Tuesday, April 15, 2008

The great land rush of '08

By conservative reckoning, I estimate that the government has given away about 200 million dinars worth of free land to the investor who wanted to build the casino on the Dead Sea, just so that he doesn’t build the casino. Everybody has been led to believe that this is some great achievement. I mean, can a price tag be put on virtue?

Other land is busily being disposed of, but at a cash price. Aside for the no-casino give away, there are three massive real estate transactions on the table.

In Aqaba, the main port area has been sold to investors from the UAE. The plan is to move the port to the southern part of the coast, and free up the land in the north for high end tourism projects. There has been a plan to do this for a while, with environmentalists have been worrying about how this will damage the fragile coral reefs in the proposed new port site. Jamil Nimri has been privy to “inside source”, who assured him that it is a fair deal.

Rumors have been going on that there is a plan to sell the area of the King Hussein Medical Center, along with the newly built and still unoccupied army headquarters and possibly the General Intelligence Department building, also to UAE investors. The original rumors said that 4 billion dollars will be paid for the area. More recent reports cut the amount to two million. New army headquarters and a new medical center are planned to be built in Madouna, in the eastern desert. Nimri again reports that the PM has defended the sale. The medical center buildings are old, and why keep land that can be sold to build much needed office space? This argument may make sense, although I was always under the impression that hospitals should be easily accessible. The PM is now saying there is no land sale. We will see.

The third project is the most controversial. The mayor of Amman is planning on building a complex for governmental offices (which is not the responsibility of the Amman municipality). The developer is Najeeb Miqati, the former Lebanese prime minister. The complex is to cost 1.4 billion dinars, and will be rented to the government. The project is a financial loss for the government. Renting the complex will cost about 140 million dinars a year, while currently the government pays only 11 million dinars per year for renting buildings all across the country. It is not unusual for Nahid Hattar to oppose such a project, but you know that there is a problem when Fahed el Fanek opposes it. Reports suggest that the government has not signed on to the scheme, and the PM is sending signals that he was not consulted and has not committed to moving government departments in rented buildings to the new complex. Of course, given the way that decisions are made (in closed rooms, away from public scrutiny), we will only find out when the dictator mayor of Amman makes his decision. Whatever the PM thinks, the municipality is going ahead with the land confiscation for the project. Maybe the PM doesn’t know that the decision has already been made.

The government says it is trimming down, as if the problem is with the real estate that it owns. I would like to see the government spending cut back and rationalized. With all this extra cash floating around, I think that this is a remote possibility, so say the least. We can only hope that a fraction of it will be spent on something useful.

21 Comments:

At 10:38 PM, Anonymous Hamzeh N. said...

I think such deals are good, but they should just not be kept secret for long.

Now I have always been wondering just what the heck those big buildings that you see when you're going down Mecca street are, and didn't know they were for the army's headquarters. Honestly, it doesn't make sense to me to have the army's headquarters there.

I also think it does make sense to relocate the hospital along with the headquarters, since most of its patients are gonna be military dependents (transportation and visits will be easier).

I don't think there are any Jordanian investors who can offer what some outside investors from the Gulf and even Lebanon can. I just hope that any outside investor in Jordan is truly a good investor and that they bring good projects and create good jobs for the people there.

It's good that these stories are out in the open now.

 
At 10:50 PM, Blogger Mohanned said...

Hamzeh,
I am all for free market and capitalizm, and as such those deals are ultimatly good for the country, BUT, where is the transperancy, and with the government history of mismanagement and corruption I just can assume good will, we have to know who will manage this money and how will it be spent? Is it going to be used to eliminate the national debt? Will it be spent on projects that will revitalize the economy? Will it be used to pay for the housing initiative and the social security net? Or maybe pay for the extra gazzillion employees that we have now in our golliath government and it's numerous committees?

Many questions need to be answered before any of us can give the approval stamp(As if we can do anything!!)

 
At 10:51 PM, Blogger Mohanned said...

*can't assume

 
At 10:58 PM, Blogger Khalaf said...

Hamzeh: I don't think that the government complex is a good idea. It is a total waste, except for those will make commissions. As for the Medical center, it will be too far from anywhere. The army command might be put in a remote area, but not a hospital.

I agree with Mohanned that in all probability, most of the money will be wasted.

 
At 11:00 PM, Blogger Mohanned said...

http://www.ammonnews.net/arabicDemo/article.php?articleID=22069

And here we go again, a new governmental entity!!! I AM JUST AMAZED how they approach problems!Instead of limiting the government to monitoring the market, they now create their own market! Can you guess what impact this decision will have? Of the top of my head:
1- The local merchants will go crazy because now they will loose more customers, this means layoffs and more cost cutting and maybe ultimatly thousand of small shops closing down!
2- Another open door for stealing and corruption.
3- More entity to manage!!What a complex process this will be, it is just amazing!!

I don't know my head hurts right now, and I wish I can slap some faces!

 
At 11:22 PM, Blogger Khalaf said...

Mohanned: Knowing how government will run the "non-profit" company, I suspect that it's imports will cost more than what "for profit" companies. You need to factor in all the extra useless employees, fancy offices, cars, commissions, etc. Once that is all figured in, the kilo of sugar will cost three dinars.

 
At 11:28 PM, Anonymous Hamzeh N. said...

Mohannad, I think all the questions you face are valid, but they are not new. I mean the money that comes from these sales is not going to be the only money to ever land in the hands of our governments.

