Friday, September 13, 2013

so, where has the absent landlord been lately? And BLUE CITY... PART 3! The missing blog post...

It's been about 3 years I guess since I left Oman. And about year since I even logged on to my accounts here at Muscat Confidential. I just, well, lost interest, and being a long way away, I had so many other things to do. Meanwhile, My inbox on my email has over 6000 spam comments. Unmoderated.

So, what has the Dragon been up to this past year? Well, Ms. Dragon and I are still very happy living in a Western country, raising little dragons and living the good life. My treasure generating capabilities are being handsomely appreciated by my new employer, and the champagne cupboard is well stocked. No-one in this country is being threatened with jail for publishing articles on human sexuality or voicing opinions on a blog.

My contacts in the Oman security services reliably inform me there is no flag on my file, so I could return to the sultanate without any nasty surprises at the airport courtesy of the Blue City lads or the ministry of information. I may well do so, as we do miss the place, and it would be great to hit the beaches and see old friends again. We'll probably wait until winter though! .

Ahh, Blue City. Google it yourself, if you don't know what I'm referring to!

original cocaine fuelled description of blue city wiki entry - what a laugh!

Blue City Part 3

Blue city was poised on the brink of success back then. Before the crash. Everything was in place. The Bahrainis had arranged the finance, almost a billion dollars borrowed from the Japanese, albeit at a cost of nearly 30 million dollars to the mysterious swiss false-Oppenheimers. The 2 oman partners, one a subeditor in his dad's newspaper, the other the nephew of the ruler of the country and a governemnt minister, had a pot of money ( at that stage about 200 million they could actually get their hands on, the rest was all locked up in strange trust accounts administered by bank melon ny) that should have been enough to build around 30% of the original plan. All they had to do was sell the houses and apartments, build a marina and several hotels, and use that money to build it as they went.The real estate market was hot, and they were all going to make a killing. Billions of dollars. Snapped up by eager buyers from everywhere. They'd nabbed the land for a song via an inside deal. For less than a 100 million [on paper $85million was paid to the government for all the land, plus the partners kept about 4 hectares of prime stuff for them selves, seperate from blue city, btw. I suspect they probably bought the stuff with a post dated cheque that was paid by the loan anyhow], they had bought gorgeous, beach front land for what would later be officially appraised at over a billion dollars.


only one problem. As the local partners had no fucking clue about how to do a mega-real estate development with dodgy financing, design a plan that made sense and the whole legal pile of paper required to get the rating to allow stupid Japanese Bankers to invest other people's money.

so they had, right from the start a partner, who did everything except get the land. A Bahraini who was already delivering highly leveraged developments in Bahrain. To get him to arrange the deal, with no money on their part, they had had to give him majority control and ownership. The Bahraini's had 70% of the shares. So the local investors essentially locked him out, literally, by not letting him into the building. They bought off paid the existing CEO a cool million I'm told, to hold his nose and do what he was told. They then recruited a good american real estate guy with a record in the UAE. They didnt sell many properties, because by the time they had redesigned everything, renegotiated contracts, restaffed the place, built themselves a 2 million dollar sales office, contractor camp, and were just about out of money to keep up the payments to the contractor.... the financial crisis hit. If only they hadnt delayed those crucial 2 years and pissed away all the money. Ooops. Meanwhile, before the shit hit the fan, they sued in the courts for 100% ownership of the project over some bizarre technicality, wasting more time. Upheld at first, overturned on appeal, but the case finally returned to them in the supreme court. (Wink wink. ) , And Mr Editor, with zero experience in real estate, took over operational control of Blue City. Living it up large as the genius who who build this new city. All fired up on his own marketing and ego. He was a friend of michael jackson, dont you know. And his marketing person from italy was very very high performing im told, even if her salary was 7000 rials a month. Thats about 250000 dollars a year tax free, plus expenses. As the Bahraini company had done the master plan, with south African contractors who hadn't been paid either, they could keep the plan, it wasn't grand enough and it made their legal case untenable if they kept the original plans, tainted as they were by being done by the Bahraini s. thus the new team under the guidance of the paperboy Chairman and CEO proceeded to spend the remaining cash like no tomorrow. They did a whole new redesign, by a renowned company (Norman Foster, no less). They commissioned golf courses, travelled far and wide ( business class for the plebs, first for the principals), paid mediocre expats vast salaries, paid to win so-called awards for design and their grandious plans for a new capital. It would require vast government infrastructure investments, but hey, I'm sure one of the owners could handle that.

