Dubai has finally decided the fate of the Queen Elizabeth 2, the 45-year-old ocean liner it bought during the peak of the economic boom five years ago and which has been lying idle in the emirate's Port Rashid ever since.
The ship's owner Istithmar World, which reportedly considered selling the ocean liner on several occasions to raise money during the financial crisis, announced plans to renovate and convert the ship into a 300-room hotel.
The state-owned company said work will take 18 months, after which the QE2 floating hotel will be permanently docked in Dubai, the Wall Street Journal reported.
"The ship is in immaculate condition," Istithmar World chairman Sultan bin Sulayem said at a news conference to announce the plans for the ship.
"It's going to enhance the tourism sector in Dubai," Sulayem added.
Istithmar refused to comment on how the project will be financed or how much it will cost.
Sulayem would only say that funds "will be there" to pay for the conversion and for a broader redevelopment of Port Rashid, which is the destination for cruise ships docking in Dubai.
The plan follows years of speculation about the future of the QE2, which Istithmar bought in 2007 for 100 million dollars from Cunard, a subsidiary of cruise giant Carnival Corp.
Istithmar originally intended to make it into a floating hotel stationed at a berth on the trunk of the Palm Jumeirah, one of Dubai's palm-shaped artificial islands.
The financial crisis intervened, however, and Istithmar was reportedly considering a sale numerous times to raise cash.
One plan that failed to materialize was moving it to South Africa to serve as a floating hotel for the 2010 World Cup.
Last year, Istithmar was said to be considering a plan to make the QE2 into temporary housing for Japanese tsunami victims and then send it to Macau for conversion into a floating casino.
On Monday, Sulayem denied that the QE2 was ever offered for sale, although he said Istithmar had been approached with several proposals.
"We never offered it for sale.
"There were people coming to us with numbers, [saying] let's sell it, let's do that," he said.
Istithmar is a subsidiary of Dubai World, the government-owned company which completed a 25-billion-dollar debt restructuring last year that included provisions for asset sales to pay off debt.
The new plans for the QE2 "will not affect financial commitments to the banks," Sulayem said.
According to Sulayem, the ship's historic character is to be preserved as it undergoes the conversion.
The 300 rooms are to be spruced up but not significantly changed; the renovation work principally involves fixing corroded and leaking pipes and connecting the boat to land-based water and electricity supplies.