Capital spending increase eyed for development projects
KUWAIT: Kuwait and Gulf Link Transport Company (KGL) yesterday announced signing a contract with the US Defense Department's logistics defense agency with a total value of $1.38 billion. KGL Catering Company, which is 99 percent owned by KGL, will provide foodstuff and logistic services for US troops in Kuwait, Iraq and Jordan for 24 months, renewable for up to 60 months, the company said in a statement issued for Boursa Kuwait.
The government plans to increase capital spending by 10 percent to KD 3.5 billion in the current fiscal year with the aim of overcoming relative weakness which slowed development rates in 2016-2017, said informed sources. The sources added that this comes in view of the anticipated expansion in construction projects listed as development assets in the 2018-2019 budget, coinciding with the launch of economic reform policies through enhancing the role of the private sector in boosting national economy by public-private-partnership (PPP) projects.
According to financial reports, the government seeks to activate economic development by focusing on production sectors and enhancing their contribution to the GDP to achieve over six percent growth in 2019-2020, as well as economic growth and sustainable development, taking into consideration that the oil sector contributes around two thirds of the GDP.
Well-informed sources expected that the bourse's privatization committee will meet Thursday to discuss the offers made by companies applying to Boursa Kuwait's assessment tender as declared by the Capital Markets Authority (CMA). The committee headed by Dr Faisal Al-Fahd, who succeeded Nayef Al-Hajraf after the latter was appointed finance minister, will study the offers and select the best ones. The sources added that CMA and the bourse's board of directors are keen on completing the privatization process this year after evaluation of market assets was delayed several times.
The sources said 50 percent of Boursa Kuwait shares will be offered to citizens in an initial public offering, six to 24 percent of the shares will be offered to government bodies like the investment and social security authorities, while 26 to 44 percent of the shares will be owned by a company listed with an international operator. "This is the likeliest scenario for privatizing the stock exchange" the sources said.
Following the steps of a memorandum of understanding recently signed with the Ministry of Commerce and Industry (MoCI), supervisory sources said the CMA is about to sign a similar one with the Central Bank of Kuwait to undo supervisory tangles between them. The sources added that the new memo will be an update of the one signed in 2011 to cope with the changes that took place over the past few years, especially in terms of listed and licensed companies supervised by CMA. The sources said that signing the memo was done according to article 202 of CMA law number 7/2010, which calls for signing memos of understanding between various supervisory bodies to avoid double supervision.
Kuwait has taken the first official step towards offering the Shuaiba refinery for international public auction due to be held in May, almost a year after it was shut down, said Mohammed Saud Al-Shemmari Deputy chairman of the committee entrusted with selling Shuaiba refinery at Kuwait Oil Company (KOC). Shemmari added that companies from Nigeria, India, US and Germany had shown interest in purchasing certain units, while Sri Lanka and the Philippines showed interest in purchasing the entire refinery, before they later decided to purchase units. Shemmari added that the auction date will be advertised in the local and international press soon and stressed that the purchase prices will be confidential. He said the auction might be cancelled if no reasonable prices are offered.
By A Saleh