Kuwait has been the surprise package for major contract awards in 2015. Over the past five years, Saudi Arabia, Qatar and the UAE have led the regions projects market with multibillion-dollar contract awards for the construction of refineries, metros and airports, while Kuwait has lagged behind.
The tables have turned in 2015. With lower oil prices this year, the value of awards across the GCC has slumped in these three key markets. Decision-making has slowed as government concerns that deficits are becoming unwieldy grow, and private developers fear that projects may not produce the returns they had originally envisaged.
Kuwait has bucked this trend and is making up for lost time in 2015. The biggest decision came in late July, when it decided to approve the award of $11.5bn of contracts for the construction of the Al-Zour refinery, and there are signs other major contracts are set to be awarded by the end of this year.
For the construction sector, the largest is the new terminal building at Kuwait International airport. On 2 August, three groups submitted offers for the deal, with a joint venture of Turkeys Limak and the local Kharafi National submitting a low bid with a price of $4.3bn. Like the Al-Zour refinery, the airport contract has been tendered before, and the Limak/Kharafi team submitted the lowest offer when prices were submitted in November 2014.
If these contracts had been awarded the first time, construction work on them would have already started by now and Kuwaits projects market would be enduring the same leveling off that Saudi Arabia, Qatar and the UAE are experiencing in 2015.
The new work has been welcomed in 2015, and as more awards are made Kuwait will increasingly become a destination for construction companies that are looking for new work.