Billion-dollar deals signed for upkeep of Kuwait’s roads

Alamy via Reuters

• Deals with 18 companies
• Three-year maintenance contracts
• Kuwait has worst roads in Gulf

Kuwait has signed road maintenance contracts worth KWD400 million ($1.3 billion) with 18 local and foreign companies.

The three-year contracts aim to improve Kuwait’s 8,400km of roads, which are a persistent source of frustration for residents of the Gulf state.

Khaled Al-Osaimi, head of the Public Authority for Roads and Land Transport, said: “This is the first time in Kuwait that 18 contracts have been signed, covering all areas of Kuwait.”

The companies involved include Limak of Turkey, Al-Mohannadi For Roads from Qatar and the Kuwaiti-listed Combined Group Contracting Company, among others.

A study of road quality by the World Economic Forum in 2019 gave Kuwait the lowest score of any Gulf country.

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The International Monetary Fund said last week that Kuwait’s economy would contract by 3.2 percent this year because of an Opec+ oil production cut. The IMF forecast that the country would grow by 2.8 percent in 2025 as the cuts get unwound, and will grow broadly in line with potential thereafter.

Government spending remains overwhelmingly dependent on oil and gas revenues, with little progress made on diversifying the economy, or in reducing the huge burden of government salaries and welfare payments. 

The government’s fiscal balance swung from a surplus of 11.7 percent of GDP in the 2022-23 financial year to a deficit of 3.1 percent of GDP in 2023-24, after lower oil prices and production, and an increase in spending.