Abu Dhabi firm backtracks on Guggenheim contract

[October 24, 2011]  DUBAI, United Arab Emirates (AP) -- The Abu Dhabi company building a branch of the Guggenheim museum in the Emirati capital said Sunday it has temporarily dropped plans to award a major construction contract, raising questions about the future of the high profile project.

The state-run Tourism Development and Investment Co. said it recalled the tender for concrete work on the Frank Gehry-designed museum because it is reviewing its strategy for handing out jobs to contractors. It didn't say when it would again seek bids.

The Guggenheim is one of the showcase museums TDIC is building on Abu Dhabi's Saadiyat Island, a planned cultural district overlooking the Persian Gulf. The island is also slated to contain a national museum, performing arts center and a branch of the Louvre.

A spokeswoman insisted Sunday that the Guggenheim project is still moving ahead, but didn't provide details.

TDIC has previously said it would open the museum by 2013.

Some preliminary groundwork for the 450,000-square-foot museum has been completed. The construction contract now on hold would have involved major work on the museum's base and other parts of the building.

TDIC has not released the value of that deal.

TDIC is one of several companies set up by Abu Dhabi to diversify the economy and drive development in the emirate, which borders Dubai to the south.

The money-losing company relies heavily on direct cash infusions from the oil-rich Abu Dhabi government, but it also has turned to banks to fund some of its operations.

TDIC executives traveled to Europe and Asia over the summer to meet with potential investors about the possibility of issuing new bonds, but then put off those fundraising plans.

The Guggenheim project has been a flashpoint for controversy.

In March, more than 130 international artists and writers promised to boycott the museum unless authorities do more to protect workers' rights at the site. That followed an earlier report by Human Rights Watch that outlined alleged abuses against migrant workers on the project.

TDIC has said it is committed to protecting workers' rights and has taken on board many of Human Rights Watch's recommendations.

[Associated Press; By ADAM SCHRECK]

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