I understand that the amount of money involved is huge and therefore warrants an extra amount of caution, but I hope that our parliament (and the people) are also careful to not drive good opportunities away.

 
At 11:32 PM, Anonymous Hamzeh N. said...

Khalaf, I haven't heard or read anything about the hospital being put on its own away from anything.

The first I read about this mentioned only the headquarters buildings which are not even complete yet, and the AFP story doesn't say the hospital will be relocated somewhere else on its own. It makes it sound like it will go wherever the headquarters go.

Is the hospital only for military people and their dependents, or can anyone go to it?

 
At 11:41 PM, Blogger Abu Daoud said...

I agree with Mohanned, the key thing is transparency, and this holds wethewr the buyer is from the UK, UAE, or even China. As long as auditors can look at the deal and say, this was the best possible deal for the money and this company has a good plan for developing the land, it is ok.

I don't see that here though.

 
At 12:01 AM, Blogger Khalaf said...

Hamzeh: The Madouneh info was in Rana Sabbagh's report.

The hospital serves current and retired military staff and their families. It also serves civilians in specialized cases where the center has exceptional expertise.

 
At 12:26 AM, Anonymous Hamzeh N. said...

That's one of the reports I read before reading this post.

My point was that since the hospital mostly serves military staff, having it far from the city (while still close to the army's headquarters) will not have such a negative impact.

 
At 6:44 AM, Blogger Khalaf said...

Only a tiny portion of the army works at the headquarters. Training camps and local commands are spread all across the country, as are the families of the military personnel.

 
At 12:40 PM, Blogger joladies said...

I hate to admit it, but I remember when the military hospital was being built and everyone was complaining that it was in the middle of nowhere and how would people get to it! They are in the process of building a huge new emergency and paediatric building, would that just be abandoned? Still most of the other buildings are really old and not in good order. As for the GHQ I don't know why it was not sold before building, it just seems ridiculous to have it on prime land when it could have been built outside of Amman. T

 
At 5:48 PM, Anonymous Deena said...

In principle, having all the government departments in a single complex may be a good thing. Last time I needed to 'a3adel' a degree, i had to go to al weibdeh, then another place in al hussein, and then to weibdeh again, to get over 40 stamps and 12 signatures ... what could have been a 20 minute procedure took 3 days. However, what I don't get is why Lebanese investors are creating this complex. This might sound very amateurish as I know nothing about economics, but why can't the project be done in phases? So if the government is willing to pay 140 million a year, and it is paying 11 now, then every year it can spend the difference (129 million) on building part of the complex as designed by Jordanian architects and carried out by Jordanian contractors. That way, in a few years, the government will actually own the complex and won’t have to pay rent, and the construction money would go towards Jordanian firms who will be able to employ more graduates, AND there is also a chance that since the architects are Jordanian that their designs will conform with local history rather than produce the eyesores being built in Amman!

 
At 5:53 PM, Anonymous Hamzeh N. said...

Khalaf, in that case, the new location won't be much worse than the rest :D

Who knows? It might even be better.

 
At 11:37 PM, Anonymous Batir said...

The location can be more attractive if Madouneh is being modified to Madonna. What I know is that the main landfill in Jordan is currently being built in the same Madouneh. Thanks Khalaf for citing an article that I wrote 8 years ago and is still valid.

 
At 12:54 AM, Anonymous khadder Kenaan said...

Thanks a lot for taking up these issues and bring it to the light. And for participant in this discussion. Personally, all of you know that I gave up on the rotten regime a while back. The level of scandels are appalling, be it on the economic level, social, administrative, or political.

This is my comment in passing on this issue:

http://jordanianissues.blogspot.com/2008/04/blog-post_18.html

Thanks again.. and Please, keep writing, all of you. Our Arab region, more so our country desrve to have fresh thoughts, and more deep review to its trajectory.

 
At 9:40 AM, Anonymous Anonymous said...

Khadder, I cannot seem to open your blog. Have you given the correct link ?

 
At 12:04 AM, Anonymous Anonymous said...

try www.jordanianissues.blogspot.com
It is on the first page,

Thanks for your interest

 
At 9:33 AM, Anonymous Anonymous said...

As noted by others, the key issues are transparency and who benefits from these deals involving public lands and institutions. It's ironic that the Min of Education doesn't have enough resources to repair and maintain the public schools at a minimum of decency for children -- and must ask help from the private sector (people who are already paying taxes AND fees for their own kids to attend private schools because the public schools are inadequate!) Slogans about social issues and education being everyone's responsilbity are fine and well but it only erodes the public trust when they hear about these "behind closed doors" deals and can't follow the money trail back to anything substantive that improves the standard of living for ordinary Jordanians. This is a dangerous game that could backfire at very high cost to social cohesion and political stability in Jordan. I hope the leadership will get a handle on this, and soon.

 
At 12:41 AM, Blogger Tallouza said...

It seems to me that people are sooo busy making ends meet and trying to figure out how to get out of the whirlwind of skyrocketing prices, that sale of a building and the relocation of a government office seem trivial and mundane compared to the prospect of starvation. The big boys are left to play while the rest of the people are left in the dark. The arrogant and disgustingly elitist approach of we know better and we disseminate information on a need to know basis is nothing but a sign of our moral and ethical bankruptcy. To whom much is given much is obliged.

 

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