Today’s top business news from the Middle East and North Africa:
The United Arab Emirates’ federal budget deficit has hit AED2.8 billion ($762 million) during the first half of this year, a top finance ministry official was quoted as saying on Tuesday.
The Al Ittihad daily quoted Younis al-Khouri, undersecretary and director-general at the ministry, as saying that revenue was AED17.98 billion in the first six months of this year, or 43% of the planned amount for all of 2012. Expenditure was 20.79 billion dirhams, half of the projection for this year, far above the government’s original forecast for the shortfall because of lower-than-expected revenue.
The ministry wants to focus on austerity measures and prioritising expenditures because of the half-year deficit, the newspaper reported. The UAE government originally marked a AED400 million deficit for 2012, with spending to total AED41.8 billion this year.
An Egyptian minister said on Tuesday the government has settled a row with a Dubai-based developer over a land contract reached when Hosni Mubarak was in power. Investors welcomed the deal and hoped it would help remove uncertainties that have depressed interest in the once-booming property market.
Cairo promised last year to settle disputes with about 20 foreign and local investors over the price of land and other issues, as part of its bid to avoid costly arbitration and rebuild confidence in Egypt.
DAMAC had said last year it had filed an international arbitration case against Egypt over a land row and the conviction of its chairman and owner, Hussain Sajwani.
Qatar Airways announced on Tuesday it is joining an alliance of airlines including American Airlines, British Airways and nine other carriers that coordinate routes and allow passengers to earn frequent flier miles on each other’s flights.
The agreement will help Qatar Airways cut costs and deliver benefits to frequent fliers in and out of the US.
The inclusion in the oneworld alliance – aimed at allowing passengers to hop around the globe easier – heralds the prestige of the Qatari national flag carrier.
Kuwait’s cabinet gave its nod to a slightly revised budget for the current fiscal year with projected expenditure of 21.24 billion dinars ($75.6 billion), state news agency KUNA reported late on Tuesday.
KUNA citing Finance Minister Nayef al-Hajraf said the draft law still needs approval of the country’s ruler. The budget sees revenues at 13.93 billion dinars ($49.63bn).
The figures announced on Tuesday expect a spending increase of about 9.5% from last fiscal year’s budgeted spending and 25% from last year’s actual spending. The original budget projection was based on an oil price of $65 a barrel, leading to a budget deficit. However, Kuwait is likely to post a surplus as global oil prices are currently trading well above $100.
Maersk Line, the world’s biggest container shipping company, has stopped port calls to Iran amid tightening Western sanctions, company’s spokeswoman announced on Tuesday.
“Maersk Line has ceased to call in Iran,” a spokeswoman for the unit of Danish group A.P. Moller-Maersk said. “This is a pragmatic decision based on an assessment of balancing the benefits of doing limited business in Iran against the risk of damaging business opportunities elsewhere particularly the US,” she added.
The blacklisting of major Iranian port operator Tidewater Middle East Co by US, which operates seven terminals in Iran including the biggest container port Bandar Abbas, led to Maersk Line’s suspension of operations at several ports.
Abu Dhabi National Energy Company, also known as TAQA, said on Tuesday it has completed a feasibility study and prepared an investment model for a major power project in southern Turkey in co-operation with Electricity Generation Co Inc.
Turkish and Abu Dhabi government officials have signed a “joint declaration” in which they expressed their strong support for the project in the Elbistan region which will see the development of mines and new power plants.
The declaration was signed on behalf of the two governments by Taner Yildiz, Turkey’s Minister for Energy and Natural Resources, and Hamad Al-Hurr Al-Suwaidi, chairman of the Department of Finance of Abu Dhabi and chairman of TAQA.
Saudi Arabia is satisfied that oil prices have fallen to a level that does not hamper global economic growth, Saudi Oil Minister Ali al-Naimi said on Wednesday.
“The market has stabilised again and prices have come down to suitable levels for consumers and producing countries, and for the global economy and its growth,” Naimi told a meeting of Gulf Arab energy ministers in Riyadh.
OPEC’s biggest oil producer raised output to 10 million barrels a day earlier in the year to help compensate for a cut in exports from Iran. Iranian supplies have been by halved by Western sanctions but extra volumes from Saudi have reversed a sharp rally in prices in the spring. Brent crude has fallen from a high for the year of $128 a barrel in March to $112.
Saudi Electricity Co (SEC) will have capital expenditure needs of nearly $10 billion next year, a senior executive said on Tuesday, and the state-controlled utility may tap debt markets to raise some of the funds.
SEC, the Gulf’s largest utility, has a 452 billion riyal ($120.5 billion), 10-year investment plan as it speeds up delivery of its power projects to meet state infrastructure demands.
Oman Air, the sultanate’s flagship carrier, said it saw a 40 percent year-on-year rise in the number of passengers carried on its domestic route between Muscat and Salalah and had added an extra 163 scheduled flights between August 19 and September 8.
The airline flew 50,000 passengers during the months of August and September 2012 on the Salalah/Muscat route, an increase of 20,000 passengers compared to the same period in 2011, the airline told the Oman News Agency. The extra demand resulted in the average seat factor on the route rising to 88 percent for the period.
As a result the national carrier operated 163 extra flights on the domestic route between August 19 and September 8, in addition to the 226 scheduled services. This resulted in an extra 22,500 more seats than the same period of last year.
The GCC hospitality industry is expected to grow at an annual rate of 8.1 percent to $28.3bn by 2016, up from $19.2bn in 2011, according to a report by investment bank Alpen Capital.
Oversupply of hotel rooms, a lack of debt funding for new hospitality projects and a shortage of skilled labour and employee will continue to remain challenges within the industry, the firm said.
Oil-rich Gulf countries are investing billions of dollars in tourism, transport and infrastructure as they look to diversify their economies away from oil.