means of questionnaires sent to both borrowers and lenders. Data relatingto twenty-eight construction projects that used Project Related Finance for theirexecution was analysed to see if there was common ground for adoption of ProjectRelated Finance strategy.The questionnaire survey also revealed that while bankers extend both CorporateFinance to construction companies as general limits, and Project Related Finance aslimits specific to the project concerned, 73 per cent of contractors that participated inthe survey used the latter. The issue of risk management in contracting and the acceptability of risk by contractors as compared to that by bankers are discussed indetail ... (continued).
Year of publication: |
1995
|
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Authors: | Shawa, Hani Hashem |
Publisher: |
Hani Hashem Shawa |
Subject: | Banking | Finance | Taxation | International trade |
Saved in:
freely available
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