Kuwait Contracts With Chinese Company to Build Port in Northern Gulf
The Kuwaiti government has signed a preparatory engineering, procurement and construction contract with a Chinese state-owned construction company for the first phase of the Mubarak Al-Kabeer Port, to be built on Bubiyan Island. The new port, very much a brown field site, is a flagship initiative in the delivery of Kuwait’s Vision 2035 strategic development project.
Chinese diplomats at the signing ceremony on December 22 were clearly delighted with the contract win for the China State Company for Communications and Construction, describing it as a key pillar of Chinese Communist Party’s global Belt & Road Initiative.
Low-lying and marshy Bubiyan Island is largely uninhabited at present – some would say for very good reason, because the local climate, in terms of temperature and humidity, is at global extremes. Theoretically, the island is close to Basra in Iraq, and Abadan and Ahvaz in Iran, both major trade hubs. But whether politics and vested local interests can be overcome to develop feeder services to exploit this potential hinterland is another matter.
Interestingly, the contract was signed not on a Build, Operate Transfer basis, but as a straight preparatory works construction contract. This leaves in some doubt who will operate the port once completed, given that the technology installed will make it easier for a port operator such as China Merchants to take on the role.
Kuwait has its own publically-owned port operating company. JTC, quoted on the Kuwaiti Stock Market and its board dominated by members of the Kuwaiti royal family, operates both the existing ports of Shuwaikh and Shuaiba servicing Kuwait, as well as in Saudi Arabia, and provides a broad range of logistics as well as port services. Its accounts suggest that it is a small but successful company, making a profit in 2024 of $21.5 million on revenue of $93 million. Kuwait is also home to the global logistics company Agility, so there is in-country experience in depth to take on the operating role.
The governmental system in Kuwait, where a parliament exercises strong oversight, is often beset by delays when it comes to capital expenditure projects, and this project is still at the pre-implementation phase. Hence the Mubarak Al-Kabeer Port is being launched at a time when other GCC countries have already delivered their strategic port hub projects and captured market share. If the Kuwaiti project is to succeed, not merely taking over domestic traffic which flows through the existing Kuwaiti ports but seizing a share of regional trade, it will have to deliver substantial cost and efficiency advantages over what are now well-established competitive rivals.