Kuwait awards $4.6bn infrastructure contracts

The Kuwait government has awarded $4.6bn contracts in the first quarter of 2017 and another $20bn worth of contracts likely by the year-end, said a report, according to Trade Arabia

Kuwait’s projects pipeline remains robust against a backdrop of improving oil prices.
Kuwait’s projects pipeline remains robust against a backdrop of improving oil prices.

The Kuwait government has awarded $4.6bn contracts in the first quarter of 2017 and another $20bn worth of contracts likely by year-end, said a report, according to Trade Arabia.Kuwait’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 a report by 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, stated the country's top bank in its report.According to NBK, the oil sector dominated the contract awards in the first quarter followed by the housing sector.

The oil sector saw a total of $2.2bn contracts awarded for eight projects.

Of this, the largest project worth $1.3bn was awarded by KOC to Petrofac to build Gathering Center 32.

The new infrastructure will have the capacity to produce about 120,000 b/d of oil and will be the first sour gathering center to be developed in the Burgan field, it stated.

According to NBK, the project is scheduled to begin soon and will be completed in mid-2020.

KOC awarded another three projects pertaining to water facilities in different gathering centres in the south, south-east and east of the country. The three contracts averaged $225m each and are expected to be complete between the fourth quarter of 2019 and first quarter of 2020.

On the housing contracts, the top Kuwaiti lender said in March, the Public Authority of Housing Welfare (PAHW) had awarded the second of four infrastructure contracts in South Mutlaa city, a strategic development plan project, to China Gezhouba Group. The contract, valued at $708m, is for major infrastructure work and is expected to be completed by March 2019, it stated.

According to NBK, the Authority has distributed most of the 30,000 plots to applicants; however, construction permits for the distributed plots will not be available until road and infrastructure construction is complete.

As per a development plan follow-up report for the fourth quarter of 2016, work on South Mutlaa project is 12% complete.

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, said the NBK in its statement.

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

Looking ahead, NBK pointed out that the project awards were expected to remain healthy in 2017

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