VZCZCXRO0318
PP RUEHDE RUEHDH RUEHDIR
DE RUEHKU #0894/01 2511215
ZNR UUUUU ZZH
P 081215Z SEP 09
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 3921
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 KUWAIT 000894 
 
SIPDIS 
 
NEA/ARP 
 
E.O. 12958: N/A 
TAGS: EINV ENGR EWWT ELTN ECON KU
SUBJECT: DELAYED MEGA PROJECT NOW UNDER CONSTRUCTION: 
BUBIYAN PORT 
 
REF: A. 08 KUWAIT 655 
     ¶B. 07 KUWAIT 852 
 
¶1.  (SBU) Summary and Key Points.  On September 3, Econoff 
met with Engineer Adel Abdullah Al-Torke, Chief of Mega 
Projects Sector, Ministry of Public Works (MoPW)to discuss 
the status of the Bubiyan port project.  Key points discussed: 
 
- Status of the Bubiyan port project: project delayed by one 
year, costs estimated to be in excess of 720 million KD; 
- Unexpected environmental challenges caused considerable 
delay; 
- Phase one: transportation corridor infrastructure currently 
under construction: new road, new bridges, and new railway; 
- Phase two: port construction and phase three: dredging 
still in tender stage; and 
- Port location within border demarcated by UN.  End Summary. 
 
Background 
---------- 
 
¶2.  (U) A project to build a new state of the art port on 
Kuwait's Bubiyan Island, conceived in 2003 and slated to 
begin construction in 2006, is finally underway.  The port is 
in close proximity to Iraq and Kuwait international 
boundaries.  The planned port will include a free trade zone 
area, a light industries area, and is expected to relieve 
traffic to existing ports (Shuwaikh and Shuaiba) by providing 
a container station of 2.5 million TEU (equal to 20' 
containers) (ref a & b).  Al-Torke reported that the project 
is currently in phase one:  building the transportation 
infrastructure corridor from Bubiyan to the Sabbiya area, a 
currently undeveloped area located on mainland North of 
Kuwait City center. This area is also slated for future 
development. 
 
2013 Targeted Completion Date 
--------------------------------- 
 
¶3. (SBU) Al-Torke told Econoff that the original project plan 
has not changed but the timeline has shifted by one year.  He 
projected a new target completion date of 2013.  Al-Torke 
reported that the environment was to blame for some of the 
delay and specifically mentioned loose soil which was found 
unsuitable for construction.  He went on to say that the soil 
has been compacted and construction of the new 37 km long 
transportation corridor from the port to Subiya, which 
includes a new road, a new railway, and corresponding 
bridges, is currently underway.   At an estimated cost of 120 
million KD, this infrastructure will accommodate an over all 
increase in traffic to the port including construction 
materials needed to begin phases two and three of the 
project. He opined that delays were not unusual for a 
project, of this ambitious scale, and that it was to be 
expected that plans, timeline, and budget would change 
throughout the project cycle. 
 
Port Construction and Dredging in Tender Stage 
--------------------------------------------- -- 
 
¶4.  (U) Al-Torke stated that the remaining project phase's 
port construction and dredging of the Kuwaiti waterway are in 
the tender stage.  He told Econoff that the MPW was using 
foreign advisors to assist with company pre-qualification 
during the tender process and that the projects would be 
awarded to joint ventures between foreign firms and Kuwaiti 
companies.  He cited Louis Berger as well as China Harbor as 
companies currently involved in the construction.  When asked 
about the maritime border with Iraq, Al-Torke stated that 
Kuwait is following the UN designated demarcation in the plan 
for the port, adding, however, that demarcation of the 
maritime borders with Iraq are under consideration with the 
GOK Minister of Foreign Affairs.  He estimated the cost for 
port construction at 300 million KD and an additional 300 
million KD for dredging (deepening the draught by 20 meters 
to accommodate container ships).  (Note:  MFA sources have 
alluded to discussions with the Government of Iraq in which 
the Kuwait side 
 has agreed to place the landfill resulting from the dredging 
on Bubiyan.  End Note) 
 
Comment 
------- 
 
¶5.  (SBU) Comment.  This "mega project" is designed to help 
the Kuwait's economy diversify from its current reliance on 
oil exports, and when completed, will significantly increase 
Kuwait's cargo handling capacity.  The location is also an 
excellent one for reaching the Iraqi or the Iranian market. 
 
KUWAIT 00000894  002 OF 002 
 
 
Absent significant improvements in Kuwait's business climate, 
however, it is unlikely that the port alone will markedly 
improve Kuwait's diversification, though it will facilitate 
Kuwaiti imports.  Post believes the current timeline to be 
ambitious given the scale of the project and the fact that 
awards have not yet been made for phases two and three.  We 
believe the project is likely to slip and may require 
additional sounding approvals from the GOK as costs are 
re-evaluated.  A map of the project can be accessed on 
Embassy Kuwait's intellipedia Econ portal.  End Comment. 
 
********************************************* ********* 
For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
********************************************* ********* 
JONES