Home to the world’s tallest building, the Burj Khalifa, Dubai is renowned for its impressive hotels and shopping centers. However 2003, a new project worth billions of dollars captured the world’s attention.
At the beginning of the 21st century, the Dubai authorities were faced with a serious problem that hampered the extensive development of the city: a shortage of coastal strip, the most attractive area for marginal development. Before the development of the artificial islands program, the city had only 80 kilometers of gross coastline, and upon completion, the conditional “first line” would have increased to 600 kilometers.
The emirate founded several archipelagos, united under the common name of the Palm Islands: Jumeirah, Jebel Ali, and Deira. In addition, the Waterfront and World Archipelagos were planned or began to be built. As a result, only the smallest of them was brought to its logical conclusion, and the rest were either abandoned halfway.
During the early 2000s, Dubai experienced a construction boom with plans to create an extensive artificial coastline. The government-owned real estate company, Nakheel Properties, spearheaded this ambitious endeavor to transform Dubai’s coastline within two decades.
The initial proposal outlined the construction of three palm-shaped islands, with Palm Deira being the largest and Palm Jumeirah effectively doubling Dubai’s coastline. In 2003, the announcement of the final project, The World, added to the grandeur of Dubai’s ambitions.
The confidence in these projects was remarkable, with the potential to become lucrative tourist attractions and diversify Dubai’s revenue streams beyond oil.
However, the realization of these ambitions faced challenges. By the end of 2006, while Palm Jumeirah’s construction progressed, Nakheel Properties ventured into additional projects, including the iconic Burj Khalifa, amid Dubai’s real estate boom.
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Despite initial progress, the global financial crisis hit Dubai’s real estate market hard, leading to the suspension of many mega-projects. The artificial islands project faced uncertainties and dwindling investor confidence.
Despite setbacks, some projects have shown promise. An Austrian construction company announced plans in 2014 to develop projects on European-themed islands within the archipelago, such as the “Heart of Europe,” reflecting ongoing efforts to revitalize the area.
When work on the Palm Jumeirah was completed in 2006, its entire territory was put under use, and the archipelago was inhabited by about 3 thousand people. This project is the smallest of the five in size, but it also brings the most money to the country’s budget, since it was the only one that was completed.
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The emirate authorities were confident that the construction of the remaining archipelagos would be completed in a couple of years, but in 2008 there was a global economic crisis that destroyed all plans. Oil exporting countries have been hit the hardest by the crisis. One of them was the UAE – at the time of the crisis, the price of oil fell from $140 to just $40 per barrel. The state had to start downsizing, investors began to leave the country, which reduced the demand for real estate in Dubai. Housing and land prices fell, and no one began to buy land on expensive archipelagos.
Those owners who invested in the development of artificial islands and bought a plots there actually lost their money. Work on the objects was far from final, and the Emirates did not have the money to complete it. The island-building company was preparing to file for bankruptcy, but the government handed it $10 billion to prevent collapse.
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It is unknown whether work on the islands will be completed to look as designed. On individual islands of the archipelagos, there are now houses and shopping centers. However, they do not recoup even a small fraction of the money invested in the construction of an ambitious project that was supposed to surprise the world once again.
