Banks yesterday welcomed a move by Standard & Poor’s to upgrade the creditworthiness of Mashreqbank, based in Dubai, and factor an increasing level of government support into ratings of other lenders in the UAE.

A spokeswoman for National Bank of Abu Dhabi, which had its “A-plus” rating confirmed by S&P on Wednesday, said the bank was “pleased” with the action.

The upgrade and boost in government support assumptions for banks appears to buck a recent trend in which the three big international agencies – S&P, Moody’s Investors Service and Fitch Ratings – have taken an increasingly sceptical view of support for state-owned companies in the region.

But Jan Plantagie, the regional manager for the Middle East at S&P, said the change was simply a reflection of recent assurances its analysts had received of backing at the federal level for the banking system.

“I don’t think we have reduced the level of government support for the banks, which has always been based on federal support rather than local support,” he said. “We have spoken to the Central Bank and other authorities to get an update on that.”

Mashreq had its ratings raised to “BBB” after S&P gave it an assumed government support uplift of two ratings notches, replacing a one-notch uplift.

Abu Dhabi Commercial Bank’s standalone rating – a ranking of its creditworthiness without factoring in government support – was lowered by a notch, but its uplift from government support was raised from two to three notches. That resulted in the bank keeping its “A” rating.

Ratings for Dubai Islamic Bank remained the same, but a review for a possible downgrade was withdrawn. Ratings for the National Bank of Abu Dhabi and Sharjah Islamic Bank were left unchanged.

“I think you have to see where the primary support comes from and obviously the banks are in a different category than the corporates because the banks are regulated by the Central Bank,” Mr Plantagie said.

The Central Bank has stepped in on several occasions to support local banks during the global downturn. It has guaranteed interbank loans and injected Dh120 billion (US$32.67bn) into the banking system in the form of borrowing facilities and deposits.

“Standard & Poor’s believes that the UAE authorities have a strong incentive, as well as a willingness and capacity, to preserve the stability of their banking sector,” the agency said.

“In our view, the UAE Government has a strong track record of support towards the banking system, and we note that it has taken several measures to boost liquidity in the recent past.”

The strengthening assumptions of support for banks contrast with a dimming view of emirate-level support for state-owned corporations. That change in attitude followed the announcement last year of the government-owned conglomerate Dubai World’s debt restructuring and has already resulted in downgrades.

Many companies in Dubai have seen their ratings reduced by all three agencies since the end of last year and S&P on Wednesday downgraded the ports operator DP World, the property developer Emaar and the Dubai Multi Commodities Centre.

The agencies have even begun to view Abu Dhabi-based companies as no longer unconditionally supported by the Government. Moody’s lowered its ratings last month of six Abu Dhabi Government-owned companies, and on Wednesday S&P placed four of them – the Tourism Development and Investment Company, the International Petroleum Investment Company, Mubadala Development and Aldar Properties – on a review for a possible downgrade.

Simon Williams, HSBC’s chief economist for the Gulf region, said the downgrades and reviews in Abu Dhabi had not had, for the most part, a measurable effect on their borrowing costs or perceptions among investors. Lower ratings generally translate into a higher level of perceived risk, leading investors and banks to demand higher interest rates on a company’s borrowings.

Mr Williams said, however, that the importance of the agencies in swaying investors’ decision-making had altered since the global downturn.

“I think the world has changed,” he said. “I’m not sure that ratings agencies carry quite the same influence they once did in light of the experience of the past few years.”

In addition to its modification of bank ratings and downgrades in Dubai, S&P left two Dubai-based entities on review for downgrades because the agency had “insufficient information” to make a rating decision.

DIFC Investments, a subsidiary of the Dubai International Financial Centre that manages the centre’s subsidiaries and other holdings, and JAFZ Sukuk, a vehicle set up to issue an Islamic bond for the Jebel Ali Free Zone Authority, had yet to submit adequate financial information for S&P to make a full review, Mr Plantagie said. Both were co-operating with S&P, he said.

afitch@thenational.ae

The £97m Titanic Signature Project is “on course” to be ready for the centenary of the doomed liner after the Executive finalised its financial commitment, according to the government department leading the project.

