Agility in search of PPP deals in the UAE says its chief executive
Agility is looking to invest US$1 billion in the UAE over the next two years and is also considering public-private partnerships (PPP) in the country, the chief executive of the Kuwait logistics company said yesterday.
Agility is involved in a number of projects in the UAE including Reem Island Mall, a joint venture project between its subsidiary United Projects for Aviation Services Company and Kuwait-based developer National Real Estate Company.
“There are a number of [PPP] projects in the UAE that we are interested in now,” said Tarek Sultan. “I think the UAE has a great stable government, [and] good policies. They are friendly to the private sector.” He declined to give more details about the PPP projects the company is considering in the UAE.
Dubai passed a PPP law last year, while the UAE is working on a framework to allow for such projects.
Thus far, an automated car park PPP project at Dubai Courts has been awarded, while Dubai’s Roads and Transport Authority is evaluating bids from developers for the Union Oasis project, which will involve 15,000 square metres of space being built in towers above one of the city’s busiest metro stations.
Agility is seeking growth for its logistics and infrastructure business as part of plans to boost earnings before tax, interest, taxes, depreciation and amortisation (Ebitda) to US$800 million by 2020.
The company posted an 11 per cent increase in third-quarter net profit to 13.7m Kuwaiti dinars (Dh166.3m), while Ebitda rose by 19 per cent to 28.9m dinars, despite a 7 per cent drop in revenue.
Agility is also involved in joint venture projects in Saudi Arabia. This year, it signed an agreement with the Saudi Industrial Property Authority (Modon) to develop industrial areas in the kingdom.
“We think the timing is fantastic for this kind of [PPP] initiatives,” said Mr Sultan. “We think going forward it is one of the silver linings in the current low energy price regime. Governments will hopefully embrace the private sector and open up new and interesting opportunities.”
Countries in the region are expected to turn to the PPP model, where the private sector helps to finance projects, as governments slash spending in the low oil price era.
The UAE, Egypt and Kuwait have been identified as three of the main markets that are likely to offer more opportunities to major international contractors and financiers thanks to their adoption of the PPP model, according to BMI Research.
Agility is focusing on emerging markets to eke out growth from its infrastructure and real estate business, which is growing faster than its logistics business.
The infrastructure and real estate unit is centred around improving management of airports and related cargo companies, investing in development of industrial parks, among other businesses.
The logistics business is suffering from the low oil price environment and from anaemic world trade growth.
Agility, which will use its own cash and raise financing to fund future investments, does not expect to issue any bonds in the near term, Mr Sultan said.
The Arabian Gulf’s biggest logistics company has also ended initial talks to invest in Kharafi National, one of the largest construction companies in Kuwait, owned by Al Kharafi family.
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Updated: November 13, 2016 04:00 AM