Dubai World is reconsidering its involvement in a US$4.5 billion
(Dh16.52bn) port and property project in Malaysia because of the
economic crisis, MMC Corporation, its Malaysian partner in the
development, said on Wednesday.
The plan to build a sprawling
maritime centre, including an oil terminal, dry docks, a shipyard,
cargo-handling facilities, logistics parks and a property development
in south Johor, was first agreed to in September 2007.
The development would have occupied 912 hectares of land owned by
MMC at Tanjung Bin. MMC, a Malaysian power producer and port operator,
said no further progress had been made on its partnership with the
Dubai Government-owned conglomerate.
“As a consequence of the
economic crisis that had negatively impacted the global community
including Dubai, Dubai World is reassessing its priorities with respect
to its investment allocation,” MMC said in a statement to Bursa
Malaysia, the stock market based in Kuala Lumpur.
Comment from Dubai World was not available.
The ports and
property company announced this month it had put on hold a number of
projects until the global markets improved, including tourism projects
in Africa and elsewhere, without giving further details.
Dubai
World’s chairman, Sultan bin Sulayem, said in May the company would
complete all projects under construction but would delay any new
developments.
Dubai World
is restructuring its finances and operations before December when a
$3.52bn sukuk for its subsidiary, Nakheel, matures.
MMC had already cast doubt on the venture in May when it said Dubai World was assessing its options on the maritime master plan.
It
was the second recent major setback to Dubai investments in Malaysia
after Damac Properties, the developer, pulled out of a proposal to buy
land with UEM Land, a Malaysian company.
But Abu Dhabi has been increasing its investments in the South East Asian nation.
Sheikh
Mohammed bin Zayed, the Crown Prince of Abu Dhabi and Deputy Supreme
Commander of the UAE Armed Forces, held a meeting with the Malaysian
prime minister last month and agreed to invest $1bn in Malaysia,
according to Bernama, the Malaysian national news service.
The
funds would go into 1Malaysia Development Berhad (1MDB), a new
Malaysian sovereign wealth fund, and be invested in energy, property
and hospitality projects, Bernama reported.
Malaysia has recently announced a liberalisation of foreign investment rules to boost its economic recovery.
Mubadala
Development, the strategic investment arm of the Abu Dhabi Government,
has already invested in a project in Nusajaya, in Malyasia’s Iskandar
Development Region, to develop 642ha of land into a “modern residential
and business community, characterising the eastern culture’s heritage
and architecture, coupled with the latest technology, security systems
and world-class logistics”, Mubadala says on its website.