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- Dubai 04:51 06:05 12:14 15:38 18:17 19:30
WCT Engineering Berhad and Arabtec have said their other ongoing projects in the region will not be affected following the cancellation of the Dh4.6 billion Meydan racecourse project at Nad Al Sheba.
Both companies, however, lost significantly in yesterday's trading as their shares nosedived to record lows.
Shares of Arabtec, slumped 9.65 per cent yesterday following news of the contract cancellation. Similarly shares of Malaysia-based WCT fell by 30 percent before the trading was suspended. According to reports WCT may lose as much as $85 million (Dh312.19m) on the project.
Arabtec, meanwhile, expressed its regret over Meydan Group's decision to cancel the contract.
Meydan on Monday announced the termination of the contract citing delay in the progress of construction work. A statement from Meydan also said alternate companies have been selected to complete the project.
Meanwhile, several companies continued their work on the project, which according to the developer will be completed on schedule. The original completion date was October 7, 2009.
"Dozens of companies, both local and international, are working on the project as per the original schedule," said a statement by Meydan.
It said the termination had become necessary as the contractors failed to abide by the time schedule. Quoting an official source, the statement said the phases of the completion of the main stand and the infrastructure works for the horse-racing course had shown considerable delay in implementation.
Expressing regret, the statement said: "Meydan has taken the decision to reassert its resolve to complete the project on time in order to honour its international and local commitments. Other companies are contracted to construct the grand stand and to execute the infrastructure works so as to inaugurate the project on the targeted schedule."
Arabtec said its contract to build the racecourse has been cancelled effective January 9. It did not elaborate on the reasons for the termination. Senior officials were, however, unwilling to comment on the delays in construction of the project.
WCT Engineering said its other projects in the Middle East, including a Formula One circuit, are not in danger of cancellation.
"Regardless of who is at fault, we see this as posing a risk to WCT's reputation as its execution capability may be in question," Jeremy Goh, an analyst at OSK in Kuala Lumpur, with a 'neutral' rating on WCT, said in a report. "It would also hamper the group's ability to secure more jobs in the Middle East, on which it relies for projects."
The contract was expected to account for 37 per cent of WCT's profit this year, according to a report by JPMorgan Chase & Co. WCT said the Formula One circuit it is building in the UAE should be finished by June.
The horseracing track for the sport's richest event, the 2010 Dubai World Cup, was designed to be the new home of the Dubai Racing Club. The racetrack, which WCT said was structurally almost complete, was to include a luxury hotel and a 60,000-capacity grandstand.
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