#PROJECT-Umm Al Quwain: AL SALAM CITY

[smshah]

Originally Posted by komer64

to smshah- you just mentioned that she said that they will pay our money back if they delay is more than 6 moths. and i am afraid that will be the case, becuse if you bought a small townhouse for 499k or a big townhouse for 650k or 3 bed for 750k at today's price it will be impossible to build these uints for these sort of prices, and not to make a loss bearing in mind that a studio in dubai is sold for 600k. therfore it is what you call a "damage limitation" it is better for the developer to call off the plan and pay money back+intrest than go ahead and loss a big buck.
i have visited the site and i have posted some photo in the past , so i know there has been no construction activities apart from the model homes. the pics that you have seen are for the model homes and they may be demolished later.
i hope i am wrong and the project goes ahead. we will have to wait and see

TO KOMER: I said that the customer care manager said to me, that we are entitled to a full refund of monies paid. i did not say that we will be forced to accept refunds. It is our choice if we want our money back, as they would have broken the contract as the contract only allows for a delay of 6 months.
The price for a studio in dubai is approx 600K AED but this is al um quwain, how much have prices appreciated here for 2 bed apartments?

[komer64]

to Smshah. they would love it if everyone asks for thier money back as stipulated in clause 12.1 of the sale and purchase agreement, then thier liability becomes less. i am holding on to see what happens, but the unfortunate thing is that we will not get the units until mid 2010 at the earliest, which means that we have tied dowm our capital from 2006 i.e for 4 years and got so much drouble in the process. we could have put the money in other projects that would have delivered a better return. i still think that the earthwork required for the project ( shifting the sand dunes) is the most expenssive part of the construction works, and i feel that this point was not properly priced. yes they have got a free land, but they did not know that the land was that bad!

[smshah]

Originally Posted by komer64

to Smshah. they would love it if everyone asks for thier money back as tipulated in clause 12.1 of the sale and purchse agreement, then thier liability becomes less. i am holding on to see what happens, but the unfortunate thing is that we will not get the units until mid 2010 at the earliest, which means that we have tied dowm our capital from 2006 i.e for 4 years and got so much drouble in the process. we could have put the money in other projects that would have delivered a better return. i still think that the earthwork required for the project is ( shifting the sand dunes) is the most expenssive part of the construction works, and i feel that this point was not properly priced. yes they have got a free land, but they did not know that the land was that bad!

Their is no use getting our money bk and investing somewhere else, prices have risen considerably everywhere in UAE since i invested in al salam. If we get our money bk what is the gain? Nothing. We have to wai this out, i have other projects in dubai marina which one of them is delayed by 1 year. delays are currently normal in uae, they werent before but now with all this constuction it is enevitable.

[nickyp]

I just contacted Customer Service, they said that they were internally discussing the matter as regards to what to tell their customers regarding the delay. They told me that there was a delay (due to Electricity) but whether that (or how that) affected the Phase 1 completion date was not yet clear.

I said what is very clear is that there is no work being carried out on site (other than the model houses). They acknowledged that, and said that they would be issuing some sort of statement to all their customers within a month in order to make the issue clear. He said also that they may defer on the payment collections if necessary. No need to panic just yet (wait until we hear something officially to do that ;-) !!)

The way I look at it, if they have not informed me of any delay, then officially I still expect to take delivery in March 2009. Obviously though that is not going to happen.

A couple of things regarding some comments made above. Earthworks/Grading/Levelling/Compacting are by no means the most expensive part of any project. The earthworks on this site so far are extremely easy compared to many sites (no piling, no dewatering, no sheet piling, no deep excavations, no demolition, no rock, no reclamation, only shifting sand!!). Earthworks are never the major cost of any housing project, and I would say that in my opinion you could not find a site which has easier earthworks than this.

[dubaiote]

Oh wow, thats a very different response. Ive been trying to contact them, but havent had a chance yet. But I was wondering whether the March 5 installment was due as usual or not. Are you guys planning to pay for it, or wait for the communique, a it seems that they keep giving all types of different responses...

