“Excavation work on the canal continues at a rate of 100,000 cubic metres per day.

"This first phase of work will involve digging 200 million cubic metres of earth. We are preparing the surrounding land for development at an appropriate time,” says a spokesman for Limitless.

Abu Dhabi-based Tristar Transport & Contracting is the contractor.

There has been speculation that the project had been delayed or cancelled as a result of the ongoing credit crisis in Dubai.

“We are committed to the project, and while we are reviewing the pace of development in response to market conditions, we will not let this short-term crisis affect the long-term vision of Dubai," adds the spokesman.

"Arabian Canal is a long-term project to be constructed over 15 years or so, and, during that time, will inevitably be exposed to market challenges as they move up and down. We remain optimistic about the outlook for the real estate sector."

Tenders are due to be submitted on 24 December for the second phase of excavation works.

The contract will involve the excavation of about 300 million cubic metres of earth along an 8.5-kilometre section of the canal.

The second package is about 50 per cent larger than the first package and is the latest of about 10 packages that will be awarded for the excavation of the 75km waterway (MEED 18:11:08).