Kuwait seems to be on the way up. Judging by some of the new projects taking shape on the drawing boards of leading consultants, the horizon looks set to be punctuated with a series of sky-breaking high-rises – many 40 storeys and above.
In the 40-storey-plus league are the Kuwait Business City, the Watya Complex, the National Mobile Telecommunications Company (NMTC), a residential building for Kuwait Finance House, and a number of others that are earmarked for the capital city.
Cranes – a barometer of construction activity in a country – now dominate the skyline as investors plunge headlong into the development of real estate. With many international firms looking at using Kuwait as a base to exploit the opportunities that will eventually unfold in neighbouring war-devastated Iraq, rents have surged and commercial and residential property has been in great demand in the emirate. The boom has been further fuelled by the return of capital invested abroad in real estate and the stock market.
Though Iraq is still struggling to get on its feet, the new era of peace with its neighbour is boosting investor confidence in Kuwait, with public and private sectors working hand in hand to forge ahead with sizeable projects ranging from development of townships and ports to commercial cities.
In an emirate where the construction sector has traditionally been driven by public sector spending, last year marked a departure from the status quo, with the private sector pressing ahead with a number of commercial and residential projects, creating a mini-boom in the real estate market.
However, the government has now started releasing a string of projects, the latest among which is the $1.2 billion container port at Bubiyan Island (see pg 11).
Given the continuing robust oil prices in an emirate where oil accounted for 91 per cent of the state’s total revenues for the first six months, prospects look bright for the construction sector especially with many projects that have been on the back-burner now moving forward.
These include plans for the development of Al Khiran township, Subiya City and the associated $1.5 billion causeway, Bubiyan Island, the historic Failaka island, the construction of a second terminal at Kuwait International Airport.
Other major projects in the offing include a 1,100-bed hospital at South Surra, a national library, a $3 billion campus for Kuwait University at Shadidiyah and the upgrading of roads – notably the expansion of the First and Fifth Ring roads.
“The country continues to further the successes it has achieved using the build-own-transfer (BOT) approach – notably with the Sulabiya wastwater treatment plant which is seeing the completion of some of this phases, and the waterfront projects.
Spending on projects, maintenance, and land purchases was the second largest contributor (after transfers and miscellaneous expenditure) to the growth in total government expenditures this year, increasing by 51 per cent compared to last year, according to a National Bank of Kuwait (NBK) report. Most of the spending increases were on electricity and water projects (KD25.7 million) and on public works (KD11.4 million).
The full year budget for capital projects was set at KD825 million, 14 per cent higher than the previous fiscal year.
Actual spending looks like it may well exceed that, given the momentum being built in executing a broad programme for developing the country’s infrastructure, and given that capital spending jumped 24 per cent last fiscal year, NBK said.
Power & water
The Energy Ministry has invited prequalification bids from international companies for the engineering, procurement and construction (EPC) of a 2,500 MW thermal power station to be located in Az Zour North. The plant will have five units of 500 MW output each. This project will be associated with a proposed desalination plant project, which can produce a total of 150 million gallons of water per day. The latter will be separately pre-qualified and contracted.
Meanwhile, three of the 1,000 MW Az Zour power plant being built by Siemens Power Generation have recently come on stream.
Among other major developments in this sector, Doosan Heavy Industries and Construction has won a $370 million desalination plant project in Subiya. The plant is expected to be the largest of its kind in the country, capable of supplying the daily potable water requirements for 600,000 people. The construction, on a turnkey basis, is slated for completion in January 2007.
Townships
Plans for a township, earmarked for Al Khiran prior to the Iraqi invasion in 1990, have been revived and two major projects for the development of the area have been launched.
The Executive Authority for the Development of Kuwaiti Islands, Divided Zones and Major Projects (Dizart) has started work on the township which will eventually be home to 250,000 people. Under phase 1, housing units and infrastructure facilities will be built for 13,000 residents. Two contracts worth a total of $161 milion for infrastructure works on the project have been awarded recently.
The La’Ala Al Kuwait Real Estate Company is the developer of the second - a mixed-use seafront project. Al-Khiran Pearl City as it is known, will offer 1,200 residential plots on 2.5 million sq m of land close to the border with Saudi Arabia. Ahmadiah Contracting and Trading has been awarded a contract for infrastructure works (see page 61).
Pearl City will be developed in phases and will eventually be home to about 50,000 residents. The consultant is a team of the UK’s Buro Happold with the local Gulf Consult.
