Three firms pull ahead in bid for $2.7bn Arabian Canal deal

05 September 2008
Australian, Iranian and local companies vie to win first-phase excavation work.

Three companies are emerging as front runners to win the contract for the first phase of excavation work on the 80-kilometre-long Arabian Canal in Dubai, planned by local developer Limitless.

Sources close to the project tell MEED that the three best-placed companies are Australia’s Mine Site Construction Services, Iran’s Mobin and the local Tristar Transport & Contracting.

The contract, which covers an area inland from Jumeirah Golf Estates next to Emirates road, is worth AED10bn ($2.7bn). At least nine bids were submitted to Limitless in mid-July.

Meeting the project deadlines is proving challenging for the Dubai-based developer, which is fast-tracking the tender process to ensure that work starts on site as soon as possible. “We are in the final stages of negotiation and assessment,” says a spokesperson for Limitless confirming that an award is close to being made.

The entire project is worth $11bn. Developers have been told the first water must be flowing through the $11bn canal by 2012. Contracts have previously been awarded to South Korea’s Samsung Corporation and the Australian/Dutch Gulf Leighton-Van Oord group for trial sections of the canal, at the northern end of the inland section of the waterway.

Excavations for the entire scheme will take three years, and will involve moving about 1 billion cubic metres of material, at a rate of 1 million cubic metres a day. The material will be used to landscape village developments neighbouring the canal.

The other bidders for the first-phase excavation contract include the local Al-Shafar Transport Com-pany, Gulf Leighton-Van Oord, Belgium’s Jan De Nul, Samsung with Abu Dhabi-based Al-Jaber Group, and China’s Sino Hydro and China Harbour Engineering Company (MEED 25:7:08).

It is understood that the bidders have proposed a variety of solutions for the project, with some using traditional excavationtechniques and others relying on methods more commonly used in open-cast mining, such as blasting with explosives.

The canal excavation work will be split into a total of nine packages. Limitless will handle four of these elements and Dubai-based Nakheel a further three, while Dubai Industrial City and the Roads & Transport Authority (RTA) will excavate the other two sections.

Dubai is planning to build more than 120 kilometres of inland waterways and canals running the length of the emirate within 10 years.

Waterways are increasingly being created by developers to attract home buyers who prefer waterfront properties.

Limitless alone plans to develop 200 square kilometres of land around the Arabian Canal, most of which will be waterfront property.

Another major scheme being planned in Dubai involves 42km of canals running through the recently launched AED200bn Mohammed bin Rashid Gardens, which is being developed by Dubai Properties.

The project will extend up to 25km from Dubai Creek, taking it from the recently completed creek extension in Business Bay through Al-Quoz and Umm Suqeim before rejoining the Gulf. It is understood that the canal will eventually join the sea close to the Burj al-Arab hotel.

Plans for another waterway, known as the Union Canal, which will link Business Bay with the Arabian Canal, were discussed when the latter was first launched in 2004.

This scheme is expected to be revived in the near future, although it is now expected to link the Arabian Canal with the canal running through Mohammed bin Rashid Gardens.

It remains unclear which developer will be responsible for the scheme (MEED 2:5:08).

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