Kuwait’s projects market has started 2017 with a bang with the government having awarded KD1.4-billion ($4.6 billion) contracts in the first quarter and another KD6.2 billion ($20 billion) worth of contracts likely by the year-end, said a report.
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.
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 top bank in its report.
The government has awarded KD1.4 billion ($4.6 billion) worth of contracts in the first quarter, said the report, citing Meed Projects, a figure roughly in line with 2016’s quarterly average.
Looking ahead to the rest of 2017, Kuwait could award another KD 6.2 billion ($20 billion) worth of contracts before year-end, it stated.
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 KD672 million ($2.2 billion) contracts awarded for eight projects.
Of this, the largest project worth KD397 million ($1.3 billion), 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 centers in the south, south-east and east of the country. The three contracts averaged KD69 million ($225 million) 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 KD216 million ($708 million), 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 per cent 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 KD149 million ($489 million) 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.