Future of Gulf construction looks brighter, says survey

Construction work on the King Abdullah Financial District, north of Riyadh, Saudi Arabia. (REUTERS)
Updated 30 January 2018

Future of Gulf construction looks brighter, says survey

LONDON: There are signs of improving optimism in the Gulf construction sector, despite continued worries about delayed payments and contract disputes, a new report said.
Overall sentiment in the building industry has risen by seven percent in the last two years, from 32 to 39 percent, a survey conducted by law firm Pinsent Masons’ found. The majority of the companies surveyed are involved in projects with a value of more than AED500 million ($136 million).
The UAE came out on top as the market expected to generate the most growth in the region, with 38 percent of respondents saying they expected the country to generate the most opportunity over the next 12 months.
“The UAE is set to see an increase in the number of projects during 2018 and we expect the country to remain in top position, particularly in the lead-up to Expo 2020,” said Sachin Kerur, head of Middle East region at Pinsent Masons.
Sentiment toward Saudi Arabia also improved, according to the survey, with 29 percent of respondents expecting the Kingdom to provide the biggest opportunities over the next 12 months. 
In 2016 just 11 percent of respondents said they saw the most opportunities in the Kingdom.
There were also pockets of pessimism, with 20 percent of those surveyed expecting their order books to decline by more than 10 percent in the coming months.
Around 86 percent of businesses said contract conditions have become less favorable during 2017, which is roughly in line with sentiment in 2016, while the same proportion said payment periods were longer in 2017 than the previous year.
Close to 70 percent of respondents said they were involved in more disputes during 2017 than had been expected.
“Whilst analysts predict a slight economic revival across many GCC markets during 2018, the survey results are indicative of what has been a challenging time for the construction sector — which has grappled with the impact of lower oil prices and ongoing geopolitical tensions,” said Sachin.
The report also highlighted the rising importance of Public-Private Partnerships (PPP) to attract inward investment into the industry. The survey found that 40 percent of respondents were currently involved or expected to be involved in PPP projects during the next 12 months. This compares to 32 percent in 2016.


Kuwait MPs launch probe into Airbus deal

Updated 19 February 2020

Kuwait MPs launch probe into Airbus deal

  • The decision came after a debate on allegations that Airbus paid kickbacks to secure a deal 6 years ago
  • The parliament also asked the finance ministry to review recent aircraft deals involving state-owned Kuwait Airways

KUWAIT CITY: Kuwait's parliament on Wednesday formed a fact-finding panel to probe alleged kickbacks in a deal between the national carrier and Airbus, which last month paid massive fines to settle bribery scandals.
The parliament's decision came after a special debate on allegations that Airbus paid kickbacks to secure a 25-aircraft deal six years ago.
It also asked the Audit Bureau, the state accounting watchdog, to investigate the deal, which was reportedly worth billions of dollars, although exact figures were never released.
Kuwait Airway Co. in 2014 ordered 15 Airbus 320neo and 10 Airbus 350, with delivery beginning last year and continuing until 2021.
Opposition lawmaker Riyadh al-Adasani told the session that Kuwait was mentioned in a settlement struck by Airbus in a British court on January 31, along with the names of some Kuwaiti officials and citizens.
Under the settlement, Airbus agreed to pay 3.6 billion euros ($3.9 billion) in fines to Britain, France and the United States to settle corruption probes into some of its aircraft sales.
Days after the settlement, Sri Lanka ordered an investigation into a multi-billion dollar aircraft purchase from Airbus after the deal was named in the settlement.
The former chief of Sri Lankan Airlines, Kapila Chandrasena, was arrested on February 6 for allegedly receiving bribes relating to the deal.
Earlier this month, two senior officials of the Malaysia-based AirAsia stepped aside while authorities probe unusual payments at the carrier, as the fallout from the Airbus scandal reverberated across the industry.
Kuwait in recent years also initiated criminal investigations into two large military aircraft deals involving Airbus -- a $9 billion Eurofighter Typhoon warplanes deal and a contract for 30 Caracal military helicopters costing $1.2 billion.