Saturday, March 21, 2009

Problems at Barr Al Jissah Resort Company. Work at villa development stopped by Muscat Municipality.


Background:

A few years ago, the Oman Government developed a remote little rocky bay in Bar Al Jissah with 3 beautiful new hotels –

The mega-hotel development that many at the time thought was a reach too far was accomplished with amazing success. \\

here's the 6 star private beachy bit




The Shangri La is accessed by a coastal road that first winds past a planned extension complex of freehold apartments, villas, and a marina.


Photo: The beautiful Bar Al Jissa site, before major construction of the villas got underway. (Hotels shown above are off screen to the bottom)


While the hotel development was a great success, with occupancy rates almost immediately ranking near the top of Shangri La properties world wide.

But the later villa development part seems to be in more than a bit of trouble (run by local giant the Zubair Corporation).

A few weeks ago all work on the site has been stopped by Muscat Municipality. Developers have told purchasers the villas will be completed June 2009 (albeit a year later than originally suggested).

MM are claiming that the buildings don’t have proper building permits and are damaging the 'look' of the place as well. So, they stopped all the construction work. The architects should expect a fine. [The new head of Muscat Municipality is obviously starting to get to grips with the way things used to be done under the previous leadership, and is toughening up.]

Ooops.

It gets more interesting.

A Muscat Confidential reader from the UAE who purchased one of those Bar Al Jissah villas off-plan some time ago, tells me he has been trying for several months – unsuccessfully – to get the developer to give him some pretty basic details: eg

1. Pre-Settlement Building Inspection [UD: who does the inspection and what are their terms of reference]
2. Defect Rectification [UD: like repairing any non-specification items to contractual specification]
3. Rental Management Agreement – Shangri-la [process, contract, fees, guarantees, liabilities, etc]
4. Furniture Packages [you know, those pre-selected options for purchasers to have the buildings furnished for them for a price...)
5. Body Corporate Fees? [how much will the owners be charged to run the complex, rubbish collection charges, rights to use the hotel facilities, etc etc]
6. Handover and Settlement Process [well, duh]
7. Residency Visa [well funnily enough, apparently still a big problem, and I’ve heard it is only a residency visa, and will not be a visa valid for employment]


All reasonable questions to have in writing, I agree. Speaking personally, required BEFORE I would get into paying loads of money and signing a Sales and Purchase agreement, but then these were the days when real estate was a sure winner.

As our reader tells it, the developer has barely even acknowledged his letters/emails [see the correspondence he's sent below], and they haven't supplied answers.

He is one unimpressed international real estate investor, I can tell you! As a result, he’s shared his letters with us here Muscat Confidential.

His problems are symptomatic of similar problems across the industry in Oman. Even people who have taken possession of their villas in The Wave [the first really successful Muscat real estate development] are reported to still be on tourist visas, because the whole issue of these 'freehold residence visas' remains unresolved. These visa were promised whenever a non-Omani/Non-GCC resident bought [and paid for] a house in one of the "designated freehold developments".

In fact, our expat correspondent from the UAE goes on to say:

Big issue for Oman - Open up to FDI in the form of property, cater to high-end buyers, then treat them like imbeciles & expect that they will accept it. Real Estate globally is getting punished and one would expect that Oman would be doing all it could to assure investors in the country. Also highlights that there is no body within Oman to regulate/referee/monitor the activities on behalf of investors of all these so called "developers"…


So what? you might [rightly] ask? Well, he’s pulling together a "Purchasers Group" to get some traction on reality with his developers. Probably his only option.

a similar group "Purchasers Group" were totally responsible for getting the Muscat Hills development going after the developer tried to force off-plan purchasers to pay significantly more than the agreed contract OR ELSE. [Rumour has it that His Majesty stepped in and picked up the rest of the tab to rescue the Muscat Hills situation, after it looked like the Government and the developers were about to get embarrassingly sued in the UK over the issue.

