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2 mln square meters on offer: PAI
KUWAIT CITY, Oct 5: Officials of the Public Authority for Industry (PAI) are planning to offer about two million square meters of storage land in auctions to investors with the expectation that the State Treasury revenues from this offering will reach about half a billion dinars annually, reports Al-Rai daily quoting relevant sources. They explained that the authority, as part of its plans to enhance its financial revenues, seeks to develop its own income system. It is currently preparing to develop the rules for granting land for storage purposes in order to ensure the utilization of unused storage land outside medical and food stores, and dividing them into small units that will later be auctioned as usufruct for a period of up to five years. The current regulations reduce the state’s benefit from investing in local storage activity. Work is underway to develop it to ensure acceleration of its target.
The authority relies a lot on the proposed mechanism for dividing the available storage land into small units and putting them up as usufruct in order to maximize its revenues and expand the base of beneficiaries from small investors and entrepreneurs in general. The conclusion of the initial inventory prepared by the officials of the authority is that there are two million square meters that can be offered to investors through auctions. This would guarantee them the right to use these land, after deducting the percentage of service land, which according to expectations will be about 400,000 square meters.
This means that the net plots that will be offered to investors through auctions according to this mechanism are approximately 1.6 million square meters. The sources did not specify the total plots likely to be offered, or the area of each of them, stressing that this data is still under review. They indicated that small plots will be offered to meet all needs, and match the spaces that must be provided for each storage activity (but it will not include sanitation and food stores). The sources said one of the most prominent benefits of this move is that it guarantees the collection of high returns for the state from these land that are considered idle in terms of investment, adding that they will be offered in auctions that guarantee their lease as usufruct according to the fair market value, which is estimated at about KD 500 million, according to preliminary studies.
They revealed that a proposal will be presented to the board of directors to allow the Public Authority for Industry to reserve 50 percent of its revenues, instead of 10 percent, and not transfer them to the general budget, provided that it is redirected towards the implementation of major industrial projects, in an effort to ensure the sustainability of the implementation of major development projects in a manner that does not constitute any funding pressure on the public budget, and will achieve sustainable industrial development.