Friday, 8 January 2010

Dubai Metro firm confirms work slowdown

One of the Japanese firms working on the Dubai Metro said on Thursday that the pace of construction has been slowed down while they negotiate with the Dubai government over delayed payments.
An official from Obayashi Corp - part of a consortium working on the Red and Green Lines - told Arabian Business that earlier reports that work had been suspended were “untrue”.
The Dow Jones newswire reported, citing Japan's business daily Nikkei, that a consortium, including Obayashi Corp, Mitsubishi Heavy Industries Ltd, Mitsubishi Corp and Kajima Corp, had decided to halt work for the time being, placing priority on talks with the Dubai government.
However, an official from Obayashi Corp said: "What we told [Nikkei] is that we are in negotiations with the client, the RTA of the Dubai government and we just slowed down the pace of the construction.
“We have been in negotiations for a long time. The slowdown is part of the strategy," the official added.
The consortium received roughly Y490 billion ($5.3bn) worth of orders to build the metro from Dubai's Roads & Transport Authority, with the work starting in 2005. But the actual construction expenses are expected to total almost twice as much, the newswire reported.
A statement from the RTA said: "The RTA confirms that the work of the DURL (Dubai Rail Link) consortium is continuing on the Dubai Metro project in keeping with the planned timeframe.
"The authority confirms its contractual commitment to the financial payments in accordance with the progress of the work on the project," the statement said. Mitsubishi Corp also declined to comment when approached by Arabian Business on Thursday.
The rail system was partially opened in September with its full completion now expected in the second half of the year when the Green Line starts operations.
Obayashi Corp is working on both the Red and Green Lines and the remaining Red Line stations were due to open next month.
When asked if the slowdown would lead to the February deadline been delayed, the Obayashi official said “it depends on how the Dubai government reacts to our slowdown.”
In December, it was reported that Japan's non-financial firms had some $7.5 billion in uncollected bills from work done in Dubai as of the end of October.
The data, excluding bank loans, was derived from a total of 18 projects worth about $15 billion and involving Japanese general contractors, trading houses and electric machinery manufacturers, the Nikkei said.
The figures included public works projects commissioned by the Dubai government, such as subway and road construction, it added.

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