Work is also set to be launched on sector B of the Jaber Al-Ahmed township project, which will include plots 1,220 houses.
Hotels & tourism
The bidding for Kuwait’s large-scale tourism project Failaka Island was initiated recently with around 42 companies having participated in the process.
The project, to be launched by Dizart, aims to transform the historic Failaka island located 20 km northeast of Kuwait City, into one of the country’s main tourism attractions. The estimated $5 billion project is to be developed on a build-operate- transfer (BOT) basis and calls for the construction of tourism infrastructure on the 43 sq km island.
The government-owned Touristic Enterprises Company (TEC), meanwhile, is spearheading development of a section of the island. A BOT contract was signed in mid-September between TEC and a consortium led by Al-Mal Real Estate Company for the development of a tourist resort on the southern portion of the island.
The resort will include a 100-room five-star hotel, 502 chalets, a sports and entertainment centre with a pier, a health spa, a water park and golf and mini-golf courses. Project costs are estimated at KD 40 million ($138 million) and the area to be developed covers about 1.7 million sq m. Detailed designs are due to take about a year, construction a further two years.
Meanwhile, plans for the development of Bubiyan island are moving forward with the go-ahead given for the $1.2 billion Bubiyan port. Dizart – which is again the client on the project – intends to develop the 530 sq km island into a tourism resort. The project is expected to be carried out in five phases.
The US’ Hill International has been selected as project manager on the scheme, which will include the construction of hotels, chalets and recreational facilities on the island and a causeway to the main island.
To keep pace with demand, a number of hotel projects have been initiated while existing ones are being upgraded, expanded or refurbished. Among the major hotel upgrade projects under way is the Messilah Beach hotel and the Regency Palace.
The Safir Marina Hotel, owned by the local real estate and construction firm United Realty Company, is due to open by the year-end, while the latest entrant on the hotel scene is the Monarch hotel – design work on which has just been launched.
Commercial/residential complexes
Numerous commercial complexes are being built in Kuwait in the wake of a real estate boom. Among the larger projects is the Heritage Village and The Avenue.
The estimated KD45 million ($155 million) Heritage Village, a major residential and entertainment complex in Kuwait City, is expected to be awarded on a BOT basis. The 20-year concession calls for the construction of theatres, cinemas, auditoriums and a cultural centre on two plots of land on Abdullah Ahmadi street over a total area of 54,700 sq m. The project is being implemented in three phases. The first phase is a residential area. The client is Kuwait City Municipality.
Mabani Company is developing The Avenues, a mixed-use development on the fifth ring-road in Al-Rai area and has signed a KD55 million contract with local Alghanim International General Trading and Contracting Company to build and maintain the project. The centrepiece of the development, which will have about 200,000 sq m of built-up area, is a shopping mall.
Given the demand for office space, the local Al-Mal Real Estate Development Company is offering firms the option of owning entire floors of its latest commercial development, the KD 12.5 million ($43 million) Dhow Tower in the Sharq district of Kuwait City. This is the first local commercial development to offer such an option – hitherto such propery was available under the customary leasing arrangement. The local Ahmadiah Contracting & Trading Company has started construction work on the 32-storey building, which is expected to be completed in the second quarter of 2006 (see page 61).
Another real estate developer, Ajial Real Estate Entertainment Company is planning to build one of the tallest commercial towers in Kuwait at a sit currently occupied by Al Hamra and Firdous cinemas. Estimated to cost KD80 million, the tower will comprise a large commercial centre, trade offices and a cinema theatre. The tower will be completed in three years.
Investment bids have been submitted for the KD550 million Arifjan residential project in southern Kuwait. The project will be set up on an area of about 33 sq km and will comprise a total 11,000 residential units. Apart from residential units, the project in Arifjan will comprise a commercial complex, a ministerial complex, a private and a state university, a general hospital and fuel stations.
The local Salem Al-Marzouk & Sabah Abi-Hanna (SSH) is working on the designs of the Business City in downtown Kuwait City. The 40-storey office building for the local United Real Estate Company is estimated to cost of about KD 35 million ($120 million).
Other SSH project, the presgious Oil Sector Complex and the Public Institution for Social Security (PIFSS) are due to open shortly (see page 59).
Educational facilities
Kuwait has recently seen the completion of construction works of a number of projects for Kuwait University that were first launched in 1989. Undertaken at a cost of KD175 million, the projects have entailed the construction of 33 buildings in Shuwaikh, Kaifan, Kaldiya and Fintas.