And Blue City, as we all said it would, went bust. The poor loss making Japanese bankers were bought out by the omani government investment fund at about 65cents in the dollar via a shell UAE company fronting the deal (more huge fees to middlemen), for the secured notes that would have enabled the bondholders to foreclose on the land. The half constructed hotels and apartment buildings are left surrounded by barren wasteland. The people who paid a deposit for apartments I presume were bailed out on the quiet by the government, and perhaps the government at least collected on the insurance and escrow funds, and nobody said anything. No front page articles in the week. All that happened is basically a couple of totally inexperienced Oman businessmen blew around 1% of the countries GDP on a megalomaniacal exploitative real estate deal that they totally screwed up due to their exceptional incompetence, greed and hubris. When they went spectacularly bankrupt, then they were rescued by the government, off the official books via the sovereign wealth fund, spending 500 million dollars to rebuy a piece of land they had owned before and had sold for 85 million. Blue city declared bankruptcy and the contractor left the country. All the expats were slowly sacked, most without what they were promised. It was a total cockup. Costing the country about a half a billion. And it was all wasted. Pissed away. By a well connected pair of amateurs who managed to borrow vast amounts under the aegis of the Royal Family, and got so gready the couldn't stand the idea of only making around 300 - 600 million for basically nothing. They had to have it all. Ah well. And nobody went to jail, because if youve got that sort of wasta, well, then the government bails you out on the sly with the public's money.

so that's alright then.

and that folks, was Blue City, part 3. Finally.


  1. OMG! Blue City Part III! I can't believe it! Welcome back (P.S. the Marketing Lady was Greek, not Italian ;)

  2. It was a disgrace. But, hey, life moves on. I just figured, after the parts 1 and 2, it was a debt I had to pay before I came back. And where I am now, the post above is a gazillion % legal, if not encouraged.

    This was never my problem, except I hate waste.

  3. Thanks UD for this Part 3. I always dreamed the law would bring justice to the 2 supremely-connected and greedy Omanis who so blatantly shamed the country with their avarice and incompetence. But, alas, it was but a dream and dreams do not always come true (especially where wasta is concerned and working for the ne'er-do-goods).

    I literally spit out some of my coffee due to unrestrained laughter when you mentioned Chairman Paperboy's "friendship" with Michael Jackson. It brought back memories of when I first met Chairman Paperboy -- all he wanted to talk about was his friendship with MJ; he was chock full of stories, none of them amusing. He merely wanted to boast. He boasted about everything all the time, especially when it came to his overconsumption of retail goods (e.g. his hideous crocodile leather shoes, for instance...and the new car he was buying to replaced his all too pedestrian Porsche Cayenne).

    Ah, Chairman Paperboy. I wonder what he is up to now. That man had threatened to have me jailed. Although, I must say, when I later bumpped into him at a local restaurant, he was most gracious and didn't bring up the threats that almost had me hightailing it out of the country over night.

    P.S. As AZ said, I can confirm that the former marketing lady is Greek.

    P.S. Why aren't you naming names in this latest post? Is it because you do not want to rock the boat given your plans to perhaps return to Oman for a visit in the near future? You used to name names and that carried greater risk as at the time you were living in Oman. In any case, I have also refrained from naming Chairman Paperboy here out of deference to what seems to be your reticence/caution.

  4. Replies
    1. It's impressive to ride horses while blog commenting Nadia.. is that a salalah warrior princess thing?

    2. I'd redirect that question....

  5. Meh. Name away! The owners of blue city are public record. Anis al zedjali and HM Haitham al said.

  6. This comment has been removed by the author.


    This really documents the above, btw.

  8. Welcome back, I hope for a few more posts!

    Glad to finally see Part 3, albeit abridged ;)

  9. UD, I almsot suffered an apoplectic attack when reading your comment that one of the owners of Blue City was "HM haitham al said"! Heaven forbid that man ever became His Majesty (i.e. HM) the Sultan. The only HM in Oman today is HM Qaboos and all should be grateful for that! Haitham's title is His Highness (i.e. HH).
    Chairman Paperboy usually spells his name Anees Issa Al Zadjali, although his father goes by Essa.

    Friend of Oman (I forgot to sign my name above as per your instructions...I am the commenter above railing against the shenanigans of Chairman Paperboy)

  10. Mmmmmm. A bit thin Mr Dragon. As you very well know there were some real (none Omani) sharks involved with the Blue City caper. Its a pity you didn't name them - but then that might spoil your future options.

    I've since been back to Oman and no-one bothered me, which kinda surprised me! So, maybe their wasta aint too good anymore!

    Willie Dryer

  11. I honestly found Anes Al Zadjali and his family to be super nice people. I also hope that the Blue City project will someday get completed. I do think that people didn't know what they were doing, I mean, you can't build a city without some more infrastructure than the concept had planned and I don't know all the financing detail with Japan and the like... I don't know. I am just sad this hasn't happened for that area of Oman and hope they plan to make the development in the future a little less "high class" and little more approachable for the average educated Omani family that wants to buy a regular old suburban existance for themselves.

