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.


Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

Updated 19 June 2019
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Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

  • British Airways owner IAG signs letter of intent to buy 200 of its 737 MAX jets
  • Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes

PARIS: Airbus, reeling from the potential loss of a major customer for its best-selling A320neo as British Airways owner IAG placed a lifeline order for the grounded 737 MAX, prepared to hit back with more orders for its A321XLR on Wednesday.
The planemaker has been negotiating with US airlines investor Bill Franke whose Indigo Partners has also been known to place orders for multiple airlines within its portfolio and could reel it in for the Paris Air Show, industry sources said.
Airbus declined to comment.
After weathering intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.
The surprise order lifted the energy of a previously subdued Paris Airshow, where the talk had been of the possible end of the aerospace cycle, given the issues at both Boeing and Airbus as well as geopolitical and trade tensions around the world.
Australia’s Qantas Airways said on Tuesday it would order 10 Airbus new A321XLR jets and convert a further 26 from existing orders already on the Airbus books.
Airbus is also in talks with leasing company GECAS and has been trying to secure an eye-catching order for the A321XLR from American Airlines, though the world’s largest carrier does not typically make announcements at air shows.
Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes.