Dubai World - what was built with borrowed money

Are you wondering where 60 bn borrowed by Dubai World was spent?
Here is a video that will show you the bright ideas that have been turned into real things by Dubia World.

Dubai government washes its hands of $59bn debt built up by Dubai World

The Dubai government refused to guarantee the huge debts built up by its conglomerate Dubai World, dashing investor hopes that the latest episode in the global financial crisis might be swiftly resolved.

The comments were made as the region reopened for business after the Eid holiday and local stock markets fell sharply.

Creditors, including several British banks, had been eagerly awaiting some clarification from Dubai officials since the brief announcement ahead of the long weekend on Wednesday night that Dubai World was seeking to defer repayments on its $59bn (£36bn) debt pile, but there was no comfort on offer. British banks have a $50bn exposure to the United Arab Emirates and high street names including Lloyds, HSBC and Royal Bank of Scotland have formed a creditors' committee seeking urgent meetings with Dubai officials.

In an interview on local television, the director general of Dubai's department of finance, Abdulrahman al-Saleh, appeared to suggest that investors only had themselves to blame for the unfolding crisis. "Creditors need to take part of the responsibility for their decision to lend to the companies," he said.

"They think Dubai World is part of the government, which is not correct. Dubai World was established as an independent company; it is true that the government is the owner, but given that the company has various activities and is exposed to various types of risks, the decision, since its establishment, has been that the company is not guaranteed by the [Dubai] government."

Dubai World is the largest of a handful of state-controlled companies and owns assets such as a profitable ports business that includes the former P&O, the QE2 liner, and the property firm behind some of the more outlandish developments of the last decade.

Fears that it could potentially default on its debts sparked turmoil on world markets at the end of last week and concerns that other heavily indebted states could be affected as investor confidence eroded, with much of the focus on Greece, Ukraine and the Baltic states.

The central bank of the United Arab Emirates yesterday sought to restore some calm by providing an emergency facility to shore up local banks, and foreign banks operating in the Emirates.

The International Monetary Fund today welcomed the move and said it continued to monitor the situation.

A view - Lisa Strotts

IT was a bubble waiting to burst. For all the glitz and glamour, something about Dubai made me feel distinctly uncomfortable.

When I first visited four years ago Dubai was already a good few years into its frenzy of construction.

The city seemed to me no more than a dusty building site - it screamed environmental disaster.

Everywhere luxury hotels, apartment complexes and more were being thrown up with gay abandon.

As we toured one concrete and glass monstrosity after another I questioned who would fill the thousands of hotel beds.

The scale of the construction came crashing home to me, literally, as I took a breather from a late party at the luxury One & Only Royal Mirage Hotel.

It was 3am and as I strolled down to the beach the sound of the sea was drowned out by hammering.

Guests paying thousands of pounds were trying to sleep as workers toiled away building a hotel next door.

Millions of Brits WERE enjoying holidays in Dubai - drawn by the attainable luxury promoted by hotels including the iconic sail-shaped seven-star Burj Al Arab hotel.

Scorching weather was a given, hotel standards blew traditional Med resorts out of the water - if you didn't fancy any culture or natural wonder it was a great bet.

But as time went on and tourist numbers increased the nagging feeling kept returning. Why, four years after I first saw man-made archipelago The World, was it unfinished and unsold?

Deals to hotels previously thousands of pounds a night began arriving in my inbox.Dubai was on sale.

With the credit crunch, visitor numbers plummeted.

Officially, Brit visitors are down four per cent this year - unofficially, travel experts say it is nearer 15 per cent.

The famous QE2 ocean liner retired last year by Cunard, supposed to become a floating luxury hotel, may end up on the scrap heap.

Plans for Dubai versions of four American theme parks are now on ice.

The practice of pumping salt back into the sea from desalination plants has allegedly all but destroyed aquatic life close to shore.

Apart from sunshine and expensive shops, I can't see a reason to visit Dubai and many other destinations offer that - and more.

Until Dubai offers more than just ostentatious hotels with views of cranes its troubles could get a LOT worse.

What Dubai World owns?

What Dubai World owns

DUBAI PORTS WORLD: World's fourth largest port operator whose investments include Port Of Tilbury in Essex, Southampton Container Terminals, Churchill Dock in Belgium and Port Of Djibouti in Africa.

NAKHEEL PROPERTIES: Developer of The Palm Jumeirah (including Atlantis, The Palm hotel), World Islands, Universe Islands and owns retired ocean liner QE II.

LEISURE CORP: Owns PGA European Tour venues such as Jumeirah Golf Estates and South Africa's Pearl Valley Golf Estates.

ISTITHMAR WORLD: Dubai World investment arm that owns American department store Barneys.

Dubai World spent the boom years hoovering up trophy assets around the world, including golf courses and hotels.

Their subsidiaries own everything from Barneys department store in the US to the QEII liner. These could now be sold off as Dubai's sheikhs scramble to raise cash.

The financial problems stem from a massive bubble in Dubai's housing market - and the Ј36billion debt taken on by Dubai World during their buying spree.

Dubai World Finished

Dubai World phase one is finished after 5 years of work. Now the developers can come...