business in kuwait 2013
Post on 03-Apr-2018
220 Views
Preview:
TRANSCRIPT
-
7/28/2019 Business in Kuwait 2013
1/16
-
7/28/2019 Business in Kuwait 2013
2/16
-
7/28/2019 Business in Kuwait 2013
3/163
INTRODUCTION
T
here has been much speculation and concern re-
garding several countries in the Middle East and
North Arica (MENA) region over the last ew years.While some countries have endured social unrest,
leading democracies like Kuwait are preparing or a
bright uture.
Ater the State o Kuwait gained independence rom the United
Kingdom in 1961, the economy has witnessed strong growth due
to the oil and gas industry. The Country has amongst the worlds
tenth largest proven oil reserves and petroleum products which ac-
count or nearly 95% o export revenues and 80% o Government
income. Kuwait is the eleventh richest country in the world per
capita and consistently enjoys one o the highest Human Develop-
ment Index scores in the Arab world. This Constitutional Monarchy
is planning its uture in a non-carbon dominated world, and with
a clear and well-unded vision Kuwait is on its way to becoming a
premier centre or trade and nance.
Kuwaits national development plan would be considered
quite ambitious even i it were not or the vast amount o legisla-
tive, regulatory, and social changes the country would be destined
to undertake. The aim is to be less dependent on State owned
nancing and State owned enterprises while cultivating a grow-
ing class o oreign educated business proessionals and entrepre-
neurs who will move the country orward in the 21st Century. The
aim o this plan is to diversiy the economy and reduce Kuwaits
over-dependence on carbon sales, which places the country at risk
when oil demand decreases like in 2009 or i oil supplies thin over
time as expected. Privatisation will urther the development o cer-tain sectors like water treatment and electrical supply to meet the
demands o population growth. While there has been some local
hesitancy to privatisation, there is renewed energy in Kuwait that
the national development plan, part o HH Emir Sabah Al-Ahmad
Al-Jaber Al-Sabahs Vision 2035, will not only create opportunities
or entrepreneurs and businesss, but generate the human and so-
cial development growth the country has long been seeking.
Kuwaits landscape is destined to change dramatically over the
next 22 years, culminating in 2035 when HH the Emirs vision or
the country is completed. There are vast plans or many projects,
most o which aim to boost economic independence rom the
government while urthering speciality business sectors. Supporterssight these projects as being crucial to the nations development,
particularly in light o its expected population increase - rom 2.6m
in 2010 to 5.3m by 2030.
The metro is the rst o a number o Public Private Partnership
(PPP) projects planned by the Government as part o a KWD 37 bil-
lion inrastructure overhaul plan. Other transport initiatives includethe 22.5 km Al Ahmed Bridge, which will connect the mixed-use
Silk City project with Kuwait City and the re-development and ex-
pansion o Kuwait International Airport. Further to the metro project
is the construction o 550 km o railway as part o a planned US$
25 bn Gul network, which will begin in Kuwait City and run to Mus-
cat via Saudi Arabia, including stops in Bahrain and Qatar. These
inrastructure projects orecast the expected population growth in
Kuwait, while others like Bubiyan Island and Failaka Island show-
case the opportunities or investors, regional workers, and visitors.
Plans to develop a tourist centre on Failaka Island, one o
the countrys major islands located some 20 km o the coast o
Kuwait City in the Persian Gul, aims to redene luxury tourism
in the GCC. The island has a historical signicance dating back
to its time as a trading post and is home to many antiquities
across several cultures. The development project aims to launch
a world-class tourist destination with 20 hotels and chalets, a gol
course, housing units, a marine park, our marinas, and provide
entertainment acilities in an environmental-riendly atmosphere.
Ater being put on hold in 2008 due to changes in legislation, the
bidding process or the project was initiated recently with roughly 42
companies having participated in the process. It is to be developed
on a build-operate-transer (BOT) basis and answers the call or the
construction o tourism inrastructure in Kuwait.
All together there will be 32 mega-projects in Kuwait over the
next two decades. The cultivation o knowledge expertise romoreign companies participating in these projects could be the most
important actor in realising Kuwaits vision. The Government has
gone to great lengths to strengthen legislation in order to protect
these national assets and the Kuwait people through the privatisa-
tion o any major entity. This includes the investment and adapta-
tion o state o the art technology to continue the development o
the privatised entity as well as providing opportunities or workers
such as development training programs to urther skill sets.
The transition rom mostly State-owned enterprises to private
companies will have challenges, yet the cost o non-development
and non-privatisation would hold Kuwait back against the back-
drop o robust regional development in countries like Qatar and theUAE. The unding and expertise to build new sectors like tourism,
logistics, and nance will provide the next generation o Kuwaitis a
platorm or success and the skills to match.
Te views expressed in Business in Kuwait 2013 are not necessarily those shared with the publisher, Global Investment I Limited. Wishing to reect the true natureo Kuwait, the editor has included articles rom a number o sources, and the views expressed are those o the individual contributors. No responsibility or liability isaccepted by Global Investment I Limited or any loss to any person, legal or physical, as a result o any statement, act or fgure contained in the Business in KuwaitSpecial Report 2013. Tis publication is not a substitute or advice on a specifc transaction.
Editor: Joseph Bove
Country Consultant: Adriaan Vickery
Design: Kuljit Kaler
www.globalinvestmenti.com
ino@globalinvestmenti.com
T: +44 (0) 20 7125 0579
F: +44 (0) 20 7183 8393
Third Floor, 207 Regent Street,
London, W1B 3HH, UK
Registered in England & Wales
Registration No. 06900033
-
7/28/2019 Business in Kuwait 2013
4/164
BUSINESS IN KUWAIT 2013
Vision 2035
Not many could argue Ku-
waits robust economic de-
velopment over the last 50
years; the small island nation
has transormed itsel rom a
territory dependent on trade,
to a country that supplies a signicant por-
tion o the worlds energy. While Kuwaitis
have long been entrepreneurial by nature
there has been an over dependence on the
oil and gas sector, in act at present oil reve-
nues drive up to 90 per cent o GDP. The u-
ture trend is a global shit away rom carbon
due to worries over climate change and ris-
ing energy prices. The general consensuswithin the country is that economic diver-
sication is required, entrepreneurs need
to be cultivated, and an attractive business
climate needs to be created where compa-
nies can grow in a stable, controlled man-
ner without government assistance.
In 2009 Kuwaits GDP dipped 5% due
to low worldwide demand and a signicant
drop in energy prices, so it should be no
surprise that 2010 started with a major an-
nouncement. Kuwaits Vision 2035 was ap-
proved by Parliament in February 2010 with
an initial KWD 37 billion allocated or greater
economic diversication and inrastructure.
