Middle East Business Review

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Plans for the Great Dubai Wheel, an AED250million ($68million) worth observation wheel to be part of Dubailand’s attractions, have been scrapped by Arjan development, one of the subcontractors of the project told the media. Originally the brochure said it was included but we were told [the Great Dubai Wheel] would not be coming and it would be something else. They are negotiating [to find a replacement] attraction, Ashok Galgotia, CEO of Triveni Builders and Promoters, said in a statement. Dubailand was one of Dubai’s most ambitious resort projects, originally planned to be twice the size of Walt Disney World, with an estimated price tag of AED335bn at its peak.

UAE’s real estate sector is still struggling to revive its bank credit that it lost after the 2008 global credit crunch. According to the Central Bank’s latest monthly bulletin released this week, mortgage credit extended to the real estate sector dropped around AED3 billion to about AED160 billion at the end of September 2011 compared to AED163 billion at the end of 2010. The drops come in stark contrast to peak mortgage lending activities during 2008 when credit leapt to nearly AED125 billion from AED56 billion, registering an astronomical rise of around 123%.

Hassad Food, the agricultural arm of Qatari sovereign wealth fund, said it has bought acres of land in Sudan and Australia and announced investment worth millions of dollars on agricultural projects in Argentina, Brazil, Kenya, Turkey and Ukraine. On the other hand, Qatari Crown Prince Sheikh Tamim bin Hamad bin Khalifa al-Thani issued a decree that promises to enhance the country’s national food security programme. Today, there are 1,400 farms in Qatar and they will increase to 3,000 farms with the new plan. We anticipate that domestic food production, if new technologies are applied and the efficiency system enforced, can easily reach 60 percent of our market needs. We anticipate that domestic demand can be met by 60 to 70 percent, Fahad Bin Mohammad al-Attiya, the QNFSPs chairman, said in a statement.

A Fitch Ratings report warned contractors in the Middle East will see profit margins shrinking in 2012 as global economic slowdown will take its toll on new contracts and leave many companies battling for few deals. “With the recently increasing competition, contractors have started to go for lower margins and Fitch expects this to remain the case over the next few years,” Bashar Al Natoor, director of the agencys EMEA team in Dubai, explained. Developers are scrambling across the region to get new projects adding pressure on local ones.A decline in project tenders across EMEA will increase competitive pressures, Fitch added.

Bahraini government has announced a record 208million Bahraini dinar ($550m) worth housing scheme that comprises of 4,000 homes to be built across the island. The deal, a first in the GCC, will enable Naseej, a local property developer, construct housing units under a public, private partnership (PPP) agreement with the government of Bahrain. It is part of a series of innovative solutions the ministry has accepted to reduce waiting lists and shorten the period of time between application and delivery of housing units, Minister for Housing Basim bin Yaqoub Al Hamer said in a statement.

According to UBS analysts, Saudi Arabia is on the verge of finalising a deal worth $780million with BAE Systems, Europe’s largest defence company. We believe we will see the bulk of Saudi contracts agreed in the first half and that this gives upside to 2012 forecasts,” Charles Armitage and Rami Myerson wrote in a note. According to UBS, Saudi Arabia has already received 24 Typhoon jets from BAE and is negotiating the price of another 48 while contemplating to place an order for more BAE Hawk jets worth $2.32billion.

Jordan’s King Abdullah II expressed his concerns over high unemployment and budget deficit while hailing political reforms initiated by his government. While addressing a gathering of political and business leaders in Amman,the Hashemite monarch urged country’s private sector to take the lead in creating jobs and stimulating growth. According to an AP report, unemployment in the kingdom hovers around 13 per cent amid widening budget deficit and stalling economic growth. King Abdullah II has so far weathered the socio-political unrest which has seen regime changes in many Middle Eastern countries.

(By Moign Khawaja – Editor: Arabian Gazette)

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