Prince Alwaleed reveals planned new investments in Saudi Arabia

Prince Alwaleed bin Talal’s detention sent shockwaves through boardrooms around the world. (Reuters)
Updated 21 March 2018

Prince Alwaleed reveals planned new investments in Saudi Arabia

LONDON: Billionaire Saudi Prince Alwaleed bin Talal has revealed plans for a string of new investments in his first interview since being detained at the Ritz-Carlton in Riyadh.
Speaking exclusively to Bloomberg Television, he said that life was now “back to normal” as he gave an intriguing inside account of his detention as part of the Saudi government’s high profile anti-corruption drive.
The Kingdom Holding chief was one of the most high-profile figures to be detained at Riyadh’s Ritz-Carlton Hotel as part of a widespread anti-corruption drive.
In a television interview with Bloomberg, a fast-talking Alwaleed said: “I am for the anti-corruption that took place in Saudi Arabia. Now, unfortunately, I was added to that group. But fortunately, I’m out of it right now and life is back to normal.”
The prince, once dubbed the Warren Buffett of Saudi Arabia, was released from the Ritz-Carlton hotel in early January.
He was among about 350 suspects rounded up since Nov. 4, including some of the Kingdom’s most senior businessmen. As a major investor in several global corporations, his detention sent shockwaves through boardrooms around the world.
Now, after being released, he wants to reassure investors of continuity across his sprawling business empire. “I need to clear my name,” he said. “And to clear up a lot of lies.”
Specifically, Alwaleed rejected claims that he was tortured, detained in a prison and was forced to abandon work on the world’s tallest tower under construction in Jeddah, and instead transfer workers to the recently announced Neom mega-project instead.
To reinforce that point, he held up a letter that he said was from Saudi Binladin Group, the main contractor on the 1,000-meter tower.
He said: “It says the following: ‘Saudi Binladin Group would like to assure Jeddah Economic Company that it remains committed to the completion of the Jeddah project.”
Alwaleed said that no charges had been brought against him and described his detention as a “misunderstanding.”
Asked if it cost him anything to leave, he said: “I will not comment on the content of the agreement between me and the government.”
The prince also revealed how he spent his time at the now world-famous Ritz-Carlton Hotel in Riyadh.
“I really divide my time into a lot of sports, a lot of walking, a lot of meditation, a lot of watching news, a lot of praying.”
The vegan prince said that while he would usually have two meals a day, when he was at the hotel he would instead have six small meals.
But while the interview painted a fascinating picture of his time at the Ritz-Carlton, the precise details of his agreement with the Saudi government were not disclosed.
Still, Alwaleed did reveal that plans were under consideration to spin off some his company’s property holdings in Saudi Arabia into a separate entity which could be a real estate investment trust (REIT).
He said that his company had invested more than $3 billion in Saudi Arabia last year and that Kingdom Holding planned to raise between $1 billion and $2 billion of new debt.
Alwaleed also revealed plans to co-invest with Saudi Arabia’s Public Investment Fund.
“Yes, this will happen. We are in discussion right now with PIF, so we co-invest in certain projects, yes,” he said.
Alwaleed’s interview comes just days after another Ritz-Carlton detainee, Waleed Al-Ibrahim, also outlined new business plans following his release.
The MBC chairman described plans for a new joint venture with the government in an interview with The Wall Street Journal.


No more spending excuses for Merkel as investment bottlenecks ease

German Chancellor Angela Merkel gestures at her arrival for the government’s ‘Open Door Day’ in Berlin on Sunday Sam sit fuga. Et laut ute odi cum as elit. (Reuters)
Updated 11 min ago

No more spending excuses for Merkel as investment bottlenecks ease

  • German leader urged to boost public investment by taking on new debt Sunducim velessunt alis plabore sernatur

