🇦🇪UAE

تأخر المدفوعات والتحقق البطيء (Project Delays & Payment Delays from Inspection Non-Compliance)

Updated: Feb 20262 verified sources

Definition

Law No. 7/2025 prohibits employers from engaging non-compliant contractors and requires proof of continued compliance during execution. Poor punch list management delays project certification and final payment sign-off. Retention funds remain blocked until all punch items are closed and compliance verified, extending Accounts Receivable aging and limiting cash flow.

Key Findings

Financial Impact: Blocked retention (typically 5–10% of contract value): AED 250,000–AED 5M per project. Cost of working capital (carrying blocked funds for 60–120 days at 4–6% annual cost): AED 40,000–AED 400,000. Project delays due to inspection non-compliance: AED 100,000–AED 500,000 in indirect costs (labor, overhead).
Frequency: Continuous during execution (20–36 months); peak impact during final 3–6 months and punch list closure phase.
Root Cause: Manual punch list workflows, slow employer approval cycles, incomplete compliance documentation, delayed notification to authorities of completion, inadequate photographic/video evidence for sign-off.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Nonresidential Building Construction.

Affected Stakeholders

Finance Directors, Project Managers, Accounts Receivable Teams, Site Engineers, Employer/Developer Project Controls

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Labor cost: 150 hours/month × AED 150/hour (skilled site labor) = AED 22,500/month = AED 270,000/year per project. Schedule delay cost (overhead + delay claims): AED 100,000–AED 500,000 per 30-day delay. Equipment idle time: AED 50,000–AED 200,000/month (cranes, concrete pumps held for inspections).

قرارات تعاقدية خاطئة من نقص الشفافية (Contractor Selection & Verification Errors from Opacity)

Cost of rework due to subcontractor non-compliance: AED 500,000–AED 2M per project. Fines for employer engagement of non-compliant contractors: AED 50,000–AED 100,000 per violation. Project delays: AED 100,000–AED 500,000. Legal disputes: AED 50,000–AED 200,000.

تأخير الدفع وتحويل الحقوق (Payment Delay & Lien Rights Impedance)

Estimated: 5–15 additional AR days per project cycle; working capital impact 2–4% of monthly cash flow (typical for AED 50M+ projects: AED 3–6M working capital drag per cycle)

عدم الامتثال للقانون الجديد (Non-Compliance with New Construction Regulation)

Estimated: AED 5,000–25,000 per non-compliant project contract; legal remediation cost AED 10,000–50,000 per dispute; potential project halts (cost: AED 50,000–200,000+ per month in idle time)

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