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Residents of a plush beachside community have complained of a fuel surcharge that has spiked their utility rates, which they claim are now the costliest in the UAE. Owners of villas in the Dh5-billion Al Hamra Village development in Ras Al Khaimah say they have been paying the fuel surcharge despite paying a large sum at the time of purchase for their property to be connected to the national electricity grid.
Many residents who brought property here to move away from the hustle and bustle of the neighbouring emirates say there is no explanation why they are being charged the extra amount.
Some residents claim they pay as much as 160 per cent more for electricity and water compared to residents in other emirates.
Al Hamra Village is administered by Al Hamra Real Estate, the government developer that is aiming to attract investors and homeowners to the area. Residents say the unresolved issues with the fuel surcharge could inhibit many from moving to the master-plan development.
Paul Scott, a businessman who owns companies in Dubai and who owns a villa in Al Hamra, says an average family would have to pay Dh20,000 more per year because of the high utility rates. ''I am sure potential investors would think again if they really knew about the living cost,'' he says.
The fuel surcharge was added to the residents' bills from February. The revised tariff is in line with the current utility cost in the region, according to a message from the developer on its website.
But Paul Smattock, an accountant in Ajman who purchased a property in Al Hamra Village five years ago, claims it is stated in his contract that his villa will be connected to the Federal Electricity and Water Authority (Fewa) network. ''This has not happened and they are charging what they like.''
With the fuel surcharge, Smattock says he is paying 60 fils per kilowatt-hour (kWh) compared to 23 fils per kWh for a property connected to Fewa.
He says villa owners have approached the developer on numerous occasions, but they have not received a clear answer, except for a promise that Fewa connection will be made.
Surprisingly, about half of the development is already connected to the Fewa network, while the rest still rely on generators. Furthermore, Smattock says as real estate activity is again picking up, many newer developments in Al Hamra are already connected to the national grid.
Mike Dunn, CEO of a company and owner of a villa and an apartment in Al Hamra Village, says he is paying ''ridiculously high'' power charges.
''We as a community are paying 160 per cent more than those who are connected to Fewa,'' he says.
When he bought his villa seven years ago, he says he was charged Dhl4,000 for connection to the Fewa grid, but it never happened.
''They brought in generators and now I am paying a fuel surcharge of Dh876. For a small townhouse, the bill comes to Dh3,000 per month in summer,'' he says. ''How can they justify this? Everybody complains, but they say, 'We can send someone to check your metre, but we will have to charge for that.'
''New buildings are connected to Fewa, why not us?''
Despite his displeasure with the utility charges, Dunn says he still prefers to reside in Al Hamra.
''It is a fantastic place to live,'' he says. ''In all fairness, the roads and the area are kept clean. But at the end of the day, it is not fair [to have such high utility charges].''
To add to the residents' woes, water charges have also gone up, increasing 40 per cent in February. Residents say they have not received an explanation ''that makes any sense''.
Scott, for his part, says he will approach the UAE's Department of Consumer Protection to ask for legal help. ''A power supply company cannot dictate month-to month what it can charge,'' he says.
Meanwhile, senior executives met with the residents to sort out the issue after Property Weekly sought the developer's comment on the issue.
In a message, the company's PR consultant said the developer is working to find ways for utility providers to have consistent rates.
''We are working closely with both public and private utility providers to ensure that we have consistent supply of utilities in our community. However, we do not have any control over costs levied by utility providers,'' says a company statement. ''We are continuously working to find ways for utility providers to have consistent rates and provide ample notice of rate changes.''
As the largest property owner in Al Hamra, the developer says it is also subjected to the same rates.
''Fluctuating energy bills have had a significant effect on the cost of managing our properties, common areas, golf course, marina and other entities we are responsible for,'' it says in a statement. ''We empathise with our residents and work closely with all stakeholders to resolve any concerns.''
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Source: Mahmood Saberi, Special to Property Weekly