A spokesman for the Department for Enterprise, Trade and Investment (DETI) said the Executive agreed to go ahead with its £43.5m contribution after legal issues were resolved.

All the funders of the project were embroiled in the fine detail of a legal agreement on the funding, development and operation of the project.

Titanic Quarter Limited, owned by Dublin-based Harcourt Developments, has already started work at the site.

The DETI spokeswoman said, “At its meeting on October 1, the Executive agreed to proceed with its commitment to part-fund the Titanic Signature Project.

“This follows the conclusion of discussions with funding partners regarding final elements within the legal agreement.

“Titanic Quarter Limited, the private sector partner in the project, as a signal of its commitment, had at its own risk and pending final Executive approval authorised work to begin on-site some time ago.

“This has ensured that the building remains on course for completion by April 2012.”

The remaining funding is coming from Belfast Harbour Commissioners and Titanic Quarter Limited, to the tune of £43.5m, and Belfast City Council, set to ratify the release of £10m at a meeting this month.

Titanic Quarter Limited refused to comment officially but a source said: “I don’t think the Executive would have signed it off if it wasn’t confident we could fulfil our end of the bargain.”

With council ratification in place, the funding partners are expected to put their signatures to the legal agreement. The project includes a signature Titanic building project with flying theatre, a “dramatic and interactive” Titanic exhibition and a luxury hotel at Harland and Wolff. The signature project – one of five planned by the Northern Ireland Tourist Board – would provide a major boost for the local construction industry and is expected to attract 400,000 tourists every year. Kathryn Thomson, the board’s chief operating officer said she was confident tourism would remain a priority for the Executive.

She said: “The last Programme for Government (PFT) was fantastic for us as it put the economy at the heart of government and tourism at the heart of the economy.”

ABU DHABI — With the improvement in the economic indicators, the UAE’s hotel industry has done ‘good’ business in the first quarter of the year led by Dubai, on the back of the Meetings, Incentives, Conferences and Exhibition or MICE activity that has contributed to the strong room occupancy, top officials said.

“The room occupancy in Dubai was third highest in the world in the month of January, as a sign of improvement in the business activities”, said Khalid Ahmed Al Sulayem, the Director General of Dubai’s Department of Tourism and Commerce Marketing.

Speaking to reporters on the sidelines of the Gulf, Incentives, Business, Travel and Meeting Exhibition or GIBTM that was inaugurated on Monday, he said the first quarter of the year was ‘good’.

About the room rents fluctuation in the wake of financial crisis and slow arrivals, he said room rents with an average of $250 per day, coupled with a highest occupancy rate was a strong indicator of the market sentiments.

The city-emirate attracted over 7.5 million visitors in 2009, which was a year of economic slowdown world-wide.

The director general said that resolution to the Dubai World’s debt restructuring would further impact positively on the business sentiments in the emirate, beaming strong signals across the world.

In the last year, the director general said 4000-new room capacity was added to Dubai’s burgeoning hotel industry that expanded to 43,000 rooms, an addition of about 20 per cent comparing with 2008. He expected a huge inventory of 20,000 rooms was in the pipe line this year.

Abu Dhabi

Abu Dhabi is expecting a handsome growth of ten per cent in its MICE related business activities this year, said Mubarak Rashid Al Nuaimi, International Promotions Manager at Abu Dhabi Tourism Development Authority.

Abu Dhabi is satisfied with the expansion of its MICE activities in the year 2009, he said as it is providing maximum incentives to private sector to market Abu Dhabi. This year, he said Abu Dhabi will bring three more MICE events to the city to take the tally to 20 events, to boosting the hospitality industry.

In spite of a strong built-up of the room inventory in the emirate, the situation is improving, said Kamal Fakhoury, the Director of Operations at Cristal Hotel in the capital.

Fakhoury said that Island capital’s hotel industry saw a huge expansion last year when about ten 4- star and 5-star properties entered the market with over 4000-rooms, during a period marred by economic slowdown. The number was quite significant as the market already had 12000-13000 rooms, the Director Operations said. “Now this inventory will go up further this year to hit over 20,000 rooms,” Fakhoury said, who recently launched Cristal Hotel in the capital.

