Emirates Business 24|7 reported that UAE is seeing an increase in the number of small and medium level contractors trying to sell their machines in order to bank roll their companies.

Mr Keith Lupton Middle East and Africa Sales director for World Wide Auctioneers said that insufficient work is forcing the contractors to sell machines lying idle. Almost 30% to 40% of those who come to us with their machines are small contractors who are desperate for cash flows. They try and sell half of their machines in order to keep the firm moving and pay salaries. He said that the auction industry had gone through a slight curve wherein sales were down between April and June.

He added that "Despite a slowdown in the construction industry, the auctions have not suffered badly. Since July, it has picked up again, especially at such times when people are in need of cash and are trying to sell off their assets. The sales are achieved quite easily, especially when the machines have no pending loans."

Mr Lupton said that among the equipment used in the construction industry, certain large machines are experiencing difficulties finding buyers.

He said that "What is happening is that very large equipment used for canal projects and quarrying is not being sold like the past. Similarly JCBs are also experiencing some strain. However, other machines such as wheel loaders are selling for good money. Similarly, excavators are doing well and are mainly bought by the Saudis and the Kuwaitis. Surprisingly, trucks too are doing well. Normally they don't make a lot of money."

Mr Lupton said that "People are attending in large numbers and we do have e-mail bidders. Moreover, most things sell for what they are worth. Business is pretty healthy at the moment."

Many of the contractors, who are approaching the auctioneers with machines, have purchased them with bank loans. Mr Lupton was however, quite critical of banks which failed to let distress clients sell machines in order to reduce their liability.

He said that "We have spent a lot of time and energy telling these banks that it is better for these machines to be auctioned off rather than remain idle. We have also tried to convince them that the money generated from sales would be directly credited to the bank account. However, it looks like many banks prefer to sit on idle machines whose value is fast decreasing. The dangers of machines remaining idle are they rust and the model gets older. It is better for these machines to be auctioned off for whatever amount they fetch in the market."

(Sourced from Emirates Business 24|7)