Work on one of Dubai’s biggest office and hotel projects is set to resume after the UK-based builder Carillion announced yesterday that it had secured a £34 million (Dh200.7m) loan backed by the British government to help to finance construction.
Carillion said that it had won a £75m contract to build the first phase of the Dubai World Trade Centre District, which extends from the existing World Trade Centre complex on Sheikh Zayed Road to Emirates Towers.
The 146,000 square metre development will include an eight-storey office building and a 588-room hotel.
Carillion said that the loan arranged by Deutsche Bank was backed by UK Export Finance, a branch of the British government that aims to boost exports.
The loan will be the first made by UKEF through a £3 billion direct lending initiative launched by the government.
The news comes nearly seven months after Carillion first announced that it had won the contract – which it then valued at £61m and said would be built through its Middle East joint venture arm, Al Futtaim Carillion.
A Carillion spokesman said that the increase in contract value reflected “refinements to the project scope”.
He added that the UKEF loan was to Carillion, but that Al Futtaim Carillion, as “part of the wider Carillion family”, would be significantly involved in the construction.
Said the UK chancellor of the exchequer, or finance minister, George Osborne: “It is great to see successful companies like Carillion winning contracts around the world.”
Andrew Gibb, an analyst at Investec, said the loan was a positive sign for the builder.
“The deal would give Carillion additional capacity to expand in its international markets, and the fact that it appears to have been granted on attractive terms can’t be a bad thing,” he said.
“However, this is a pilot scheme so we need to see how it pans out before we get too excited.”
Plans for the Dubai World Trade Centre District were first drawn up by Hopkins Architects and WSP in 2006 comprising two hotels, more than 2,000 apartments and 250,000 square metres of office space with shops and car parks.
Al Jaber Engineering and Contracting was awarded the Dh3.4bn contract to build the project in 2008 but was told to down its tools the next year.
In 2008, the Dubai World Trade Centre owner launched an international design competition for the second phase of the business district, including plans for a so-called Landmark Tower that was described at the time as “one of the most striking structures ever developed in the region”. However, progress on this was also halted during the financial crisis.
In April 2013, the owner said that construction would soon begin on the first phase. It said then that the office block was scheduled to be completed by the end of next year and the hotel was due to open in 2016. Construction of two mixed-use buildings was set to start this year and next and would be completed within 30 months.
lbarnard@thenational.ae
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