WASHINGTON: Pakistan is hoping to finalize both the delayed privatization of its flag carrier and the outsourcing of Islamabad’s international airport in November, the country’s finance minister said Wednesday.
Muhammad Aurangzeb, who took office earlier this year, spoke to AFP at the World Bank’s headquarters in Washington, where he is attending the annual meetings of the International Monetary Fund and the World Bank.
During a previous interview with AFP in April, Aurangzeb had said he hoped the privatization of the government-owned Pakistan International Airlines (PIA) could be completed by June 2024.
Speaking Wednesday, the finance minister said the five-month delay was down to two factors: ensuring macroeconomic stability, and doing the proper due diligence of the interested parties.
“The reality is, when any foreign investor comes in, or even the local investor, who are going to put in a substantial amount of money, they want to ensure that the foundation is there,” he said, referring to macroeconomic factors.
Aurangzeb noted that potential bidders for both PIA and Islamabad airport also required scrutiny, another factor in the delay.
“Therefore it’s ultimately the cabinet which approved the extension in the timelines so people can do their due diligence before they make these submissions,” he said.
Aurangzeb said Pakistan had been behind on existing profit and dividend repayments when the current government took office, and had taken steps to remedy that after making progress on macroeconomic stability.
The country came to the brink of default last year as the economy shriveled amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, as well as a global economic downturn.
Inflation peaked at 38 percent, but has since dropped to less than seven percent, after the central bank maintained sky-high interest rates, amid other government tightening measures, including import bans to preserve foreign exchange.
Last month, the IMF approved a $7 billion loan, Pakistan’s 24th such payout from the multilateral lender since 1958.
Aurangzeb touted progress on the country’s current account deficit and the stabilization of the Pakistani rupee, which has depreciated against the US dollar by about 65 percent since 2020.
“In May and June on the back of this macroeconomic stability and building up on our reserves, we paid more than $2 billion to our existing international investors,” he said.
Pakistan’s gross public debt currently stands at 69 percent of GDP, according to the IMF, or roughly $258 billion.
Alongside privatizing state-owned enterprises (SOEs), Pakistan’s IMF deal also rests on increasing its tax base, and reforming of the country’s power sector.
Aurangzeb told AFP there was a common theme between all three major issues.
“Tax, power, SOE: There’s leakage, there’s theft, there’s corruption, right?” he said. “And we have to deal with all of that.”
But he dismissed media reports that the government was not serious about broadening its tax base, saying that the tax take had risen by 29 percent in the last fiscal year, which overlapped with a prior caretaker government, and was targeted to rise by a further 40 percent in the current fiscal year.
In a nation of more than 240 million people where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.
“People who are not paying up, they need to start paying for the simple reason that we have reached a saturation point of the people who are paying,” he said.
“The salaried class, the manufacturing industry, reached a saturation point. And this cannot go forward,” he added.
The government was also committed to doing a better job of taxing certain sectors of the economy, he said, naming real estate, retail, retail distributors, and agriculture.
Pakistan’s finance chief says government aims to privatize national flag carrier in November
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Pakistan’s finance chief says government aims to privatize national flag carrier in November
- Muhammad Aurangzeb attributed months of delay in PIA privatization to bidders’ due diligence
- He denies media reports saying the government is not serious about broadening the tax base
Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan
- ACWA Power has been significantly involved in Uzbekistan’s renewable energy sector in recent years
- Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030
JEDDAH: Saudi utility giant ACWA Power launched three renewable projects in Uzbekistan, including wind, solar, and battery storage, marking a $3 billion investment in the country’s energy transition.
On Dec. 18, Uzbekistan’s President Shavkat Mirziyoyev and the Kingdom’s Minister of Energy, Prince Abdulaziz bin Salman, who joined virtually, inaugurated the projects.
The initiatives include the Bash and Dzhankeldy Wind Power Plants with a total capacity of 1,000 megawatts and a transmission line, the Samarkand 1 and 2 solar projects with 1,000 MW of solar power and a 1,000 MWh battery energy storage system, and the Tashkent BESS Project, which consists of a 500 MWh BESS.
Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030, a critical milestone in its broader plan to achieve 20 gigawatts of clean energy capacity by the decade’s end.
