Kuwait’s Public Authority for Housing Welfare (PAHW) has emerged as one of the biggest clients for the construction sector in recent years.

Kuwait’s population is projected to grow to 5.3 million by 2020 from 3.2 million in 2012. Although there are plenty of residential properties for expatriates, and office space is widely available, Kuwaiti citizens increasingly expect the state to provide housing for them, and affordable accommodation for nationals is becoming increasingly scarce.

To combat this, the PAHW has been tasked with the construction of a series of new residential schemes, which will add hundreds of thousands of new homes over the next decade. In 2011, it awarded an estimated $1.1bn of deals, including a $448m infrastructure package for the new Sabah al-Ahmed housing scheme. The project, which is located 50 kilometres south of Kuwait City, will provide more than 9,000 housing units to Kuwaiti citizens.

PAHW is also planning four major new township developments – Jaber al-Ahmed, Saad al-Abdullah, Mutlah and Khiran – which will add more than 50,000 new residential units to total supply.

In 2012, however, awards from the authority stalled. In the year to September, it has not awarded any contracts of significant value and has retendered some public buildings contracts.

Part of the authority’s housing plans include the formation of joint-stock companies to act as developers of major new schemes, with about 40 per cent of shares in each new firm held publicly through a listing on the Kuwait Stock Exchange (KSE). Bidding on the construction contracts for the new housing schemes and subscription to share issues for the new development companies are open to both international and local firms. International firms, however, cannot hold listings on the KSE if they want to participate in any new offering.

As with Kuwait Petroleum’s subsidiaries, any major new project tendered is announced through the weekly official Kuwait Gazette, with the PAHW first asking for requests for qualification, followed by proposals and bids.