BERLIN: German Chancellor Angela Merkel has fended off growing calls for more fiscal stimulus by citing the slow outflow of existing federal funds — but data suggests the money is indeed being used up as local authority bottlenecks gradually clear. With Europe’s largest economy on the brink of recession and borrowing costs at record lows, Merkel has faced pressure at home and from abroad to ditch her pledge to target balanced budgets and instead boost public investment by taking on new debt.
Merkel and her conservatives say Berlin has already earmarked billions of euros in investment for schools, nurseries and hospitals but that local authorities have spent only a fraction of this windfall.
But this excuse seems no longer valid: Figures from the Finance Ministry show that towns and municipalities are now tapping the federal government’s funds more actively, suggesting that planning and labor bottlenecks are easing.
Of €3.5 billion ($3.9 billion) earmarked in a municipal infrastructure fund for investment in schools, nurseries and hospitals (KInvFG I), local authorities have applied for nearly €3.4 billion, the data showed — roughly 96 percent of the overall amount on offer.
The fund was created in 2015 and initially meant to last until 2018. Due to the slow initial take-up, it was then extended to 2020.
Of another €3.5 billion put aside by the government in 2017 for school renovations (KInvFG II), authorities so far have tapped €2.4 billion, or 69 percent.

HIGHLIGHTS

• German towns tap into federal funds more actively.

• Improved outflow raises pressure to provide more money.

• Coalition parties at odds over debt-financed stimulus.

“As you can see, the program is running very well,” a Finance Ministry spokeswoman said, adding that the take-up had jumped by nearly €2 billion over the past 12 months.
“The figures show that there is planning progress in most federal states and that financially weak municipalities welcome the financial aid from the federal government,” she added.
The improved flow of funds is important for Germany, where heavily indebted towns and municipalities historically manage a large chunk of public spending and many citizens are annoyed by run-down local infrastructure and closed public facilities.

Austerity
Years of austerity linked to the national debt brake — a constitutional amendment introduced in the wake of the global financial crisis of 2008/09 to rein in public debt — have led to pent-up public investment needs in towns and municipalities worth a combined €138 billion, data from KfW Research shows.
“Towns and municipalities have been structurally underfunded for more than 20 years. They were forced to cut staff,” Gerd Landsberg, managing director of the German Association of Towns and Municipalities, told Reuters.
“That partly explains the initial problems with the slow take-up of federal funds — it takes time to hire new staff and get the ball rolling,” Landsberg explained.
The latest figures show, however, that authorities are overcoming those staff-related planning bottlenecks, meaning most of the money should be used up soon, he said.
Landsberg called on the government to provide more funding lines and improve the design of its programs.
“Short-term investment funds alone do not provide sufficient planning and personnel security. We must secure the financial strength of towns and municipalities in the long term.”
Like Merkel and her conservatives, Finance Minister Olaf Scholz of the jointly governing, center-left Social Democrats (SPD) has shown little appetite so far to ditch the balanced budget goal and boost investments through new debt.
Eckhardt Rehberg, the chief budget lawmaker in Merkel’s conservatives, is also sticking to the line that billions of euros still sit unused in various special-purpose funds.
“The debate about debt-financed investment programs misses the point. The problem is not a lack of money, but the sluggish outflow of funds,” Rehberg said.
Authorities must hire more staff, cut red tape and speed up planning and approval procedures, he said. “In addition, the construction sector has already reached its capacity limit, which means it can hardly cope with more demand,” Rehberg added.
Nevertheless, members of both the SPD’s own left wing and of the Greens, an increasingly strong opposition party, are pushing for a fiscal U-turn. Even the influential BDI industry lobby group, traditionally close to Merkel’s conservatives, last week called for a debt-financed fiscal stimulus package.
Cansel Kiziltepe, a lower house SPD lawmaker specializing in finance, said Merkel and the conservatives should stop blaming local authorities and rethink their insistence on incurring no new debt in their budgets, a policy goal commonly known as the “black zero.”
“Especially in times of economic weakness and in light of improved outflow of funds, it’s high time to say goodbye to the fetish of the black zero,” Kiziltepe told Reuters.