It is a bad year to be a contractor. Late payments have left the construction industry grappling with a cash flow crisis and some of the region’s biggest and most high profile firms are no longer able to pay their bills.

Insolvent contractors cannot deliver projects and that is the fear that project clients now have. While this is a concern across the region, it is particularly acute for developers in Dubai where projects are being fast tracked to be completed in time for the 2020 Expo and Qatar where there is a similar deadline for the 2022 World Cup.

Developers say that delivery risk is now their most significant concern for the next few years, and stories of projects being paralysed because subcontractors have stopped working because the main contractor is not able to pay them have begun emerge.

The cashflow crisis is a frustrating problem for a developer because even though they may be paying their bills on time, their contractors may not be performing because another clients has failed to pay for work on another projects.

Unable to completely control the situation, the best solution spotting the cash flow issues early. Ideally the best solution is due diligence during the tendering phase and not award work to contractors with financial problems. If the problems develop during the project then the contractor’s performance must be monitored closely.

The next few years will be nervous times for project clients.