The master developer of Meydan Commercial Sport Project at Nad Al Sheba, Meydan Group, has said that the racecourse project will be ready for the Dubai World Cup 2010 as per schedule in spite of the cancellation of the contract, said an official.
"We will meet the deadline of the project and this will be ready for Dubai World Cup 2010. After terminating the contract, we are considering a couple of companies and will finalise it very soon," Group Chairman Saeed Al Tayer told Emirates Business yesterday.
Citing delay in execution of the project, Meydan has terminated the contract with the Malaysian engineering company WCT and its partner Arabtec. "We have cancelled the contract because WCT failed to abide by the project schedule," he said.
The cancellation of the contract has triggered several rumours in the market. It is learnt that WCT might reclaim the money involved in advance payments and performance bond.
According to market sources, this development might impact WCT's goodwill in the global market. The possible 178 million ringgit (Dh186.7m) loss from the performance bond and the advance payments is likely to take a toll on the WCT financial performance as the contract was expected to account for 37 per cent of its profit this year, according to a report by JPMorgan Chase.
Meydan and Arabtec won the Dh4.6 billion project contract in September 2007. Reacting to a question on advance payments made to the Malaysian company, Al Tayer said: "Dubai racecourse project is prestigious to us and the project execution on time is valuable. There would not be any proposal to downsize the project. We will have the project on time for Dubai World Cup 2010."
WCT Malaysia along with its partner in Dubai, Arabtec, was executing the project.
Meanwhile, the shares of Arabtec Holding came under selling pressure on Dubai Financial Market (DFM).
Analysts predict the loss of the Dh1bn to Dh1.2bn of the contract value is expected to dilute Arabtec's earnings.
The bottomline contribution would have been Dh120m to Dh144m.