The government of Kuwait has now provided 520 hectares of land in Al Shadidiyah to Kuwait University for the development of a new University City, complete with a medical campus and a 400-bed teaching hospital. The university city is expected to be fully developed, completed and occupied in 10 years. Turner Projacs is project manager on the development while SSH is preparing the masterplan of the project (see page 57).
The new University City will allow for consolidation of the various campuses currently spread throughout Kuwait into one mega-campus that will serve the student population over the next 30 years.
Another major university on the cards is the Gulf University for Science and Technology, which is to be built in West Mishref. Tenders for the project are due to be floated shortly (see page 53).
The Public Authority for Applied Education & Training (PAAET) has plans to expand two of its campuses – the main campus situated in Shuwaikh and a new campus in the district of South Sabahiya. New facilities continue to be developed and constructed on the Shuwaikh campus, integrated with a new campus-wide infrastructure system including two interconnected central plants. The existing campus, approximately 2 km long and 1 km wide, presently contains six operating colleges, with an additional three scheduled to commence operations in 2005. The Construction Training Institute in South Sabahiya is scheduled for completion in early 2006. Turner Projacs are acting as construction manager for this expansion programme.
Oil & Industry
Last August, Kuwait’s Supreme Petroleum Council (SPC) gave the go-ahead for the construction of the country’s fourth refinery in Shuaiba which will eventually replace the ageing facility there.
In a bid to expand its loading capacity at the Ahmadi export terminal to handle planned increases in crude production, the State-owned Kuwait Oil Company (KOC) intends to build further oil storage and export facilities. Engineering, procurement and construction contractors have been invited to submit bits for the estimated $850 million project which calls for the building of 11.4 million barrels of crude storage capacity.
Kuwait, which is currently estimated to hold one tenth of the planet’s oil reserves, is looking to raise its crude production capacity to between 4 million and 5 million barrels per day (bpd) by 2020 from the current 2.5 million bpd.
Among the major industrial projects in the offing is a billion-plus-dollar, integrated petrochemical complex, known as the Olefins-2, in to be built Shuaiba. It will include construction of an 850,000 tonnes per year (tpy) cracker, a 600,000 tpy ethylene glycol unit, a 450,000 tpy ethyl benzene/styrene monomer unit and an expansion of polyethylene capacity at the existing complex. The completed facility will double the capacity at the existing olefins complex.
The Olefins-2 complex is a joint venture between Dow Chemical Company and Petrochemical Industries Co (PIC) of Kuwait. The project is expected to break ground early next year for completion in 2007.
Technip USA Corp has been contracted to to provide engineering services for the ethylene plant at the complex.
Roads
A contract is expected to be awarded by the end of next month for the $104-million-plus expansion of Kuwait’s First Ring Road motorway, which includes the construction of 10 bridges and several other technical projects.
The scheme entails the upgrade of 2.5 km of carriageway, 10 bridges and a diversion of the existing underground utilities. The project also entails the construction of an 800-m stretch of single-lane overpass, a 300-m stretch of dual-carriageway overpass and a 1.5-km section below ground level.
The Fifth Ring-Road project in Kuwait City is also being extended. The estimated KD18 million ($60 million) scheme includes: the upgrade of a 3-km section between Fahaheel expressway and Al-Taawin Street into a motorway.
Kuwait airport
SSH with Germany’s Dorsch Consult is working on a consultancy contract to update a masterplan for the upgrade and expansion of the Kuwait International Airport. The plan include the construction of a second terminal on a BOT basis.
The size of the second terminal has still to be determined: the existing runway’s capacity allows for a new terminal of up to 15 million passengers a year. KIA has capacity to handle up to 5 million passengers a year.
Other projects
• A joint venture of the local Mohamed Abdulmohsin Kharafi & Sons and Germany’s Philipp Holzmann International has the estimated KD 55.8 million ($189 million) main contract on the Shaikh Jaber Al Ahmed International Stadium. The 60,000-seat stadium, to be built over 130,000 sq m, comprises a soccer field and complete facilities for Olympic-standard track and field athletics. The project is scheduled to be completed by the end of 2006.
• Construction work has just started on the landmark Minister of Interior project which is expected to be completed by September 2007 (see page 47).
• Architect Ken Yeang has been appointed to design the headquarters for the Olympic Council of Asia, which is based in Kuwait City. The 65,000 sq m building will become the main home of the Olympics in Asia. It will cost at least £70m ($134.57 million) and will comprise a 35-storey tower containing office space and a hotel.
