Dubai Metro saga not to hit UAE rail project

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Source:  www.business.maktoob.com

ABU DHABI – The high-profile dispute over unpaid bills that has beset the Dubai Metro project will not deter international bidders for contracts on the nation-wide rail network, the CEO of state-owned Union Railway said on Monday.

Dubai metro
Dubai metro

Richard Bowker said Union Railway will hold a meeting for companies interested in bidding for the first phase of the project later this month and that firms will be “beating a path to our door”.

“This project is considered of major international interest. The entire world in terms of the railway suppliers industry is beating a path to our door,” Bowker told reporters on the sidelines of a conference in Abu Dhabi.

“I am confident that it will be a very well attended event. There are very few projects like this and we’ve got very high expectations of genuine international interest.”

He said contracts for the first phase should be awarded by the end of the year.

The 1,300-km network will link the seven emirates and their various industrial clusters. The first phase of the train network is planned as a 270-km link between the Shah gasfield in Al Gharbia and the Ruwais oil and chemicals complex.

The entire project will cost up to 40 billion dirhams ($10.9 billion) and take seven years to complete, Bowker said, adding that the first phase is expected to be ready by the end of 2013.

“I think the cost is going to be 30-40 billion dirhams. We are not making a final determination of that because things are still being developed and designed,” he said.

Dubai’s Roads and Transport Authority (RTA) was locked in a standoff with the Japanese-led consortium building the Dubai Metro for months over unpaid bills that run into billions of dollars, which brought construction to a near standstill.

Construction on the metro restarted on Feb. 7 after the RTA reached a settlement with the consortium over unpaid bills of around $2 billion to $3 billion, according to UK daily the Financial Times. The RTA declined to comment on the FT article.

The consortium, which includes Obayashi, Mitsubishi Heavy Industries, Mitsubishi and Kajima and a Turkish firm, was owed $5.2 billion as of the end of October, the Nikkei business daily reported in December.

The payment problems have forced the RTA to push back the completion date for the second line, the Green Line, by over a year and delayed the opening of more than a dozen stations on the Red Line by several months.

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