PROJECTS: Kuwait's $6.5bln Mubarak Al Khabeer Port project put on hold

New tenders and awards expected for ports and logistics cities under 2035 plan - KPA Chief

  
Image used for illustrative purpose. Fire erupted aboard the Cormo Express carrying 50,000 Australian sheep at Kuwait's Shuwaikh port where it docked after Saudi Arabia rejected it on health grounds, an Australian official and Kuwaiti newspapers said October 6, 2003.

Image used for illustrative purpose. Fire erupted aboard the Cormo Express carrying 50,000 Australian sheep at Kuwait's Shuwaikh port where it docked after Saudi Arabia rejected it on health grounds, an Australian official and Kuwaiti newspapers said October 6, 2003.

REUTERS/StephanieMcGeheeWS

Kuwait has put on hold its $6.5 billion Mubarak Al Khabeer Port project in Boubiyan Island, a top official at Kuwait Ports Authority (KPA) said. The port was a key component of the first phase of the $86 billion Silk City (Madinat Al Hareer) project planned in northern Kuwait near the Iraq border.

"The port project has been put on hold pending further feasibility study, but the land is available for other projects like power generation and water desalination," said Sheikh Yousef Al Abdullah Al Sabah Al-Nasser Al-Sabah, Director General, KPA and President, Arab Sea Ports Federation.

"There are many factors to be considered regarding this project. We had a team from DP World visit the port a couple of years ago. There are certain reservations due to environmental factors," he said, speaking at an event organised by Transport Events last week.

"Given the shallow water depth at 1-1.5 metres, dredging costs are going to be tremendous, and the port doesn't look feasible or profitable. The project has also caused geopolitical tensions with our neighbours. And now we are on the edge of an economic crisis due to COVID-19 induced low oil prices."

The project has been on the drawing board for almost a decade-and-a-half. A February 2019 report by official news agency KUNA said a Chinese delegation held discussions with authorities to develop the port as part of the first phase of the Silk City project, a key GCC component of the Belt and Road Initiative.

The project was also part of the New Kuwait 2035 plan, which includes 11 other projects - three port development projects at Doha, Shuaiba, Shuwaikh, four logistics cities, a dry port, and a smart port project, and two marina developments.

Project updates

Regarding the 11 projects that form part of the 2035 plan, Nasser Al-Sabah said KPA would be issuing a design tender for the Smart Port project within the next two weeks.

For Shuwaikh port, he noted that "the infrastructure development tender award will be announced soon. A design tender for the expansion of the Shuwaikh port has been issued. We are planning for six berths with a total berth length of 1.8 km compared to three berths now. It will be a big port spread over at least 1 million square metres (sqm) of reclaimed land and capacity of 1.5 to 2 million TEUs. We are also studying the possibility of the port to be fully automated or semi-automated."

The KPA official disclosed that Jacobs is the design consultant for the Shuaiba port expansion project.

"A tender for infrastructure development has been issued, and we are waiting for the award," he said.

"The Doha port expansion will be implemented on reclaimed land as a recreational centre and include a commercial project and a marina. We have not yet decided what the final design would be," he said.

The Dry Port project is planned to be developed over an area of 1 million sqm west of Shuaiba port, with a bridge linking the two ports to facilitate direct transit of trucks bypassing the Shuaiba industrial zone and avoid long waiting hours at the border," Nasser Al-Sabah said.

KPA is also developing two marinas, namely Marafi Fintas and Al Mahboula Marina. Marafi Fintas would be developed over a land area of 365,000 sqm with a 1.8 km waterfront and accommodate 2,000 boats, 800 yachts, shops, restaurants, hotels, and one of the biggest malls in the region.

"Royal Haskoning...has transformed my vision for the marina into a beautiful design, and construction will now begin in two months," he said. Al Mahboula Marine project is still at the planning stage and would also include a fish market and heritage landmarks," he added.

Logistics cities

Four logistics cities have been planned to make Kuwait a regional logistics hub.

"The cities will occupy an area of 317,355 sqm at Shuwaikh port, 300,000 sqm at Doha port, another 270,000 sqm at Doha port and 1,000,000 sqm at Mina Abdullah port. We recently issued the engineering design tender for all four locations after an eight-month delay due to coronavirus," he said.

KPA currently makes a profit of 50 million Kuwaiti dinars on a revenue of 100 million dinars. "We expect these projects, including the industrial port, to take the revenues to about 300 million dinars and profits up to 180-200 million dinars," he said.

KPA is also looking at hiving off assets into a separate holding company while continuing as a supervisory body for the ports sector, he said.

(Reporting by Somwya Sundar; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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