Kuwait has come up with a surprise package for major contracts awards in 2015, says a report in the Middle East Economic Digest (MEED). Saudi Arabia, Qatar and the UAE have, over the past five years, led the Gulf region’s projects market with multibillion-dollar contracts in the construction of refineries, metros and airports sector, while Kuwait has lagged behind in these areas.
However, 2015 tells a different story even after the price of a barrel of oil has dwindled Kuwait rising to the occasion while the contracts awards in these three key markets has slumped. The decision-making has taken the back seat as government concerns that deficits are becoming unwieldy grow and private developers fear the projects may not bring in the projected returns. Kuwait is making up for the lost time in 2015.
The biggest decision came in late July, when it decided to approve the $11.5 billion worth of contracts for the construction of the Al-Zour refinery, and there is evidence other major contracts seeing the green light by year end. For the construction sector, the largest is the new terminal building at the Kuwait International Airport. On Aug 2, three groups submitted the tender, with a joint venture of Turkey’s Limak and the local Kharafi National submitting a low bid with a price of $4.3 billion.
Like the Al-Zour refinery, the airport contract has been tendered before, and the Limak/Kharafi team submitted the lowest offer when prices were submitted in November 2014. If these contracts had been awarded the first time, construction work on them would have already begun by now and Kuwait’s projects market would be enduring the same leveling that of Saudi Arabia, Qatar and the UAE are experiencing in 2015. The new work has been welcomed in 2015, and as more awards are made Kuwait will increasingly become a destination for construction companies that are looking for new work.
Source: Arab Times