Abu Dhabi needs to push ahead with infrastructure development to sustain economic momentum across the United Arab Emirates, according to Khalaf al-Habtoor, outspoken chairman of one of Dubai’s biggest conglomerates.
Habtoor Leighton, a contractor in which Habtoor Group has a 27 per cent stake, has tendered for several projects that have been delayed amid the capital’s continuing spending review, the businessman says.
“Normal practice when there is pressure is that the government needs to spend money for recovery – this is the right time now to continue and go ahead with infrastructure,” Mr Habtoor says. “This is the blood circulation in the body – this is the wrong time to delay.”
Abu Dhabi, which embarked on a property development drive a few years later than Dubai, has faced a sharp decline in the sector, forcing the $5.2bn bail-out of Aldar, a state-related developer, as well as providing earlier support to debt-laden Dubai, Mr Habtoor’s home town.
The government is now assessing development needs that were devised before the global financial crisis in an era where domestic welfare is taking prominence.
Abu Dhabi has announced it is proceeding with the long-delayed airport terminal expansion, but high-profile projects such as the museums on the cultural zone of Saadiyat Island are subject to uncertainty.
Mr Habtoor agrees with many Abu Dhabi analysts who believe a spending review was long overdue as the capital seeks to rebalance priorities.
“To review things is good – but it shouldn’t take so long,” says Mr Habtoor, who is believed to be one of the country’s richest businessmen. “The most difficult thing in life is a decision, and we are used in the UAE for our leaders to be decision-makers.”
As a young engineer, Mr Habtoor launched his contracting business in 1970 and has developed his conglomerate in tandem with the growth of Dubai. His business empire spans hotels, construction, real estate, car sales and leasing.
The emirate’s fundamental sectors – trade and tourism – have bounced back, but the large property industry is still suffering the consequences of the debt-riddled past decade.
Habtoor Leighton is rescheduling payments to troubled developers, including Dubai Holding’s Dubai Properties.
“Sometimes you need to co-operate with your client, even if we are suffering, at least we have to grab something in hand,” he says. “Everywhere in the world they are rescheduling payments.”
Habtoor Leighton is part of an international consortium building a segment of Dubai airport’s Terminal 3, and is embarking on arbitration with the civil aviation authority over a Dh2bn-Dh2.5bn ($544,000-$680,000) dispute over “technical details”, he says.
Having to rely on dispute resolution is anathema to Mr Habtoor, a longstanding friend and ally of the ruling Al Maktoum family in Dubai.
Habtoor Group is at the emirate’s economic heart, rising and ebbing with its fortunes: Dubai’s growth has furnished the group with riches, and the business, in turn, has contributed to the city-state’s growth story.
With the emirate’s economy recovering, the polo-loving businessman predicts growth of 15 per cent this year across his empire.
“There is a major recovery here, especially in the private sector,” says Mr Habtoor. “We are a safe haven in the Middle East and Asia.”
Dubai’s economic recovery, underpinned by uprisings elsewhere in the Arab region, is filling his hotels while sales are strong at his agency for Bentley, the luxury car brand.
Habtoor Group recently revived plans to build a Waldorf Astoria resort on the man-made Palm off Dubai’s coast, to be run by the Hilton group, which will also take over management of his two properties in Lebanon.
“Our major interest here is the people who visit this country: houses are opening, all our hotels are approaching 100 per cent occupancy, this is fantastic: why would I think growth is going to be slow?”