Farayand Virtual World

*Cost of Dubai light rail project reduced

Dubai's multi-billion dollar light rail transit project enters the final phase of bidding with the municipality and its lead consultant, Systra, releasing the final project document recently. A number of changes have been
brought to the initial design, while reducing costs from Dh14.3 billion to Dh12.5 billion. The municipality earlier shortlisted five consortia for making the final offer in two stages. The consortia are expected to attach a
financing solution along with their offers that will cover 90 per cent of the project's cost, with a repayment and recovery schedule ranging from 12 to 20 years, mostly from the annual operational income. Dubai government
will invest the balance 10 per cent.
Bidders must also submit a performance and bid bond equivalent to four per cent of the value of the bid.

The deadline for the technical bid, or rolling stock and electromechanical offer, has been scheduled for November 1, while the commercial and final bid is deadlined for January 31. A contract is expected to be awarded by March
or April, with site work to start by May. Phase 1 of the project is scheduled to be completed in 48 months.

The 90 per cent financial onus will force the bidders to form banking consortia to fund the project. "We have finally completed the detailed engineering and project design and the document has been made available to the five bidding consortia to make the offers," said Nasser Saeed,
General Coordinator of Dubai light rail transit project. "We have cut the number of stations and made alteration in the
initial design that will reduce the project cost from Dh14.3 billion to Dh12.5 billion. "We have also reduced the project's design phase by six months, bringing the schedule forward. It is now up to the bidders to come up with the best possible solution for the project." The project, Saeed said, will generate more than Dh500 million in revenue per year.

"We expect to carry over 150 million passengers per year,
with a possible fare structure averaging Dh3 per person per trip. With operation and maintenance costing Dh200 million per year, we expect to recover over Dh300 million per year."
Phase I of the 72-kilometre project will include the entire Green
Line that runs from Dubai Airport Free Zone to Dubai Healthcare City, covering the major locations in downtown Dubai, as well as part of the Red Line that runs from Rashidiya till Dubai Marina. Phase I covers 43 kilometres of which about 3.5 kilometres will be underground. Phase II runs from the American University (near Dubai Marina) till Jebel Ali port, covering 29 kilometres. Most of the cost cuts have been made on Phase I, which according to initial estimates was Dh8.5 billion. With new and finalised documents, the cost has come down to Dh6.5-Dh7 billion.