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Mon 2 Jan 2012 08:18 AM

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Dubai residents fume over hike in cooling fees

Tenants in The Gardens development argue that 50% jump in charges is unfair, unjustified

Dubai residents fume over hike in cooling fees
Nakheel has said it can no longer afford to subsidise utility bills

Residents in The Gardens in Dubai are expecting a huge hike in their district cooling charges this year, after developer Nakheel said it would raise utility costs to meet revised government tariffs.

Tenants said they received a circular from Nakheel informing them of the new rates at the end of November, despite the changes being effective from the beginning of that month.

Many have written to the former Dubai World conglomerate to dispute the high costs, which in some cases reflect an increase of nearly 50 percent on their previous bills.

“My district cooling charges were AED445 per month, now they are AED686,” said one resident, Obaid Sadiq, who lives in a two-bedroom apartment in the development.

“A lot of my friends who are living in The Gardens also say they don’t know what to do. People living in three-bedroom apartments have had to go from AED650 to AED1262 per month - that’s almost a 50 percent increase.”

Some tenants may leave the community if Nakheel goes ahead with its plans, he said.

“My contract ends in March so I will probably move out. I am not willing to pay another AED5000 [per year] and stay in the same apartment, because I can get a better apartment where I don’t have to pay this.

“Most of the other residents I have spoken with have also said they will move out to none-Nakheel properties like Silicon Oasis and JLT, especially people in large apartments.”

Nakheel said in a statement it had long been subsidising the cost of increased water and electricity prices for residents in the Jebel Ali development, and could not afford to continue.

The previous cooling rates were set in 2002, it said, and were not applicable following increases in rates by authorities, the state-owned company told Arabian Business.

“In the current economic climate we are no longer able to continue to subsidise the rates as we have been doing. Moreover, in January 2011 the government of Dubai announced a further increase to the tariff charged to the District Cooling Companies.”

The dispute is the latest in a series of rows between Nakheel and residents in its Dubai developments. The company in October became embroiled in a dispute with homeowners in its luxury Palm Jumeirah Shoreline apartments, after it moved to privatise the beaches, pools and gyms within the development.

Nakheel last month brought in security guards to ban tenants from accessing the project’s facilities if they, or their landlord, have not paid maintenance fees. Many homeowners have withheld payment in protest at the plans to charge for access to facilities, arguing that Nakheel does not own the development’s communal areas.

Nakheel is also facing difficulties in its Discovery Garden’s projects, where hundreds of residents have refused to pay service charges in protest at the cost and quality of maintenance.

The company is understood to have told residents it will use security cards to block access to the buildings for homeowners yet to pay their fees.

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S Kurian 7 years ago

Please note that the rate hike is 100% and not 50%. I was paying about 600 Dhs per month which itself was absurd and now it is Dhs 1260 per month. District cooling is supposed to bring down the costs of Air-conditioning and not increase it. There should be a sub-metering policy wherein individual apartments should be metered for the consumption of chilled water and there would be no problems in charging for this along with the power, water, sewage from DEWA, but to charge flat rates irrespective of season and usage is only misusing the monopoly status of DEWA.

The response to earlier queries to Nakheel was that they are not responsible for this hike and that this has to be dealt with directly with DEWA.

Dave 7 years ago

Come on you guys are paying peanuts for rent in the older Garden Project and your charges were subsidized all this while.. If you don't like the service charges then just move out and get a new place - at a higher rent.

RaOne 7 years ago

Per month 650AED for cooling can be too much when you consider many don't use the cooling in winter months, but will still end up paying each month.

The problem is there is no individual meter and hence no way to counter the Nakheel price hike.

But good for tenants as there are many flats available and they can now consider moving to other non-nakheel development

Murad Ali 7 years ago

Let me put some facts for everyone to ponder

DEWA charges the highest Tariff rates to district cooling companies because they consume high amount of enery as a single customer ( Slab Rate ) but to provide district cooling to large communites and 1000 of customers .
All over the World District cooling companies are charged the lowest tariff rates as they produce very high effeciencent and manageable cooling systems which are lower in cost compared to individual cooling appliances installed in each community home with the idea to conserve energy.
The end user in Dubai pays a fixed per sqft charge for example in Old town Dubai about 6.8 AED per sq ft . So if you use the cooling system or not you pay a fixed charge . when the end user is charged fixed he does not care how much cooling he is using as he is on a fix charge and here starts the cycle of waste and the cautious and careful community user pays for the abusers.

Lets go Green , Conserve Energy and Stop Waste

Tim 7 years ago

Half of the problem with the Gardens is that the cooling is on permanently in the corridoors, all year round. It is not needed. This is why fees are so high.

Disagree with Dave's comment above, just because you are paying lower rent doesnt mean that you should have to stand for these higher charges when they are not justified. If Nakheel can provide justification for it then we will be OK with it, but at the moment we are just being told to pay it

Muhammad Ali 7 years ago

Well noted Dave... Hey guys stop screaming.. if I am not mistaken in old Gardens were you not paying like 50K for a 2BD when rest of the Dubai was paying 150K...?? you never complaint Nakheel in those days..?? Even with extra cooling charges you are way below the market as a whole... so if you are not happy then why don't you please step out and give oppertunities to others, if you possiblly can!

Red Snappa 7 years ago

There is only one option move out, but before you do add the revised central cooling charges to your rent and match it to the rental options elsewhere. If it saves you money that won't be eaten up by increased travel costs, then move on, you may well get more space for your money at least.

One thing I would say was that Discovery Gardens was built as supposedly affordable housing and the majority of new arrivals in Dubai are not higher middle income execs, more likely lower to lower middle income. Thus if costs like this rise to such an extent, then its not worth them being in Dubai if they came to make money. Then the minimum wage has to rise not that there is an official benchmark for this.

Marc 7 years ago

Oofff - Nakheel are just clamering for money. First its the Palm spat with residents on using the beach, etc.....and now, this. Watch out, looks like all Nakheel's projects will be subject to hearty price hikes and new fees..

The rate hike is not at all inline with any DEWA increases. That and the fact that you dont use full cooling in the winter. So this is just another baseless way to make more money to plug the gap.

I've left Nakheel properties a long time ago when I knew this was going to happen. Come on people, wake up...and move out.

Don 7 years ago

100% hike is not justified. We have not budgeted for this hike when we moved in last month and the Nakheel did not even informed us about this. Very sad to know that Nakheel is not responsible for this. Lost confidence will not come back again. Do not live in this artificial world where you think you can survive as before.

Prices should have been reduced for this old cooling unit rather than increasing!!!!!! this monopoly nature will bring you down so badly and you will not be able stand !!!!!

OSomebody 7 years ago

Yeah, right. Now look who is arguing on the lines of 'If-you-don't-like-it-you-know-where-the-airport-is'
There is no justification for this absurd hike. We switched off the AC in November and it will probably stay that way for another month atleast.

Maintenance in the Gardens is a shambles with exorbitant prices for each service. They took 2 months to replace a faulty WC ! Every other day, one of those watering pipes bursts and you have the recycled smelly water spilling all over the place.