Developers pass on cooling costs to owners

Developers are charging property owners hidden charges to offset District Cooling cost, real estate experts say.

Gulf News reported that residents who live in a community with district cooling system end up paying more for their air conditioning as they are charged not according to the usage but the size of the apartment of villa.

Developers also pass on capital costs to the owners under the guise of service charges, Matthew Green, head of research and consultancy at CB Richard Ellis Ltd Middle East, was quoted by Gulf News as saying.

"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."

Calling it unwarranted, 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.

Apart from the hidden costs the billing system is also unfair, as there is usually one centralised meter for the entire building which doesn’t differentiate between an efficient user and a careless user.

Sub-metering, a critical component for proper measurement and billing of consumption is still in its infancy in Dubai and according to Jarmo Heikkinen, general manager of Kamstrup, an energy metering manufacturer, only 30 per cent of Dubai buildings using district cooling have installed individual metering.

Apart from its environmental benefits, individual meters also provide a monetary incentive to people to conserve reduce the energy bills.

The system gives tenants no incentive to conserve energy because their bills are the same whether they use their air conditioning or not.

"District cooling has been billed as a more efficient form of cooling, but so far this has proved to be far from the truth in Dubai," added CB Richard Ellis' Matthew Green.

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