Failaka Resort project will cost about KD 205mn to ensure implementation

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KUWAIT CITY, June 10: According to informed sources, the latest developments in the Failaka Resort project and the proposed steps to ensure its implementation would cost about KD 205 million, of which KD 130 million is the volume of capital expenditures. About KD 75 million will be borne by the government for infrastructure purposes. It is expected that the number of its visitors will reach about 300,000 annually, reports Al-Qabas daily. According to a recent study by the Touristic Enterprises Company that was reviewed by the Council of Ministers, it is impossible to achieve economic feasibility for any project the size of Failaka Resort within three years, as it requires legislative amendment so that the period of offering to use the Failaka Resort is 30 years or more. An internal revenue return can then be achieved at a rate ranging between 11 and 13 percent for it to be attractive to private sector investors.

Study
The study expected that the project would contribute about KD 80 million to the gross domestic product by 2035, and would provide about 3,000 job opportunities, assuming that the lease contracts are for a period of 30 years. This would enable the concerned authorities to attract specialized foreign companies to invest and contribute to its development and operation. In addition, with the aim of filling the shortage of recreational products in the country, the executive authorities are accelerating their preparatory steps aimed at rebuilding the Failaka Resort affiliated to the Touristic Enterprises Company, and reviving it as an entertainment and tourist destination in the southwest part of the island.

According to relevant sources, the government’s vision, which was recently presented by the Touristic Enterprises Company to the Council of Ministers, includes the establishment of luxury and family resorts along the west coast of Failaka Island, along with a group of chalets on the beach, and a central area designated for retail stores and the public square. The Touristic Enterprises Company’s study identified the most important requirements of the project and its economic feasibility. Its cost amounts to about KD 205 million, of which KD 130 million is the volume of capital expenditures, in addition to approximately KD 75 million for infrastructure. It is expected that the number of visitors will reach about 300 thousand annually.

The project would contribute about KD 80 million to the gross domestic product by 2035, with an internal revenue return of up to 13 percent, assuming that the lease contracts are for a period of 30 years, and provided that the government provides financing for infrastructure at a value of KD 75 million. It is expected that the project will provide about 3,000 job opportunities by 2035. The study took into account the fact that the resort should be established in a way that achieves a meaningful economic return for the state, and in a way that enables the concerned authorities to attract specialized foreign companies to invest and contribute to its operation and the transfer of the necessary expertise.

This news has been read 8198 times!