After more than two years of lacklustre oil prices, and a whole host of macroeconomic challenges, the GCC’s construction community is in dire need of some good news.
So it’s hardly surprising that Expo 2020 Dubai and the 2022 FIFA World Cup in Qatar are garnering the lion’s share of the headlines at present. These big-ticket events boast immovable deadlines, and the prospect of guaranteed work becomes particularly appealing when construction-related certainties are in such short supply.
But two events, no matter how large, cannot sustain six countries’ construction sectors. The World’s Fair and the World Cup will undoubtedly provide a welcome boost for our industry, but if the Gulf is to recover from its current slump and thrive in the longer term, it’s going to need more – more investors, more projects, and more bread-and-butter construction work.
It’s encouraging to note, therefore, the steady progress that is being made in Kuwait. The country may not have a mega-event on the horizon, but don’t be fooled by this quiet exterior; decision-makers have been working diligently to bolster Kuwait’s construction sector at a domestic level and, in doing so, have simultaneously strengthened its position on the international stage.
During the past month, the country has witnessed contract awards for a $492m (KWD150m) runway at Kuwait International Airport, a $1.3bn (KWD400m) engineering, procurement, and construction (EPC) project for the Burgan oilfield, and the $817 (KWD250m) Kuwait New Maternity Hospital. Last week, Korea Land & Housing Corporation scooped a $41m (KWD12.5m) contract for the planning and design of Saad Al-Abdullah City. Yasser Abul, Kuwait’s Minister of State for Housing Affairs and Minister of State for Services, described the deal an example of successful partnership and cooperation between nations.
And this is not the only example of the country’s multilateral construction strategy. During recent weeks, the Kuwait Fund for Arab Economic Development (KFAED) has agreed loans of $18m (KWD5.5m), $37m (KWD11.3m), and $51m (KWD15.5m) for construction and infrastructure works in Sri Lanka, Lebanon, and Tanzania, respectively.
Meanwhile, government efforts to increase oil production already appear to have had a positive impact on Kuwaiti construction. Research published ahead of The Big 5 Kuwait 2017 found that, at present, the country has 722 active projects worth approximately $234.4bn (KWD71.5bn) in total. The study noted that the market appears to be growing at a steady pace, with the majority of government funding focussed on infrastructure, utilities, and housing as part of Kuwait Development Plan 2020.
The UAE and Qatar certainly deserve attention for their upcoming mega-events, but we mustn’t lose sight of the steady progress being made in markets like Kuwait. It might not be accompanied by a great deal of fanfare, but it’s exactly the type of work that the GCC construction sector needs in order to secure long-term prosperity.