Damac's $15bn Iraq project faces axe

Damac Properties CEO Peter Riddoch

By Martin Morris

Dubai-based developer Damac Properties is said to be running into challenges over its AED55 billion ($14.98 billion) Tarin Hills project in Iraqi Kurdistan, government officials in Iraq have said.

Herish Muhamad, chairman of the Kurdistan regional government’s board of investment, said the government was ''facing some difficulties'' with Damac over the project because ''nothing has started on the ground''. He said the project could be cancelled, according to The National newspaper.

''My team and I will discuss all possible scenarios before taking the last decisions,'' he said. ''However, our decision might not be pre-consulted with them,'' the newspaper reported.

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The 170m sq ft project, launched in June 2008, was touted as a major pledge of foreign direct investment into a region battered by years of dictatorship under Saddam Hussein.

It was envisaged that sales for the project would start last summer and construction commence by December 2008.

At the time Peter Riddoch, CEO of Damac Properties, said: "The hills of Tarin will be transformed into a golf course residential community with villas surrounding and intertwined among the 18-hole course.

"This community will be augmented with a golf club and health centre, which will be a focal point destination for recreation and leisure.

''In addition, the community will encompass a water and theme park, arts centres, retail complexes, besides schools and business parks."

Niall McLoughlin, a spokesman for Damac, said on Saturday the company was adjusting the project’s timeline and plans because of the global financial crisis.

''Damac has taken the sensible step of reviewing the construction timetable with a view to rescheduling some projects,'' he said.

''It simply makes good business sense for us at this time to focus on those construction sites where we are at a more advanced stage.''

McLoughlin said the company was in negotiations with the board of investment, according to the newspaper.