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Sun 28 Sep 2008 11:24 AM

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Scotland going cap-in-hand to Qatar

Gov't planning to hit up gas-rich Gulf state for billions of dollars in loans to fund infrastructure projects.

Scotland is looking to Qatar to invest billions of dollars in its creaking infrastructure system, which is badly in need of a facelift after years of underinvestment.  

First Minister Alex Salmond, leader of the Scottish National Party, is reported to be planning a trip to the gas-rich Gulf state next year to ask its government to provide billions of dollars worth of loans for improvement projects to his country's road, rail and power networks, according to the Scotland on Sunday newspaper.

Any deal, which would involve Scotland paying back the debt over a number of years, would solve a major headache for the government as it struggles to raise the cash for projects including the new 4 billion-pound ($7.34 billion) Forth Road Bridge and a 5 billion-pound electricity cable running under the North Sea.

Both the public and private sector in western Europe are increasingly looking to cash-rich Middle East nations and their hugely wealthy government-backed investment vehicles - sovereign wealth funds (SWFs) - to secure funding.

Many SWFs have hundreds of billions of dollars at their disposal, accumulated from years of oil profits.

Qatar’s fund is thought to be worth $60 billion and is expected to double in value by 2010.

The International Monetary Fund (IMF), an organisation which lends to poorer nations around the world, estimates total investment by SWFs in 2012 will top $12 trillion.

Digital magazine: Read the latest edition of Arabian Business online

peter roberts 11 years ago

As a British national, I have to ask "What has happened to the megabucks earned from North Sea Oil? Why is this revenue not being used to carry out Scotland's much needed infrastructure repairs?" Probably another case of "fat cats" creaming off what belongs to the Nation? Shame on the petrochemical companies and shame on the UK Government!

The Consultant 11 years ago

Peter, UK Government receipts from North Sea oil (corporation tax and petroleum duties) amounted to GBP 7.7 Bn in tax year 2007/8. That represents just 1.4% of total receipts of GBP 550 Bn (the Government actually made more money from tobacco tax than oil). Coincidentally (or perhaps not), this is a very similar number to the total of the extra public spending per head that Scotland receives under the Barnett formula compared to England. (approx GBP 1,500 per person x roughly 5 million). So, indirectly, the answer to your question is that the oil money IS being used to pay for Scotland's infrastructure. Whether it's being spent well is another question altogether. Unfortunately, despite what some people would have you believe, the present day North Sea is not a gold mine that can pay for anything that the politicians think is a good idea.

Andy 11 years ago

Is this the first real sign that the Great British self esteem and inner governments are admiting that their policies are not working. Surely under a labour government the idea should be to create work, build the infrastructure and bring money back in through taxes etc, which eventually creates a loop back to work, employment, infrastructure etc etc. The UK/Scotland may now be starting to suffer from the offset in population due to immigration and the influx of 'less educated persons' and the outflux of over 400,000 employable nationals a year overseas. A lot of that money that could be put to use for infrastructure is going on immigration - illegal or not - how many BILLIONS was it last year!? Certainly enough to put to good use on the general infrastructure of the UK!

Bob 10 years ago

Time for Scottish independence ASAP. Read the de-classified top secret papers coming out about North Sea oil. The Unionists needed to nip that in the bud at all costs. Aberdeen tycoon said last month North Sea oil reserves were worth an extra £787 billion.

Travelling Parent 10 years ago

Bob, The good readers of AB do not need to be caught up in Scotland's domestic political arguments about independence - there is plenty of space in the online comments section of regional newspapers like the Herald and the Evening news if you're that bothered - you might even find one or two readers interested in your paranoid conspiracy theories in those rags. But good to see you pontificating about independence whilst enjoying a nice tax-free expat posting in Saudi Arabia - clearly you have been taking lessons from the master of that particular game, Shir Shean Connery!