KUWAIT CITY: Kuwaiti politicians and media fumed yesterday over $2.2bn paid to US giant Dow Chemical as a penalty for the Gulf emirate scrapping a joint venture, and called for those responsible to be held to account.
State-owned Petrochemical Industries Co (PIC) said on Tuesday it had reached a final settlement with Dow Chemical to pay around $2.2bn.
The US firm said it has received the payment.
Last May, the International Chamber of Commerce, acting as an arbitrator, granted Dow Chemical around $2.2bn in compensation for Kuwait withdrawing from the $17.4bn joint petrochemicals project.
In December 2008, the Kuwaiti government scrapped the deal after pressure from opposition MPs, citing the global financial crisis.
In a front-page editorial yesterday headlined “A company hunts a state,” the liberal Al Qabas newspaper demanded firm action against those responsible for the joint venture failing.
“Kuwait has lost a suspicious deal and is now paying the price... A mistake in procedures, in the deal and in the cancellation has cost the state billions” of dollars, it said. “There are people responsible for this and these must be held to account.”
PIC said in a statement that the amount of $2.2bn did not include $300m in interest for delaying the payment awarded a year ago.
Under the original deal, PIC was to pay $7.5bn to form a petrochemicals firm known as K-Dow.
Yussef Al Zalzalah, head of parliament’s financial committee, said in a statement published in the local media that scrapping the deal was a “major mistake” and insisted that those responsible be punished.
AFP
