67 Development Projects Worth $865 Million Underway in Kish

EghtesadOnline: A total of 67 development projects worth 200 trillion rials ($865 million) are underway on Kish island.

News ID: ۷۵۰۸۱۱

26 August 2020

According to Ali Moqaddaszadeh, an official with Kish Free Trade Zone, these projects have created jobs for 35,000 people, ILNA reported.

“Forty-seven out of these 67 projects will become operational in the current and next fiscal year (ending March 2022),” he added, noting that about 16,000 jobs are expected to come on stream once all these projects are completed.

He put the value of these 47 projects at 110 trillion rials ($475 million) and said a total of $100 million worth of foreign investments have been made in Kish to date.

According to Moqaddaszadeh, investment in Kish has increased by 162% in the current year compared with last year.

“The value of investment in dollar term has also increased fivefold compared with last year,” he added.

Kish is a 91-square-kilometer resort island in the Persian Gulf, off the southern coast of Iran. It is part of the Bandar Lengeh County in Hormozgan Province.

Owing to its free trade zone status, Kish Island is touted as a consumer's paradise, with numerous malls, tourist attractions and resort hotels.

Kish Island is the third most-visited vacation destination in Southwest Asia, after Dubai and Sharm el-Sheikh. Tourists from many foreign countries entering Kish Free Zone from legal ports are not required to obtain any visa prior to travel.

Hotels in Kish suffered huge losses during the Iranian New Year holidays (March 17-April 5) due to the outbreak of the novel coronavirus.

“Revenues derived from the 20 days of New Year holidays, when people have the free time to travel, for Kish equals that of four months of business. Yet, this year, the Covid-19 crisis took away these revenues and left us with losses that will be very difficult to compensate,” the head of Kish Hotel Owners Association, Masihollah Safa, was quoted as saying by ILNA.

“There are 50 hotels operating on Kish Island, all of which have been hit by the virus outbreak, following which all hotels in the country were closed down.”

Last year, the Securities and Exchange Organization gave the go-ahead to High Council of Free Zones to issue 3,000 billion rials ($13 million) worth of sukuk (Islamic debt securities) to finance development projects at Kish Free Trade Zone.

Secretary of High Council of Free Zones Morteza Bank said at the time that the figure could rise to 10,000 billion rials ($43 million).

“The funds raised through the issue of sukuk must be invested in infrastructural projects on Kish Island, off the Persian Gulf, including the development of Kish International Airport, port and logistics as well as ICT infrastructures,” IRIB News quoted Bank as saying.

Sukuk are defined by the Accounting and Auditing Organization for Islamic Financial Institutions as “securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets”. These securities are structured to comply with Islamic law by paying profit, not interest, generally by involving a tangible asset in the investment.

Daily Sabah reported in July last year that Kish was about to welcome a Turkish investor who will build the Crystal Hotel with an investment of $100 million. The 1,000-room hotel will be the largest investment on the island, located in Iran's southern coast in the Persian Gulf, the report said

Turkish tourism investor Tuncay Kilit, who is the owner of Crystal Hotels scattered across Turkish resort cities, has decided to invest on the island of Kish.

The accommodation facility to be constructed by the Turkish investor will have meeting rooms, separate beaches for men and women, sports areas, a water park, pools and social areas where families can spend time together.

Kish, known as the gateway to the heart of Iran, offers visitors shopping without taxes and investors are exempt from income and corporate taxes for a period of 20 years.

Crystal Hotels, operating under Kilit Hospitality Group, has a network of 18 accommodation facilities in Turkey. Beginning its operations in the tourism and accommodation sector in 2005, Crystal Hotels has become one of the largest hotel chains in Turkey in 14 years. The hotel network has a bed capacity of 20,000 and 7,000 employees.

Kilit Hospitality Group Chairman Tuncay Kilit and Kish Free Trade Zone General Manager Gholamhossein Mozaffari signed the deal last week for the investment project to be built on an area of 10 hectares.

In his speech after the signing ceremony, Mozaffari said a large number of investors from Qatar, Oman and Iraq are showing high interest in Kish and noted that investment on the island will rise significantly in the near future.