Demand for construction Project Finance has developed in recent years as
construction projects have become more elaborate requiring more expensive and
specialised technologies for their execution.
Contractors' involvement with banks when operating in the United Arab Emirates
usually starts at the bidding stage with the issue of bid bonds. This develops into
larger commitments following their request' for performance bonds and finance
facilities when they are awarded the contracts.
The aim of this researchi s to investigate lending banks' assessmentso f contractors
operating in the UAE, and the latter's financial requirements in order to execute
various construction projects. It further aims to reconcile the needs of the
construction contractor to those of the lending banks and arrive at an acceptable level
of risk sharing and reward.
A method of research has been adopted which includes a literature review, interviews
with selected bankers and contractors, the development of case studies, and a field
survey by means of questionnaires sent to both borrowers and lenders. Data relating
to twenty-eight construction projects that used Project Related Finance for their
execution was analysed to see if there was common ground for adoption of Project
Related Finance strategy.
The questionnaire survey also revealed that while bankers extend both Corporate
Finance to construction companies as general limits, and Project Related Finance as
limits specific to the project concerned, 73 per cent of contractors that participated in
the survey used the latter. The issue of risk management in contracting and the acceptability of risk by contractors as compared to that by bankers are discussed in
detail ... (continued).
A Doctoral Thesis. Submitted in partial fulfillment of the requirements for the award of Doctor of Philosophy of Loughborough University.