The plan intends to privatise many key
State-owned entities such as Kuwait Air-
lines, as well as major utilities like water and
electricity. Broken down into smaller more
manageable 5 year plans, Vision 2035 is
grand to say the least, State privatisations
are the straightorward tasks, but a system-
ic overhaul which includes human devel-
opment, inrastructure projects, legislative
changes and increasing non-oil revenue by
20% will all be signicant accomplishments.Since growing non-oil and gas rev-
enues is key to the diversication plan, Ku-
wait is doing what many successul small
island nations have done - transorming
itsel into a nancial and commercial hub
attracting investment, and creating an envi-
ronment where the private sector leads the
economic activity. Along the way and with
vast resources the ethos o the country will
be urther developed through establishing
strong values, maintaining social identity,
realising human development, balanceddevelopment and providing suitable inra-
structure, advanced legislations and creat-
ing an encouraging business environment.
Kuwaits history as a commercial hub, along
with the countrys trading prowess will only
help. Additionally the Kuwait Government
is playing an active role in ensuring positive
business riendly legislation and superior in-
rastructure that presents opportunity and
inspiration or Kuwaiti and oreign compa-
nies alike.
To this regard, the Medium-Term De-
velopment Plan or 2010-2014 envisions
quantitative and qualitative changes and
improvements across a range o areas,
grouped under three main headings: eco-
nomic development; human and social de-
velopment; and management, administra-
tion and planning.
The central ocus o the plan is on se-curing diversication o the economy and a
quantum shit rom public to the private sec-
tor with the aim o all round improvement in
eciency. The main targets o the plan are
extensive and ar reaching. The rst is to
secure a real annual growth rate o 5.1% in
GDP; with private sector activities securing
an annual rate o 8.8%, non-oil public sec-
tor at 4.4% and oil public sector at 2%. The
second target is to maintain average annual
investment o KWD 7393 million, with pub-
lic sector (oil) at KWD 1617 million, public
sector (non-oil) at KWD 2350 and private
sector at KWD 3426 million. The third, is to
secure a reduction in the contribution o the
oil sector in GDP rom 43% rom the base
year (2008) to 39% by 2014. The ourth
target, is to secure an increase o private
sector share o non-oil GDP rom 65% in
the base year to 70% in the nal year o the
plan period. The nal goals are to increase
the private sector share o non-oil invest-
ment rom 40% to 65% and to secure an
increase in the share o non-oil revenue in
total state revenue rom 12% to 30%.At the same time the plan addresses
key issues in human and social develop-
ment. For example a reduction in the av-
erage annual number o those newly em-
ployed in the Government sector rom
15,000 in 2002 to 8,000 a year by 2014.
This goes in line with creating a robust,
responsible private sector that can help
develop leading specialities in the areas o
nance trade and logistics.
Along with business growth the Gov-
ernment is preparing or population growth,with construction due to commence on
48,117 new housing projects including res-
idential blocks, houses, and apartments.
There are signicant opportunities or or-
eign companies in the construction sector.
Kuwaits national vision 2035
was approved by Parliament
in February 2010 with an
initial KWD 37 billion (GBP 85
billion) allocated or greater
economic diversifcation.
While other sectors like education and
healthcare are also growing. Part o the plan
under the human and social developmentagenda is increasing early education in Sci-
ences rom 34% o curriculum to 50% by
2014. Currently there is development and
knowledge expertise needed in healthcare
acilities and practices, including elderly
care, dentistry, and specialised medicines.
The key initiatives to gain urther pri-
vate sector participation in the economy
have been outlined and are currently under
way in Kuwait under the national develop-
ment plan. Starting with diversication o
property structure by gradually reducing the
participation o the public sector, encourag-
ing and increasing the private sector role,
especially that o small and medium enter-
prises.
The privatisation o state-owned enter-
prises will continue, while there has already
been signicant laws passed to acilitate
and simpliy investment procedures. This
will be a major actor in Kuwait attracting
more FDI, something which the country has
not historically relied upon. The comple-
tion o on-going inrastructure projects, and
realizing integration and cooperation ornew projects by encouraging participation
o small and medium enterprises will also
continue to establish a robust private sec-
tor. Furthermore, the knowledge expertise
gained by Kuwaiti companies engaging in
PPPs with major oreign rms is already in-
troducing new skills, ideas, and best prac-
tices into several sectors o the economy.
Ultimately this environment will help attract
more oreign investment and trade through
the on-going development o these sec-
tors and business relationships cultivatedthrough protable partnerships. HH the
Emirs Vision is a grand one, the expec-
tations are high, and Kuwait needs these
positive reorms to stay relevant in a non-
carbon dominated uture.
Kuwaits grand plan for economic development and diversification.
-
7/28/2019 Business in Kuwait 2013
5/165
Privatising the Handshake
Along with Parliaments approval o Vision 2035 the
law setting out the ramework or a programme o
privatization o State-owned enterprises was also
passed in May 2010.
The Kuwait economy has long been dominat-
ed by the public sector, coinciding with a generous
welare system. A ar reaching initiative to privatise many leading
state-owned companies comes with signicant consequences or
employees, job seekers, and everyday citizens. For instance, per-
ceptions o loss o privileged relationships and special advantages
enjoyed by customers and employees were bound to evoke resist-
ance. Kuwait has long been a place o international trade and busi-
ness, with that brings unique relationships that do not always take
into account matters o ownership. Failure to deal eectively with
the transition process could damage the chances o success othe programme. Not least among the issues is the need to resolve
the question o jobs and employment. With an estimated 80% o
citizens being employed in the public sector, there is no doubt that
uture change was needed.
Kuwaits previous experiences with privatisation were not al-
ways greeted with optimism and some residents eel this law has
been passed too quickly with not enough regard or the benets
and who they reach. Regardless regional experts and the Kuwait
Government do eel it is time to move the country orward. Oil sup-
plies are nite and i over relied upon and mismanaged, the State
will no longer be able to be the sole nancier o the country. A
robust private sector based on knowledge expertise within dened
categories will allow Kuwait and its people to move orward, al-
beit with some scepticism. Critics have voiced concerns over the
lack o inormation being put orth in the country or the privatisa-
tion plans. In response the Government has established a Higher
Privatization Council consisting o nine members with the Prime
Minister as head and ve Ministers. In addition three specialists
with competence in nancial, economic, legal and technical issues
relevant to the programme are members. The Councils purpose
is to oversee and regulate the sale o public entities to the private
sector. This stands to be an exciting time in Kuwait or both local
and international investors. What Kuwait companies need most
in order to move orward under private ownership is knowledge
expertise in their elds, and the Government has already made im-provements in the oreign visa and investment process.
