Shams Ahsan

Saudi Gazette

JEDDAH — Some 93 people of various nationalities, who invested in the bankrupt Marina West project, an iconic gated community on the west coast of Bahrain, signed a petition Thursday to be submitted to the Bahraini Prime Minister Prince Khalifa Bin Salman Al-Khalifa.

“We have also formed a sub-group to visit the Saudi ambassador in Bahrain in this regard,” Hassan Al-Husseini, one of the investors in the project and a former Saudi Aramco employee, told Saudi Gazette in a telephonic interview from Manama. 

“We have also formed a sub-group to visit the Saudi ambassador in Bahrain in this regard,” Hassan Al-Husseini, one of the investors in the project and a former Saudi Aramco employee, told Saudi Gazette in a telephonic interview from Manama.

He said that about 40 percent of the investors in the defunct project are Saudis, about 40 percent are Bahrainis and the remaining 20 percent come from 20 different countries. The investors want to avoid legal action since that would be a time consuming process with little help.

“If we go to the court we will be stuck for five to 10 years going back and forth,” said Al-Husseini.

The investors, most of whom have already paid 80 percent of the value of the apartments, want possession of their property. They do not want their money back, said the former Saudi Aramco employee who has taken the initiative to bring together all the investors and raise the issue at the level of their governments.

The case relates to the $750 million project on the western coast of Bahrain south of Budaya Village.

Marina West was first presented in a press release in Dec. 2006 as a $300 million project consisting of 1,280 freehold apartments within 11 residential towers. One tower was reconfigured in 2008 as a 5-star hotel. Total project cost estimates were raised to $750 million, and apartment prices were increased by up to 100-150 percent in 2008-09. Marina West sales came to a near stop. By February 2009, workers of the contractor Al-Hamad Construction went on strike due to nonpayment of wages.

More than 400 Bahraini, Saudi, European, North American and other families have invested about $150 million since 2007 in the project.

They were supposed to have received the apartments by Dec. 2010, but construction work stopped in March 2010.

On October 7, 2010, Mahmoud Janahi, the Marina West Managing Director, issued a letter to the buyers, admitting failed efforts with investors to fund the remainder of the project. According to estimates, banks, suppliers and contractors are owed about another $100 million.

A petition was submitted by over 120 apartment buyers to the Crown Prince and Chairman of the Bahrain Economic Development Board on Nov. 24, 2010. The petition pleaded for government investigation and intervention.

A second petition was submitted to the National Dialogue Committee in June 2011 to investigate the allegations of fraud.

Mahmoud Janahi in August 2011 said three solutions were to be pursued after discussions with the government.

These were to seek private investors, bank financing, and possibly government participation. By the end of 2012, no action had been reported. Several local law firms have been unwilling to pursue court action or quoted extravagant rates. Real estate firms have been equally reluctant to get involved.

Owners say they have been told by Marina West officials that efforts to bring in new investors and creditors since early 2009 have failed to bring in new financing. Some home buyers report that the Janahi brothers have rejected several significant offers from Saudi, European, Chinese and other developers and investors.

Al-Husseini expressed the hope that the Bahraini government will issue a royal verdict appointing a capable person to track the progress of the project.

“The Bahraini government has signed a treaty to promote and protect investment. We hope that the government appoints someone to run the bankrupt project,” he said.