Dubai opens door for future metro projects

29 June 2016

Route 2020 decision ensures competition for future lines

Dubai’s plans for its metro network do not stop with the extension to the Red line connecting to the Expo site.

As part of the emirate’s long term plans for its rail network there are further extensions to the existing Red and Green lines, as well as new Purple, Pink and Gold lines. These plans, which are still at an early stage, will be reviewed by a masterplan study that consultants are preparing to submit offers for in July.

The award of the $2.7bn Route 2020 Red line extension to a consortium of Spain’s Acciona, Turkey’s Gulermak, and France’s Alstom will mean that the tendering for construction work on those future lines will be competitive. That may not have been the case if the other shortlisted bidder of Japan’s Obayashi, Athens-based Consolidated Contractors Company (CCC) and Japan’s Mitsubishi had won the deal.

Mitsubishi and Obayashi, which had led the consortium that completed the existing Red and Green lines in 2009 and 2010, had been widely expected to win the Route 2020 deal.

Speaking to MEED in 2014, before the project had even gone out to tender, RTA officials had said the Japanese team was the firm favourite for the deal. “They have the biggest chance to win. They have the technology. They know all the information. They have the lessons learned. Now all they have to do is submit a competitive price,” said the official.

Despite these comments, the Route 2020 project still garnered strong interest and in March this year five groups submitted bids. Bidders appeared determined to dislodge the Mitsubishi team with all four other consortiums submitting lower offers, including a very competitive offer from a team of Turkey’s Nurol, Italy’s Astaldi and Spain’s Construcciones y Auxiliar de Ferrocarriles (CAF), which was about 29 per cent less than the second lowest bid.

The two highest bidders (Acciona/Gulermak/Alstom and Obayashi/CCC/Mitsubishi) were then shortlisted in May. The shortlist indicated that with an immoveable Expo deadline in 2020, Dubai was departing from the region’s usual tactic of awarding contracts to low price bidders and prioritising delivery.

With Mitsubishi having completed the first phase of the metro and Alstom completing the Dubai Tram scheme in 2014, the RTA must have felt comfortable with delivery and its focus turned to price. After a series of final offers it decided to award the contract to the Acciona/Gulermak/Alstom team.

Some in the market have said this is a more risky option because even though France’s Thales is the nominated supplier for the signalling and systems, the new line will connect to an existing line completed by the Japanese using their technology and equipment.

An alternative longer term view is the risk for Dubai could have been that the automatic assumption from contractors and rolling stock providers that any future metro lines will go to Mitsubishi, resulting in weak interest and higher pricing. The Alstom win means that future metro lines in Dubai will be competed for just as fiercely as Route 2020.

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