So, bottom line seems to be that there is quite a bit of ‘sorting out’ to be done, on all of the Omani mega-real estate developments, to inject some basic professionalism. The least I’d expect when you consider the prices people have paid for these properties, and the vast amounts of Government infrastructure spending and free prime beach land that was provided [via Omran, for a piece].

Certainly, the Oman Government should realize that the sort of foreign investors who can buy these types of high-end properties are not idiots. Nor are they the sort of people to accept poor performance (like potential breaches of contracts, non-specification delivery, or ‘inshallah’ answers to key questions) without taking serious action themselves.

Whoever in the Government is in charge of this, or whoever should be, get a grip and sort these developers out.


here is our reader's letter to the Bar Al Jissah developers. How pissed off is he? See for yourself.
EMAIL 1

Dear Mr. Lakshminarayan,
I am writing to you as the official representative under the terms of the SPA with BAJRC to seek some clarification on project questions that I have been asking the Marketing Agent (PRD) to clarify on your behalf for many months.

To date I have yet to receive any information regarding the following items:
1. Pre-Settlement Building Inspection
2. Defect Rectification
3. Rental Management Agreement – Shangri-la
4. Furniture Packages
5. Body Corporate Fees
6. Handover and Settlement Process
7. Residency Visa

As the property developer responsible for delivering this project and provisioning of these services I am looking to you to advise on what is proposed.

Considering this property is due to be handed over in less than 60 days, as per your latest advice, I would expect that the above items have been resolved/agreed and are now being implemented.

Frankly I am fed up with hearing the response “the developer is working on this” from PRD after numerous requests for information on how this property is to operate.

I think we, the purchasers, have been patient enough until now for solutions to be presented - after all you have been in the process of delivering this project for over 2 years.

As you are aware we have all invested a substantial amount of money with BAJRC based on contractual obligations and representations as to the product and services that are expected to be delivered.

The above items have a very large impact on capital expenditure requirements (furniture packages), ongoing costs (body corporate), quality (defect rectification), and proposed income (rentals) and we will be incurring interest cost whilst these items are unresolved. Not to mention the additional logistics of being available for settlements, handovers, residency applications and moving house when required.

This is something that your purchasers, owners or investors, NEED to prepare for and make the appropriate arrangements to action – we are not able to drop everything at a moment’s notice for BAJRC once you finally get you act together.

I trust that you understand my concerns, concerns that are shared amongst many other purchasers, and I would appreciate a formal response from you by the 12th of January 2009.
Yours
XXXX




After no response, this was followed by

EMAIL 2

Dear Mr. Lakshminarayan,

Today is the 15th of February and as I have not received a response from you or your company, despite having confirmation of receipt of my request.

BAJRC seems to believe that it is either exempt from treating it’s customers with some basic common courtesy or is too incompetent to do so.

I have requested clearly and politely for the information on this investment without success – now I am going to introduce you to some high-level, sustained NEGATIVE PUBLICITY in the hope that it motivates you into addressing these concerns.

As a result of your non-reply, listed below is the course of action that I, and others, are now going to take.

A list of outstanding requirements from BAJRC to advise purchasers in the Barr al Jissah Residences and a copy of this email detailing BAJRCs failings to communicate to date has been compiled.

This correspondence will be sent to the following recipients as of Wednesday the 17th of February 2009 as a first step.

Request for Assistance to resolve my concerns from the following parties

1. OFFICE OF H.H. PERSONAL REPRESENTATIVE OF H.M. THE SULTAN

2. B.A.J.R.C - Khaled Mohammed Al Zubair

3. Zubair Corporation - Mohammad Al Zubair

4. Omran - Mr. Wael Al Lawati

5. Department of Tourism - Dr. Rajiha Abdul Ameer Ali

6. The Shangri-La Hotel – Arbind K Shrestha

7. The Shangri-La Hotel – Head Office - Shangri-La International Hotel Management Ltd, Hong Kong
If a response is still not achieved, the next steps will be to forward my complaint to the following parties:

Other investors to commence a Purchaser Action Group

1. Media Groups
2. Local Newspapers, Magazines & Blogs [UD: that's me]
3. Regional Papers – Gulf News, The National, 7 Days, Arabian Business,
4. International Press – Specifically UK Newspapers & Travel publications
5. Local Banks – HSBC, NBO, OAB, Bank Muscat
6. Real Estate Developers & Agents

a. The Wave
b. The Blue City
c. Muryia Developments
d. Cluttons
e. Hamptons
f. Gulf Property World

Please do not misunderstand the above as an idle threat.

