Plans have been put on hold for the proposed $1 billion Real Madrid-themed resort in Ras al-Khaimah, the United Arab Emirates. There had been indications from Ras Al Khaimah Investment Authority (RAKIA) in June that the plan would face setbacks due to a lack of financial resources. The resort was expected to include a 450-room hotel, marina, yacht club, museum, amusement park and 10,000-seat stadium on 50 hectares of land. Though the project had been announced in March 2012, little progress had been made since.
The resort expected to be constructed on Marjan Island, a man-made island 65 miles of Dubai. However, the land for the resort had not been purchased and the resort’s location may shift to Abu Dhabi according to Michael Hernandez, the developer of the project, in an interview with Reuters. The initial plans set the construction completion date as January 2015.
Given the proclaimed interest last year from individuals, private institutions and financial institutions, it is most interesting that a lack of funding for the project is being cited as the reason for the delays.
RAKIA is not a genuine sovereign wealth fund backed by substantial revenues and serves an austerity program to keep Ras Al Khaimah’s borrowing costs under control. A spokesperson for RAKIA cited harsh economic times as the cause. Ras Al Khaimah was banking on promised funds from France and Luxembourg. Ras Al Khaimah was unable to put any funds into the project because the sheikhdom has been engaged since 2010 in a program to reduce its 5 billion AED debts.
The foundation stone for the project was laid on March 29, 2012 in Ras al-Khaimah, the initial location of the resort. President Florentino Pérez, the Emir of Ras al-Khaimah Sheikh Saud bin Saqr al Qasimi, RAK Marjan Island Football CEO Louis Armand de Rouge, RAKIA CEO Khater Massaad, Real Madrid Board Member Nicolas Martin-Sanz, Director General Jose Angel Sanchez, Director of Institutional Relations Emilio Butragueño and Assistant Coach and Sporting Director Zinedine Zidane were present at the presentation event.
When unveiling the plans for the island at in March 2012, Real Madrid president Florentino Perez said:
This is a decisive and strategic step that will enhance the strength of this institution in the Middle East and Asia, a key region in which the passion for this club has been apparent.
It has been more than 18 months since the initial announcement and the project likely will not be completed until early 2016 under the current progress.