Kuwait airline corruption inquiry

Kuwait passed a law in 2008 to privatise Kuwait Airways, with shares to be held by the government, private sector and employees.

Mohammed al Busairi, the Kuwaiti minister of communication, has launched a committee to investigate alleged corruption in Kuwait Airways Corp (KAC), the government-owned carrier that is set for privatisation. "Last week, I formed a committee to investigate alleged financial and administrative violations in KAC. I gave the panel two months to complete the probe," Mr al Busairi told the parliament.

Speaking on Tuesday, he said the investigation would give him the names of those allegedly responsible for "administrative corruption and financial wrongdoing", and assured the chamber that the culprits would face criminal action. He said several reports, including one by a parliamentary committee in 2007 and another by the audit bureau last month, had accused KAC of a wide range of violations. The head of the parliament's budget committee, Adnan Abdulsamad, said that "horrible violations" had been committed by KAC, especially since the national assembly voted to privatise it two years ago.

Mr Abdulsamad said Mr al Busairi needed to act decisively on allegations of poor aircraft maintenance, the Kuwait Times reported. "KAC has become an example of corruption. Kuwaitis fly on Qatar and UAE [airlines] because they are afraid for their life [on KAC]," the newspaper reported one member of parliament, Saifi al Saifi, as saying. Two other MPs, Khalid bin Essa and Hussein al Huraiti, blamed most of KAC's alleged violations on interference by the government and the parliament, the newspaper said.

Mr al Busairi assured the parliament that KAC safety standards were adequate. He said a third of the corporation's budget was spent on maintenance and its problems were limited to its financial administration. The fact that European nations have not banned the carrier from flying to their airports was proof that its aeroplanes were well maintained, the minister said. But he gave little defence for KAC's financial performance. The carrier consistently runs at a loss and last year the media reported that its draft budget for 2009-2010 predicted a loss of 23 million Kuwaiti dinars (Dh291.8m).

The airline, which lost most of its aeroplanes during the Iraqi invasion in the early 1990s, has previously faced accusations of not modernising. Last month, Khalid al Neshmi, the deputy chief of the carrier's ground services department, said KAC was "undergoing a stage of preparation for privatisation" and once it was finished "the priority will be given to modernising the aircraft". KAC operates a fleet of 15 Airbuses and two Boeings.

The law enabling the carrier to be privatised, which was passed in 2008, outlines the formation of a shareholding company in which 40 per cent of the shares are held by individuals, 20 per cent by the government and 35 per cent by private-sector companies. The remaining 5 per cent will be distributed to KAC employees, who would be ineligible for the state's generous retirement benefits. Mr al Busairi has said the privatisation of KAC was a part of the country's recently launched five-year development plan. The 30 billion Kuwaiti dinar project was designed to boost the private sector and launch major infrastructure projects in the country.

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