The Privatisation Law does set out to protect interests in Ku-
wait, where there is a general ear that capital reserves will leave
the country with the arrival o oreign owners. Although the Govern-
ment has no plans to privatise major industries such as oil and gas.
None-the-less provisions o the law include ensuring consumer
protections and avoiding any monopolistic practices, while setting
price controls to avoid exploitation. Other inclusions are to ensure
the availability and development o modern technology in order to
urther develop each sector. To ease ears or Kuwaitis, potential
owners o the privatised sector cannot be current owners o an-
other business whose objectives are similar to the company beingprivatised. This is something that is important as many Kuwaitis
eel this law is mostly advantageous or the wealthy with ew op-
portunities or entrepreneurs and a lack o job protection or ordi-
nary workers. To alleviate concerns about loss o jobs or Kuwaiti
citizens, the law provides or protection o employees working in
the relevant entity prior to being privatised. This protection will last
or 5 years unless the employee chooses a lesser period o time.Ultimately the Council would hear any disputes and has the right
to investigate any breach o these laws. The Council is the crucial
body to oversee the process and maintain transparency, and with
many large entities starting the privatisation process in 2013 it will
be important to report the progress to citizens.
A point o concern is whether the Privatisation Law has gone
ar enough or i it basically creates quasi-private enterprises. I
there is a guarantee to keep workers at their wages or up to 5
years, how can it truly be a private company? O course the Kuwait
Government eels this is a rst step and employee protection is vital
to their solid social-welare system. Initially the Council will have
direct oversight to review the company and its operations, which
has been a detriment or some investors. To receive good partners
the Council deems all o these points to be arbitrary, these are stra-
tegic assets o the Government o Kuwait, and as such they should
be dealt with in a thorough and responsible manner. There has
also been contentious debate regarding the issue o the golden
share. The Government will hold a share in all State enterprises
going through privatisation, regardless o the actual share in the
company which is typically 20% or less, it will maintain a deciding
vote over matters o shareholder consideration in order to protect
public interest. Some investors might take this as a good sign, still
involving the Government thus ensuring a smooth transition over
time, while others may want more initial fexibility - either way as
strategic assets the Council will take their time to ensure its a winor both parties.
The Privatisation Law passed by a narrow margin in Kuwaits
Parliament and is not short o critics. It is widely accepted that
the law would not have been passed without certain measures or
employee protection and pricing protection in place, yet Govern-
ment involvement is bound to make some investors weary. There
are many entities that would benet rom oreign investors with
knowledge expertise, including Kuwait Electrical Company, who is
expecting massive customer expansion with new commercial and
residential developments over the next 10 years. In the meantime
pressure will be on the Council as well as the Kuwait Government
to inorm the public o progress being made in the privatisationprocess. The Government o Kuwait has made several headlines
stating privatisation will move the country to a more dynamic pros-
perous uture, there is little doubt in this but a major success story
with a leading public entity would really help attract quality oreign
partners and build condence with the local population.
The success of Kuwaits national development plan depends greatly on the transition of many
State-owned companies.
-
7/28/2019 Business in Kuwait 2013
6/166
BUSINESS IN KUWAIT 2013
Investor Relations
What role is the KFIB playing in helping to achieve HH the
Emirs 2035 Vision and national development plan for Kuwait?
KFIB was established under FDI Law No. 08/2001 to promote Ku-
wait in international markets, and to attract oreign investors into
mega investment opportunities in the country as partners with the
local private sector to support; technology transer, diversiying the
non-oil economic base, creating more jobs and training opportuni-
ties, and ostering an environment o competitiveness. This makes
KFIB one o the implementing arms o the Government o Kuwaitsnational development strategy, transpired by a series o medium
term 5 year plans towards the 2035 Vision. This plan is based on
HH the Emirs vision or transorming Kuwait into a world class
commercial and nancial hub, with the private sector leading eco-
nomic activities. It is well understood that it will take a concerted
eort at all levels to attain this vision.
How would you describe the current investment environment
in Kuwait or oreign direct investment?
I truly believe Kuwait has all the right attributes to make it an at-
tractive investment hub, attaining competitive advantage in various
sectors led by the petrochemical industry, but with great potential
or other promising sectors like education, health and ICT. More re-
cently we have seen strong movement towards creative industries
which are based on the generation o knowledge through innova-
tion such as media, design, animation and lm making.
The core attributes that make up Kuwait, possess a Unique
Selling Proposition including; our strategic location, strong macro-
economic perormance, established democracy, political stability
and security, a well-educated and skilul youth, a rising entrepre-
neurial class, high growth market, adequate inrastructure, open-
ness and riendliness, mega investment opportunities through the
development plans in various sectors, adoption o several new
economic laws and establishment o regulatory bodies to improve
the overall business environment. Furthermore, Kuwait has enteredinto more than 100 bilateral agreements connecting the country to
major trading partners.
Kuwait is also active in the international arena o economic
initiatives; it has proposed US$ 2 billion und or developing Asia.
This was announced during the Asia Cooperation Dialogue (ACD)
summit, which was held in October 2012 in Kuwait City and at-
tended by leaders o 32 Asian countries indicating the rise o a
new era o cooperation among Asian countries, in areas such as
agriculture, industrialization, health & education, ood security, and
energy. Also, HH the Emir initiated the SMEs Arab Fund during the
First Arab Economic Summit with a capital o US$ 2 billion. Kuwait
was the rst country to make a contribution to the und, oering25% o its total capital.
What is the process or oreigners to invest in Kuwait?
Once oreign investors choose to invest in Kuwait, it is a straight-
orward transparent process. There are multiple investment entry
modes; one o them is under current FDI Law No. 8/2001 pertains
to an approved investment license issued exclusively by our o-
ce, upon coordination with concerned government entities, to es-
tablish a closed shareholding company with 100% ownership, or
opt or a lower equity share to a maximum o 49% limit under the
Commercial Companies Law. In this case oreign investors can ap-
ply separately under FDI Law 8/2001 or granting incentives to their
project. This process usually takes 4 months by law, and is allowed
to be renewed once to an extended period o 8 months maximum.
