KUWAIT, 10 November 2004 — Kuwait has approved a multi-billion-dollar plan to develop its Boubyan island into a commercial seaport in a bid to position the Gulf Arab state as a main gateway for Iraq’s rebuilding.
Trade and Industry Minister Abdullah Al-Tawil told Reuters on Monday that the Council of Ministers gave its approval during its weekly meeting on Sunday to the plan to build the strategic port at the entrance to the northern Gulf.
“The plan was officially approved and the go-ahead was given to the company doing the detail studies,” Tawil said.
“We will see the first four berths in Boubyan port in 2008, God willing.”
OPEC nation Kuwait, which controls nearly a 10th of global oil reserves, was the region’s premier trade hub in the 1970s, but now faces competition from more established centers such as Dubai and Bahrain after investors were scared away by the 1980-88 Iraq-Iran war, then by Iraq’s 1990 invasion of Kuwait.
But with increased domestic security after the fall of former occupier Saddam Hussein in a US-led war last year in Iraq, Kuwait now wants to lure billions of dollars in foreign direct investment and regain its former role as a trade hub.
“This is going to be one of the important and vital projects for the coming period,” state news agency KUNA said. “It boosts Kuwait’s role as a key station in the regional and international transport system.
“It’s expected that there will be big growth in demand for inbound and outgoing goods from northern Gulf ports as a result of the recent political changes in the region.”
The plan, which does not need parliament’s approval, calls for setting up a special company to oversee the project, which could cost as much as $3.47 billion over a possible 30-year lifespan to finish various stages, Tawil said. He said the government would spend about $1 billion initially on building infrastructure, including berths.
But the private sector will build the quays and piers, and will be responsible for container docks and transport systems such as a rail road, bridges and highways, if needed.
“The initial cost to the government will be about $1 billion for infrastructure but the private sector will take care of the rest,” he said. “It will be run by private sector.”
The design, financial studies and tenders will be finished during 2005 while actual works are expected to start in early 2006, the minister added.
Asked how many tenders will be issued, he said: “There’s dredging, buildings, highways, there are many things.”
The Cabinet formed a committee to follow up the plan headed by Housing and Public Works Minister Badr Al-Humaidi, and grouping Tawil and Energy Minister Sheikh Ahmad Al-Fahd Al-Sabah as well as officials from related fields, said Al-Qabas daily.
“There’s going to be a massive port...it will be a huge push for the Kuwaiti economy,” Humaidi said in September.
Kuwait has six ports, three used to export petroleum and refined products and three for non-oil commerce.
According to KUNA, Boubyan’s construction will be divided into three stages to end in 2016. It said the port was expected to start receiving vessels at the end of 2008 with four berths that give it a capacity of one million containers per year.
But with addition of three berths, capacity will rise to 1.5 million containers then 2.5 million containers later to meet rising demand at the end of the next two decades.
KUNA said the collective capacity of the key five commercial ports in the norhtern Gulf - Kuwait’s Shuwaikh and Shuaiba and Umm Qasr, Zubair and Basra in Iraq - now stood at 40 million tons yearly. But an additional 28 million tons per year would be needed due to higher demand from the two countries.
The United Nations Development Program (UNDP) said in October some $120 million was needed to fund lifting of sunken ships blocking access to Iraq’s main northern Gulf seaports. Many were sunk by military action in the Iran-Iraq war, the 1991 Gulf war and the US-led invasion of Iraq last year.