Meydan: despite worries, developers say deadline will be metPICTURE: Dubai Racing Club
$1.3bn Dubai racecourse contract cancelled
UAE: Major work on Meydan, the futuristic racecourse due to be opened in Dubai in November this year, was halted on Tuesday - giving rise to concerns about the deadline for a multi-million-dollar project set to be officially opened at the Dubai World Cup in March 2010.
Meydan's developers have cancelled the main construction contract, which was reported at the time of its signing in September 2007 to be worth $1.3 billion (£890m).
A statement from Meydan said the deal, between a 50-50 joint venture of local company Arabtec and the Malaysian firm WCT Engineering, had been called in "because of non-adherence to the agreed time schedule for construction".
They stressed the decision had been made in order to ensure the showpiece project is ready on time.
The decision will not affect the ten-meeting Dubai Carnival season at Nad Al Sheba, which starts on Thursday week, or this year's World Cup on March 28, within days of which the existing Nad Al Sheba site is due to be bulldozed.
However, despite a statement from Meydan confirming the intention "toinaugurate the project as planned in time for the 2010 Dubai World Cup," the turn of events is bound to cast some doubt on the timetable for new track.
Meydan: scheme unveiled in 2007PICTURE: Edward Whitaker
Meydan said that several other firms were working on the project, but did not make clear whether these included a replacement for the joint venture constructors.
The racecourse scheme was unveiled by Sheikh Mohammed to huge amazement and acclaim during the Dubai World Cup meeting in March 2007.
It includes a one-kilometre-long grandstand, with capacity for up to 60,000 racegoers, a five-star luxury hotel, more than 10 restaurants, a museum, office space for the Dubai Racing Club and covered parking for 10,000 vehicles.
WCT told the Malaysian stock exchange that it was given 14 days' notice to cancel the contract on December 29.
The original construction period was 754 days, with completion timed for October 7 this year.
WCT claimed that the joint venture had finished about 55 per cent of the physical works,with five per cent still to be undertaken. The remaining 40 per cent was to be done by nominated sub-contractors, it added.
A spokesman for Arabtec, which is also building the Burj Dubai, the world's tallest tower, told the Abu Dhabi-based National newspaper that the company's share of work on site was "95 per cent" complete.
According to WCT, Meydan had called in performance and advance payment bonds provided by the joint venture, which was being contested. WCT said it viewed the cancellation as a breach of contract, but added that it had no plans to begin legal proceedings and would seek an amicable solution.
Shares in the company were initially suspended and lost 30 per cent of their value when trading was resumed.
The international economic downturn has already caused several Dubai-based constructors to scale back on existing projects, with financing become scarce, even in a part of the world that has led the way in project development.