Archive for January 2011

Dubai’s world has a sinking feeling

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A cluster of man-made islands off the United Arab Emirates coast is sinking.

THEY were intended as the ultimate luxury possession. But ”The World”, the man-made islands off the coast of Dubai shaped like the countries of the globe, are sinking, a property tribunal has heard.

Developed with hotels and villas, the islands are accessible by boat, but the sands are eroding and navigational channels between them are silting up, the British lawyer for a company bringing a case against state-run developer, Nakheel, told judges. ”The islands are gradually falling back into the sea,” said Richard Wilmot-Smith QC, for Penguin Marine.

According to Nakheel, 70 per cent of The World’s 300 islands have been sold, but most of the development plans have been brought to a crashing halt by the financial crisis. Only one of the islands – Greenland – is inhabited, and that is a showpiece owned by the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum

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An artist’s impression of "The World" issued by developer Nakheel. Photo: AP

The company was part of Dubai World, the state-owned conglomerate that had to be bailed out of debts put at $A25 billion at the end of 2009.

Nakheel is also behind Dubai’s palm-shaped offshore developments. Villas in the only one near completion, Palm Jumeirah, were given to or bought by footballers, including former England stars David Beckham and Michael Owen.

Investors who bought islands proved unwilling or unable to finance further work when Dubai’s property prices halved.

John O’Dolan, owner of the company that bought Ireland for $A38.5 million, killed himself, while Safi Qurashi, who bought Britain for $A69 million, is in jail in Dubai after being accused of bouncing cheques.

Penguin Marine, which bought the rights to provide boat travel to the islands, is trying to get out of a contract that involves paying an annual fee of about $A1.6 million to Nakheel.

Graham Lovett, for Nakheel, said the project was not dead but admitted it was ”in a coma”.

The tribunal found for Nakheel yesterday, saying it would give full reasoning later.

A Nakheel spokesman insisted the islands were not sinking. ”Our periodical survey over the past three years didn’t observe any substantial erosion that required sand nourishment,” he said

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