UAE | Government
UAE government to stand by Dubai: Hamdan
Federal government will support Dubai as it tackles its $26 billion debt
- By Nadia Saleem, Staff Reporter
- Published: 14:24 March 9, 2010
- Image Credit: Gulf News Archive
- Shaikh Hamdan said the emirate had not yet approached the federal government for aid.
Dubai: The Federal Government will come out in support of Dubai if necessary, Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, said at the opening of the Water, Energy Technology and Environment Exhibition in Dubai.
"The Emirates is one unit and hopefully things will be better soon," he added.
In any event, Shaikh Hamdan said, the Dubai government has not yet asked for federal support. "The federation has not reached this point yet," he explained.
Last November, Dubai World had asked its creditors to restructure a $26-billion (Dh95.47 billion) debt and is negotiating a new payment schedule with its creditors in London this week. Banks in the talks include HSBC and Standard Chartered and sources close to the matter are reported to have said that a restructuring proposal is in its final stages. However, the restructuring of the debt is being delayed by efforts to value the assets of Dubai World's property unit, Nakheel.
Assistance
On December 14, the Abu Dhabi government had injected $10 billion into the Dubai Support Fund, to help deal with Dubai World's debt. Of the total amount, $4.1 billion was used to pay off a maturing Nakheel sukuk. Dubai World has also been paying the interest on its loans, using government funding which ends in April.
Nevertheless, Shaikh Hamdan was upbeat about the future of Dubai. "Dubai's projects up till now are running," he explained, pointing out that the few that had stumbled would not have an impact on the emirate's overall economic development.
Masoud Ahmad, International Monetary Fund director for the Middle East and Asia, said in January that Dubai could come out of the economic crisis by relying on sectors other than real estate.
"Dubai is much more than real estate. There is a vibrant services sector and a logistics business, and that's something which we will continue to see growth in," he said.
While Dubai World's debt restructuring would have some impact on the economy of the UAE this year and next, in "the medium-term [the] strategy remains good", Ahmad said.
15 bids tendered
The Dubai Electricity and Water Authority (Dewa) received 15 bids from prospective consultants for a power plant whose tender period closed on
Monday, Chief Executive Officer Saeed Mohammad Al Tayer said.
Dewa is seeking advisers to help attract international investors to build a 1,500- megawatt power plant and water desalination facility in Dubai.
Al Tayer, who spoke on Tuesday at the opening of a water and power exhibition in Dubai, is set to sign infrastructure project contracts worth more than Dh3 billion at today’s event.
Dewa is confident its plan to sell bonds to investors next quarter will be well-received after surveying interest from banks, Chairman Matar Humaid Al Tayer said at the exhibition.
"Management has a green light," he said. The bond will help finance operations and repay some other borrowings, the executive said.
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