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.

More on the Air Traffic Control meltdown. Near misses common events in Oman

Well, as the manhunt continues within the Ministry and Muscat ATC for the sources of Muscat Confidential's latest story on Oman's sorry state of Air Traffic Control, a few other people have also come forward with ... both 100% confirmation of what happened, and additional details of both the flying blind event in October and in general. [You know who you are - thank you]

A near miss or Airprox event happened when the Oman Air VIP flight was showing off the new Airbus to HE the Minister and various important people. While cruising comfortably along in the custody of Oman Air Traffic Control, a sudden high acceleration evasive maneuver was taken by the pilots to avoid a mid-air collision situation, causing the VIPs to almost spill their champagne, and hardly unnoticed by those on board.

It was also not the only near miss.

Photo: Near misses due to Oman ATC errors are routinely covered up, say our sources

We await Muscat Daily's follow-up report* on such a worrying problem and the civil service cover-up, a situation potentially impacting not just the safety of all those who fly through or over Oman, but also the reputation of the whole country wrt tourism and business.

Here are some key questions they could simply ask the appropriate Government Authorities:
- for how long was Oman without an effective ATC system in October 2009?
- what were the real reasons for the Minister's Oman Air flight having to take evasive action?
- how many near miss events happened when the ATC system was down?
- what are the qualifications of the Senior System engineer responsible for the ATC system, and why was a junior engineer allowed access to the master passwords?
- Why is the senior engineer still in his job after such a blatant breach of standard operating procedures (SOPs)?
- who is responsible for ensuring near miss events are properly reported and that international standards are adhered to? IS the non-reporting of near miss events part of Oman ATC Standard Procedures?
- what is the actual back up system if there is a catastrophic failure of the only radar thingy, or of the main computer system (say by flood or fire)?

Interested parties might also want to see if the recommendations made in the independent review by top-notch international Swedish Consultants have been addressed or even shared with those accountable for the safety of Oman's ATC system? (Hint: Mr Minister, or even Council of Ministers - Ask to see an unedited version of the comprehensive Swedavia report. If the findings themselves don't scare you, the clear attempt to hide the report from the powers that be should perhaps be of even greater concern...)

I found it rather ironic that coincidentally, on 13-15th October, the Ministry of Transport and Communication was hosting the Trans-Oman conference "the Sultanate’s first comprehensive event providing access to cutting-edge solutions, services and infrastructure especially designed for the transport, shipping, aviation and logistics industry!" I'd LMAO if I didn't fly so often.

TRANSOMAN is not just an exhibition. It is a forum to discuss industry issues; discover the latest trends; connect and do business with various suppliers and service providers in the air, road, rail, shipping, customs, cargo and logistics businesses, connecting Oman, the rest of the region and beyond.

* or lets face it, any of Oman's media. This is a big story. Perhaps our friends in the UAE would be more willing and able to follow up this? A few phone calls is all it would take, plus interviews with the UAE or Indian ATCs who of course had to be informed that Oman airspace was temporarily unable to accept new planes for a while.

Sunday, November 1, 2009

Flying Blind: Oman's Air Traffic Control system error

I fly a lot. So do many of you, I know.

Perhaps you might be interested in a recent report I received over a beer from a good contact in the US Military, who is sometimes passing through here. His news was confirmed with a nod and a wink by my contact in the relevant Ministry, so I thought I'd share. It's also doing the rounds of the regular aircrews by now too.

In early October, Oman's entire Air Traffic Control system, covering the whole damn country, went down for several hours, due to human error and sloppy procedures when operating the underlying IT system. The back-up system failed too. All the poor controllers had left were radio communications with the planes and basic radar, which just gives blips on the screen and no data like call sign, aircraft type or even airspeed - vital data for the way aircraft are controlled in our airspace.

In fact, it seems that for a while it's likely that Oman's air traffic controllers were basically 'flying blind', without even the basic radar.


Photo: Oman Air Traffic controllers have apparently had several near-misses this year, aka 'airprox events'

The event is being followed up by the appropriate authorities, of course, but because no aircraft actually crashed, and this being Oman, it's being hushed up somewhat. Afterall, it was all OK in the end. Yani!! Mafi mushkala!! (or perhaps Hakuna Mattata?)

International airlines have responded to the incident by unofficially suspending the ban on in-flight smoking while in Oman airspace. An unofficial spokeman for one airline, who declined to be named, said:

"We figured, what the hell. After all, it could be our last chance for a bloody cigarette, so everyone can now just go for it. The crew won't say anything until we're safely outside Omani airspace."

Now, joking aside, air traffic controllers - even ours - do train for such situations. And the planes themselves also have a basic Traffic alert and Collision Avoidance System or TCAS (thank's to the International Civil Aviation Organization, after a few mid-air collisions in the 70s and 80s).

And I have every confidence things will improve after lessons have been learnt...


I also see that there wasn't a report (yet) made to the Aviation Safety Reporting System (a voluntary international confidential near miss reporting website run by NASA) either. Tsk tsk.

One for the Muscat Daily to follow-up on? I'd love to read an official version of what happened...