Qatar has postponed plans to build a new chicken farm complex that would have helped bolster its food security, according to a company that would have helped finance the project.
Doha-based private bank Investment House had been working to raise some QR750 million (US$206 million) through a planned initial public offering (IPO) for a company that aimed to nearly quadruple the amount of home-grown poultry and eggs in Qatar.
The farm was part of a wider strategy to increase the amount of locally produced foodstuffs to reduce Qatar’s current overwhelming reliance on imported produce.
Through the IPO, Investment House had planned to raise around half of the total amount of funding required for the 5.7 sq km complex, which would have had the capacity to produce up to 40,000 tons of chicken and 7.5 tons of eggs each year.
The rest of the funding would ideally have come from private investors, the government said in an announcement made in December.
However, earlier this week Investment House CEO Hashem Al-Aqeel was quoted by Reuters as saying that it had been ordered by regulators to put its flotation plans on hold.
While he did not give a reason for the move, or a new timeline for the IPO’s launch, the announcement comes amid a period of belt-tightening in Qatar, as a number of projects not directly related to the 2022 World Cup have either been shelved or scaled back.
This is in part due to the sudden drop of oil prices since last June, which are also forecast to bring down gas prices in the coming year.
“The lower oil price is affecting Qatar – we are seeing a slowdown in the rate of investment here in the construction, banking and energy sectors,” Al Aqeel told Reuters.
Project delays
The poultry farm isn’t the only project on hold.
Last month, Dubai-based business intelligence firm MEED reported that the 12km Sharq Crossing would be delayed.
Designed to deal with Doha’s increasing traffic issues, the project involving building a series of tunnels and bridges to connect Hamad International Airport, Katara Cultural Village and the Dafna/West Bay business district.
MEED previously put a price tag of around $12 billion on the project.
News of the postponement came just a week after Qatar’s government established a ministerial committee to oversee projects of “strategic importance.” The committee was tasked with prioritizing major development initiatives and reviewing costs, among other responsibilities.
Meanwhile, a leading regional project delivery specialist has predicted that the fall in oil prices would encourage alternative funding schemes in Qatar in the coming years.
Dr. Mamoon Alameen, who will speak at the Project Qatar conference next month, recently said he believed the decline in prices would not affect the key infrastructure projects already underway for 2022.
“It may, however, catalyze PPP (public-private partnerships) in many sectors,” he added in a statement.
Thoughts?
I guess $300 million paintings are more important than food security
Loll. You are right. That said, he might have been instructed to put his project on hold to avoid more constraints on the construction sector. Unlike the painting which is a ready-made product, this complex has to be built and managed. And since it seems huge (5.7 square km), it would need a lot of resources that the government might want to channel into WC-related project.
Not sure how much civil construction will be required for a chicken farm as opposed to a WC stadium but what do I know …
You’re right, probably the farm will be made from ready-made panels, like a warehouse, not a real brick&mortar building.
Maybe they can buy a picture of some chickens next. They already have the one with the dogs playing cards
And more malls
Malls are different, privately funded not govt.. But I get your point
This sounds like it’s private. After this it goes on to say that the balance would be funded by a private investor. So it’s puzzling why government would stop a private enterprise. “” Doha-based private bank Investment House had been working to raise some QR750 million (US$206 million) through a planned initial public offering (IPO) for a company that aimed to nearly quadruple the amount of home-grown poultry and eggs in Qatar.”
Because the government knows they would have to underwrite it and don’t want to be on the hook for all the liabilities. It would make marginal difference to Qataris and would probably only benefit expats so not needed.
Exactly. Every large “private” project isn’t really private at the end of the day.
We own harrods, we can get a lifeline of those chocolates and stare at the painting to uplift our spirits in any food shortage crisis.
Boo hoo
Did April 1st come early this year ?
I never thought I would read this: “a period of belt-tightening in Qatar”
Well they have been spending like a drunken sailor and it’s been coming for some time. The crash in oil price has accelerated the process. 60% pay increases for Qataris, lavish subsidies and gold plated pension schemes have to be paid for. Plus those rebel groups in Egypt, Libya, Iraq and Syria don’t come cheap…..
The 60% pay rise is in my opinion a big nonsense from an economic point of view. A one off payment of 100k to every Qatari (whether working in the government or not) would have been a much better idea, while still being a tremendously generous gesture from the Emir towards the people of Qatar.
The 60% pay rise explains why you can hardly see any Qatari working in the private sector.
Can hardly see a Qatari working in the public sector either…unaccountable, do as they please
Deleting for stereotyping.
waa
So on the day it’s announced that Qatar has bought 100 % ownership of a chunk of downtown Milan (not to mention Canary Wharf last month) they decide they can’t afford a chicken farm ? Priorities anyone ?
I just recently came to Qatar over a year ago and there was a huge chicken shortages during the two Eid holidays.