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Anything goes in n Dubai

AGENDA

The range of construction projects in Dubai - from towers to theme parks, to hotels - have one thing in common: they all stem from the country's drive to have the biggest of everything.But where is the money coming from?Tom Cullen reports

WHEN the time comes and the meek inherit the earth, one doubts they will be overly keen on Dubai.

There is nothing humble or understated about the bizarre metropolis that has sprouted up on the edge of the Arabian Desert.This haven of ostentation exists as a playground for architects and a seeming treasure chest for contractors. In a forest of one-upmanship, developers appear to be screaming out to the rest of the world 'Anything you can do, we can do bigger'.

Take, for example, the Burj Dubai - Emaar Properties' plan to build a skyscraper that will dwarf any other.

Gregg Atwood, technical director of structures at Hyder, the British consultant on the project, said: 'The project team was called in for a meeting with Emaar and we were handed a simple brief - give us the biggest tower in the world.And that's what they will get. It's basically a very tall tower, with a very tall tower stuck on the top. It won't just be the biggest, but the biggest by a distance.'

Meanwhile, off the coast of the fashionable Jumeirah beach district is The Palm, a man-made island in the shape of a palm tree, which, when completed in 2007, will be home to the biggest hotels in the world.

Property on the Palm has already been bought and sold at a huge profit before the scheme's completion, prompting developers to begin construction on The Palm 2 and pre-empt plans for The Palm 3.

A little further down the coast is The World, a massive project that involves the construction of 300 islands, which, when viewed from above, look like a map of the world. One contractor scoffed: 'Nice for an astronaut. Pointless for a holidaymaker.'

Dubai is already home to the world's only seven-star hotel, the Burj AlArab, which has an underwater restaurant that guests are taken to in a submarine.

Also on the cards is the world's biggest indoor ski-slope - a mechanical and electrical job that will see building cooling, where outside temperatures soar to 50 degrees, taken to a whole new level. And Balfour Beatty has won the contract to build the biggest shopping centre in the world - The Dubai Mall.

Dubai projects ooze eccentricity but is there a method to the madness?

Is money growing on palm trees or is it simply a desert mirage of opportunity?

Ric Nye, director for Middle East and North African International Construction at the British Consultants and Construction Bureau, said: 'The only way I can see this construction boom ending is if the Emirates oil supply runs out or if they run out of space.Now the oil isn't in short supply and they have a desert at the back door.They even build their own space if the desert doesn't suffice.'

But the Dubai building bonanza is not simply a misguided venture aimed at turning heads the world over.The Emirate has for years been synonymous with oil and gas, palm trees and desert.Not for much longer.

Mr Nye added: 'All this development is a sign of Dubai systematically diversifying its economic backdrop. It is becoming a world stage for finance and business.'

Included in this push for power is the Gate, also known as the Dubai International Finance Centre, a vast building shaped like the Arc De Triomphe in Paris. It is receiving the attention of the world's biggest banks.

But it is not just finance Dubai is giving a wake-up call to.The aim is to become a major centre for tourism.Take, for example, Dubailand: 200 million sq m of sand will be transformed into a theme park boasting 45 separate 'worlds'.

At £3.3 billion and the size of Washington DC, it will be the world's biggest and most expensive theme park.

Dubai has also set its sights on becoming the Singapore of the Middle East, a gateway to the Emirates that will see floods of people jetting in, staying, spending and moving on.

In 1988 Dubai airport received 4.3 million passengers. In 2003 that figure had reached 18 million and by 2010 60 million people are expected to pass through the terminal.

But last month rebuilding work at the airport - worth, incidentally, £2.2 billion - was hit by tragedy when five workers were killed and 27 injured when a wall collapsed.An investigation has begun and is expected to report shortly.

One contractor, which works out in the region, said: 'Safety in Dubai needs regulating or there will be more deaths - sooner rather than later.Developers cut back on costs and safety gets hit.'

Fergus Harradence, of the Middle East Unit of UK Trade and Investment, added: 'Developers will bargain right down to the last dirham. Despite the vast number of construction projects in Dubai they are not handing out money. It's shrewd and it's tough and you work to their concerns.'

Other problems exist. One subcontractor voiced concerns over his battle to get hold of cash following a project completion.He said: 'In Britain you're looking at 90 days before the money is exchanged at the end of a job. In Dubai it can take six months or over to get the figures.'

Mr Harradence explained: 'The developers are sophisticated.The longer they are holding the cash, the longer they are receiving the high interest payments available. But be assured that the cash will come. It is very rare that even oral agreements are not honoured. Reputation and trust is everything in Dubai business.'

Reputation and trust, a bizarre combination in an industry that is born on a cash supply with spurious origins.Mr Harradence added: 'The interesting thing about development in Dubai is that nobody knows, or will say, where the finances have come from. It is neighbouring Abu Dhabi rather than Dubai that has the oil and gas reserves and tax is so low in Dubai that the vast sums aren't raised from there.

'The cash comes from very wealthy Sheikhs.Because they have for many years used an unrefined banking system, tracing their investment funds to a source is nearly impossible. Cash is circulated at such a rapid pace, bouncing from project to project, that it has become, in effect, laundered.The truth is the cash has come from tainted areas, a dark region of Dubai development that is being improved under international pressure.'

Many of British construction's biggest players have offices in Dubai - Balfour Beatty, Multiplex, Laing O'Rourke and Carillion to name but a few.But the focus for these offices does not start and stop there.

The BCCB's Mr Nye said: 'Many of our members have offices out there but it's not purely for Dubai itself.The place undoubtedly is a venue for projects on its own but it is also used as a base for projects throughout the Middle East.'

The Middle East is, of course, a major source of work.Hyder's Gregg Atwood said: 'The biggest inroads by a UK contractor are being made by Ray O'Rourke, he is regularly in Dubai and has targeted it for expansion. It is a brave man who questions his business acumen.'

Still, some major firms are not salivating over the Dubai market at the moment.Mowlem business development director Darius Sarosh said: 'We are keeping an eye on Dubai and have carried out work there in the past but it is not a major focus of our progression.'

But if a firm is casting a curious eye at the Middle East, Dubai stands out as the obvious choice.The Emirate is economically stable and there is no end to its appetite and imagination. Perhaps most importantly the area is peaceful. Unrest in areas such as Iraq and Saudi Arabia only serve to underline Dubai's appeal.

Next month Dubai will play host to the 'Big 5' construction trade fair. Attended by 1,500 companies from 50 countries worldwide it is little surprise that, in true Dubai style, it is the biggest event of its kind in the world.

Mr Harradence said: 'Dubai has defied the global economic slow down in the last five years.Many thought the Dubai boom would end in 2000-01 but it didn't. It remained consistent when the US went into recession and has been unperturbed by a fall in overseas investment. Forecasting an end to the boom is pointless because Dubai is driven by a relentless ambition in many sectors to be not only the biggest, but the best.'Today's Dubai skyline, dominated by tower cranes, is testament to that.