We have instances where procedures take merely two months to
attain the approval and issue the investment license, depending o
course on the nature o the project and the subsequent require-
ments. These approvals are pending the decisions o the Foreign
Capital Investment Committee (FCIC) headed by the Minister o
Commerce & Industry, with members representing both the publicand private sectors. The recommendations and eedback attained
rom various concerned Government entities is brought to FCIC
attention through the existing coordinating mechanism with KFIB,
depending on their specialization and relevance to the nature o
investment projects under consideration.
How competitive is Kuwaits FDI policy and investment envi-
ronment in comparison to regional counterparts?
Kuwait has been described as the rising pearl o the Gul since the
early 1960s, and it is by ar the rst constitutional democracy in
the region, highlighted by the grant o ull rights or women. It has
always enjoyed reedom o commerce, and is home to a national
merchant class that took the lead in establishing pioneering suc-
cessul endeavours that should be built upon. Furthermore, Kuwait
is classied amongst the group o High Income per capita coun-
tries, with high purchasing power because o its abundant oil re-
sources comprising 10% o proven oil and gas reserves worldwide.
Kuwait is an active outward investor in the international arena
through its sovereign wealth und (SWF), managed by the Kuwait
Investment Authority, with around US$ 300 billion, and is the sec-
ond oldest out o 62 currently established SWFs. The Government
has urther increased the proportion o revenue it allocates to this
und rom 10% to 25%. Kuwait has also been an active and gen-
erous donor through the Kuwait Fund or Arab Economic Devel-
opment (KFAED), established in 1961 and considered the largestdevelopment und ater the World Bank. The und has grown since
its inception and to date has participation rom a total o 114 coun-
tries with total loans o 832 valued at KWD 4.9 billion; along with a
total o 205 grants valued at KWD 117.9 million, making the ratio
o its ocial development assistance to GDP around 1.3% (nearly
double the international targeted average o 0.7%).
The tax system in Kuwait is avourable with a fat corporate tax
rate at 15% according to Law No. 2/2008 on oreign companies,
an improvement rom the previous gradual 5% to 55% tax rate o
Income tax Decree No. 3/1955, and there is no individual income
tax. Kuwait perormed well in its Sovereign credit rating at investor
grade by major credit rating agencies (Moodys: Aa2 with a stableoutlook, Fitch: AA, Standard & Poors: AA-). Kuwait has a well edu-
cated and a young population (72% age group rom 15-64 years),
and is leading in implementing the millennium development goals
(MDG). Finally in terms o business costs, Kuwait enjoys competi-
tive costs in transport, uel and electricity.
The Kuwait Foreign Investment Bureau continues to lead the way in
attracting FDI and furthering international relationships.
Interview with:
Dr. Meshaal Jaber Al
Ahmad Al Sabah
Chief, KFIB
-
7/28/2019 Business in Kuwait 2013
7/167
What are the incentives to invest in Kuwait?
The benets under current FDI Law No.8/2001 include allowing the
oreign investor who is granted an investment license to establish
a business with 100% ownership, also to carry out trade or open
branches in Kuwait without a Kuwaiti agent. Other specic incen-
tives include income tax exemptions or a maximum period o 10
years; total or partial exemption rom customs duties on projects
import o raw materials, equipment, and packaging materials; al-
location o land and real estate in accordance with Kuwaiti laws; al-
lowing the recruitment o oreign labour in accordance with Kuwaiti
laws; and accruing benets arising under Double Taxation Treaties
(DTTS) and Bilateral Treaties or the Encouragement and Protection
o Investment (BITs).
The guarantees provided under this law include the protec-
tion against expropriation, compulsory disinvestment or nationali-
zation, and providing air and timely compensation i conscation
occurs due to security or public interest; allowing ree repatriation
o oreign investors prots and capital without any restrictions, and
i compensation paid on account o disinvestment; and the protec-
tion o proprietary inormation.
What eorts have been made to improve efciency andenhance the overall ease o doing business in Kuwait?
Kuwait aces a serious challenge to improve the starting a business
sub-component ranking within the ten components o the Ease o
Doing Business Index that is annually released by the World Bank.
Eorts are under way at various ronts in order to improve this rank-
ing. KFIB is actively working to pass a new drat FDI Law that would
address some shortcomings o the current FDI Law No. 8/2001;
the new Law will lead to the establishment o a nancially and ad-
ministratively independent pubic authority, establishing a one stop
shop, reducing processing time o investment licenses to 30 days,
and allowing or dispute settlement through arbitration.
In the meantime, KFIB has taken actual measures to cultivate
customer service culture by recently launching its Investors Service
Centre (ISC) on our premises in Kuwait City to be on the rontline
or welcoming potential or existing investors, to provide needed
acilitation in completing the procedures leading to the issuance o
the investment licenses, and to handle all inquiries, responding e-
ciently and in timely manner with requested inormation. We also
play an advocacy role in identiying obstacles and contributing to
the ongoing eorts or streamlining red tape in coordination with
various Government related entities.
What sectors are being promoted to help diversiy Kuwaits
economy and reduce over reliance on the Oil and Gas
Industry?KFIB promotes and attracts inventors into the 14 economic sec-
tors that are permissible or oreign investment in Kuwait by the
Council o Ministers decision. These sectors include: Industries ex-
cept or projects related to oil and gas exploration or production;
construction, operation and management o inrastructure projects
in the elds o water, electricity, sanitary drainage or communica-
tions; banks, investment companies and exchange companies ap-
proved by the Central Bank o Kuwait; insurance companies ap-
proved by the Ministry o Commerce and Industry; ICT; hospitals
and pharmaceutical industry; land, sea and air transport; tourism,
hotels and entertainment; culture, media and marketing except is-
suance o newspapers and magazines and opening o publishinghouses; Integrated housing projects and development o districts
except or speculation in real properties; real estate investments
through oreign investor contribution to Kuwaiti shareholding com-
panies according to the provisions o law no. 20/2000; storage and
logistics services; environmental activities; and recently education
and training. These are all very crucial sectors that will contribute to
attainment o Kuwaits 2035 vision.
The UK is one o the largest oreign investors in Kuwait.
What specifc opportunities are available or British frms?
KFIB completed its rst Investment Opportunities Guide just as re-
cently as April this year, and we are in the process o granting a
contract or a study on the development o three economic zones
or light industries and services, expected to be completed within
3-5 years.
Overall, Kuwait oers lucrative investment opportunities under
the current economic development plan (2010/2011-2013/2014)
allocating KWD 30 billion (GBP 70 billion) or nancing hundreds o
projects, that meet the realization o the Emirs vision o transorm-
ing Kuwait into a leading commercial and nancial centre. Some
o the Mega Development Projects in the plan provide high value
investment opportunities that include: Bubyian Island Mubarak Al
Kabeer port, city metro system, railway project (KWD 2.5 billion),
Failaka Island (KWD 2.1 billion), massive residential developments,
Kuwait International Airport development, hospital development
program, electricity generation and water desalination. There are
also sizable investments needed in the strategic oil sector, or bothupstream and downstream petrochemical industries.
