Desert island dreams

08 May 2008

Off-shore developments in Dubai. From left to right: Dubai Waterfront, which almost engulfs the Palm

Off-shore developments in Dubai. From left to right: Dubai Waterfront, which almost engulfs the Palm Jebel Ali, Palm Jumeirah, the World and Palm Deira.

Think construction in the Middle East and the chances are you will think of Dubai. It is estimated there is about US$ 90 billion of development currently under construction in the tiny Emirate.

One of the biggest areas of construction at present is in the offshore sector. With only 60 km of natural coastline to develop Dubai has had to look elsewhere to satisfy the demand for beachfront properties. And where Dubai leads, other Middle Eastern countries have not been slow to follow.

Offshore projects currently under development in the region include the World, Palm Deira, Palm Jumeirah, Palm Jebel Ali (see iC December 2004) and the Waterfront, all in Dubai, Durrat Al Bahrain and Bahrain Financial Harbour (Bahrain), The Pearl (Qatar), New Doha International Airport (Doha) and City Fnar (Saudi Arabia), with more planned.

What drives these developments is generating income. Oil revenues and inward investment may have kick started the current construction boom but the oil will run out one day. To secure a future source of income the authorities are therefore keen to develop the country's resort potential to the full. In 1990 630000 tourists visited Dubai, in 2004 5.4 million came. By 2010 the Emirate hopes to be attracting 15 million visitors a year.

The Palms

Dubai's three Palms, all owned by local development company Nakheel, for example, will contain about 12000 private homes, more than 10000 apartments and over 100 hotels, together with marinas, water theme parks, restaurants and the ubiquitous shopping malls. They will be accessible by car, boat and, it is hoped, monorail. Land reclamation involves using about 10 million m3 of sand and rock.

The first of the three developments out of the starting blocks was the Palm Jumeirah, a simple palm tree-shaped island and protective crescent. The 5.6 by 5.6 km development, situated opposite the Jumeirah Beach district, itself undergoing enormous development (see iC June 2004), is clearly visible above water and should be complete by next year.

The more ambitious Palm Jebel Ali, a 6.4 by 7.3 km development that should be complete by 2008, followed. The big brother of Palm Jumeirah will see Belgium-based Jan De Nul reclaim over 172 million m3 of sand and gravel. By May this year over 60% of land reclamation was complete, with a staggering 6 million tonnes of rock already placed.

While that might seem impressive the third of the Palms, Deira, measures 14.5 by 8.9 km and will have an outer crescent 21 km long. Due for completion in 2009, the development will use about 1 billion m3of sand, gravel and rock to create an extra 240 km of valuable beachfront.

If this is still not enough recently unveiled plans will see all three developments dwarfed by the 81 million m2 Dubai Waterfront, which will have 10 zones and incorporate Palm Jebel Ali alongside 250 master planned communities both on and offshore.

Other offshore developments include The World, a collection of over 300 islands in the shape of… the World. About 50% of the sand needed to realise this 63 km2project has been reclaimed and 88 islands are now visible above water. More than 181 million m3 of sand has been deposited to date and a fleet of 14 barges and 30 dredgers are currently working on site, having placed 5.5 million tonnes of rock so far. When complete in 2008 over 321 million m3 of sand and 31 million tonnes of rock will have been used to create an extra 850 km of waterfront.

Elsewhere there is the Jumeirah Islands, a self-contained community of 50 islands.

Covering an area of 3 million m2 the development is the usual mix of up market properties and shopping malls, golf courses, commercial properties and hotels. The development is actually inland on an artificial lake.

Other developments

While Dubai's Palms continue to grow the country does not have a monopoly on offshore developments. In Doha, Qatar, for example, the US$ 2.5 billion Pearl Qatar, is a four-phase mixed use development comprising 10 distinct districts housing 8000 beachfront villas, town houses, luxury apartments and penthouses, which will be home to 30000 people. The Riviera styled community will be linked to the mainland by an eight lane, palm tree lined super highway.

Exclusive luxury villas will be located in clusters around the island's perimeters. Three 800 room hotels are also planned along with four marinas for 700 boats. There will be schools, cinemas, shopping malls and parks as well as an extra 60 km of reclaimed coastline and 20 km of beaches. Situated 350 m offshore, close to the West Bay area of the country's capital, dredging work is underway and completion is due in 2009.

In Bahrain work is underway on the US$ 1.3 billion Durrat Al Bahrain complex of islands. Work on the previously stalled project recently started again and completion is due in 2009.

Durat Al Baharian, or the ‘Rising Pearl’as it is known locally, will consist of 13 islands spread over 20 km2. The 30000 residents will have access to 2000 villas, 3000 apartments, schools, mosques, health centers, golf course, sports and leisure facilities and iof course shopping malls.

Also in Bahrain is the Danaat al-Howar project, 70 new islands varying from 1000 to 250000 m2.

Supply and demand

Development on this scale is not without its problems. Labour may be cheap and in easy supply, most comes from the Indian sub-continent, but concerns have been expressed over the environmental impact such large scale dredging is having on the area's environment.

Besides the impact on marine wildlife there are also potentially harmful changes in the marine currents to consider; how will this affect the natural ebb and flow of the coastline? Many consultants in the region are wary of upsetting the delicate balance between concerns for the environment and loosing out on potentially lucrative contracts.

Environmental impact studies are certainly done for all major projects, but whether the client acts on them is another matter. While consultants and contractors can bring a certain amount of pressure to bear on developers no one wants to rock the boat too much.

Commodity prices are also beginning to have an effect on developments. China's huge demand for steel, coupled with the inherent price rises this has brought have begun to stall many high rise, steel framed developments.

The supply of cement has also been a problem in recent months. In Qatar the National Cement Company started to import cement last year, with cement coming from India and Saudi Arabia. In Oman the Government banned all exports, which settled prices and ensured all locally produced cement stayed within its borders.

In a bid to speed up supply last year the Dubai Government cancelled the 5% import, handling and storage duties on cement. According to the Dubai Chamber of Commerce &Industry (DCCI) prices for Portland Cement hit a high of US$ 71 per tonne in 2004, while White Cement hit a high of US$ 120 per tonne. Prices are now down by - 15% to an average of US$ 74 per tonne for Portland Cement.

Outlook

Construction throughout the region depends on a stable supply of materials, particularly steel and cement. While Governments have acted to stabilise supplies theunderlying cause for the shortages remains; demand is outstripping supply.

Conversely the supply of apartments and hotel rooms will soon exceed demand. Without a steady demand for properties and work space the Governments’ambitious infrastructure plans - road, rail, waterways and business parks - could be in doubt.

Environmental concerns are also causing headaches for consultants and foreign contractors active in the region. If there are no safe guards on what is happening to the region's unspoilt desert and beaches the very reason to visit the region is also in doubt.

It will be therefore be interesting to see if the current boom can outlast the developers’ponchant for iconic developments.

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