Legal action has been taken against investors behind a BD10-million ($26.3 million) shopping mall in Bahrain for overdue payments to the government.

Reef Al Jazira, a joint venture between two Bahraini businessmen and a Kuwaiti investor, operates Reef Mall in Malkiya, which includes shopping outlets, a hypermarket, a food court and children’s play areas, reported the Gulf Daily News, our sister publication.

The Northern Municipal Council claims the company has racked up around BD2 million ($5.3 million) in unpaid rent and municipal fees since the mall opened in May 2010. It urgently referred the case to the Works, Municipalities and Urban Planning Affairs Ministry, which sent it to the Public Prosecution.

Plans for the mall were first announced in 2002 by His Majesty King Hamad to support residents in Buri, Hamala, Demistan, Karzakan, Saddad, Shahrakan, Dur Kulaib, Malkiya and Hamad Town.

However, it faced a three-year delay, allegedly due to a lack of co-ordination between government organisations involved.

The Royal Court later intervened and handed responsibility over to the ministry, which is supervising it.

A board was also set up to represent the residents, headed by former Northern Municipal Council chairman Yousif Al Boori.

“We are aware that payments reaching BD2 million ($5.3 million) have not been made, but the mall comes under the responsibility of the council and the ministry, and they have decided to follow the investors legally,” said Northern municipality director-general Yousif Al Ghatam.

Council chairman Mohammed Bu Hamood, who is interim chairman of the board until a decree is issued, said the investors did not pay “a single fil” since opening the mall.

“As interim board chairman I asked all of those concerned to meet, and everyone showed up except for the representatives of the investor,” he said.

“We wanted to help but it seems the investors don’t want to negotiate, so we decided to refer them to court and (Works Minister Essam Khalaf)agreed with our decision.

“I spoke to the Cabinet and they agreed to open offices for the General Directorate of Traffic, the Bahrain Investors Centre (BIC) and the Electricity and Water Authority (EWA), amongst others in nine vacant offices inside the mall, but nothing has happened.”

He added that some businesses have vacated the mall but the hypermarket, run by the Kuwaiti investor, and major food chains renting spaces were still operating there.

“We want to revive the mall for the sake of the people since revenues are set aside to serve them and it is unfortunate that the investors who were granted licensing to open their own mall in Zayed Town are refusing to listen,” he said.

Residents’ representative and former area councillor Jassim Al Mahdi said he campaigned for action to be taken against the mall for years.

“Either they pay or they are gone – it is not a joke,” he said.

“I asked a long time ago for a court case against the investor, but I was told to wait, years have passed and nothing happened, and people are paying the price.”

Representatives of the investors were unavailable for comment when contacted by the GDN.

The council, during its final meeting before the summer break, also suspended discussions on a proposal to have an open market for street vendors in the open space adjacent to the mall because it would affect business.

The GDN earlier reported on other setbacks involving the mall such as the ministry announcing it would allocate two-thirds of the mall’s revenue for its projects and services.

This angered the board, which already promised allocating 70 per cent of the revenue for residents.

However, the ministry later said it had no intention to have the money for its coffers; it just had a list of plans to develop the villages in the area.

The issue was settled in September 2009 and parties concerned agreed to co-ordinate on allocating the money.

It was hoped that out of the annual revenue, 70 per cent would be distributed to charity funds, clubs and community projects in the area.

Twenty per cent would be deposited in a bank account as savings for emergencies, maintenance and future expansions, while 10 per cent would go to board members and administrative expenses.

The mall also features a multi-purpose hall, an educational centre and a medical complex, in addition to a petrol station on the request of residents. – TradeArabia News Service