|TAP Special| 
The star-crossed Dubai Pearl project is in trouble again. Work on the project, which has a history of chronic fund shortages, missed deadlines and botched up designs, has been completely stalled and expectations of an early resumption of construction have been belied.
In the wake of defaults of various nature, the structure faces the risk of even a second demolition, according to insiders. After the project was abandoned by the original owners, four nearly fully-built structures were demolished in an operation that lasted years.
Originally launched in 2009, the mixed-use project overlooking the Palm Jumeirah envisaged branded apartments, retail and leisure, commercial offices and hospitality units.
With the financial crisis taking hold on the Dubai property sector, the project straightaway ran into trouble as some of the original promoters withdrew.
After remaining in limbo for some time, the project was, however, revived with the involvement of Abu Dhabi’s Al Fahim group, in a deal credited to the current CEO Santhosh Joseph. Before the new management started work on its plans, the fully-built structure of the four towers were demolished. The new grand design incorporated four towers based around a large podium, with 1,490 apartments, seven five-star hotels including a Bellagio and an MGM, over 60 restaurants and a 1,800-seat theatre.
But despite the revival, the construction work proceeded at a snail’s pace as payment defaults marred the progress and the main contractor Habtoor Leighton Group faced serious trouble with construction milestones and payment schedules. Dubai Pearl suffered its worst setback when DIFC Investments pulled out of the project in 2011. DIFC Investments had pledged nearly a billion dollars to buy 29 floors of the east tower. But it paid only $13.6 million and declared it had no further commitments. The development put the fate of the project in the balance.
Early this year, the project seemed to have received a fresh lease of life, when a major Hong Kong property group acquired a $1.9 billion interest in the project in what was hailed as “a significant milestone” for the stalled development.
But even the new arrangement did not seem to make a difference as the construction work continued to fall behind deadlines. Gradually, work completely stopped and the authorities had to step in to see what action could be pursued, including a possible demolition.
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