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Ambitious infrastructure projects in pipeline for Kuwait

Kuwait is all set for an ambitious infrastructure programme planned over the next two years, with investments worth $12.6bn for 2012-13, the Minister of Public Works and Municipality Affairs, Fadel Safar Ali Safar has announced.

The private sector and foreign investors are likely to play a major role in implementation of the project, as the private firms have been encouraged participation with a range of schemes.

The development plan involves more than 320 infrastructure projects, including bridges, roads, and government buildings, all being monitored by various ministries such as education, health, public works, justice and the interior.

Speaking about the prominence of the programme for Kuwait’s future, Safar mentioned that construction of tangible infrastructure facilities is the pillar of economic and social development in Kuwait. This investment will also be a major boost to the economy, thereby boosting demand when the global outlook is still unclear.

Safar said that training for workers will be provided, focussing on enabling Kuwaitis to handle the facilities under construction. Further, this project is the groundbreaking first in infrastructure public-private partnerships (PPPs) in the country.

The project, with an estimated value of $1.8bn, will have installed capacity of at least 1500 MW, thereby producing 102 to 107 gallons of potable water a day. The contract will be a 40-year purchase deal with Ministry of Electricity and Water (MEW). The plant, located in Al Zour North, about 100kms south of Kuwait City, will constitute for 23 percent of installed desalination capacity and 12 percent of power capacity in Kuwait.

The MEW further plans to launch 20 projects over the next two years, to develop water resources and power supply, including increasing alternative energy production and enhancing efficiency.

Kuwait is also investing heavily in transport network. The 2012-13 development plan also includes road projects, with road-building programme setting aside $10.6bn for it in 2010, with more than 500kms of roads now under development.

In later March 2012, the international press revealed that Kuwait has been lining up initial tender for construction of new terminal at the Kuwait International Airport (KIA). The project is worth around KD700m to KD800mn. Nearly 16 international firms have already expressed interest and this new terminal is KIA's second, and will be ready by 2016.

The first stage of tender involves design and consultancy, followed by tender for construction which will be ready by mid-2013. Several other major infrastructure projects are in pipeline, including major big-ticket schemes, with more number of international companies showing interest in Kuwait.

It will be heartening for both local and foreign investors to note that foreign firms can directly bid for contracts without the assistance of a local agent, and permitting the Central Bank to deal with investment choices and supervise tenders.

With more vital infrastructure to build over the coming years, Kuwait needs the capital and expertise of private sector, including that brought by foreign investors. Having recognized this aspect, the latest development plans of Kuwait offers ample opportunities for private sector participation.

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