NEWS | Wednesday, 18 February 2009

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Matthew Vella
Crashing real estate prices and a worsening state of affairs for one of the richest emirates in the Middle East may be still far away from the Maltese shores.
But as construction in Dubai grinds to a standstill and redundant foreign workers flee back to their homes, CEO Claudio Grech plays down any potential effects from the worsening state of affairs on SmartCity Malta.
Real estate prices in Dubai are reported to have dropped by over 30% while credit agency Moody’s is expected to downgrade ratings on six state-owned companies, including Dubai Holding, which owns Tecom – SmartCity Malta’s parent company.
“There is no doubt that the global crisis will have an impact on all major projects. Nevertheless, I am not aware of any specific impact on SmartCity Malta arising out of the developments you refer to,” Grech told MaltaToday.
“The company has been significantly capitalised in January and have appointed BV Joint Venture as SmartCity Malta’s Phase One-A’s general contractor,” Grech said referring to a €31 million injection back in January.
Dubai may have to refinance €12 billion in debt, due this year from its total debt obligations of €55 billion, according to Moody’s.
DP World Ltd and Emaar Properties PJSC are among six government-owned companies in Dubai whose credit ratings are under review at Moody’s for possible downgrades. Dubai Holding Commercial Operations Group LLC, DIFC Investments LLC, Dubai Electricity & Water Authority and Jebel Ali Free Zone are the others that have been placed under review.
Grech said that even in the current climate, Malta has “all the right characteristics to become a leader in the knowledge-based industry.”
He said Malta and SmartCity “can provide investors with a unique window to tap in the SmartCity global network, benefit from relocation and start-up assistance, and operate in a first-class high-yield destination at the fraction of the cost of other major business hubs.”
To date, SmartCity Malta has demolished all the factories in the Ricasoli industrial estate, cleaned the site, constructed an administrative block for its operations and in November 2008 commenced the construction of SCM 01, which is expected to be handed over to the first business partners in SmartCity Malta in 2010.
The number of employees on site varies according to the works which are underway.
Grech has so far been reticent on providing any names on who will be taking up office space in Kalkara. “We shall be making announcements at the appropriate time. In the meantime, SmartCity Malta is endeavouring to ensure the success of our business partners through our committed vision to develop a unique destination for all businesses, whether they are international, regional or local.”
Newspapers report more than 3,000 cars sitting in a parking lot at Dubai Airport – left there by debt-ridden foreigners (which make up 90% of the population there) fearing they could be imprisoned for failing to pay their bills.
With jobs getting fewer and far between, and lower salaries, there is no point in staying in Dubai – where you will be promptly expelled if lose your work visa.
The New York Times says the downward spiral has led to a 40% crash in real estate prices that has left Dubai “looking like a ghost town”. Borrowers no longer able to meet their payments on property, and those who have been made redundant, are running away.

mvella@mediatoday.com.mt

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