The Dutch dredging and marine contractor has signed the Dh16 billion contract with the local Nakheel company, which is developing the residential and tourist islands in the shape of palm trees, the official WAM agency said.

The new Palm, Deira, is to be 18km long, 9km wide and its surface will measure 4000 hectares.

Building the project will involve shifting one billion cubic metres of sand and 40 million tonnes of rock, the Rotterdam-based firm said in a statement.

Construction frenzy

Van Oord has been operating in Dubai since 2001 and helped build Palm Jumeirah, south of Dubai, a Palm shaped island that was the first of the ambitious coastal projects.

It is currently putting in place The World, an archipelago of reclaimed islands that form the map of the world and the Deira Corniche, situated at the base of the new Palm Deira, the company added.

Affluent Dubai, a member of the seven-strong United Arab Emirates federation, is in the midst of a construction frenzy, with resorts, malls and residential complexes sprouting across its desert sands and even in the sea.

The emirate aims to establish itself as the Gulf's business and leisure hub. About one million people live in Dubai, the majority of whom are foreigners. Dubai welcomed 5.4 million visitors last year and aims to attract 15 million visitors a year by 2010.