Kuwait invests $5.28bn in water projects

Updated 25 August 2013

Kuwait invests $5.28bn in water projects

Kuwait Financial Centre (Markaz) recently published the executive summary of its report on Kuwait water. In this report, Markaz examines and analyzes the current status of Kuwait water sector. The report highlights the demand, supply and investment trends in the sector. The report also presents the Kuwait water projects scenario, market structure and tariffs and a SWOT analysis of the Kuwait water sector.
The total investment in Kuwait’s water sector between 2005 and 2014 stands at $5.28 billion. Of all water sector investments, water treatment plants saw highest investment at $3.4 billion. In 2010 many projects were undertaken and finished. The construction of Sabiya distillation plants projects Stage I & Stage II, Shuaiba north distillation plants and Shuwaikh Reverse Osmosis Desalination Plant took place.
The construction of Az-Zour North Distillation Plant Project is a huge and much awaited one in Kuwait. The purpose of this project is to supply and erect 15 multi stages flash distillation units each of 17 MIGPD capacity with a recarbonation plant, in addition to one Reverse Osmosis Desalination Plant having 25 MIGPD capacity, that is having total capacity of 280 MIGPD for the plant.
Kuwait recorded the highest water consumption per capita per day and the value was 500 liters. In terms of its water withdrawal, Kuwait seems to be low at 374 m3 per year per capita, but the availability of renewable water resources stands at 7 m3 per year per capita, which is also very low compared to its GCC peers.
Potable water is mainly consumed by municipalities as potable water finds its use among residential places. Potable water consumption in 2011 stood at 128,236 MIG (million imperial gallons). Municipalities are mainly urban cities and the urban population in Kuwait is increasing rapidly. With increasing population and changing usage trends, the consumption of potable water is estimated to be 142,230 MIG in 2015. This value highlights the heat of demand for fresh water in near future.
Agriculture is also a major sector that withdraws substantial amount of water. Sulaibha farms are government owned farms, which are supplied with brackish water. Brackish water is highly saline, which is not suitable for municipal consumption. Brackish water consumed in 2011 stands at 19,265 MIG. Though the arable land in hectares has decreased from 12 to 11 from 2002 to 2008, the crop produce has been exhibiting increasing trend. The crop production index, which is produced by keeping cultivated land area constant, has shown an increasing trend between 2008 and 2011. These all indicate the possibilities for an increase in withdrawal of water by agriculture sector.
On supply side, there are very little internal renewable water resources. The annual precipitation is very meager when compared to the prevailing demand. Desalination and sewage treatment plants are the alternative sources of water. Total desalination capacity as of 2010 is around 423.1 MIGD (million imperial gallons per day). Sewage treatment plants are taken care by Ministry of Public Works. Sulaibha facility is the only plant producing RO treated wastewater as of 2011.
MEW (Ministry of Electricity & Water) owns and operates all existing power and water production facilities, transmission networks and distribution systems in Kuwait and sells electricity and water. Water tariffs are categorized based on type of consumer. It is just 0.02 Kuwait dinar (KD) per 1,000 gallons for Sulaibha farms and it is 0.85 KD for state facilities and companies.


HSBC reports lighter-than-expected third-quarter profit fall

Updated 27 October 2020

HSBC reports lighter-than-expected third-quarter profit fall

  • HSBC has a further headache – geopolitical tensions via its status as a major business conduit between China and the West

HONG KONG: HSBC said Tuesday its third-quarter post-tax profits fell 46 percent on-year as the Asia-focused banking giant continued to take a hammering from the coronavirus pandemic and spiraling China-US tensions.
However, the profit falls were not as bad as some analysts had predicted and HSBC said it expected credit losses to be at the lower end of a previously announced $8 billion to $13 billion range.
The global economic slowdown caused by the virus has hit financial giants hard and there is limited optimism on the horizon as Europe and the United States head into the winter with infections soaring once more.
HSBC has a further headache — geopolitical tensions via its status as a major business conduit between China and the West.
As a result, the lender is in the midst of a worldwide overhaul, aiming to slash some 35,000 jobs by 2022, primarily in its less profitable European and American divisions.
“We are accelerating the transformation of the Group, moving our focus from interest-rate sensitive business lines toward fee-generating businesses, and further reducing our operating costs,” chief executive Noel Quinn said in a statement accompanying the results.
Reported post-tax profit for the third quarter came in at $2 billion with revenue down 11 percent at $11.9 billion, the statement said.
Adjusted pre-tax profit slid 21 percent to $4.3 billion in the period, beating a $2.8 billion estimate by Bloomberg analysts.
Quinn described the latest figures as “promising results against a backdrop of the continuing impacts of Covid-19 on the global economy” as well as low interest rates.
In the first six months of 2020, HSBC’s post-tax profits were down 69 percent, meaning the third-quarter results were something of an improvement as some major economies relaxed some of their coronavirus restrictions.
The bank said its board would consider whether to pay “a conservative dividend” for 2020 based on final end of year results and how the global economy looks in early 2021.
Earlier this year, UK regulators called on British banks to scrap dividends for the year to preserve capital during the pandemic crisis.
HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.
As a result, it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.
The bank has tried to stay in Beijing’s good graces.
It vocally backed a tough national security law that Beijing imposed on Hong Kong in June to end a year of unrest and pro-democracy protests.
The move sparked criticism in Washington and London but analysts saw it as an attempt to protect its access to China, which has a track record of punishing businesses that do not toe Beijing’s line.
“Geopolitical risk, particularly relating to trade and other tensions between the US and China, remains heightened,” HSBC said in Tuesday’s profit statement.
The US has sanctioned nearly a dozen key Hong Kong and Chinese officials over the national security law, telling international banks to stop doing business with them.
China’s national security law, however, forbids businesses in Hong Kong from adhering to foreign sanctions regimes, leaving many in an unclear regulatory tight spot.
“Investor and business sentiment in some sectors in Hong Kong remains dampened and ongoing tensions could result in an increasingly fragmented trade and regulatory environment,” HSBC said in its statement.
The bank also highlighted the uncertainty over Britain’s withdrawal from the European Union as another potential headwind.
Talks for a post-Brexit trade deal have made little headway with a 31 December deadline fast approaching.
“There is a risk of additional ECL (expected credit losses) charges, particularly in the UK in 4Q20, if the UK and the EU fail to reach a trade agreement,” the bank said.