Kuwait Invests Big to Capitalise on Its Commercial Potential

A recent World Bank report ranked Kuwait in 36th place out of 155 countries in terms of the movement of goods and services through its ports, but traffic congestion at existing locations has prompted significant investment into new facilities in order to capitalise on commercial potential and secure gateway status for the Northern Gulf region.

The Gulf state’s $1.2bn Mubarak Al Kabir megaport project on Boubyan Island in the north-east of the country, is the poster child for the future of Kuwait’s maritime sector, and senior port authority officials including HH Sheikh Dr Sabah Al Jaber Al Ali Al Sabah, President of the Arab Transport Sector, Head of the Arab Sea Ports Federation and Director General of Kuwait Ports Authority, will lead Kuwait’s participation at Seatrade Middle East Maritime (SMEM) 2012.

The leading maritime event for the region, SMEM 2012 exhibition and conference returns to Dubai from 27-29 November, with international visitors and high profile industry experts heading to the UAE to discuss and analyse the state of the regional maritime sector.

HH Sheikh Dr Sabah Al Jaber will be a keynote speaker at the opening session of the three-day conference, as part of a panel of industry leaders from across the region, who will discuss the state of the industry.

“Capacity utilisation for Kuwait’s busy ports stood at 77% in 2011, a figure that the government is looking to boost with significant investment into terminal infrastructure at existing locations, as well as the long-awaited debut of the Mubarak Al Kabir megaport project, which is tentatively scheduled for 2016-17,” said Chris Hayman, Chairman of Seatrade.

A 2012 Oxford Business Group report noted that Kuwait’s two main ports at Shuaiba and Shuwaikh are both facing capacity boundaries, with a combined capacity of 1.2 million TEUs, as well as challenges due to the shallow waters surrounding both facilities, resulting in delayed shipment clearance and access for larger vessels.

Berth renovations and the addition of a number of new gantry cranes and equipment at existing facilities is helping to offset any short to medium term capacity handling issues, but in order to realise its economic goals, Kuwait is looking to the Boubyan Island deep-water port as the long term solution.

“Kuwait’s strategic location, with access to Saudi Arabia, Iraq and Iran, makes it a natural transit and transport hub for the Northern Gulf, but with neighbouring nations working on their own infrastructure upgrades, the market is becomingly increasingly competitive,” added Hayman.

According to Jim Robb, general manager for Kuwait and Iraq at Inchcape Shipping Services, the buoyant consumer sector, with its growing levels of disposable income, is boosting retail trade and commercial cargo business for the country’s ports.

Kuwait’s logistics pedigree, which has been largely driven by defence contracts with the US and coalition forces, has also seen the Gulf nation grow its local expertise, with leading international logistics companies including Agility, KGL Holding and Mubarrad Transport resident in the market.

“While Boubyan Island will be a major boost for the logistics sector, the possibility of introducing a rail link – connecting to the proposed GCC rail network – will be a logical next step linking the region’s transportation infrastructure,” remarked Hayman.