Sharjah’s government is introducing a new online payments service for contractors, which it has said will cut the time that companies wait for payment by half.
Waleed Al Sayegh, the director general of the government’s central finance department, has said that contractors working for Sharjah’s Department of Housing can expect the amount of time they wait for payment once they file a completion certificate for work carried out to fall to 45 days, from a current period of 90 days.
Mr Al Sayegh said that some contractors complained it took so long to receive payment for work that it affected their ability to bid for other tenders.
He added that the new system, which has taken a year to implement, will be completely carried out online. Once contractors receive a certificate of completion for a building from a consultant and file it online, they can expect money back in their account within 45 days.
Mr Al Sayegh added that he hopes the more efficient system will lead to a wider participation in housing tenders from local contractors. Currently, there are about 600 contractors registered with Sharjah’s Ministry of Housing.
“That’s why we’ve tried to improve the process,” he said. “More contractors, better participation between them. It will create so much more competition – we even feel the price will come down if they participate.”
Bob Flanagan, a director of project management and cost consultancy at Colliers, said that public sector contracts in the UAE typically have payment terms of 45 to 60 days, and private sector contracts usually stipulate payment within 45 days. However, he added that delays from both were not uncommon.
“Typically, in the UAE, you can wait for 60 to 90 days for payment. Anything over that is a problem project.”