Nakheel playing catch-up on Race to Dubai bills

Developer has yet to pay off debts from 2009 event, but has signed new three-year deal
Nakheel playing catch-up on Race to Dubai bills
Jumeirah Golf Estates saw work suspended on two of its four golf courses in 2009
By Shane McGinley
Wed 14 Dec 2011 09:18 AM

Indebted developer Nakheel still has outstanding bills related to the 2009 Dubai World Championship, which is hosted at the company’s Jumeirah Golf Estates course, its CEO has said.

The world’s richest golf event, which this week inked a new three-year deal with Dubai that will see its prize money increase to $8m in 2012, debuted in the Gulf emirate two years ago, at the peak of Dubai’s debt crisis.

“We are abiding by all our contractual arrangements and agreements. There may be some delay [in payments due since 2009], but they will all be honoured,” Sanjay Manchanda told a press conference in Dubai.

Nakheel received a cash injection from the government in June to restart work on Jumeirah Golf Estates. Work on two of the four golf courses stalled in 2009 after the developer was unable to meet payments to contractors.

The project was initially launched by Dubai World subsidiary LeisureCorp, whose activities were merged with Nakheel’s in June last year. The developer has since been carved out of Dubai World to become a fully government-owned entity.

Manchanda said Nakheel was pressing ahead with construction in an effort to complete Jumeirah Golf Estates, which was initially slated for handover in 2012.

“We have a number of people who are now on site and it is our commitment that the infrastructure… is completed according to plan,” he said.

A number of the completed villas overlooking the courses have experienced issues with water and electricity connections and Manchanda said this was also being addressed.

“In any contracting environment, there can be a few slips and contracts delays. For the past three years there has been no activity, but the contractors remobilised recently. We are hoping that we will get to the end of, as we say, the tunnel, and get you better facilities.”

The European Tour on Sunday confirmed the Race to Dubai’s season-ending event would remain at Jumeirah Golf Estates until at least 2014, scotching rumours of a move to Abu Dhabi.

Media reports had hinted the event would move to Abu Dhabi when Dubai’s contract ended in 2012 but tour CEO George O’Grady said the city would remain on the schedule.

The event, which is to be renamed the DP World Tour Championship from 2012, will also increase its purse from $7.5m to $8m, Grady said.

Nakheel, whose ambitious real estate plans were a key trigger of Dubai’s 2009 debt crisis, is restructuring $16.1bn of debt. The company said this week it had paid AED 7.3bn in outstanding bills to its trade creditors, under its agreement to offer repayment through 40 percent cash and 60 percent in the form of an Islamic bond, or sukuk.

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