  12. And Margarita WAS a very skilled and intelligent saleswoman/PR person (and nice person) so even if people don't like what happened with blue City, that's probably why she's still working in Oman to this day even elsewhere. That's just my personal opinion of her, and seeing her in action in the showroom. She kind of held alot of things together as they were falling apart and no one can really blame a PR person for that can they? That's their job.

  13. I guess the nice people could have just got it wrong but it would be good and publicly transparent if they were to open all eir bank accounts to show that they did not profit from this mega error

  14. Anon: I am sure they did profit. I didn't know their salaries but Margarita--- at least with me--- never was flashy [unlike some of the other blue city project-based employed girls/lads], and the porsche cayenne I am pretty sure belonged to a daughter [not employed by Blue City but actually a fashion designer]--- not the chairman;).

    I know a lot of people who put in good work there and got paid super late. I think it became a mess and probably was no reason for that. But my personal opinions of people like Richard Russel, Margarita, and others, ect... they were super professional individuals getting on the best they could. And I never heard an Anees Michael Jackson reference myself;). And I am pretty sure none of the clan knew I was a blogger back then;) beyond the head of the healthcare devlopment department at BCC1.

    I personally just wonder what they are going to do with the project now you know? I really believed in its benefit for Oman then, and still do. I heard some pretty practical "fixies" suggested by experts from outside Oman but they weren't employees of BCC1, so still I wonder. I mean, myself, investors infomrally asked me, would you buy here? I guess I would, but I am not a high-flyer, so as a regular-old Omani, there needed to be a segment of that represented, especially for an area that far out of Muscat without the completed roadworks, schools, shops, and all. You can't compare the BC project with The Wave or Muscat Hill or even Jebel Sifah, really. Jebel Sifah is pure luxe in an area of perfect beaches. Muscat Hills and The Wave are relatively small developments already within the infrastructure of Muscat. Schools and shops are in driving distance ect.... I've lived in Barka. For a cultural-Omani chic like me, fine and dandy, but for luxe ex-pat investment villas (or even high-flyer Omanis) it requires a little more to be practical as a design concept, even from the outset of Phase 1.

    I'd like to hear Muscat Confidential's opinions on that.

  15. My dear Omani Princess,

    I'm kinda sorry to have to tell you this, but you've got putty for brains - and that's being kind.

    Me thinks you've been in the sun too long girl, or have been reading far, far too many silly girlie magazines.

    You need to ask a few hard questions of someone close to you about the wonks in Blue City dear. It was a TOTAL crock of shit. In fact it was about the biggest crock of shit in the whole of the Middle East house of cards! Get real girl!! The folks involved (including their slappers) were all just simply crooks... or nit wits picking up loose change. Why is that so hard for you to comprehend? Are you daft?

    Willie Dryer

  16. Wow, just simply WOW! It is shocking to read the nonsense spewing forth in the words of Omani Princess. It was like reading an economic treatise written by a 6 yr old. "Oh me oh my, everyone is so nice. I just wish they could build more stuff for we non high flyers. Oh me oh my, Anees Issa must be an honest man."

    Many of us in the know knew all along that Blue City was a scam. We were silenced and threatened with jail if we said anything. And, yes, Omani Princess, your beloved Anees Issa did threaten people with jail (through his connections/wasta) if they exposed the details of his evil plans. Get a grip girl.

    - Expat Bob

  17. Expat Bob: Don't read what I am actually saying, and comment on being angry with people (to me---not them)...

    I am saying my personal opinion of people how I knew them. And then I am saying, how or what I think it would have taken to make the development work better than it did. I don't think that makes me stupid. I also wanted to clarify that the car belonged to someone I know, not Anees ect... (who I didn't know well, but I knew his daughters because one of them was married to the brother of one of my friends). I can only say how I saw people's actions. if they threatened to send me to jail for speaking the truth, I would have blogged about that, gone to the police, recorded it ect... I mean people should speak up if they know something criminal. but I am syaing what I know and think there is nothing naive or stupid about that. I call it part of being a decent human being.

    I met a lot of skilled developers (from Dubai and from Canada ect.), and I wasn't involved in the financial side of Blue City, but I am saying, the project could have worked if it was done differently. They didn't put the infrastructure in the initial investments. If that means to others they stole, so be it, but to me, it means it was done wrong, and I am sad the project failed because it would have been good for the Al Batinah region, if they got, say, Universities like GUtech out there, and another training hospital, and a hotel designed by the same gorup who designed the Qasr Al Serab in Abu Dhabi... the residential areas should have suited the population that will actually want to live in Al Batinah ect....

    I don't think I would have said any of that if I was 6;). Hate away as you like, but please, don't judge people you don't know, including me. If you know them, sure, then speak your mind, I am all for that.


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