I am putting BAJRC on notice that, as your customer in a very significant property investment, you have a duty of care to inform me of matters affecting my investment.

If you continue to treat me, your customer, with such ignorance and disregard as to not even bother responding to my real and clear concerns then I am determined to introduce you to the concept of a Purchaser Action Group and the affect that it can have on your businesses credibility.

40 comments:

  1. I wonder what the soon to start Bandar Jissah project will run into

    ReplyDelete
  2. Pissed off? News like these will encourage potential buyers to invest in Oman.

    Why shouldn't they? Aren't their rights protected by the wise laws of the Sultanate?

    You want to buy a property? Come to Oman! Here the Rule of Law is absolute, power is never arbitrary, and it is limited (of course) by a system of checks and balances that works just great.

    I am just wondering why these evil expats don't rush to buy properties here.

    After the bubble finally implodes, maybe?

    No, not even then.

    ReplyDelete
  3. Ding dong the king is deadMarch 22, 2009 at 1:10 PM

    Look, it's all very very simple and straightforward. Just give us ya money and er, umm... Fuck off! Why? Because we are Wasta OMANI! WE RULE!!

    ReplyDelete
  4. UD you are deliberately twisting facts:

    1. "A few years ago, the Oman Government developed a remote little rocky bay in Bar Al Jissah with 3 beautiful new hotels"

    2. "But the later villa development part seems to be in more than a bit of trouble (run by local giant the Zubair Corporation)."

    The Shangri-La Barr Al Jissah was right from the start a Zubair Corporation project. The government came in as an equity partner when banks demanded a higher equity contribution as a condition for financing the project.

    You have worded your article to make it sound as if there are two projects here: a highly successful government owned hotel, and floundering villa development owned by the Zubairs.

    With regards to the points raised by the buyer, most of them are valid. But I would like to remind you that they are not the first project to do the same. The Wave didn't allow the buyers to inspect their homes prioer to the last payment. I think The Wave also hasn't finalized the maintenance fees for that project till date. And the residency visa issue is the same for all the foreign ownership properties. It is the government that hasn't finalized the details till date.

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  5. UD- I noted, as you did, your friend from UAE threatened the BAJRC folks with going to "Local Newspapers, Magazines & Blogs" to publicize his problem. That must have them shaking in their boots- or sandals (as the case may be). Only if there is a whiff of zionist conspiracy theory will ole Shk Essa take note of it, and the rest of the press will treat it with the usual ignore-ance. Abd

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  6. Has anybody heard about the living conditions of the Indians working in the Barr al-Jisah Resort? It would be interesting to find out. They are treated almost as slaves, it seems. The salary is a misery, and the food is kept to the minimum. Outrageous.

    But you know, there is no human trafficking in Oman. Oh, no! The real outrage is the report of the US Department of State ranking Oman in tier three. Let's see if the temporary upgrading to the second one is permanent (thanks for your gift, Mr. Bush).

    I don't think it will be permanent (I hope not), as Omanis seem to be become greedier everyday. More despicable, too. Mean.. well, maybe they always were. At least the well-to-do ones. The poor ones (ohhh are there poor people in Oman?) always were a completely different story.

    Congratulations, you are on the right way to make your country more prosperous every day.

    ReplyDelete
  7. I believe the construction is being undertaken by Larsen and Toubro, an Indian company. And if you actually were to investigate, you'd find that Indian owned companies are the ones that usually treat their Indian staff the worst!

    ReplyDelete
  8. "Indian owned companies are the ones that usually treat their Indian staff the worst!"

