Pandemic-led challenges and bureaucratic hurdles are forcing organizations to keep projects on shelf, many a times after procurers and bidders have incurred substantial costs. Consequently, the following observations emerge.

Key themes

Stable oil revenues to propel economic recovery

The extended run of high oil prices is further bolstering the country’s oil and gas sector. With the country focusing on diversifying its economy, increased oil revenues can encourage investments in other important sectors such as infrastructure that can, in turn, further support GDP growth.


Financial pressure and the push for PPP

Kuwait faces an ever-increasing burden of public wages and social subsidies which continue to exceed its total budgeted revenues (USD 67.9b vs. USD 63.4b in Kuwait’s budget for FY2023–24). This greatly diminishes the government’s ability to allocate funds toward high-investment, long-duration infrastructure projects. The private sector’s role becomes more important than ever in supporting the development of nationally important projects, bringing in capital, technology, operational skillsets and the focus on efficiency, and profitability which is a hallmark of private sector-led projects. Therefore, it is essential for Kuwait to make its PPP program a success to help drive its infrastructure agenda.


Prioritizing procurement

Procurement and supply chain management are now core focus areas for organizations as they seek to anticipate and plan for potential disrupting events, such as the COVID-19 crisis and Suez Canal obstruction. Be it key workforce, material and/or equipment, organizations want them where required in advance and avoid long lead times.


Reluctance to pay and use

The dearth of parking facilities in Kuwait is slowing down the implementation of modern features, such as smart parking. The reluctance toward pay-to-use services is prevalent and further hindering such projects from being carried through, especially in areas with low- to medium-income populations. The more modern assets that are up to date with the developed countries are present only in small pockets.

Customizing unique experiences

While the government predominantly caters to broader groups with blanket needs, private sector involvement can lead to better personalization of services. However, in the long term, far-reaching adjustments to infrastructure value chains can pave the path for improved response times and value generation that can, as a result, support the growth of infrastructure as a service.


Navigating sunk costs and assets

In some cases updating and/or upgrading existing infrastructure may prove to be a more effective and quicker strategy to address capacity issues, compared to greenfield projects. However, as climate change gets increasingly factored into projects, holding on to outdated assets that are at the risk of obsoletion and add to costs and waste is unlikely to solve any of Kuwait’s infrastructure problems. This is considering most of the old assets are kept operational only to be dismantled after new ones are brought in. 


Avoiding urban decay

Between the COVID-19 crisis and the decline in expatriate population, expectations around infrastructure have changed, accelerating the adoption of relatively newer concepts, such as work from home and e-commerce. As a result, developers and institutions are looking to remodel cities, coalescing the work, play and live agendas, to create a fully nurturing ecosystem that appeals to a larger audience.

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Emerging trends in infrastructure

The Kuwait Perspective

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