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Discuss this article (8 Comments)Nakheel is receiving funds from gov't - CEO
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 11 May 2009
zoomGOV'T FUNDS: Nakheel's chief executive has confirms receipt of funds from the government. (ITP Images)
Master developer Nakheel is receiving funds from Dubai government as it looks to complete projects and pay outstanding obligations, its chief executive confirmed on Monday.
"The actual figure is confidential and so are all the other details, but yes Nakheel is receiving funds," Chris O'Donnell said in comments published by Emirates Business.
The developer said it was also talking to its contractors and re-negotiating payments plans and contracts.
"Yes, we are trying to help them and ourselves through our current situation. We are at the stage of commercial settlements and negotiations. Rather than detail on percentages, it is a true statement to say that construction costs are falling and there is definitely a reduction," added O'Donnell.
Dubai sold $10 billion of bonds to the UAE central bank earlier this year to raise funds to support state-linked companies suffering from the financial crisis, and plans to issue another $10 billion in bonds later this year.
Speaking about the latest on the status of Nakheel projects, O'Donnell said that work on Palm Jebel Ali has slowed down while the Palm Deira and the Universe projects are on hold.
However, construction on Jumeirah Village and Al Furjan is progressing, he said.
READERS' COMMENTS
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Request and a Comment
Posted by Dude, Dubai, United Arab Emirates on Tuesday 12 May 2009 at 04:13 UAE time
Would be great, later when everything is agreed on the funds, if Nakeel can share with investors what amount will be allocated to paying for outstanding payments and the amount will be actually used in further progressing Nakeel projects.
From my humble financial experience it doesn't make sense to borrow money to finalize these projects when the turning point in the economy can't be reliably predicted and therefore determine when financially capable investors will start to buy your product (i.e. generating cash in flow to the borrower). Even more no one can predict what structure the market and the industry will adopt during the next growth cycle especially the fundamentals/structures/principles are challenged today.
Posted by Dude, Dubai, United Arab Emirates on Tuesday 12 May 2009 at 04:13 UAE time
Would be great, later when everything is agreed on the funds, if Nakeel can share with investors what amount will be allocated to paying for outstanding payments and the amount will be actually used in further progressing Nakeel projects.
From my humble financial experience it doesn't make sense to borrow money to finalize these projects when the turning point in the economy can't be reliably predicted and therefore determine when financially capable investors will start to buy your product (i.e. generating cash in flow to the borrower). Even more no one can predict what structure the market and the industry will adopt during the next growth cycle especially the fundamentals/structures/principles are challenged today.
At last
Posted by duckman, dubai on Tuesday 12 May 2009 at 01:08 UAE time
I am one of those unfortunate investors, not flippers, at Jumeirah Park, where work seems to have come to a standstill around January in most parts.
I wish they would finally pay all their contractors, so this nice development will be finished and can be handed over to their rightful owners. After all, most of the owners have already paid 60 + % and after the latest regulations from RERA will lose a lot of money without any wrongdoings on their part if work is stopped for good (not officially cancelled of course).
I do hope that the people in power come up with some sensible regulations for this market, not just for the locals, so Dubai can thrive again.
I know that my comment will probably not make any difference to this whole issue but it feels good to get it off my chest.
Posted by duckman, dubai on Tuesday 12 May 2009 at 01:08 UAE time
I am one of those unfortunate investors, not flippers, at Jumeirah Park, where work seems to have come to a standstill around January in most parts.
I wish they would finally pay all their contractors, so this nice development will be finished and can be handed over to their rightful owners. After all, most of the owners have already paid 60 + % and after the latest regulations from RERA will lose a lot of money without any wrongdoings on their part if work is stopped for good (not officially cancelled of course).
I do hope that the people in power come up with some sensible regulations for this market, not just for the locals, so Dubai can thrive again.
I know that my comment will probably not make any difference to this whole issue but it feels good to get it off my chest.
JVC Circle
Posted by vicky, Dubai, UAE on Monday 11 May 2009 at 21:46 UAE time
Construction on Jumeirah Village Circle is in progress but with lot of delay, I would request Mr. O'Donnell of Nakheel to compensate investors as well as end user, end user also have to unnecessary pay extra rent to their existing landlord for extending their current contract.
When Nakheel is re-negotiating and bringing down the cost with the contractors they must pass on to their buyers, this will at least cover some loss which buyers have taken in Nakheel projects due to delay.
Posted by vicky, Dubai, UAE on Monday 11 May 2009 at 21:46 UAE time
Construction on Jumeirah Village Circle is in progress but with lot of delay, I would request Mr. O'Donnell of Nakheel to compensate investors as well as end user, end user also have to unnecessary pay extra rent to their existing landlord for extending their current contract.
When Nakheel is re-negotiating and bringing down the cost with the contractors they must pass on to their buyers, this will at least cover some loss which buyers have taken in Nakheel projects due to delay.
Nakheel is receiving funds from gov't - CEO
Posted by Sebastian, Sharjah, UAE on Monday 11 May 2009 at 16:46 UAE time
I am one of those unfortunate sub-contractors who has already provided a 10% discount on receivables (nearly 2 Million) to get it on instalments & the tail end is yet to come for Palm Jebel Ali, Deira & Universe projects.
A similar situation exists for me at Al Furjan & Jumeirah Village but its only about a million there & the main Contractor says it is yet to get the mony from Develpoer which is renegotiating on cost front and I am guessing as to what would be that “%”
Posted by Sebastian, Sharjah, UAE on Monday 11 May 2009 at 16:46 UAE time
I am one of those unfortunate sub-contractors who has already provided a 10% discount on receivables (nearly 2 Million) to get it on instalments & the tail end is yet to come for Palm Jebel Ali, Deira & Universe projects.
A similar situation exists for me at Al Furjan & Jumeirah Village but its only about a million there & the main Contractor says it is yet to get the mony from Develpoer which is renegotiating on cost front and I am guessing as to what would be that “%”
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