Mohammad Abunayyan, the chairman of ACWA Power’s board of directors, who also chairs the Saudi-Uzbek Business Council, emphasized the significant progress in his company’s collaboration with the Uzbek government, highlighting its role as a key strategic investor in the country’s rapidly growing clean energy sector.
Abunayyan said: “Today’s groundbreaking highlights the multitude of large-scale foreign direct investments and commendable efforts by Uzbekistan to strengthen the potential of the country’s energy system and capacity. It also paves the way for the commencement of ACWA Power projects that are expected to yield widespread benefits for Uzbekistan’s key regions and communities.”
Prince Abdulaziz commended the robust relationship between the Kingdom and Uzbekistan and said the alliance has nurtured deep collaboration across multiple sectors, with a particular focus on energy, which has brought mutual benefits to both nations, according to a statement from the company.
The Saudi minister also praised the economic cooperation between the two countries, particularly in the context of Saudi Vision 2030 and Uzbekistan Strategy 2030. He stressed their shared goals of economic development, diversification, renewable energy, and sustainable growth, as well as the Kingdom’s growing investment in Uzbekistan’s electricity sector amid the country’s energy transition.
In October, ACWA Power announced it signed a letter of intent with the Asian Infrastructure Investment Bank to secure $150 million for the development of three wind power plants in Uzbekistan, namely the Kungrad 1, 2, and 3 plants in the Karakalpakstan region.
The company, listed on the Saudi Stock Exchange, said in a press release that the financing will support the three facilities, each with a capacity of 500 MW.
The financing term is set at four years and will be backed by an institutional guarantee from ACWA Power.
Uzbekistan is a key foreign market for ACWA Power, which has been significantly involved in the country’s renewable energy sector in recent years.
The company’s current portfolio in Uzbekistan includes 11.6 GW of power, with 10.1 GW from renewable sources, along with the country’s first green hydrogen project, which has an annual capacity of 3,000 tonnes.
Since the partnership began, four major projects worth approximately $3 billion have been successfully implemented, with an ongoing portfolio of initiatives valued at $15 billion, ACWA Power said in the statement.
Saudi Arabia unveils enhanced e-guide to boost exports
JEDDAH: The Kingdom’s businesses now have access to an enhanced support system through the newly launched electronic guide by the Saudi Export Development Authority.
SEDA has introduced the first digital version of its Export Incentive Service, or Incentives, which provides a comprehensive overview of key benefits, application procedures, and eligibility criteria aimed at promoting exports.
The initiative is designed to help Saudi companies expand into global markets by offering nine distinct incentives that adhere to World Trade Organization regulations, according to the Saudi Press Agency.
This launch is part of SEDA’s ongoing efforts to enhance the export environment, raise awareness of export practices, develop human capital within the sector, and create new opportunities for Saudi exporters.
Additionally, the program seeks to address the challenges faced by exporters through collaboration with both public and private sector stakeholders. By supporting these efforts, the program aligns with the Kingdom’s Vision 2030 goals of diversifying sources of national income.
The guide caters to the specific needs of exporters, covering a wide range of activities, including e-commerce platform registration, product certification, participation in international trade shows, marketing, advertising, product registration, and facilitating visits to potential buyers. It also offers legal consultations and specialized training.
A notable feature of the program is its cost-sharing component. The initiative compensates companies for a portion of the costs associated with entering new markets, offering reimbursement ranging from 50 percent to 75 percent, depending on specific terms and conditions.
In the third quarter of 2024, Saudi Arabia’s non-oil exports reached SR79.48 billion ($21.17 billion), marking an impressive 16.76 percent increase compared to the same period in 2023, according to data from the General Authority for Statistics.
Notably, the Kingdom’s exports to the UAE amounted to SR19.58 billion, followed by India at SR6.78 billion and China at SR6.48 billion.
Chemical products led the Kingdom’s non-oil exports, representing 25.5 percent of total shipments, with a 5.3 percent year-on-year increase. Plastic and rubber products followed, accounting for 24.9 percent of exports, reflecting an 8.9 percent growth compared to the previous year.
In addition to the export incentives program, SEDA recently introduced another initiative exempting industrial inputs from customs duties.
Developed in collaboration with the Ministry of Industry and Mineral Resources, this service provides industrial companies with customs duty exemptions on inputs used to produce export goods. This move aligns with Vision 2030’s broader goal of diversifying the economy and increasing non-oil exports.
