Kuwait invests in large-scale infrastructure projects and transport programmes

Kuwait is investing in a significant pipeline of major infrastructure projects and transportation programmes connected to the Kuwait Development Plan 2015-20.

The country’s most recent 2016-17 spending plan earmarks roughly $15.6bn for infrastructure projects across the housing, transport, electricity, ports, aviation, telecommunications and renewable energy sectors. The government will contribute 49.3% of investments, the state-owned oil sector will cover around 33.8% of spending, and the private sector is expected to contribute 16.9% within a public-private partnership (PPP) programme, according to the General Secretariat of the Supreme Council for Planning and Development.

Due to the many transport infrastructure projects under way in Kuwait, government expenditures are projected to rise to $65.2bn for FY 2017/18, up 5% over the previous year on the back of a 30% jump in oil revenues. The budget assumes an average $45 per barrel on daily production of 2.8m barrels as opposed to $35 in the previous year. Despite the growth in oil income, FY 2017/18 will mark the third year in a row that Kuwait runs a significant budget deficit due to the sharp drop in oil prices. The sustained investment in rail, road, airport and port infrastructure projects at a time of lower oil prices underscores the continued commitment of the government to achieving the objectives of the New Kuwait 2035 programme, and establishing Kuwait as a regional trade and financial centre.

Infrastructure

The centrepiece of the transport infrastructure development programme is the expansion of Kuwait International Airport (KWI), and the addition of a KD1.3bn ($4.2bn) passenger terminal designed to accommodate all types of aircraft, while boosting passenger capacity from 7m passengers in 2016 to 25m per year. Related developments in support of the passenger terminal include a KD149.8m ($490.7m) project for the construction of a third 4.5 km-long runway and an air traffic control tower, and expansion of the east runway and necessary infrastructure. The supporting project is being executed by Chinese and Kuwaiti companies, with plans to launch in June 2017.

In the maritime sector, work is well under way on first phase of development of Mubarak Al Kabeer Port, expected to deliver four container berths at a combined capacity of 1.8m twenty-foot equivalent units (TEUs). On completion of the third and final stage, the port will comprise a total of 18 operational container berths with a combined capacity of 3.6m TEUs per year.

Major expressway construction projects are also under way, including the Jamal Abdul Nasser Road Project, the Jahra Road Development Project and the Sheikh Jaber Al Ahmad Al Sabah Causeway.

The KD242.42m ($802m) Jamal Abdul Nasser Project and the KD264.76m Jahra Road Project are nearing completion, with the former scheduled for completion in 2017, and a 4-km section of Jahra Road opened by the Ministry of Public Works (MPW) in February 2016.

The KD738.75m ($2.4bn) Sheikh Jaber Al Ahmad Al Sabah Causeway bridge is also moving towards completion, with 71% of the Sabiyah link completed by early January 2017, along with 51% of the Doha link. Scheduled opening is set for November 2018. The net impact of these road projects will be to resolve congestion issues, enhance traffic accommodation capacity, enhance national integration and boost trade volume.

New Master Plan

In December 2016 Kuwait Municipality appointed a global consortium comprising Dar Al Handasah and Perkins+Will to draw up the country’s fourth master plan, an urban constitution and roadmap for development projects to 2040, in line with Vision 2035 objectives. Through initiatives such as the PPP programme and the privatisation law, the development focus of the new master plan is expected to include a greater emphasis on the shared responsibility for infrastructure development. The efficiencies of improved private sector engagement will help to drive development in infrastructure, and create new opportunities for companies in transportation and logistics.