    Motion seconded.

    It's the all too present caste system. These workers are usually Dalits. They get treated like shit because "they deserve it" in this world "but there is no caste system in India anymore".

    JD

    ReplyDelete
  9. Speaking as a fellow investor/ buyer in this Dvlp, it is certainly true that this latest turn of events is a disappointment. However, to address the positives: The Dvlp itself (I do not pretend to have knowledge of the environmental impact, negative or otherwise) is sensational. The attention to detail in respect to the buildings (so far) appears to be superb. The service / attitude provided by the Agents (PRD) has been excellent in spite of the impossible position that they now find themselves in through no fault of their own. It is common knowledge that HE Mohammed Zubair has now become involved in addressing the current situation, and his reputation is such that this crisis will be resolved sooner than later. The real test in all these situations is whether, if given the chance, one would still be a buyer of the Dvlp knowing all we now know. In my case, the answer would have to be in the affirmative. This is particularly so with all Ex Pats who think in Sterling. The Omani Rial has appreciated dramatically and as a consequence they are further ahead financially.

    Given the choice of the other Major Dvlps in Oman, the Barr Al Jissa is the jewel in the crown.

    ReplyDelete
  10. When investing in a foreign country, investors should not expect that things are arranged in the same way as in their home country. The foreign country might be much more advanced and everything might go much smoother and professional. But the foreign country might also be a less developed country with lots of work to be done. In that case, the investor should expect things to be a little harder and not that well arranged. If an investor is not prepared to deal with that, he/she would better invest elsewhere.
    In reality, most developments in this region will have similar issues, but the Barr Al Jissa indeed seems to be one of the better ones, providing real value to the buyers. Blue City and several other large developments in the region should be expected to be far less successful and, at the same time, have similar issues by the time they are nearing completion (if that ever happens).
    Finally, for people who really don't like Oman, it would be better not to be in Oman in any case, let alone as an investor.

    ReplyDelete
  11. If you have a choice, yes: it is better to leave Oman.

    ReplyDelete
  12. I would agree that for many people there will be better/nicer places in the world to live than Oman. But Oman is clearly a much better place to live and work than most other countries in this region. So leaving Oman in that sense basically implies leaving the Middle East region. And that's exactly what most expats would do if the oil (money) would dry up.

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  13. The Arabian Peninsula is just a part of the Middle East. Luckily, it is not the most representative one, as there are still quite a few Arab countries with much more human capital than you, but without the oil wealth that you undeservedly got.

    As a true Middle Eastern person would say, in Oman they speak Arab with Indian accent.

    But you are right: it is not the Omani "charm" which keeps most evil expats here.

    ReplyDelete
  14. I just have a very simple question for all the investors in all these projects:

    Where were all these questions before you bought into the development?

    Simple answer:

    GREED. All the people rushed in driven by GREED of making quick and fast money, in the process they didn't bother ask anything.

    Still lame investors take part of the blame, the government and developers have a different type of responsibility. The responsibility to put in place clear cut laws and procedures to protect both the investors & developers in the real estate sector.

    It seems that most developments were setup to do a one time deal with investors with no plan of having them as repeat customers, and that's why they just would not answer any questions or queries after you bought.

    ReplyDelete
  15. Not sure how you determine which country deserves oil wealth, or wealth related to any other natural resources. Seems like saying that somebody doesn't deserve to be born with for example a talent for music or with rich parents. One can obvioulsy be jealous and say the other doesn't deserve it, but I can't see this being very helpfull...

    ReplyDelete
  16. Al-fasd:
    "the oil wealth that you undeservedly got."

    God has given so many people (countries) many things that they never deserved, like your ability to envy.

    Please never believe that Oman and its limited oil reserves are behind your troubled life, it is you corrupt BRAIN.

    Get a LIFE. (or at least die trying)

    ReplyDelete
  17. well said T.


    When investors bought in Oman they took a risk and were waiting for a high return. Questions were not asked cause greed blinded them, or they would not be complaining now, but now that the value of their unit went down they are bitching about the whole country....

