Thursday, December 31, 2009

So that was 2009. Best wishes for 2010 readers.

The last day of the year. So, obviously, Ms Dragon and I are off to one of the many NYE parties in town. Lashings of champagne and some dancing to bring in the New Year.

A big thank you to all my contributors [you know who you are] and readers for supporting Muscat Confidential and for all those emails and comments. 2009 has been the best year yet in terms of readership, with around 17,000+ visitors a month from all over the world, and the number keeps growing.

It will be interesting to see how the coming Ministry of Manpower's nonsensical crack down on so-called 'free visa' expats works out. After all, we all know how vast numbers of Omanis are desperate to get those laboring jobs digging holes for 5 rials a day or to be part-time housemaids for 1.5 rials an hour. I'll be posting on that soon.

Meanwhile, congratulations to Muscat Confidential reader Stephen Thomas, OBE, who was just given the Order of the British Empire by her Majesty in the New Years' Honours List. He is currently CEO of Renaissance Services, Oman's home grown (and so far quite successful) international oil field services company. Many of his staff seem to like him too. So well done Stephen.

Photo: Stephen Thomas, OBE, and CEO of Renaissance Services, Oman.

Stephen started OPAL, Oman's oil and gas operators and contractors organisation, that has grown well and helped lots of Omani SMEs to become successful companies too (also thanks in no small part to the support of John Malcolm, Petroleum Development Oman's current CEO).

Order of the British Empire OBE
Stephen Rowland Thomas. Founder and former chairman of OPAL, Oman. For services to British business interests and to the community in Oman.

Tuesday, December 29, 2009

Injured Omani in Thailand motorbike accident allegedly found with drugs

Just take care on holiday kids. And say no to drugs.

Local Thai Newpaper Pattaya People reported that an Omani tourist, 31 yr old Abdul Khalil, who was injured in a motorcycle accident, was allegedly found in possession of drugs.

what a bummer. Busted up in a road accident and busted for a stash.

I'm sure he was just holding them for a friend.

Photo: Pattaya People pic of Omani tourist (and suspected drug possessor) Abdul Khalil after his motorbike accident

(Yaba, BTW, is the Thai version of methamphetamine aka crystal meth.)

Drugs Find
Pattaya police received a call from staff at the Pattaya Memorial Hospital on the evening of the 26th December that a tourist had been admitted with injuries after a motorcycle accident on Thepprasit Road. However, on searching the man’s clothing, they discovered a quantity of drugs. Police went to investigate and question the 31 year old man, Abdul Khalil from Oman about the possession of yaba, ecstasy and sleeping pills. However, the man was in a semi-conscious condition to answer. Police are now guarding the man who they believe is a drug dealer until he sufficiently recovers to give a statement about the drugs.

Sunday, December 27, 2009

Oman rescues Xmas for Canadian Navy. Ex-Galfar subsid in dock in Brunei

As you may have noticed, I'm on holiday. Wonderful!

Don't worry, back to work soon...

Galfar is had seemed to be in a spot of bother with its creditors in their Brunei based subsidiary, currently facing multiple winding up orders in the courts from creditors over some $25 million.

Post-publish--correction Dec 29 2009: Galfar have issued a press statement yesterday (as reported in the Muscat Daily) that the company named in court winding up orders in Brunei no longer has any connection with Galfar Engineering and Contracting Oman. The statement says that shares previously owned by Omani businessmen Sh. Al Araimi and Dr Haji P Mohammed Ali were sold "some time ago" to the local partner (one Haji Roney bin Haji Roslee). The Borneo Bulletin article is factually incorrect and misleading, said the statement.

Photo: Galfar subsidiary accused of not paying creditors in Brunei

Significant shareholders are were Omani businessmen Sh. Al Araimi and Dr Haji P Mohammed Ali.

Here's an excerpt from the apparently incorrect Borneo Bulletin report:
Court Records Show Company Owes $25M In Total

Bandar Seri Begawan - Brunei's biggest bankruptcy since Amedeo Corporation went on the block has been put in motion yesterday with a court action against Galfar Pembinaan & Perusahaan (B) Sdn Bhd, one of Sultanate's largest construction companies.

According to Brunei Supreme Court documents, there are 12 other companies given notice to be present at a winding up proceedings against Galfar. They are owed $25 million in total by the once star performer, court records show.

Galfar, a leading construction company in the country involved in various large government projects, is basically a joint venture between local and Oman interests.

A search of the official records reveals the local partner is Haji Roney bin Haji Roslee @ Haji Roni bin Haji Rosli who holds 900,000 shares in the company. The rest, 3,000,000, is held by Sheikh Salim Saeed Hamed Al Fannah Al Araimi and the late Mohamed Rashid Al Araimi. They hold 699,999 shares each, records show.

An Indian national who has business interests in Oman, Dr Haji P Mohammed Ali controls 700,002 shares.

The company came to Brunei from Oman well over a decade ago and soon established a name for itself but got into difficulties in recent times until it faced its current problems.


Meanwhile, the Omani's saved Xmas for the Canadian Navy when apparently we sent a mail barge to get Santa to them on time.

Photo: The Canadian Navy await Santa on tour in the Gulf of Oman

Ah, a heart warming Christmas tale, compliments of the season readers!

Sailors try to get into the Christmas spirit

The 250 sailors aboard HMCS Fredericton, currently deployed to the Gulf of Aden, celebrated Christmas several thousand kilometres from home.

Many of them weren't up to partying on Christmas Eve, but a few dozen sang Christmas carols on the exterior bridge, forgetting for a moment the distance separating them from their families.

Santa also came by with presents for each sailor.

A barge, which came from as far away as the Oman capital of Muscat, dropped off late Christmas mail.

To fix an Air Canada mistake, it took a four-day trip at sea to deliver the three tonnes of packages and presents in time for Christmas.
The operation cost at least $60,000.

Sunday, December 20, 2009

Omantel arrest people for VOIP. Worldcall proven to be an even worse investment than predicted.

I've been meaning to blog this for a while. VOIP is a big issue in Oman.

Omantel continue to pressure the Telecomms Regulatory Authority and the ROP to arrest people providing VOIP (voice over internet protocol, ie skype) services.

If you own or run an internet cafe, it is illegal in Oman to sell 'internet phone cards' or to enable people to use Skype or any other VOIP.

Oman cuffs 212 for selling VoIP calls
This year, police in the Arab nation of Oman have raided 121 internet cafes throughout the country and arrested 212 people for providing VoIP services, according to a local report.

"Around 212 accused of various Asian nationalities have been arrested since the beginning of the year [until October 26]," a senior police officer told Middle East and North Africa news outfit Menafn.

Providing telecom services without a license is illegal in Oman, and that includes VoIP. Those who violate the law stand to be fined 50,000 Omani Rial (about 130,317 US dollars) or spend two years in jail or both. The senior police officer, who requested anonymity, told Menfn that both cyber cafes and individuals had been using VoIP to provide cheap international phone service, saying this resulted in huge losses for local telecoms.

"Most arrests were made after the Directorate General of Inquirires and Criminal Investigation was tipped off about people using the internet and some technical device to sell the cheap calling cards," he said.

Omantel maintains a total monopoly on Oman's international telecommunications. NAWRAS are a retail competitor, but even they are forced under their licence agreement to get their internet and overseas access only via Omantel. Omantel have also for years been blocking access to the official skype website* and interfering with skype packets.

As a result of this monopoly power, Omantel have been milking the population of Oman for years with expensive international call rates. And now they are continuing to protect their super-tax by using the law to bust people using VOIP. These are people who are among the poorest in the country. Rich people like me (and you, if you're sensible) run Skype at home on our own computers. (Actually, I don't know if home use of skype is legal either, hmmm...)

Meanwhile, Omantel management are free to waste hundreds of millions of dollars on useless overseas acquisitions like WorldCall Pakistan. Their cash purchase of a majority stake in WorldCall Pakistan from an Omani businessman [Sheikh Sulieman Ahmed Said Al-Hoqani] in late 2007 has been a total disaster. They paid US$190 million at 25 Pakistani Rupee per share for 65% of the company, a suspiciously large premium even at the the time. Their investment has since plummeted in value (see graph).

