Kuwait awards record $30b on projects despite oil slide

KUWAIT CITY — Kuwait has awarded projects worth a record $30 billion so far this year despite the sharp fall in oil income, officials and experts said Tuesday. 

"Up until mid-October, Kuwait has awarded record projects worth $30 billion [28 billion euros], up around $6 billion on the whole of last year," Edward James, director of analysis at Middle East Economic Digest (MEED) Projects told a conference on Kuwaiti projects. 

He said Kuwait was the only country in the energy-rich Gulf Cooperation Council (GCC) to exceed MEED forecasts in awarding projects this year. 

Projects in neighbouring Saudi Arabia and United Arab Emirates (UAE), which are the leading regional nations in projects, saw their project awarding process cut by half, James added. 

In Saudi Arabia, the value of awarded projects dived to around $33 billion and in UAE it slid to under $20 billion. 

MEED indicated that Kuwait, which gave contracts worth $24 billion in 2014, has projects worth more than $251 billion planned or underway. Of those, $137 billion worth are in the pre-execution stage and around $85 billion of them are under study, MEED pointed out. 

Key sectors include construction at $90 billion, oil and gas ($69 billion), transport ($49 billion) and power ($26 billion).

In February, parliament approved a five-year development plan that envisages spending 34 billion dinars ($112 billion) between the current 2015/2016 fiscal year and 2019/2020.

Talal Al Shemmari, a senior official at the Supreme Planning Council, told the conference that projects planned over the next five years include a metro system at $18.5 billion, a railway project as part of the GCC railway link at $6.6 billion and a power plant at $8 billion.

Under the plan, power generation will be doubled to just under 30,000 megawatts and a 25-kilometre causeway linking Kuwait City with the country's north is already under way.

Last month, Kuwait awarded contracts worth $13 billion to foreign firms to build a 615,000-barrel per day refinery.

Prime Minister Jaber Mubarak Al Sabah reiterated Tuesday that the drop in oil revenues will not impact development projects.

Like other GCC peers, Kuwait's economy heavily relies on oil which contributes 94 per cent of public revenues.