(MENAFN - Khaleej Times) In his capacity as the ruler of dubai his highness shaikh mohammed bin rashid al maktoum vice-president and prime minister of the uae has issued law no.
pursuant to the new law the 10 per cent performance bond exemption articulated in article 32 of law no. 06 of 1997 has been amended to include any contracts with total value not exceeding dh500000 which comprises commencement of any work or provision of consulting services.
additionally if the contractor failed to present the performance bond and the total contract value ranges between dh500000 and dh2 million then the contractor may benefit from the performance bond exemption yet an amount equivalent to 10 per cent of the contract’s payables is held against the final performance bond until the project’s final handover and this amount is subject to release upon submission of an equivalent bank guarantee.
the director-general of government of dubai legal affairs department dr lowai belhoul said the new law answers to requests from various government departments and aims to encourage service providers and small and medium enterprises that practise construction commodities and services activities. he added that the new law took into consideration the financial burden caused by the performance bond which relatively increases the projects’ cost. dr belhoul expects that the new legislation will have a positive impact as it adds more flexibility to dubai government’s contracting procedures facilitate operations reduce the financial burden on contractors and service providers and encourage smes to engage in serving dubai’s economy and attain sustainable development.