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Dubious delays?: Abu Dhabi’s museum move
It's a marketing tactic and not economic realities that led to the decision to delay some of their projects, says TDIC. Of course, it is.
October 30, 2011 2:31 by Precious de Leon
It’s not hard to imagine Shaun O’Connor did not have a good weekend. From the articles that have come up this Sunday, the chief financial officer for Abu Dhabi’s Tourism Development and Investment Company (TDIC) sounds like he’s not only been grilled, he’s also skewered by the press, following the announcement that the three star projects of Saadiyat Island are going to be delayed.
As master developer, TDIC has decided to stagger the launches of the Louvre, the Zayed National Museum and the Guggenheim Museum—the Louvre is still on schedule for its 2013 launch while the other two will launch at a yet to be announced date.
Keen to emphasize that they are not cancelling any of the projects, however, O’Connor said TDIC decided to “extend the delivery dates for the museum” and that procurement of art and installations will continue as planned. “It makes more sense to bring these to market as each museum has a chance to build a following. It makes more sense for Abu Dhabi to stretch this out over a time period.”
That’s the story and they’re sticking to it.
In fact, in a few articles on The National (there were at least three of them), O’Connor pretty much says the same thing over and over again; that it’s a tactical marketing decision and not a financial issue.
Well of course it is. We, at Kipp, totally get that. Sometimes somewhere in the middle of doing something you realise there’s a better way of doing it. It happens to all of us. Of course most of us have never had to juggle multi-billion dollar projects like those on Saadiyat Island and may then argue that well-seasoned project managers who would have known that it would be better to stagger these launches from the get-go—which was about five and a half years ago.
And if that doesn’t convince you, O’Connor also says that the delays were also because of the “immense magnitude of the work” and to “ensure that the quality is not compromised and allow each establishment the time needed to create its own identity”.
And then again, in an article on The National, O’Connor stresses: “We do not have financial issues and we are not constrained. We are looking at this as a real estate company and taking real estate decisions on when is the right time to do projects.”
Of course right after that quote, O’Connor then said TDIC will need to raise AED2-3billion a year (about $544 million ) to fund construction of the projects in the next few years. He also says that the company may “rethink going back out to capital markets” in the first half of next year. The National very helpfully adds that TDIC is carrying Dh12 billion of debt, including Dh7.4 bilion of bonds scheduled to mature in 2014.
No, kids. It’s got nothing to do with finances. Look at my right hand. Now, look at my left hand. Now look at me. I’m on a horse. Sound familiar? See. Sleight of hand isn’t just for an Old Spice commercial.
A couple of weeks ago, I bumped into a colleague who shared some challenges her company has been facing with some of the projects in Abu Dhabi, more than hinting at companies in the capital holding out on paying some its suppliers and contractors.
Are we looking at the start of a downward spiral for some of the capital’s more ambitious projects? We hope not. But speculations like this are going to be rife when news of delays are made with a…(CONTINUED TO NEXT PAGE)
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