Kuwait's Council of Ministers has approved a study on the establishment of a $1.34 billion, 450 square kilometre port on the island of Bubiyan.
A committee from the ministry of public works will oversee construction that is set to begin in 2005.
Speaking at an executive presentation of the study for the Kuwait Fund for Arab Economic Development (KFAED) by Kuwait Consulting and Investment Company (KCCI), Minister of Public Works Bader Al Humaidi said, "Kuwait is preparing for an economic boom and the port in Bubiyan which will have the potential for 3.5 million containers by 2025 will create the base for trade."
The government will foot the $1.34 billion bill for the infrastructure which includes the building of the facility, dredging the channel, two new bridges, a railroad and two new roads.
An additional estimated $135 million will be invested for equipment by a private management company which will be floated in the second quarter of 2008.
Fawzi Al Jouder, General Manager of KCIC, said the master plan for the port, roads, rail and environment protection of Bubiyan will be completed by January 2006.
"The Divided Zone Agreements and Kuwaiti Islands Mega Project Development (DIZART), who represent the Kuwaiti government, will establish the Bubiyan Island Development Company which will in turn have a technical services agreement with a private shareholding company to operate the facility, invest in equipment and promote usage," Al Jouder said.
"The expected rate of return from the facility is 14.2 per cent and the return on investment is expected in 14 years."
There is also a plan to phase out container traffic from the existing ports in Shuwaikh and Shuaiba by 2011 but that is not a must, he said.