Major project victory for Arabtec
Arabtec, the largest contractor in the UAE, has also been shortlisted for two other projects in the capital worth a combined Dh3bn, and is bidding for work in Lebanon, Libya and Egypt.
The contracts should help the firm weather the slowdown in Dubai, where it is still owed more than Dh3bn in outstanding invoices, 80 per cent of which are from government-owned bodies.
Riad Kamal, the chief executive of Arabtec Holding - which owns Arabtec Construction - said he was confident the company would eventually recover the money, which was mostly for work completed this year.
"It's a question of being patient," said Mr Kamal.
"The money is actually flowing, it's just that it has to flow faster."
Nation Towers, a twin-tower development that includes a hotel on Abu Dhabi's Corniche, is the first project that Arabtec and NPC, an Abu Dhabi company, have worked on together.
NPC has about Dh5bn worth of projects under construction in the emirate. Arabtec's backlog of work is worth about Dh28.4bn.
The company has lost Dh4bn worth of contracts in the UAE because of projects being delayed or cancelled since the downturn. They include a Dh550m contract from Dubai Properties to build Mudon General Residences and a Dh900m contract for Tiara United Towers, a project by Zabeel Investments.
A contract for the Meydan Racecourse was cancelled in January after a dispute with the developer, Meydan, over the construction schedule.
Arabtec had completed more than 70 per cent of its share on the project, which was undertaken in partnership with WCT Engineering, a Malaysian contractor.
The joint venture launched arbitration proceedings in March in the hope of recovering Dh1.69bn in compensation from Meydan.
Arabtec is still awaiting the go-ahead on a Dh10bn deal to build Gazprom Neft's headquarters in St Petersburg, Russia, which was awarded last May.
If the project goes ahead, Arabtech may have to cut up to Dh3bn from the contract as the project has since been revalued. Arabtec posted a 30 per cent decline in first-quarter profit to Dh161m, down from Dh231.4m in the same period of last year, and is steering ahead with its expansion beyond the UAE.
The company is bidding for five projects in Egypt and is in talks with four partners for potential projects in Libya.
It is also looking at prospects in Lebanon and Algeria, and hopes to generate revenues of Dh1.47bn from projects in Saudi Arabia this year through its recently established subsidiary, Arabtec Saudi Arabia.
"Since we became a public company, our strategy was to diversify outside of the UAE and expand geographically... We're still pursuing that strategy but maybe a bit more rigorously now," said Thomas Barry, the chief executive of Arabtec Construction.
Updated: May 10, 2009 04:00 AM