DHA takes over: Crescent Bay project on the rocks

Published: July 8, 2011

A drawing of what the finished Crescent Bay project would look like. IMAGE: EMAAR BROCHURE

KARACHI: 

The Pakistan Defence Officers Housing Authority (DHA) and the Dubai-based international construction giant Emaar are at loggerheads over the much-advertised and much-delayed 108-acre Crescent Bay project in DHA Phase VIII’s waterfront zone E.

DHA has filed a petition against four companies — Emaar Giga International FZCO, Emaar Giga Karachi Limited, Emaar Properties PJSC and CEO Global Marketing Services (GMS) Shaukat Qureshi — in the Sindh High Court. It won a stay order on June 27 until the next hearing scheduled for July 12, The Express Tribune has learnt.

DHA and Emaar Giga International had signed a memorandum of understanding on May 20, 2004 to construct 46 towers in three ‘uniquely designed’ bays.

According to Emaar Pakistan’s website, each of these three bays was to be “encircled by a community with its own unique look and character, which extends from the architecture to the landscaping and the street furniture.” Crescent Bay One was set to feature a hotel, malls, a waterfront promenade, piazza, four office towers, surrounded by green spaces, parks and plazas. Crescent Bay Two was to house residential towers complete with a Waterfront Retail Arcade running along the beach. Crescent Bay Three was termed the most exclusive of the residential neighborhoods, with controlled vehicle access, and a luxurious waterfront promenade.

However, even though more than seven years have passed since the deal was inked, DHA contends that only two towers and that too only till the second floor have been constructed, even though Emaar has collected more than Rs1.5 billion from its customers in advance.

Moreover, out of the 110 people who were allotted plots in Crescent Bay, 100 of them are in litigation against Emaar and many of them are demanding their money back.

Sources in DHA said that their beef with Emaar was not only due to the fact that the international construction giant owes it Rs600 million, but also because “it was trying to create a DHA within DHA.”

DHA maintains that Emaar was trying to “clandestinely” sell Crescent Bay plots without its permission to “unauthorised parties.” The authority says it was “shocked” to learn through a letter on June 13, 2011 from CEO GMS Qureshi that his marketing company was working with Emaar Giga Karachi for the last 15 months to sell land that had been sub-let by DHA.

On June 25, 2011 DHA officers discovered GMS staff taking measurements and dimensions of the land, which the regulatory body believes was in clear violation of its agreement that mentions that no sale can move ahead unless DHA approves it. DHA immediately removed the GMS personnel from the site and took over possession of the land and the Crescent Bay project itself in “public interest”. It now wants to undertake construction of the two towers which, according to them, Emaar has abandoned.

Senior officials with DHA told The Express Tribune that it was extremely unfortunate that Emaar has not completed its commitments to the people, especially since there were huge expectations from them, given their expertise and long list of successful projects. Although DHA’s experience in mega construction projects is negligible compared to Emaar’s, it believes that with its experience of Creek Vista in Karachi, it can take off from where the international construction stopped.

Crescent Bay senior manager projects Adnan Qureshi was repeatedly contacted for comment but he declined to say anything. A senior representative of Emaar Pakistan from Islamabad told The Express Tribune, however, that the issue was “really minute” and had nothing to do with the Crescent Bay Project. According to the representative who wished not be named, Emaar Pakistan is here to stay in Pakistan and all reports that it is planning to abandon its projects were false. He said Emaar Pakistan was working in partnership with DHA in Islamabad as well. It is true that some of the customers of Emaar’s Crescent Bay project have gone to court, but it was the customers who were at fault, and were greedy about claiming their money after investing only one per cent in the project.

He said that the delay in the project was only natural because of the large amount of land that had to be reclaimed. Another Emaar Pakistan representative in Karachi contradicted DHA’s claims and said that the Crescent Bay master plan was ready and with them.

Published in The Express Tribune, July 8th, 2011.

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Reader Comments (19)

  • Salman
    Jul 8, 2011 - 8:32AM

    arrest GMS’ Shaukat Qureshi like they do in Dubai when companies owe money to customers and do not fulfill their contracts and they do have debtor prisons in Dubai as they did in the West two centuries ago.

