Kuwait’s contract awards drop 81.83% in first quarter of 2024
The country saw a substantial decline in the total value of awarded projects during Q1 2024, dropping from $1.8 billion in the same period of 2023 to just $327 million.
• MEED magazine projects that future projects in Kuwait are valued at around $105.5 billion, with 58.1 percent in the study stage and 11.2 percent in the design stage.
• The total value of projects currently under implementation in Kuwait reached $49.2 billion as of April 2024.
• Project awards in Gulf countries have surged past geopolitical concerns at regional and global levels, according to the ‘Kamco Invest’ report
According to the ‘Kamco Invest’ report, project awards in Gulf countries have surged past geopolitical concerns at regional and global levels. In the first quarter of 2024, they saw a 20.3% annual increase, reaching $45 billion, compared to $37.4 billion in the same quarter of 2023.
The report noted that project awards in Gulf countries have managed to confront challenges stemming from reduced oil production quotas, impacting regional economic growth. This is evident in the latest forecasts by the International Monetary Fund (IMF), which lowered growth expectations for the Gulf countries this year from 3.7 percent to 2.4 percent.
The rise in project award contracts in the Gulf reflects the region’s governments’ commitment to economic diversification projects, supported by government financing.
The growth in awarding project contracts in the Gulf countries was evenly distributed among the various countries in the first quarter of 2024, with 3 out of 6 Gulf countries experiencing year-on-year growth in the value of awarded projects.
However, Kuwait’s performance in awarding contracts during the first quarter of this year was disappointing. The total value of awarded projects amounted to $327 million, down significantly from $1.8 billion in the same period of 2023, representing an 81.83% decrease.
Despite the weak performance observed in the project market during the first three months of the year, contractors are currently gearing up to submit bids for major projects, particularly in the oil sector.
According to MEED magazine, seven companies have acquired tender documents for the planned fuel depot project in the Al-Mutlaa area, with a proposed value of $850 million by the National Petroleum Company.
One of the most prominent contracts awarded during the first quarter of 2024 is a $100 million design contract aimed at modernizing the Mina Al-Ahmadi refinery. This contract encompasses a project to repair the acid gas removal station at the refinery, along with consulting work.
Currently, MEED magazine estimates the value of future projects at approximately $105.5 billion, with 58.1 percent in the study stage and 11.2 percent in the design stage.
In terms of future projects, the electricity sector is expected to receive 27.2 percent, equivalent to $28.7 billion, making it the largest sector in anticipated contracts in the country. Following closely is the transportation sector, with future contracts valued at $27.6 billion.
Saudi Arabia leads Gulf region in Q1 2024 contracts
Saudi Arabia took the lead by acquiring more than half of the value of contracts awarded in the Gulf region during the first quarter of 2024, totaling $23.5 billion compared to $19.1 billion in the same period of 2023. This achievement disregards the disappointing GDP growth expectations issued by the IMF, as the country continues on a strong non-oil growth path.
In contrast, the UAE saw a marginal 1 percent decline in the total value of contracts awarded, reaching $11.5 billion in the first quarter of 2024 compared to $11.6 billion in the same period of 2023.
On the other hand, Qatar experienced a significant 68.5 percent annual increase in the total value of contracts awarded during the first quarter of 2024, reaching $6.1 billion compared to $3.6 billion in the same period of 2023.
In the first quarter of the year, there was a substantial increase in the value of projects awarded in the gas and oil sectors at the sectoral level. Specifically, the value of gas sector contracts in Gulf countries surged by more than 19-fold in the first quarter of 2024, reaching $7.4 billion compared to $382 million in the same quarter of 2023.
Conversely, the total value of contracts awarded in the Gulf oil sector increased nearly sevenfold, reaching $9.0 billion for this quarter. This significant growth makes the oil sector the largest contributor to the absolute increase in the value of contracts awarded in the Gulf region during this quarter.
$709 billion for future projects in Saudi Arabia
The ‘Kamco Invest’ report, citing MEED magazine, stated that the project market index in Gulf countries for contracts expected in the coming period amounted to $1.4 trillion as of April 2024.
Saudi Arabia secured the largest portion of future projects in the Gulf (50.2 percent or $709 billion), followed by the UAE with approximately $316.1 billion and Oman with future projects valued at about $172.1 billion.
Kuwait’s project implementation surpasses $49.2 billion mark
The total value of the project market index in Gulf countries for ongoing projects as of April 2024 amounted to about $1.3 trillion, with Saudi Arabia representing 54.4 percent ($683.3 billion), followed by the UAE at 30.9 percent and Kuwait at 5.9 percent.
According to MEED, the total value of projects currently under implementation in Kuwait reached $49.2 billion as of April 2024. This includes 65 percent within the construction sector, 13.9 percent within the transportation sector, and 13.1 percent within the energy sector.
