By Andy Sambidge
UPDATE 1: Shares in Malaysian construction firm slump, breach of contract claimed.
A company involved in the cancelled $1.3 billion contract to build Dubai's new racecourse saw its shares plummet on Tuesday.
WCT Bhd shares slumped the most in almost 14 years in Kuala Lumpur trading after the Malaysian engineering company’s contract to build the Meydan racetrack was cancelled, newswire Bloomberg reported. The stock lost 30 percent to 1.29 ringgit, set for the biggest drop since at least February 1995, before being suspended.
WCT and Arabtec Holding won the contract in September 2007 from Meydan and WCY officials said the cancellation of the deal was a breach of contract and they would be "considering all options". The horseracing track, built for the sport’s richest event, the 2010 Dubai World Cup, was designed to be the new home of the Dubai Racing Club.
WCT, based in Shah Alam outside Kuala Lumpur, has been targeting projects in the Gulf and is building a Formula One circuit in the UAE.
The contract completion date was Oct. 7, 2009, and the venture was to be paid as work was carried out. The contract was scrapped because of a missed deadline, Reuters reported, citing a Meydan statement. WCT, which didn’t give a reason for the cancellation in its statement, said Meydan gave 14 days notice. The new Nad Al Sheba racetrack was to include a luxury hotel and a 1km long, 60,000-capacity grandstand.
Shares in Arabtec, building the Burj Dubai, the world’s tallest tower, on Monday rose 15 percent to 2.59 dirhams in Dubai.
Dubai's Meydan said it is considering other companies to complete the racecourse by 2010, when it is to be opened with the Dubai World Cup horse race.
Here's a quandary for the developer - construction companies are notorious for running over time. Out of the big 5 remaining; Murray and Roberts, ETA, Laing O' Rourke, Leighton Habtoor and Nabbodah group, who would chance a possible poisoned chalice?