    *"He said that the delay in the project was only natural because of the large amount of land that had to be reclaimed."*

    Hogwash. Much of Dubai is built on reclaimed land and this company is well experienced with working on reclaimed lands. The amount of time to reclaim land was included in the projections and delivery dates were given after taking into account all the factors. If they are delayed they should pay the customers.

    Of course our officials will prove to be patsies and gutless in protecting Pakistani consumers because these officials have to be in good graces of Dubai’s powers to be, not knowing when they would have to seek refuge there.Recommend

  • Shariq
    Jul 8, 2011 - 10:59AM

    DHA is no more than a mafia in itself. They have been terrorizing residents of DHA to hand over ridiculous amounts of money for land legally owned by residents in the guise of “upgrades” and “fees” Recommend

  • Khalid Shaikh
    Jul 8, 2011 - 1:17PM

    DHA could never reclaim the land, but what they could do was to try & illegally take over it. Recommend

  • Bilal ali qureshi
    Jul 8, 2011 - 3:12PM

    Emaar is the only construction company in pakistan tht is undergoing such major projects. It has invested billions of rupees in Pakistan which is why it is contributing to the infrastructural and economic development of the country. It does not deserve the kind of treatment it is getting in Pakistan from the authorities.Recommend

  • Tehreem
    Jul 8, 2011 - 3:27PM

    The complexity and investment of the project should be kept in mind and this is not the way to treat international investors.Recommend

  • Rehan Ali
    Jul 8, 2011 - 3:36PM

    Another effort to ward off foreign investors. Taking control and possessions of private (civil) resources seems to be MIK (men in khakis) favorite. DHA run by a serving MIK has done nothing new. In the greater good of the nation they plunged us into an endless war and if that wasn’t enough they are out to block the limited foreign investments coming in Pakistan. Good work guys, these investors should be taught a lesson for choosing Pakistan. Recommend

  • Anonymus
    Jul 8, 2011 - 3:41PM

    It is unfortunate how multinational companies like Emaar have to concentrate their efforts on engaging with local companies over self interests when they can instead be focusing on taking architecture to an international level.

    We owe the availability of outstanding job opportunities, infrastructural development and progressive business attitude to the presence of companies like Emaar in Pakistan and rather than making a contribution towards visualizing their over arching goals, we choose to play dirty while inefficiency blossoms in our backyards.

    Acceptance and patience are integral to moving forward and the sooner we understand that, the better it is. Recommend

  • Armaghan Mirza
    Jul 8, 2011 - 4:32PM

    This is not the way to treat a foreign investor of Emaar’s reputation. I am sure UAE government would get involved to take DHA to task at some point. Recommend

  • Jul 8, 2011 - 8:26PM

    Oh dear! Another attempt to malign the good name of the military…well Emaar is broke, fat chance any money will come through

    Recommend

  • Fahd Javed
    Jul 8, 2011 - 9:00PM

    We all know the reality about DHA and how they “suck” the money out of a customer in the name of fees! This step taken by the DHA is a very selfish one because it will only discourage foriegn investment by reputable companies such as Emaar. The difference in the quiality of deliverence by both the companies is evident to everyone and needs no elaboration. I strongly oppose this decision of the DHA and I think they should reconsider and come up with something which is more in the favour of the country in general rather than the personal interest of a few.Recommend

  • Huma Yasin Khan
    Jul 8, 2011 - 10:11PM

    Being a senior manager of customer care and HR at Emaar Pakistan group I can vouch that the delay in Crescent Bay project is only because of technical and financial reasons and that there is no intention to abandon the multimillion dollar project. It is unfortunate thay DHA seized the sales center which effects foreign investor like emaar and threatens jobs of many. Moreover all customers are infact investors who want money back which is not possible.

    Recommend

  • shakeel
    Jul 8, 2011 - 11:56PM

    All this planned by malik riaz and akd wid dha.shame on them what they r doing wid foreign investor.now who invest in pakistan?Recommend

  • Ghulam Mustafa Chaniho
    Jul 9, 2011 - 6:28AM

    Return the bundo islands and beach front to the original inhabitants of the city. This is the biggest “QABZA” in Pakistan.

