Kuwait approves thirty five projects worth $51 billion

• The total value of future projects in Kuwait amounted to $108.4 billion in October 2024, representing 7.5 percent of the total future projects in the GCC countries.

• In Q3 2024, Saudi Arabia’s contract awards rose 22.7% to $35.4 billion, leading in project value with 55.9% ($1.53 trillion) of total projects, followed by the United Arab Emirates at $627.6 billion.

• In terms of sectoral representation, the construction sector accounted for the largest share at 30.9 percent, equivalent to $444.6 billion, followed by the transport sector at 19.7 percent at $283.5 billion.

KAMCO Invest reported that the Kuwaiti government has approved thirty five projects valued at approximately $51 billion to modernize its infrastructure and facilities, as highlighted by Al Rai newspaper.

The KAMCO Invest report indicated a decline in the total value of project attribution activities in the Gulf countries in the third quarter of 2024. The total value of projects awarded in the Gulf decreased by 15.3 percent, reaching $54.2 billion in the third quarter of 2024 compared to $64.0 billion in the same quarter of 2023.

During the third quarter of 2024, the value of contracts awarded in the Gulf was distributed unevenly, with three out of six Gulf countries recording year-on-year growth in project values, while the remaining three markets experienced a year-on-year decline during this quarter.

According to MEED, the total value of projects planned for implementation or currently under implementation in the Gulf countries amounted to $2.7 trillion as of October 10 this year.

Saudi Arabia leads with the largest value of projects either under implementation or planned, accounting for 55.9 percent, equivalent to $1.53 trillion, followed by the United Arab Emirates (UAE) at $627.6 billion and the Sultanate of Oman at an estimated $208.9 billion. However, the situation differs for planned projects only, excluding contracts under implementation.

The total value of future projects amounted to $1.43 trillion as of October 10. As expected, Saudi Arabia ranked first in the Middle East and North Africa (MENA) region regarding projects under preparation, with 53.0 percent ($763.0 billion), followed by the UAE at 20.0 percent ($287.1 billion). The total value of future projects in Kuwait amounted to $108.4 billion in October 2024, representing 7.5 percent of the total future projects in the GCC countries.

In terms of sectoral representation, the construction sector accounted for the largest share at 30.9 percent, equivalent to $444.6 billion, followed by the transport sector at 19.7 percent ($283.5 billion).

Saudi Arabia’s contract awards surge 22.7% year-on-year in third quarter of 2024

The value of contracts awarded in Saudi Arabia saw a significant increase of 22.7 percent year-on-year in the third quarter of 2024, reaching $35.4 billion compared to $28.8 billion in the same period of 2023. This growth is primarily attributed to the continued momentum of projects supported by economic diversification efforts and the recovery of the Kingdom’s economic activity. However, this comes amid expectations of a decline in the rate of economic growth in the Kingdom due to low oil production and relatively low oil prices.

According to government forecasts, the Kingdom is expected to experience marginal gross domestic product (GDP) growth of 0.8 percent this year, followed by a more robust 4.6 percent in 2025, supported by rising oil production.

Growth by sectors

In the third quarter of 2024, significant growth in the value of assigned projects was observed in two of the eight sectors: the oil and energy sectors.

The value of contracts within the energy sector in the Gulf countries surged by about 5.5 times, reaching $18.4 billion compared to $3.4 billion in the third quarter of 2023. In the oil sector, the total value of contracts awarded reached $5.2 billion, representing a substantial increase of 86.1 percent compared to the same period last year.

Economic diversification

Despite the impact of oil production cuts that led to a contraction of the Saudi economy by 0.8 percent in 2023 (according to the International Monetary Fund), the Kingdom has continued its efforts to promote economic diversification throughout 2024.

The Kingdom has also realigned its investment priorities and spending on projects within the framework of Vision 2030, allowing it to focus on key initiatives that support the overall vision’s objectives. These strategies include modernizing the country’s infrastructure and transforming the transport network, with some efforts already beginning to bear fruit.

Pioneering efforts in international sports arena

One of the most significant achievements is Saudi Arabia’s successful bid to host the 2034 FIFA World Cup, which enhances the country’s position in the international sports arena and supports its pioneering efforts in this field.

During the third quarter of 2024, Saudi Arabia awarded contracts totaling $35.4 billion, marking a year-on-year growth of 22.7 percent and accounting for approximately 65.9 percent of the total value of projects allocated in the Gulf countries during this quarter.