    Come on, greedy losers, You win some you lose some.... at least you will get your unit one day...

    Saying that, the gov must set laws to aovid these kind of things from happening.......

    but you can't win all the time

    ReplyDelete
  18. It is good to read this. At last we got things right, we used the right word: envy. Envy is what moves all those who critize our fantastic country and region. Envy and Zionist conspiracies. Good to know.

    Inhabitants of the Arabian Peninsula are not loved in the rest of the world because most people envy them. It just amounts to that. It is clear now. Thanks for your enlightenment.

    ReplyDelete
  19. Dear small-minded-jealous-types; of all race, color & creed,
    Please read the article again - and switch on your tiny brains. The article highlights the discrepancies between what has been represented by a developer, in contracts; prepared by good smart white folks with real degrees from real universities, and what is currently being delivered/communicated during the completion of the project.

    The people who bought here, Omani or Foreign are not stupid, poor, jealous or unreasonable (unlike some commentators on this blog) and may not be "mad greedy speculators" out to make a "quick buck" as the peanut gallery have suggested.

    What they are is consumers or investors who have bought a product, for whatever reason, happily paid the asking price for it and want/expect it to be delivered in a timely and professional manner - just like the contract says. They may even want to be communicated with during the process!!

    This is a common understanding throughout the developed world and one that it would be beholden on Oman businesses to become familiar with as the economic conditions become even more challenging and competitive.

    The fall back position for some that "this is the way it happens in Oman" or anyone who dares criticize a local company in the hope that they may improve their level of service must be derided as some sort of lunatic -is quite naive

    An other alternative is to recede back into the stone age and preoccupy your energies with petty tribal squabbles over the issue of the day.
    Oh and Mr T - I'm sure you would be elected leader of this narrow-minded stone-aged paradise. T is for Tosser isn't it?

    Other sensible discourse - many thanks

    ReplyDelete
  20. Or is it T for Twat? I thought I had already told him to keep his "opinions" to himself. Actually I have changed my mind, it is amusing me no end to see him demonstrate his lack of intellectual capacity.

    Read that one over and over while I enjoy my huge fat expat salary, that I earn contributing to this country's development, as opposed to living off my parents or others generosity.

    I am glad to say you are not representative of the great things about Oman, Mr T, only of the worst things. Enjoy your evening tonight, smoking shisha and blaming expats for your mediocrity, and do a couple of donuts in your blinged out Nissan Maxima for me.

    Arjay

    ReplyDelete
  21. And complaining about how expats are getting all the jobs, but lacking the intellectual capacity (the brains) to qualify for them. Or the will power. Lacking even the curiosity to be well informed about their country, not to speak of the rest. And if they get a job, they fail miserably.

    Or read books.. oh, I think this is asking too much from the Omanis. Do they actually read books? Some don't even read the Qur'an.

    Maybe they should be doing the manual labour?

    I think so.

    Well, it is just a question of time, how many oil booms are there left?

    Back to the camel, road safety would be much improved.

    ReplyDelete
  22. Receiving criticism is simply not something people in this region are very good at; they seem to be much better at feeling insulted and at blaming others. Should others really care?

    ReplyDelete
  23. There is a lot of unwarranted vitriol in these comments. Can we please keep it civil?

    -Omani in US

    ReplyDelete
  24. Joe the Farmer:

    Thanks for voting for me, now back to your barn. There is milking to be done.

    Looks like a McCain type of guy, another "maverick" wanna be.

    Arjay:

    I don't drink or smoke, but it seems that sniffing glue before posting here is your specialty. I thought I already told you to enjoy your last few months in Oman.

    Look, I know what you are going through right now, as I'm sure you are losing hair, gaining weight, sex drive is zero and drinking is becoming a hobby.

    Please keep your personal problems to yourself, don't ruin this blog for everyone else.