Thanks in advance

[Kairi]

I just talked to customer care about the same issue. They acknowledge there will be delay and they ask not to pay until further notice within two weeks.

[nickyp]

I have already given them post dated cheques, I have no control over how they will use them. I am fully expecting them to cash them in as usual.

[komer64]

i even did not pay December's installment. i made it clear that we cant pay on good faith only, we have a contract and we all kept our part of the bargin and its now time for Tammer to deliver thier's. most of us paid around 50% and seen nothing on the ground. it is simple, no construction progress, no payments.

[Kairi]

When I didn't see any progress I kept paying half what I am supposed to pay. I told them if you want me to pay the rest I need to see progress on the project. The only risk I took is the possible cancellation of the contract.
Anyway, I talk to them and we agreed to freeze the payments until further notice.

[bizzybonita]

[komer64]

any news from Tameer ? still nothing offical on the website.

[alsalam]

See below from Oxford Business Group News service

LATEST BRIEFING


N. Emirates: Addressing Energy Demand
19 March 2008

Shortages in supplies of energy feedstock are causing problems for the Northern Emirates, forcing the authorities to address water and energy demand.

The UAE as a whole is among the highest consumers of energy and water per head in the world. Water consumption in the UAE is currently running at 130 gallons per person per day, while energy consumption is around 20,000 KW per person per year. According to the World Wildlife Fund, the UAE has the highest per capita ecological footprint in the world, at 29.4 acres per person.

The impact of consumption falls unevenly however, with the Northern Emirates most exposed to increases in demand. Electricity in the Northern Emirates is sold at a subsidised price of around 15 fils per kilowatt-hour (kWh), well below the average annual cost of 70 fils, Khaled Al Awadi, gas operations manager at the Emirates General Petroleum Corporation (Emarat), told local press. By comparison, consumer rates in Dubai and Abu Dhabi are marked down by only around 10% during the summer, he said.

The difference relates to the ease of acquiring feedstock in varying regions. Al Awadi estimates the UAE's total natural gas supply to be around 4.5bn cubic feet per day, a figure some analysts say is around 1bn cubic feet below demand. Whereas Abu Dhabi and Dubai are able to meet some need from their own resources, the Northern Emirates are not so fortunate. They have been forced to meet shortages by burning liquids (diesel, liquefied petroleum gas, crude, medium fuel oil or kerosene) or even resorting to coal.

This is a far from ideal solution, as liquids are both more polluting and less energy efficient. The cost per MW for liquid generated power is also much higher, hence the Northern Emirates' large subsidies. Problems in securing supply from Qatar via the Dolphin Energy project (currently supplying 2bn cubic feet per day to the UAE) mean the situation is likely to deteriorate further.

Umm Al Qaiwain in particular is beginning to feel the pinch. In a region as water-scarce as the Gulf, feedstock scarcity affects not only energy supply, but also water availability. A planned $54.5bn desalination plant in Umm Al Quwain, for example, is currently stalled due to a chronic shortage of energy feedstock.

The plant, to be built by Imdad, a joint venture between the Umm Al Quwain government and Saudi Arabia's Al Rajhi Investment Group, has exclusive rights to supply a number of new developments planned across the emirate: Al Salam City, developed by Sharjah-based Tameer; Dubai-based Emaar's 2000-acre Marina project; and White Bay, developed by Al Murjan Real Estate, a joint venture between Sheikh Abdullah bin Rashid Al Mualla, deputy ruler of Umm Al Quwain, and Sheikh Tariq bin Faisal Al Qassimi, chairman of the Emirates Investment Group. The combined value of these projects is an anticipated $14bn, bringing in a total of $12.7bn in foreign direct investment (FDI) in 2007 alone, making them vital to Umm Al Quwain's development.

The plant was originally scheduled to come on stream in 2009, but is on indefinite hold due to ongoing difficulties in securing electricity supplies.

