Builder eyes $84mn compensation over Meydan deal

A Malaysian construction company is reportedly poised to claim 300 million ringgit ($84 million) in compensation after the cancellation of a contract to build the new Meydan racecourse in Dubai.

The claim by WCT Bhd comprises 178 million ringgit in performance and advance payment bonds, 75 million ringgit for unpaid completed works and 47 million ringgit for demobilisation costs, OSK Research said in a report on Friday.

WCT Bhd shares rose slightly on Bursa Malaysia on Friday after plunging more than 35 percent earlier in the week.

On Tuesday, WCT reported that its joint venture with UAE-based Arabtec had been cancelled by Meydan, the developer behind the project to build the new racecourse ready for the 2010 Dubai World Cup.

Meydan chairman Saeed H al-Tayer told Arabian Business on Thursday that the contract was terminated because the joint venture was not able to deliver certain zones of the project on time.

Research house, OSK Research, said it had been told by the WCT management that work on the project had encountered minor delays of about two months, reported The Malaysian Insider.

However, the company stated that the delays were mainly due to design changes required by Meydan, late submissions of project drawings and slow instructions to proceed with the revised changes.

OSK Research said the termination of the contract was puzzling because at the point of termination notice, there would have been about 10 months left before the contract completion date.

According to OSK Research, even with the two-month delay incurred, the job would have still been completed by end-2009 in time for the race in March 2010.

Arabtec has so far declined to comment on the contract cancellation.