Boston, MA -- (SBWIRE) -- 02/06/2014 -- Work on Kuwait's extensive infrastructure investment programme has been subject to various delays in recent years, but we are starting to see good progress being made. Claims of corruption have been putting off foreign investors from key infrastructure projects in Kuwait, despite government's support towards development projects. In comparison to its GCC neighbours, Kuwait's industry size is relatively small and will experience more moderate growth rates. Between 2014 and 2018, BMI forecasts the value of the Kuwaiti construction industry to increase from US$3.5bn in 2014 to US$6.8bn by 2023, growing at an improved - albeit still modest - rate of 4% year-on-year (y-o-y) annually. However, we see energy and nonresidential segments as areas offering relatively better growth potential during the medium to long term.
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Estimates from the Central Bank of Kuwait reveal that the construction industry value grew by a modest 0.36 % y-o-y and 1.8% y-o-y - in real terms - respectively during 2010 and 2011. However, in the 2013/14 fiscal year alone, the government is planning to invest US$15.8-17.5bn to support development projects.
Key developments in Kuwait's infrastructure sector include:
- Kuwait's Ministry of Public Works, State of Kuwait, awarded AECOM a contract to carry out feasibility study for a 40km deep water navigation channel for the port development on Boubyan Island. The project is broadly aimed at turning Kuwait's largest island - Boubyan - into a commercial seaport. Local consultant SQC International will provide AECOM technical assistance and baseline environmental data. Starting from August 2013, the feasibility study is expected to take 11 months.
- In September 2013, UK bank HSBC was awarded a contract for the management of tenders for a 280MW solar power facility to be located in Al-Abdaliya, close to Kuwait City. The project is expected to cost KWD926.75mn (US$3.3bn) to develop.
- The Subiya causeway, officially known as the Sheikh Jaber al-Ahmed al-Sabah bridge, is a 37.5km bridge that will cross Kuwait Bay, linking Kuwait City, the Subiya peninsula and Boubyan Island. Boubyan Island is the location of a number of major development projects, including a US$3.5bn commercial seaport, which is still in the planning stages after repeated delays. Construction work on the Subiya causeway started in November 2013 and will provide major support to our construction growth forecasts over the coming years.
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