The Federal Electricity and Water Authority has, until recently, been in charge of securing all energy and water for the Northern Emirates. Responsibility for securing electricity is now shared with the Abu Dhabi Water and Electricity Authority (ADWEA). There have been widespread calls for greater privatisation throughout the UAE's energy and water sector and private developers are reportedly being told that they must source and supply feedstock for new plants themselves.

However, the Federal National Council (FNC), meeting earlier in the month, rejected a draft law to privatise the electricity and water sector in the Northern Emirates. Yousuf Al Nuaimi, an FNC member for Ras Al Khaimah, said privatisation in the Northern Emirates would send rates as high as 90 fils per kwh, compared to 7.5 for Abu Dhabi.

"Privatisation of electricity would be a fatal blow to Emiratis, it would mean higher bills for consumers, hitting the ordinary people the hardest, and as such I reject this law," he said.

As an alternative step to curb demand, the Sharjah Electricity and Water Authority (SEWA) launched a year-long power and water conservation campaign this month. The campaign will focus on spreading awareness through media advertising, public events and even Friday sermons. It remains to be seen though how much impact such a campaign can have: much of the Northern Emirates' high demand for water and electricity comes not so much from individual usage, as from the raft of resource-hungry new construction projects currently underway.

[smshah]

so this is the hold up. im sure al salam city will not be cancelled. after all look at how much has been spent already. al salam will go just a delay. but of course delays in construction are the norm in the uae

[komer64]

for the time scale of the delays please read the following link. salam city may not be cancelled, but it looks like we will move in by 2014-2018 ie after the completion of the infrastructure works. although i pesonally hope that they will cancel it now and pay us our money+intrest back. it will be a long slog otherwise.

http://www.gowealthy.com/newsletter/...weeklynews.asp

[Kairi]

I think the project is still on and hopefully will not be cancelled. I expect the delays to be around 2 years (2011).

[Kairi]

Today, I called Tameer customer care and got the following feedback:
1- Since it is not clear what will happen to Al Salam City project, the investor can take back all their money without any penalties.
2- You can also leave the money and Tameer will update with a new payment schedule and delivery date

Also, tameer might give a kind of compensation in future..

[dubaiote]

Originally Posted by Kairi

Today, I called Tameer customer care and got the following feedback:
1- Since it is not clear what will happen to Al Salam City project, the investor can take back all their money without any penalties.
2- You can also leave the money and Tameer will update with a new payment schedule and delivery date

Also, tameer might give a kind of compensation in future..

This really is annoying. I would hope that they at least would inform on the status of the project and give an approximation/idea of where they expect it to be at.
The best deal I would think is to allow owners at AlSalam city to buy at preferential price in some of their new projects. This could compensate for the cost of blocking money for so long in a high inflation country.

[alsalam]

I am sure that the delay is real and is outside Tameer's control but it is interesting to consider their possible tactics. The prices of townhouses at Al Salam always seemed very low relatively, as the difference between a 3 bed terrace 'townhouse' and a 3 bed terrace villa' (or terrace 'villas' in Ajman for example) was very great. If Tameer had sold too low then the best thing would be to get the properties back and then relaunch, together with a new 'zone' at more realistic much higher prices. Resellers often describe the 3 bed townhouses (with maid room) as 4 bed villas. So Tameer would probably love to get the townhouses back, even pay a bit more, as they can then sell again later for much higher.

[komer64]

alsalam- I agree with you.Tameer will be more than happy to refund all the money, as i mentioned in my earlier posts. it is just simple economy, that they will not be able to build the villas for 650k or 750k at todays prices. they will drag it on until evrey one gets worried and jittery and ask for a refund.

[dubaiote]

I also received an email from them saying that there was a delay and that they suspended payments due. They said they still do not know the extent of the delay though. I was hoping to get some level of visibility at least.

I am personally thinking of keeping townhouse, since we all agree that the prices are much lower than market and anything that can be launched/constructed today.
Q: When you say that they would refund the money paid, what about people that bought from the secondary market? They would need to be compensated greater than the amount they paid to Tameer to not be worse off, or else ift would really make no sense for them to do so.