Other Sectors o importance include renewable sources o en-
ergy and environmental projects such as recycling centres, waste
water treatment acilities, green industries, and environmental im-
pact assessment. It is true that UK has a leading experience in PPP
and BOT projects.
British companies have won around 70% o
Kuwaits PTB consultancy contracts to date
based on their expertise in developing PPP/PFI model or project establishment.
British companies were also successully awarded contracts in
the oil and gas sector, and the construction sector including the
Mubarak Al-Kabeer port project (phase 1) and expansion to the
existing Amiri Hospital. There were also many contracts awarded
or design and engineering projects within public works consisting
o upgrading roads and interchanges.
I would like to see a continuation o the historic trade and in-
vestment relationship between UK and Kuwait which has extended
or more than 200 years, with deep rooted bilateral relations. The
trade between UK and Kuwait mainly covers energy rom the Ku-wait side, and tourism, deence exports, education, and health
rom the UK side. Kuwait is considered the UKs 45th largest ex-
port partner, and 37th in terms o imports. Kuwait and the UK have
signed avoidance o double taxation treaty or transport on Sep-
tember 25, 1984, ollowed by another one or income and capital
on February 23, 1999. Furthermore, the Kuwait Investment Author-
ity (KIA) has or long been an active institutional investor in the UK,
and has had an oce in London since 1953.
A Memorandum o Understanding (MoU) was signed on busi-
ness, trade and technical cooperation in February 2011, pledging
to double UK-Kuwait trade to US$ 4 billion a year by 2015. The
UK-Kuwait Trade & Investment Task Force, and the British Busi-ness Forum (BBF), are all active entities in voicing British business
concerns in Kuwait. The KFIB database shows the UK companies
that had beneted rom Kuwaits FDI Law during the period 2003-
2012 totals KWD 22.6 million (GBP 52.2 million), with a share o
around 2.1% o total approved projects in this period.
-
7/28/2019 Business in Kuwait 2013
8/1688
Kharaf National Company Profle
Khara National (KN), established in 1976 hasdeveloped from a local contracting company intoa world class Pan-Arabian Infrastructure ProjectDeveloper, Contractor and Facilities Service Provider.Today, Khara National is an international, multi-disciplined company with diversied operations
in Water/ Wastewater, Power, Oil & Gas, Waste,Petrochemical and Infrastructure sectors, closing2011 with a turnover of $2.5 billion.
KN has a robust international expansion plan withgrowing operations in the Middle East and Africa. Withover 32,000 employees from 58 different nationalitiesand with multi disciplined operations, the company isable to develop and deliver parallel projects on timeand to internationally recognized quality standards.
The companys long term strategy is underpinned byits commitment to excellence and a focus on qualitythat lies at the core of its operations and people. KNsstrategy is based on maximizing the opportunitiesfor synergy across the Company by rmly focusing
Kharaf National Operations
Khara National provides a complete range of services to diverse markets through its main business lines: Engineering,Procurement and Construction (EPC), Infrastructure project development, Operation and Maintenance (O&M) whichconsists of institutional and commercial facilities management as well as industrial services. The company is alsosupported by a strong and vast platform of industrial support services which is considered the 4th business line thatprovides a constant, reliable service to Khara National projects and additionally guarantees the highest level ofavailability, quality, safety and trained operators.
ABJ - Fabrication Services: ABJ Fabrication is awholly owned subsidiary of KN. It is a manufacturer ofa wide range of heavy industrial process products, andaccredited to the highest of international safety andquality standards. The equipment fabricated includesPressure Vessels, HRSGs & Boilers, Evaporators &Desalters, Skids, Stadium Roof Structures and pipingsupport. These facilities can fulll the fabricationrequirements for multiple parallel projects.
Instant Access - Quality Access Equipment:Instant Access is a wholly owned subsidiary of KN. Theregions leading businesses, for the sale and rental ofinfrastructure-related equipment throughout the MiddleEast. With more than 500 units in its rental eet of acomplete and wide range of leading international brandsit supports Khara National and external clients in theirneeds providing stringent products, training, and safetystandards protocols.
Qtech - Trading Division: QTech is a wholly owned
subsidiary of KN. Qtech supplies leading internationalhigh-quality materials, equipment and systems to majorclients and contractors principally for infrastructureprojects.
-
7/28/2019 Business in Kuwait 2013
9/1699
www.kharanational.com
on three key project stages: development, projectdelivery and facilities management. This will enableKN to generate the greatest amount of value across awide range of projects.
Khara National is also continuing to expand itsdevelopments and operations in new and potentiallyemerging markets. With experience in PPP schemes,
and a strong, extensively resourceful businessdevelopment team, KN becomes the perfect partner toprovide the ideal infrastructure solutions throughoutdeveloping markets.
Moreover Khara National has complete in-housesupport services such as an equipment division,scaffolding and calibration, all meeting the highestlevels of quality and strict compliance with best practiceHSE procedures and guidelines.
Kharaf National Leaders in Wastewater
Treatment
In Kuwait the most inuential and avant-garde projectundertaken has been a Build Operate and Transferproject for a Wastewater Treatment and Reclamationplant. This project positioned Khara National as one ofthe main leaders in the wastewater sector. This positionwas re-conrmed by the two following wastewater plantsbuilt in Abu Dhabi, again through a BOT contract.
The Sulaibiya Wastewater Treatment andReclamation Plant in Kuwait; one o its kind in
the world
This Plant is a unique example, being the rst andlargest privatized project in Kuwait between The KharaGroup and GE for the Government of Kuwait. The UtilitiesDevelopment Company (UDC), established by the twocompanies was awarded the 30 year BOT project,unparalleled in the region and one of the largest of itskind in the world using reverse osmosis (RO) techniquein domestic wastewater.
Kharaf Nationals Scope o Work:
EPC - KN Designed and built the largest waste/watertreatment plant within a BOT structure worldwide it hasa 375k m/day reaching a maximum capacity of 500k m/day). Currently planning expansion to 600km/day.O&M - Khara National is responsible for the operation
and maintenance of the entire plant; Wastewatertreatment and reclamation covering 60% of the countrysneeds. The Plant supplies around 330,000m3/day of watertreated to a potable quality; exceeding the requirementsof the World Health Organization.
