International firms to vie for Kuwait Airlines audit

13 June 2008
The contract to audit Kuwait Airways will now be open to international accounting firms, after efforts to award the work to a local firm were rejected by the government. The audit is seen as vital if the airline’s planned privatisation is to go ahead.

The Kuwait Investment Office, which is overseeing the process, had made efforts to award the audit contract domestically by offering the work to the Gulf Investment Corporation.

That move has now been scrapped, according to a source close to the airline, after objections were raised within government. International firms will now be considered for the work.

“There have been some delays in the process but we expect to begin the search [for an auditor] soon,” says an airline official.

The momentum behind the privatisation has been lost in recent months following parliament’s decision in early 2008 to postpone the process for two years.

The airline’s former chairman, Barak al-Sabeeh, resigned in frustration earlier this year, having urged that the sell-off be pushed through rapidly (MEED 11:1:08).

While some figures within the government and the airline’s management team are still keen to accelerate the process, a $1.2bn compensation claim from Iraqi Airways is still outstanding and the privatisation cannot proceed until an agreement is reached and the airline’s accounts are in order.

The Iraqi carrier recently offered $150m to settle the claim, which Kuwait is expected to reject (MEED 30:5:08).

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