Drake & Scull: UAE regulator to appoint valuer to check Arabian Hills' contract

Dubai: An independent valuation firm will be appointed to look into the project value put up by Dubai engineering firm Drake & Scull for a new contract win. The appointment will be done by the UAE regulator SCA (Securities & Commodities Authority) and was confirmed by Drake & Scull itself.

This is to assess the ‘fairness and competitiveness’ of the contract value that Drake & Scull signed up for. This is for all the infrastructure works related to the development of Arabian Hills Investment & Real Estate Development for its project in Dubai.

The Arabian Hills project is coming up at a location that was earlier marked out for 'Wahat Al Zaweya'.

The contract value would cover infra works over an area of 6.2 million square meters and the various packages would come to over Dh1 billion. And with ‘minor deviations from market benchmarks’, according to DSI.

Drake & Scull ‘affirms the valuation process and presentation to the general assembly were conducted transparently and based on reports from independent engineering consultants’.

“The transaction supports the company’s growth and expansion strategy,” DSI added.

This is indeed one of the biggest projects DFM-listed DSI has entered into since its turnaround strategy was given the approval by the Dubai Courts. DSI had been fighting against liquidation for years before the court gave the approval, and with combined losses of Dh4 billion plus through the years.

In the recent past, DSI had secured multiple projects, but the one for Arabian Hills development takes it up a scale or two. DSI will handle all of the infrastructure overseeing rather than individual packages within it.

Scope of Drake & Scull's work at Arabian Hills

* There was a direct agreement between DSI and the developer to carry out infrastructure works over an area of 6.2 million square meters

* The scope of the work includes excavation, infra networks for water and sewage, road connection, lighting and treatment plants.

* The project period extends to over 3 years, with an additional 1-year warranty period.

* The agreement does not require bank guarantees, which reduces financial burden.

* The project is expected to yield a profit margin between 8%-10%.