KUWAIT CITY, 1 May 2005 — Kuwait has invited bids for building the first phase of a state-of-the-art container port on Bubiyan Island at a cost of around $2 billion, the emirate’s public works minister said yesterday. About 17 international and local companies have been prequalified for the project which is expected to start operations by the end of 2008 or early 2009, Bader Al-Humaidi told a press conference.
The first phase involves building a 34-kilometer (21-mile) road linking the new port to Iraq’s Umm Qasr port, dredging works and the main infrastructure of the port at a cost of around $1 billion. It also involves building a railway parallel to the road and a bridge that links the island to the mainland at a cost of $400 million, according to the head of the ministry’s mega projects agency, Waleed Al-Thaqeb.
Companies have three months to submit their offers and the ministry will make the selection within a month after that, Thaqeb said. All contracts are expected to be signed before the end of this year, he said.
The government has given the project the green light as part of a major plan to develop Bubiyan — the largest of the emirate’s nine islands — into a free zone, storage area, oil depot and recreational services. The capacity of the port after the conclusion of the first phase will be around one million twenty foot equivalent units (TEUs). Capacity will rise to 2.5 million TEUs a year after the third and final stage in 2016. A private company will be set up to manage the port.
Thirty percent of the company will be owned by a foreign operator and 30 percent by Kuwaiti investors. The remaining 40 percent will be sold in an initial public offering (IPO).
Bubiyan island lies between Iraq, Iran and Kuwait at the northern tip of the Gulf. Following the fall of Iraqi leader Saddam Hussein, Kuwait anticipated a huge increase in the volume of regional container shipping.
Experts expect demand for container trade in Kuwait and Iraq to reach three million TEUs in 2025. Currently there is no container trade in Iraq while Kuwait handles around half a million TEUs a year.