It exemplified the booming property market and ambition of Dubai’s entrepreneurs. But after the global financial crisis led to the collapse of the emirate’s home-building market, a unique development known as ‘The World’ is reportedly facing Armageddon.
The project, a man-made archipelago designed to resemble a map of the planet, is facing disaster as its islands have begun sinking, a tribunal heard this week.
The development, which sits a mile and a half from the mainland, is all but vacant after investors who bought up its ‘nations’ saw their finances collapse after the economic crash.
A company that ferries people to the islands is now seeking to withdraw from its contract with Nakheel, developers of The World, due to a lack of business and the erosion of the islands’ sands.
Richard Wilmot-Smith QC, a British lawyer for Penguin Marine, told a property tribunal the islands are ‘gradually falling back into the sea’
He added there was evidence of the ‘erosion and deterioration of The World islands’.
Only one of the ‘nations’ – Greenland is inhabited currently, with Dubai’s ruler owning a show home on the island.
While Nakheel deny penguin Marine’s contention that the project is ‘dead’, the firm admits The World has slipped into ‘a coma’.
‘This is a ten-year project which has slowed down,’ he told the tribunal. ‘This is a project which will be completed.’
He added Penguin would see a return on its investment.
‘That’s the price Penguin makes to stay in the game,” he said. ‘They have the potential to earn millions.’
The tribunal found for Nakheel on Thursday, with full reasoning to come later.
A spokesman for Nakheel insisted the islands were not sinking.
‘Our periodical monitoring survey over the past three years didn’t observe any substantial erosion that requires sand nourishment,’ a statement said.
The World has already experienced its fair share of problems, with the businessman who bought the Ireland residence committing suicide after the collapse of his company while a London businessman who paid £43million for the Britain island was jailed for seven years last year for bouncing cheques.
The claims of the erosion of The World comes as a Reuters poll showed Dubai’s house prices are set to fall by another 10 per cent over the next two years.
Property prices in the emirate have fallen 58 per cent from their peak in the fourth quarter of 2008.
Source: Daily Mail