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Abu Dhabi Slow Payments Leaves Architecture Firms Suffering

Back at the start of the month, The Art Newspaper filed a great report explaining some of the reasons behind the delay and/or complete shut down of Frank Gehry‘s new Guggenheim in Abu Dhabi, namely that the wealthiest of the Emirates was pulling funding away from projects deemed less necessary (like construction on giant museums) to lend a financial hand to struggling neighbors like Dubai, and putting cash into keeping its citizens happy in the wake of the Arab Spring. However, with recent developments surrounding the storied London-based architecture firm Austin-Smith Lord, it appears that either Abu Dhabi just decided to cut everyone off in order to meet its altruistic goals, or perhaps has pockets in worse financial shape than had previously been thought. Building Design offers up this interesting read on its severe suffering after not having been paid by its Abu Dhabi Authority for Culture & Heritage (ADACH) client to the tune of £11.3 million, forcing it to lay off a large number of staff, leave workers unpaid, and teeter at the edge of going under completely. While the ADACH did eventually pay out a small chunk of that, it hasn’t greatly helped save the firm from shaky ground. A partner at the firm told Arabian Business, “The damage has been absolutely colossal. Our reputation, and the opportunity cost of this has been just mind-blowing.” Meanwhile, the ADACH tells the news outlet that they are still reviewing contracts for the remainder of the funds, and in talking to a regional economist, who says “it’s not surprising that individual authorities and entities are experiencing cash flow difficulties,” it certainly puts flickers of Dubai’s fallout in mind, and once again, definitely doesn’t provide any more positive momentum toward finishing the Guggenheim.

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