Dubai Municipality reports $205m H1 budget surplus

Dubai Municipality on Sunday reported a budget surplus of AED756m ($205.8m) for the first half of 2011, nearly a third more than projected.The city’s authority’s surplus of AED756m ($205.8m) for the first six months of 2011 was 30.9 percent higher than the AED578m projected for the same period The increased surplus was despite total income during the first half of the year falling to AED2.246bn ($611m), a 2.55 percent drop compared to the same period in 2010. The projected income for the whole of 2011 is now estimated at AED4.728bn, Mohammed Abdul Karim Julfar, assistant director general of Dubai Municipality said in a statement. "Despite the improvement and increase in the fees of hotels as a result of the expansion and operation of new hotels, and the recovery of tourism, there was a slight decrease in the percentage of collected revenues. It attributes to the failure to complete the settlement procedures and collection of fees carried out by other local departments for the municipality" Julfar said.He added that of the AED3.572bn ($972m) budgeted for expenditure in 2011, AED1.490bn – or 42 percent – had been spend so far during the first half of 2011. Between January and June 2011, the Municipality's wage bill amounted to AED504m, down 3.6 percent year-on-year, while capital expenditure rose 40 percent year-on-year during the period to AED760m.General expenses amounted to AED197m, and increase of 36 percent compared to the same period last year. Total expenditure for the first half of 2011 is down 32.9 percent compared to last year.In January, Dubai’s government said it aims to cut spending in 2011 in a bid to shrink its budget deficit after a debt crisis that roiled global markets in 2009. The government forecasts a gap of AED3.78bn ($1bn) this year, down from AED5.99bn projected for 2010, the emirate’s media office said. That’s “well within” the targeted ceiling of three percent of gross national product, it added.Spending is forecast at AED33.7bn, down by 4.9 percent from the 2010 projection published in a government bond prospectus in September. Dubai, the second-biggest of the seven United Arab Emirates, had to seek a bailout from neighbouring Abu Dhabi after the global financial crisis pushed property prices down by more than half, and frozen credit markets forced some state-owned companies to delay loan payments.Dubai World agreed with creditors in October to restructure $24.9bn of debt. “Dubai is continuing with its contractionary fiscal stance for 2011 given the debt challenges” at state-owned companies, Monica Malik, an economist at investment bank EFG-Hermes Holding, said in an email.“With government resources being directed towards debt management, we do not expect to see fiscal support for the economy in the medium-term.” From / Arabian Business News