'Vertical city' is a towering folly, claim Dubai critics

• Fireworks light up the 2,717-ft tall Burj Khalifa at yesterday's opening ceremony in Dubai. Picture: Getty

Rising some 2,717 feet from the desert, the tower was opened in a lavish ceremony that will see numerous records rewritten.

Home to the highest occupied floors, service lift and observation deck, the 160-floor structure also boasts the world's highest mosque and swimming pool.

But the renaming of the building from its long-standing title of Burj Dubai raises the question if history will deem it a crowning glory or a monument to folly.

In a surprise move, the tower will be known as Burj Khalifa, after Sheik Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi.

Only last month, the oil-rich capital of the United Arab Emirates stepped in with a 6 billion bail-out to help its big-spending neighbour stave off economic catastrophe.

Last night's inauguration, however, was firmly designed to rekindle the optimism that once fuelled Dubai's growth. Dubai's hereditary ruler, Sheikh Mohammed Bin Rashid Al Maktoum, unveiled a plaque at the tower's base revealing its new name, kicking off inaugural festivities that included a vast firework display, traditional Gulf Arab dance performances, and skydivers – whose parachutes were emblazoned with the colours of the UAE flag – landing near the tower's base.

Security at the ceremony was tight, with 900 police officers and 1,000 security personnel in attendance. Guests on Burj Island, meanwhile, were scanned with airport-style security machines, as a team of snipers monitored from surrounding buildings.

Mohamed Ali Alabbar, chairman of Emaar Properties, the developer behind the spire, said the design of the "vertical city" had posed unprecedented technical and logistical challenges, not least because of its height.

He said: "We have been hit with lightning twice, there was a big earthquake last year that came across from Iran, and we have had all types of wind which has hit us when we were building.

"The results have been good and I salute the designers and professionals who helped build it."

He added: "Crises come and go. We build for years to come ... We must have hope and optimism."

Analysts, however, cast doubt over whether the tower would kick-start Dubai's faltering economy. "The worry for Dubai is that the event will be remembered as a second bout of hubris," said David Butter, regional director for Middle East and North Africa at Economist Intelligence Unit.

Covered in around 26,000 glass panels, Burj Khalifa towers over the previous record holder, the Taipei 101, by nearly 1,000 feet, with its top visible from 60 miles away. It will be home to 1,044 luxury apartments, 49 floors of offices and eventually a 160-room Armani-branded hotel. Around 12,000 people are expected to live and work in the tower, which is part of a 500-acre development.

However, investors are facing losses even before the tower is completed because property prices in Dubai have slumped amid the global economic crisis.

Some apartments were selling for $2,700 per sq ft, but are now going for less than half that. Analysts say it will be difficult to lease office space.

The tower's developers said they were confident of the safety of the structure, which is more than twice the height of New York's Empire State Building.

Greg Sang, Emaar's director of projects, said the tower has "refuge floors" at 25 to 30-storey intervals that are fire-resistant and have air supplies in case of emergency.

Its reinforced concrete structure, he added, makes it stronger than steel-frame skyscrapers.