meed-logo

line1 line2 line3
SIGN IN / REGISTER

Kuwait election gives hope to businesses

13 June 2023

 

Kuwait’s recent snap election has offered a glimmer of hope to businesses with its promise to form a government freshly mandated to make key policy decisions to help revitalise the country’s economy.

The vote took place on 6 June after Kuwait’s constitutional court in March annulled the results of last year’s election and reinstated the previous parliament elected in 2020.

Opposition lawmakers won 29 of the legislature’s 50 seats, according to results published by the official Kuwait News Agency.

While the make-up of the new parliament is similar to the one elected last year and later annulled, with all but 12 of its 50 members retaining their seats, business leaders say there is potential for ending the country’s political deadlock.

“It’s still a difficult situation,” said one source. “After a couple of days have passed, we will have a much clearer picture of the situation and whether or not a government is going to be formed.”

Picking a prime minister

A key indicator as to whether the country will break the political deadlock will be whether a prime minister is named over the coming days and who that prime minister is.

One source said: “It is possible that, if the right person is named as prime minister, the political deadlock will be broken, a government will be formed, and the key strategic economic decisions that need to be made will be pushed through.”

Turnout reached 50 per cent one hour before polls closed, according to the Kuwait Transparency Society, a non-governmental organisation. Last year’s election saw a turnout of 63 per cent.

While lawmakers are elected, Kuwait’s cabinet ministers are installed by the ruling Al-Sabah family, which maintains a tight hold over political life.

Continual standoffs between the branches of government have prevented lawmakers from passing economic reforms, while repeated budget deficits and low foreign investment have added to an air of gloom.

Speaking after the new parliament was elected, Janan Bushehri, the new parliament’s only female member, said she expected it “to seek stability and move ahead on outstanding issues, whether political or economic”.

Far-reaching ramifications

The country has seen a dramatic contraction in the value of its oil and gas projects market over recent years as the political deadlock has blocked approvals for major infrastructure projects in the sector.

Between the start of 2020 and the start of May this year, the total value of all active oil, gas and chemical projects in Kuwait declined by 65 per cent from $67.1bn to just $23.5bn.

Many industry stakeholders believe that breaking the political deadlock is essential for reversing the contraction seen in the country’s oil and gas sector.

The interim government has only approved essential projects such as maintenance. It has avoided making decisions on major strategic projects, such as the planned $10bn Al-Zour petrochemicals complex being developed by state-owned Kuwait Integrated Petroleum Industries Company (Kipic).

Kuwait is also struggling with an increasingly unsustainable public sector wage bill that has stifled productivity in both its private and public sectors.

This is unlikely to be resolved without strong leadership and an end to the political impasse.

Reform requirements

In the absence of strong leadership, the country will likely struggle to catch up with other nations in the region that have enacted economic reforms, particularly taxation.

In 2017, Kuwait agreed, along with its co-members of the Gulf Co-operation Council, to introduce value-added tax, but has yet to implement it or announce a set date for doing so.

The IMF has also encouraged Kuwait to introduce taxation such as excise duties, expand corporate tax to domestic firms and implement property tax.

On 5 June, the IMF issued a statement saying: “The dominance of oil in the economy, coupled with global decarbonisation trends, necessitates fiscal reforms to reinforce sustainability, and structural reforms to boost non-oil private sector-led growth.

It noted that Kuwait has benefitted economically from higher oil prices over recent years – helping its economy recover from the pandemic – with fiscal and external balances strengthening and financial stability being maintained.

However, it added: “Political gridlock between the government and parliament has hindered reform progress, which could be made now from a position of strength.”

The IMF highlighted the failure to enact reforms as a key risk for the country’s economy.

It said: “Delays in needed fiscal and structural reforms could give rise to pro-cyclical fiscal policy and undermine investor confidence while hindering progress towards diversifying the economy and enhancing its competitiveness.”

Though the chance of a new strong political leadership emerging from the latest election remains slim, if it does occur, it could be transformational for the country by accelerating needed fiscal and structural reforms, boosting investor confidence and stimulating private investment.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10933769/main2540.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Lebanon sets October deadline for power generation projects

    23 September 2026

     

    Lebanon’s Electricity Regulatory Authority (ERA) has extended the deadline for private sector companies to submit expressions of interest (EoIs) for several upcoming power generation projects.

    The new deadline is 15 October. The original deadline was 30 September.

    The regulator said the extension follows “requests received from interested applicants for additional time to finalise and submit the required documentation”.

    The EoI covers up to five grid-connected solar photovoltaic projects with a combined installed capacity of 350 megawatts-peak. The projects are also expected to include battery energy storage systems with a combined capacity of 1,000 megawatt-hours. 

    The regulator is also seeking proposals for distributed dual-fired thermal power plants with net capacities ranging from 20MW to 100MW. The plants are expected to run on natural gas as the primary fuel and heavy fuel oil as a backup. 

    The ERA invited companies to submit EoIs at the beginning of August.

    On 11 August, the ERA issued its first set of clarifications following queries regarding the EoI. The clarifications confirmed that “proposed dual-fired plants should be gas-ready”, with natural-gas infrastructure planned but no implementation timeline yet available.

    The ERA also said key power purchase agreement (PPA) terms, including duration, tariff structure and indexation mechanisms, will be determined “during a future procurement process”.

    Electricity reforms

    The EoI comes as the government advances wider reforms to Lebanon’s electricity sector. On 4 September, the Higher Council for Privatisation and Partnership discussed steps to transform the state utility Electricite du Liban (EDL) into a company, including creating a new entity, transferring its assets, and taking measures to protect employees’ rights during the transition.

