Megaprojects in Kuwait in 2023
Image credit: Shutterstock / Jes Romero
The gross domestic product of Kuwait’s economy will grow to over USD110 billion by the end of 2023.
With a population of 4.25 million, only 1.5 million of whom are Kuwaiti citizens, this translates into one of the highest per capita GDPs in the Middle East (at approximately USD25,000).
With proven oil reserves of over 105 billion barrels, Kuwait is also the third largest crude exporter in OPEC.
Oil export revenue alone is expected to exceed USD87 billion by the end of 2023.
With such a significant surplus in foreign exchange revenue, it is not surprising that Kuwait has a sizable sovereign wealth fund. Launched in 1953, the Kuwait Investment Authority (KIA) is indeed the oldest sovereign wealth fund in the Middle East.
The KIA is currently managing over USD800 billion worth of assets, making it the second largest sovereign wealth fund in the Middle East, just after that of Abu Dhabi and above Saudi Arabia’s mighty Public Investment Fund (PIF).
This puts Kuwait in a position to think of ambitious megaprojects—not dissimilar to those undertaken by Kuwait’s neighbor and fellow GCC member, Saudi Arabia.
Such megaprojects can enhance Kuwait’s brand image and give it favorable international visibility, while triggering economic growth. If planned wisely and with due consideration, megaprojects are indeed an ideal reinvestment of oil revenues in the country’s infrastructure.
There are several ongoing megaprojects in Kuwait, with more in the pipeline. In July 2023, the Kuwaiti government unveiled its four-year program for 2023-2027, which “included 107 major projects covering all economic, social, entertainment and human resources fields to be completed through to 2027,” according to Kuwait Times.
Some of these projects, however, will stand out more than others, including a colossal tower which is expected to become the world’s tallest man-made structure.
Kuwait National Rail Road
Kuwait has not had any significant railway infrastructure so far, but this is about to change soon, as Kuwait will be part of the proposed Gulf Railway project, which will link up all six members of the Gulf Cooperation Council (GCC) with rail tracks.
In the meantime, the country is working on its own national rail road system, for whose first phase USD3.25 billion has been earmarked.
“Local and international consultancy firms are participating in the tender for a study and detailed design work for the Kuwait National Rail Road (KNRR) project,” reported Middle East Business Intelligence (MEED) in 2023.
Kuwait Islands Development
Off the northwestern coast of Kuwait City, are the islands of Bubiyan, Warba, and Failaka. The largest of them, Bubiyan, has a larger surface area than Kuwait City and Kuwait Bay combined.
Failaka was perhaps the earliest one to develop with a price tag of USD5 billion. The country’s Mega Projects Administration formed the Failaka Development Consortium which completed the island’s master plan in 2005.
The work, however, is far from over. The country is planning to spend the whooping sum of USD160 billion over the next two decades on the development of the three said islands as well as the smaller islands of Maskan and Aouha. This is while Kuwait has already spent billions of dollars on the development of the islands.
On the island of Bubiyan, meanwhile, one of the largest and most sustainable ports of the Middle East is under construction. Mubarak Al Kabeer Port is Kuwait’s attempt to establish itself as a leading shipping hub. The mega project is jointly funded by Kuwait and China as part of Beijing’s Belt and Road initiative.
Bids were announced for three new segments of the Mubarak Al Kabeer Port megaproject in 2023. “The cost of the project ranges between USD990 million and USD1.32 billion, and the scope of work includes the construction of protective walls, buildings, roads and other facilities,” reported The Kuwait Times.
Just across the bay from the island of Bubiyan, in Subiya on mainland Kuwait, lies yet another mega-project. Silk City, or Madinat Al Hareer as it is called in Arabic, is the largest waterfront project in the region—and soon in the world if all goes according to plan.
This project, too, will be partly funded by China’s Belt and Road initiative. It is going to be one of the costliest infrastructure projects in the history of Kuwait. Silk City’s causeway, alone, was built at the cost of USD3 billion in 2019.
The entire project will cost more. Much more! “Kuwait Silk City is expected to be completed reportedly with an estimated cost of USD132 billion,” observed Arabian Business in 2023.
The megaproject has many more features under construction, including a port, a dedicated power plant, and even its own nature reserves. Upon completion it will also house the proposed Burj Mubarak Al Kabeer which will stand at 1,001 meters tall, making it the tallest man-made landmark on earth.
Being the most exciting addition to the city, the colossal tower will come toward the end of the mega-project circa 2035, as the project will be carried out in a phase-by-phase manner. “First the causeway. Then, the port. And, in due time, a skyscraper,” as the Insider Middle East puts it.
International Airport Terminal 2
If Kuwait is to claim its place as an international business hub, it needs to improve its connectivity to the world. To begin with, Kuwait City Airport will have to raise the capacity of its arrivals to over 2 million per month, hence the idea of Kuwait International Airport Terminal 2.
Terminal 2 will be able to handle up to 50 million passengers per year upon the completion of its third phase. The first phase which began in 2017 will cost no more than USD1.5 billion—a reasonable price tag compared to those attached to the country’s other megaprojects.
“The Terminal 2 (T2) at the Kuwait International Airport (KIA) is being developed by the airport’s operator Directorate General of Civil Aviation to transform it into a new regional air hub in the Gulf,” according to the Airport Technology magazine.
Terminal 2 may become operational in late 2023 or early 2024, and it will be a fitting gateway to the Kuwait of future as portrayed in Vision 2035.