The hotelier expects a tough competition ahead in the year for vying business in Abu Dhabi, a market that catered to corporate business segment, with the arrival of 3000-4000 rooms that would be launched between summer and winter. The supply will certainly affect the average room rents by up to 10 per cent, he suggested.   Sales Opportunities Manager of Etihad Airways, the UAE’s national airlines, David Granville said that the airlines had made Abu Dhabi, a truly transit destination with the launch of non-stop flight to Tokyo. 
—haseeb@khaleejtimes.com

Weeks of training and audits have resulted in ‘Menu-Safe’ HACCP certification for Dubai’s Arabian Park Hotel, the first three-star hotel in the Middle East to do so.

The hotel, which is managed by the Wafi Group, successfully implemented HACCP (Hazard Analysis and Critical Control Point) standards into their food preparation which will safeguard against food safety hazards.

HACCP is an exacting prevention system with key actions in place called Critical Control Points, or CCP, designed to decrease or eliminate physical, chemical and biological hazards in the preparation of the food, but does not focus on the finished product.

Mark Lee, Arabian Park Hotel’s general manager, acknowledged that the “achievement reinforces our objective of being market leaders within the mid-market hotel segment, not only within the UAE, but also within the Middle East,” while adding the “Chef de Cuisine Girish Babu and his team have worked extremely hard.”

Dubai Municipality-approved Menu-Safe worked with the management of the Arabian Park Hotel to help acquire the HACCP certification.

This included 10 weeks of kitchen staff training and personal audits to result in the prevention of food safety hazards in all aspects of food preparation and production.

The Dubai Department of Tourism and Commerce Marketing (DTCM) held a meeting with select representatives of Dubai hotels on Tuesday as part of its continuous efforts to take stock of the current tourism industry developments and discuss various initiatives to boost visitors’ number to the emirate and hotel occupancies.

Khalid A bin Sulayem (3rd from left) chaired the Hotel Group meeting held on April 6- 2010.

The meeting, chaired by DTCM Director General, Mr. Khalid A bin Sulayem, was attended by senior officials of the department in addition to top management representatives of hotel establishments in the emirate.

During the meeting, held at Novotel Hotel at Dubai World Trade Centre, the participants discussed issues concerning the tourism industry in general and the hotel sector in particular.

The meeting discussed the new marketing plans to be implemented by the department during this year and the latest developments in the global tourism industry and new projects in the emirate.

A presentation was made to the participants about the performance of tourism industry in Dubai and a report prepared by Smith Travel Research (STR), a London-based independent international tourism research institution.

The STR report revealed that Dubai ranked first in the world for the average room rate (ARR) in the month of February 2010 with hotel average room being $252. It held the same status in the previous three months previous with the average room rate being $250 in January, December 2009 $235 and $236 in November 2009.

Tokyo was placed second in the month of February at $242 and got the same position in January at $250, while Paris was placed in the third place during the months of February and January at $211 and $212, respectively.

In terms of average revenue per available room (RevPAR) category also, the report said Dubai is ranked first as the average revenue was $199, followed by Tokyo with $170, Hong Kong with $146, Sydney ($140) and Paris ($137).

In terms of average hotel occupancy rates during the month of February, Dubai occupied the second place with 79% with average hotel average room being $252, next only to Sydney with 85.2% with $164 average room rate, while Hong Kong, London, Tokyo, New York and Cairo were placed on the list from third to eighth positions.

Mr. bin Sulayem praised members of the hotel group for the achievements made by Dubai tourism industry, which have been made possible due to the marketing and promotional campaigns carried out by the department in collaboration with the tourism sector in the emirate.

The Dubai municipality, in a significant move, has ordered all the hotels and food establishments in the city to stop selling dishes containing alcohol, said a report.

The municipality had last week sent a circular to the food establishments across Dubai in this connection, the National reported. As per the circular, alcohol will no longer be an ingredient in dishes served in Dubai’s restaurants, the report added.

Those violating the ban will face fines of Dh5,000 ($1,360) to Dh20,000, a municipality official was quoted as saying.

The circular also called upon the outlets serving alcoholic drinks to keep them separate from food products during storage, preparation and display.

