Abu Dhabi developer halts tenders for main construction contract of Guggenhim Museum

TDIC has recalled the construction tender for the Guggenheim Museum, one of the flagship projects on Saadiyat Island.

A computer rendering of the Guggenheim Museum on Saadiyat Island.

Bidding has been halted for the main construction contract on the Guggenheim Museum on Saadiyat Island, raising questions about the timetable for one of Abu Dhabi's flagship projects.

Video:What next for Abu Dhabi's Guggenheim?

Kevin Brass discusses the move by the TDIC to halt the bidding process for the main construction contract on the flagship project.

The tender for the concrete works at the museum, originally issued last year, was recalled as part of a review of "project procurement strategy", according to a spokesman for the Tourism Development and Investment Company (TDIC), which is overseeing the wider US$27 billion (Dh99.17bn) Saadiyat project.

"This work, which forms a part of the multiple work contracts that make up the project, will be re-tendered at a future date, and all renewed interest from contractors will be welcome," the spokesman said.

Work has already been completed on land reclamation, the seawall and the building's foundation piles. Work on the design by the architect Frank Gehry is due to be completed early next year, the TDIC said.

The Guggenheim, which is to house a contemporary art collection, is part of the museum district on Saadiyat Island designed as what was described as the world's largest single concentration of premier cultural institutions. In addition to the Guggenheim, plans for the district include the Zayed National Museum, a branch of the Louvre, a performing arts centre and a maritime museum.

Contractors submitted bids for the primary construction work on the $1bn Louvre project in December, but the contract still has not been awarded.

Abu Dhabi has been reviewing expenditures on most of its major construction projects, industry officials say.

Earlier this year, evaluation work was halted on deals to build the Dh10bn Mafraq-Al Ghweifat Highway to Saudi Arabia, after years of negotiations. The Abu Dhabi Department of Transportation was developing the 327km road as a public-private partnership but in May abruptly announced it was evaluating different options.

Throughout the region, clients are re-tendering projects as they look for ways to cut costs and the competition for work intensifies among contractors.

"This is driven by clients seeking to get best price in a market that still continues to show downward pressure and to obtain more favourable contract conditions," said Nick Smith, a partner in EC Harris, a property consultancy.

The Guggenheim was originally scheduled to open in 2013.

Contractors submitted bids for the Dh400 million project in March. But the TDIC has told construction companies that it will return their bonds and deposits paid to participate in the process.

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Bidders included Alec, the local subsidiary of Al Jaber Construction; Al Fara'a, Al Habtoor Leighton, Arabtec, Saudi Oger and Orascom, according to the business magazine Meed.

The project was originally developed as a design-to-build contract, with one primary construction company. Instead, the TDIC opted to strike separate deals for the sub-structure, piling and other elements of the overall project.

Although the tender for the main construction work has not been awarded, progress continues behind the scenes. Programmes are under way to train future museum staffers, the TDIC said yesterday.

"The art collection continues to grow and a series of focus groups with international experts are taking place to discuss areas related to the development of the future museum's curatorial and educational programming," the tourism group's spokesman said.

The overall re-evaluation of projects is a positive step for the emirate, said David Dudley, the head of the Abu Dhabi office for the property consultancy Jones Lang LaSalle.

"Large-scale projects expected to progress will be those that achieve strategic benefit for the emirate," Mr Dudley said.