Dubai’s Roads & Transport Authority (RTA) has reached a deal to repay the developers of the Dubai Metro and settle contractor claims on the project.

The RTA has reached a deal to pay the Dubai Rail Link Consortium (Durl) AED29.6bn ($8bn) for the development of the project. According to the prospectus issued for a Dubai government bond, the RTA has already paid AED20bn of the amount owed to the consortium members.

Under the terms of the repayment deal, the RTA will pay AED3.77bn in monthly instalments of AED169m between May 2010 and September 2011. The remaining AED5.82bn will be repaid over the next seven years. The prospectus said the repayment deal had been reached “recently”.

The RTA has been working on a settlement with the Durl consortium, which includes Mitsubishi Corporation, Mitsubishi Heavy Industries, Obayashi Corporation and Kajima Corporation, all of Japan, and Turkey’s Yapi Merkezi, since late 2009. In November 2009 Seiichi Otsuka, the Japanese consul in Dubai, said that Japanese contractors working on the Metro were facing payment problems.

The government has provided a guarantee for the final AED9.6bn in payments, according to the bond prospectus.

The Durl consortium won the contract to build the Metro after submitting a price of $4.5bn for the work. Costs spiralled however, leading the total budget for the development of the project at nearly double that initial price.

Payment problems have also been an issue at other RTA schemes. In June the consortium led by France’s Alstom and the local/Belgian Belhasa Six Construct stopped work on the estimated $1.1bn Al-Sufouh tram project in Dubai.

The settlement of the payment issues on the Metro follows the agreement by 99 per cent of creditors to Dubai World to reschedule $23.5bn owed by the Dubai-government owned firm.