By Richard Spencer in Dubai Last Updated: 4:07PM BST 14 May 2009  Dubai's construction boom has been wiped out by the recession  The Association for Consulting and Engineering (ACE) said some members have been offered just 65 cents on the dollar on unpaid fees by the emirate's best-known developer, Nakheel.  Nakheel, which has built palm-shaped islands in the Gulf and has plans for the world's first kilometre-high tower, is dealing with a debt crisis caused by the collapse in the property market following the credit crunch.  After a visit to Dubai, ACE's chief executive, Nelson Ogunshakin, described the situation as "chaos". He has written to Lord Mandelson, the Business Secretary, to ask for political intervention. The most important developers in the United Arab Emirates, including Nakheel, are part of holding companies owned either by the governments or rulers of the federation's seven emirates, particularly Dubai and Abu Dhabi.  "There remain a number of serious concerns, namely a staggering amount of unpaid fees, which our soundings indicate are around £400m," he said. "There is also a growing sense of mistrust in the UAE, and it looks set to worsen through episodes like this."  Although just one of a number of developers selling villas and apartments across Dubai, it was Nakheel's extraordinary showpiece ventures that captured the international imagination.  This week, though, Nakheel admitted it had been forced to accept money from a $10bn (£6.6bn) bond raised by the Dubai authorities to bail out government-linked companies. It also has to refinance a $3.5bn Islamic bond due in November.  Analysts said it was trying to avoid a wholesale restructuring as any debt default would hit not only its own reputation but also the credit ratings of other government-backed companies.  Bobby Sarkar, an analyst at Al Mal Capital in Dubai, said it was unclear whether the 35pc discount being demanded of contractors was across the board. "Obviously this does affect confidence," he said. "People aren't going to be willing to do more business if they are only going to get 65 to 70 cents on the dollar."  A spokesman for Nakheel said it was acting "responsibly" to reassess its immediate business objectives.  "We are in discussions with all our key suppliers and contractors to help secure jobs and ensure that projects are on track," the spokesman said. "We have benefited from an injection of capital from the bond issue. The value and other details relating to this funding remain confidential."
Builders and engineers responsible for the luxury developments that turned    Dubai into a desert boom town have called on the British government to help    them recover hundreds of millions of pounds in unpaid debts.