Arriyadh reopens talks with Almabani over fee for tunnels

01 February 2009
Progress on a SR2bn ($533m) project to construct road tunnels under an airbase in Riyadh has stalled as the client, the Arriyadh Development Authority (ADA), seeks to renegotiate with the low-bidder over the fee.

The local Almabani General Contractors submitted the lowest bid for the road expansion project in late November 2008, beating bids from four other firms. An award was expected in early January, with mobilisation work expected to start immediately.

However, talks between Almabani and the ADA over the cost of the project have now reopened, with the client thought to be willing to pay only half the fees.

“We are renegotiating with them at the moment,” says one source at Almabani. “They are trying to manage their funds to ensure we can get the work. It could take one month or two months [to finalise the negotiations]. We are not sure.”

The source confirms that work will not start on the project until the details have been finalised.

One solution could be for the contractor to receive half the funds and carry out a limited amount of work. The rest of the project could then be retendered in the future.

Other local firms that had submitted bids for the original contract include Shibh al-Jazira Contracting Company, Saudi Oger and Saudi Binladin Group. China Harbour Engineering Company also submitted a bid.

The original project scope covers the construction of three tunnels with a combined length of 3.3 kilometres, beneath Riyadh Air Base in the centre of the capital.

They are designed to alleviate traffic congestion in the capital.

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