RTA denies slowdown on metro

The RTA says Metro work remains on track.

A spokesman for Dubai’s Roads and Traffic Authority (RTA) has denied reports that the Japanese-led consortium building the Dubai metro has slowed work on the project due to a US $2.5 billion (AED 9.2 billion) payment dispute.

“Work on the metro is proceeding as planned and is on target,” the RTA’s corporate communications director, Peyman Younes Parham, told Construction Week.

“The contractors are also being paid on time. I am not sure where comments to the contrary are coming from.”

Last month, Construction Week revealed that the Dubai Rapid Link consortium (DURL) was claiming $2.5 billion in over-costs for construction of the first metro line which partially opened in September. The RTA is disputing the claim.

On Thursday, a spokesman for Obayashi Corporation, one of five main contractors in the consortium, said work on the remaining unopened metro stations would be slowed as negotiations with the RTA over payment continued.

Obayashi's comments followed a report in Japan's Nikkei business daily Thursday morning, which said the consortium would suspend construction on the metro due to the delay in payment.

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FEATURED COMMENT The above story is not true. The Consultant of Dubai Metro has terminated 75% of their staff last week due to payment is   6 Comments Read more comments »

The consortium members decided to halt the work for the time being, placing priority on talks with the Dubai government to secure back payments, it said.

The DURL consortium also includes Japanese firms Mitsubishi Heavy Industries, Mitsubishi Corporation, Kajima Corporation and Turkish firm Yapi Merkezi.

It was awarded a $3.39 billion contract in 2005 to build the metro’s red line and a $1.11 billion contract to build the green line in 2006.

In August, the RTA chairman HE Mattar Al Tayer conceded that the cost of building the metro system had spiralled by “billions” since the original contracts were awarded.

According to estimates, the cost of the project increased by 75% to around $7.6 billion.

Ten of the 29 stations on the metro’s red line opened in September, with the remainder due to open in June. The green line is also expected to be operational within the year.