How the Guggenheim Abu Dhabi will look at the Saadiyat Island Cultural District. Image Credit: Gulf News archive

Dubai: The cancellation of a major construction tender at the Guggenheim Abu Dhabi does not mean the multi-billion dollar project will be delayed, the Tourism Development and Investment Company (TDIC) said yesterday.

TDIC told Gulf News that all of its projects — including the Guggenheim on Saadiyat Island — were closely watched to ensure they are "on schedule and within budget".

"TDIC is moving forward as planned with all of its announced projects, including all the museums in Saadiyat Cultural District," a spokesman said yesterday.

"An exact completion date for Guggenheim Abu Dhabi will be announced in the near future."

His comments came after analysts told Gulf News that market conditions were likely to be a factor in the decision to cancel the tender for concrete works at the site, in which a number of high-profile contractors had entered.

In the statement, TDIC said the cancellation was "due to a review of its project procurement strategy", and encouraged companies to look out for the re-issue of the tender in the near future. But Saud Masoud, a senior analyst, Real Estate and Construction, at Rasmala Investment Bank, said that "cash flow and market pressures have impacted development work and continue to affect certain projects' viability. Engaging in further loss-making activities becomes a tough choice, especially when market trough is not apparent.

"If tender economics don't meet requirements then the project could see delays."

Another analyst, who wished to remain anonymous, said the decision was "consistent with other moves that the Abu Dhabi government has taken recently to slow down or delay real estate projects."

A report issued this month claimed that a number of developments in the capital had been slowed in an effort to prevent oversupply in the Abu Dhabi property market.

Designed by Gehry

But a spokesman yesterday said that this had not been the motivation for the tender cancellation.

"This speculation has no basis in fact. The project is proceeding, and TDIC continuously monitors the delivery of its projects to ensure they remain on schedule, within budget and that TDIC's high standards are upheld throughout the process," he said.

The 450,000-square-foot museum was designed by award-winning architect Frank Gehry and is due to be a centrepiece of the Saadiyat Island Cultural District, which will include the Louvre Abu Dhabi and a national museum dedicated to the late Shaikh Zayed Bin Sultan Al Nahyan, designed by UK architect Lord Norman Foster.