CEO fears global crisis could impact $3bn project

AMMAN PROJECT: Abdali wants to build a vibrant business and residential development in the Jordan capital. (AFP)

The CEO of a firm creating a $3 billion new downtown in Jordan’s capital Amman has admitted he is concerned the current global financial crisis may deter foreign companies from investing in the development.

But he believes by the time the project comes online in 2010 the economic downturn will be over.

Abdali is an urban regeneration project aiming to build a vibrant business and residential district to attract foreign direct investment to Amman and make it a major base for business in the region.

“We wanted to make Amman ready to receive big companies and make Amman their hub for the region,” said Jamal Itani, chief executive officer of Abdali Investment and Development PSC, a private shareholding company established to implement the development of the project.

“I am concerned for this period of time I will see a slowdown in foreign companies moving into Jordan because they are shrinking and not expanding.  But this is just a phase we have to go through and by the time we open this project in 2010 we will be out of this period.”

Abdali Investment and Development PSC is financing its own schemes within the development, the Boulevard and the Central Market Place.

In addition to using its own company finances, it is borrowing from banks, with an average of between 30 and 50 percent of construction costs leveraged by banks from within and outside Jordan.

The majority of the development was sold to developers from Jordan, the UAE, Saudi Arabia, Lebanon, and Kuwait.  

The Jordan government is a 43.75 percent partner in Abdali through Mawared, the investment arm of the military.

Itani said he did not foresee any problems from relying on banks to fund part of the development at a time of global turmoil in the banking system.
                 
“Until today we have not seen any impact whatsoever as the banks in Jordan are solid banks and the project is not highly leveraged,” he said.

“If there is an impact we will be least affected because of the rules and regulations that the Jordanian government has put in and the banks have put in for lending and this is why the exposure of the banks is really minimal compared to elsewhere.”

Covering a total built up area of more than 1.8 million square metres, Abdali will be made up of residential apartments, office space, hotels, shops and entertainment outlets.

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