Kuwait is set to award about $47.2 billion (KD14 bn) of projects this year, almost double the value of those awarded in 2014 as the government concentrates on infrastructure, according to a new report.
Observers say it is part of the new drive by the Kuwaiti government to move ahead with vital infrastructure projects.
Yesterday is was revealed that Kuwait’s Central Tenders Committee has already awarded around $5bn (KD1.5bn) of tenders this year.
According to the official Kuwait News Agency, the Committee held 26 meetings which led to around 152 tenders being awarded though the vast majority of the tenders were in the oil sector with five worth $4.17bn, were issued by Kuwait Oil Company.Last year Kuwait awarded $25bn of contracts, four times as much as in 2013 and more than the last three years combined, stated the report by MEED Projects.
The total value of Kuwait’s projects market (planned and active projects) is estimated to be in the region of $212bn (KD64bn), it said.Last year, the authorities introduced a new law to regulate all public private partnerships (PPP), which, it is hoped, will accelerate the involvement of the private sector in Kuwait’s projects market..
A new law making it easier to invest in Kuwait along side sweeping new changes that allow new companies to be set up in just 30 days is already increase in foreign investment.The Direct Investment Promotion Law agreed by government at the end of 2014 aims to improve Kuwait’s business climate and reduce red tape. It coincides with a drive to bring private sector companies in to work on a series of billion-dollar infrastructure projects over the next five years.
According to a new report by business consultancy the Oxford Business Group (OBG), the change will play a key role in investment growth and “there are signs that investor interest is rising”.Law firm Al Tamimi & Co confirmed it had witnessed a rise in interest since the regulations were released.
“We are aware that several applications have already been submitted to KDIPA, and we anticipate numerous more applications will be submitted based on the number of inquiries we receive from our clients on a daily basis,” wrote Sonia A Salah, a lawyer at the firm, in a February 2015 Kuwait Times article.The OBG said: “Experts say that the new FDI law addresses flaws in the previous system, as well as encourages the creation of new, large companies in the country.
“The law is very clever in the sense that it promotes diversity and reduces too much dependency on oil and gas.”
The new law calls for a “one-stop-shop” where new businesses are approved and licensed.It is responsible for preparing introductory guidelines and giving clear requirements for investors, which have caused concerns in the past.
In addition, the incorporation process will complete in 30 days as opposed to the six months faced previousy.Kuwait has also revised its public-private partnership (PPP) laws from October 2014 – which superseded an older law and established a clear regulatory framework for implementing PPP projects – as well as the long-awaited New Companies Law, are expected to be instrumental in boosting the contribution made by the private sector to economic growth.
Under the new law, the Partnerships Technical Bureau (PTB) will be superseded by the Kuwait Authority for Partnership Projects (KAPP), an independent government body with greater executive powers in order to more effectively manage all PPP projects, said the report.
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