Saudi projects huge deficit as oil price drop bites

RIYADH, Saudi Arabia (AFP) – Saudi Arabia announced a 2015 budget with a huge deficit Thursday as the world’s largest crude exporter begins to feel the impact of its own decision not to shore up oil prices.

The government announced the US$38.6 billion deficit on state-run television, saying it would nonetheless boost projected spending by tapping its vast financial reserves.

The lead producer in the Organization of the Petroleum Exporting Countries, Saudi Arabia has insisted the cartel will not move to strengthen global oil prices despite a drop of nearly 50 percent since June.

OPEC has maintained a production ceiling of 30 million barrels per day, in a move analysts say is aimed at stifling competition from new market players with higher costs, in particular North American shale oil producers.

Saudi officials have vowed not to boost production no matter how low prices go, regardless of the impact on the country’s coffers.

The budget announced for next year sees spending at 860 billion riyals (US$229.3 billion) and revenues at 715 billion riyals (US$190.7 billion).

Projected spending is slightly higher than planned for this year, but revenues are 140 billion riyals lower than estimates for 2014, said the statement read after a cabinet session chaired by Crown Prince Salman bin Abdulaziz.

The 2015 budget shortfall is the first deficit projected by the OPEC kingpin since 2011 and the largest ever for the kingdom.

Finance Minister Ibrahim al-Assaf said the kingdom was in good enough shape to see out the downturn.

“The challenge was bigger than expected. We continued to revise the budget figures as oil prices dived,” Assaf told Saudi TV.

“Despite the deficit, we will continue to spend on development projects… We have the buffers to bear the drop.”

Assaf said everyone agreed oil would rebound and that it was only a question of when.

In the past decade, Saudi Arabia overspent budget projections by more than 20 per cent and if the trend is maintained next year, analysts say the deficit will be much higher.

“I believe we are headed for a difficult year in 2015. I think the actual deficit will be around 200 billion riyals because actual revenues are expected to be lower than estimates,” Saudi economist Abdulwahab Abu-Dahesh said.

“Spending in the budget is not in line with the sharp decline in oil prices.”

The finance ministry also announced the 2014 preliminary actual budget figures, saying it expects a deficit of 54 billion riyals, the first shortfall since 2009.

The ministry said that, according to the preliminary figures, revenues in 2014 were at US$278.9 billion, 22 per cent higher than projected.

But spending was at US$293.3 billion, the highest in the kingdom’s history and about US$33 billion more than expenditures in 2013.

The rise was due to huge expansion projects at Muslim holy sites in Mecca and Medina, an increase in spending on development and foreign aid.

The price of oil, which makes up around 90 percent of public income in Saudi Arabia, has lost about half of its value since June due to a production glut, weak global demand and a stronger US dollar.

In royal decrees issuing the budget, King Abdullah called for “rationalisation of spending” and for the “accurate and efficient implementation of the budget” in 2015.

If oil prices remain at the current level of about $60 a barrel for benchmark Brent crude, Saudi Arabia is expected to lose half of its oil revenues of $276 billion posted in 2013. Oil income this year is expected at $248 billion.

But the wealthy kingdom, which pumps about 9.6 million barrels per day, can easily tap into huge fiscal buffers, estimated at $750 billion, to meet the deficit.

King Abdullah authorised the finance minister to draw from the reserves or to borrow to meet the deficit.

Ratings agency Standard and Poor’s lowered its outlook for Saudi Arabia to stable from positive following the oil price slide.

But it also affirmed its high ratings for Riyadh over the “strong external and fiscal positions” it has built up in the past decade.

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Saudi projects huge deficit as oil price drop bites

Lucea mayor to address neglected projects in ill councillor"s division

RIVERSIDE, Hanover — MAYOR of Lucea and Chairman of the Hanover Parish Council Wynter McIntosh has agreed to oversee programmes in the Riverside Division that have been abandoned since People’s National Party councillor for the area fell ill three months ago.

“I want to move in the division by Wednesday [yesterday] to have hands-on information as it relates to those programmes that have been set out, after which I will have dialogue with the Member of Parliament [Ian Hayles], as to some of the things he would love to see,” McIntosh said.

For the past three months, Lester Crooks, who is still recuperating, has been on sick leave.

He, however, attended last week’s sitting of the Hanover Parish Council general monthly meeting. During the meeting, Crooks, who is also a former mayor of Lucea, broke down in tears, lamenting that his division has been neglected during his absence.

“Nothing has been done to the division, believe you me, by this council. I am ashamed,” he said, “so much ashamed.”

Mayor McIntosh gave an assurance that the Riverside Division would be given priority attention.

Speaking with the Jamaica Observer West early this week, the mayor pointed out that he has only been in the position now for a month and these issues should have been addressed by the former mayor, Shernet Haughton. He said the councillors had formed the impression that the programmes were being implemented in the division.

“It is my duty now to move into the division as the chairman of council along with the Road and Works Department [of the council] to make sure that the programmes that were set out by the councillor are achieved,” said McIntosh.

Some of the programmes to be implemented are the cleaning of drains and the bushing of roadways.

“With the ChikV [chikungunya] going around now, I have to move in fast to see what I can do in terms of cleaning up. So, as other councillors are doing what they are doing in their respective divisions, I think it is only befitting now for me to move in to the Riverside Division to have work start at the earliest possible time,” said McIntosh, adding that work will start by the end of the week.

