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The title is a quote from the Oman Observer of 6th January 2006, describing Ahmed Abubaker Janahi, the Vice Chairman of Al Sawadi Investment and Tourism Company at the signing of the agreement for construction of Phase 1 of the Blue City on 6th January 2006. But it could have been taken from a press release, since the Times of Oman had a similar quote in its article of January 7th.

“Though the Blue City project would be built in Oman, the company that conceived it was a Bahraini. ‘In the wake of globalisation, there will be more and more competition and Bahrain has emerged as a model country with huge assets of human resources and intellectuals in all vital areas. The Blue City has proved the capability of Bahrain for producing a project worth billions of dollars,’ Ahmed Janahi said.”

Ahmed Janahi is therefore responsible for what has been termed the largest urban development in the Gulf region valued at $20 billion over15 years - about 80 percent of Oman's gross domestic product in 2004. That’s an awful lot of cash.

Ahmed Abubaker Janahi is Bahraini. He admits in a profile that he was a bit aimless when he was young, taking an engineering course at a technical college in Bahrain, and then studying architecture at Manchester Metropolitan University (then Manchester Polytechnic) in UK, which allowed him to express his creativity. Now he urges young people to focus on their futures and to keep fit.

His architectural company, established in 1988, is small, employing around 40 overseas professionals Ahmed AbuBaker Janahi Architects is listed as using virtual office software for “geographically dispersed colleagues,” and is classified as a SME. Up until 1999, his company could boast just two shopping centres, one of which is the Al A'ali shopping complex (the Ahmed Al A'ali Company has won a contract for dredging, in Phases II and III of the Bahrain Financial Harbour), a villa and CERT, the Centre for Applied Research and Training in Abu Dhabi. But in 1999, Ahmed Janahi Architects won the contract for designing and overseeing construction of the $1.3 billion Bahrain Financial Harbour.

AAJHoldings, which has upgraded its website substantially within the last two weeks, owns Ahmed Janahi Architects, and ReeMoon, a company established in 2000 to provide business and real estate advisory services. It also owns a company called Sintegro which has unspecific responsibilities for planning infrastructure and providing management services

When I looked two weeks ago, AAJHoldings also had equity interest in Stratum W.L.L., “recognized as one of a new breed of professionally run private equity firms in the Gulf region” according to Gulf Business (2004)

Stratum was appointed by the Bahrain Monetary Agency (BMA) to serve as the strategic project manager for the Bahrain International Insurance Center (BIIC), which will be housed in the Bahrain Financial Harbour (BFH), a development project in Bahrain which aims to secure the county a premier position as a financial centre in the Gulf.

The chairman of Bahrain Financial Harbour Holding Company is Esam Janahi, who is also CEO of the leading Bahrain-based Islamic investment bank, Gulf Finance House B.S.C (GFH) and Managing Director of TAIB Securities. GFH has a paid up capital of US$ 150 million and an authorised capital of US$ 300 million, fairly small for a bank. GFH was established in October 1999, the same year that AAJ Architects won the contract for BFH. In fact, Esam Janahi, and Ahmed Abubaker Janahi, together unveiled the vision of BFH during the Waterfront Expo conference at the Excel Conference Centre in London Docklands in October 2003.

In 2004, Mr Esam Janahi, who has won accolades as an Islamic banker, said that 'We have successfully arranged and placed investments in the GCC and in Europe yielding 9 to 10 per cent per annum cash dividends with maturity profiles of 5 to 7 years. These real estate backed deals have helped plug the gap in medium term Islamic product offerings.'

So he and his colleagues have been busy looking for real estate developments in which high net worth investors can put their money with assurance that the terms of the investment meet the conditions of Islamic banking law, as well as creating such developments.

"The main activity for Gulf Finance House," he [Mr Esam Janahi] said, "is private equity investment, with 80 percent of our time here allocated to this. Gulf Finance House acquires a controlling stake in companies, creates a turnaround situation for these companies, holds them for three to five years, and then exits out of them. The geographical focus, as I have mentioned, is the GCC, the Gulf region, and then the Middle East and North Africa."

