A year ago, I took part in a press tour of Berlin's new international airport. At the time, it was due to open just weeks later, on June 3.
The spokesman insisted with utter conviction everything would be ready on time. He emphasised how thoroughly the opening had been prepared, with 10,000 volunteers equipped with 15,000 suitcases having tested the baggage-handling system over and over again.
"We have learned from the experiences of others such as Heathrow Terminal 5," the spokesman said, referring to the brief chaos that followed the opening of the London terminal in 2008, when the brand new baggage system malfunctioned, leading to hundreds of flight cancellations.
I believed him. We all did. This, after all, was Germany, the industrial powerhouse renowned for its reliability and engineering skills.
Everyone was getting ready to write that Berlin Brandenburg Airport Willy Brandt (BER), named after West Germany's famous Cold War chancellor, would open on time, allowing the German capital to jettison a cumbersome legacy of its Cold War division with the closure of its two small, outdated western and eastern airports, Tegel and Schönefeld.
But just four days later, the airport turned into a national disgrace. The opening was postponed indefinitely because the firefighting system could not be completed in time. Then, in January, a new opening date for this year was scrapped, and now no one is daring even to predict when the hub, once dubbed "Europe's most modern airport" by its management, will be finished. The government says it may be in 2015.
Airlines, particularly Air Berlin, 29 per cent owned by Etihad Airways, face millions of euros in lost revenues because they have not been able to expand their services.
It is hard to believe but construction at the site has been at a standstill for almost a year. It is a ghost airport, the silence occasionally pierced by a lone drill or the arrival of an empty train in the underground station - a measure to keep the station ventilated. Only the lights are on, day and night, not entirely intentionally, though. The airport's technical director admits they cannot be shut off because of problems with the control system.
The airport's manager, Rainer Schwarz, was fired in January, the government is suing the architect, Meinhard von Gerkan, for €80 million (Dh381.9m) in compensation and an inspection is underway to catalogue the construction flaws - according to media reports, they number up to 40,000.
To name some of the bigger ones: the complex smoke extraction system does not work properly; the escalators from the railway station are too short; the air conditioning system is too weak to stop the central computer system overheating; not enough room was left for underfloor cabling; components of the jet refuelling system will have to be replaced; and there are not enough check-in counters. In addition, the whole airport, designed to handle 27 million passengers per year, is too small, say experts. The two existing airports handled 25 million passengers last year - and Berlin is growing fast as a tourist destination. It is already Europe's third-biggest, behind London and Paris.
The chaos has not just angered Berliners, local politicians and airlines. It is viewed as a national disgrace that could end up depriving German construction and engineering firms of international contracts.
"Our global reputation is at stake," said the transport minister Peter Ramsauer. "We want to keep on carrying out big projects and exporting them around the world."
Part of the blame has been pinned on amateurish supervision by the paymasters - the national government and the regional governments of Berlin and Brandenburg - since construction began in 2006.
Another problem was that politicians kept demanding expensive changes to the design, such as upgrading the veneer of the interior to an elegant walnut, insisting on limestone floor tiles and ordering an expensive relocation of the planned two-storey jetway for the giant flagship A380 Airbus jets.
The cost of the airport has ballooned from an originally planned €1.7 billion in 2004 to €4.3bn at present. Few seriously believe that will be the final figure.
"An incredible number of things were done wrong," says Thomas Bauer, the president of Germany's construction industry federation.
"They didn't organise it properly from start to finish. And if you get one thing mixed up in such a complex project, it's hard to fix it. With big projects it happens too often that plans are altered mid-way and the construction firms then have to work through those changes."
But Mr Bauer insists it is not a sign of a wider malaisein the country .
"German engineering remains great. There's no doubt about that. We still build the largest buildings around the world, the best cars, the best industrial plants."
But the airport debacle is not an isolated one. Other major projects in Germany have been plagued by cost overruns and delays.
Experts say German red tape is partly to blame, along with the nation's reluctance to embrace public-private partnership in big projects, a concept that has been proven to work well in other countries.
Some say politicians often opt for unrealistically cheap tenders because they are easier to get accepted by voters. So cost overruns are preprogrammed, as in many countries.
Bent Flyvbjerg, a Danish professor of city planning at Oxford University who has researched the budget overshoots of hundreds of projects around the world, recommends compensating for this optimism bias by adding a risk supplement from the start to arrive at a more realistic figure for the amount projects will end up costing.
