Sheikh seeks quick fix to power woes


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FUJAIRAH // Electricity shortages are threatening to pull the plug on developments in the northern Emirates, but the Crown Prince of Fujairah is moving quickly to lure back hesitant investors. "We can't move forward until we fix the problem of electricity," Sheikh Mohammad bin Hamad Al Sharqi, told The National in an interview. "It affects the current residents, future residents and the investors. That is the truth."

Fujairah, like the rest of the northern Emirates, is dependent on the federal supply of electricity. The Crown Prince has asked Abu Dhabi for help but realises the capital is going through its own boom. "We understand it will take time to solve so we are looking into alternatives while we await assistance." The power shortages have meant that the emirate has not experienced the same rapid development as Abu Dhabi and Dubai.

Yet while it has still to taste the fruits of expansion, it is already bearing one of its burdens - inflation. House prices in Fujairah have more than tripled in just over a year. "The same three-bedroom flat that cost Dh13,000 last year is now Dh50,000. It is too much," Sheikh Mohammad said. Investment in property developments could have alleviated some of the pressure but several projects have been put on hold.

"Investors may be willing to come, but the global financial crisis and the electricity problem, are holding them back." The Crown Prince said there was little that could be done about the international credit crunch, but that he was exploring ways of solving the power shortage. He has just dispatched a team from the municipality to the Netherlands to study the feasibility of a project he believes holds great promise for the emirate: a solid waste energy plant.

"Instead of waste piling up, why not turn it into a useful energy source?" Sitting in his office at the Royal Court, surrounded by large oil paintings of Fujairah's mountains and coastline, the 22-year-old Sheikh says he is determined to prepare Fujairah for the future - but not at the cost of its environment. "The quarrying industry is a critical source of income for this emirate, but at the same time, we know the side effects of such an industry and are doing everything we can to minimise the damage to the environment and health."

The export of aggregates to Qatar and Kuwait alone is worth tens of millions of dirhams to Fujairah each year. Sheikh Mohammad said there had always been laws and policies governing the quarries, but that until recently "they have not been strictly adhered to". He now makes frequent visits with his team of officials to ensure that quarries are obeying the rules - covering conveyer belts, introducing new filters and using water vapour to keep the dust down.

The emirate is also braced for the arrival of a new highway linking Fujairah with Dubai. The Dh1.2 billion (US$325m) road will cut the journey time between the two to about 45 minutes when it opens early next year. "It will be faster to reach us, but at the same time, we are preparing ourself for the congestion that it will bring, as people move here and work in Dubai." Sheikh Mohammad said Fujairah did not want to find itself in the same predicament as Sharjah, which acts as a spillover community for Dubai.

"We don't have enough housing now for a boom, and at the same time, we can't build more until we have secured the necessary electricity needed to run the new buildings. So you see, everything is intertwined." Some new residential roads have been built in Fujairah using part of Dh16bn in funds the federal government has allocated to develop the region's infrastructure, and more projects are planned.

The Sheikh is also determined to defend another of the emirate's greatest assets: its shoreline. He is putting his full weight behind protecting Fujairah's waters from oil spills, as well as the red tide algal bloom that has disfigured 60km of coastline up to Dibba. "We have one of the world's most beautiful coral reefs and great diving experiences, so we are trying our best to preserve that." Oil leaks are a major concern for the Sheikh. Ships dump used engine oil out at sea, beyond the UAE's maritime borders, to avoid the cost of having it cleaned out in port. The oil then pollutes the waters and washes up on beaches.

A team at Fujairah Port, with help from Bahrain, is studying the best means of dealing with these oil spillages, and expert advice is being sought on the toxic red tide that has killed thousands of fish. One of the emirate's biggest projects is a new oil terminal that will handle exports of oil from Abu Dhabi. This is being built in an industrial area near the port. "The plan is to keep the public beach open to its people and to preserve the scenic coastline and keep the more industrial sites together away from the public," the Sheikh said

Fujairah's long coastline makes it more vulnerable to natural disasters. After it was hit by Hurricane Gonu in 2007, the threat is being taken very seriously. "We have learned from previous disasters, and have special police and army units always on standby in case of a natural disaster," Sheikh Mohammad said. "We can't control nature, but we are doing our best at studying it and understanding it."

New regulations also prohibit houses from being built too close to the shore. At the end of each day, after finishing work, the young Sheikh indulges in his favourite pastime: driving across his emirate and admiring its grandeur."People say there is nothing here, but I say, that is what is beautiful here. You can relax here and take a break from malls and see a traditional way of life. "We remain a traditional emirate, and we want to preserve the mud houses and the old way of life, even as we move forward.

"We should not forget how our grandparents lived, and how hard it was in the past. It helps us appreciate what we have now." rghazal@thenational.ae

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5 of the most-popular Airbnb locations in Dubai

Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:

• Dubai Marina

The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.

Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739 
Two bedroom: Dh627 to Dh960 
Three bedroom: Dh721 to Dh1,104

• Downtown

Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure.  “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."

Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154

• City Walk

The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena.  “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”

Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809 
Two bedroom: Dh682 to Dh1,052 
Three bedroom: Dh784 to Dh1,210 

• Jumeirah Lake Towers

Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.

Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629 
Two bedroom: Dh549 to Dh818 
Three bedroom: Dh631 to Dh941

• Palm Jumeirah

Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.

Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770 
Two bedroom: Dh654 to Dh1,002 
Three bedroom: Dh752 to Dh1,152 

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Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

The specs: 2018 Audi RS5

Price, base: Dh359,200

Engine: 2.9L twin-turbo V6

Transmission: Eight-speed automatic

Power: 450hp at 5,700rpm

Torque: 600Nm at 1,900rpm

Fuel economy, combined: 8.7L / 100km

The Ashes

Results
First Test, Brisbane: Australia won by 10 wickets
Second Test, Adelaide: Australia won by 120 runs
Third Test, Perth: Australia won by an innings and 41 runs
Fourth Test: Melbourne: Drawn
Fifth Test: Australia won by an innings and 123 runs

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If you go

The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.

The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.

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Some of Darwish's last words

"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008

His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.

The biog

Favourite food: Tabbouleh, greek salad and sushi

Favourite TV show: That 70s Show

Favourite animal: Ferrets, they are smart, sensitive, playful and loving

Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can

Name of first pet: Eddy, a Persian cat that showed up at our home

Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big

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.”

MATCH INFO

Rugby World Cup (all times UAE)

Final: England v South Africa, Saturday, 1pm

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UAE currency: the story behind the money in your pockets
The biog

Birthday: February 22, 1956

Born: Madahha near Chittagong, Bangladesh

Arrived in UAE: 1978

Exercise: At least one hour a day on the Corniche, from 5.30-6am and 7pm to 8pm.

Favourite place in Abu Dhabi? “Everywhere. Wherever you go, you can relax.”

Pearls on a Branch: Oral Tales
​​​​​​​Najlaa Khoury, Archipelago Books