Chart: Omantel have blown $170mln our money on a useless Pakistani company WTL.KA

The shares were trading at around 3.5 PKR per share today, about US$0.04 cents, compared to Omantel's purchase price of 25PKR, equiv then to around $0.42 cents. So they've lost around 90% of their investment - around US$170 million - plus need to inject even more cash. That is comparable to around 6 months of profits.

Last month, Arabian Business reported that Omantel need to inject another $50 mln into Worldcall, following ever building losses ever since they took over.

... Omantel, Oman's largest company by market value, is also waiting for shareholders to approve a $50 million injection into its Pakistani unit Worldcall, Mamari said. The group is still deciding whether to use equity or raise debt to finance the injection.

Omantel bought 488.8 million shares of Pakistan's Worldcall Telecom Ltd, equivalent to 65 percent of the company, in February 2008. The $193 million deal marks its biggest foreign investment so far. But Worldcall's shares have fallen sharply since.

So I guess Omantel will need to keep the ROP arresting people to stop VOIP while it continues to bleed the population for massively expensive overseas phone calls. Omanhel are also making 134 people 'voluntary redundant' to reduce costs too.

Meanwhile the money is being used to subsidise Omantel's failed business adventures overseas.

Thanks Omantel!

And thanks TRA and the Government too. Remember, Omantel is a majority Omani Government owned company. The Government clearly doesn't mind that Omantel is taxing the most vulnerable people in the country with massively inflated charges to subsidise their failed (and suspiciously expensive) overseas investments.

So thats alright then.

* A question for the lawyers: how is Omantel's blocking of Skype allowed under either WTO or US FTA rules?

Monday, December 14, 2009

Abu Dhabi relent and bail out Dubai World with yet another $10bln

The words 'piss-up' and 'brewery' come to mind. First we had the stream of official announcements this year that everything was OK, of course Dubai would meet its obligations, stop criticising us, etc. Then the reshuffle at the top levels of Dubais various semi-commercial entities, followed by the shock announcement of a debt default and that Dubai would not stand by the debts of Dubai World and Nakheel, and now... they've bought some more time.

Today Abu Dhabi relented and agreed to lend the cash-stapped ruler of Dubai yet another $10bln specifically for sorting out Nakheel's Sukuk bond (due today $3.52bln + 15% interest) which will, apparently be paid in full.

Bondholders - especially those who bought the bond in the market at steep discount earlier this year - will be very happy that Abu Dhabi finally came to the rescue. I would imagine that a lot of those bond holders actually happen to live in Abu Dhabi.

Photo: Who you gonna call Sh. Maktoum?

Dubai's Sh. Maktoum naturally talked his usual schtick about Dubai being committed to being a Global Financial Leader, 'good governance' etc etc etc. (see below) Yawn. I think even those that still think Sh. Maktoum a financial genius and visionary must get uncomfortable with the unrelenting bullshit he pumps out in direct contradiction to the facts. (Orwell would love Dubai).

Dubai has realised it at minimum needs a comprehensive corporate Bankrupcy law (although the Dubai Government are calling it a "reorganisation law") to enable creditors to at least know what the minimum rules are. A personal bankruptcy law would also be a tremendous improvement.

So in the past 12 months Maktoum has got $25bln from Abu Dhabi, probably borrowed long term at around 4%. And there will be haircuts required by some creditors no doubt. But big brother obviously was worried about the impact the sudden default announcement had caused on the wider UAE economy and their own aspirations: shares down heavily, several country's Governments complaining about Dubai's other billions in unpaid bills to their contractors [Japan, UK, Turkey, Greece, US,...], plus obvious embaressment at the GCC conference (on-going in Kuwait) with the Dubai crisis causing all the regions' Governments to experience more expensive borrowing costs and tightening credit lines. Everyone must have been asking Abu Dhabi to get a grip. As Maktoum himself said today:

...Recently, Dubai World announced that it might not be able to commercially support its obligations. Since that time, the Government of Dubai has worked closely with the Abu Dhabi Government and the UAE Central Bank addressing and assessing the impact of Dubai World on the UAE economy, banking system and investor confidence.

Dubai is now confirmed as a vassal of big brother Abu Dhabi, with Maktoum being made to learn a lesson and come to heel. Cash is king. I wonder when we'll see a merger between Etihad and Emirates...

The bailout is good news for Oman. The pressure on our own access to credit will ease, and perhaps there will be more sophistication in the market in not assuming Sovereigns will stand behind debt. Who knows, maybe Sama Dubai will even get off its arse and do something with the Yeti development.

I do wonder what's happening with the Blue City bonds... The Omanis might have noticed that defaulting on one's international obligations does not go unnoticed in the international financial community...

Extract from Statement by Sheikh Maktoum Chairman of the Dubai Supreme Fiscal Committee (published in The National)

... Today’s actions, taken together, demonstrate our strong commitment as a global financial leader to transparency, good governance, and market principles.

There will certainly be challenges periodically, just as there are challenges in other major financial centers around the globe. We believe today’s actions will best serve the interests of all stakeholders.

We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices.

Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come. The Government of Dubai remains committed to its high standards and its obligations. We are confident in our economic model, and we are confident in the long-term health and outlook for our economy.

The actions taken today are consistent with our market development, and we believe they are the actions that will best serve the interests of all stakeholders.

Sunday, December 13, 2009

ROP seek investigation of speeding fines corruption allegation, and threatens whistle blowing reporter with prosecution

Ah, rain. Excellent. The trees are now cleaned of over a years' worth of dust, and it was a beautiful day in Muscat. Surface flooding was pretty mild and the rain was a welcome break from the unrelenting blue sky and sunshine.

Meanwhile, I've been meaning to post about the strange case of the ROP Speeding fines corruption allegation.

An article in one of Oman's Arabic newspapers last week accused some members of the Royal Oman Police, aka the ROP, of falsifying the assignment of speeding fines by transferring the fines in the computer system from those that did the crime to innocent drivers, enabling the errant speeders to avoid paying.

Wow, that's ground breaking stuff for an Omani newspaper, especially an Arabic one.

In response, the head of the ROP, Inspector General of Police and Customs, Lieutenant General Malik bin Sulaiman Al Ma’amari, issued a rare public statement published in both Arabic and English newspapers in Oman and in the UAE papers too, saying this would be investigated and that it was a threat to public trust in the ROP. (see below for the statement).

But in a much more interesting development, a local arabic blogger has published what appears to be an official instruction on letterhead from the Inspector General himself.

The leaked ROP documents from local blogger

The letter is to his head of public prosecutions, instructing him to:
(a) investigate the claim, and to follow the law if anyone is found to have done the illegal fine trannsfers (no matter how far it goes), and
(b) that they will be granted full access to the ROP computer systems to establish what happened.

in addition
(c) that the report has impuned the public reputation of the ROP, and that the reporter who made the claim is to be interrogated by Public Prospectutions to name his sources for the story, and if he either refuses to provide those sources or if the report is determined to be untrue, to seek prosectution against the reporter for bringing the ROP into disrepute. [Note: any readers with a more precise and professional English translation of the leaked documents would be welcomed!]

Now, bringing the reporter in for questioning is reasonable I suppose. Reporters have been jailed even in the USA for refusing to name sources under obstruction of justice charges.

But many have interpreted the leaked document as a threat to all journalists with the offense of defaming the ROP again mentioned. It brings up (again) the infamous Telecommunication Act Article 61(3) that makes it a criminal offense (punishable by jail time and/or fines) to publish anything "contrary to public order and common morals". It has also been deemed illegal by the courts to criticise in print Government officials under (again, criminal not civil) general anti-defamation laws.