The service covers industrial inputs, such as raw materials, labor, fuel, equipment, and buildings, enabling Saudi manufacturers to reduce costs associated with production for export. By improving cost efficiency, the initiative aims to enhance the global competitiveness of Saudi industries.
Together, these programs are designed to diversify income sources, enhance non-oil exports, and promote sustainable growth, offering innovative solutions tailored to the needs of exporters while supporting the competitiveness of the Kingdom’s industrial sector.
Closing Bell: Saudi indices close in green
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Wednesday, gaining 12.33 points, or 0.10 percent, to close at 11,961.05.
The total trading turnover of the benchmark index was SR4.5 billion ($1.2 billion), as 117 of the listed stocks advanced, while 106 retreated.
The MSCI Tadawul Index increased by 0.40 points, or 0.03 percent, to close at 1,498.37.
The Kingdom’s parallel market Nomu also gained 95.94 points, or 0.31 percent, to close at 31,196.25. This comes as 47 of the listed stocks advanced, while 39 retreated.
The best-performing stock of the day was Savola Group, with its share price surging by 9.98 percent to SR33.60.
Other top performers included United International Holding Co., which saw its share price rise by 9.01 percent to SR171.80, and Batic Investments and Logistics Co., which saw a 6.05 percent increase to SR3.68.
Alkhaleej Training and Education Co. saw its share price surge by 4.35 percent to SR32.35, while Fitaihi Holding Group recorded a 3.58 percent rise, closing at SR4.34.
Red Sea International Co. saw the biggest decline of the day, with its share price dropping 7.05 percent to SR56.70.
Jahez International Co. for Information System Technology saw its shares drop 5.07 percent to SR29, while Zamil Industrial Investment Co. declined 3.95 percent to SR32.80.
Moreover, Sumou Real Estate Co. dropped 3.83 percent to SR46.50, while Al-Baha Investment and Development Co. fell 3.12 percent to SR0.31.
On the parallel market Nomu, the top performer was View United Real Estate Development Co. with its share price surging by 30 percent to reach SR9.88.
Leen Alkhair Trading Co. saw a 9.62 percent surge in its share price to SR25.65, placing second, followed by Yaqeen Capital Co., which rose 8.13 percent to SR26.60.
Dar Almarkabah for Renting Cars Co. saw a 7.71 percent increase, reaching SR17.75, while Abdulaziz and Mansour Ibrahim Albabtin Co. rose 7.59 percent to SR17.80.
Nomu’s two biggest decliners for the day were Enma AlRawabi Co., with its share price falling 11.65 percent to SR22, and Knowledge Net Co., which dropped 8.70 percent to SR31.50.
Leaf Global Environmental Services Co. followed with a dip of 8.40 percent in its share price reaching SR97.10.
Bena Steel Industries Co. and Advance International Company for Communication and Information Technology were also among the worst performers with a 7.16 percent and 6.25 percent decline respectively.
On the announcement front, Saudi Arabia’s Capital Market Authority has approved Saudi Fisheries Co.’s request to reduce its capital from SR400 million to SR66.99 million, representing a reduction in the number of shares from 40 million to 6.7 million. The move aims to restructure the company’s capital base.
Saudi Fisheries Co.’s share price closed Wednesday with a 0.44 percent drop to settle at SR22.56.
Additionally, the CMA has approved Makkah Construction and Development Co.’s request to increase its capital from SR1.65 billion to SR2 billion.
The capital increase will be achieved by issuing 0.213 bonus shares for every existing share owned by registered shareholders, with a total of 35.18 million new shares to be issued.
The increase will be funded by transferring SR351.84 million from the company’s statutory reserve account to its capital.
Makkah Construction and Development Co.’s share price dropped 1.46 percent on Wednesday to settle at SR107.80.
In a separate announcement, Yaqeen Capital Co., acting as the financial advisor and lead manager for ITMAM Consulting Co., disclosed the firm’s intention to offer 3 million ordinary shares, representing 14.29 percent of its total capital, in an initial public offering.
The company plans to list its shares on the parallel market, subject to regulatory approval.
Cairo-Jeddah named second-busiest international air route for 2024
- Airline capacity on this route has surged by 14% compared to 2023, and has increased by 62% compared to 2019
- Expansion contributes to Saudi Arabia’s target of attracting 150 million visitors annually by the end of the decade
RIYADH: The Cairo-Jeddah air route has been ranked as the second-busiest international flight corridor in 2024, with approximately 5.5 million available seats, according to a new report.
