Dubai’s Drake & Scull says hopes to resolve Lamar dispute

Dubai builder Drake & Scull has said it still hopes for an “amicable resolution” after a real estate developer in Saudi Arabia reportedly blamed it for delays to a project in Jeddah and filed a lawsuit.

Saudi Gazette said that investors in the Lamar residential towers at Jeddah’s Corniche have grown frustrated with the lack of progress at the development after being promised handover this year.

It reported that only 38 per cent of work at the site was complete, falling well short of the 80 per cent scheduled to meet a hand over target of May 2017.

In a bourse filing, Drake & Scull said it was not contacted by the publication.

“The company has been actively engaged with Lamar Investment and Real Estate to arrive at an amicable resolution to the significant challenges faced by Drake & Scull hindering the progress on the project,” it said.

Drake & Scull said its stake in the project, reported to be 10 per cent, would lead to its “success”.

However, the contractor revealed it had removed the development from its order backlog and made required provisions in its books.

Most investors in the project were described as paying 60 per cent of the total apartment value and have been told instalments must be paid on time or their bookings will be cancelled, according to the report.

Saudi Gazette said Lamar’s chairman, Ahmed Halawani, and CEO, Bakr Nazer, both blamed Drake & Scull for the delay.

Halwani said the company had paid SAR360m ($95.9m) to the contractor in guarantees and other dues but it had completed work values at SAR160m ($42.6m).

“We have filed a lawsuit against the contractor to retrieve the remaining SAR200m ($53.3m) for not completing the project,” he was quoted as saying.

The company said it was studying whether it was possible to award the project to another contractor and expected completion within three years.

Drake & Scull said it hoped for a mutual agreement with the firm to settle “outstanding issues” and reaffirmed its commitment to the Saudi market.