Kuwait in spending spree despite decline in oil revenues
KUWAIT CITY - Kuwait awarded projects worth a record $32 billion last year and plans to raise the figure in 2016 despite a sharp decline in oil revenues, an economic report said Monday.
Last year's awards were 20 percent higher than in 2014, National Bank of Kuwait, the largest lender in the emirate, said in a report.
Over half of the amount spent on projects in 2015 went to the oil and gas sectors, it said.
The awards include a $13-billion contract to build a new refinery with a capacity of 615,000 barrels per day and a heavy oil production facility costing $4 billion.
In the transportation sector, the government awarded a $4.3-billion contract for the airport expansion but the project has not yet been signed.
This year appears to be a bumper year with contracts worth $55 billion expected to be signed before the end of 2016, NBK said.
The projects include a $3.3-billion liquefied natural gas import terminal, a $7-billion petrochemicals project and a natural gas development project worth $5.7 billion, it said.
The government also plans to tender a large number of projects in the power, health and housing projects in 2016.
The investment spending spree comes although Kuwait is projected to post its first budget deficit due to low oil prices, after 16 consecutive years of windfall.
During those 16 years, the Gulf state amassed fiscal reserves of over $600 billion.
In February, parliament approved a five-year development plan that envisages spending 34 billion dinars ($112 billion) between the current 2015/2016 fiscal year and 2019/2020.
Like other Arab states of the Gulf, Kuwait's economy heavily relies on oil which contributes 94 percent of public revenues.