Construction and transportation sectors project activity witness positive growth.
03 September 2023, 12:00 AM
31 October 2023, 12:00 AM
The MEED magazine stated the the project activity in construction and transportation sectors witnessed positive growth for two consecutive years in 2020 and 2021, the total project activity decreased significantly indicating at the moment transportation projects worth approximately $28 billion are being planned in Kuwait, including contracts worth $22.9 billion that are still in the early stages, projects worth $2.3 billion in the design stage, and contracts worth $2.8 billion in the bidding stage reports Al-Rai daily.
In the construction and transportation sectors combined, there are projects worth $4.7 billion that have passed the pre-qualification stage and are now either in the bid-submission or bid-evaluation stages and if contracts are awarded at even half of this value, 2023 could become the best year for contractors since 2018, but most of this value is collected in very large projects and will depend on the resumption of major plans that may in turn need the approval of the National Assembly.
The construction and transportation projects market in 2022 witnessed a decline of about 40 percent to settle at just under $1.7 billion as a result of the decrease in the number of awarded projects.
Since the beginning of this year so far, the country has awarded contracts worth $1.2 billion in the construction and transportation sectors. Construction was the second largest project sector in Kuwait last year, with contracts awarded at about $627 million, and in 2023 and so far the volume of contracts has reached about $440 million, which indicates that the current year is going in a similar direction, but the two numbers are much lower than the average of $1.8 billion in awards between 2018 and 2022, or an average of the $4 billion spent in the preceding five years.
As is the case in other project sectors in Kuwait, the construction sector is a victim of a significant reduction in public spending on projects in the country, because the plans got caught up in the internal political struggle over spending and debt. At the same time, the volume of construction projects scheduled and awaiting award amounts to about $22.9 billion, with projects worth $8.7 billion under study, $6.6 billion in the design stage, and $7.6 billion in the bidding stage. The transportation sector enjoyed the strongest project activity in Kuwait in 2022, with more than $1 billion worth of contracts awarded, more than the average annual total awards of $800 million between 2018 and 2022.