May 28 2010
Research and Markets (http://www.researchandmarkets.com/research/8d29d5/kuwait_infrastruct) has announced the addition of the "Kuwait Infrastructure Report Q3 2010" report to their offering.
The Kuwait Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's infrastructure industry.
Kuwait is on the brink of an infrastructure development plan that will on paper change the face of the country over the coming years. As MPs in Kuwait's National Assembly passed a US$108bn package for infrastructure development in February 2010, it became harder for more cynical observers to deny that Kuwait is soon to experience a genuine infrastructure boom. BMIs more sober forecast in its latest Kuwait Infrastructure Report, however, demonstrates how instrumental the political environment will be in a year of anaemic growth of 0.53% in construction.
The defining four-year development plan albeit reduced from US$129bn leaves few sub-sectors untouched, with rail, power, oil, water, health and education all slated for investment as the government develops new ports and cities. The smooth implementation of the development plans will be paramount in a country where projects have been plagued by disputes between the executive and legislature.
The cabinet promisingly approved the transfer of US$16.6bn of the US$108bn four-year package to the annual state budget for spending, which is effective from April. An additional US$10.8bn was handed to the Ministry of Public Works in March 2010 for infrastructure spending. The litany of projects or at least those that come to fruition will lift growth Kuwait's construction sector up from US$2.54bn in 2010 by about 1% year-on-year to 2014 according to BMI calculations.
Moves were also made this quarter to expand gas supplies as some progress was seen on the joint Kuwaiti and Saudi Dorra offshore gas field. The Dorra field is an important one for Kuwait, as one of its few nonassociated gas reservoirs producing gas independently of oil extraction and is being developed by Al-Khafji Joint Operations (KJO), Further gas supplies yet may come from the more unlikely source of Iran's South Pars gas fields via a new 577km pipeline. Kuwait and Iran stopped short of a final price arrangement during the latest in a number of talks on the pipeline, which will pump 8.5mn cubic metres of gas from Iran to meet Kuwait's increasing appetite.
Meanwhile, the health of Kuwait's banking sector took a turn for the worse in the latest quarter partly due to its exposure to the construction sector, placing even greater urgency on the implementation of the country's development plan. The wider banking sector sees a potential boon in the country's four-year development plan as it will help ease the current disincentive to further expose balance sheets to the construction industry. The Central Bank of Kuwait moved again to help unleash liquidity in the hope that the banking sector will step-up lending at a time when the emirate moves closer to the resumption of mega-projects.
The highly uncertain political climate does not currently justify a significant adjustment in growth forecasts. BMI sees the construction sector growing by just 1.39% in 2011 to US$2.64bn. Growth will peak over the forecast period in 2014 at 3.2%, taking the value of Kuwait's construction industry to US$3.22bn.
Companies Mentioned:
- Burhan International
- Mabanee International
- Kharafi National
- Kuwait Company for Process Plant Construction & Contracting (KCPC)
- Gulf Consult
Source: http://www.researchandmarkets.com/