However, managers at restaurants and hotels were ’shocked’ at the new order, which they said could damage business.

Leading hoteliers said the ban is going to have a big affect on the food industry since most of the items such as steak-and-ale pie, sushi and teriyaki are made with alcohol apart from some sauces, cakes and chocolates.

Some chefs pointed out that the ban will hit their menus and argued that ‘it will change the taste of food in Dubai’s hotels.’

However, the municipality officials said the circular was partially the result of complaints from customers.

“There have been a lot of violations, with hotels often hiding content of alcohol in food from customers,” said Ahmed al Ali, the head of food inspections at the municipality.

“This is a Muslim society and visitors to our hotels are our guests. It is important to ensure they are informed about everything,” he was quoted as saying.

Though Municipality officials said an inital grace period will be permitted, some hotels have begun removing the ‘alchohol dishes’ from their menus.

At 73% of the total area, green space dominates Dubai’s biggest parks project, Mohammed Bin Rashid Gardens. Michele Howe takes a closer look.

Just when it seemed as though Dubai couldn’t possibly contain any more mega developments, along came the announcement of Mohammed Bin Rashid Gardens.

Under development by Dubai Properties, part of Dubai Holding, Mohammed Bin Rashid Gardens is a US$54.4 billion parks project that will stretch over a massive 82 square kilometres.

Located between Al Khail Road and Emirates Road, the project is a significant one for outdoor design: almost three quarters of the total area – roughly 60 square kilometers – will be dedicated to green space.

The starting point for the planning of the development was looking back to the Arab renaissance in the 12th century, explains Eric Kuhne, principal of UK-based design firm CivicArts Eric R Kuhne & Associates, architects and masterplanners for the project.

The idea, developed in line with Sheikh Mohammed’s 2015 Strategic Plan for Dubai, was to build “a city for roughly a quarter of a million people, that would create parks and gardens, waterways, educational institutions, cultural facilities and establish a new city based on Arabian urban design principles, not European and North American principles,” he says.

“Everything that is going on in the Middle East is the same old drivel that is pushed out by the West in terms of planning strategies and they miss on the key part, which is the molecule of the Middle East is the family not the individual, and the strength of the family requires a completely different type of physical pattern than when you are developing towards individuals,” he adds.

The development has four city centres called houses: The House of Nature, which will include parks, flower gardens, and a zoo; The House of Wisdom, which will have a library, universities and a mosque; The House of Humanity, which will house the Mohammed Bin Rashid Al Maktoum Humanitarian and Charity Establishment; and The House of Commerce, which will include banks, financial services firms and insurance companies.

The design follows the intricate geometry of Arabian art and science, using parks and gardens to divide the city into a network of sustainable neighbourhoods. The greenery is offset by a series of canals and lakes.

“The Mohammed Bin Rashid Gardens offer a culturally resonant alternative to the sterile Western-style street grids that currently dominate the Middle East. They replace those rigid, rectilinear lines with the sweeping arcs and circles of the planispheric astrolabe,” says Kuhne in a description of the project.

Understanding the heritage of a culture is essential, says Kuhne. “Modernism threw the baby out with the bath water. They said everything that is old is out and we’re going to stuff that’s new.

As a result, you get cities that have been robbed of their storytelling quality. Architecture has been reduced down to a geometric exercise in structural exhibitionism and it is awful, and it has erased the identity of civilizations all over the planet, and the only thing it looks good in is the portfolios of the architects,” he states.

Kuhne describes the design for the project as an “enlightened model of urban planning [that] will help reverse the Gulf’s existing commuter culture that has eroded both communities and the environment”.

Walkability was central to the design, says Kuhne, with the project scaled to pedestrian use. “The 500 metre walking distance that cities have been planned on European models around the world for a century is out of date,” he says.

“The walking distance that we use to put our city centres together and our neighborhoods and our villages is 300 metres.

If you want to design a city for young individuals, then you stay with the antiquated 500 metre walking distance but if you want to design a community for a family or group of friends that are walking together, interacting with each other, then you have to cut that distance in half to 250 metres to 300 metres and as soon as you change that distance from 500 metres to 250 metres, the physical dimensions of cities change instantly because you have to push primary services closer to where people live,” he notes.

