Dubai Municipality will now finance the entire light rail transit (LRT) project estimated to cost Dh12.5 billion, shifting its earlier stand of financing only 10 per cent, according to sources close to the process.
A letter was sent to the bidding consortia a few days ago, which changed the entire financing equation since more than 10 local and international banks were in the process of backing five pre-qualified bidding consortia.
"Dubai Municipality has sent out a letter to all the consortia bidding for the project two days ago, saying that it will finance the project fully," a senior member of one of the leading bidding consortia told Gulf News yesterday.
"We had earlier received strong backing from one of the world's top banks in our bid. However, the scenario has now changed."
Dubai Municipality earlier announced that it would finance only 10 per cent of the project, and the rest was to be arranged by the bidders.
Accordingly, all five bidding consortia were in the process of making arrangements with a number of banks to finance the remaining 90 per cent.
The five pre-qualified bidding consortia are: 1) Dubai Star that includes German Bilfinger Berger (leader), Taisei (Japan), BeSix (UAE), Al Habtoor, Alstom (France); 2) Vinci (France), Hochtief (Germany, CCIC (UAE), Ansaldo (Italy); 3) Obayashi (Japan), Yapi Merkesi (Turkey, Mitsubishi (Jap-an); 4) Metro One, that includes Odebrecht (Brazil), Arabtec (UAE, Parsons (US), Bombardier (Canada) and 5) Bin Laden Group (Saudi Arabia), Diwidag (Germany), Siemens (Germany).
While Mashreqbank was leading a consortia to back the bid of one of the leading groups, HSBC was in the process of arranging finance for one of the front-runners in the race.
When contacted, Nasser Ahmed Saeed, chairman of the Dubai LRT project, declined to comment.
"I cannot discuss this over the phone and I am not aware of this," he said.
A leading member of another consortium, who confirmed receiving the letter, said, "This letter has made the bidding process easier as we no longer need to arrange the 90 per cent financing as required before.
"This also means that we no longer have to add the cost of finance when we submit the commercial bid."
The bidders have so far submitted two technical bids.
The third technical bid which details the engineering of the elevated sections will be submitted on January 31.
Final commercial bid submission date is on February 28.