However, I'd note on the positive side that if the instruction from I.G. Al Ma’amari implies that the reporter will only be punished if the report is untrue, that would be an improved interpretation on the current law. At present, the laws against disturbing 'public order', 'common morals', 'insulting' individuals (even if dead)and protecting Government officials from criticism do not really describe a defense against these broad and ill-defined offenses. In most countries a solid defense against charges of defamation is to show that the statements were true. This is NOT the case (as far as I'm aware - BlueChi?) under Omani law.

So, admitting that the reporter was OK to publish the story if the charges against the ROP are found to be true would be a big improvement!

It will be interesting to see where this story goes.

Published press Statement following the allegations of ROP corruption
Muscat: Inspector General of Police and Customs, Lieutenant General Malik Bin Sulaiman Al Ma’amari, has promised serious action against errant police officers, if they are found guilty.

“I cannot confirm or deny the case in which traffic policemen were accused of transferring violations from a person’s register to another motorist’s,” Al Ma’amari told Arabic daily Al Shabiba in response to reports in [the] Arabic daily about the alleged violations committed by police personnel.

Lt. Gen.Al Ma’amari said it was a serious issue as the trust of citizens and residents in the police apparatus was at stake.
“We are determined to severely deal with any personnel, if the incident is proved true,” he said.

He, however, said that it is up to the concerned courts to declare who is innocent and who is not, adding that some police personnel who were involved in violations and detained earlier have been duly punished as per the law.

He added “We have some cases of violations by personnel under investigation by the Public Prosecution”.


Wednesday, December 9, 2009

Gone in 60 seconds. British Gas 4x4 stolen from Al Sharooj car wash

A contact forwarded me the incident report below, sent out by British Gas Oman.

Someone pretty brazen simply walzed into the Al Sharooj car wash last month, paid the cleaning charges, and drove off in a nice new Toyota Land Cruiser belonging to British Gas.

Photo: Al Sharooj car wash in Shatti - a good place to pick up a cheap 4x4!

What a cheek! I wonder where the poor car ended up?

So, take care folks. There have also been reports of people driving off in cars left with the engine running outside service station convenience stores too.

Reports that the thief was Angelina Joli are mistaken

Report from British Gas Oman: Vehicle Theft from Al Sarooj Car Wash Facility nr. BG Oman Office

BG Oman Toyota Land Cruiser No. 9912 RY was being prepared for issue to newly arrived BG staff member. Following a mechanical service the previous week, the vehicle was delivered to a local garage/car valeting facility in close proximity to the office at 11.00hrs on Saturday 21st November and the keys were left with the car as has been the normal practice.

At 16.30hrs the same day, the BG staff member went to collect the vehicle but was told it was not ready, so he decided to leave the vehicle for completion overnight.
At 07.00hrs on Sunday 22nd November, the BG staff member returned to the facility, but was told that it had already been collected. Following phone calls to other BG Oman Admin staff, it was ascertained that no one from BG Oman had taken the vehicle and the theft was reported to the Royal Oman Police (ROP) at 11.00hrs the same day.

From initial discussions with the ‘night-shift’ personnel at the car wash facility, it appears that upon completion of the cleaning, a third party arrived and, claiming to be the owner, paid for the cleaning and was given the keys to the car.

ROP have taken statements from BG Oman staff and are now interviewing the relevant car wash staff. The investigation is ongoing.

Oh Dear.

Monday, December 7, 2009

BBC Radio investigate the 1970 coup of Sultan Qaboos

A fascinating radio show broadcast on BBC Radio 4 on Nov 24th, goes into the history of the successful coup of Sultan Qaboos and the role of the British in assisting the Sultan in his efforts.

You can hear the broadcast here.

For the first time, previously secret UK Government documents have been obtained that demonstrate the extent to which Britain played an active role in the planning of the coup, and in preparing to support the Sultan had his initial attempt failed. The British also clearly assisted Sultan Qaboos in communicating his plans with those Omani supporters outside his place of house arrest in Salalah.

Of course, His Majesty's initial attempt at taking over the country did not fail, thank goodness, and no 'contingency plans' were required to be activated. According to the BBC, these contingency plans involved the seconded British Officers who at the time ran the Sultan's Armed Forces[SAF] at the time,. essentially switching the army to support Qaboos, even though in effect they would have been betraying their official leader, HM's father.

Interesting too that the BBC is of course funded by the UK Government. Such is the power of a free press that they are empowered to do a piece like this and publish it...

HM comes out of the investigation with total honour and full legitimacy. His coup was widely seen within Oman, as well as by the British as a very positive thing for pretty much everybody (well, except the Russian/Chinese supported insurgent troups in the south).

And as a westerner living in Oman for some time, its nice to know that the Brits were fully prepared to back the Sultan right from the start. Because he is an exceptional leader.

Sunday, December 6, 2009

Dubai in Denial over debt problems - how unusual

No local news of real note as we all struggle to clear our inboxes after the 9 day public holiday.

I was disappointed that Essa, in his typically insightful and hard-hitting anti-Zionist-state opinion piece in the Times of Oman this week, failed to even mention the meeting Omani Officials had with the Israeli Foreign Ministry chaps (well publicised by the Israelis). Ah well. Our guys were probably just being polite.

But Dubai continues to play out in the news cycle. Those committed to Dubai, not surprisingly, are whining about how unfair the world/western media are portraying their situation.

I thought the article in The New Yorker summed it up quite nicely.

The rejection of the criticism, and the style of the reaction and rejection, is typical of the regional attitude to criticism. First response is abject denial, followed by defensive attacks that it's all someone else's fault (typically USA, "The West", Israel, UK, et al), and that it's all anyhow a great thing and that it's much worse somewhere - anywhere - else.


For the record:
- yes, Dubai has some core businesses that are real [Jebel Ali, Shipping, Emirates, tourism, regional logistics, and misc other stuff] and unfortunately their real value is no-where near enough to cover or even service the debt.
- Dubai is still better than most places in the region as a place to live if you have a bit of cash and skills & ambition. Especially if your only other options are Mumbai, Tehran, or Cairo.
- Abu Dhabi has more than enough cash (even now) to bail out Dubai 5 times over.
- The rest of the Dubai economy is mostly hype and foolishness: creating islands of sand in a place full of sand and empty land; Building an artificial winter ski resort in the desert; importing all your consumables (food, clothes, cars, whiteware, electronics, gas...), importing everything else too (money, talent, real workers) and desalinating all your water; the whole Ponzi scheme of the real estate boom, and the huge inverted pyramid that was based upon it - all the real estate sellers, marketers, bumpf publishers, shwag makers, and the restaurants and bars and schools and shopping centres they all spent their money in.
- and it was all based on limitless underpaid workers, willing to come to Dubai to scrape a living 24/7 slaving for the Emirati because even that hell was 1000% better than what they had or were ever going to get in India/Pakistan/Afganistan/Bangladesh...

As we now know, that money was (and still is) pretty much all borrowed, borrowed in the hope that by the time the bust came (if ever) everything would have reached a self fulfilling virtuous circle and enough real value creation and loose money attraction would have been accomplished to pay the interest rates.

And I have precious little sympathy for those who lent it to them. They should have known better. And while it flowed (for the money was not really theirs either, but borrowed from depositors) they too got their commissions and business class and expenses and big bonuses.

And when the vast river of cheap borrowed cash was flowing, everybody else stuck an oar in too, from the ruling family on down. The graft was (and is) everywhere. After all, there was enough money for everybody! Yeehah! Party!!! (hey maybe everyone was just snorting coke all the time...)

And stupid things got built, too many stupid things. A lot of the infrastructure and buildings are also not of the highest international standards, as it was pretty much all built by poor manual labour from the sub-continent. Slap-dash, no standards or enforcement, all bog-it and leg-it.

But I still love a lot of what is Dubai, just to visit: the Dubai 7s, the bars, the nice bits (if you have cash), the glamour, the girls, the pace, the pure self induced hedonistic hallucination of it all.

But talk about a bad case of denial.