Inrastructure Project Development Manages theproject, customer contracts and relations.
The Future
UDC will continue to operate and maintain the plantthrough its operator Khara National until the expiry ofthe concession period in July 2032.The Sulaibiya project will continue to bring substantialbenets to the Government and people of Kuwait by thefollowing:
Saving the State the nancial burden of hugeinvestments.
Avoiding marine environmental pollution, aspartially treated wastewater is no longer dischargedinto the Arabian Gulf.
Reusing the reclaimed wastewater in a safe mannerthat preserves the environment.
Achieving the Governments strategic objective toreuse treated wastewater.
Treating sludge to a standard that can be furtherutilised as a component for natural fertilizer suitablefor agricultural purposes.
Delivering fresh potable water at an economic costto the State of Kuwait, compared to desalinatedwater.
Providing the State of Kuwait with a fully-functionalwastewater reclamation plant at no extra cost whenthe concession period expires.
The State will make savings of around KD3.2 billion($11.00 billion) over the lifetime of the concession.
-
7/28/2019 Business in Kuwait 2013
10/1610
BUSINESS IN KUWAIT 2013
Capital Growth
The Kuwaiti nancial system is sizeable, well devel-
oped, and has many advantages or uture growth.
The market already has an established mix o nan-
cial companies including banks, investment unds
and a dynamic stock market. The insurance sec-
tor is also growing quickly including reinsurance, a
specialty area in which the region had previously depended on
oreign companies to provide.
Banking in Kuwait consists o the Central Bank o Kuwait,eleven local banks and several leading oreign banks. In terms o
both assets and capital, the market is dominated by the National
Bank o Kuwait (NBK), Kuwait Finance House (KFH) and Gul
Bank making up the top three banks. NBK is listed in the worlds
50 saest banks as ranked by US-based Global Finance. There
are also ve sharia-compliant lenders, including Kuwait Finance
House and Ahli United Bank a regional Islamic investment power.
Foreign banks include HSBC, BNP Paribas, Citigroup, National
Bank o Abu Dhabi and Qatar National Bank. As Kuwait begins
to implement its national development plan, it is likely that busi-
nesses and the government will increasingly turn to local banks
or nancing, creating demand or any idle capital. The bankingsector appears to be well positioned to take advantage o any
protable investment opportunities that may arise especially as
there has been a slowdown in returns since 2009.
Kuwait provides the necessary nancial services or investors
and business people conducting transactions in the MENA
With so much competition amongst other
leading fnancial centres it has been
suggested that Kuwait may fnd the most
success in a specialised area o fnance, like
Islamic investments or asset management.
region. This includes banking services (e.g. deposit acceptance,
Loan provision and issuance o guarantees), investment services
(e.g. asset management and establishing mutual unds), insur-
ance services (e.g. property and lie), and has a well organised,
developed and supervised nancial markets that provide diversi-
ed sources o nance or businesses.
The number o non-bank nancial institutions has increased
signicantly in the last ew years as there has been wide spread
opportunities or oreign investment unds, and downstream ser-
vice providers including law rms. While the activity o conven-
tional investment companies is heavily concentrated in oreignmarkets, the core business o Islamic investment companies,
which have been growing quickly in recent years, is domestic.
With so much competition amongst other leading nancial cen-
tres it has been suggested that Kuwait may nd the most success
in a specialised area o nance, such as Islamic investments and
Investors stand next to the electronic quotation boards inside the Kuwait Stock Exchange building. Photo taken by Jack Dabaghian, provided courtesy o the Ministry o Inormation.
-
7/28/2019 Business in Kuwait 2013
11/1611
Kuwaits fnancial industry is set or strong growth as
privatisation and inrastructure projects get underway.
FDIPUSH
The Kuwait Stock Exchange is the second largest
bourse in the Arab world ater the Saudi Arabian
equity market, with over 200 listed frms. To date the
market cap o the KSE is above US$ 106 billion and is
up nearly 20% rom last year.
asset management.
Over the last ew years several o the leading banks in Kuwait have ap-
plied or and received Sharia compliance status. In act, o Kuwaits ten local
banks, ve are now Sharia compliant. According to Zawya Market Intelligence,
Islamic assets have grown at an average rate o 15%-20% per annum over thepast decade to reach approximately US$ 1.3 tln in 2011. The main driver be-
hind the development and growth o the Islamic nance industry is the growing
demand and preerence or Shariah-compliant nancial products, backed by
rising wealth and excess liquidity arising rom high oil prices over the years. For
this reason, the Islamic wealth management industry remains one o the ast-
est growing sectors in the Middle East and has even sparked interest outside
the region. Kuwait is a good position to capture this market, already a wealthy
country, with a solid sharia market in place and growing class o entrepreneurs.
In 2010, the Kuwait Parliament passed legislation to establish the Capital
Markets Authority (CMA), Kuwaits rst independent stock market regulator, as
part o a larger regulatory ramework or the countrys capital markets. The
CMA regulates the Kuwait Stock Exchange (KSE), supervises public and private
subscriptions and oversees mergers and acquisitions. The CMA Kuwait has
brought more transparency and oversight to Kuwait Stock Exchange which has
boosted condence among oreign and institutional investors. The KSE is the
second largest bourse in the Arab world ater the Saudi Arabian equity market,
with over 200 listed rms. To date the market cap o the KSE is above US$ 106
billion and is up nearly 20% rom last year. Many investors have been drawn
to the high risk, high return environment, however most think that the new
authority will increase competition and ultimately lead to greater direct oreign
investment into Kuwait. Stability will be welcomed by long term investors who
see population and development growth as a winning scenario or investment.
For the past decade, investment rms in Kuwait have taken advantage o
the booming economies by investing in various assets across the region, and
generating prots rom the sale o such investments. Wealth management andother ee generating business lines have also been exercised, but have oten
been overshadowed by the prot potential ound in investments. In recent years
as these prots have slowed and investment opportunities have withered away,
Kuwaits national development plan means that many new projects and entities
will need to raise capital, which is expected to bring the nance sector back
to pre-crisis growth levels. There are also expectations that Kuwait nationals
will opt or sae investments on a domestic and regional basis in light o the
on-going situation in Europe and the US. While there has also been a push
into promising Asian economies the overall expected growth in the GCC region
has local and international investors excited. The banks in Kuwait are very well
capitalised and highly liquid and have the capacity to make signicant loans or
experienced inrastructure and development companies. Evaluating the risk willbe a major actor or any bank in Kuwait yet with so much capital the nancial
system will need to make positive investments and with the progression o cer-
tain mega-projects in 2013 the banking and overall nancial services industry is
set to reap rewards o an improved economic outlook and the continued drive
to become a regional nancial hub.
