How has the Abu Dhabi construction / engineering industry been affected by Classification?

November 21st 2012 was the deadline for Construction, Consultants and Engineering companies to get Classified in Abu Dhabi.

The purpose of the Classification process is to ensure that companies are fully qualified and experienced to undertake the projects for which they are tendering. The seven different levels of Classification are intended to protect companies from unequal competition, as well as eliminate fake companies.

Abu Dhabi-based companies affected by the Classification have had two years to comply.  During September, the Classification team organised a couple of seminars to reinforce the importance of the mandatory regulation.  At that time, there were a total of 11,449 commercial licences for contractors across Abu Dhabi, Al Ain and the Western Region, of which just 2,629 had completed the Classification process.

I followed up on how the Classification is affecting Abu Dhabi, post the November 21st-deadline.  I was advised that the Classification team had been experiencing a rush of applications in the run up to the deadline, although not as many companies had completed the process, as they had anticipated.  However, they advised that it was a tough time to launch the new regulations with so many companies operating in Abu Dhabi and a lack of projects as a result of the global economic climate.

However, as we move into 2013, they are optimistic of additional projects as construction is a vital part of a growing economy.  As part of Abu Dhabi’s 2030 Vision, which will encourage people and business away from the main island of Abu Dhabi, infrastructure will be required off of the island and projects focused in the Western Region are anticipated.  They believe that if companies can survive the economic blip and get Classified, they will be successful in Abu Dhabi.

Moving forward, companies with a commercial activity on their trade licence which requires Classification, will not be able to renew their trade licence until they have completed the Classification process. For new companies entering the Abu Dhabi market, they will have one year from the issuance of their initial trade licence to complete their Classification.

The category companies choose to be Classified under determines the following:

  • The value of projects for which they will be able to tender
  • Financial position of the company (Capital and asset value)
  • Technical team –Level of education and experience of staff
  • Previous Experience – projects must have been completed within the previous six years
  • Quality / Healthy and Safety requirements

From our experience of assisting companies through the Classification process, it’s best to carefully select the category for which they intend to classify, ensuring they can meet the criteria.  Then, determine which projects will be used to demonstrate previously completed projects.  Obtaining the necessary documentation relating to the completed projects can take considerable time, especially if those projects are overseas and require attesting by the UAE Embassy and Ministry of Foreign Affairs in the country of the project. The better the understanding of the process and the more organised the company is at the start of the process, the quicker it is to complete.

Preparation is key!

The Links Group has experience in assisting companies to achieve Classification for the top level: Special Category. This brings a thorough understanding of the process, as well as a strong relationship with the Classification team.

Don’t delay – if you need to get Classified, start the process now!
A documentary on one of the larger projects in Abu Dhabi (all credits to the film’s creators)

 

Article by Links Group on Jan 8th 2013

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