The Dubai metro pay row

The Dubai metro

The Japanese consortium responsible for Dubai's state-of-the-art Metro system have reported that completion of the project has been slowed due to a dispute with the Dubai government over delayed payments, said to be worth over $3 billion.

The consortium, that includes the Obayashi Corporation, Mitsubishi Heavy Industries, Mitsubishi Corp, Kajima Corp and Turkish company Yapi Merkezi, have said that work on the remaining unopened stations would be slowed as a deliberate negotiating manoeuvre in payment talks with the government's transport authority.

A spokesman from Obayashi Corp, who are working on the Red and Green Line, denied that work online the Metro had been completely suspended, saying such rumours were "untrue."

"What we told [Nikkei] is that we are in negotiations with the client, the RTA of the Dubai government and we just slowed down the pace of the construction.

"We have been in negotiations for a long time. The slowdown is part of the strategy," the spokesman added.

Contractual payments

Dubai's Roads & Transport Authority have said the project will remain on track and that they are committed to paying the consortium their expenses.

A statement from the RTA stated that, "The RTA confirms that the work of the DURL (Dubai Rail Link) consortium is continuing on the Dubai Metro project in keeping with the planned timeframe.

"The authority confirms its contractual commitment to the financial payments in accordance with the progress of the work on the project."

The construction groups have already received nearly $5.3 billion worth of orders to build the Metro, but since the project began in 2005, expenses have almost doubled.

Despite the Metro system opening in September, Obayashi Corp is still working on both the Red and Green Lines with the remaining Red Line stations set open next month. It is unknown whether the slowdown will affect this deadline, but an Obayashi official said to Arabian Business that "it depends on how the Dubai government reacts to our slowdown."

The bursting of Dubai's property bubble and debt woes have put pressure on the government's ability to meet outgoings. As such, it has been estimated that the Japanese firms are due over $7.5 billion in uncollected bills from work done in Dubai as of the end of October.

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