Japan's Obayashi Corp said on Wednesday it is likely to post an operating loss of 66 billion yen ($730 million) for this financial due to increased costs related to the construction of Dubai's metro.

The world's longest automated rail system project has cost more than originally planned due to design changes and a rise in labour and material costs.

Obayashi, one of Japan's main construction firms, had projected an operating profit of 20.5 billion yen for the financial year ending in March.

Obayashi, which was in talks with the Dubai government about the increase in costs on the metro, said these are at a final stage.

The construction firm also cut its net forecast to a loss of 54 billion yen from a profit of 7.5 billion yen for this financial year.

Japan's Kajima Corp, Mitsubishi Heavy Industries Ltd and trading house Mitsubishi Corp have also joined the project.   

A Kajima spokesman said the company is still examining the extra costs related to the project, while a Mitsubishi Heavy spokesman said the firm does not expect any impact on its earnings. Mitsubishi Corp was not available for comment. - Reuters