Unfair Gaps🇦🇪 UAE

Shipbuilding Business Guide

6Documented Cases
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All 6 Documented Cases

عدم إنفاذ الضمانات الاحتياطية وخسائر الاسترداد من بناة السفن

AED 20M–100M annual leakage across UAE fleet (estimated 5–15% of pre-delivery installments on active projects = AED 1B–3B total exposure @ 5–15% recovery rate). Per-project: AED 100M contract × 30–40% advance payment = AED 30M–40M at risk per delayed/cancelled project.

Shipbuilders retain title to vessels until final payment. If construction is abandoned, buyers can only recover pre-delivery installments via refund guarantee. Weak guarantees (conditional upon court ruling, payable after shipbuilder failure confirmed) are often uncollectible. UAE Maritime Law (Article 9) allows shipbuilding contract registration, but enforcement mechanisms depend on guarantee structure. Manual monitoring of guarantee validity, builder creditworthiness, and trigger events leads to missed claims.

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عدم الامتثال لمتطلبات الكشف عن العيوب المخفية والغرامات التنظيمية

AED 500K–2M per disputed claim (legal fees AED 100K–500K; arbitration/court costs AED 200K–1M; lost productivity AED 100K–500K). Average fleet (20–50 vessels) experiences 2–5 hidden defect claims per 3-year cycle = AED 1M–10M total compliance cost.

Article 11 of UAE Maritime Law creates automatic liability for hidden defects up to 2 years from takeover—beyond standard warranty periods. Many contracts are silent or contradictory on this obligation. Disputes arise: (1) Is a 24-month hidden defect claim valid if the 12-month warranty expires? (2) What constitutes 'hidden' vs. 'discoverable at delivery'? Manual case-by-case determination requires legal review, creating 3–8 month delays and high professional fees.

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تجاوز التكاليف والنفايات (Cost Overrun - Contract Inefficiency & Waste)

Estimated 2.3-6.3% margin gap on newbuild contracts = AED8.7M to AED22.9M underutilized gross profit per H1 2025 (annualized: AED17.4M to AED45.8M); disposal of floating dock = AED40M cost reduction target

ADSB's newbuild and engineering segment generated only AED21.91M gross profit on AED381.56M revenue (5.7% margin). Industry benchmarks for shipbuilding show 8-12% gross margins on Navy newbuild contracts. The margin gap suggests cost overruns and waste. Historical context: ADSB restructured its cost base and disposed of a floating dock to reduce annual costs by AED40M, indicating severe cost control issues.

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تجاوز مهل الإخطار بمطالبات الضمان وفقدان الحقوق القانونية

AED 2M–10M per vessel incident (based on typical commercial vessel repair costs of AED 500K–5M+ multiplied by frequency of multi-year fleet operations). Manual processing adds AED 50K–200K annual administrative drag per fleet operator.

Vessels built in UAE or for UAE buyers face dual jeopardy: (1) Contractual warranty claims expire if not notified on time; (2) Insurance policies are voided if warranty notification fails. Gard (shipowner's mutual insurer) documents cases where buyers lost entire claims due to tardy notice. This is compounded by manual verification workflows and yard coordination delays.

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