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Dubai district cooling stand-off resolved

Nakheel says Palm Utilities will not cut cooling in two developments.

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Dubai's Discovery Gardens and the Shoreline Apartments in the Palm Jumeirah will not be cut of from cooling, says Nakheel.
Dubai's Discovery Gardens and the Shoreline Apartments in the Palm Jumeirah will not be cut of from cooling, says Nakheel.

Nakheel, the Dubai World construction unit that received state cash to pay contractors and suppliers, said it had resolved a dispute with a supplier and that air conditioning wouldn’t be cut off in two of its projects.

Occupants of three buildings in the developer's high-profile Shoreline Apartments complex on Palm Jumeirah, as well as residents of Discovery Gardens, had been informed that Palm Utilities would halt chilled water supplies, stalling air conditioning systems, on June 15 as temperatures surpass 40 degrees Celsius.

"An error has been rectified,” a spokesperson for Nakheel said by e-mail. “No utilities will be cut off.”

Nakheel, whose projects include palm-shaped islands off Dubai’s coast, is restructuring US$10.5bn of financial liabilities and has asked trade creditors to wait five years to receive full payment after falling behind on its bills. The Dubai government in March pledged to pump $8bn in cash into Nakheel to help it pay contractors and suppliers and complete developments.

“Due to the building owner’s continuing failure to enter into a legally binding contract with us, we have served on the building owner a ‘Notice of Disconnection’ of chilled water supply,” Palm Utilities unit Palm District Cooling had said in posters put up in the entrance and lift of Discovery Gardens Building 107. Discovery Gardens includes more than one hundred apartment blocks.

“Chilled water supplied to this building to service the building’s air conditioning will be disconnected on Tuesday June 15 2010,” the statement added.

Dubai World, the state-owned holding company that includes Nakheel and Palm Utilities among its construction, hotel and shipping assets, reached an agreement last month with its main creditor group to restructure $23.5bn of liabilities. Terms include extending repayment dates and converting loans into equity.
 

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