According to this report, the broke state-owned property developer Nakheel will start paying claimants who are owed less than 500K Dirhams. And apparently Nakheel’s PR advisors think this is such good news that they sent press releases to every copy + paste newswire in town.
Question:
Do PR people really consider people so stupid to believe that paltry sums like 500K Dirhams make an iota of difference to the number of mega projects Nakheel started and shelved? Nakheel’s projects were the archetypical Dubai superlative of hubris. Both immensely over-reaching in ambition and badly (and in some cases, criminally) managed, the state owned developer owes – by their own reluctant admission – hundreds of millions of Dirhams to consultants and contractors. Contractors will typically pay their subcontractors and suppliers “if and when” they are paid themselves. It’s a top-down trickle effect: the clue, Nakheel, is in the word "top-down". Any claim of less than 500K Dirhams is likely to be smaller outstanding payments to direct suppliers of Nakheel, for example printers of their lavish marketing material. [Does anyone remember the banners across Sheikh Zayed road: “We promised you the World. What next?” I tell you what’s next: you are broke and the international butt of jokes; that’s what’s next.]
Paying the small dues first and advertising this as a glorious restart of stalled projects does two things: Firstly, it is a slap in the face of the big consultants and contractors who should be paid first, and aren’t, and who could really make a difference in restarting Nakheel’s projects if they were paid. Secondly, it is a glorious shot in your own foot - an embarrassing admission that Nakheel doesn’t have the money to settle the serious claims.
As the saying goes: You can fool some people some of the time but you cannot fool all the people all the time; not even in Dubai. Come to think of it, especially not in Dubai where perhaps 50% of the population are somehow connected to the construction industry or know someone who is.
07 June, 2010
Subscribe to:
Post Comments (Atom)
Posts
10 comments:
I need to have one of those ads.
"the world is flat", "what next".
They are a Dubai classic. Does anyone know who the ad agency is?
Nick:
After reading the entire post and all that it entails, I'll just admit your title for this post should have been iCon.
Nakheel have vision, something that you pessimists never had.
There is a new global economic reality which means whoever is getting their dues should be grateful for whatever they are getting.
Of course this only works one way, so Nakheel can delay payments as much as they want but individual investors have no right to delay payments to developers or banks.
@Anon:Are u Nakheel's PR manager??
i'm sure this post will see a lot of interesting comments.. as well as comments by many sub-organisms such as algae and larva that seem to infest the bottom of this blog...
btw, I'd love to work in Nakheel now.. they do have vision!
it's one thing building into the sea and building a new city from scratch, but a bigger challenge is maintaining it for future generations in a sustainable way.
Anon 7 June, 14:23..sarcasm?
BuJ,
The bottom-dwelling algae and larvae work in media and tend to write exclusively about themselves in their own blogs rather than this one.
BuJ:
There's no doubt in my mind that Dubai may have set the trend for (cash-rich) ambitious rookies. Unfortunately, they defied the law of gravity by going up a slippery slope way too fast for their own good.
What we are seeing now is a repercussion of that reckless joy ride.
On a lighter note, I hope someone with good literary skills could turn the Dubai predicament into a bestseller & enjoy the spotlight.
nakeel bust
Post a Comment
NOTE: By making a post/comment on this blog you agree that you are solely responsible for its content and that you are up to date on the laws of the country you are posting from and that your post/comment abides by them.
To read the rules click here
If you would like to post content on this blog click here