'The World' is sinking
The World, the ambitious archipelago of islands shaped like the countries of the globe, is sinking back into the sea, a property tribunal has been told.
Developed with hotels and villas, the islands are accessible by yacht or motor boat.
But the sands are eroding and the navigational channels between them are silting up, the British lawyer for a company bringing a case against the state-run developer, Nakheel, told the tribunal.
"The islands are gradually falling back into the sea," said Richard Wilmot-Smith, QC, for Penguin Marine. The evidence showed "erosion and deterioration of The World islands".
Nakheel says 70 per cent of 300 islands have been sold but most of the development plans have been brought to a crashing halt by the financial crisis.
Only one island, Greenland, is inhabited and that is a showpiece owned by the ruler of Dubai. Sheikh Mohammed bin Rashid al-Maktoum.
The company was part of Dubai World, the state-owned conglomerate that had to be bailed out of debts put at US$25 billion at the end of 2009.
The tribunal was set up to hear cases arising out of the restructuring of the companies involved. Nakheel is also behind Dubai's palm-shaped offshore developments.
Villas in the only one near completion, Palm Jumeirah, were given to or bought by footballers, including David Beckham and Michael Owen.
Investors who did buy islands proved unwilling or unable to finance further work when Dubai's property prices halved in the space of a year. Some were hit by troubles elsewhere.
The owner of the company that bought Ireland for NZ$49.35 million, John O'Dolan, killed himself, while the man who bought Britain for NZ$88.44 million, Safi Qurashi, is serving seven years in Dubai for bouncing cheques.
Penguin Marine, which bought the rights to provide boat travel to the islands, has seen little business and is trying to get out of a contract that involves paying an annual fee of 5 million dirhams (NZ$1.76 million) to Nakheel.
Penguin said work on the islands had "effectively stopped". Mr Wilmot-Smith described the project as "dead". Graham Lovett, for Nakheel, said the project was not dead but admitted it was "in a coma".
"This is a 10-year project which has slowed down," he said. "This is a project which will be completed."
He said Penguin would make money eventually. "That's the price Penguin makes to stay in the game," he said. "They have the potential to earn millions."
The tribunal found for Nakheel on Thursday, saying it would give full reasoning later.
A Nakheel spokesman insisted the islands were not sinking. "Our periodical survey over the past three years didn't observe any substantial erosion that required sand nourishment," he said.