In March, GIH announced it was conducting a feasibility study for the scheme, which was to be built on a 1 square kilometre plot, close to the $2bn Blue City tourism development and some 100 kilometres from the capital.

The proposal included plans for medical colleges, hospitals, conference halls, hotels and shopping malls.

The project was to be developed on a build-operate-transfer basis, and the client had planned to approach international architects and consultants to participate in the scheme.

It is not clear why the plans have now been abandoned.

“The project never actually started to progress. It was an idea but it did not seem feasible,” says one source close to the project.

A GIH spokeswoman confirms the project has been dropped, but declines to offer further details.

The scheme would have been the second healthcare city project in the region. Dubai began developing Dubai Health Care City in 2002.

The construction is being carried out in phases and involves building a number of hospitals and office buildings.

The local/UK Al-Naboodah Laing O’Rourke has been awarded the AED2.1bn ($572m) contract to build a teaching hospital at the development (MEED 12:3:08).

The project is aimed at enhancing the quality of healthcare in the emirate, which hopes to persuade patients to travel to Dubai to undergo surgery.