The annual increase in the value of assigned projects is primarily due to the surge in contracts awarded within the energy sector, which rose from $1.4 billion in the third quarter of 2023 to $16.6 billion in the same quarter of 2024.

The third quarter of 2024 also saw the awarding of several notable projects in Saudi Arabia. Among the largest contracts is a $3.7 billion project to construct high-voltage direct current (HVDC) transmission stations connecting the central and southern operating areas in Riyadh. The Saudi Electricity Company assigned this project to a partnership that includes the local Al-Fanar Company and China Electrical Equipment, Energy, and Technology Corporation.

One of the most significant contracts during the quarter is a $2.5 billion project awarded by Aramco to the Italian company Saipem for engineering, procurement, construction, and infrastructure installation, including underwater pipelines in the Murjan oil and gas field.

UAE second-largest market for projects in the Gulf region

The UAE has maintained its position as the second-largest market for projects in the Gulf countries, accounting for 18.8 percent of the total value of contracts awarded in the region, compared to 40.4 percent in the third quarter of 2023. However, in terms of sectoral performance, the annual growth rate of contract awards has tended to decline, with six out of eight sectors experiencing a decrease in annualized projects during the third quarter of 2024.

One of the most notable projects awarded by the UAE during the third quarter of 2024 is the engineering, procurement, and construction contract for the tank warehouse project at Abu Dhabi Airport, which Abu Dhabi National Oil Company (ADNOC) awarded to a coalition of several Abu Dhabi-based companies, including Trojan Construction Group and Dubai-based Celingas.

Kuwait’s project market poised for a strong comeback

The total value of contracts awarded in Kuwait exceeded the $2 billion mark in the third quarter of 2024, despite a year-on-year decrease of 10.9 percent, reaching $2.1 billion compared to $2.3 billion in the third quarter of 2023. This figure marks the third highest level in 16 consecutive quarters.

The project market in Kuwait is expected to rebound in the near future, as reports indicate that the Kuwaiti government has approved 35 projects worth up to $51 billion to modernize its infrastructure and facilities. Projects worth approximately $25 billion are expected to be completed by 2030.

Some of the major initiatives approved include the development of 9,800 residences valued at $3.3 billion, a $1.4 billion initiative to build and enhance roads, and the construction of a 111-kilometer railway line connecting the railway networks of the six Gulf states. Additionally, the $3.2 billion Mubarak Al-Kabeer Port development project was among the key projects approved.

In terms of sectoral performance, the value of contracts awarded within the Kuwaiti energy sector in the third quarter of 2024 surged nearly 14 times, reaching $1.4 billion compared to $98 million in the third quarter of 2023. Notable contracts awarded within this sector during the quarter included a $126 million contract awarded by the Kuwait Oil Company to develop the power distribution network for electric submersible pumps (ESP) in Zones 1 and 2 (S&EK 11 KV).

The total value of contracts awarded within the oil sector also saw a significant increase of 265 percent year-on-year, reaching $168 million compared to $46 million in the third quarter of 2023.

In contrast, the total value of contracts awarded within the transport sector decreased by 77 percent year-on-year, reaching $440 million during this quarter compared to $1.9 billion in the third quarter of 2023.

Highlights of major awarded contracts

Among the most significant contracts awarded during this quarter was a multi-sector project worth $294 million to develop the South Sabah Al-Ahmad City project. The Public Authority For Housing Welfare awarded the contract to the Chinese company AVIC International Holding Corp.

The project includes the construction and development of roadworks, irrigation systems, sanitation, road lighting, electrical cables, irrigation tanks, and telephone networks for more than 6,500 residential units.

Another major contract awarded this quarter was to the Mechanical Engineering and Contracting Company, valued at $140 million, for engineering, supply, and construction works to establish flow lines and associated works for exploration and Jurassic wells in the North Kuwait region.

Qatar sees 57.9 percent surge in total value of projects in third quarter of 2024

The total value of projects awarded in Qatar improved by 57.9 percent year-on-year during the third quarter of 2024, reaching $4.2 billion compared to $2.7 billion in the same period last year. The total contracts awarded on a quarterly basis recovered from the lowest levels recorded in over sixteen quarters, which was $187 million in the second quarter of 2024. The gas sector accounted for the lion’s share (94.6 percent) of the total value of contracts awarded during the third quarter of 2024, recording annual growth of 135.3 percent, with a value of $4 billion compared to $1.7 billion in the previous year. In addition to the gas sector, project awards were limited to three other sectors this quarter: the transport sector ($93 million), the oil sector ($90 million), and the construction sector ($46 million).