ME firms to boost investment in key projects
Manama, December 15, 2012
Investment in major projects remains positive despite challenging economic conditions both globally and in the Middle East, according to a new survey.
A total of 66 per cent of respondents reported spending over $100 million on major projects in 2012 across a broad range of industry sectors, with 72 per cent expecting to increase their spending in 2013, the Gulf Daily News, our sister publication reported citing the survey by PwC entitled "Delivering the Middle East's Mega Projects."
The report seeks to establish issues and challenges facing project owners and explore opportunity markets, it added.
The report also sheds light on project financing issues, including funding constraints, perception of private financing and the funding outlook for 2013.
Despite regular project reporting and structured review regimes, the number of participating respondents experiencing performance issues relating to their capital projects was high.
Around 80 per cent of respondents said that their projects had experienced a delay, with 46 per cent saying that they had suffered delays in excess of six months.
Completing projects on budget was also a significant issue, with only 36 per cent of respondents saying that their projects were completed on or under budget.
However, respondents also said that their projects were subject to regular reporting and review.
"Governance, accuracy and completeness of reporting will dominate the areas of focus of senior management for 2013," said PwC in the Middle East partner Charles Lloyd.
"Whilst reporting is regular, there appear to be concerns around its transparency and accuracy."
Another issue facing projects in the Middle East is the availability of funding for major projects. More than half of respondents said that their projects had been delayed, scaled down or cancelled due to funding constraints.
"Furthermore, two in three respondents expect restrictions to continue into 2013 and more than 60 per cent of respondents expect their projects to be funded, at least in part, by the private sector.
Export credit agencies, local banks, development banks and Islamic finance are now active considerations for sponsors looking to fund infrastructure projects.
Such alternative funding sources, however, give rise to different challenges and financing considerations including hedging, inter-creditor issues and appropriate risk allocation.-TradeArabia News Service
More Finance & Capital Market Stories
- Qatar sets up mixed business incubator
- Kuwait budget spending up 8pc in April-Jan
- Thomson Reuters to host Mena IFR awards
- ADIB offers smartphone industry investment
- Gulf Finance House to start $3bn Tunisia project
- KFH completes ICT project upgrade
- Egypt urban annual inflation slows to 9.8pc
- BIBF signs deal with Palestinian institute
- Bahrain’s GDP set to expand 12pc
- KFH-Bahrain rebrands priority banking
- Bank Nizwa wins top Islamic bank award
- Qatar labour costs may jump: IMF
- Kuwait Q3 trade surplus hits $23bn
- Dubai trade growth up 7.6pc to $362bn
- Deloitte appoints new managing director
- Al Ramz tops UAE trading in Feb
- IFC in $150m loan deal with Bank Audi
- SME funding focus for Abu Dhabi forum
- Insurance House posts second year of profit
- ETF global assets hit record $2.44 trillion
- Bahrain firms plan IPOs
- Serbia wins $1bn Abu Dhabi loan
- Key equity banker resigns from Saudi Fransi
- DMCC to boost Islamic commodity trade with tie-ups
- IDB, KIA units to invest in Morocco
- First Gulf to set up $1bn sukuk in Malaysia
- Singapore’s UOB Bullion and Futures joins DGCX
- Infrastructure investment ‘key to growth’
- BKIC declares 30pc dividend
- StanChart profit falls 16pc in 2013