Arabtec gives updates on Meydan arbitration
Arabtec will 'pursue what we believe to be our rights' in Meydan deal
There is no end in sight to the arbitration proceedings initiated by Arabtec Holding and Malaysian engineering firm WCT Berhad against Dubai-based Meydan over the Meydan Racecourse contract cancellation.
Proceedings began two months ago following the controversial January cancellation of the US $1.25 billion (AED4.6 billion) Meydan Racecourse main construction contract.
But the construction giants are still unable to put an estimate on how long it will take to resolve the issue.
“It could take three weeks, it could take three months, or it could take three years,” Arabtec Construction CEO Thomas Barry told Construction Week yesterday. “We are continuing to pursue what we believe to be our rights.”
Arabtec CEO Riad Kamal was not prepared to comment on the issue, saying only: “That’s one subject I do not want to be discussing today.”
At the time of the Meydan cancellation, the project developer said the decision had been taken because WCT Berhad “failed to abide by the time schedule for the completion.”
But WCT Berhad, which was awarded the contract in September 2007 as a 50/50 joint venture with Dubai-based Arabtec, disagreed.
“The board views the cancellation as a breach of contract on the part of the employer,” the firm said.
Barry and Kamal’s comments came immediately following a press conference to announce the awarding of the $436 million Nation Towers contract to a joint venture between Arabtec Construction and National Projects and Construction.
Meanwhile, Kamal revealed that a decision would be made concerning the future of its US $3 billion Okhta Center project in St Petersburg, Russia, “by the end of the month.”
“We are hoping that by the end of the month a decision will be taken on when to proceed,” he said.
The project has been repeatedly delayed since it was announced in 2005. Funding for the project, being provided by Gazprom Neft with 51% and the City of St Petersburg with 49%, ran into problems with the onset of the financial crisis in Russia.
Arabtec will be hoping for a positive outcome. The $3 billion project accounts for 39% of Arabtec’s total order backlog of $7.7 billion.
This figure compares to an order backlog of roughly $12 billion at this time last year.