-
7/28/2019 Business in Kuwait 2013
12/1612
BUSINESS IN KUWAIT 2013
Back to Basics
Over the last decade Gul Bank has
endured many high and lows, but is
there a recognisable year that cracksbegan to appear in certain business
units?
Gul Bank was essentially a successul
retail and commercial bank in the 2000s
and the astest-growing bank in Kuwait
until 2007. From about 2006, however,
it started to diversiy its income stream in
order to maintain the growth momentum,
and it ventured into new, ashionable ar-
eas, such as proprietary trading, derivatives
and direct investments. But it didnt have
the governance culture nor the proper risk
management and control processes, so
there wasnt a thorough understanding o
the risks it was taking. And thereore, when
the market turned ugly, in 2008, Gul Bank
essentially lost its capital, as many local
counterparties to the derivative trades were
unable to meet their commitment towards
the Bank.
As one o the only Banks in the GCC
region to experience a run leading to
Government intervention, what lessons
has Gul Bank taken away rom theevents o 2008?
It was denitely a crash course in crisis
management! The Bank, however, was
viewed as systemically important to Ku-
wait, so the Central Bank stepped in
and guaranteed the depositors money,
and ultimately, by the end o 2008, the
Bank was successully recapitalized.
O course, one key lesson here is
stick to the core competencies you under-
stand. Another is that good times may not
be the best time to test your skills in newareas (every investor looked like a smart in-
vestor beore the bubble bursts). A third is
that one should not shortcut the controls
and processes (dont get into a business
until you have gured out and accepted
all the risks). As a result o that traumatic
experience, Gul Bank has decided to re-
turn to its roots as a conventional domesticbank, exiting all peripheral (and volatile) ac-
tivities. Our aim is to be a dominant player
in the local market and to oer the best
and astest services to our customers. In
the longer term, we want to be perceived
as the pre-eminent bank in the region.
Mr. Accad, you were appointed CEO in
2009 to essentially rebuild Gul Bank
to its ormer position as a proftable,
stable, trusted bank. How did you set
about achieving this task?
Our strategy back in 2009 revolved around
4 pillars: (1) reocus on our core competen-
cies; (2) build a ortress balance sheet; (3)
ring-ence our legacy problems; (4) provide
superior customer service. The rst pillar is
sel-explanatory, and by 2011, we had es-
sentially exited all high-risk peripheral activi-
ties. The second pillar, the ortress balance
sheet, was achieved through a drastic re-
duction in NPL (rom 30% o our loans to
less than 11% today with a 145% cov-
erage ratio!), Strong improvements in our
capital and liquidity position, and by put-ting in place what I believe is the best risk
management and governance process in
the region. To address the third pillar, a new
management structure was put in place
in the Corporate Bank, splitting the good
bank rom the bad bank, and allowing us
to ollow dierent strategies without the
risk o contamination. And nally, we were
able to dierentiate ourselves rom all the
other Kuwaiti banks by delivering on our
best and astest service promise, which
is still unmatched in the region who elsecan guarantee its clients that they will get a
personal loan or credit card the same day
they apply or it?
Gul Bank had an impressive 2012,
The fnancial crisis o 2008 had many consequences or banks
outside o the US and Western Europe. Gul Bank is a regionalexample o how fnancial institutions worldwide were diving
head frst into complex investments outside o their historic
banking acilities. Established in 1960, Gul Bank, under the
leadership o CEO Michel Accad, has entered a new stage
o prosperity and growth while never orgetting the not too
distant past that caused so much upheaval.
-
7/28/2019 Business in Kuwait 2013
13/1613
Gul Bank completes an impressive turn around by fnding
strength in core competencies.
ending the year with a reported
KWD 30.9 million in net proft. What
key undamentals led the bank tosuccessully rebuilding its proftability
and robust balance sheet?
When one reocuses on its core business,
and that core business is relatively simple
(domestic conventional banking services),
its actually easier to excel.
Our best and astest service promise
has essentially helped us double our loan
and card sales volumes on the Retail side.
On the Wholesale ront, we are now oering
value-added products (e.g. Cash manage-
ment, project nance advisory, loan syndi-
cations, debt capital market issuance) that
have increased our prole with our top Cor-
porate clients, resulting in more business.
We have also learned to manage our
balance sheet much better: our cost o
unds is now equal to the market average,
and yet more than hal o our term deposits
are or 6 months or longer, giving us
an exceptionally strong liquidity prole.
However, the overall key to this success
is a team o proessionals working with a
common purpose towards a common
objective. O course, the reaction o ourclients, the markets in general and our
regulators has been very positive.
What is your outlook or the Kuwait
banking sector in 2013?
We continue to see good growth on the
Consumer side, and generally across all
Consumer products. Last year, Corporate
credit growth was lagging. This year, we
are a bit more optimistic, as the national
developmental plan hopeully takes o. A
lot depends on that, and rankly, we seesome good signs already. For example a
new commercial law and new corporate
governance regulations have been enacted
and a couple o very large power and in-
rastructure projects have been awarded
and now we are waiting or their execution.
Now that growth and proftability havebeen maintained, what are Gul Banks
plans over the next 4-5 years?
I believe we have really turned the page
now, so we can aord to be more ambitious
in our aspirations going orward. We plan
to nalize a new strategic direction and a
rereshed 5-year Plan later this year, so its a
bit too early to talk about specic products
and initiatives.
One thing Id say though, is that its
easier to move rom bad to good, but much
more dicult to move rom good to great,
so the challenge will be enormous, but
were up to it!
You are a well known banker in the
region, and have successully led the
turnaround strategy or Gul Bank. In
your opinion, what do you think the
customer really wants when choosing
a bank as most banks have the same
oering insoar as products go?
When you ask a customer what they want
rom a bank customers world-wide want
the same thing. They want convenience,speed, quality o service, a air price and
overall value or their money, whether it is in
banking services or other services. There-
ore, I think we have been able to dierenti-
ate ourselves rom the competition by hav-
ing a very clear vision, purpose and promise
that we make to the customer.
Our Promise campaign has allowed us
to oer our commercial and retail clients a
level o service that is pretty unique. There
are not many banksactually there are no
banks in Kuwait or the entire Middle East,and I would assume that there are very ew
banks internationally that can oer the con-
sumer a loan and disburse that loan, the
same day that they make the application.
