Middle East Business News Review – 13 September

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Photo – Vahid Salemi/AP

Today’s top business news from the Middle East and North Africa:

Dubai to build its first ‘eco-mosque’

Al Arif Contracting has been awarded the contract for the construction and maintenance of the UAE’s first eco-friendly mosque, and what will also be Dubai’s largest mosque upon completion in 18 months time.

An initiative of Awqaf and Minors Affairs Foundation (AMAF) the 3,500-worshipper mosque is to be built on a 9,755 sqm plot near the Clock Tower Roundabout in the Bur Saeed area of Dubai’s Deira.

Commerzbank, others to sue Dubai over unpaid loans

Commerzbank, Germany’s second-biggest bank, said on Thursday that it and Royal Bank of Scotland and South Africa’s Standard Bank, plan to take Dubai to court over unpaid loans.

Commerzbank said in a statement that it and the two other banks had been seeking a “consensual solution for over two years with Dubai Financial Group” concerning the restructuring of some $10 billion in debt.

SR 2.4 bn municipal projects in Jeddah

Municipal and Rural Affairs Minister Prince Mansour bin Miteb on Wednesday launched 15 municipal projects worth SR 2.4 billion, including a SR 37 million land park project in Dahban on the Red Sea.

The minister launched the projects during a ceremony organized by Jeddah Mayoralty.

They included nine cleaning contracts with a total value of SR 1.8 billion in addition to the construction of four bridges and an underpass (which will cost SR 515 million). Prince Mansour commended the efforts being made by Jeddah Mayor Dr. Hani Aburas and other officials in carrying a number of vital projects in the city in a record time.

Qatar’s Annual Inflation In August up at 2.3% on Rising Food Costs

Qatar’s annual inflation rate was up at 2.3% in August, compared with 2.2% in July, led by a rise in almost all of the major groups including food, beverages and furniture, official data showed Thursday.

All groups making up the overall basket of the consumer price index, or CPI, rose in August on an annual basis except rent, fuel and energy costs, which registered a drop of 3.3%, according to figures published by the Qatar Statistics Authority.

Edison wins $580m discount from Qatar’s Rasgas

An arbitration court in Qatar has ruled against Rasgas, the country’s largest producer of Qatari LNG after Qatar Petroleum, in a decision which saw Italian energy group Edison awarded a €450m (US$578.07m) discount on the price of supplies Rasgas was to supply the Milan-based firm as part of a 25-year contract.

Edison, which last year successfully challenged Russian gas export monopoly Gazprom to reduce the cost of long-term gas supplies, currently also has pending arbitration hearing its gas contracts in Libyan and Algeria.

Civil war, inflation decimate purchasing power by a third in Syria

A Syrian state newspaper reported on Thursday that people are facing unprecedented problems buying basic necessities due to rampant inflation flared by a bloody 18-month-old conflict that has engulfed the whole country.

“In the last few months, the price of the most basic commodities has risen,” Tishrin newspaper said, adding that the population’s purchasing power had been reduced by a third.

The state newspaper quoted Mohammad Jumaa as saying that economic sanctions on Syria have brought about a reduction in products and services offered on the market, which, set against the high demand of consumers, has caused the price rise.

Create new Sharia board models for Islamic banking reform – scholars

A group of Islamic scholars have proposed that banks’ sharia boards create partnerships between the boards and Muslim depositors, to insulate the boards from pressure exerted by bank managements and counter allegations of conflicts of interest.

Sharia boards, composed of experts in Islamic financial law, supervise Islamic banks’ activities and products to make sure they conform to religious principles, such as bans on interest and pure monetary speculation.

A group of scholars in South Africa, led by Durban-based Ebrahim Desai, a senior figure in the city’s Muslim community, proposed that Muslim depositors in each bank fund a sharia compliance body that would be created separately from the bank.

Tunisia banking on US guarantees to secure 2013 borrowing

Tunisia’s investment and international cooperation minister said on Thursday he expected the US government to guarantee around a fifth of the $2.5 billion the North African state will need to borrow next year.

Reuters quoted Riadh Bettaib as saying that Washington has pledged to guarantee a loan worth more than $500 million in order to “help us tap international debt markets at a low interest rate in the limits of 1.68%”.

The minister did not explicitly say if that meant Tunisia would use the guarantee as it did in July when it raised $485 million from an international bond issue.

Algeria allocates $14bn for three fertilizer plants by 2020

The Algerian government has allocated USD 14 billion to build three fertilizer plants by 2020, with a total installed capacity of 35 million tons per year, a senior official at state-owned oil and petrochemicals giant Sonatrach told Zawya.

Sonatrach will announce international tenders in the second half of 2013 to choose partners for the plants. The plants will be located in eastern Algeria, at Tebessa, Souk Ahras and Skikda,” the person said on condition of anonymity. The three locations are close to phosphate mines.

“We already are negotiating with some Spanish companies in this regard,” the person said.

London hotels wooing big-spending Gulf guests with better understanding

Visitors from the oil rich Gulf nations are arriving in the UK capital in great numbers, staying for up to a month in their preferred district of Mayfair and block-booking a bunch of top-tier suites and apartments, a Reuters report said on Thursday. London hoteliers are tweaking their products, taking cultural sensitivities into consideration and working to understand a new generation of Middle-Eastern visitors in order to keep their numbers steady, the report added.

High-end Hilton Park Lane hotel has extended its opening hours of food and beverage outlets, and added a 24-hour room service with menus in Arabic language to entice its Arab clientele to spend more.

Middle-Eastern tourists make up one in four guests at Hilton Park Lane, a third of which are from the UAE. The property has seen visitor numbers from the top five Middle-Eastern markets grow by 21% year-on-year. Halal meat is already being served across the board in many five star hotels.

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