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.
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.