Construction Week Newsletter 26th February 2005

An intrepid reporter from a hawkish Western news agency once asked me what was the one major obstacle I have faced in my relatively long innings as a journalist in the Gulf. It was perhaps as loaded a question as any innocent glass of Pepsi could be. “Lack of data” was my truthful reply. I could see that he was disappointed.

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By  Eudore Chand Published  February 26, 2005

Editorial Leader|~||~||~|

Urgently required: credible and complete information

An intrepid reporter from a hawkish Western news agency once asked me what was the one major obstacle I have faced in my relatively long innings as a journalist in the Gulf. It was perhaps as loaded a question as any innocent glass of Pepsi could be. “Lack of data” was my truthful reply. I could see that he was disappointed. But it’s true. At numerous press conferences and interviews, my colleagues and I have asked questions, but the mists of mumbled replies or the obscurity of guesswork continues to cloud straightforward issues. Even the experts do not have either sufficient or reliable data, which is evident from the oft-repeated, “I’ll get back to you on that one” answer. And they never do. Just an hour before writing this piece, I got a call from a reader who wanted to know if Abu Dhabi is gearing up to get into the construction boom. He seemed fairly intelligent and mature, yet uninformed. Earlier this month, Aldar Properties announced that it will go ahead with a US $14.71 billion gateway city on the approach from Dubai, so either news doesn’t get through effectively or people have become used to announcements that are lost in the ether. There is no denying that the region is still very young in terms of modern systems of society, business and politics. Most of the Gulf countries were propelled into the modern age in a matter of years and have reached their present levels of maturity in barely four to five decades. People say the region is still on a learning curve and that we should give it time. But ‘time’ is just what the region is lacking in its rush to catch up with the modern age. Everywhere you look in the Gulf, you’ll find evidence of the race to be the best in the world: multi-billion dollar reclamation projects are rising up like Aphrodite, and cities are being created out of the sea and the desert. Boom time is on. But as the market matures and competition increases, the need for clarity — which is fostered by reliable, credible and easily accessible information — rises proportionately. Commercial decisions are no longer based on ‘gut instinct’ but on hard facts. These, like cheap housing, are in short supply. Time and again, the need for good governance has been stressed at events large and small across the Gulf. Good governance is only possible if high levels of transparency are implemented. And that requires a flow of information. The market has reached the stage where it needs credible, reliable and easily accessible information. But it’s not getting it. Even the supposed ‘experts’ and ‘industry watchers’ are inconsistent. For example, I have heard industry leaders estimating the value of the Gulf’s construction sector at anywhere between US $50 billion and $150 billion — even at conferences that boast of international status. The variance is too high for comfort. This needs to be looked into. And the best candidate for the job is the government. Questions such as how much money is being invested, which are the various categories of investors, what is being done on the regulatory and legal side and what is being planned — all these are presently not easily answered. And they should be. Government agencies such as municipalities, economic departments, land registry offices and other licensing authorities probably have access to such information. Mortgage companies, banks and major property developers have information about about individual buyers. I am sure that developers know how much demand is from brokers, block buyers, individual users or how much is speculative — at least for their own developments. What we need is a central agency, whether in the private or public sector, to access such information then collate it, analyse and present it to the region’s real estate development and construction sector in a reliable manner. Proper research, backed by reliable information, will, I’m sure, help to direct the growth of our industry on to a well-defined, properly managed and — most importantly — sustainable growth path.||**||

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