Under the original scenario, the bidding consortia had been asked to submit proposals for arranging 90 per cent of the financing for phase 1 of the LRT scheme, with the remainder to be provided by the municipality. However, a letter issued by the municipality to the consortia stated it would provide financing for both project phases. Industry sources say the municipality's decision had been expected for some time, but bidders were only informed in mid-January that no financing arrangements would be required.

'This is one less factor in the bidding process and takes away a level of complication that had until recently existed,' says David Powell, consortium director of Metro One, the group led by Canada's Bombardierand including Brazil's Oderbrecht. 'It will also give the consortia a freer hand in sourcing their equipment.'

The announcement came as consortia prepared to submit proposals for the last of two construction packages covering the elevated section of phase 1 - to be completed in 2009 - on 31 January. Commercial offers for the first phase are due on 28 February. Bids for the underground section and for the electromechanical works and rolling stock package were submitted on 3 January and 1 November respectively (MEED 5:11:04).

The municipality is considering other options to speed up project execution, including bringing forward construction of the project's second phase - originally due to start on completion of phase 1 and to be completed in 2012. It is expected that the successful bidder for phase 1 will also carry out the second phase, although the municipality is entitled to exercise the option of launching another tender, according to sources.

Phase 1 covers a 35-kilometre section on the planned red line linking the airport free zone with the American University of Dubai (AUD), while the second phase involves extending the red line from AUD to Jebel Ali and building a second line. The green line will link Dubai International Airport with Dubai Healthcare City via Saeediya. In total, the LRT network, which will be served by fully automatic, driverless trains, will run over a distance of 70 kilometres, of which about 30 per cent will be underground.

www.meed.com/transport