Work resumes on Dubai Metro after settlement reached

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By Joanne Bladd  www.arabianbusiness.com

Work has resumed on the Dubai Metro after a settlement was reached with a Japanese-led consortium over unpaid bills that total billions of dollars, the Financial Times reported, citing two sources familiar with the situation.

Dubai metro
Dubai metro

An agreement has been reached between Dubai Roads and Transport Authority (RTA) and the consortium, which includes Obayashi, Mitsubishi Heavy Industries, Mitsubishi and Kajima and a Turkish firm, over disputed payments of about $2-3bn, the paper said.

The consortium received roughly $5.3bn worth of orders to build the metro, with the work starting in 2005. But the actual construction expenses are expected to total almost twice as much, sparking disputes between the two parties over who would fund the added costs.

The group had slowed work on the Metro in January, in a bid to strengthen their hand in negotiations with the government agency.

Construction of the 18 unfinished stations on the main red line and another 18 on the unopened green line restarted on February 7, the paper said, and there is optimism that the whole red line may be able to open in the next few months.

The 52kn Red Line, which runs between Al-Rashidiya and Jebel Ali, launched on September 9 with just 10 of its 29 stations open.

The remaining 19 stations were scheduled to open this month. Only the Dubai Mall station has, to date, met this deadline.

The 22.5km Green Line, which spans 18 stations between Deira and Bur Dubai, remains under construction.

In January, an official from Obayashi Corp, which is working on both the Green and Red lines told Arabian Business the delay in construction work was a deliberate tactic.

“We have been in negotiations for a long time. The slowdown is part of the strategy,” the official said.