Construction work on City of Silk faces three-year delay

19 September 2008
Contractors blame bureaucracy for slow progress on the $58bn megaproject.

Construction work on Kuwait’s $58bn Madinat al-Hareer (City of Silk) megaproject faces delays of at least three years and will not begin until 2012, according to the developer in charge of the project.

“I do not think it will come on line for a while,” says Burhan Ravat, deputy general manager of projects with Tamdeen Real Estate Development Company, which is developing the scheme. “It will be three years before we are physically on site. If things go well, [the contractors] will start construction around 2012.”

Earlier this year, Eric Kuhne, managing director of London-based Eric R Kuhne & Associates, which is responsible for the design of the 250-square-kilometre project, said construction work was due to begin by the end of 2008 (MEED 8:2:08).

One local contractor whose company has been in talks with the developer over participating in the project says the scheme has suffered the same bureaucratic delays that are affecting real estate developers across the country.

“The City of Silk is going to take a while,” he says. “It is not the developers; they would start tomorrow. It is the government, the politics - that is what is slowing things down.

“We last heard from the developer four to five months back. Nothing is going on. Kuwait is very slow.”

It is the latest example of slow progress on the project. The concept for the City of Silk was launched in 2005, but only received approval from the Council of Ministers in November 2007.

The city will be located to the north of Kuwait City on the Subiya peninsula. It will be complete by 2030 and is expected to have a population of 700,000.

The centrepiece of the development will be the 1,001-metre-tall Burj Mubarak al-Kabir tower located in Commercial City.

The 234-storey tower will be connected via a podium with 27 other buildings in a nine-pointed star arrangement.

The city will feature themed districts for culture, film, media, industry, business, sports, leisure, the environment and health, as well as a national wildlife sanctuary and convention and exhibition centres.

The adviser on the scheme is the local OHA Engineering Consultants. Consultant KPMG has carried out an economic analysis, while Dubai-based SQ.FT Consulting is the strategic adviser.

Doubts were raised earlier in the year over the progress of mega-projects in Kuwait, because of a mixture of bureaucracy and the preference of local clients for fixed-price contracts, which place more of the risk of cost rises on contractors (MEED 18:7:08).

According to Gulf projects tracker MEED Projects, Kuwait is the slowest-growing projects market in the region. The value of projects planned or under way in Kuwait has climbed by 17 per cent over the past year, compared with a 56 per cent rise in Saudi Arabia and 46 per cent in the UAE.

The value of projects in Kuwait stands at $296bn, making it the third-largest market in the Gulf.

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