Dubai discusses financing with all five metro bidders

24 March 2016

Financial offers were opened in early March

Dubai’s Roads & Transport Authority (RTA) has held meetings with all five bidders competing for the contract to design and build the new metro link connecting to the Expo 2020 site.

The meeting discussed the financing proposed by each of the consortiums as the RTA assesses which bid offers the best value. Once the financing has been assessed, a shortlist of bidders will be prepared and final negotiations will start.

Dubai Metro Red Line Extension

Route 2020

New Expo Metro Line

The market was surprised on 6 March, when a team of Turkey’s Nurol, Italy’s Astaldi and Spain’s Construcciones y Auxiliar de Ferrocarriles (CAF) submitted the lowest commercial offer for the contract to design and build the metro link. The group submitted a price of about AED7bn ($1.9bn) with no alternative offer, which is 29 per cent cheaper than the second-lowest offer of about AED10bn with no alternative offer.

Metro results*

1. Nurol (Turkey) / Astaldi (Italy) / Construcciones y Auxiliar de Ferrocarriles (Spain) – AED6,998,874,922 (no alternative offer)

2. Mapa Gunal (Turkey) / China Railway Group (China) / CSR Corporation (China) – AED9,891,387,231.14 (no alternative offer)

3. Orascom (Egypt) / Yapi Merkezi (Turkey) / GS Engineering & Construction (South Korea) / Siemens (Germany) – AED10,019,449,463 (no alternative offer)

4. Acciona (Spain) / Gulermak (Turkey) / Alstom (France) – AED10,224,868,000 (base offer), AED9,975,831,483 (alternative offer)

5. Obayashi (Japan) / Wade Adams (local) / Consolidated Contractors Company (CCC; Athens-based) / Mitsubishi Heavy Industries (Japan) – AED10,394,846,241 (base offer), AED10,341,846,241 (alternative offer)

*=All five consortiums provided financing offers.

The scheme, known as Route 2020, involves building a 15-kilometre-long line branching off the existing Red Line at the Nakheel Harbour & Tower station, between the Ibn Battuta Mall and Jumeirah Lake Towers stations. The line will also connect to Al-Maktoum International airport. About 11km of the line will be elevated, with five elevated stations and two underground stations.

Dubai metro usage

Dubai metro usage

History repeats itself with Dubai Metro low bid

Dubai metro

Dubai metro

In late February 2005, Dubai’s construction sector was stunned when a consortium led by Japan’s Mitsubishi Corporation submitted the low bid for the contract to deliver the first phase of the Dubai Metro.

The price, which was some 40 per cent lower than the second-lowest price, was at the time considered by other bidders to be too low and impossible to deliver. Despite the concerns raised, Dubai Municipality, which was handling the project before the Roads & Transport Authority (RTA) was created, went ahead and awarded the consortium the deal.

Just over 11 years later and history is repeating itself with Dubai receiving another bid for metro work that is significantly lower than the competition. On 6 March, the RTA opened commercial offers for the contract to design and build the new metro link connecting to the Expo 2020 site. Read more >>

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