– ANTHONY LEWIS

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Lucea mayor to address neglected projects in ill councillor"s division

Glazer's unfinished projects to be completed

New York real estate development company, Buckingham Properties, whose CEO Larry Glazer along with his wife Jane died in Friday’s plane crash off the coast of Portland says it intends to complete projects which he started.
The company, in a statement Monday, said it will soon be available to address questions and concerns regarding the completion of several developing projects.
Mr. Glazer was the founder of Buckingham Properties, which has several high-profile developments throughout Rochester, New York including Midtown Tower.
A spokesman for the family says plans are in the works for a memorial service.

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Glazer"s unfinished projects to be completed

St Lucia Government to implement projects under Taiwan assisted CDP

Business

Friday, July 19, 2013

CASTRIES, St Lucia – The St Lucia government Wednesday said it is moving swiftly to implementing community projects under the Constituency Development Programme (CDP) with financial assistance from the Taiwanese government.The Kenny Anthony government said as a result of the grants provided by Taiwan, it has allocated EC$24 million (One EC dollar = US$0.37 cents) to the CDP this financial year.A government statement said that since the start of the financial year, 120 contracts, valued at five million dollars, had been awarded under the CDP.It said projects in all 17 constituencies will benefit from the programme “in the form of new infrastructure such as the construction of roads, drains, footpaths, retaining walls and steps.“One of the greatest benefits of the CDP is that it engages community contractors and creates employment for hundreds of residents within the various communities where projects are being implemented,” the statement added.— CMCThe Kenny Anthony government said as a result of the grants provided by Taiwan, it has allocated EC$24 million to the CDP this financial year.

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St Lucia Government to implement projects under Taiwan assisted CDP

China provides EC$18 m for projects in Dominica

News

Tuesday, July 16, 2013 | 10:59 AM

ROSEAU, Dominica (CMC) – China is providing more than EC$18 million to Dominica for a number of community-based projects and the construction of a new hospital in the capital.“This assistance is being granted to us by China at a very difficult time for all of us in the world including China, but because of the extra ordinary friendship between the two countries. China continues to be a very dear and sincere friend to the Government and people of Dominica and we are indeed very grateful for this” Prime Minister Roosevelt Skerrit said.Skerrit and Charge D’affaires of the People’s Republic of China, Qui Wei Wei signed the two agreements, according to a government statement.It said the accord follows the promise made by Chinese President XI Jing Ping when he met with Prime Minister Skerrit and other Caribbean leaders in Trinidad and Tobago last month.“The first agreement is for $50 Million RMB, as grant aid from the Government of the People’s Republic of China coming out of our meeting with the President of China in Trinidad who offered this assistance to the Government and people of Dominica. This sum will be used largely to assist in addressing some community based projects in various parts of the country,” said Skerrit.He said the second agreement will cover the plans for the construction of the new Princess Margaret Hospital.“There is a delegation which will visit Dominica in the next few days that will put forward the designs for the new Princess Margaret Hospital. This assistance will no doubt trigger that process,” he added.The Chinese diplomat said that the agreements are testimony of the growing cooperation existing between Dominica and China.“This agreement is another step in the cooperation between our two countries. We are very glad to see that this aid will be put into programmes which will benefit the local people. The Chinese government will continue to provide this type of aid to Dominica and we will continue to work together with your government”.

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China provides EC$18 m for projects in Dominica

"Infrastructure projects should seek value for money"

NASSAU, Bahamas – PUBLIC-private partnerships (PPPs) mean governments will have one less infrastructure project on their balance sheets.

But the main deciding factor for such projects should be the possibility of value for money rather than just fiscal prudence, according to Perry Christie.“I must stress that such a consideration (private sector’s financial responsibility) should not be the main driver for the initiation of any PPP project which, I believe, must first and foremost be driven by an efficiency objective,” said the Bahamian prime minister at CIBC First Caribbean’s infrastructure conference, which was held at the Atlantis Resort in the Bahamas last week.“The main reason that government would contemplate such arrangements is that they offer the possibility of an improvement in value-for-money for the government,” he said. “This is achieved through the transfer of risks to the private sector where it is best placed to assess and handle those risks.”Furthermore, private sector involvement in building roads, bridges, airports and other structures should lead to both better quality services and lower cost services.One of the Bahamas ports is owned in part by the Government, a private company, Arawak Cay Port Development Holdings, and citizens. Private interests also manage the Lynden Pindling International Airport in Nassau.According to Christie, the government is looking at leasing public building infrastructure and office complexes.Bahamas is also open to possible partnerships in health, schools, water and electricity production and distribution, he said.Indeed, PPPs warrant regulatory framework, which sets out policies to guide the delivery of services.Christie noted that Bahamas is presently in the process of expounding the policies and procedures in respect of the development and implementation of future PPPs.The leader of the archipelagic state also said that a sound regulatory framework, possibly enshrined in the legislation, ensures accountability of the government and private sector partners by strengthening bid processes and limiting contract re-negotiations.It’s still early days yet for countries to decide if and how to etch the guidelines in their constitutions.Jamaica’s PPP activity up to now has been executed outside of a comprehensive policy framework and procedural guidelines.One government official of Barbados, Minister Darcy Boyce, figures that a legislative approach may not be flexible for the southern island. He holds a preference for a strong policy framework.“I don’t know that we have to do any special legislation,” said the minister in the Office of the Prime Minister in Barbados. “PPPs are driven by contractual arrangements between various parties and our contract law is sufficiently robust to deal with the issue. There are some people who think that it is good to have legislation.”

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"Infrastructure projects should seek value for money"