The new year brings fresh opportunities

22 March 1996

The new year has brought a number of new construction opportunities and hopes that the sector, which has been hit hard by cutbacks in government expenditure, may be recovering after two years of depression. but the nature of the market is changing for Kuwaits contractors. With little prospect of a return to the halcyon days of high oil prices, they are now adjusting to a new era in which the private sector is playing an increasingly active role in generating and financing large-scale projects.

Despite the squeeze on government spending, all has not been lost in the public sector and the most vital projects are moving ahead. Ever-increasing student numbers have necessitated the large-scale expansion of Kuwait University and the con- struction of a new campus for the Public Authority for Applied Education & Training.

Work on a new police academy is also in the preliminary stages and contractors are hoping that construction will finally begin this year on the new headquarters of Kuwait Petroleum Corporation, a project that was first put out to tender in 1988 but halted Kuwait waterfront development is being financed by the private sector after the Iraqi invasion.

With the call on Kuwaiti crude expected to increase by 50 per cent to 3 million barrels a day (b./d) by 2005, the oil sector will always be a constant source of work.

In December last year, China Petroleum Engineering & Construction Corporation was awarded a $390 million contract to build gathering centres (GCs) 27 and fields of Umm Gudair and Minagish from 110,000 b/d to 500,000 b/d. Officials at Kuwait Oil Company say that construction of GC 25 in the Rawdatain field will go to tender in 1996.

In domestic refining, Kuwait National Petroleum Company (KNPC), has issued fresh tender docments for the Mina al-Abmadi gas removal plant (AGRP - - see Kuwait). South Korea's Sunkyong Engineering & Construction Company was low bidder at KD 40.5 million ($135 million) for the contract in August 1994, but its bid was subsequently rejected on technical grounds. In early March, KNPC invited prequalified contractors to bid by 7 May for the key maintenance and construction contract for the getty at the Shuaiba refinery. The north and south arms of the loading pier were badly damaged during the Iraqi invasion.

Tapping private funds

Contractors have reacted positively to the first serious moves by the public sector to tap the resources of the private sector. The waterfront in Kuwait city is being developed on a build-operate-transfer (BOT) basis. Work on phase 3 is already underway and proposals are being drawn up for phases 4 and 5.

Housing is the latest sector where the government is looking for private finance. In 1995, it passed law 25 on 'the participation of the private sector in (the) reclamation of state domain fallow land for the purpose of housing care'. The law opens the way for the involvement of the private sector in the financing and implementation of new housing projects. In late February, the local press reported that National Bank of Kuwait, Kuwait Finance House and Kuwait Real Estate Bank bad submittcd offers to the Public Authority for Housing Care to finance new projects.

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