Monday, 6 April 2009

Nakheel confirms cancellation of $1bn construction contract

From Arabian Business 6 April '09
Nakheel has cancelled a $1bn contract with Samsung C&T to build shopping malls, apartments and commercial buildings in Dubai.

Dubai state-owned developer Nakheel confirmed on Monday it had cancelled a construction contract with South Korea’s Samsung C&T that had included the building of shopping malls. In a statement, the developer said it had taken the decision to reschedule or cancel a number of supplier contracts as a result of a delay to its $3bn mall expansion programme.

At the end of last month it announced it was putting the design work and site preparation for the programme on hold for 12 months because of the global financial downturn.

Samsung said on Friday its $1bn order from Nakheel to build apartments, shopping malls and other commercial structures in Dubai had been cancelled.

"The cancellation of the deal came via unilateral notification by the contractor," Samsung C&T said in a regulatory filing without elaborating on the reason.No one was available to comment from Samsung’s Dubai office on Monday.A Nakheel spokesman said: “Nakheel Retail remains committed to its expansion plans over the medium and long terms and will make announcements about new target completion dates for projects in due course.”

In April last year, the company’s retail division unveiled an ambitious shopping mall development programme across the UAE.It said it would build five new projects including one on the Palm Jumeirah, its palm-shaped island.Nakheel, which is also behind the ambitious The World project, is owned by state-backed investment group Dubai World.

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