Tuesday 21 October 2014

Extravagant Dubai island project sinks under weight of the credit crunch

James Mclean and Brian McDonald

Published 12/09/2009 | 00:00

THE Galwayman who bought Ireland is dead, England is deserted, while Australia and New Zealand have merged.

They were designed to make Dubai the envy of the world: a series of paradise islands inhabited by celebrities and the super-rich reclaimed from the azure waters of the Arabian Gulf and shaped like a map of the Earth. It was called The World.

As millions of tonnes of rock were dumped into the sea for the foundations, timely leaks suggested that Brad Pitt and Angelina Jolie were to buy Ethiopia, Richard Branson was tipped to occupy England, while Rod Stewart would border him in Scotland.

Hazard

Instead it has become the world's most expensive shipping hazard, guarded by private security in fast boats and ringed by warning buoys to keep the curious away.

A development that was meant to send Dubai's star into the firmament of First World cities has been left to the mercy of the waves and the baking winds.

Mile after mile of breakwater built from boulders brought hundreds of miles by ship has been laid, but inside its man-made lagoon, work has completely stopped.

The expected map of the world of 300 islands is instead a disjointed and desolate collection of sandy blots -- a monumental folly just out of sight of Dubai's shore.

Those who bought into what was the world's most ambitious building project were not celebrities.

Many were more ordinary investors who put down 70pc deposits, some of them Anglo-Indians.

Galway auctioneer turned developer, John O'Dolan (51) fronted a consortium under his O'Dolan International banner and bought Ireland for e28m in 2007 and last year snapped up England from under the noses of several UK interests for e23.5m.

But the property crash brought tragedy in its wake as the Galwayman committed suicide in February of this year.

As well as his foreign investments, the popular family man had extensive business interests in Ireland. He owned a bar and a hostel in Galway as well as other properties in Dublin and Limerick.

A couple of weeks before his tragic death, a receiver was appointed to his Galway hostel and a property company. His body was discovered in a shed on his Barna Road property.

His fellow investors in the Dubai development now have little prospect of seeing a return. The World has stopped, but they can't get off.

"The World has been cancelled. It doesn't even look like the world. Basically there is one island that is maintained that is said to be owned by the Sheikh [Dubai's ruler] and the rest looks like a pile of muck," said one local property agent.

It is the starkest example of a financing crunch that faces the emirate but many other projects are also in jeopardy.

In the United Arab Emirates (UAE), of which Dubai is a part, about $300bn (e205bn) of building is on hold after prices began tumbling.

Abu Dhabi, Dubai's oil-rich neighbour, is helping to support it through the crisis, so far to the tune of about $10bn. Another $10bn is likely to follow soon, and more may follow.

Property is not the only dark spot in the UAE. In the nearby emirate of Sharjah the credit crunch caused massive power outages, leaving businesses and houses without electricity

Troubles

This week, Sheikh Mohammed Bin Rashid Al Maktoum, Dubai's ruler and the UAE's Prime Minister, vowed to steer the emirate through its troubles and pledged to further rein in extravagant developments.

Officially, however, not a single project has been cancelled -- just delayed.

"I don't blame anybody. Some papers try to write this but they are forgetting their problems [in their own countries] ... But people only throw stones when a tree has fruit," he said.

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