It's been about 3 years I guess since I left Oman. And about year since I even logged on to my accounts here at Muscat Confidential. I just, well, lost interest, and being a long way away, I had so many other things to do. Meanwhile, My inbox on my email has over 6000 spam comments. Unmoderated.
So, what has the Dragon been up to this past year? Well, Ms. Dragon and I are still very happy living in a Western country, raising little dragons and living the good life. My treasure generating capabilities are being handsomely appreciated by my new employer, and the champagne cupboard is well stocked. No-one in this country is being threatened with jail for publishing articles on human sexuality or voicing opinions on a blog.
My contacts in the Oman security services reliably inform me there is no flag on my file, so I could return to the sultanate without any nasty surprises at the airport courtesy of the Blue City lads or the ministry of information. I may well do so, as we do miss the place, and it would be great to hit the beaches and see old friends again. We'll probably wait until winter though! .
Ahh, Blue City. Google it yourself, if you don't know what I'm referring to!
original cocaine fuelled description of blue city wiki entry - what a laugh!
Blue City Part 3
Blue city was poised on the brink of success back then. Before the crash. Everything was in place. The Bahrainis had arranged the finance, almost a billion dollars borrowed from the Japanese, albeit at a cost of nearly 30 million dollars to the mysterious swiss false-Oppenheimers. The 2 oman partners, one a subeditor in his dad's newspaper, the other the nephew of the ruler of the country and a governemnt minister, had a pot of money ( at that stage about 200 million they could actually get their hands on, the rest was all locked up in strange trust accounts administered by bank melon ny) that should have been enough to build around 30% of the original plan. All they had to do was sell the houses and apartments, build a marina and several hotels, and use that money to build it as they went.The real estate market was hot, and they were all going to make a killing. Billions of dollars. Snapped up by eager buyers from everywhere. They'd nabbed the land for a song via an inside deal. For less than a 100 million [on paper $85million was paid to the government for all the land, plus the partners kept about 4 hectares of prime stuff for them selves, seperate from blue city, btw. I suspect they probably bought the stuff with a post dated cheque that was paid by the loan anyhow], they had bought gorgeous, beach front land for what would later be officially appraised at over a billion dollars.
Sweet.
only one problem. As the local partners had no fucking clue about how to do a mega-real estate development with dodgy financing, design a plan that made sense and the whole legal pile of paper required to get the rating to allow stupid Japanese Bankers to invest other people's money.
so they had, right from the start a partner, who did everything except get the land. A Bahraini who was already delivering highly leveraged developments in Bahrain. To get him to arrange the deal, with no money on their part, they had had to give him majority control and ownership. The Bahraini's had 70% of the shares. So the local investors essentially locked him out, literally, by not letting him into the building. They
bought off paid the existing CEO a cool million I'm told, to hold his nose and do what he was told. They then recruited a good american real estate guy with a record in the UAE. They didnt sell many properties, because by the time they had redesigned everything, renegotiated contracts, restaffed the place, built themselves a 2 million dollar sales office, contractor camp, and were just about out of money to keep up the payments to the contractor.... the financial crisis hit. If only they hadnt delayed those crucial 2 years and pissed away all the money. Ooops. Meanwhile, before the shit hit the fan, they sued in the courts for 100% ownership of the project over some bizarre technicality, wasting more time. Upheld at first, overturned on appeal, but the case finally returned to them in the supreme court. (Wink wink. ) , And Mr Editor, with zero experience in real estate, took over operational control of Blue City. Living it up large as the genius who who build this new city. All fired up on his own marketing and ego. He was a friend of michael jackson, dont you know. And his marketing person from italy was very very high performing im told, even if her salary was 7000 rials a month. Thats about 250000 dollars a year tax free, plus expenses. As the Bahraini company had done the master plan, with south African contractors who hadn't been paid either, they could keep the plan, it wasn't grand enough and it made their legal case untenable if they kept the original plans, tainted as they were by being done by the Bahraini s. thus the new team under the guidance of the
paperboy Chairman and CEO proceeded to spend the remaining cash like no tomorrow. They did a whole new redesign, by a renowned company (Norman Foster, no less). They commissioned golf courses, travelled far and wide ( business class for the plebs, first for the principals), paid mediocre expats vast salaries, paid to win so-called awards for design and their grandious plans for a new capital. It would require vast government infrastructure investments, but hey, I'm sure one of the owners could handle that.
And Blue City, as we all said it would, went bust. The poor loss making Japanese bankers were bought out by the omani government investment fund at about 65cents in the dollar via a shell UAE company fronting the deal (more huge fees to middlemen), for the secured notes that would have enabled the bondholders to foreclose on the land. The half constructed hotels and apartment buildings are left surrounded by barren wasteland. The people who paid a deposit for apartments I presume were bailed out on the quiet by the government, and perhaps the government at least collected on the insurance and escrow funds, and nobody said anything. No front page articles in the week. All that happened is basically a couple of totally inexperienced Oman businessmen blew around 1% of the countries GDP on a megalomaniacal exploitative real estate deal that they totally screwed up due to their exceptional incompetence, greed and hubris. When they went spectacularly bankrupt, then they were rescued by the government, off the official books via the sovereign wealth fund, spending 500 million dollars to rebuy a piece of land they had owned before and had sold for 85 million. Blue city declared bankruptcy and the contractor left the country. All the expats were slowly sacked, most without what they were promised. It was a total cockup. Costing the country about a half a billion. And it was all wasted. Pissed away. By a well connected pair of amateurs who managed to borrow vast amounts under the aegis of the Royal Family, and got so gready the couldn't stand the idea of only making around 300 - 600 million for basically nothing. They had to have it all. Ah well. And nobody went to jail, because if youve got that sort of wasta, well, then the government bails you out on the sly with the public's money.
so that's alright then.
and that folks, was Blue City, part 3. Finally.
