Category Archives: Architecture

Everything You Need to Know about Kuwait’s Infrastructure Spending

Everything You Need to Know about Kuwait’s Infrastructure Spending

Home to more than 6 percent of the world’s crude oil reserves, Kuwait has built a relatively strong economy based upon oil production and distribution, with petroleum accounting for more than 90 percent of the nation’s export revenues. However, realizing the need to diversify its economy, Kuwait’s leaders are now heavily investing in civic- and energy-related infrastructure projects to boost economic growth as part of a long-term development plan.

 

Construction Infrastructure Boom

The Kuwait National Development Plan aims to position the country as a global leader in diplomacy, philanthropy, trade, and culture, while expanding its economic interests by modernizing existing national infrastructure and developing new assets. As part of this plan, the country has committed to an 11 percent increase in infrastructure investment until 2035 and has already made significant progress in this area. For example, the Kuwait construction sector has experienced a resurgence of activity recently, with the government committed to spend $112.5 billion in projects by 2020. According to Timetric’s Construction Intelligence Centre, the country’s construction sector will be worth $15.5 billion by that time. This represents a compound annual growth rate (CAGR) of 6.44 percent. In contrast, the sector experienced a CAGR of only 5.23 percent from 2011 to 2015.

 

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Silk City Project

One of Kuwait’s most prominent infrastructure projects is the ambitious Silk City Project at Subiya. Expected to be constructed over the course of 25 years, the multiphased development will span 250 square kilometers and include an airport, an Olympic stadium, and a two-square-kilometer nature reserve, in addition to centers for business, athletics, and leisure. The community will be divided into four separate villages, each of which will house hotels, hospitals, and environmental facilities. The city’s main attraction will be a 234-floor tower that will include residences, hotels, and offices.

Silk City will provide housing for up to 700,000 residents and will be linked to Kuwait City through the Jaber Causeway, which will be the fourth-longest bridge in the world upon completion. According to state news agency, KUNA, the Silk City project will soon begin the process of securing foreign investors.

 

Road and Bridge Construction and Maintenance

Beyond ambitious projects like Silk City, Kuwait is committed to improving its existing infrastructure, especially in the transportation sector. In July 2018, the government awarded $48.5 million worth of contracts for the completion of several key projects, including the expansion of Fifth Ring Road as a means of easing traffic congestion. Within the next two years, projects will be completed to connect the road to the Al Ghazali intersection via an overpass and expand its sub-route connecting to the Airport Road 55 toward Jahra.

 

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Purchase of North Sea Midstream Partners

Kuwait’s increased infrastructure spending isn’t limited to national projects. In late July, the United Kingdom-based infrastructure arm of the country’s sovereign wealth fund, Wren House, announced its purchase of North Sea Midstream Partners (NSMP), an oil and gas pipeline firm, from ArcLight Capital. According to Reuters, Wren House secured the purchase over prominent players like JP Morgan and Blackstone.

NSMP maintains a 100 percent stake in the FUKA pipeline and owns the Teesside Gas Processing Plant and the St. Fergus Gas Terminal. The Kuwait Investment Authority is now the world’s fourth-largest sovereign fund with a combined $592 billion in investments. The deal should not only contribute to the recovery of the country’s oil revenues, but also foster continued capital expenditure growth in desired areas such as infrastructure.

 

Fiscal Deficit Declines and Capital Expenditure Increases

While Kuwait registered a fiscal deficit for the fourth consecutive year, the deficit dropped by 18.1 percent as of March 31, 2018 compared to the same period last year. Oil revenues increased by 22.2 percent, while non-oil revenues experienced a similar increase of 21.7 percent. After allocating 10 percent of its total revenues to the Fund for Future Generations (FGF)—a cushion against lower oil prices—the country’s deficit was roughly $15.9 billion. Meanwhile, capital expenditure comprised 16.7 percent of total spending, which was the highest recorded figure for this area in the past five years.

