Gulf Construction Online - Kuwait set to award $27bn contracts

Regional News

Kuwait set to award $27bn contracts

01 August 2016

Kuwait’s projects market continued to expand in the second quarter of this year in spite of low oil prices and the state is expected to award another KD8.4 billion ($27 billion) worth of contracts before year-end.

The country awarded KD812 million ($2.7 billion) worth of contracts in Q2, according to Meed Projects, bringing the total value of contracts awarded so far this year to KD2.25 billion ($7.5 billion), said the NBK report.

By the end of June, Kuwait’s projects market (active and planned) grew to KD76.8 billion ($255 billion), an increase of 2.9 per cent year-to-date.

Although Kuwait’s project market faces many challenges on top of low oil prices, such as lack of FDI (foreign direct investment) interest, a weak private sector and a less attractive environment than its neighbours, the economy is cash-rich and the government has an ambitious five-year plan that includes currently over eight public private partnership schemes aimed at improving the country’s aging infrastructure, it said.

According to Meed Projects, bids for the bulk of 2016’s planned projects (44 per cent) are currently under evaluation, followed by 27 per cent that are in the main contract bid stage which means that over 71 per cent of the planned projects are within their final stage prior to execution, the NBK report said.

Oil and gas projects account for 27 per cent of the planned projects in Kuwait for 2016, behind the transport and the power and water sectors. However, Kuwait still has KD2.3 billion ($7.6 billion) worth of projects to award this year.

In H1 2016, Kuwait National Petroleum Company (KNPC) awarded a KD882 million ($2.9 billion) contract to build a liquefied natural gas (LNG) import and regasification terminal.

Kuwait awarded KD570 million ($1.7 billion) worth of construction projects in the first half of 2016. The biggest and most notable award was for the new 600-bed maternity hospital is to be built opposite the existing one in Sabah Medical Area. The contract has been awarded to Italian firm Pizzaroti for KD219 million ($730 million).

Meanwhile, the Kuwait Authority for Partnership Projects (KAPP) has extended the deadline for three of its projects that were scheduled to be tendered this year. The main contract bid for the KD450-million ($1.5 billion) Umm Al Hayman Wastewater Treatment Plant has been pushed to August 31, while the bid for the Kabd Municipal Solid Waste Project was rescheduled to July 28. Bids for the Al Abdaliya Integrated Solar Combined Cycle (ISCC) Power Plant (CSP) was also pushed to July 28.

KAPP has announced tenders for the main contract for Phase Two of the Al Zour North IWPP, which aims at producing 1,800 MW of electricity and 464,100 cu m a day of desalinated water.