Posted by Ian Parker
When I was in Reykjavik this time last year, Icelandic reaction to the the country’s economic disaster was mixed—grief, fury, a kind of giddiness—but nobody was pretending that nothing had happened. Last Wednesday, Dubai asked to be excused six months of payments on a debt of fifty-nine billion dollars owned by Dubai World, the state-backed conglomerate. Yesterday, Dubai’s stocks fell 7.3 per cent; today they fell another 5.6 per cent. And the Gulf News, an English-language Dubai newspaper, has reported this online with the headline: “UAE markets bounce back at the end of trading sessions.” Another story, quoting Sheikh Mohammad bin Rashid al-Maktoum, Dubai’s leader, is headed: “World lacks understanding of Dubai debt crisis.”

Only Icelanders were embarrassed by Iceland’s financial collapse. In Dubai, something more than national pride is at stake, and one wonders how far disappointment could stiffen into denial. (Yesterday, the Times quoted from an online forum in Dubai where someone had written: “Dubai is a victim of media distortion” and “All the Western countries have ganged up on Dubai. Why? Because it has succeeded.”) In the summer of 2005, while reporting a piece on development in Dubai, I met Sultan Ahmed bin Sulayem, chairman of Dubai World, in his office on the forty-seventh floor of the Emirates Office Tower, in a room whose carpet featured a recurring pattern of palm trees, a theme repeated in the fronds of artificial reefs, packed with villas, extending from the coastline below the window—one of his projects. He said,

Dubai broke a myth in the region. People say you cannot do this here. It can only happen in the Far East, it can only happen in Europe, it can happen in America. We cannot do it, it’s not something for the Middle East. But the way we broke that myth? We said, no, we can do anything we want. And now it gives a lot of courage to neighbors in the region, whereby they say, if Dubai can do it, we can do it.
Dubai’s reaction even to unpromising ideas, he said, was “to see how big we can make them.” At that time, one could detect a rumble of anxiety, as the city’s indoor ski-slope neared completion; you could hear a little “Glengarry” urgency in the pitches made by real estate agents in the malls. Today, Dubai may owe more than eighty billion dollars.

Thursday, December 3, 2009

How can an Expat hire a maid in Oman?

A question for my readers: assistance required!

How can a newly arrived Expat legally hire a nanny or housemaid? What if they are in the wilds of say Nizwa or Ibra?

What's the best way to go about it?

In my experience, the company or employer usually takes care of it, as I think only an Omani or a company can be a sponsor of an expat maid, and I've never heard of an Omani maid. But what are the options?

Monday, November 30, 2009

Oman to set up new unit to develop water and energy strategy

Ahhh, don't you love Eid + National Day? A whole week off work and the weather's perfect. One of the reasons Oman is a nice place to live.

The Ministry of National Economy is forming a new high powered analysis unit to study the economics of the nation's water and energy provision, and to develop a national strategy for energy [aka subsidised and increasingly unreliable electricity], fuel [ever increasing cost of subsidising petrol and diesel] and desalination/dams.

Perhaps a highly experienced expat leading such a team can stop this madness of building a $1bln coal fired power station in the middle of nowhere running on imported coal...

Oman continues to plan a coal fired power station in Duqm even though Oman has no useful coal deposits to run it

Oman needs to do a lot more to:
- stop subsidising electricity
- encourage electricity efficiency (double glazing and insulation?)
- stop subsidising petrol
- stop wasting water
- develop solar electricity
- reduce requirements for more and more desalination

The current incentives and subsidies present a huge distortion in pricing compared to true costs and therefore not only allow too much waste of natural gas. The subsidising of power and gas acts to discourage any real private investment in power generation and infrastructure, or in additional gas production and alternative energy.

In other news,

Oman cracks down on hard working poor foreigners
Oman's fabulous Ministry of Manpower is cracking down on... poor subcontinent workers who have a visa with one employer but actually work on building sites for others. Oman changed the law to supposedly allow the employers to be fined, but naturally its the poor workers who are paying the price. The reported increases in the suicides of such unfortunates will only increase as a result. Once again a cheap and ill-thought out law is being used to try and fix a deep-seated problem by diktat. The claim by Salim Bin Saeed Al Badi, a DG with the Ministry, that as a result more Omani will be employed working on building sites is pure delusional fantasy that might sound good in the comfort of an air-conditioned Ministry tea-room but has precious little to do with the reality of the labour market.

Meanwhile, speaking of delusional fantasies, Dubai has still to resolve the Dubai World debt problem and the world wide panic it started last Wednesday. Markets have woken up to the fear of a second global meltdown as the debts in Dubai Inc, and the related CDS derivatives, are suspected of having the potential to become the new sub-prime crisis triggering more liquidy freeze. Royal Bank of Scotland, for example, appear to have more than $2bln in exposure to financial genius Sh. Maktoum's various money pits, and HSBC are reported to have loaned him almost $16bln. LMAOFOFL.

Thursday, November 26, 2009

Dubai ruler bounces a $3.5bln cheque, but probably will avoid the jail time...

After Dubai got its hands on another $5bln loan from Abu Dhabi controlled banks, international investors had assumed that the money would be in part used to repay the huge debts coming due from Nakheel, the real estate development arm of Dubai World. Many were speculating on Nakheel debt earlier this year, as it was selling for 65cents in the dollar while a payout would bring in $1.15. Easy money, it seemed according to the National, as in seemed inconceivable that Abu Dhabi or MAktoum would allow such a default.

Oops. Wrong.

Dubai World instead announced a further restructuring (ie sacking people, more loans, selling assets and and pulling back on projects) and that it was 'asking' Nakheel and Dubai World bond holders to wait for their money until May next year, even though it is due in December. The announcement [thanks for the link Muscato! LOL] has sent CDS rates for Dubai and the entire region sharply higher and seriously blown what little remaining confidence was left in Dubai being willing and able to meet its obligations. The $10bln Dubai previously borrowed from the UAE Central Bank [=Abu Dhabi] is already gone it seems.

If the Nakheel bond is not repaid in December as promised by Dubai's leaders, it will be a default, despite the spin being put on it by Dubai's press.

Ironic then that the Dubai based Gulf News at the same time are still showing a neat little video from July by local lawyer Hassan Arab on how the UAE courts view bounced cheque suspects, helpfully explaining the legal implications in Dubai of a bounced check in the Emirate:

Any bounced cheque .. is a crime.. As per Penal Code 401, the punishment for a bounced cheque is either a fine of a minimum of 1000 dhirams [~US$250] or a period of 1 month to 3 years in prison'

Dubai has suffered from exteremely poor legislation dealing with bankruptcy and insolvency, with no possibility under the law for personal bankruptcy. This is what prompted many expats to flee their debts over the past 9 months, as it is treated as a crime in true Victorian style. Defaulting on a Sukuk bond is essentially the same as bouncing a cheque, except ... er... well... its different. Bouncing cheques is what ordinary people do, while restructuring and defaulting debts is what big insolvent corporations do.

But what's good for the expats of Dubai is, of course, not something the rulers of Dubai feel applies to them. So the likely Nakheel default will not be leading Sh. Maktoum to see the inside of a Dubai prison, a fate many expats have suffered despite their losses being insignificant compared to defaulting on a $3.52bln loan. Nakheel has another $3.6bln loan coming due in May next year too, on top of various other syndicated loans.

The suggestion of a default sent entire European stock markets down around 3% in a day, as the ramifications of Dubai failing to pay its debts would impact the world financial system.

Welcome to Dubai folks, where everything is just peachy! Please bring cash. The cheque's in the mail, by the way.

Photo: Hogarth's depiction of a Georgian debtors prison.

Tuesday, November 24, 2009

Dubai starts to pay the piper - heads rolling

In a great tip off from JustCurious, this story in the FT a couple of days ago about the recent replacement of the head of Dubai International Financial Center.

The story* describes, in perhaps as direct a way as could be possible given Simon is based in the UAE, the fallout in the upper levels of Dubai Inc. management following the impact of the recession there.

