x Abu Dhabi, UAEWednesday 24 January 2018

Nakheel insists The World is stable

Chris O'Donnell, the chief executive of Nakheel, says the World is definitely not sinking, washing away or eroding.

An aerial viewakheel said it had uncovered no evidence of significant erosion on the The World archipelago.
An aerial viewakheel said it had uncovered no evidence of significant erosion on the The World archipelago.

Nakheel insisted yesterday The World archipelago was not eroding into the sea.

A lawyer for Penguin Marine, a company hired by Nakheel to handle all transport to and from the islands, last week alleged in a hearing before the Dubai World Tribunal that the islands "are falling back into the sea".

But Chris O'Donnell, the chief executive of Nakheel, countered that yesterday. "The World is definitely not sinking, washing away or eroding," Mr O'Donnell said.

In a presentation from two of the company's top marine directors, Nakheel outlined the safeguards it had put in place to avert erosion of the islands.

A 26km breakwater with six entry points circles the man-made islands. Those entrances are positioned in a way designed to minimise the impact of waves. The distance between the breakwater and the islands is at least 400 metres as an extra precaution.

Ali Mansour, the director of projects for marine and civil works for Nakheel, said the company had uncovered no evidence of significant erosion of the islands.

But Mr Mansour said each island owner would have to take their own precautions to maintain the shapes of their islands, especially if they wanted "sandy beaches", which can be prone to tidal movement. He pointed to island G19, part of a group representing Greenland and the site of a former Nakheel sales office, as proof that the islands had long-term staying power.

"This island has been here for six years and nothing has changed," Mr Mansour said. Nakheel later clarified it had had to undertake some maintenance work to "replenish" the beach.

Penguin Marine argued at the Tribunal last week that The World project was "effectively dead".

The company was seeking a ruling that it should not have to pay a Dh5 million (US$1.3m) annual subscription fee for the transport rights because, it claimed, the project was not moving forward. The Tribunal's three judges ruled against Penguin but have not yet published their reasons.

Graham Lovett, Nakheel's lawyer and the Gulf managing partner for the law firm Clifford Chance, said the project would move ahead, but that it was in a "coma" because of the global financial crisis.

The World is one of the most recognisable of Dubai's projects. More than 70 per cent of the 255 man-made islands laid out in the shape of the continents have been sold.

Just two developers have made significant progress on their projects. The Heart of Europe project by the Austrian property developer Josef Kleindienst has completed "vibro-compaction", a process designed to enable permanent buildings to be put up on the island .

The Lebanon island project by Wakheel Ahmed has made the most progress. Bulldozers and trucks were yesterday shifting sand from a barge on to the island. Several trees have been planted.

Ali Lootah, the chairman of Nakheel, said yesterday the owners of the islands were responsible for their upkeep and development. Nakheel was required only to maintain the islands it owned and maintain the breakwater.

"It is up to the developers," Mr Lootah said. "Our commitment to the developers is complete … They have their own financial problems. I cannot do anything for them. I cannot go and give them money." He said reports about the Tribunal hearing last week were taken out of context.

"It's a baseless argument" that the islands were eroding, Mr Lootah said.

"Lawyers are always going to find an exit route for their client … Not a single developer came forward complaining about the island or that there were any problems with the island.

"If there were a problem, they would be the first to come forward."