Arabtec gears up to build controversial tower in Russia

Arabtec Holding is positive that a public backlash against a deal for building Europe's tallest building for the Russian oil company, Gazprom Neft, will not affect the plans and the whole process will be carried out smoothly.

At a public hearing on Wednesday, plans for the 400-metre tower were protested against by St Petersburg residents. They hold the viewpoint that Gazprom Neft, a subsidiary of the state-owned natural gas giant Gazprom, was not right in making efforts to change the city's zoning laws to construct the project, known as the Okhta Centre. Following a clash with police and security guards, nearly six people were asked to leave the meeting immediately.

As per the UN Educational, Scientific and Cultural Organisation (UNESCO), if the project, which will be Gazprom Neft's headquarters, is built, then the city's historic centre could be struck off the World Heritage List.

Last year in April, the contract to build the skyscraper was awarded to Arabtec, the biggest builder in the UAE; however, the progress was hindered by design changes as Gazprom looks to decrease costs because of the global economic slowdown.

Ziad Makhzoumi, the chief financial officer of Arabtec said: "The original contract was valued at Dh10bn (US$2.72bn) and was the largest ever to be awarded to the firm, but it is now likely to be reduced by about Dh3bn due to cost-cutting. The latest setback is not expected to halt the project."

Last month saw the laying of the foundations and soil tests, in spite of the delays, said Mr. Makhzoumi.

He continued, "We signed the contract a long time ago but there have been lots of changes. The tests are part of the value engineering … these should be finalised by the end of October and will then be presented to Gazprom."

Mr. Makhzoumi predicted the construction would begin after March next year, if permission is granted. The construction of five other buildings and leisure facilities is also included in the contract.