Week of November 17, 2003
Snapshot from the Field
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$5B 'Dubailand' Rising
in Middle East
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing
DUBAI, United Arab Emirates Disneyland in the desert, you could call it. "Dubailand," though, is the chosen moniker for the massive project now rising in the Middle East.
By any name, though, it's a doozy of a development: a $5-billion plan to build an inordinately broad-ranging destination for tourism, entertainment and leisure. The project's ambitious design was recently unveiled by the government of Dubai, the United Arab Emirates (UAE) nation that's become synonymous with promoting projects of staggering size.
Sheik Mohammed bin Rashid al Maktoum, crown prince of Dubai, pointedly emphasized that pro-growth track record in announcing Dubailand.
"The biggest war that any country can engage in is that of development," he said. "Although it is a long and costly war, the number of soldiers increases instead of decreasing. So let's take part in the war of development together, and let our victims be poverty, ignorance and backwardness."
Dubai has zealously waged that war. Dubailand, however, marks a quantum leap forward in sheer size.
The completed project will span 2 billion sq. ft. (180 million sq. m.), or about 45,900 acres (18,360 hectares). That huge swath of land equals almost the entirety of all of the fully developed land thus far in Dubai, a small desert nation with a total land mass of about 960,000 acres (384,000 hectares).
Private Sector Courted for Most of $5 BillionBut for all Dubailand's dizzying dimensions, the project has the clear-eyed look of an idea that's headed for reality. Dubai's government, in fact, has already begun building the project's $700 million worth of infrastructure (which isn't part of the park's overall price tag).
But full details for Dubailand's $5-billion estimated total funding haven't been fully fleshed out. Most of the project's capital investment will likely come from the private sector, already successfully tapped for many of the nation's numerous other billion-dollar mega-projects.
"It is an initiative that strengthens the bond between the government and the private sector," Sheikh Mohammed said of Dubailand. "The government works on developing the infrastructure and providing an environment that encourages the growth of business, and gives a chance for the private sector to benefit from the large investment opportunities that it provides."
The government also suggested that it might build some of the commercial developments - including hotels, shops and various theme parks - and then lease them out to tenant companies.
Prince: 'Dubai Does Not NeedSheik Mohammed certainly wasn't shy - or modest - in sounding the call for Dubailand investors.
Investors; Investors Need Dubai'
"I would like to tell capitalists" he said, "that Dubai does not need investors; investors need Dubai. And I tell you that the risk lies not in using your money, but in letting it pile up."
Investors who bring their capital to Dubai, Sheik Mohammed continued, "can gain guaranteed returns on their investments instead of just hoarding their money in safe-boxes that will just rust and be of no use. . . . When I encourage you to invest, I am not asking you to put your money into a fire. I guarantee that your money will be invested in carefully studied projects.
"I want to be frank with you. I have the courage to take decisions and to bear the responsibility for the consequences. Do you have the courage to be frank and decisive?"
A Theme Park of Jumbo-Size ScaleDecisiveness and frankness, however, aren't the only essential traits for Dubailand investors. They'll also need the ability to think on a very broad scale.
Dubai officials, who have studied the idea for more than two years, readily admit that they were initially inspired by Disney's successful theme parks. Dubailand, though, takes theme-park scale several steps further. The design contains 45 "main projects" and 200 "sub-projects," government officials said.
The main projects will include Arabian Theme Park (an equestrian center); Aviation World; Dinosaur World; Motor Racing World; Pharaohs' Theme Park, and Snow World (an indoor ski-slope), as well as The Mall of Arabia, which project officials are billing as "the biggest shopping mall in the world." Not to mention other Dubailand components that include the largest zoo in the Middle East; a sports complex; several new five-star hotels (including one built among desert dunes); an artificial rain forest under a huge glass dome; a modern art gallery, and a water amusement park.
In short, Dubailand could be unlike anything the world's seen. "Anyone who does not attempt to change the future will stay a captive of the past," said Sheik Mohammed.
First Investors Sign on for $735 MillionDubailand has already taken one of its big future steps. The Dubai Development and Investment Authority (DDIA at www.ddia.ae), which is managing the project, has signed a contract with three prominent UAE investors - Abdul Rahim Al-Zarooni, Abdul Rahman Falaknaz and Abdul Rahman Bu Khater - to develop one of Dubailand's major elements.
The three have joined in a consortium to build the $735-million, 80-million-sq.-ft. (7.2-million-sq.-m.) Dubai Sports City. It will include a 25,000-seat multi-purpose stadium for outdoor events including soccer, rugby, and track and field. Other Sports City facilities will include an 18-hole championship golf course, a hotel, shopping malls, cinemas and stores, and a medical clinic, said Al-Zarooni, president of the Dubai-based Al-Zarooni Group.
"The announcement of this huge project after a few days from launching Dubailand . . . shows the confidence of UAE and regional investors in the local economy," said DDIA Chairman Mohammed al-Gergawi.
Dubai's Tourism ThrustUnderneath Dubailand's baroque scale lies a clear-cut goal: boosting tourism. Dubai's tourism push is part of its larger plan to derive 100 percent of its gross domestic product from non-oil sources by 2010.
Currently, Dubai's 200,000 barrels of oil per day account for only some 8 percent of its $14-billion GDP. At the same time, though, oil contributes 20 percent of GDP in Dubai's re-export trade, the emirate's largest economic sector.
Dubai currently attracts 4.8 million visitors a year, a 31-percent upsurge since 2001. But the government wants more - lots more: Its goal is to attract 15 million visitors by 2010. That would raise tourism's GDP contribution to 20 percent, an 8-percent rise from current levels.
Dubailand is a major element in Dubai's tourism thrust. The government is hoping that the theme park will draw in 200,000 visitors a day.
The emirate's tourism goals don't seem unattainable. Currently, some 70 million tourists visit the Middle East each year, while another 35 million leave the region to travel in other world areas. Significantly, the Middle East doesn't have a major theme-park attraction.
Project's 2006 End Date Gives Some PauseDubailand's projected timetable, however, has given some observers pause. The government expects to have the massive project completed and fully operational by late 2006, barely three years away.
Then again, massive developments have a way of rapidly materializing in Dubai. The host of huge fast-track projects now under way includes the $10-billion Dubai Marina, a city that will house 100,000 residents; the $3-billion Palm Island resort development on reclaimed land, and the $1.6-billion Dubai Festival City, the Middle East's largest mixed-use development.
Expansion is also in progress at the Jebel Ali Free Zone. Created by the government in 1985, the free-trade zone now houses 1,125 corporate operations that represent 72 nations.
"Anyone who looks at these projects as separate ventures," Sheik Mohammed said of the nation's many immense projects, "won't realize that they form a chain of interlinked elements that are part of a clear strategic vision."
Dubai's crown prince also used the Dubailand announcement to deliver a pro-development point to other Middle East nations.
"I have a message for the leaders of some Arab countries," he said. "I ask them to give small local investment the chance to grow by doing away with laws that discourage small projects, and I ask them to cancel taxes that go back to the Ottoman Empire. We are willing to support them with our expertise in this area."
And what of those who still doubt how far Dubai's progress can go?
"They should not look at what we have achieved," said Sheik Mohammed, "but what we will achieve."
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©2003 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.