According to Finance Minister Nayef Al-Hajraf, this reflects the country’s commitment to executing infrastructure projects in line with goals established in the Kuwait National Development Plan: “We believe that reform starts with curbing wasteful spending, increasing collection rates of dues to the government’s various entities, while maintaining a healthy rate of capital expenditure on infrastructure and minimizing the impact of our fiscal reforms on the Kuwaiti people.”

What You Need to Know about MENA Infrastructure and Climate Change

What You Need to Know about MENA Infrastructure and Climate Change

Worldwide temperatures in summer 2018 have highlighted the impact of climate change and stressed the urgency for global leaders and organizations to expedite and improve their carbon-reduction solutions. Sweden, for instance, is in the middle of its hottest-recorded summer in more than 100 years, while Japan is experiencing dangerously high temperatures up to 41 degrees… Continue Reading

Spotlight on the Development of 5G in the Middle East

Spotlight on the Development of 5G in the Middle East

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What You Need to Know about the GCC Rail Network

What You Need to Know about the GCC Rail Network

The Gulf Cooperation Council comprises six Middle Eastern countries and was established in 1981 to achieve political and cultural unity among the participating nations, which share a belief in Islam. While the countries—Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, and the United Arab Emirates (UAE)—have political, economic, religious, and cultural ties, they will soon be further… Continue Reading

Everything You Need to Know about the Latest Saudi High-Speed Railway

Everything You Need to Know about the Latest Saudi High-Speed Railway

In addition to shifting its economy away from its reliance on oil, Saudi Arabia is implementing numerous rail transport projects. This will not only diversify its economy, but alleviate traffic congestion on its roads. The Saudi Landbridge Project will connect the capital, Riyadh, with Jeddah on the Red Sea coast. While it will primarily be… Continue Reading

Spotlight – 4 of the Latest Infrastructure Developments in the Middle East

Spotlight – 4 of the Latest Infrastructure Developments in the Middle East

As a result of oil prices rising following successive years of poor performance, several Middle Eastern countries are leveraging the increased revenue to invest in infrastructure projects with the potential to diversify their respective economies and shift away from a reliance on oil. The following are four recent infrastructure-related developments that will impact the economy… Continue Reading

Spotlight on Promising Infrastructure Developments in Jordan

Spotlight on Promising Infrastructure Developments in Jordan

In order to stimulate economic growth, the Middle Eastern country of Jordan is focused on infrastructure projects. Unrest in neighboring Iraq and Syria has significantly affected economic growth in Jordan, as the country’s debt has reached $40 billion, while it is also operating on a $700 million budget deficit. Moreover, Jordan’s debt-to-gross-domestic-product ratio is at… Continue Reading

4 Telecom Developments and Trends You Need to Know about

4 Telecom Developments and Trends You Need to Know about

The world is continually adapting to advancements in technology, and nowhere is this more evident than in the telecom sector. Prominent service providers are growing in size and scope and implementing new technology to appease existing customers and attract new ones. The following are four recent developments that are shaping the telecom industry in the… Continue Reading

4 UAE Infrastructure Developments You Need to Know About

4 UAE Infrastructure Developments You Need to Know About

The United Arab Emirates (UAE) has one of the healthiest economies in the world and, as a result, it has been able to invest heavily in its infrastructure sector. A recent study conducted by Agility, a prominent logistics firm, ranked the UAE as having the best quality of infrastructure in the entire Middle East and… Continue Reading

What You Need to Know about Saudi Arabia’s Entertainment Infrastructure

What You Need to Know about Saudi Arabia’s Entertainment Infrastructure

Saudi Arabia’s economic growth was stagnant in 2016 and 2017. However, the Kingdom’s government announced its highest-ever budget in early 2018 and, among other measures, its effort to diversify its economy stands out. Whereas the production and sale of oil was a major facilitator of economic growth in the past, the development of mega-cities is… Continue Reading