The pace of project implementation in Kuwait cooled somewhat in the second quarter (Q2) of this year as bidding on major projects faced some delays, said a report.

Contracts worth KD600 million ($1.989 billion) were awarded in Q2, according to Meed Projects. This is half the 2016 quarterly average, said the NBK report. Award activity in the quarter was dominated by the power and transport sectors.

NBK said it expected implementation to improve in the remainder of the year as more delayed projects move ahead. The second half of 2017 could see KD3.5 billion ($11.6 billion) in new contracts.
 
According to Meed, the Ministry of Electricity and Water (MEW) awarded the largest contract in the GCC in June 2017, a project worth KD176 million ($583.35 million) for the third phase of the Subiya combined-cycle gas turbine project. It was awarded to Alghanim International.

Other major awards during the quarter included three road projects by the Ministry of Public Works (MPW). These were the Northern Regional Road (KD92.8 million), the South Surra Road upgrade (KD85.2 million), and the road linking Mina Abdulla and Wafra (KD84.9 million).

Some delays in the bidding process have affected the construction, transport, power, and oil sectors. Close to KD2.4 billion worth of contracts that were expected to be awarded in Q2 were postponed. This included 14 contracts worth a total of KD808 million in the construction sector, eight contracts for KD850 million in the transport sector, nine contracts valued at KD456 million in the power sector, and four contracts for KD230 million in the oil sector, the NBK report said.
 
Transport: The transport sector dominated project awards in Q2 accounting deals worth KD280 million. Another KD1.1 billion worth of awards are expected in the rest of 2017. The MPW is expected to open bidding on nine separate contracts this year related to the northern section of the Regional Road, roads at South Al Mutlaa, the southern section of the Regional Road, and other road works. Seven road projects were supposed to be awarded by the end of Q2 but were delayed, it said.

Four contracts related to the northern Regional Road are expected to be awarded this year at a value of KD448 million. According to Meed Projects, Combined Group Contracting is believed to be the lowest bidder for the central part of the southern Regional Road, submitting a bid of KD197 million; the project is due to be awarded soon. Combined Group was also awarded the South Surra Road upgrade, which is expected to be completed in three years.

Power: The power sector saw KD226 million in awards in Q2, with another KD1.1 billion in the bidding process and expected to be awarded later in 2017. Five contracts were awarded in Q2 in the power sector, three of which by the MEW, including the Subiya Gas Turbine, which alone made up 78 per cent of the Q2 awards in the sector.

The sector awaits two large power projects which could be awarded before the end of the year. The much-anticipated Phase Two of the Al-Zour North IWPP (independent water and power project) power plant had been expected in Q2, but now could happen later in the year. Still, according to Meed Projects, the Kuwait Authority for Partnership Projects (KAPP) has yet to decide on whether to proceed with this project or with the Khairan IWPP.

The Al-Zour North plant contract is expected to be worth close to KD530 million. Another significant public-private partnership (PPP) project in the sector is the Kabd Municipal Solid Waste. Similar to Al-Zour, no date for the commercial bidding has been set; the project is expected to cost KD267 million.

Construction:  Only one contract was awarded in the construction sector in Q2, though KD1.7 billion in contracts are in the bidding process. In Q2, Mabanee awarded Phase 4B of The Avenues at KD63.7 million to Ahmadiah Contracting & Trading Company.

Meanwhile, the KD363 million contract for the Jahra Ministries Complex has been delayed but could be awarded later in the year - making it the largest award in the sector in 2017. According to Meed Projects, the MPW may change the location of the project to South Al Mutlaa, but there hasn’t been any official confirmation of this yet.

The Amiri Diwan tendered the new Palace of Justice building for bidding at an expected cost of KD303 million. The project, to be executed on behalf of the Ministry of Justice, is expected to be the world’s tallest and largest judicial building. Mohammed Abdulmohsin Al-Kharafi & Sons is the lowest bidder at KD288 million, and bids are under evaluation.

Oil: There was hardly any activity in the oil sector in Q2, but a total of KD935 million worth of contracts is expected in H2. Kuwait Oil Company (KOC) awarded one contract in Q2 worth KD7.3 million. KOC has opened bidding on eight separate contracts that are expected to be awarded in 2017. They include the feed pipeline for the new refinery in Al Zour. Bids have been submitted and are currently under evaluation. The lowest bidder is Saipem with KD255 million ($842 million), the NBK report said quoting Meed Projects.