At present, Gulf Finance House has interests in the US$600 million Al Areen Desert Spa and Resort in the Kingdom of Bahrain, the Dubai Heritage Vision in Dubailand, the $1.5 billion ‘Arabian Legends’ theme park resort in Dubailand and Jordan Gate, the Royal Metropolis in the Hashemite Kingdom of Jordan.

Alternative figures quote US$1 billion for the Royal Metropolis in the Hashemite Kingdom of Jordan, the US$3.8 billion Legends in Dubailand in the UAE, the US$1.4 billion Bahrain Financial Harbour, and the US$750 million Al Areen

So successful has the investment in Bahrain Financial Harbour been that a batch of investors, represented by BFH Inc., who had invested in BFH in early 2003, were able to exit the scheme in mid-July 2005 after earning a return of 50% on their investment, as against a return of 40% projected by GFH in two years.

Basically, the same company names are coming up in several deals involving a lot of money. If you can make one and a half times as much as your original investment in under three years, then you must be on to a good thing. I’m just a bit puzzled as to how the value of the investment goes up in that short space of time.

Back to the Blue City at Al Sawadi. In common with all the other developments being promoted by Ree Moon, AAJ Holdings and also those sponsored by Gulf Finance House, it will incorporate a lot of residential units, as well as hotels, malls, health and educational facilities.

Apparently, the Blue City secured 100% financing before the official launch. Oppenheimer Investments AG (Solothurn, Switzerland) , are said to be the backers, who have appointed Bear Stearns, the seventh largest investment bank in the U.S., to act as bond placement agent. I’ve drawn a bit of a blank about the Swiss-based Oppenheimer, not having been able to establish what kind of links nor backing that they in turn have. Is this a different type of arrangement from the one that Mr Esam Janahi promotes through Gulf Finance House?

The largest construction company in Greece, Aktor Ate, a branch of Hellenic Technodomiki, along with the Turkish company, Enka Insaat ve Sanayi A.S., won and signed a $1.9 billion contract for building Phase 1 of the development in January 2006.

Aktor Ate has experience in wastewater engineering adhering to European treatment standards, and also built the Olympic Village for the 2004 Olympic Games. Enka has been building new towns in Libya and Saudi Arabia since the 1980s. It also built over 5,000 apartments at five locations in Russia and Belarus in the 1990s, (I suggest you visit the site and look at the photos), and accommodation for AGIP at the Caspian Sea refinery site in Kazakhstan. I would say that the type of building is low-cost, with short to medium term life.

These developments are mooted as tourist-oriented. Which tourists, from where? If you’ve been to the Mediterranean or that stretch of coast west of Alexandria, you’ve seen some of the property that springs up in the coastal resorts, and I’m guessing that the buildings at Al Sawadi will be of a similar standard. Are the tourists coming from the Gulf or from wider afield? Will there be entertainment, other than golf courses?

Will the coastline behave itself and not keep changing after dredging alters its outline?

Mr Ahmed A Janahi also seems to have concerns about provision of entertainment at his developments. Another press release claiming that Michael Jackson would be an entertainment consultant to Janahi’s company, AAJ Holdings, has shown up in America, where there are doubts about Jackson’s credentials for the job. According to Mr Janahi’s statement, "Stagnant architectural structures need content in the form of entertainment to revive them and that's where Michael Jackson will play an integral role."

However, The Vine Online suggested that Jackson has little experience of such endeavours: “Jackson's amusement park experience is limited to Captain Eo (the '80s-era 3-D film and Disney theme park attraction he created in collaboration with George Lucas and Francis Ford Coppola) and some scuttled plans to build amusements parks and entertainment complexes in such locales as Detroit, Poland, Brazil, Japan, South Korea and Africa.”

The only item that I have read so far on the subject from Jackson’s side is a statement by his public relations agent, Raymone Bain published on 24th January: “The truth is that a multi-billion dollar entertainment conglomerate has asked him if he would consider becoming an advisor helping to bring entertainment enterprises to the Middle East." Which implies that Jackson may be thinking about the offer, but isn’t prepared to state that he has accepted it.