Experts envisage new plan to revive stalled projects in Bahrain

Manama / Tribune News Service

Setting up a new venture to collect millions of dinars to restart work on four developments in Bahrain that were never completed has been proposed by industry experts. They also called for the auctioning of two of the stalled projects as part of measures to resolve the crisis in the next six years.
Thousands of Bahrainis, GCC nationals and expatriates invested
their hard earned money into off-plan developments that never saw the light of day. Experts say Bahrain needs close to BD400 million to complete the projects; Marina West, Amwaj Gateway, Juffair Views and Sunset Hills.
Bahrain Chamber of Commerce and Industry’s Real Estate Committee chairman Dr Hassan Kamal said the funds could be collected once shares for the proposed company, that would be established in the form of a Special Purpose Vehicle (SPV), were issued to the public.
“We need to understand that Bahraini authorities similar to their GCC counterparts have employed a series of austerity measures to tackle the economic challenges,” he told the GDN. “They do not have the funds to take over the delayed projects and it’s difficult to convince investors at this stage to buy these properties.
“We cannot demolish these uncompleted deserted structures and the bottom line is someone needs to invest between $300m to $400m to complete all the [stalled] projects.” The issue of delayed projects is being overseen by a ministerial committee for construction and infrastructure, chaired by Deputy Premier Shaikh Khalid bin Abdulla Al Khalifa.
It has already referred the four projects to a judicial panel, known as the Stalled Property Committee for the Settlement of Real Estate Projects, for review. Based on the latest developments, the committee is expected to call for a public auction of Juffair Views and Amwaj Gateway, and is working on resolving the other two projects, sources told the GDN. Dr Kamal said the committee was mandated to refer the projects to prosecution, appoint a new board and invite new investors to merge certain projects. He said the government committee was reviewing different options to resume work on the projects, which have become an eyesore in Bahrain’s skyline. “The best solution available for us right now is to set up a financial vehicle to collect funds from the public in order to complete the projects,” he added. He said investors in stalled projects would automatically be eligible to get shares in the company, which would be equivalent to the money they invested in a residential unit.
“For example, if an investor paid BD70,000 for a flat in one of the delayed projects, he can either wait for work to be completed or agree to become a shareholder in the company,” he explained.
“We understand property value
has appreciated over the years but a deal can be reached if investors are assured their shares in the company is slightly more than what they initially invested.
“Investors can only claim their share money after the project is completed within a deadline of about six years and units sold to new buyers.” He said once the stalled projects were completed the company would be dissolved or would be allowed to develop Bahrain’s beaches and other family oriented tourism projects. “Developers who failed to meet their commitments will be blacklisted and will not be part of the company in any manner including their business interests,” added Dr Kamal.