Dubai have grown increasingly touchy over any negative press as their real estate lead boom, aka Never Never land bubble of hype, was pricked by the liquidity crisis, and their HUGE debts were exposed. The laws recently passed their make it difficult to differentiate fair criticism of whats going on in Dubai or Abu Dhabi from illegality, especially because the whole thing is fundamentally based on confidence that this massive bet the Maktoum family has made will actually be sustainable and pay off. It right now, is very much a confidence .... situation.

Anyone who - even (or especially) with some justification - questions the bets being made, or the economics, or the debt problems, or the resulting governmental and administrative problems, or those crazy insane artificial islands, or the treatment of expatriots or women, or the nature of the financial relationships within the ruling elite of the UAE, can be accused of being an economic traitor to the bubble economy.

For example. Ownership of the Dubai airline Emirates was 'transferred' in Dec 2008 from the Government of Dubai to the Investment Corporation of Dubai (ICD). Rumours have abounded since the big $20bln bond issue that big brother Abu Dhabi (perhaps via the UAE National bank) took an effective 51%-78%-100% (you pick) mortgage, along with other collateral, for underwriting the loan to [not illegal to say in Oman, but in Dubai) technically insolvent Dubai [in hock for ~$85 bln(?) and nowadays a net oil and gas importer remember].

But publically, far as I can tell, the Maktoum family owns it, personally. And of course a handshake agreement, or even the right sort of glance, would probably be enough, if you're Abu Dhabi's ruling family. (Abu Dhabi strill pumps about 2mln barrels a day. Nice. That F1 circuit cost probably less than a week's production). There also seems to be a correlation between Abu Dhabi's control on Dubai's money and increased repression within Dubai of 'loose morality' i.e. scantily dressed Expats and consumption of alcohol...

Photo: from - Made for Dubai?

I'm afraid I was never a fan of the Dubai business model even before the crash, but I'll admit I do enjoy the restaurants and pubs. Meantime, Abu Dhabi have little choice but to support Dubai with their huge SWF and the still robust oil revenues.

As for those readers within the bubble of Dubai, who buy the Maktoum claim that everything's OK, should note that before Abu Dhabi kicked in the $10bln, the market prices for Dubai's Credit Default Swaps*** (a sort of insurance against a loan to Dubai going bad) exceeded those for famously insolvent Iceland, reaching 1,175 'basis points' earlier this year, equivalent to having to pay 11.75% per annum for a 5 year default insurance on Dubai Inc's Sovereign debt...

Dubai ousts financial chief over debt troubles
By Simeon Kerr in Dubai
Published: November 20 2009 20:38 | Last updated: November 20 2009 20:38

Dubai has removed the high-profile governor of the Dubai International Financial Center as a political power struggle caused by the emirate’s financial troubles continues to build.

Omar bin Sulaiman, governor of the centre since 2004, has been replaced by Ahmed al Tayer, a former finance minister. He is chairman of Emirates NBD, Dubai’s largest bank, and a member of one of the merchant families that helped build the foundations of the emirate’s economy.

The US-educated Mr bin Sulaiman appears to be the latest victim of Dubai politics as the emirate seeks to redress the excesses of the supercharged growth from 2003 to 2008 that created an $80bn debt pile and a burst real estate bubble. The ruler’s court, the traditional root of the sheikh’s power base, has assumed increasing powers, including controlling a $20bn (€13.4bn, £12bn) fund that will support cash-strapped state-linked businesses.

The ruler on Thursday also reshuffled the board of the Investment Corporation of Dubai, a government company overseeing the government’s stakes in commercial companies such as Emirates airline.

The ICD board reshuffle has removed three of his lieutenants: Mohammed Gergawi, head of Dubai Holding; Sultan bin Sulayem, head of Dubai World; and Mohammed Alabbar, chairman of Emaar Properties, the government-linked real estate giant.

This triumvirate was instrumental in Dubai’s transition from a regional trading centre to global business hub over the past decade.

The replacement of Mr bin Sulaiman with an old school government official from an established Dubai merchant family could be another signal of a back-to- basics policy.

“This is all about projecting a more conservative image to the bankers, to show that Dubai will be more careful in the future,” said one observer.

Dubai is trying to renegotiate billions of dollars of debt with bankers while also raising the finance needed to meet other obligations, such as the $4bn that becomes due in mid- December on an Islamic bond issued by Nakheel, the government-owned developer that built the city’s Palm Islands.

An anti-corruption campaign against executives who abused their positions of power for personal gain during the real estate boom has recently stepped up a gear.

The authorities are now said to be investigating the bonus culture and real estate holdings of many executives at the state- linked companies that helped propel Dubai to global prominence during the boom.

Yet some local observers are also scratching their heads at the arbitrary nature of the reshuffles, with some executives responsible for ballooning debts and bad investments apparently escaping retribution.

* I've ripped the online segment below (get a blogger option FT!) because, as JC pointed out, its just so nice to be able to run a story on the UAE that is not being reported in the UAE. Bad Dragon, sorry FT and Simon. Please do and register online with the Financial Times immediately readers!

** Credit default swaps, or CDS, are contracts in which a buyer pays a series of payments to a seller, and in exchange receives the right to a payoff if a credit instrument goes into default, or on the occurrence of a specified credit event, for example bankruptcy or restructuring. One basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. An increase signals a deterioration in the perception of credit quality.

Monday, November 23, 2009

UN Follow-up Part 1. Questions about the real Oman

OK Team, as a follow up to the earlier post, here are some more specific questions from the UN researchers, asking about how they could aid Oman.

Photo [from Google Earth]: Oman from space. How can the UN best help the people of this place?

Can you help answer their questions? Is there any data on these issues, or others, available on line? Where can one find out about mentally handicapped children in Oman? Are there any women's shelters? Etc. I think the focus should be on collecting facts and data (or the absence of same) in these key areas.

On reflection, perhaps the first think the team could offer is an independent report into such things, where data collection is the focus...

Dear Dragon,


Concerning the traditional fisheries, are there any plans being made that you know of to revive the fish-population?
- What happens to handicapped children in the small villages and with the Bedouin nomads? Are they being ignored?
- What is the main Omani attitude concerning education? Is there any [need] for [of] compulsory education for the Bedouin people?

Friday, November 20, 2009

UN Research Questions: Where does Oman need assistance/aid?

OK team. You think you know where Oman has problems? Or where it doesn't?

You can help prioritise the international research being done right now into where Oman could do with some assistance meeting the UN Millennium Goals.

Here's the email from the UN sponsored team:

Dear Sir / Madam,

We are students of Avans University in Breda (Netherlands) and we started a new project recently aiming to aid the world where necessary. Every project group has been assigned to a country that has been put on an urgency list by the UN in the year 2000. We are going to work on this project as a group for the next two months.

After a week filled with research, expositions and documentaries we arrived at the point where we need to contact people who know all about Oman. We are aware of the fact that Oman is a country with many contradictions in prosperity and culture. The image shown by the media is predominantly positive but the grade of prosperity is not equal in all parts of the country.

The given millennium goals are very general. Eventually the ultimate goal is to fight poverty worldwide and to make sure the promises of the millennium goals are kept. Concluding, we are looking for issues the Omani people face, no matter how small. The millennium goals include eliminating hunger, diseases and child mortality and stimulating equal rights, good education, a sustainable environment and fare trade.

Our question to you is, which problems in Oman deserve special attention?

If you are not able to answer our questions, but you know someone who could possibly do, please send us an email how we can get in touch with that person. All information is welcome!

Thanks for your help,

The UN Millennium Goals

Now, I figured you could help. So, comments please. You can help Oman and the UN.

Meanwhile, here's my reply:


Oman is in pretty reasonable shape overall, given its history and low income.

