Dubai World

Is It The End Of The World In Dubai?

In 2009, I wrote that The World project in Dubai might be in trouble due to the economic downturn. The ambitious development in the Gulf may have another problem on its plate. Reports came out yesterday stating that the islands shaped like countries are sinking back down into the water.

The project has been in trouble for years due to the debt-ridden state of Dubai as well as the logistics of building hundreds of islands in the middle of the water. The picture above shows the project back in 2006 but more recent reports tell of a more misshapen development plagued by erosion. At a property hearing, Richard Wilmot-Smith QC, a British lawyer for a company that ferries people to the islands, told the tribunal that the land is gradually falling back into the sea. Penguin Marine sought to get out of its contract with the developer Nakheel, saying that fewer people are going to the islands is and that the project is essentially falling apart.

Work on the islands has reportedly been stopped for over a year. The project is becoming an ocean wasteland, a half-finished project of rocks and sand surrounded by breakwaters. Work has stopped inside the manmade lagoon and instead of neatly defined islands in the shape of recognizable countries and continents, ragged sandy blobs pushed barely above the water remain.

Tags: dubai, dubai world, nahkeel, the world

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The Queen Elizabeth 2 Finally Going Up For Sale

by Deidre Woollard (RSS feed) —

Filed under: Yachts & Sailing

For a long time it has seemed that Dubai's acquisition of the Queen Elizabeth 2 cruise ship has been ill-fated. Dubai World acquired the ship for a reported $100 million and planned to turn it into a glamorous floating hotel in Dubai. But the anticipated renovation never took place and rumors began last year that the ship would eventually be for sale amid the general financial turmoil that has hit Dubai. Now various sources are reporting that in order to pay down some of Dubai World's massive $22 billion debt it is seeking to unload a variety of assets including the QE2. Also up for sale could be the global circus troupe Cirque du Soleil. The sell-off began last week when Dubai World's investment subsidy, Istithmar sold off a 13 percent stake in Indian domestic airline SpiceJet.

The real question is, who's buying? The Queen Elizabeth 2 was launched in 1967 and she would need a major, costly refit to be attractive as a tourist cruise ship again. Some fear that the venerable vessel may be looking at the scrap heap and other are calling for England to buy the ship to save her.

Tags: cunard, Dubai World, DubaiWorld, isthimar, Queen Elizabeth II, QueenElizabethIi

City Center Considers Bankruptcy Filing

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels, Real Estate Developments

In January, it was announced that MGM Mirage was planning to scale back their City Center project, now the project seems to be in even deeper trouble. The $8.6 billion project has hired a law firm in order to prepare for a potential bankruptcy filing. The project is the Las Vegas Strip's most ambitious development, a 67-acre sprawl of hotels including a Mandarin Oriental property, residences, a casino and a huge retail and entertainment complex.

The developers, MGM Mirage and Dubai World, are expected to miss a $220 million debt payment due Friday and the project could file for bankruptcy within days unless an agreement is made. Dubai World has already filed suit against MGM Mirage, saying that its shaky finances put City Center at risk. MGM Mirage reported a $1.15 billion fourth-quarter loss this month and is said to be more than $13 billion in debt. Earlier this week the deal to sell MGM's Treasure Island casino to Phil Ruffin for $775 million was finalized.

As the Wall Street Journal mentions, even if the project does end up in bankruptcy it is likely that construction could continue or be restarted once agreements are made. No one wants to leave this massive complex of partially completed buildings unfinished and both MGM Mirage and Dubai World have sunk billions into the project. Also the city of Las Vegas needs the project to work both because of the potential jobs it creates as well as for the statement it makes that Las Vegas tourism is still thriving.

UPDATE: MGM Mirage has made a $200 million payment to the City Center project to keep the project afloat.

Source

Tags: city center, CityCenter, dubai world, DubaiWorld, mgm