    Please stop attacking me, and lets keep it civilized ;)

    ReplyDelete
  25. Thanks Mr T for yet another demonstration of your razor sharp wit. Keep them coming, it is keeping me hugely entertained until UD gets back.
    Arjay

    ReplyDelete
  26. Actually, it is good to see how some Omanis here show their true face. It does not match what the well greased PR mechanism of Oman tries to present as the "natural" Omani "friendliness" or "hospitality", does it?

    Reality has not much to do with propaganda, and the divergence is particularly sharp in Oman.

    And, by the way, Omanis might be neutral, even sometimes polite in a very primitive way, except if money is involved. It does not matter if they already have enough. They will always want more, and they forget any idea of politeness and decent human behaviour when money is involved.

    Even the newly rich in the West would be ashamed of the behaviour of some Omanis who had access to some money just the day before yesterday. They don't even fall into the category of the newly rich.

    ReplyDelete
  27. Arjay:

    "it is keeping me hugely entertained"

    What else keeps you "hugely" entertained?? You must be super gay

    "until UD gets back."

    Wonder what you two ladies have in common to keep each other entertained???

    ReplyDelete
  28. Al-Fasad:

    I congratulate you on making no sense at all. The earth is round and your head is square, ok we got it move on.

    ReplyDelete
  29. All these negative vibes and energies. What a silly, sad waste. UD, better do something about it before it really ruins your great blog.

    ReplyDelete
  30. Censoring the postings, for instance?

    ReplyDelete
  31. I'm against censorship in any shape or form. But if comments do not relate to the subject of the article, they should be posted elsewhere. Same for comments which only seem to be part of silly brawls between obviously troubled individuals. Maybe this blog needs something like a 'recycle bin'?

    ReplyDelete
  32. Mr T says: 'Please stop attacking me, and lets keep it civilized..' The upper limit of hypocrisy. A bin would indeed be the best destination.

    ReplyDelete
  33. Hey Gang- there is a saying- "the only thing worse than being St'oo'pid is showing everyone your st'oo'pid." We have some folks in this 'comments' section who try to act cute while actually only showinging their asses. But, I am against censorship. It only take a few minutes of my time to read these comments, and I am usually taking a break when I do it, so it just gives me a chuckle. If these people don't mind the rest of us laughing at them, let them have at it.

    ReplyDelete
  34. "I'm against censorship in any shape or form. But if comments do not relate to the subject of the article, they should be posted elsewhere" "Maybe this blog needs something like a 'recycle bin'?"

    That sounds a little bit Orwellian, doesn't it?

    Reading too much local press?

    ReplyDelete
  35. I know it is bad form to respond to trolls...just haven't been able to resist.

    I'll get back into my box, but it has kept me vaguely amused!

    arjay

    ReplyDelete
  36. Arjay said it -

    DON'T FEED THE "T"ROLL!!!

    Has everyone seen this story?

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  37. The site is back open again. That didn't take long to sort out!

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  38. Larsen & Toubro (Oman) LLC (LTO) is a Joint Venture between L&T International FZE and The Muscat Trading Co. AND Muscat Trading Co. was the original name of the Zubair Corporation. So Zubair bears full responsibility for the way the workforce is treated at Barr Al Jissah. I was at the Barr Al Jissah resort every day for six months last year (work related) and witnessed the terrible conditions the Indian workforce had to endure. They were practically dying on their feet. Their salary is anything between 20 and 40 OMR per month depending on their skills. For lunch they had nothing but dal and it was very watery dal. Not a piece of meat in sight. I used to go to the staff cafeteria and try and steal as many oranges and apples as I could and then had to try and hand them out surreptitiously to try and avoid a stampede from the poor indians that were craving something more than watery dal. It was dreadful. Nothing but Slave Labour and Zubair fully exploiting them all.

    ReplyDelete

If you wish to post anonymously, please pick a nickname by selecting the Name/URL option, or at least sign off your comment with one! I will delete comments I find objectionable or needlessly inflammatory. Sorry for the word verification.... OMG the spam has gotten BAD these past 12 months... trying to avoid making one log in...