Al Qabas News paper- Monday September 15, 2008

Al-Othman: The Real Estate investor is being fought from the governmental sectors.

How would companies continue financing their projects after the discontinuation of Loaning?

The Vice chairman & managing director of Tijara & Real Estate Investment company, Tareq Al- Othman confirmed that investor in the local real estate market is facing a lot of problems and obstacles from all governmental sectors whether at the municipality or other places that obstructs the work process in the private sector, where projects' execution operations are being delayed which cost companies huge losses due to such delay. Despite this, many decisions were issued as a reaction that won't add but extra obstacles before the investor, and exacerbate his loss.

Al-Othman regretted the terrible situation of the local real-estate market during the current time, confirming that most companies prefer to invest in the external markets especially, in the absence of a governmental vision for the local economy process and random decisions. Al-Othman said that most of investors, companies and individuals suffer from unequal treatment at governmental bodies. For example, we can find two similar attached lots of lands, each one with different construction proportion, the first is twice more than the second, which give the opportunity to some and deprive others.

Al-Othman cleared that the last Central Bank decisions about limiting lending were surprising and issued by the time when many real-estate companies had finished their studies and execution plans to construct their own projects, knowing that these projects cost's millions of Dinars, other companies were shocked by the discontinuation of loaning after they had started their projects already, which triggers the following question, from where those companies are going to continue the financing of their projects, and did "The Central Bank" suddenly realize that the lending risks exceeded the tolerable limit?

Al-Othman added that we are now in the best phase the region had ever known as for economic prosperity, and many of Kuwaiti companies refuse to invest in the external neighboring markets and prefer to invest inside the country. However, now after those decisions we are forced to go out to external markets to make profits especially that we are joint stock companies and have commitments and obligations before the shareholders and have to seek sources and revenues outside the country.

Al-Othman confirmed that the regional markets wish the continuity of dreadful situations inside our local market, especially that Kuwaiti companies are considered the largest financer of vital projects in the region.

He further mentioned the delayed infrastructure development process in many areas in Kuwait, specially the new residential areas as east of Al-Qurain, saying:"we have been hearing about signing contracts to develop those services for more than three years but nothing so far is done, the matter which contributes in prices increase and encourages speculations emergence on the lands of those areas". He regrets the decision of stopping the private sector from dealing with the private housing sector saying that the government had forgotten the real estate companies' favors in providing thousands of residential units and providing alternatives for citizens.