The TDIC and Leighton, Australia's largest construction company, agreed to the joint venture shortly before the financial crisis struck.
TDIC drops joint venture partner
A joint venture planned between the Tourism Development and Investment Company (TDIC), the development arm of Abu Dhabi's tourism authority, and Leighton International has been abandoned. The TDIC and Leighton, Australia's largest construction company, agreed to the joint venture in December 2007 but as the economic situation worsened and construction costs fell, TDIC opted to invite different contractors to compete for tenders. TDIC's projects include the Saadiyat Island development, which will house the Louvre and Guggenheim museums, and Al Bateen Wharf.
The new company was expected to generate annual revenue from a minimum of US$270 million (Dh991.5m) in the first year to at least $1.4 billion in the fifth. "After a strategic review of TDIC's business model and due to the changing economic climate, it became more commercially viable for TDIC to retain the flexibility to work with different contractors, therefore the joint venture was never progressed," said Lee Tabler, the chief executive of TDIC.
TDIC-Leighton Contracting was to undertake various contracts for TDIC developments, including the 6.5km Saadiyat Link road, connecting Abu Dhabi's Shahama district to Saadiyat Island, they said in a statement after signing a memorandum of understanding in 2007. Leighton is controlled by the German construction giant HOCHTIEF. "TDIC and Leighton will continue to work together on various projects," Mr Tabler said. "Leighton will also be invited to tender for all future TDIC contracts.
"[TDIC] will always act in the best interests of the business and to ensure that it continues to perform to its maximum potential." Chris Gordon, a spokesman for Leighton, confirmed that it was bidding for contracts with TDIC. Leighton, with operations across Asia and the Gulf region, last month cut its full-year profit forecast by 10 per cent because of the slump in the industry. * with Bloomberg