Off the top of my head, they need help with:
- imminent collapse of many of their traditional fisheries, due to over-fishing and mis-management
- care of special needs children (huge genetic problems caused by in breeding, combined with cultural avoiding of such children)
- education about, & access to, genetic councilling (see above)
- access to basic hygiene and health care information in remote areas, especially nomadic Bedouin,and far off villages
- greater availability of micro-finance schemes
- family planning clinics
- women's shelters (I'm not sure that Oman has any)
- foreign workers rights and treatment
- sex worker rights and treatment
- a poor education curriculum based on rote learning and the principal that no one fails or really needs to study too hard.

and so on. But unless you get some data its all pretty anecdotal.

I'll post your inquiry on Muscat Confidential and see what my readers can add, but in truth the question would be best asked in Arabic on one of the many Omani forums.


Thursday, November 19, 2009

Ask an Omani - Arranged Marriages

Yes readers, its time for another edition of our popular 'Ask an Omani' segment. This week, arranged marriage.

Do you think its OK to have your marriage totally arranged? How big a % of Omani marriages do you think are effectively arranged?

Arranged Marriages?

In general, an arranged marriage in Oman (mostly towns around Muscat) is not as bad as it sounds. When the guy proposes to a girl (whether it's because he saw her and liked her, or his female relatives suggested her to him), he gets to see her before the engagement. They see each other and talk. Many end up texting or calling each other.

During this time (which can take a week or months), both of them have the opportunity to decide whether they want to be together or not. However, there are two types of arranged marriages. One is a fake-arranged marriage, and the other is, well, an arranged marriage. The fake one is where the two have a secret relationship, but keep their parents out of it. This way the father will "always" be proud that he married his daughter off in a pure arranged marriage!

Think of it like this: in the West, some of you have moms and dads that like to introduce suitable partners (like match-making). Some of you hate it, and others don’t mind it! It's the same idea, but we have protocol to follow or else….gossip!

I think these two types of arranged marriages are acceptable, and they usually are successful. However, I do not think it is "suitable" anymore to have a pure arranged marriage where the two never see or talk to each other until their wedding night. I know many girls that struggle, and I think that it has a lesser success rate. This type of arranged marriages is mostly common in Northern and Southern parts of Oman

Thanks Dreamer!

And readers, don't forget to email your questions to undercover(dot)dragon(at)gmail(dot)com

Tuesday, November 17, 2009

A pure diversion: One of the Dragon's true heros


I offer a fascinating diversion for you, especially if you're doing what I often do, which is surf one's many blogs, websites, feeds, facebooks, skypes, emails, forums, ...

Plus, follow up on your various posts and threads and family and friends on all of the above, google searches, wikis,...

Don't forget on-line banking, e-government, direct feed TV and radio, and videos, and tring to find cool images...

and your flights on expedia/kayak

Holiday/rental car/hotel/trips sites...And just walk away from the Crackberry and the Twitter kids.

I know. I should be grateful you even got this far. And I am. But do us both a favour, take a moment to listen to this guy. For what it's worth, here is one of the Dragon's heros. A physicist called Richard Feynmen.

Enjoy. (He got a Nobel prize for Quantum Electrodynamics and also helped build the bomb). He was an really amazing human.

I would love to know his opinion of the Bahla zombies... Listen to him here, but preferably follow the links on youtube to his many other interviews.

Any thoughts - leave a comment.

Monday, November 16, 2009

Oh dear... UAE reinforces Oman's reputation for Voodoo... But zombie numbers under control in Bahla, thanks to ROP

As one travels through the GCC, it is not unusual occasionally for the locals to comment, when hearing where you live, 'Oh, Oman, that's voodoo country'.

No, really. They do. ((if you don't believe me, check out Muscat-based blogger Suburban on the same issue)

It's a side effect of the East African fear that Oman represents, combined with a much older and deeper pre-Islamic culture being long established in Oman compared to the 100% 'desert states' of the Gulf. For the many many thousands of years Oman has been populated, pagan rituals were common, like everywhere I guess. (and there are still tales of jijn told today when exploring in the amazing wadis of Oman, fair enough).

That is pretty much rubbish today, obviously. But the downside of a freer press in the UAE means they are not above a poke at old Oman, their country cousins. See the report in The National.

Good news in the report though.

According to the super reliable local ex-tour guide Mr Suroor (hint: Age 82), the number of zombies in Bahla is well down in the past few years, what with modern developments reducing the number of local farms (a big natural habitat for Omani zombies, nats)...

No, really.

Mr Suroor said that some of the isolated farms behind the barren, jagged mountains nearby were turned into slave labour camps. Some of them were people who had disappeared from their homes in mysterious circumstances and turned into zombies to work as slaves in the remote farms. With fewer farms and more modern houses being built in their place, the number of zombie workers has been on the decline in the last 20 years, thanks also to police efforts and a change of attitude in the new generation of the local people, he added.

Saleh, come on. You can do better. Where's the Michael Jackson tie in? Halloween? At least get a photo of the zombies man! Now THAT would be a story! Or ask the local police if they can share their zombie busting secrets with the rest of us. I had meetings with several today, for example.

Maybe there is scope for a GCC National Enquirer after all. But I expected better from The National's editors.

Photo: Bahla Farm workers: According to The National.

The National: World News: Oman:

The healing benefits of a witch’s brew
Saleh al Shaibany, Foreign Correspondent

BAHLA // The ancient fort, built before the dawn of Islam, stands vigilant in the middle of the modern part of Bahla, a town famed for its witchcraft and whose reputation extends to the rest of the Gulf and as far as Oman’s former colonies in east Africa.

Wealthy families from the region travel regularly to Bahla seeking witch doctors’ counselling for their problems, which can range from divorce to inheritance.

According to local tradition, the origin of witchcraft in Bahla started with the murder of a local dignitary who was killed by villagers for practising wizardry in the town about 1,400 years ago. The fort was later built on top of his grave to prevent his followers from turning it into a shrine. His spirit then started to appear in the town and it was reported later that he was tutoring youngsters in wizardry at the citadel’s courtyard in the dead of night.

“I am not sure about the story but I know for a fact that people from different parts of the country come here to seek consultations with witch doctors,” Hamood Suroor, the 82-year-old retired guard of the fort, said.

“It ranges from people wanting revenge, pay rises, casting and the removal of evil spells and money matters.”

Mr Suroor said local witch doctors were average people you could see around Bahla’s streets and included traders in the markets, farmers and even civil servants.

“They are also your everyday people and known to all but they possess special powers. They talk to the spirits to get the answers they are looking for in order to cast their spells,” Mr Suroor said.

The witch doctor Khalfan Ismail, 52, was asked to remove an evil spirit from a 26-year old woman that had been preventing her from getting married. Before the ritual could take place, Mr Ismail wanted a pregnant black goat to be slaughtered in the courtyard of his house and the carcass to be offered as a sacrifice to the friendly spirits.

After the slaughter, the woman, clad in black from head to toe, was escorted by her parents into a semi-dark consultation chamber at the back of Mr Ismail’s house. A thick grey smoke from an incense burner floated to the ceiling, creating a screen that divided the room. The woman and her parents walked through the smoke screen to enter the other side of the chamber.

Mr Ismail, sitting on the floor in a corner of the chamber, dropped chunks of frankincense into the incense burner. He mumbled incoherent words as the woman sat down opposite him, flanked by her parents. Seconds later, she dropped her head, her chin touching her chest and began to rock sideways. First gently, but then the movement of her upper body gathered speed as the mumbling from the witch doctor grew louder. Less than a minute later, a single beastly growl coming from the woman was followed by bouts of gasps. The woman sprang to her feet and almost immediately collapsed on the floor in a heap, too quick for her parents to cushion the fall.

The woman was still gasping as she lay down. The witch doctor left the chamber taking the incense burner with him. He came back to open the curtains and let in the sunlight. He assured her parents that the evil spirit had already departed their daughter’s body. She would also find a suitor soon to marry her now that she was free from the shackles of the devil. He explained later the significance of the smoke screen that divided the room. The possessed woman needed to enter the “safe zone” to force the spirit out.

What method had Mr Ismail used to remove the spirit?

