Louvre contract revision to delay award

The main construction contract for the $1bn Louvre Abu Dhabi museum will likely be delayed after the format of the deal was changed.

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The main construction contract for the US$1 billion (Dh3.67bn) Louvre Abu Dhabi museum is unlikely to be awarded until early March after the developer, the Tourism Development and Investment Company (TDIC), changed the format of the deal. It was originally expected to be awarded by the end of the year as a design and build contract, which is meant to minimise project risk for a developer and quicken delivery by overlapping the design and construction phases.

While the method was preferred during the construction boom, recent turmoil in the market has led developers to consider other methods to save costs. One example is a fixed-price, lump-sum contract, under which a contractor would not be able to charge a premium for taking a design risk. TDIC will now complete the designs before inviting contractors to bid for the construction, the company confirmed.

"That's quite a shift and a completely different process," said Simon Light, the head of client solutions at EC Harris, a construction consultancy. "They may be looking at taking the risk away from the contracting lines and bring it more in-house." TDIC said that piling works on the museum, which has been designed by the French architect Jean Nouvel, will begin next week, while a contract for substructure work will be awarded on January 24.

The Louvre is part of the Cultural District on the Dh99bn Saadiyat Island development that will include a performing arts centre, a maritime museum, the Zayed National Museum and The Guggenheim museum designed by the Canadian-American architect Frank Gehry. The UK firm Buro Happold is the Louvre project's engineering consultant, while Parsons Corporation of the US is the infrastructure consultant.

TDIC has also invited contractors to bid for the Dh2.75bn contract to build The Guggenheim museum. Construction is expected to begin in the first half of next year. The developer has reworked a number of its project tenders as a result of cheaper construction costs, which have fallen by about 20 per cent in Abu Dhabi from a peak in the third quarter of last year, according to figures from EC Harris.