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Kuwait awards $30bn worth of projects despite oil price fall

File photo shows the construction site of the Mubarak al-Kabir port project on Bubiyan Island, Kuwait. ©AP

Kuwait has awarded $30 billion worth of various projects during the current year despite a drastic fall in the Persian Gulf country’s revenues as a result of plummeting oil prices.

"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 on Tuesday, AFP reported.

The official added that Kuwait is the only country among the member states of the energy-rich (Persian) Gulf Cooperation Council [(P)GCC], which has exceeded MEED forecasts in awarding projects this year.

According to James, the rise in Kuwait’s awarding of projects comes despite the fact that neighbouring countries, including Saudi Arabia and the United Arab Emirates, which are the leading regional countries in terms of awarding projects, saw their project awarding process cut by half.

In Saudi Arabia, for example, the value of awarded projects reduced to around $33 billion, while in UAE, the corresponding figure slid to under $20 billion.

Based on MEED’s report, Kuwait, which gave contracts worth $24 billion in 2014, has projects worth more than $251 billion planned or underway, $137 billion worth of which are in the pre-execution stage and around $85 billion are under study.

Key sectors in which the projects have been awarded include construction at $90 billion, oil and gas at $69 billion, transport at $49 billion and power at $26 billion.

In February, Kuwait’s 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.

Taking part in the same conference, Talal al-Shemmari, a senior official at the Supreme Planning Council, said that projects planned over the next five years include a metro system at $18.5 billion, a railway project as part of the (P)GCC railway link at $6.6 billion and a power plant at $8 billion.

When the power plant is commissioned, Kuwait’s power generation will be doubled to just under 30,000 megawatts. Meanwhile, a project for the construction of a 25-kilometer (15-mile) causeway linking Kuwait City with the country's north is already underway.

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

Kuwait’s Prime Minister Sheikh Jaber Mubarak Al-Sabah reiterated Tuesday that the drop in oil revenues will not impact the country’s development projects.

Like other (P)GCC member states, Kuwait's economy heavily relies on oil which contributes 94 percent of its public revenues.


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