"We need to be much more realistic about risk and stop believing fairy tales. We need to have more thorough risk assessments," he says. His methods are already in use in Britain. But in Germany, boosting cost estimates in such a way would not be allowed, says a spokesman for the transport ministry.
Teutonic perfectionism has been identified by some as a further drawback. In practice, rigorous adherence to the plan does not always work. Germans need to get better at improvising, a skill that enabled Britain to get ready in time for the 2012 London Olympics.
"It's a fact we are sinking in a sea of regulations no one can grasp," says Albert Speer, a German architect and city planner who has worked on projects around the world.
There may be a faint light at the end of the tunnel for BER, though.
Last month, the airport hired Hartmut Mehdorn, a no-nonsense septuagenarian problem solver, as the new airport chief executive. He has already ruffled feathers by suggesting Tegel should remain open alongside BER, which would then lose its status as Berlin's only hub.
"They hired me," he says.
"Now they're going to have to put up with me."
business@thenational.ae
Have you been targeted?
Tuan Phan of SimplyFI.org lists five signs you have been mis-sold to:
1. Your pension fund has been placed inside an offshore insurance wrapper with a hefty upfront commission.
2. The money has been transferred into a structured note. These products have high upfront, recurring commission and should never be in a pension account.
3. You have also been sold investment funds with an upfront initial charge of around 5 per cent. ETFs, for example, have no upfront charges.
4. The adviser charges a 1 per cent charge for managing your assets. They are being paid for doing nothing. They have already claimed massive amounts in hidden upfront commission.
5. Total annual management cost for your pension account is 2 per cent or more, including platform, underlying fund and advice charges.
UAE Premiership
Results
Dubai Exiles 24-28 Jebel Ali Dragons
Abu Dhabi Harlequins 43-27 Dubai Hurricanes
Final
Abu Dhabi Harlequins v Jebel Ali Dragons, Friday, March 29, 5pm at The Sevens, Dubai
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Neo%20Mobility%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20February%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Abhishek%20Shah%20and%20Anish%20Garg%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Logistics%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Delta%20Corp%2C%20Pyse%20Sustainability%20Fund%2C%20angel%20investors%3C%2Fp%3E%0A
The biog
Favourite pet: cats. She has two: Eva and Bito
Favourite city: Cape Town, South Africa
Hobby: Running. "I like to think I’m artsy but I’m not".
Favourite move: Romantic comedies, specifically Return to me. "I cry every time".
Favourite spot in Abu Dhabi: Saadiyat beach
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
RESULTS
Catchweight 63.5kg: Shakriyor Juraev (UZB) beat Bahez Khoshnaw (IRQ). Round 3 TKO (body kick)
Lightweight: Nart Abida (JOR) beat Moussa Salih (MAR). Round 1 by rear naked choke
Catchweight 79kg: Laid Zerhouni (ALG) beat Ahmed Saeb (IRQ). Round 1 TKO (punches)
Catchweight 58kg: Omar Al Hussaini (UAE) beat Mohamed Sahabdeen (SLA) Round 1 rear naked choke
Flyweight: Lina Fayyad (JOR) beat Sophia Haddouche (ALG) Round 2 TKO (ground and pound)
Catchweight 80kg: Badreddine Diani (MAR) beat Sofiane Aïssaoui (ALG) Round 2 TKO
Flyweight: Sabriye Sengul (TUR) beat Mona Ftouhi (TUN). Unanimous decision
Middleweight: Kher Khalifa Eshoushan (LIB) beat Essa Basem (JOR). Round 1 rear naked choke
Heavyweight: Mohamed Jumaa (SUD) beat Hassen Rahat (MAR). Round 1 TKO (ground and pound)
Lightweight: Abdullah Mohammad Ali Musalim (UAE beat Omar Emad (EGY). Round 1 triangle choke
Catchweight 62kg: Ali Taleb (IRQ) beat Mohamed El Mesbahi (MAR). Round 2 KO
Catchweight 88kg: Mohamad Osseili (LEB) beat Samir Zaidi (COM). Unanimous decision
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Seven tips from Emirates NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
'Dark Waters'
Directed by: Todd Haynes
Starring: Mark Ruffalo, Anne Hathaway, William Jackson Harper
Rating: ****
More on animal trafficking
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets