Kuwait politics hinders growth

06 December 2012

Key infrastructure projects have been put on hold or cancelled due to the reluctance of opposing groups in parliament to release funds

Kuwait’s projects market has long held the unenviable title of being the region’s biggest underperformer.

Despite having vast oil resources and a relatively small population, the country has been unable to deliver on its planned infrastructure programme. The decades after the Iraqi invasion in 1990 saw Kuwait fall behind its Gulf neighbours in terms of infrastructure development.

One of the main stumbling blocks for its development plans in recent years has been political schisms in parliament. Key infrastructure projects have been put on hold or cancelled due to the inability of opposing groups in parliament to release funds.

The market has started to pick up recently, with the collapse of the government in October coinciding with progress being made on several major infrastructure projects. Since the award of the $2.6bn Subiya Causeway just after the dissolution of parliament, tenders have opened and contracts approved for several major construction projects. Regional contractors have started bidding for work as more projects are rolled out.

Protracted and outdated tender processes also hamper the progress of important schemes

The short-term future of Kuwait’s projects market may have been boosted by the recent parliamentary elections, which were boycotted by opposition groups. However, Kuwait’s projects market still faces obstacles before it can reach its potential. In addition to parliamentary divisions, protracted and outdated tender processes still hamper the progress of important projects. Aware of this, the Partnerships Technical Bureau is seeking an in-house consultant to assist in implementing its $28bn public-private partnership programme. 

With several projects moving towards completion, cashflow in the construction market is set to decline over the next 12 months. It is vital for contractors and Kuwait’s development plans that the upturn continues and state and private clients are able to progress with planned projects.

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