Japanese firms reportedly slow down Dubai Metro construction work over payment

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By BI-ME staff  www.be-me.com

INTERNATIONAL. A consortium led by Japan’s Mitsubishi Heavy Industries has put the brakes on construction work on the Dubai Metro due to a disagreement over payments, one of the firms said last week.

Dubai metro
Dubai metro

“We are slowing the pace of the construction for the purpose of negotiating the terms of contracts,” said Toshitaka Kawahara, a spokesman for Obayashi Corp., which is one of the constructors.

The consortium also comprises Mitsubishi Corp., Kajima Corp., and Turkey’s Yapi Merkezi.

A source close to one of the companies said that the construction work appeared to have been temporarily halted.

“It seems that the work has stopped on site,” said the source, who declined to be named.

A spokesman for Mitsubishi Heavy Industries said the work had “slowed down.”

Dubai said in September that the cost of building the metro had nearly doubled to 7.6 billion dollars, adding to the financial troubles of the Gulf emirate, which is battling a serious debt crisis.

The Japanese Nikkei business daily reported earlier Thursday that the consortium would suspend construction on the metro as early as Thursday due to a delay in payment from the Dubai government.

The consortium members decided to halt the work for the time being to secure back payments from the Dubai government, it said.

But Dubai authorities said the project was on track and they were committed to meeting financial obligations on the project.

“The authority confirms its contractual commitment to the financial payments in accordance with the progress of the work on the project,” the statement said.

Dubai inaugurated its metro network in September in a bid to cut dependency on cars and ease congestion, becoming the first city in the oil-rich Gulf to introduce rail as a commuting option.