United Arab Emirates: 12/31/2005

Palm Deira will not be called off

Dubai: Nakheel, the leading property developer in the UAE, yesterday denied media reports that it was calling off the Palm Deira project.

"The project is expected to be completed as plan-ned, and villas will be handed over to their owners after 10 years according to estimates by the Dutch-based dredging company Van Oord," a company source said.

Letters have been sent to owners and buyers of villas in the project, informing them they will receive their villas after 10 years, the source added.

Speaking to Gulf News, Sultan Ahmad Bin Sula-yem, Executive Chairman of Nakheel, said that the Deira Palm project will not be called off.

Bin Sulayem said: "These are just baseless reports, which are meant to distort the image of the company and its success.

Strategic importance

"There is no way to cancel the project, which has already made a significant headway in addition to being of strategic importance to Dubai from residential, tourism and commercial aspects."

Land reclamation works are being conducted within a specific timeframe. The company's letters to investors are meant to explain to them that the reports are rumours, Bin Sulayem said.

"Investors who bought villas in the project have understood our message clearly and appreciated our transparency and frankness," he added.

He said that experts expected the project to take at least 10 years to be ready of which six years will be for deepsea land reclamation works alone, two years for infrastructure works and two years to build the villas.

"Since they have signed the contracts with us, investors know that the Palm Deira is not a set of villas or a residential district, but an integral city being built out in the sea," Bin Sulayem said.

"Investors are also fully aware of the size of the project, which is a massive one and is the first of its kind in the world.

They know that it is not meant for short-term investments, because it is 10 times bigger than the Palm Jumeirah and needs great efforts to be completed," Bin Sulayem said.

The Palm Deira project was announced in 2004. Nakheel estimated then that it would take 10 years to complete.

Now that work is under way, however, Nakheel has postponed the completion date by two years, from 2013 to 2015, based on estimates from Van Oord.

Nakheel said the initial contracts signed with investors did not include a specific delivery date for the residential units. Instead, the company marketed its project on the basis of a 10-year term for completion.

Investments

According to the company's sales centre, only a few investors decided to withdraw their investments. A large number of them chose to transfer their investments to other Nakh-eel projects, such as the Palm Jumeirah, International City and Discovery Gardens.

The company said it does not deduct any percentage of down payments made by those who wanted to withdraw from the project.

But owners whose 10 per cent down payment was waived as a gift from General Shaikh Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defence Minister, will not receive a refund. They can, however, still benefit from the gift by transferring their investment to another project to soon be announced by Nakheel, the company said.