x Abu Dhabi, UAE Friday 21 July 2017

Off the grid: No power, no business

In the north, banks won't back new buildings, while others sit empty, because of the lack of a reliable electricity supply.

A barber shop powered by a generator stands out in an area of Fujairah where most low-rise business developments remain empty because of the lack of electricity.
A barber shop powered by a generator stands out in an area of Fujairah where most low-rise business developments remain empty because of the lack of electricity.

If their small contracting firm in Fujairah was not entirely dependent on the federal Government for business, Mohammed Qishta and Mohammed Rabah say that they would have ample reason to be upset with it. Their company, Rabah Building, Contracting and Waterproofing, started to lose business two years ago when new buildings in the emirate started being denied access to the federal power grid.

Since chronic electricity shortages began, banks and investors have all but stopped funding new buildings, they say. Along with the effects of the global recession, this has caused the number of projects taken on by their company to plummet from nearly 30 to five in the past 24 months. "There are so many buildings, so many villas that don't have power in Fujairah," said Mr Qishta, 36, project manager at Rabah Building, which has 32 employees.

"And the banks know they'll never get power, so why would they want to give new loans for any new construction projects?" Unlike Abu Dhabi, Dubai and Sharjah, which have their own water and electricity authorities, Fujairah and the rest of the UAE depend primarily on the Federal Electricity and Water Authority (FEWA) for their energy. This dependency has often proved problematic. For Rabah, it is also a source of irony: although unable to supply its market with enough electricity, the federal Government is now the company's sole source of income.

"The only work we're getting now is on a few villas with the Sheikh Zayed Housing Programme," Mr Rabah, 30, the company's general manager, said of the Ministry of Public Works programme that builds low-cost accommodation for Emirati nationals. "At one time, we wanted large industrial projects ... not the Sheikh Zayed Programme. Without this programme, we'd go bust." It is a similar story across Ajman, Ras al Khaimah and Umm al Qaiwain, which, with Fujairah, are known as the northern Emirates.

Lack of electricity in these emirates has caused scores of gleaming new high-rises, delivered by developers months and even years ago, to wait idly for the day tenants can work in office spaces and sleep in bedrooms. Increasingly, building owners are resorting to the expensive and environmentally unfriendly option of using generators to power their 30- and 40-storey towers, often to the chagrin of tenants who must deal with the noise and cost.

"It's too expensive," Bassam Hasan, 34, a Jordanian physician, said of having diesel generators power his apartment building in Ajman. The monthly electricity bill for his two-bedroom flat, he reckoned, amounts to about Dh700 (US$190). The added fees, coupled with rising rents (about Dh45,000 for his flat), forced him to tighten his budget. This meant periodically turning off his air conditioning during the summer, which made living uncomfortable for his wife and two young daughters.

But it was an ideal location, in the Al Suan area of Ajman. "What can you do? If you want to live in a convenient place, you have to adapt accordingly," he said. In a flat two levels below, Lisa Mallari, 28, a secretary from the Philippines, said the generators do not just make for expensive bills. Their roaring engines usually prevent her from getting a sound night's sleep. "It's hard for me, sir, because I sleep near the balcony," said Ms Mallari, who, along with six flatmates, pays part of a monthly energy bill that typically surpasses Dh1,100.

"All of us here work, sir. We're not in the apartment much, so we don't know why we have to pay so much money." But for many of the 1,000 commercial buildings in the northern Emirates that lack access to the grid. generators are the only alternative for owners who have grown tired of waiting. "They authorities just told us there wasn't enough electricity; they said it would take maybe two years before we could connect" two buildings, said Mohildin, a senior manager of Marcom Group, which owns six towers and two villa complexes in Umm al Qaiwain.

The company recently purchased three generators for Dh160,000 (US$43,600) each to power the two towers. He estimated the monthly cost for running one was about Dh45,000, plus a yearly maintenance fee of Dh50,000. Perhaps in recognition of the situation's apparent permanence, Mohildin, who declined to give his last name, is building elaborate covers to protect the generators from the elements. In Fujairah, the exhaust and jarring roar of generators has recently convinced local authorities to curtail their use. "We're not giving permission for buildings to use them," said Mohammed al Afkham, the emirate's municipality head.

"Generators mean pollution, noise. And then there is the safety issue. What if you're in a large tower, living at the top, and the power goes out? Imagine that. For tall buildings, you can't gamble." Yet, Mr al Afkham says, in some ways the years-long power issue has helped reduce the effects of the global economic slowdown on Fujairah. Many of its buildings were empty, for a lack of power, during the construction boom, sparing it the outflow of foreign nationals that has ailed the economies of its neighbours.

"When your buildings are empty because there is no electricity, they're still empty," he said. "When they're full, that means you have people who can run away and not pay their rents and things like that. "It's not a problem when no one has been living there in the first place." Mr Qishta and Mr Rabah of Rabah Building disagreed. Their company is still owed nearly Dh200,000 from buildings it helped construct in Fujairah's Al Hayl Industrial Area.

The owners, because of the electrical issue, never opened their businesses. Instead, the industrial area, mostly rows of unused buildings, has turned into a rubbish dump where donkeys and vermin feed. "It's the same story for anyone who worked in Al Hayl," Mr Rabah said. "There's no electricity and all of the businesses have left. ... They want to make Al Hayl a big centre for industry, but how can you when there's no power?"

Asked about the prospect of getting the company's money from projects in Al Hayl, Mr Rabah responded: "Have you ever seen a graveyard? That's what Al Hayl is." hnaylor@thenational.ae