“I made contact with the friendly spirits to remove the bad one. The mumbling was part of the ritual to seek their help. The growl was the pain of the bad spirit as he was leaving her body. Of course, it does not always work. The friendly spirits may not co-operate. It also depends on the skills of the witch doctor,” he said.

Mr Suroor said that some of the isolated farms behind the barren, jagged mountains nearby were turned into slave labour camps. Some of them were people who had disappeared from their homes in mysterious circumstances and turned into zombies to work as slaves in the remote farms. With fewer farms and more modern houses being built in their place, the number of zombie workers has been on the decline in the last 20 years, thanks also to police efforts and a change of attitude in the new generation of the local people, he added.

“Witch doctors are still much sought after in Bahla for people who want a shortcut in life. We have wealthy businessmen from the Gulf coming here to take revenge on their competition by casting spells on them or men who want to marry women who rejected them,” Mr Suroor said.

Some of the old demands may be on the decline, like ordering the death of an enemy through spiritual power, but requests of love potions, business prosperity and office promotions are on the rise. These lesser demands keep witch doctors in business in Bahla.

Witch doctors are paid nominal fees for their services, ranging from a mere 20 rials to 100 rials (Dh191 to Dh955) a session. Mr Suroor said that it was the respect and attention that witch doctors receive that keeps them practising, not wealth. Some of them are wealthy in their own right, from the private businesses they run.

“You can still see loose spirits wandering aimlessly in and out of the Bahla Fort, even now, during the night. You can tell that they are no ordinary people because they have no shadows,” Salim Ghailan, a post office worker said.

Mr Ghailan said normally people did not go close to the fort in the night but his car had suffered a puncture and he had been forced to stop within a hundred metres from the old citadel.

Sunday, November 15, 2009

Update: Air crashes (not), crashing defeats, and crashes avoided

Ah, the week that was.

Can you actually get TWO feet in your mouth? Yes! Just ask Oman Air and The Wave!
Local bloggers Muscat Mutterer and Jet Driver covered the debacle that was the EXERCISE EXERCISE EXERCISE Wave Airplane Crash, complete with:
- actual panicked residents of the Wave (no notice given except a flyer dropped hours before),
- simulated condolence statements posted on the actual Oman Air active website,
- burning tires,
- real traffic jams, etc

For some bizarre reason even the numbers of passengers and crew couldn't even be made to add up in the pre-prepared scenario used for the accident. And someone actually phoned in to report the hallucination of seeing an actual plane crash. EXERCISE EXERCISE EXERCISE

Lessons to be learnt all round, no doubt. Next time chaps, while the Army are excellent at shooting things, logistics, and getting things done (like setting fire to and extinguishing burning things), maybe think about subcontracting the whole "PR and Project planning" side?

JD's photoshop jest summed it all up really. I have to report it again here, it's so good.

Perhaps a great opportunity for the Blue City to point out how very far away from an airport they are... or maybe not.

Meanwhile, ....
Oman's football team manage to snatch defeat from the jaws of victory. This is the life. And someone in the crowd threw a firecracker. Ooooh. As my ol' gran would say "its all good fun until someone loses an eye!!!"

Speaking of planes plummeting into Integrated Tourist Development sites built at the end of new runways for our main airport, the earlier story of the catastrophic shut down of Muscat's entire Air Traffic Control system, that happened mid day October 6th. There's been ome typical stuff being discussed on the fascinating forum for all things airborne PPRuNe where had I mentioned the shut down in a back room dedicated to, of all things, Muscat Air Traffic Control (I'd point interested readers to the comment "shit happens" made purportedly by an Omani ATC).

Black Hawk Down:
mabrook(cong) as if there is no any faults world wide but in Muscat
what are you digging for my friend,yes Muscat is a system which isnt 100% perfect?!?! and i guess all systems around the world arent either
spit it out?what happened that day was the first time ever.and i tell you we are 99%radar in Muscat and i guess the 1% happened that day so tuff luck to all,at least we never(at least since i joined) fired anyone because of see it a dominos effect else where(like next door) everyone blames who is below him for faliures,but we dont here in Muscat we support each other.


well st does happen doesnt it?

Love that safety attitude! (there's more. Dragon haters will love it)

UPDATE: I have it on good authority (multiple sources) that the only air traffic controller mentioned in the earlier links on Muscat Confidential - Australian C.M - did a sterling job (unlike the suggestion of a UAE ATC commenter). Further facts to come, as now the story's out many involved are talking openly about it. But it sure happened.

The problems however - and they are legion - are at last under investigation by those accountable and on high. The tender for the new ATC radar and control system went out months ago anyhow. As I've always insisted the problem was first and foremost a systematic and pre-existing one, and not really down to individual ATCs (except perhaps the likes of Black Hawk Down). The Muscat ATCs in general - I'm sure - all did their level best to keep everyone up there at the time alive, and they succeeded, thankfully.

Friday, November 6, 2009

Trouble in Paradise. Bar Al Jissa resort villa purhasers unhappy with Oman's premier development.

Imagine you're in business. You have customers who are well educated, rich, mainly foreign, and who have just spent sums in the order of US$1.4 million each with you. Customers who should be providing you a steady source of solid follow-on money as you provide the services they will require to look after what they have already bought.

If you're in any business, no-one should like it when such customers are dissatisfied, complaining, sometimes looking to offload your product, and contemplating legal action.

But this is certainly what's happening in Oman's premier ITD Development to date: Barr Al Jissah Residence, run by the mega-giant Zubair family oligopoly. Several customers have joined forces and retained local legal council, forming PAG, an 'owners action group', to try and get the various property managers to deliver what they promised.

The response from those responsible for the development, e.g.:
Zubair Enterprises (the ultimate owner/promoter),
PRD International (sales),
Imagine Design Consultants (design),
Larson and Touboro (construction),
Turners (project managers),
Strata Global (property management)
Juthoor (strategic construction and real estate consultant & Furnishing)

are demonstrably unsuccessful as I write (and here I define success as satisfying customers whilst making money for the company and owners).

Aside: I'm not sure how much Sh. Zubair himself actually knows about this project and what is happening below deck, but if you're reading this and you know his email, why not send him the link. Personally, I think a lot of the problem is that the honorable Sh. Zubair is simply being kept in the dark.

The long running issue at the development, between purchasers and developers, is exposing the underlying problems Oman faces when stepping up to do business in a truly international market. It's a different ballgame, meeting the grade when not protected by soft Government contracts and regulations, your internal intra-company-family dealings, or being able to strong-arm local and powerless SME companies.

I've been told some of the works performed were unnecessary from an strictly engineering POV (like some of the vast walls built for the purposes of 'retaining' solid rock), but that these things were still done to maintain all the 'side commissions', backhanders, and various quantities of profits and contractual mark-ups being taken. Classic snouts in the trough. I'm reliably informed of a senior, experienced North American expat talent, brought in specially for the project, was summarily sent home this year after just a few months service when he kept raising such issues. They had disagreements over the provisions of his employment contract for payments due following such termination too.

I've also been told by clearly delusional sources that its all a symptom, a side-effect not normally discussed in public, of 'The Indian Mafia', whoever they are, with everything being done primarily on a mutual back scratching basis for the benefit of the middle and senior management layer, rather than for the benefit of the business or its customers. Who would have imagined? Patently Ridiculous.

The on-going management fees are rather high too, at more than double the Wave development(more snouts in the trough?). The quote people have been given to furnish a villa to make it suitable for rental is a rather shocking 40,000 rials! That's US$100k to furnish a rental apartment!

The many, many photos I've been sent of a recent inspection by a purchaser show the type of poor completion standard achieved to date (and still late). Its shocking. Especially when you remember this is for a semi-detached 'villa' that cost over $1.4 million dollars. Pools unfenced from huge cliffs. Cracked walls badly covered over. Cheap plastic doors. Minimal landscaping. Botched cupboard installations, missing skylights, mismatched and cheap tiling, ... IE, general Gulf spec built to exacting 'Indian labourer standard'.

