01 June 2017

Kuwait’s projects market started with a bang in 2017 with the government awarding contracts worth KD1.4-billion ($4.6 billion) contracts in the first quarter and another KD6.2 billion ($20 billion) worth of contracts likely by the year-end, a report said.

The country’s projects pipeline remains robust against a backdrop of improving oil prices and a government commitment to maintain healthy capital spending and move forward with its development projects, according to the report by the National Bank of Kuwait (NBK).

Even as lower oil prices continue to dampen state oil earnings, the government remains committed to implementing its development plan and is awarding major infrastructure contracts, the country’s top bank said in its report.

The KD1.4 billion ($4.6 billion) worth of contracts in the first quarter was roughly in line with 2016’s quarterly average, the report said, citing Meed Projects.

The oil sector dominated the contract awards in the first quarter followed by the housing sector. The oil sector saw a total of KD672 million ($2.2 billion) contracts awarded for eight projects. Of this, the largest project, worth KD397 million ($1.3 billion), was awarded by KOC to Petrofac to build Gathering Center 32. According to NBK, the project is scheduled to begin soon and will be completed in mid-2020.

Among housing contracts, in March, the Public Authority of Housing Welfare (PAHW) had awarded the second of four infrastructure contracts in South Mutlaa city, a strategic development project, to China Gezhouba Group. The contract, valued at KD216 million ($708 million) is for major infrastructure work and is expected to be completed by March 2019.

Awards during the first quarter included work on Kuwait’s airport. The Directorate General of Civil Aviation (DGCA) awarded one of the eleven sub-projects pertaining to the expansion of Kuwait airport. 

The project has been awarded to a joint venture of Avic International and HOT E&C for KD149 million ($489 million) and completion is expected by March  2022.  It includes construction of new runways in addition to extending existing ones and enhancing supportive infrastructure.

Looking ahead to the rest of 2017, the NBK said that Kuwait could award another KD 6.2 billion ($20 billion) worth of contracts before the year-end.

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