Posted November. 30, 2009 08:45,
At 11 a.m. Saturday, the site for a hotel on the shores of the man-made island Palm Jumeirah was idle with construction materials strewn. On when work would start, a source from Nakheel PJSC, the builder of the hotel, said, I dont know.
The nearby luxury resort Kingdom of Sheba is scheduled to open this year, but is far from complete. About 30 hotels were due to open on Dubais first man-made island Palm Jumeirah, which was called the eighth architectural wonder of the world. Over 5.6 square kilometers of land, however, the Atlantis Hotel is the only one operating.
The situation in Palm Jumeirah, however, is better than in other man-made islands near Dubai because construction has been completed due to its relatively small size. Work on the infrastructure of Palm Jebel Ali, which covers 12 square kilometers, has stopped due to lack of payments. Reclamation work for Dubais largest man-made island Palm Deira (46.4 square kilometers) has also been suspended.
Nakheel is the real estate development arm of Dubais biggest state-run company, Dubai World. When the builder appeared unable to repay a bond of 3.5 billion dollars maturing next month, the United Arab Emirates finance ministry sought a debt moratorium last week for six months.
Signs of the collapse of Dubai, which surprised the world as an economic miracle in the desert, are seen everywhere. Global financial markets are rebounding from the initial shock but the fallout will continue, according to experts.
Experts agree that the cause of the debacle was reckless expansion of the real estate business by Dubai, which lacks large oil reserves.
A case in point is a massive project near Jebel Ali, the largest port in Dubai. Nakheel has announced an ambitious plan to build Palm Jebel Ali and waterfront space near the port to draw 1.7 million people by 2020, larger than the Dubai population.
Though it appeared impossible, the project drew accolades from the world over because Dubais seemingly unlimited potential at the time had the globe mesmerized. Limitless LLC, another business unit of Dubai World, also announced a downtown Jebel Ali project to build 300 office buildings.