Developers use service charges to pass on district cooling costs

Developers use service charges to pass on district cooling costs

Thursday, Jun 16, 2011

Gulf News

Dubai Dubai property owners are paying too much for their air conditioning due to district cooling, real estate experts say.

Matthew Green, head of research and consultancy at CB Richard Ellis Ltd Middle East, told Gulf News yesterday that developers were passing on the infrastructure costs of centralised cooling systems to the owners through service charges.

?In terms of charges, district cooling often appears to be out of proportion with the apartment size and also not reflective of usage,? Green said.

?Charges are levied not for the amount of energy used but for the size of the apartment or villa that is owned. This comes back to developers passing on infrastructure costs directly to the owners, and this simply makes the system unworkable and massively overpriced.?

These extra charges come under the label of ?capacity charge.? According to Robert Pacella, interim board member of a homeowners association at a JBR tower, the bill includes the capital costs which were required to build the district cooling plants and is a way of recovering construction costs.

Hidden costs

?This seems a very odd way for a commercial company to do business. It would be like going to get a tank of gas and in addition to the price of the gasoline, you?re also charged an extra fee for part of the cost of construction for the gas station or the refinery,? said Pacella.

via Developers use service charges to pass on district cooling costs – Power & Utilities – Zawya.

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