The Dubai-based property developer says it is "reviewing" its construction contracts for the $1.6bn Tameer Towers.
Tameer 'reviewing' Reem Island contracts
ABU DHABI // Tameer Holding, a Dubai-based property developer, is "reviewing" its construction contracts for the US$1.6bn (Dh5.87bn) Tameer Towers on Reem Island. Sources close to the company said the developer was planning to cancel the construction contracts with Al Habtoor Engineering, Murray & Roberts and Al Rajhi Contracting. However, one option the company was considering was to hire the same contractors at renegotiated prices, the source said. "Tameer is reviewing the construction programmes and associated costs for its iconic Tameer Towers project on Al Reem Island," a company official said. "Tameer confirms that the Tameer Towers project is moving ahead. The enabling works are complete. Residential sub-structure works will commence upon completion of this assessment." Property developers have been renegotiating construction contracts as prices for materials such as steel and concrete decline. In some cases, developers have passed on those savings to buyers through lower home prices to spur sales.
Cancelling construction contracts can lead to drawn-out disputes, as is proving to be the case with one large project in Dubai. Earlier this year, the Meydan City project for a racecourse and development in Dubai cancelled its construction contracts with Arabtec and a Malaysian engineering firm, WCT. Last week, the company hired China State Construction Engineering Corporation and Mammut Building System to finish the project. But Arabtec and WCT are seeking Dh1.65bn through arbitration proceedings because they say Meydan broke its contract agreement. Tameer, which is majority owned by the Al Rajhi Investment Group in Saudi Arabia, sacked more than half its employees, or 180 people, late last year as the property sector swung into a downturn.
Tameer Towers is planned to be a central project of the Shams Abu Dhabi development on Reem Island. The project includes six towers, including four residential buildings, one commercial building and a hotel, as well as other facilities. Sorouh Real Estate is the master developer of the site. Gurjit Singh, Sorouh's chief property development officer, declined to comment on the Tameer project specifically, but said the Shams Abu Dhabi project was making "rapid progress" with the Sun and Sky towers expected to reach their final height soon. "In the current global economic climate, it will not be surprising if some developers choose to delay some projects," Mr Singh said. "But such delays will not impact Sorouh or its projects. A development such as Reem Island is a long-term project and short-term delays will not be significant issues." email@example.com