Kuwait has a small, relatively open economy dominated by the oil industry and the governmental sectors. The public sector plays an important role in Kuwait’s economic, as governmental expenditure is the economic drive, but also the main employer (20% of total work force). Confirmed crude oil reserves are of around 98 billion barrels which stands at 8% of global reserves.
These reserves are completed by other 5 billion barrels in the Neutral Zone, jointly exploited with Saudi Arabia. According to official data, the oil sector has a 50% contribution to the GDP, generates around 95% of export revenues and 85% of governmental revenues.
The global financial and economic downturn had a quite serious impact on Kuwait’s economy, especially due to the fall of the demand and the global increase of oil prices. However, Kuwait’s economy has recovered rapidly, the real GDP increasing by 4.5% in 2014 and expected to increase by 5% in 2015. Nevertheless, Kuwait plans to reduce oil dependency focusing on the development of other economic sectors. One of these sectors is railway transport.
Consequently, Kuwait is part of the group of countries in the Persian Gulf (Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates) that will be connected by a railway network. The countries part of the Gulf Cooperation Council (GCC) plan to invest over USD 200 Billion for railway projects, including metro, tram and rail station, by 2020. Kuwait’s Government announced the approval of the Development Plan 2015-2020, according to which a metro network will be built in Kuwait, the railway to the GCC countries and other major projects.
Kuwait’s government representatives have advanced estimates of around USD 7 Billion for the 171-km long metro network and of around USD 20 Billion for the ambitious railway project that would provide connection to the GCC network. In January 2015, the first phase of the railway project received the green light from Kuwait Municipal Council.
According to feasibility studies, Kuwait’s railway network will be 511-km long, double track. The railway system will serve both freight and passenger transport. The network will be designed for speeds between 120 and 200 km/h. Most probably, the construction of the railway network will be initiated in 2017.
by Elena Ilie
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