ABU DHABI // The President yesterday ordered Dh5.7 billion of investment in electricity and water infrastructure in the northern emirates that analysts say will breathe new life into the area and strengthen the ties that bind the nation.
Sheikh Khalifa also ordered that residential and commercial property belonging to UAE nationals in the northern emirates be connected to the power grid.
The announcements came after a tour of the area last month by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, to determine the needs of citizens.
Local politicians and residents who have complained in the past about services being inferior to those in Abu Dhabi and Dubai, with frequent water and power cuts, said yesterday they were optimistic about the future.
“This was a burden that has now been taken away,” said Yousef al Neaimi, a former FNC member from Ras al Khaimah. The announcement by Sheikh Khalifa has satisfied “a lot of the sons of the northern emirates”, he said.
The move also showed leadership from Abu Dhabi that will further cement the bonds between the emirates, said Dr Sultan al Muazzin, a Fujairah official and former committee chairman at the FNC.
“There is no difference between Abu Dhabi and Fujairah and Dubai. On the contrary this shows unity,” said Dr al Muazzin. “We are all one nation. This will strengthen the union between the emirates, and the people of the UAE.”
Mr al Neaimi said continued investment by Abu Dhabi in the northern emirates, ensuring the supply of essential services, cemented the capital’s commanding role in the federation. “The leadership is in Abu Dhabi, the presidency is in Abu Dhabi, the capital is there, the budget was provided by Abu Dhabi,” he said. “Abu Dhabi is the backbone of the union.”
Under the President’s order, the Abu Dhabi Water and Electricity Authority (ADWEA) will provide 1.3 gigawatts of electricity to the Federal Electricity and Water Authority (FEWA), which is responsible for the power grid in all the northern emirates except Sharjah.
Sheikh Khalifa also ordered the construction of a 100km water distribution supply line from Kalba in Sharjah, through Fujairah and Khor Fakkan, to Dibba. The cost of that project is estimated at Dh900 million.
The supply line will provide 23 million gallons of water a day to Fujairah and 13 million gallons to Dibba, Khor Fakkan, Kalba and Dhadnah.
Another 60km water line costing Dh300 million will provide 18 million gallons of water a day to Umm al Qaiwain. The water will be supplied by ADWEA desalination plants in Fujairah. Umm al Qaiwain had not previously been part of the national desalinated water grid.
Sharjah, which has suffered power cuts every summer, will receive an additional 700 megawatts from the capital, and a new distribution plant will be set up in the emirate,at a cost of Dh500 million. The emirate will also receive an additional 10 million gallons of water a day.
“This comes at the right time,” said Dr al Muazzin. “It has made us very happy.”
The amount was enough to cover shortages in essential services, he said, but better coordination was still required between municipal governments to ensure that the grants had an effect on the ground.
“If we talk about development, we have to talk about development in the UAE, not in one specific region,” Mr al Neaimi said. “The good must include all regions.”
“If you want to attract investors, and they feel you don’t have the most basic infrastructure in terms of energy and water, it’s impossible,” he said.
Mr al Neaimi was one of the authors of an FNC report in January last year that criticised the inadequate power supply to homes and businesses in the northern Emirates, and said companies in Sharjah in particular had suffered.
The report criticised FEWA for not having long-term plans to deal with the rise in electricity consumption. It said many UAE nationals had faced crippling financial losses and lawsuits for failing to make interest payments because many of their businesses were not provided with power through the grid.
“People have suffered losses, millions in interest to banks,” he said. “It is unbelievable to have that in the UAE.”
Mr al Neaimi blamed the shortages on FEWA. “They lacked a plan to develop the infrastructure in the northern emirates,” he said.
The FNC also criticised FEWA for running a Dh800 million budget surplus while failing to invest in infrastructure.
The recent visits by Sheikh Mohammed allowed citizens to relay directly their concerns about power cuts to the leadership, according to local representatives.
In contrast, Mr al Neaimi said, there was a disconnect between FEWA, whose headquarters are in Dubai, and the population in the northern emirates.
kshaheen@thenational.ae
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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.”
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This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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