This not only means that your credit card
Our aim is to be a dominant
player in the local market and
to oer the best and astest
services to our customers.
is approved, you actually receive your card
the same day too. For car loans you get
your car keys the same day you make the
application i approved. Furthermore we not
only promise our customers the best and
astest service, we actually guarantee it!
What personal message would you like
to send to our readers in London about
Gul Bank and Kuwait?
Gul Bank is back. It is the only bank in
the region that was upgraded by the rat-
ing agencies in 2011. Since that time it has
won numerous awards, including Bank o
the Year in 2012 rom the The Banker an
FT publication.
We are the second largest convention-
al bank (and third largest including Islamic
institutions) in Kuwait, and we oer the best
service. To our Consumer Banking clients,we guarantee the best and astest service.
To our Corporate clients, we oer creative
nancial solutions and advice.
The Kuwait market is at a turning point.
While the country continues to enjoy strong
and stable economic undamentals, the -
nancial markets have suered since 2008
as a result o the worldwide nancial crisis.
The recovery o the nancial markets has
lagged as the developmental plan ailed to
take o as initially expected. However, all
indications now are that the plan is beingrevived. In turn, this will spur private invest-
ments, stimulate economic activity and re-
vitalize the nancial markets. This is an op-
portunity that investors would probably not
want to miss.
-
7/28/2019 Business in Kuwait 2013
14/1614
BUSINESS IN KUWAIT 2013
Working Together
The expected growth and success o Public-Private
Partnerships (PPP) globally suggest that the estimat-
ed investment in inrastructure expansion and mod-
ernisation by 2030 will be in excess o US$ 41 trillion.
Investment in the MENA region alone is expected to
account or 2.1% o this investment, accounting or
US$ 870 bn, with water projects taking up US$ 225 bn, road and
rail projects US$ 320 bn, power projects US$ 180 bn and air/sea
port projects US$ 145 bn. Governments alone cannot support this
level o unding which is why massive private sector participation is
being encouraged.
The region is already witnessing an increase in the number
o regional investors, with banks and sovereign wealth unds
showing an interest in various initiatives across the Gul. In addition,
US$ 59 bn worth o construction projects are currently plannedor under way in Kuwait and more contracts will be awarded in
2013 as the Government makes a sustained eort to address
and streamline their process
or inrastructure development
in the country. Public-Private
Partnerships in various orms
are a natural opportunity or
Kuwait to introduce private-
sector capital and expertise
in sectors traditionally under
public control, such as the
provision o public services,
without losing its supervision
o output quality and tari
levels. International experience
proves that PPPs introduce
private-sector practices and
eciencies, promote competitive markets, and acilitate innovation,
reducing costs and improving output quality while ensuring the
protection o public interests.
There is also the expectation that this will urther aid the de-
velopment o knowledge expertise in Kuwait and in the uture, help
develop a vibrant class o entrepreneurs. Kuwaits PPP Law com-
bines the objective o attracting private-sector participation based
on competitive and transparent rules with the social objective oensuring that the economic benets o private investment are
shared with Kuwaiti citizens. The scope o the Law is great, ap-
plying to both inrastructure projects or public service delivery and
commercial land development projects. As such many opportuni-
ties exist or partnerships between Kuwait companies and leading
oreign entities to benet rom the nations economic development
and growth. In Kuwait PPPs can be undertaken by any Public En-
tity, whether it is a government Ministry or specic department run
and unded by the Government; that enters into a contract with a
private sector company to implement any project actively targeted
by the Government such as those identied in the Governments
5 year development plans. The agency or the implementation othe provisions o the PPP Law is the Partnerships Technical Bureau
operating with supervision rom the Ministry o Finance. A notewor-
thy aspect o the Law states no public body may enter into a PPP
Contract without rst obtaining the approval o the Higher Com-
mittee or PPPs and once the PPP is approved limits the term o
the Projects to 30 years. Albeit in certain cases the approval time
could be 40 years but generally where there is no set amount o
time requested the project liespan will be 25 years. O course once
the project is awarded no party can sell on the rights and the deal
cannot be extended, amended, or renewed.
In the last 15 months alone, the State o Kuwait has issued re-
quests or qualications or a host o diverse large-scale inrastruc-
ture projects, the costs o which are expected to be in the tens o
billions o dinars. As it stands Kuwait is trying to raise an anticipated
US$ 28 bn through the privatisation o 32 key projects. About US$
17 bn is currently being spent on rail schemes, which include the
metro project and the railway network. Another major project is the
development o Kuwaits rst independent water and power plant
at Al-Zour North. With the announcement o the new Parliament
in Kuwait, signs are looking positive, as neither the Governmentnor the public sector is expected to be the primary nancier o an
array o projects which also include; the planned redevelopment
o Failaka Island, a new physical
rehabilitation hospital, a national
rail road network, a power plant,
as well as the comprehensive
redevelopment o the countrys
international airport and the pri-
vatisation o Kuwait Airlines.
The clear intention o the
PPP Law is to create wider
ownership in large projects and
to improve the overall eciency
o public services. Furthermore
the Law will help to reduce the
Governments role and nancial
commitment in core sectors and
shit this role towards private investors, while giving the investor
management control o the joint stock company and the project.
In this regard, where the joint stock company approach is used,
Article 5 o the PPP Law prescribes the ormula or allocating the
companys shares: 40% o shares will be oered by the joint stock
company in an open auction among companies listed on the Ku-
wait Stock Exchange and other companies approved by the Higher
Committee. The Higher Committee may select unlisted companies,including oreign entities, to participate with Kuwait Stock Exchange
companies in the open auction o the oered shares. The selection
o such oreign or unlisted companies allowed to participate will
be based on a pre-qualication process established by the Higher
Committee. This particular Article provides ar reaching opportuni-
ties to both local rms in Kuwait and international companies in
wide ranging industries.
While Kuwait based companies will benet rom receiving
knowledge expertise, skills and training, and larger contracts, UK
and oreign companies will be given the chance to bid on long
term contracts in a host o strategic assets in a growing coun-
try and region. To date leading companies rom the UK includingAMEC, BDP and Petroac have already been awarded contracts.
The stakes will be high or any PPP since the projects outlined are
signicant interests o the Government, yet in the long-term Kuwait
may have ound the right recipe or growth and development, not
only or their inrastructure but also their economy.
After years of project funding and service delivery by the Kuwait Government, the PPP Law
intends to develop infrastructure and a new way of thinking.
-
7/28/2019 Business in Kuwait 2013
15/16
The Middle Easts
leading integrated
infrastructure company
www.kharafnational.com
-
7/28/2019 Business in Kuwait 2013
16/16
top related