    The government said the restructuring aims to improve the financial sustainability of the electricity sector, recover costs and improve electricity supply. 

    On 18 September, the council discussed a draft decree to establish the new EDL company, evaluate its assets and separate its activities. However, it deferred a decision for further study.

    The ERA was established earlier this year, more than two decades after it was envisaged under Law No. 462/2002 but not implemented due to political delays. The Energy & Water Ministry and EDL previously oversaw the electricity sector.

    Lebanon’s electricity sector continues to face insufficient generation capacity, fuel supply constraints, ageing generation assets and limited grid flexibility. These challenges have led to prolonged electricity shortages and increased reliance on private diesel generation and distributed solar systems, prompting the government to seek additional private investment in new generation capacity. 

    According to the EoI document, the projects are expected to be structured as independent power producer (IPP) schemes. The competent public authority will determine any future contractual arrangements, including PPAs, under the applicable legal framework. 

    The ERA said the EoI is open to private investors, IPP operators, engineering, procurement and construction contractors, equipment suppliers and consortiums. It aims to assess market interest, identify potential generation projects, and evaluate the technical and financial capabilities of prospective developers. 

    Respondents must provide information on their technical and financial capabilities, proposed project locations, grid connection plans and relevant project experience. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19906210/main.jpg
    Mark Dowdall
  • Jedco maps next phase of Jeddah airport expansion

    22 September 2026

     

    Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

    The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

    The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

    The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

    Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

    The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

    T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

    The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

    Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

    In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

    Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

    Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

    These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19877992/main.jpg
    Yasir Iqbal
  • Contractor wins $105m Medina university hospital deal

    22 September 2026

     

    Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

    The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

    Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

    The contract duration is three years, with delivery targeted for late 2029.

    The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

    The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

    Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

    Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19870032/main.jpg
    Yasir Iqbal
  • Fourteen contractors bid for Oman dam drainage project

    22 September 2026

    Fourteen contractors have submitted bids for a major drainage project designed to manage flows downstream of Oman’s Al-Khawd Recharge Dam and strengthen flood protection in Al-Seeb, Muscat Governorate.

    The proposed works will manage flows downstream of the Al-Khawd Recharge Dam and reduce flood and erosion risks around Al-Khawd village and surrounding assets. The project site includes remote wadi reaches, with access constraints expected to affect construction logistics and temporary access arrangements. 

    Oman’s Ministry of Agriculture, Fisheries & Water Resources (MAFWR) is the project client.

    Bidders submitted their main contract bids on 14 September, with prices ranging from about $126m to $390m.

    The bidders and their prices are:

    • China International Water & Electric Corporation: $125.94m
    • Eksen Project Construction Tourism & Trade (Turkiye): $149.09m
    • Ozkar Construction (Turkiye): $149.71m
    • United Thumtait Lines (Oman): $149.80m
    • Portex Construction Industry & Trade (Turkiye): $154.67m
    • Galfar Engineering & Contracting (Oman): $154.80m
    • The Arab Contractors (Egypt): $159.70m
    • Yildizlar Grup (Turkiye): $172.03m
    • Hindustan Construction Company (India): $182.15m
    • Strabag Oman (Oman): $205.80m
    • AZ Engineers (Oman): $231.19m
    • Sarooj Construction Company (Oman): $232.33m
    • The Egyptian Contracting Company (Egypt): $239.25m
    • Al-Adrak Trading & Contracting (Oman): $389.93m

    The project scope includes a drainage network, channel lining and bed protection works, pipelines and concrete box culverts. 

    MAFWR appointed Muscat-based ARQ and Partners Consulting Engineers to carry out the design works in July 2025. The main contract tender was subsequently issued in May 2026. 

    Dam pipeline

    In parallel, Oman continues to advance a pipeline of major flood protection schemes across the sultanate.

    In August, MAFWR received bids from nine contractors to construct the Wadi Rijma flood protection dam (R2A) in Liwa, North Batinah Governorate.

    The Wadi Rijma dam project is one of four flood protection dams being planned in the sultanate to intercept floodwaters flowing from the northern Omani mountain range into the coastal plain.

    In June 2025, MEED reported that the Islamic Development Bank (ISDB) had extended a $632m loan to the ministry to fund the construction of four major flood protection dams in the sultanate.

    The four projects are:

    • Wadi Al-Khoud Flood Protection Dam (AK01) in Seeb
    • Wadi Rijma Flood Protection Dam (R2A) in Liwa
    • Wadi Majlas Flood Protection Dam in Qurayat
    • Wadi Ahin Flood Protection Dam in Saham North

    In June, the ministry invited contractors to bid to construct the Wadi Al-Khoudh flood protection dam in Wilayat Al-Seeb, Muscat Governorate, reviving a project that had been on hold since 2019.

    The design review and supervision services contracts have been awarded for both the Wadi Majlas Flood Protection Dam and Wadi Ahin Flood Protection Dam projects.

    The contracts were awarded to local firms Al-Abraj Consulting Engineering and Atlas International Engineering Consultants, respectively. The main contract tenders for these projects are expected to be released by the end of the year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19868201/main.jpg
    Mark Dowdall
  • Oman tenders Thumrait Industrial City infrastructure

    22 September 2026

     

    Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

    The tender was issued on 14 September, with bids due by 12 November.

    The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

    In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

    The first phase of the development will cover about 120,000 square metres (sq m).

    Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

    The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

    In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

    According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

    The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

    Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19866218/main.jpg
    Yasir Iqbal