The analysis, conducted by global travel data provider the Official Airline Guide, revealed that airline capacity on this route has surged by 14 percent compared to 2023, and has increased by 62 percent compared to 2019.
This growth is aligned with Saudi Arabia’s broader efforts to enhance its aviation sector, which is a key part of its Vision 2030 strategy.
These efforts include strengthening the country’s airlines, logistics services, cargo infrastructure, and other support industries to boost tourism and make the Kingdom a global aviation hub.
The expansion also contributes to Saudi Arabia’s target of attracting 150 million visitors annually by the end of the decade.
John Grant, chief analyst at OAG, attributed the rapid growth of the Cairo-Jeddah route to significant investments under Vision 2030, as well as longstanding ties between the two cities, which have historically seen high volumes of worker traffic and, more recently, increased business activity in consultancy and services.
He also noted that the easing of travel restrictions for entry into Saudi Arabia and the rise of low-cost carriers have contributed to the route’s growth.
The report also highlights a 19.1 percent capacity gap between the second and first-place routes. Hong Kong-Taipei holds the title of the world’s busiest international route in 2024, with 6.8 million available seats.
The Seoul Incheon-Tokyo Narita route ranks third with 5.4 million seats, just 58,818 seats behind Cairo-Jeddah, while Kuala Lumpur-Singapore Changi follows closely in fourth place with 5.4 million seats, only 28,293 behind third.
The Bangkok-Hong Kong route has made a significant leap into the Top 10 Busiest International Routes for 2024, ranking seventh with 4.2 million seats. This marks a 29 percent increase in capacity compared to 2023, although it still lags 13 percent behind the 2019 levels.
Asia dominates the top 10, with seven of the busiest routes located in the region. Other notable routes include New York JFK to London Heathrow and two Middle Eastern routes: Cairo-Jeddah and Dubai-Riyadh. The Jeddah-Riyadh route has also seen impressive growth, with capacity increasing by 10 percent in 2024 compared to the previous year.
These trends highlight the growing demand for air travel in and out of the Middle East, particularly in Saudi Arabia, which continues to make strides toward achieving its ambitious goals under Vision 2030.
King Fahd Airport sees 15% growth in passenger traffic, reaching 12m in 2024
- Airport set new daily records for the number of passengers, surpassing 50,000 in a single day
- Saudi Arabia’s civil aviation sector experienced a 17% annual surge to 62 million passengers in the first half of 2024
JEDDAH: Saudi Arabia’s King Fahd International Airport reported a 15 percent annual increase in passenger traffic in 2024, reaching 12 million, according to official statistics.
Dammam Airports Co, the managing and developing firm of the facility, reported that the Eastern Province-based airport achieved this milestone between January and mid-December, adding that it handled over 99,000 flights during the same period, reflecting a 5 percent growth compared to 2023.
The airport also set new daily records for the number of passengers, surpassing 50,000 in a single day, a new peak for daily traffic since it started operations.
On June 13, the airport reached a record daily air traffic volume, with 374 flights operated on the day, according to the report by the Saudi Press Agency.
This aligns with the Kingdom’s aviation goals, including tripling annual passenger numbers to 330 million, expanding connectivity to over 250 destinations from its 29 airports, and increasing air freight capacity to 4.5 million tons of cargo annually by 2030.
Breaking the 12 million passengers record is part of the series of successes accomplished by the KFIA’s operating and managing company, aligning with the goals of the National Transport and Logistics Strategy, represented by the National Aviation Strategy.
Saudi Arabia’s civil aviation sector experienced a 17 percent annual surge to 62 million passengers in the first half of 2024, amidst increasing domestic and international travel demand.
According to official statements the General Authority of Civil Aviation issued in July, the period also saw 446,000 flights, reflecting a 12 percent increase compared to 2023. Additionally, air cargo traffic through the Kingdom’s airports rose by 41 percent, reaching 606,000 tons during the same period.
King Khalid International Airport in Riyadh led the growth, handling 17.7 million passengers, a 21 percent year-on-year increase, and 132,000 flights, marking a 15 percent rise from the previous year.
Jeddah’s King Abdulaziz International Airport recorded 24 million passengers, a 16 percent increase, and 148,000 flights, showing a 13 percent rise compared to 2023.
