Dubai Metro firm confirms work slowdown

Source: ArabianBusiness.com
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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.

Japanese builders owed billions for Dubai work

Source: ArabianBusiness.com 8 Nov 09
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Japanese companies are owed billions for work done in Dubai, including the metro system, the Japanese consul general in Dubai has said. Japanese construction companies are facing "serious debt problems" amid issues with being paid for work done in Dubai, a top ranking official has said.
Seiichi Otsuka, the Japanese consul general in Dubai, claimed firms are still owed billions of dollars on projects that include the Dubai Metro and Palm Island, UAE daily The National reported on Sunday.
Japanese builders have played a major role in Dubai’s construction boom, spearheading work on the metro and other key projects in the emirate.
“Some Japanese construction companies are facing very serious debt problems,” Otsuka told the paper. “Some companies engaged with the construction of the Metro are facing some payment issues.”
Mitsubishi Heavy Industries (MHI), the lead company for the metro contract, are among those firms affected by non-payment on contracts, the paper added.
“MHI executed the construction of the Dubai Metro and some other contracts and we are still awaiting payment,” said Koji Okamoto, the general manager of the Middle East office of MHI in Dubai. The company has contracts in the Middle East valued at $150bn.
The Japanese government has not discussed the payment issues with the Dubai Government, nor has it intervened with financial assistance to those companies affected, Otsuka said.
“We are in a position to push both sides to make an amicable solution,” he said.
Otsuka told the paper it was difficult to put a figure on the outstanding debt as some payment was due shortly.
Last month, it was reported that some UK contractors were turning down invitations to chase work in Dubai because of continuing doubts over whether they will be paid on time.
According to Nelson Ogunshakin, the chief executive of the UK Association for Consultancy and Engineering (ACE), a large number of UK firms significant number of UK firms are still owed money by struggling developers in the emirate.
In July, the UK government reiterated its call for contractors to be paid by Dubai developers – and said it was "continuing to monitor the situation".