One question that continues to be asked by people around the world is just how big a project can be before it’s absolutely laughable to call it green. The latest mega-project from Dubai stretches the bounds of eco-believability. It’s a $54.4 billion environmentally friendly real estate project stretching over 20,000 acres.

The Mohammed bin Rashid Gardens has four main clusters themed around wisdom, humanity, nature and commerce. The plan is to have 73% of the total area covered in greenery. Yes, in Dubai, a country that is pretty much a desert. The design as shown in the model above calls for plenty of large lakes and canals.

The House of Nature will have parks, flower gardens, recreational clubs, a zoo, hotels, environmental labs and alternative medicine and herbal healing clinics; the House of Wisdom will be home to a library, international universities, history and science colleges and a mosque; the House of Humanity will include the Mohammed bin Rashid Al Maktoum Humanitarian and Charity Establishment, the Museum of Light, the Human Civilization Museum and other room for other charities such as Unicef; and the House of Commerce will include banks, financial services firms and insurance companies and colleges that will specialize in banking and finance.

Internet rumors have pegged the location of the project, which will be overseen by Dubai Holdings, to be between Al Khail Road and Emirates Road in an area that borders Downtown Burj Dubai to the north and Dubailand to the south. This hasn’t been confirmed and no date has been given for the start of construction.

“Architecture is the New Diplomacy. The Mohammed Bin Rashid Gardens capture the spirit of Civic Design, creating new hope for the Middle East by restoring the soul of Arabian civilization to the heart of its cities. Enlightened leadership has filled history with grand precedents for such grand designs.

By ordering his Persian capital to be moved to Isfahan, Shah Abbas I realised a vision for his parks, gardens and libraries of Nisf-e-Jahan (Half the World) to reflect the heavens above.

As Domenico Fontana was to Pope Sixtus V’s Rome; Peter the Great to St Petersburg; L’Enfant to Washington DC; Hausmann to Napolean III’s Paris; Frederick Law Olmstead to Manhattan; Edwin Lutyens to New Delhi; and Walter Burley Griffin to Canberra, so Sheikh Mohammed’s vision for a new Dubai will redefine the quality of civic life for the citizens, residents and guests of the Arabian Gulf.”Eric Kuhne

Dubai has embarked upon a massive green initiative, costing about Dh.200bn, spreading across 880mn square feet of land, aimed towards preserving and protecting the environment.

The Vice-President and Prime Minister of UAE, and Ruler of Dubai, H.H. Sheikh Mohammad Bin Rashid Al Maktoum, launched the project, named ‘The Mohammad Bin Rashid Gardens Project’ on Friday.

The project comprises four clusters with 73 percent greenery, implemented by Dubai Properties, a member of Dubai Holding.

A model of the project has already been shown to Shaikh Mohammad during the launch on Friday.

The event saw the participation of Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum – the Dubai Crown Prince, Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum -Deputy Ruler of Dubai, Mohammad Abdullah Al Gergawi – Cabinet Affairs Minister, and Lt. Gen. Mussabah Rashid Al Fattan – Head of Shaikh Mohammad’s office.

The CEO of Dubai Holding, Al Gergawi, said the project, with its green environment-friendly buildings, restricts power usage and protects against wastage of natural resources, aiming to meet Shaikh Mohammad’s concern over health and welfare of future generations.

The Project is divided into four sections – the ‘House of Wisdom’ which includes translation houses, Knowledge Gardens, international universities, international organizations, history and science colleges, and Shaikh Mohammad’s Mosque.

Secondly the ‘House of Humanity’ will include the House of Giving, Museum of Light, Mohammad Bin Rashid Humanitarian and Charity Establishment, Human Civilization Museum and charities.

Thirdly, ‘House of Nature’ project will be the main cluster of the project, which includes international themed gardens, hotels, recreational clubs, a huge zoo, flower gardens, apart from alternative medical and herbal clinics.

Finally, ‘House of Commerce‘ will comprise higher educational institutes in Banking and Finance, Insurance Companies, Large International Company’s branches and Islamic and International Banks.