CA urges a freeze on the numbers of contractors

The UAE Contractors Association has suggested to the country’s Ministry of Economy & Trade to withhold issuing further licences to entrants for the time being.

  • E-Mail
By  Eudore Chand Published  January 14, 2004

The UAE Contractors Association feels that the contracting community may be overpopulated. Consequently, the organisation has suggested to the country’s Ministry of Economy & Trade to withhold issuing further licences to entrants for the time being. The spurt in construction activity taking place in the Emirates, and especially Dubai, has attracted several entrants to the sector. These are not only homegrown firms, but also small and large companies from across the globe. Entrants require a contractor licence to operate in, and from, the UAE as per the law. The practice so far had been to licence firms, which have an agent in the UAE or which have a partnership with local firms. Alternatively, global majors have been taking up residency in the many free zones that dot the country. But that limits them to work available in only that emirate where they are based, almost as an offshore entity, industry experts said. But the urgency and speed with which several major projects have come up, and the acquisition of licences and registration in various free zone entities, is said to have forced a rethink about the entire registration process at the Ministry of Economy & Trade. Since construction firms fall under UAE Companies Law, the Ministry of Economy & Trade maintains the Register of Companies in the UAE, and as such, acts as the licensing and regulatory authority. The UAE’s Ministry of Public Works & Housing is not responsible for private sector construction industry players. “The Ministry of Economy & Trade had approached us some months ago asking for our opinion on licensing procedures for overseas contracting companies. We responded by requesting them to please stop issuing new licences – not only to foreign companies, but also to local companies,” Dr. Rashed Ahmed Rashed, general manager of UAE Contractors Association, told Construction Week. It is said the construction sector might be overpopulated, just as the banking sector claims that it is over-banked. According to the UAE Contractors Association, the sector has some 17 000 general contracting firms accounting for some 346 000 workers. This is not counting the specialised contracting firms, the building products manufacturers, fabricators and the design, consulting, project management and other construction-related firms in the emirates. “We told the Ministry of Economy & Trade [to] let us evaluate the system of licencing because we don’t believe that the existing system is a professional one. Contracting is a profession and industry that requires conditions that need to be applied,” the official said. The Contractors Association has been campaigning to improve industry standards and ethics, introduce standardised UAE-wide professional qualifications and obligatory requirements through the establishment of a Supreme Council. The council would act for the construction industry in a manner similar to that of the UAE Customs Council, which co-ordinates the customs departments of various emirates, or as the UAE Central Bank operates for the banking sector under the UAE Ministry of Finance & Industry. “In the present system, there are so many weaknesses. The profession requires certain criteria. It needs a professional body to regulate it,” said Dr Rashed. Currently, all a company has to do to get a licence is to visit one of the emirates’ chambers of commerce or economic departments and provide a money guarantee and a silent UAE national partner to get the licence. “There is no consideration of whether you are qualified or of the size of your company or of the size of the market. If you licence 17 000 [projects] and you don’t have 1000 projects, what will they do? They will trade in visas and do other things that harm the economy,” Dr. Rashed said. “It has become very important to accelerate the formation of the Supreme Council. It is also necessary to make membership in the UAE Contractors Association compulsory for contracting firms and it is necessary to have professional criteria for licensing firms, he stressed.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code