x Abu Dhabi, UAEThursday 27 July 2017

QE2 to plot a course for Cape Town

Dubai World sees gains from moving the ship from Dubai to South Africa, which would welcome the famous liner.

The Queen Elizabeth 2 sits docked in Port Rashid yesterday, where it has been moored in Dubai since arriving in November.
The Queen Elizabeth 2 sits docked in Port Rashid yesterday, where it has been moored in Dubai since arriving in November.

The Queen Elizabeth 2 seems all but certain to be berthed temporarily in Cape Town harbour after statements yesterday by South Africa and the ship's owner, Dubai World. A spokeswoman for South Africa's Department of Environmental Affairs and Tourism said her agency would not oppose a possible 18-month berthing of the famous vessel at Cape Town.

A statement from an executive of the Dubai World subsidiary that operates the ship welcomed the South African government's position and said: "It has been our intention for some time to provide a short-term opportunity to enjoy QE2 as a stationary hotel in her current condition before refurbishment begins." Last week, just months after the QE2 arrived in Dubai at the end of her "final voyage", it emerged that Dubai World had applied to berth the 41-year-old ship in the Cape Town harbour.

The National Ports Authority of South Africa and the board of Transnet, that country's major ports company, still have to give their final approval. The statement made yesterday by Manfred Ursprunger, the chief executive of Nakheel's QE2 Enterprises, linked the ocean liner's possible berthing at Cape Town to the 2010 FIFA World Cup and an expected influx of tourists for the event. The move to Cape Town would mark a significant change of plans for the QE2, which was to have been permanently berthed off a spit of land connected to the trunk of the Palm Jumeirah.

The ship, currently docked at Port Rashid, was bought by Istithmar, an investment arm of Dubai World, for $100 million (Dh367m) in June 2007. Nakheel planned for her to become a floating hotel with 200 rooms, restaurants and a theatre. But Dubai World has been under increasing pressure to streamline its operations and reduce spending because of the global financial crisis. Nakheel has been hit especially hard by the downturn in the property sector and is trying to sell some of its projects to investors to raise funds.

The most pressing issue facing Dubai World is a Dh12.9bn (US$3.5bn) Islamic bond from Nakheel that is maturing in December. The company also has payments due to contractors and decisions to make about the future of some of its stalled projects. Dubai World recently hired AlixPartners, a restructuring consultancy based in the US, to "advise on a structural reorganisation" of the company. Nakheel has cut nearly 1,000 jobs and is trying to sell land and other assets to raise money. It has also shelved some of its most ambitious projects, among them the more than 1km-tall Nakheel Tower and the Trump Tower on the Palm Jumeirah.

Moving the QE2 to South Africa for a visit would take advantage of Dubai World's other projects in Cape Town. The company and a consortium of investors bought the Victoria & Alfred Waterfront development, near Cape Town's commercial port, for the equivalent of about Dh3.4bn (US$920m) in 2006. bhope@thenational.ae