Doha Bank recently hosted a knowledge sharing session at the JW Marriot Hotel, Kuwait covering Opportunities and Challenges in Projects and Contracts. The event was attended by economists, major contracting companies and bankers in Kuwait.
Speaking at the conference, Doha Bank Group CEO, Dr. R. Seetharaman, said: “According to the IMF, Kuwait's current economic outlook is positive and non-oil GDP growth is forecast to accelerate from 2.7% in 2013 to 3.9% this year, backed by government investment in infrastructure and large oil projects. Kuwait has projects worth more than $72.8 billion expected in 2014. In April 2014, The Kuwait National Petroleum Company signed contracts worth $12 billion with three international consortia to upgrade two refineries and invited bids to build a new multi-billion-dollar refinery. Kuwait has plans to open a new refinery called Al Zour. The first phase of Zour North power station, to be built by a venture led by GDF Suez, secured financing last year.”
Dr. R. Seetharaman said the global economic framework was important to consider: “According to the IMF, global growth is projected to strengthen from 3% in 2013 to 3.6% in 2014 and 3.9% in 2015 respectively. Key drivers in advanced economies are a reduction in fiscal tightening, except in Japan, and still highly accommodative monetary conditions. Emerging economies growth will be helped by stronger external demand from advanced economies, but tighter financial conditions will dampen domestic demand growth.”
In the GCC's economies, he said, “GDP at current prices in the GCC is expected to grow by 3.5% in 2014 and touch $1.7 trillion and GCC current account balance as a % of GDP at current prices will reach 18% in 2014. Kuwait's economy is expected to grow by 2.6% in 2014. Kuwait’s budget projected expenditures for fiscal year 2014-15 amounting to $77 billion, a growth of 3%. The budget assumed oil prices at $75 per barrel in the latest fiscal year. Kuwait stock market is down by more than 2%. It plans to launch derivatives trading in 2014.”
Other speakers who participated in the panel discussion included Dr. Riyad Al-Faras, Assistant Secretary General at the Supreme Council for Planning and Development in Kuwait who spoke about the release of new contracts for Kuwait by the Kuwait government. He also addressed topics such as clean fuel projects and funding for aid hospitals.
Other topics addressed during the conference included project risk management and contract management. Steve Berto, Head of Business Development at Doha Bank highlighted the importance of risk management in projects, the need to understand risk and its role in contract management. He also spoke about common project risks faced in contracts and key project risks in the near future and the possible mitigation of these factors.
Anindya Roy Chowdhury, Partner and Head -Transactions & Restructuring at KPMG spoke about effective governance structures for mega projects. He highlighted the key challenges to successful projects and the underlying principles for an effective framework.
Ibrahim Sattout, Partner- Al Ruwayeh & Partners (ASAR) highlighted the restrictions on creating security for assets and the dispute resolution mechanism prevailing in Kuwait.