The Ministry of Finance is studying a new mechanism to temporarily renew contracts with investors operating projects developed on state land under expired or expiring BOT agreements, aimed at preserving operations and increasing state revenues until the projects are publicly auctioned and transferred to new investors.
Under the proposed mechanism, original investors would continue managing, operating and maintaining completed projects under new contracts with revised rental values. The values would be based on the nature and income-generating capacity of the existing projects rather than the original land allocation price.
The initiative covers around 23 BOT projects, many of which are commercial and tourism destinations. The ministry is considering launching the mechanism with a commercial complex, with the new contracts expected to remain in place until the projects are handed over to successful bidders.
A key element under consideration is determining new rental values based on the projects’ financial performance over the previous three years. Investors would submit audited financial statements, with the revised rental value expected, under the proposed approach, to increase by around 20 to 30 percent.
The ministry considers the approach more appropriate than valuing projects according to land allocation prices, given that these are established, income-generating assets that have become state property following the expiry of their original contracts.
The temporary renewals are also intended to prevent operational disruptions while consultancy studies, feasibility assessments and tender documents are prepared for the projects’ re-offering. Based on the experience of Souq Sharq and Al Muthanna Complex, the preparation and tendering process can take about three years.
The measure is part of the ministry’s broader efforts to improve the efficiency and returns of state-owned assets, strengthen the investment attractiveness of existing projects and support greater public-private sector participation in line with Kuwait Vision 2035.
The 23 projects identified for re-tendering span commercial, real estate, tourism, market and slaughterhouse facilities. They include Al Kout waterfront in Fahaheel, Marina Mall waterfront Phase Five, construction-waste treatment plants, the Slaughterhouse Project, International Center, United Market, Al-Masil Market, Grand Market, Al-Watiya Market, Kuwait Market, Plage 11 (Kuwait Magic), Al-Mubarakiya Market, Al-Farwaniyah, Al-Jahra and Al-Ahmadi slaughterhouses, National Market, International Golf Club, Al Safat Market, Climate Market, International Building Real Estate, Jleeb meat, vegetable and fish market, Al Jahra Meat and Vegetable Market (Al Khayma Mall), and the Central Vegetable and Fruit Market in Sulaibiya.
