Party plans cancelled

The first developer to start building on the world map-shaped chain of islands off Dubai's coast cancelled plans to hold a New Year's Eve party there after failing to build the beach bar where it would have been held.

The event on the "Monte Carlo" island has been rescheduled for next year because of "circumstances beyond our control", Josef Kleindienst, chief executive officer of family-owned Kleindienst Group, said.

The Austrian developer was the first to begin construction on "The World" project since developer Nakheel PJSC put work on hold in 2008. Kleindienst Group bought six islands for a 3.1 billion-dirham ($1 billion) project known as The Heart of Europe, which will include vacation homes, hotels and a replica of a European city centre with air-conditioned streets. The beach bar on Monte Carlo was due to be the first property completed.

Work has been slowed by technical obstacles and higher-than-expected costs, the National reported.

Kleindienst said compaction of the soil is causing the islands to spread out and studies are being carried out on how to prevent that, the newspaper said.

The CEO said he was "disappointed" about the delay, though he takes a "pragmatic" view of the situation.

"Kleindienst Group is playing a part in writing the history of one of Dubai's most ambitious projects, and we remain committed to our development and our position as pioneers out on The World islands," he said.

- BLOOMBERG