Kuwait Infrastructure Report Q1 2013Published by: Business Monitor International Published: Nov. 21, 2012 - 56 Pages Table of Contents
AbstractBMI View: High oil prices continue to buoy the economy but contentious politics in Kuwait remain asignificant drag on implementation of infrastructure plans. The government has long failed to implementplanned large scale infrastructure projects especially the Kuwait Development Plan, which has reallystruggled to get off the ground since US$108bn of funding was announced in 2010. Year on year (y-o-y)growth is improving in 2013, although still relatively low at 3.6%, compared with previous performance.Construction industry value is expected to rise from US$2.6bn in 2013 to US$5.0bn by 2021.Key developments in Kuwait’s infrastructure sector include: Kuwait's Public Works Minister Fadhel Safar has signed a financing deal for new infrastructureprojects in the country. The financing worth US$20.5mn will be directed towards infrastructurefor the first phase of a project to construct five major blocks in the Funaitees area. The firstphase will entail the installation of subsidiary roads, traffic signs, street lights, and water andsewerage networks. The Kuwait National Petroleum Company (KNPC) is to construct the largest oil refinery inthe Middle East. Five engineering companies have submitted bids for the project, with theKNPC to unveil the winning bidder in August 2012. The US$14.5bn facility will have a dailyprocessing capacity of 615,000 barrels from 2018. The largest oil refinery in the region iscurrently the Ras Tanura facility in Saudi Arabia, which has a daily processing capacity of550,000 barrels. The North Zour power plant in Kuwait will be ready in 2015, one year later than planned,according to Suhaila Marafi, the director of studies and research at the Kuwait Ministry ofElectricity & Water. A joint venture company, named Al Zour North, is yet to be establishedfor construction of the 1,500MW plant, which is to be developed by GDF Suez. Kuwait's political backdrop is complicated by labour and population imbalances, as well as a parliamentwhich has consistently blocked the government's reform efforts. Meanwhile, with three elections in thepast four years, the prospect of new polls and policy instability is always on the horizon. Lacklustre investment spending on the part of the government will weigh on Kuwait's long-run economicprospects, and we see growth slowing gradually in the years ahead. That said, in the near term we expectloose fiscal and monetary policy to continue to spur activity and forecast real GDP growth of 4.5% and3.7% in 2012 and 2013 respectively. Get full details about this report >> |
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