Mitsubishi says ‘price is right’ on world’s largest urban rail project

It was hardly a close run race. With a bid that was US $1.6 billion cheaper than its nearest rival, the Mitsubishi-led Dubai Rapid Link consortium was always the hot favourite to build the Dubai Metro. Now it’s official. The talking is over and the construction is about to begin.

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By  Sean Cronin Published  June 4, 2005

A new era in the urban development of Dubai dawned this week with the award of the world’s biggest urban rail project to a Mitsubishi-led consortium of contractors. Controversy has dogged the project ever since tenders were opened earlier this year and it emerged that Mitsubishi's US $3.4 billion (AED 12.45 billion) tender was some $1.6 billion lower than the next nearest bidder. Mitsubishi director Susuma Uchida claimed this week that his company’s price was the right one for the job. But that claim will soon be put to the test when construction work starts on the mammoth urban rail project. The Mitsubishi-led Dubai Rapid Link consortium also includes Japanese firms Obayashi and Kajima as well as Turkish contracting giant Yapi Merkezi. The contractor was also awarded a $500 million contract to carry out maintenance work for the next 15 years. The Dubai Metro will have two lines. The first being the Red Line running from Rashidiya Station to Jebel Ali Station and the second, the Green Line, running from the Dubai Airport Free Zone to Dubai Health Care City. The contract award follows a three month long evaluation of both financial and technical offers submitted by the four consortia. But this week's announcement may not have come as a shock to the losing bidders whose original bids were all at least 30 per cent adrift on price. Dubai Municipality officials glossed over the glaring difference in bid prices at this week's official project signing ceremony. General project coordinator Nasser Ahmed Saeed, said: “We found all the offers were acceptable from a technical point of view. “The difference was that some consortia were better than their counterparts in certain aesthetic aspects. “The technical team found that all consortia have the potential and expertise to undertake the turnkey project. “However, there was a substantial difference in terms of the rates quoted by the consortia. So the selection was made less difficult.” But speaking after the event, several officials and members of the construction team pointed out that two of the losing bidders revised their bids following the tender opening earlier this year. “After the opening of the bids, they all came down and reached us within 5 per cent,” said Yapi Merkezi chairman, Emre Aykar. The final rates, quoted by the four consortia, stood at $ 3.4 billion (AED12.45 billion) for DURL, $5.1 billion (AED18.26 billion) for Dubai Star, $5.2 billion (AED18.84 billion) for Salsabeel and $5.4 billion (AED19.29 billion) for Metro One. The Metro will be built in two phases within a period of 55 months, with phase one taking 49 months and phase two around 35 months. Qassim Sultan, director general of Dubai Municipality, said “We will start phase two 20 months into phase one, finishing both lines in less than five years. Turkish company Yapi Merkezi is a veteran of several similar urban rail schemes and has worked on around half of the urban transit systems to have been developed in Turkey. The Metro award marks the company's debut in the UAE. The project represents a cocktail of civil engineering challenges for the Dubai Rapid Link team. Apart from major utilities diversion work, the scope of the project will also include tunneling elements and significant traffic management to ensure that the five year construction programme does not exacerbate existing traffic congestion problems in several bottlenecks around Dubai. The project will also involve construction of a total of ten underground stations.

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