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
  • Saudi Arabia approves new procurement law

    17 August 2026

    Saudi Arabia’s Council of Ministers has approved a new Government Tenders and Procurement Law (GTPL), introducing changes to public procurement procedures and government contracting.

    The Ministry of Finance announced the approval on 5 August.

    The new law aims to strengthen governance and transparency, improve procurement planning and implementation, and promote fairness and equal opportunities in government contracting.

    The changes give government entities greater flexibility in procurement while introducing new provisions that could affect contractors and suppliers, including contract variations, outstanding payments and procurement procedures.

    Contract flexibility

    According to a Ministry of Finance summary of the key amendments, one of the main changes allows government entities to increase existing contract items by up to 20% of the contract value. Contractor approval is required for increases exceeding 10%, while the total increase from adding new items or increasing existing items cannot exceed 20% of the contract value.

    The amendments also introduce measures addressing outstanding payments to contractors. A government entity cannot make a new award when it has outstanding amounts owed to contractors for works or procurement and the required procedures have not been taken, after notification from the Ministry of Finance.

    Exceptions apply where non-payment relates to ministry procedures or where the government entity has taken the required action on a claim but does not have sufficient budget allocations.

    Single committee

    Under the new law, the committees responsible for opening and examining bids will be merged into a single committee.

    The maximum value for direct procurement will rise from SR100,000 ($26,700) to SR1m ($267,000) while government entities will be required to explain and document their use of direct procurement.

    Direct procurement will also be permitted in cases involving research, development and innovation and certain contracts with professional practitioners.

    The amendments reduce the minimum standstill period following a procurement award from five working days to three working days. Government entities will also be able to negotiate where the best bid exceeds the estimated cost plus the permitted contingency.

    Localisation

    The new framework includes provisions covering industrial localisation and knowledge transfer. The Ministry of Finance said it will issue rules for contracting for these purposes in cooperation with the Local Content and Government Procurement Authority.

    A new regulation will also cover research, development and innovation, including tendering and contracting provisions for these activities.

    Other changes involve contractors’ exposure to penalties. The maximum delay penalty on contracts, excluding supply contracts, will fall from 20% to 15% of contract value. The maximum penalty for non-performance in continuous-performance contracts will also fall from 20% to 15%.

    The value of purchases exempt from providing a final guarantee will rise from SR100,000 ($26,700) to SR300,000 ($80,000). Additional exemptions will apply to contracts with professional practitioners and emergency or urgent cases.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18805103/main.jpg
    Mark Dowdall
  • GCC reviews first phase of water interconnection study

    17 August 2026

    The GCC General Secretariat has completed the first phase of a study examining the feasibility of developing water interconnection projects between GCC member states.

    A two-day workshop reviewing the study’s findings concluded on 12 August at the headquarters of the GCC Interconnection Authority (GCCIA) in Dammam, Saudi Arabia.

    The GCC General Secretariat organised the workshop in cooperation with GCCIA, with representatives from relevant authorities and experts in water, infrastructure and water security taking part.

    Participants reviewed the first phase findings, including an assessment of existing water supply infrastructure and the actual water needs of GCC member states. They also discussed the technical requirements and data needed to complete the study.

    The study is intended to identify practical options and feasible solutions for developing a regional water interconnection network. This includes establishing an implementation roadmap.

    The initiative aims to improve the GCC states’ ability to respond to emergencies and crises and support continuity of water supplies.

    First meeting

    The workshop followed a virtual meeting on 22 July between the GCC General Secretariat and Saudi Arabia’s water authorities as part of the study.

    That meeting, which also involved consultancy Artelia, reviewed the study’s methodology and implementation stages. These include assessing existing water systems across GCC states, their resilience and emergency readiness, and developing technical options for bilateral water interconnection projects.

    In Saudi Arabia, the study is focused primarily on the Eastern Province and Riyadh. It is assessing water production and desalination facilities, transmission pipelines, strategic reservoirs, pumping stations and existing and planned projects.

    The study is also examining potential bilateral connections between Saudi Arabia and Bahrain, Kuwait and Qatar, as well as the possibility of a connection with the UAE.

    The 22 July meeting also discussed potential connection points and routes, water flow directions and the possibility of designing interconnection pipelines to operate in both directions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18802726/main.jpg
    Mark Dowdall
  • Neom’s next phase is crucial to green hydrogen pipeline

    17 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The completion of construction at Neom Green Hydrogen comes at an important point for Saudi Arabia’s wider hydrogen ambitions.

    The project has already shown that a large green hydrogen scheme can secure financing by reaching financial close in 2023 with long-term offtake from Air Products.

    With the facility now moving into commissioning ahead of a targeted commercial operations date next year, Neom could soon give lenders and developers real evidence on the performance, costs and risks of a large-scale green hydrogen project.

    That could be important for projects still moving through development. Acwa’s Yanbu Green Hydrogen Hub, for example, is targeting commercial operations in 2030.

    The project has brought in Germany’s EnBW as a co-developer and minority investor and Japan’s Itochu as a co-developer, investor and offtaker. Acwa is targeting production of 2.5 million tonnes a year of green ammonia from the hub.

