KD 25 billion loan is haram: official – Sovereign fund to announce volume of investments soon
KUWAIT: Kuwait Gulf Oil Company (KGOC) allocated KD 55 million in its 2018-2019 fiscal year budget to re-operate Al-Khafji and Wafra fields, said informed sources. The sources added that during its previous meeting with KGOC executives, the board of directors of Kuwait Petroleum Corporation (KPC) urged it to include the cost of re-operating the two fields in the company’s operational cost of KD 360 million, which means that the company will have to cut its budget by KD 55 million.
The sources said that KPC board allowed KGOC to hold a further meeting to discuss cutting its budget to KD 360 million including the re-operation cost, which may take up to six months and might exceed KD 55 million in the event of the emergence of operational problems during this period. Notably, the Khafji and Wafra oilfields which are both located in the neutral zone along the Kuwaiti-Saudi borders have been closed for more than two years (Khafji closed in Oct 2014 and Wafra in May 2015).
Meanwhile, Well-informed sources said KPC plans to borrow $2 billion from local and foreign banks to finance its share of $4 billion in the Duqm refinery in Oman. The sources added that local banks will have the priority and feasibility studies have shown that KPC has many funding options, and will fund the balance of $2 billion from its own budget. Notably, oil projects have recently become major channels for funding provided by local banks after an alliance between NBK and KFH managed to provide KD 1.2 billion in funding.
Rapporteur of the parliamentary financial and economic affairs committee Saleh Ashour said the committee will discuss amending the Kuwait Investment Authority (KIA) law in its next meeting. Ashour added that amendments will include reforming the board of directors and its liabilities, forming a committee for nomination, establishing an executive board headed by the managing director to carry out KIA’s strategies and restructuring KIA. Ashour said KIA will announce the volume and geographic distribution of its investments on celebrating the 65th anniversary of the establishment of the sovereign fund, the oldest in the region.
KD 25 billion loan
Member of the Fatwa and Legislation Department Ajeel Al-Nashmi yesterday issued a statement in which he said that the KD 25 billion loan the government plans to obtain would be ‘haram’ and the excuse made for getting it to cover budget deficits is unacceptable. Nashmi added that he rejects this loan the way he did with previous state transactions involving usury, which is haram (forbidden) in Islam. He added that the KD 25 billion loan will involve usury and cannot be accepted to cover budget deficits. “Allah has blessed us with a luxurious life and kept us safe…usury is a denial and disbelief in such blessings,” he explained, warning that some actions can lead to catastrophes. He also suggested that economists use alternatives such as Islamic bonds and sukuk, which had already made $65 billion in 2017. Meanwhile, the Central Bank of Kuwait had announced yesterday latest stock and “tawarruq” issue at a total value of KD 240 million ($792 million) valid for three months, at a two percent proceed rate. The central bank issues the bonds as a measure to maintain monetary market stability.
Minister of Information Mohammed Al-Jabri yesterday referred his assistant undersecretary for administrative and financial affairs Mohammed Al-Shemmari to retirement and tasked assistant undersecretary for legal affairs Munira Al-Howaidi to do his job too. Informed sources said Jabri was about to make some administrative decisions within the coming fortnight at most, including reshuffling some assistant undersecretaries and managers and appointing new managers in positions that have remained vacant for long. “The ministry is about to witness some radical changes,” said the sources, noting that changes will include senior officials, employees and issues that had remained unresolved for months, especially those related to projects included in the development plan.
Senior citizen cards
Manager of the elderly care department at the Ministry of Social Affairs and Labor (MSAL) Amani Al-Tabtabaei said the senior citizen card the ministry started issuing to citizens older than 65 in December 2017 have many privileges. She explained that the card gives senior citizens priority in doing transactions at various government bodies and exemption from customs fees, service fees at various ministries and revenue stamps for any transaction. Tabtabaei said that 800 cards had been issued until Sunday and the ministry continues to issue more cards, with an average of 90 cards daily.
Kuwait Municipality stressed that preparations are complete to offer a tender for bidding to provide vehicle impoundment sites by the private sector.
By A Saleh