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Kuwait's top 10 construction developments of 2018

15 April 2018

Kuwait is pumping billions of dollars into aviation to meet rising demand across various economic sectors, such as transport and residences.

Energy is another sector that may have piqued the interest of specialist contractors in Q1, following Kuwait's target to supply 15% its energy demand with renewables by 2030. But that's not all.

Big projects were delivered and numerous contracts were won in the country last quarter, and it was also revealed that China may become a major construction investor in Kuwait.

Kuwait's top 10 construction developments of 2018

1. Aviation megaproject

A new mega airport that could attract $12bn (KWD3.6bn) of investment and create 15,000 jobs may be on the horizon for Kuwait, a senior aviation official revealed last month. Directorate General of the Civil Aviation (DGCA) chief Sheikh Salman Sabah Salem Al-Humoud Al-Sabah said plans to build an airport with a capacity of 25 million passengers per year were being explored to address Kuwait's growing air traffic. Al-Sabah said DGCA was "studying" the viability of issuing a tender for setting up an airport in the northern part of the country. Air traffic at Kuwait International Airport has grown in recent years, with the airport accommodating 13.7 million passengers and 218,631 tonnes of air cargo in 2017, according to Al-Sabah. DGCA is braced for an increase in both the number of passengers and cargo it will need to process in the next two decades, fueling the need for Kuwait to explore ways to accommodate this. The DGCA is already developing two runways and a control tower at the Kuwait International Airport, and is in the first phase of building a “new cargo city” at the airport, which is expected to be the largest in the Middle East.

2. Phase 4 of The Avenues mall opens

The fourth and final phase of Kuwait's biggest shopping mall, The Avenues, worth $2bn (KWD600m), opened in April. Phase 4 was delivered by Mabanee Co, which owns the project, and consultants Pace and Gensler. Completion of the final phase could pave the way for the creation of 30,000 jobs, many of which will be customer-facing roles in the 300 new shops at The Avenues, which now has more than 1,100 retail units altogether. The Avenues' Phase 4 has a built up area of13ha, a total leasable area of 8.5ha and cost $900m (KWD265m). As part of the project, a four- and five-star hotel are due to be developed.

3. Limak signs $830m airport expansion funding pact

Turkish construction firm Limak Holdings signed an agreement in February to pay $830m to finance a new terminal at Kuwait International Airport. The $830.6m (KWD249.2m) funding agreement was signed with two local banks - National Bank of Kuwait and Kuwait Finance House. Limak is working with Kuwaiti construction firm Kharafi National on the project. Around a month after the agreement was stuck, Kuwait's Minister of Public Works, Hussam Al-Roumi, called on Limak to expedite construction of the new terminal. He also revealed other construction projects, including a new airport apron and a parking lot for the country's main airport, would be launched soon, although he did not specify a timeline.


4. Kuwait eyes cut of China's trillion-dollar Silk Road project

Kuwait has told the world's second-largest economy, China, it is "eager to collaborate" with the Asian superpower on its trillion-dollar Belt and Road initiative. China wants to work with Kuwait on infrastructure projects, including the construction of Al-Harir City and the development of five uninhabited islands off Kuwait's eastern coast. The two countries expressed an interest to collaborate on construction, energy, infrastructure, and mass communication projects after a meeting in Beijing, China's capital city, on 1 March. No formal agreement on construction projects were struck at the meet. However, the fact that both countries expressed an interest to work together could be significant as it may herald the start of a rise in Chinese-backed investment into Kuwait construction projects. China is reportedly set to invest close to $300bn by 2030 in its Belt and Road initiative, which is a revival of the ancient Silk Road trading route and aims to transform global trade.


5. Limak wins contract to build $153m Kuwait govt homes

Kuwait is a goldmine for Turkey's Limak. Not only is the construction firm involved in its new airport terminal, Limak also won a $153m contract to build government housing in the first three months of the year. Limak Holding has won an infrastructure contract from the Public Authority for Housing Welfare (PAHW) to construct, complete, and maintain 3,260 land plots for the local government authority. It is one of the biggest largest residential schemes in Kuwait, with 5,201 units, of which 2,346 are part of Phase 1. The Turkish company's work on the South Abdullah Al-Mubarak housing project will last two years.

6. Ministry signs $141m contracts to upgrade two power plants

Kuwait's Ministry of Electricity and Water signed two contracts, worth $141m (KWD47m), to upgrade the Doha West and the Sabiya power plants. The Doha West power station's fuel reception systems will be renovated over two and a half years. Sabiya power plant's fuel conditioning systems will be overhauled over a period of 36 months. Both of the upgrade agreements were signed by Bakheet Al-Rashidi, Kuwait's Minister of Electricity and Water. At the singing ceremony Al-Rashidi updated official on another major energy project - a sea-water desalination plan at the Doha West power plant. This $384.7m (KWD116.7m) plant is more 76% complete.

7. Government plans to generate 15% of power from clean energy

Kuwait hopes renewable energy will meet 15% of its power demand within the next 12 years.

The Ministry of Electricity and Water said the country would produce 15% of the country's power demand from renewable energy sources, particularly solar, by 2030. ''Mounting power demand in Kuwait should prompt all stakeholders to come up with practical solutions to minimise dependence on oil to produce energy,'' said Mohammad Al-Sharhan, the ministry's assistant undersecretary for technical services, according to the Kuwait News Agency. Early efforts to increase renewable energy production are already in place, following a solar energy agreement between the Kuwait Institute for Scientific Research (KSIR) and two South Korean companies – KEPCO E&C and SAM UN.

8. Two skyscrapers launched

Two 40-storey skyscarpers were launched by Kuwaiti real estate giant United Real Estate Company (URC), which will develop 40% of the project through its affiliate company, MENA Homes. Both residential buildings were launched as part of the Hessah Towers development project in the Hessah Al Mubarak district and along the Arabian Gulf Road. The project was conceptualised and designed by Dar SSH and Nabil Gholam Architects.

9. Kuwait to build 80 road projects

Kuwait's budget for road projects is valued at $26m (KWD8bn), according to a government official. The director general of the roads authority and land transports, Ahmad Al-Hesan, said up to 80 projects will be implemented in Kuwait in the coming years as the country looks to improve conditions for drivers.

10: KIPCO completes infra work for Hessah Al Mubarak District 

Kuwait Projects Company (KIPCO) completed infrastructure work for Hessa Al Mubarak District.

Handover of public facilities to government entities are reportedly ongoing, with developers expected to commence construction work “soon”.

Join us at Kuwait Construction Week 2019 to discover current and future construction projects and Kuwait and the GCC. Kuwait Construction Week will be held on 5-9 March 2019 at Kuwait International Fair, Mishref. For more information, please visit www.kuwaitconstructionweek.com