Concern over sharp rise in MODON rents

Updated 23 August 2013
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Concern over sharp rise in MODON rents

The Saudi Industrial Property Authority (MODON) has decided to increase the rent for land at industrial cities by 100 percent from the beginning of next Hijrah year (Nov. 4).
The rents would see an eventual increase of 400 percent after three years, said an industrial source.
It said industries have to pay SR2 per square meters, instead of SR1 next year.
The rent at major industrial cities in Riyadh, Jeddah and Dammam will be increased by 300 percent in 2015 and 400 percent in 2016, the source added.
The hike in rent was aimed at improving the services being extended by MODON to industries and meeting the cost of infrastructure projects at industrial cities.
But most industrialists have opposed the move, saying it would increase the prices of national products at local and international markets.
“We had requested the authority not to increase the rent but they are not listening to us,” Ahmad Al-Sheikha, an industrialist based in Jeddah, told Arab News.
He said the decision would put additional burden on consumers.
Al-Sheikha urged MODON to take loans from commercial banks or Saudi Industrial Development Fund if it requires money to develop industrial cities, instead of increasing rents that would reduce industrial profits.
Fadhel Albouainain, an economic analyst, supported Al-Sheikha’s viewpoint, saying the rent hike would have a negative impact on the Kingdom’s industrial sector and affect its competitiveness.
“We have to lent all possible support to national industries to compete with others in the global market,” Albouainain said.
Some industrialists wanted the authority to use the additional revenue on further improving services.
Salman Al-Jeshi, deputy chairman of the National Industrial Committee at Asharqia Chamber, said he believed the rent hike would not affect prices of industrial products.
“It will have a limited impact on industrialists,” he pointed out.
Saleh Al-Rasheed, director general MODON, said the revenues of MODON increased to SR352 million in 2012, against SR 304 million in 2011, a growth of 16 percent in revenues.
The number of factories, he added, increased to 4,718 factories with investments reaching more than SR300 billion.

"The most prominent achievements of MODON for this year is the establishment of factories fully equipped for the benefit of small and medium enterprises," Al-Rasheed said.
"MODON has taken this initiative to encourage SMEs.The authority has so far developed 142 million square meters of land at industrial cities."
It aims to reach the total area of developed land to 160 million square meters shortly with the necessary infrastructure and the supporting services.


In nod to debt concerns, China Belt and Road summit to urge sustainable financing

Updated 21 April 2019
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In nod to debt concerns, China Belt and Road summit to urge sustainable financing

  • The Belt and Road Initiative envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond
  • But the initiative has proved controversial in many Western capitals, particularly Washington

SHANGHAI: World leaders meeting in Beijing this week for a summit on China’s Belt and Road initiative will agree to project financing that respects global debt goals and promotes green growth, according to a draft communique seen by Reuters.
The Belt and Road Initiative is a key policy of President Xi Jinping and envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond with massive infrastructure spending.
But it has proved controversial in many Western capitals, particularly Washington, which views it as merely a means to spread Chinese influence abroad and saddle countries with unsustainable debt through nontransparent projects.
The United States has been particularly critical of Italy’s decision to sign up to the plan last month, the first for a G7 nation.
In an apparent nod to these concerns, the communique reiterates promises reached at the last summit in 2017 for sustainable financing — but adds a line on debt, which was not included the last time.
“We support collaboration among national and international financial institutions to provide diversified and sustainable financial supports for projects,” the draft communique reads.
“We encourage local currency financing, mutual establishment of financial institutions, and a greater role of development finance in line with respective national priorities, laws, regulations and international commitments, and the agreed principles by the UNGA on debt sustainability,” it added, referring to the United Nations General Assembly.
The word “green” appears in the draft seven times. It was not mentioned once in the summit communique from two years ago.
“We underline the importance of promoting green development,” the draft reads. “We encourage the development of green finance including the issuance of green bonds as well as development of green technology.”
The Chinese government’s top diplomat, Wang Yi, said on Friday that the Belt and Road project is not a “geopolitical tool” or a debt crisis for participating nations, but Beijing welcomes constructive suggestions on how to address concerns over the initiative.
A total of 37 foreign leaders are due to attend the April 25-27 summit, though the United States is only sending lower-level representatives, reflecting its unease over the scheme.
The number of foreign leaders at the April 25-27 summit is up from 29 last time, mainly from China’s closest allies like Pakistan and Russia but also Italy, Switzerland and Austria.
China has repeatedly said Belt and Road is for the benefit of the whole world, and that it is committed to upholding globally accepted norms in ensuring projects are transparent and win-win for all parties.
“We emphasize the importance of the rule of law and equal opportunities for all,” the draft reads.