UPDATE 1-Facelift or folly, Belgrade braces for Dubai-style makeover Reuters Middle East * Gulf Arab cash to bankroll riverside development * Scale unprecedented in central and eastern Europe * Opponents fear capital to lose identity (Updates with developer's comment, paragraph 13) By Matt Robinson BELGRADE, March 31 (Reuters) - The vista of rusting boatsand drab wasteland that greets visitors passing over the riverSava into Belgrade is set to be transformed into a futuristicforest of skyscrapers under ambitious redevelopment plans thathave left Serbs deeply split. Construction for the Belgrade Waterfront project is due tokick off this summer, bankrolled by Gulf Arabs, and will foreverchange the appearance, and critics say also the character, ofSerbia's capital city, home to around 1.3 million people. The project crowns an unlikely but fruitful alliance betweenSerbia, an aspiring European Union member, and the United ArabEmirates that spans defence, agriculture and cheap financing. A UAE property developer plans to spend at least threebillion euros ($3.26 billion) building 5,700 apartments, 2,200hotel rooms, offices for 12,700 people, a curvaceous 200-metretower and a sprawling shopping mall on the 1.8 million squaremetres of prime riverside land. The project marks the first foray into central and easternEurope by Abu Dhabi-based Eagle Hills and board member MohamedAlabbar, the UAE real estate tycoon behind the world's tallestbuilding, Dubai's Burj Khalifa. Supporters say the development will create thousands ofjobs, address a severe shortage of office and retail space indowntown Belgrade and put the city firmly on the investment mapof eastern Europe. However, detractors say it is folly - a Xanadu conjured upwithout public tender or consultation, soulless, elitist andjarring with the look of the existing, centuries-old city. Acontract has yet to be signed even as land is cleared apace,fuelling complaints about transparency. "It's still unreal to me," said Dejan Ubovic, founder of KCGrad, a cultural centre in the graffiti-riddled Savamaladistrict that has become a mecca for tourists and artists andstands on the perimeter of the proposed Waterfront site. "Nobody normal would have anything against some kind ofimprovement," he said. But this 'megalomania' "has very littleto do with ordinary Belgraders". Fearing for Savamala and the city itself, activists face atough fight to block a project likely to define - for better orworse - the rule of Prime Minister Aleksandar Vucic. Vucic's nationalist-tinged but pro-Western policies have wonhim a hold on power not seen since late strongman SlobodanMilosevic, whose war in Kosovo brought NATO bombs down onBelgrade in 1999. "We've never seen (such a project) in the whole of Centraland Eastern Europe," said Andrew Peirson of property consultantJones Lang LaSalle. "Serbia's the first to get them (Gulf Arabinvestors) and I think people are wondering why." "THIS CITY NEEDS EVERYTHING" Contacted by Reuters, Eagle Hills cited Belgrade's potentialas a "regional hub" as a reason for its planned investment,adding: "(The project represents) the future of the city and aworld-class benchmark for dynamic, mixed-use living." That growth potential is tied up with Serbia's EU ambitions. The project gives the UAE a toehold in a country likely tojoin the EU, the world's biggest single market, in the nextdecade while costs remain relatively low. It can also avoid thetough public procurement rules, transparency and regulationdemanded of EU members but more easily circumvented in Serbia. The first collaboration between Serbia and the UAE was a $40million equity investment by Abu Dhabi's Etihad airline inSerbia's national airline. Other deals quickly followed. Real estate experts say the project would address the city'schronic lack of good quality office and retail space, a shortagehindering Serbia's efforts to lure foreign investors. Belgrade mayor Sinisa Mali, a Vucic ally, says the new workfor local firms would also help drive the anaemic economy. "Do they (the critics) want hundreds of huts, shacks, peopleliving in abandoned railway wagons? ... Do they not want aninvestor to come and invest several billion euros, to put towork the local construction industry and employ 20,000 people?"he said in an interview with Reuters. Peirson said Belgrade had plenty of work to do before itcould expect investors to start queuing up. "This city needs everything ... You can get the governmentto fly out to Palo Alto and meet with Google and Facebook andtell them they need to move people to Serbia, but there are nooffice buildings," he said. But opponents question the overall viability of such aproject in a country where a fifth of the workforce isunemployed and the average monthly net wage is 350 euros. Theeconomy is facing a second straight year of recession as Vucic'sgovernment tries to overhaul a bloated and costly public sector. "There's no question that it needs to develop on theriverfront. The key is, when you see those plans, how long willit take to build that up?" said Peirson. "Because they're goingto have to follow the demand of the market, and not try andbuild it and then expect the demand to come." Mali said construction would take up to 20 years, dependingon market conditions. Serbia will pay for infrastructureupgrades outside the limits of the site, costs put by Mali atjust under 300 million euros but at much more by the critics. Purists like Belgrade former chief architect Djordje Bobicfear for the city's distinctively erratic architecturalheritage. "Belgrade," he said, "will be left to peer shyly from behinda bunch of senseless, aggressively scattered skyscrapers."($1 = 0.9211 euros) (Additional reporting by Aleksandar Vasovic in Belgrade andHadeel Al Sayegh in Dubai; Editing by Gareth Jones)
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