CASH FLOW ISSUE – DELAY IN COMPLETION

Date    : xxx

Ref       : CC/269/CM/56

To                          : M/s. xxx, Dubai, UAE

Kind Attn              : Mr. xxx

Project               : 2B + G + 14+ Lower Roof Hotel Building on Plot No. 373-1297 at Al        Barsha 1st, Dubai U.A.E.

Subject                 : CASH FLOW ISSUE – DELAY IN COMPLETION

Dear Sir,

With reference to the above mentioned subject, we would like to inform you that our progress of the work for the project is seriously affected because of delay in materials procurement and settlement of account of the sub-contractors due to serious cash flow problem faced by us.

Please also note that situation for procurement of materials in the market is also changed due to which we have to make cash payments against any purchase, in many cases.

We are grateful to you for making direct payments on our behalf to some of our suppliers and sub-contractors. However in order to avoid more delays we request you for the following:

1. Make direct payment to our suppliers and sub-contractors as per the list attached.
2. To postpone deduction of the payment made by you on our behalf from next few payment certificates to avail some cash flow for our others essential expenditure for the project (eg. Labour payments, staff salary, purchase of many miscellaneous, but critical items, utility bills etc)

On the subject of our request for postponement of recovery of the amount paid on our behalf, kindly note the following

1. We expect to achieve comfortable cash flow based on the anticipated enhanced progress of work within next few months
2. Part of the advance paid to us has already been recovered by you (in proportion to certified percentage of work)
3. You are holding our bank guarantee against the advance paid to us.
4. You are holding 10% of retention amount from the certified amount as per the previous payment certificate.

With above security against the amount paid by you, we request you to consider postponement of the recovery of the same up to a period to be mutually agreed by us.

Please note that as per present status of work, completion of project in September 2017 is impractical. However based on the extension of claim we are granted against our claim & financial help we get from you. We will submit our revised program with practical completion date.

In anticipation of your positive quick response.

Yours faithfully,

xxx

Managing Director

xxx Contracting L.L.C