Dubai: Uncertainty surrounds Damac's cancellation of its Palm Springs project as master-developer Nakheel, which is building the Palm Jebel Ali where the project was initially planned, saying it was not informed of Damac's decision to cancel.

Marwan Al Qamzi, managing director of the Palm Jebel Ali, said Damac's decision came as a surprise and Nakheel learned of it through the media.

"We are very surprised by the statements made by Damac suggesting that the reasons for the cancellation of its Palm Springs project are due to revisions in the Palm Jebel Ali masterplan," said Al Qamzi. "The Palm Springs plot was relocated to a prime position due to widening of the crescent," he said.

"Our last interaction with Damac took place in February this year and was one of positive engagement. It left us with the firm view that Damac was proceeding with the project. We are extremely disappointed by this recent development," said Al Qamzi.

Al Qamzi said that the revised masterplan allowed for significant improvements in the design.

Nakheel has sold other plots of land on the crescent of Palm Jebel Ali to Damac. Al Qamzi said it was now the responsibility of Damac to ensure the delivery of any units it has sold within these plots to customers.

Revisions to the Palm Jebel Ali masterplan were communicated to investors more than ten months ago.

"From Nakheel's perspective, Damac's cancellation of the Palm Springs project must be linked to other development issues specifically related to the project," said Al Qamzi.

Damac was unavailable for comment.