A Malaysian construction company that was supposed to be building a Dh980 million mixed-use project in Abu Dhabi has said it is pulling out because it has not been paid.
Zelan Holdings issued a notice last Thursday to Meena Holdings, the developer building the project in the Port Zayed area of the capital, of its plan to terminate their agreement.
Zelan Holdings had signed a contract to build package two of the Meena Plaza project, which was meant to contain three apartment towers and one office tower, in 2008.
The project was meant to be made up of 246,000 square metres of buildings and include a helipad sun bathing deck, a covered Jacuzzi and wading pool, a cinema and private medical centre.
Work had started and stopped several times,but a new agreement was signed last September after Meena Holdings agreed to pay Zelan Dh121.63m which it said was owed for work done.
As part of the deal, the contract price was revised upwards for a second time to just more than Dh980m. It was initially expected to cost Dh925m.
But on Thursday, Zelan again announced that it was halting work and was looking to terminate its agreement.
In a statement to Malaysia’s stock exchange, Zelan said Meena Holdings had failed to pay Dh27.6m for work done and materials supplied.
It also highlighted “the employer’s continuous interference with the valuation and/or certification” of its claims for money owed.
Zelan said it was now looking to terminate its contract within the next 14 days as a result of that.
It said it “will take the appropriate steps to pursue its claims against the employer and recover any loss and damage arising out of the termination”.
Meena Holdings could not be reached for comment.
The company was set up to create the project by a number of shareholders, including the privately-owned Abu Dhabi developer Tamouh.
A Tamouh spokesman said it “is not in a position to comment on this matter as we are not the only employers of the contractor Zelan. In fact there are several parties and investors involved in the development of Meena Plaza”.
“However, we are aware of the dispute taking place between the employers and the contractor, which we understand had to be reported to the Malaysian Stock Exchange Authority by Zelan pursuant to clauses specific to the country’s laws, given that the contractor is a public company listed on the Bursa Malaysia,” he said.
“Though we are not directly involved in the resolution of this disagreement, due to our minority ownership and having no direct role in the management of this project, we are confident that this matter will be settled shortly with all the relevant technical teams. It is the priority of all concerned parties to reach an amicable resolution and the delivery of the project on the planned date.”