Quote: "Landscaping to include established plantings befitting a multi-million dollar 5 star resort - not "dead twigs" and "1 dying palm tree"

You probably are living in a classic example of such standards as you read this, if you live in the GCC. Shoddy electrics and plumbing built by people with little experience of either, roofs that leak when it rains, bodges and poor quality workmanship everywhere. But then you or your landlord didn't just buy the property for huge money at promised international prestige specification and luxury finish, hmmm?

Photo: The original marketing pitch for BAJR


Times are hard, and these days people willing to pay for far flung 5 star developments with expensive running costs are hard to find. There are plenty of places in the world where one can spend a cool $million ++ and get a GREAT place to live and/or vacation. There is a lot of competition. As a result, developments with problems building things to standard, furniture rip offs, unprofessional management and non-communication, situated in a country in the scary Middle East where it is too f**kin hot to sit outside 4 months of the year are clearly in need of upping their game.

Not that such problems are stopping the typical PR crap being pumped out to the media by BAJR management. See Zawya press release.

26 October 2009
MUSCAT -- The prestigious Barr Al Jissah luxury residential development project is nearly complete and soon 71 luxury townhouses and villas will be handed over to their new owners. This marks the successful launch of Oman's first integrated tourism complex (ITC) project. This was revealed here yesterday at press conference addressed by Ziyad al Zubair, Director, The Zubair CorporationThe Zubair Corporation, Jose Lora, CEO, Juthoor Real Estate, and Arbind K Shrestha, General Manager, Shangri-La Hotel, Resort.

Speaking to the Oman Observer, Ziyad al Zubair said foreigners own about 50 per cent of the 71 houses while the remaining 50 per cent belong to citizens and residents of Oman. Arbind K Shrestha said the project has been completed in spite of difficult economic climate. The Barr Al Jissah Residence, comprising 71 luxury town houses and villas in a unique luxury real estate development, is one of the first ITC developments in Oman that offered real estate for sale to expatriates as well as Omani nationals. The development has three areas the Dusk Townhouse, Dawn Townhouse and Pearl Villa areas within the Shangri-La Hotel Resort and Spa offering breathtaking views of the Omani horizon.

And don't forget those breath taking views of electrical substations and air conditioning plants...

Or the fact that so far not a single villa has been handed over, despite being more than a year late. The reason the development has gone as far as it has is that the buildings all sold out well before the peak of the real estate bubble. Everyone got in way too deep to pull out by the time the crash happened - owners, Zubair, Shangri La.

For your entertainment, here's the latest email I was sent from the Owners group PAG to the developers. Talk about problems with customer satisfaction...

I suspect there's more to come on this story!

---------- Forwarded message ----------
From: DH
Date: Thu, Oct 29, 2009 at 2:16 PM
Subject: Fwd: Solution to Complete BAJ
To: "HAL" , "WD"
Cc: RO , RB

Below are my thoughts, as a purchaser, PAG rep and Developer in how to potentially address things going forward.

As discussed with H last night at length, I am happy to focus on the solutions and put the past nonsense behind us but this requires real engagement, solutions and action on longstanding, critical issues.

My thoughts:
1. The Developer needs to appoint a decision maker(s) who can address issues, make decisions, instruct owners & consultants in order to get things moving. Could be up to a $$$ limit before referral to a Director or Board. Each decision seems to take forever, by which time things escalate and compound making the decision redundant. The decision maker(s) need to understand the issues, be a good communicator, not have vested interests, and able to act fair and reasonably for both the developer and the owners. This could be task shared with clear delineation and coordination between the 2 decision makers.

a. Construction/Building Completion – XX is a prime candidate to coordinate the re-inspections with owners, instruct Juthoor/Turner/L&T/Atkins/etc on what needs to be done. He is also the best person to navigate the Ministries for approvals and coordinate the “Settlement Checklist” being an Omani, Property Experience and knowing the project history.

b. Documentation, Services Agreements, Titles, Management Agreements – XX - has shown to be fair & reasonable, knowledgeable and diligent. With authority from BAJRC he could quite quickly and professionally collate, check, change & instruct other consultants to do what is required to get this project finished.

2. Focus on the issues and not on the people raising the issues. Attack the problems not the people. Buyers who have invested such large amounts of money in these homes are naturally going to be concerned for the outcome. Each person will act differently – some will coast along and accept anything in good faith, while others due to personal, professional, experience and cultural reasons – expect 5 star service along with 5 star prices. Each customer is different and will need to be handled individually, however, the level of service/finish/completion/etc will need to be consistent across the project to avoid further conflict down the road. This is part of having Customers and is the burden of the Developer to get right – that’s why they make a profit – or not. It is a very universal concept and one to get right when dealing with an international clientele such as BAJ Owners.

3. Address the MAJOR issue and communicate directly – answers the questions, provide the solutions. Avoiding issues will not solve them, it just makes them worse. Selectively answering the “easy questions” doesn’t work either. With focused attention, decisions, clear instruction, agreed timeframes and effective communication – most of the major concerns at BAJ could be resolved quite quickly.

a. Defects & rectification – If lists have been submitted – address the list. Agree what is or is not going to be rectified and advise owners. Then go fix it. Then arrange for a re-inspection where expectations can be met or exceeded- not disappointed due to mismatched expectations. Agree alternatives, solutions, concessions with buyers as required. Document and communicate so both parties are on the same page.

b. Settlement – address the checklist, what needs to be done, by who, how long will it take. When do you think it will all be complete. Will rentals be able to commence -if not, how can this be resolved? Advise the owners so they can get themselves and their money organized. Do a practice run with the lawyers/banks/ministries/developers/agents/whoever to make sure it is all possible. Avoid the disappointment of further screwing people about.

c. Service Charges- this is unacceptable in the current form. It is not going to go away. Strata Global either need to re-price ASAP or be replaced. There are alternatives if required. The Owners will not be railroaded into excessive fees as it impacts the value of their properties – this is a fact. It needs to be recognized and resolved as no-one in the PAG will be paying these fees at settlement to avoid SG disappearing with the money upon termination. O/A formation also affects insurances.

d. Documentation – This needs to be wrapped up - Title plans, Easements/Right-of-way, Services Scope of works from Body Corp manager (S.G or replacement), Rules & regs, Hotel Access Fee issue, Hotel Management Agreement, Hotel revenue forecasts, Marina berths, etc

e. Furniture package- This proposal is unacceptably overpriced. This is a view shared by all interested members of the PAG and therefore makes the Shangri-la Management unattractive. The Furniture package will be a flop in its current form and this issue needs to be addressed. It is not going away either. Like the service charge fees, the only people who are arguing for the furniture package are not buying it! This hasn’t worked, will not work and Juthoor/Shangri-la need to revise the offer to meet the customers’ expectations. The alternative is for both the furniture and the Hotel scheme both to be a flop.

f. Visas, Import – Thankfully this appears to be gaining tractions and support from Juthoor and the Developer in doing what is necessary to assist the owners.

g. Agency for Re-Sales – Absolutely nothing has been done on this by Juthoor/Developer/external agents since the arrival of Juthoor 6 months ago. There are owners who want to sell. There are commissions to be made. Why isn’t something being done to allow agents onsite, a display villa even, a photo shoot, some marketing onsite. Again - help your customers - make money from it even. Do something or invite other agents to sell/lease if Juthoor is not interested/able.

h. Communicate –What happened to the newsletter? 1 issue then gone. What about a bi-weekly email update-"we are doing this, that, and a photo" . All general info to reassure owners that it is all still happening. Most are not in Muscat as you know and lack of information breeds concern and discontent.

I am happy to assist with issues and advice if required to get this wrapped up. I am also happy to endorse initiatives outwards to the PAG members and advise them that they need to engage with the Developer to resolve their individual purchases.
Many are probably sitting on the sidelines and observing the carnage that has occurred quite publicly and want to stay out of harms way. If we have some good news and quick wins that can be broadcast from the PAG it will help to turn the mood and assist the re-engagement with customers.