    Recommend

  • Rafique Akbar
    Jul 9, 2011 - 2:17PM

    It does seem odd that DHA should choose to forcibly take possession of Crescent Bay at this point. Perhaps not as “odd” as “convenient”. Now that Emaar has used its expertise to add several hundred acres of land to the coastline through reclamation (something DHA could not possibly manage on its own) now DHA is taking possession of the extra land which of course means extra profits for the faujis.

    DHA isn’t exactly renowned for its fair-play policy, so i certainly cannot take their “for-the-benefit-of-the-people” excuse for a classic karachi “qabza” very seriously.

    Good luck to Emaar. It’s not easy beating off the opportunistic vultures circling around their landmark project.

    Recommend

  • Shaheen
    Jul 9, 2011 - 5:38PM

    EMAAR is nothing else than a MEGA FRAUD. They have booked each apartment 5 times i.e. at the end of the day, they WILL NOT offer you the same apartment you have booked. All those readers comments who are supporting Emaar Pakistan, are Emaar’s current useless employees, who are themselves hanging in the air for their jobs. The fact is, the money received by Emaar world over, has all been vanished by Emaar. They have failed to KEEP THEIR PROMISE and WE PROMISE WE DELIVER. They have not delivered anything to Pakistan on the date of delivery. I am a fully complying customer and have my money stuck with EMAAR because they have not constructed my apartment and do not intend to do so, now they are telling me to buy something else with them at an even higher price. Such investors are nothing but have caused a shame on The Government of Dubai.Recommend

  • Anonymus
    Jul 11, 2011 - 2:43PM

    Oh GRUMPY clients pull up your socks! If Emmar was a fraud they would have left you in the mid air! Didn’t you hear they are here to stay!! There is a thing called LOYALTY!! oh what would you know paying only one percent of the total amount and then you wait for a ready product…WHO’s doing the FREUD here.

    Recommend

  • abassi
    Jul 11, 2011 - 10:58PM

    So Emaar according to most of the people, and from the khakis point of view is fraud, if that is the case then how come there working in isb, and offcourse Karachi, DHA just took advantage and as u all no they got expertise to grab land of any kind like a land mafia, but as its mentioned above there is a thing called loyalty and reputation then definitely Emaar is going to fight back and provide the karachiates a community like no other in Pakistan

    Recommend

  • The financial covenants may be affected depending on the nature of the transaction and the accounting treatment. Investment-grade deals will not be hit as their loans typically contain few, if any financial covenants.

    Conversely, transactions which fall into the high-yield space (which includes all leveraged buy outs) may be affected, depending on the accounting treatment, as those deals invariably include a number of maintenance covenants (e.g., total debt/EBITDA).

    Recommend

  • An affected Customer
    Jul 12, 2011 - 10:10AM

    After having seen the comments above, I am rather disappointed at the attitude of those supporting Emaar, and I especially totally agree with Shaheen’s comment above that all those comments in favour of Emaar are actually written by incompetent employees of Emaar. One can surely make out from the language they are using against their Customers and trying to show fake LOYALTY with the company to save their jobs.

    Whatever happened to “The Customer is King” and “The Customer is always right”?? I am not only disappointed to see such ugly remarks against us like “Oh Grumpy clients”, but also the fact that I am a fully complying customer in their Canyon Views, Islamabad project and owner of a Mirador Villa which has not been completed. I invite all readers to visit Canyon Views and see for themselves! Not a single brick is being laid there. Only a few houses are complete and that too with numerous problems and issues. Since the start of the project till now, there is no supply of utilities, no Sui gas, no water supply, and extreme powerdowns. Security is slacking also. Whatever they had advertised, We Promise, We Deliver, it is one BIG LIE.

    Whenever I contact customer care, their attitude is extremely rude, and incompetent all together. They are now asking me to move to another Villa for a higher price in a worse place than I had originally selected a few years back.

    I ask all those disfavouring the DHA to show better judgement and employees of Emaar to exhibit better judgement of character for their customers who are their bread winners. I am happy that DHA has taken over the crescent Bay in phase 8, and see a ray of hope for the customers. And for those who think DHA cannot reclaim land, THINK AGAIN! Lets not forget that the entire phase 7 and 8 in karachi is reclaimed over years, so reclaiming another 100 odd acres of land would not be an issue through a contractor.

    Recommend

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