Local firms snubbed as Mitsubishi wins Metro

Last ditch move by rivals to match US $3.4 billion best price fails to change outcome.

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By  Sean Cronin Published  June 4, 2005

Dubai Municipality has delivered a snub to local contractors with the award of the US $3.4 billion (AED 12.45 billion) Metro contract to a Mitsubishi-led consortium. The price was a staggering 30% cheaper than the next lowest price. But Construction Week has learned that two of the losing bidders re-submitted massively discounted bids when it emerged that Mitsubishi’s price was at least $1.6 billion cheaper than the rest of the short-listed bidders. The massive price difference shocked the market when tenders were opened earlier this year, but the last ditch move by some of the other groups to re-submit their proposals in line with the Mitsubishi price, is believed to have caused anger within the Municipality. Mitsubishi has teamed up with Japanese partners Obayashi and Kajima, and Turkish contractor Yapi Merkezi, to deliver the driverless rail transit system across the emirate. It saw off competition from three of the other short-listed bidders; Dubai Star, Salsabeel and Metro One. Dubai Star (Bilfinger Berger, Alstom, Taisei Corporation, Orascom, Besix and Habtoor Engineering Enterprises) submitted a bid of AED18.26 billion. The next highest price came from Salsabeel (Siemens, Dywidag, Saudi bin Ladin and China’s Citic) which quoted AED 18.84 billion. The highest bid came from the Metro One consortium (Bombardier, Odebrecht, Arabtec, Parsons, Guris of Turkey and Ghella of Italy). Its price was AED19.29 billion. This week Mitsubishi Heavy Industries board director Susuma Uchida, insisted that the company had not under-bid the project. Instead, he said that the re-submission of bids by other short-listed firms proved that the company had got its price right. He said: “I think the Mitsubishi price was the right price.” Leading Turkish urban rail specialist, Yapi Merkezi will make its Dubai debut with the Metro project. The top contractor has worked on 50% of all the urban rail projects in Turkey and has 30 years of experience in the sector. Yapi Merkezi chairman Emre Aykar also insisted that the consortium had submitted the correct price for the project. He said: “After the opening of the bids, they all came down and reached us within 5%.” Aykar added: “Together with our Japanese partners, we will bring Turkish hard working competitiveness to this project.” (See full story on page 5)

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