    Saudi Arabia is also putting more of the framework around the industry in place. In July, the government granted Acwa exclusive rights to export green hydrogen produced in the kingdom along with its derivatives, including green ammonia, methanol and fuels.

    However, partnerships and policy support alone will not remove the commercial questions facing projects. Yanbu still needs to progress through development and secure the financing needed to move into construction.

    Neom’s financing structure and 30-year offtake may be specific to the project, but its operating performance should give future developers and lenders a clearer reference point for assessing production, reliability and costs.

    While Neom will not make the next projects bankable on its own, if it stays on track and performs as expected, it could give lenders a stronger basis for assessing projects that follow. In the long-run, this could be one of its most important contributions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800285/main.jpg
    Mark Dowdall
  • Five bid for King Salman Bay construction work

    17 August 2026

     

    Five teams have submitted bids for the contract covering the marine infrastructure works at King Salman Bay on the Red Sea coast, north of Jeddah.

    MEED understands that the bids were submitted on 31 July.

    The bidders include:

    • Deme / Archirodon (Belgium/Netherlands)
    • ⁠Van Oord (Netherlands)
    • ⁠Abdulmohsen Altamimi / NMDC Group (local/UAE)
    • ⁠Urbacon / Negida Contracting  (Qatar/Egypt )
    • ⁠Modern Building Leaders / China Harbour (local/China)

    The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres.

    King Salman Bay is expected to be a waterfront development that aims to reshape the city’s northern Red Sea frontage into a mixed-use destination, anchored by public-realm improvements and leisure-led development.

    Saudi gigaproject developer Red Sea Global (RSG) is developing the project.

    The latest development follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a materials recycling facility, a transfer station, an administration building and a vehicle maintenance building.

    In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18800910/main.jpg
    Yasir Iqbal
  • PDO allows more time for Al-Ghubar field project prices

    17 August 2026

     

    Petroleum Development Oman (PDO) has allowed contractors additional time to prepare commercial bids for a project to build a new facility to handle additional oil production from the Al-Ghubar field in the sultanate.

    The Al-Ghubar field is located in the Ghaba Salt Basin at Qarn Alam, within majority state-owned PDO’s Block 6 concession area.

    The Al-Ghubar gas-oil gravity drainage (GOGD) facility will be designed as a sour (hydrogen sulphide) facility and is expected to handle maximum oil production of 1,800 standard cubic metres a day (cm/d), a maximum total water flow rate of 10,421 standard cm/d, and maximum gas lift of 256,934 standard cm/d. Production from the planned Al-Ghubar GOGD facility will be exported to PDO’s main oil line.

    Following receipt of the technical bids for the project in July, PDO granted contractors additional time – until 16 August – to submit commercial bids for the project, MEED recently reported.

    The project operator has now extended the deadline for submitting commercial bids to 1 September, sources told MEED.

    PDO floated the tender for the Al-Ghubar GOGD facility project in March, setting an initial bid submission deadline of 4 May, MEED previously reported.

    PDO later extended the deadlines for submission of technical and commercial bids to 26 July and 7 August, respectively. Contractors submitted technical proposals by the revised deadline, according to sources.

    The following contractors, among others, are understood to be bidding for the project:

    • Archirodon (Greece)
    • Engineering for the Petroleum & Process Industries (Egypt) / Petrojet (Egypt)
    • Jereh (China)
    • Kent (UAE)
    • Larsen & Toubro Energy Hydrocarbon (India)

    The scope of work on the Al-Ghubar GOGD facility project covers the engineering, procurement and construction (EPC) of the following:

    • On-plot scope consists of:
      • Production separator  
      • Test separator  
      • Concentric wash tank
      • Wet oil pump
      • Water bath heater
      • Surge tank
      • Gas injection/gas lift compressor (centrifugal)
      • Utilities (Instrument Air compressors, chemical injection skids, drain system, vent system) 
      • Suction scrubber
      • Air coolers
      • Discharge scrubbers
      • Condensate flash drum
      • Atmospheric pressure knock-out drum 
      • Flare system
      • Gas heater
      • Water disposal pump
      • Oil shipping pump
      • New 132kV substation and plant substation (housing 6.6kV & 415-Volt switchboard)
      • New control room
         
    • Off-plot scope consists of:
      • Off-plot pipeline network (bulk header, test header, gathering infrastructure/ gathering line header, instrument air header, water disposal header)
      • Two remote manifold stations 
      • Tie-in connection to main oil line
      • Tie-in to gas network pipeline

    PDO previously intended to tender the Al-Ghubar GOGD project under its framework structure with selected EPC contractors, but eventually tendered it separately.

    PDO is the operator of the Block 6 hydrocarbons concession in Oman, which is the sultanate’s largest and most prolific concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields, with PDO producing a total of approximately 680,000 barrels a day (b/d) of oil and condensates from those fields.

    The Omani government holds a 60% stake in PDO through Energy Development Oman (EDO). The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s state-owned PTTEP (2%).

    ALSO READ: PDO floats tender for major flare gas monetisation scheme
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18799485/main.jpg
    Indrajit Sen