The Silk City Authority Is Gone: What Contractors, Suppliers and Investors Should Do Now

Decree No. 175 of 2026, published in Kuwait Al-Youm Issue 1816 on 8 November 2026, abolishes the Silk City (Al-Subiya) and Boubyan Island Development Authority created by Decree No. 240 of 2012. It takes effect on publication. The authority's assets, rights, obligations and contracts pass to government bodies that the Council of Ministers has yet to name.

Why this matters: for more than a decade the authority was the counterparty, the planner and the point of contact for development in the north of Kuwait. Anyone who signed with it, bid for its work, or planned an investment around Silk City now faces a simple question with no answer yet: who is on the other side of the table? The decree keeps the rights and obligations alive, but it leaves a gap in time between the authority's closure and the Cabinet decision that will fill its place. How businesses use that gap will decide how smoothly they come out of it.

1. What the decree actually does

The decree has five articles. Article 1 repeals Decree No. 240 of 2012, without affecting Decree No. 22 of 2025, which had already moved the completion of Mubarak Al-Kabeer Port to the Ministry of Public Works. Article 2 asks the Council of Ministers to name the government bodies that will carry out the development of Silk City and the Kuwaiti islands, and follow up on the policies, plans, programmes and projects for them. The authority's assets, rights and obligations pass to those bodies, each within the task assigned to it, including contracts, agreements, projects, studies, documents, records, files and related budget allocations. Article 3 moves permanent staff to the Civil Service Commission on their current grades and salaries and ends the service of others. Article 4 repeals anything that conflicts with the decree, and Article 5 brings it into force on publication.

Two points stand out. First, the development mandate survives: the text speaks of continuing the work, not ending it, and it now covers the Kuwaiti islands generally, not only Boubyan. Second, the work may be split. The phrase 'each within the task assigned to it' allows the Cabinet to hand different parts of the portfolio to different ministries or authorities.

2. Your contract survives, but your counterparty will change

A contract with the authority does not end because the authority ends. The decree transfers its rights and obligations by force of law, so the successor body steps into the authority's position without the need for a fresh contract or the contractor's consent to an assignment. Prices, scope, guarantees and dispute clauses stay as they are.

What changes is practical. The person who approves an invoice, issues a variation, signs a completion certificate or answers a claim will sit in a different body, perhaps one that has never seen the file. If the work is split between several bodies, one contract may end up touching more than one of them. Expect some delay while files move and new teams read in.

3. Living in the gap

The decree sets no deadline for the Cabinet to name the successor bodies. Until it does, we suggest the following. Keep performing, unless your contract or the law gives you a clear right to suspend. Keep serving notices, claims and extension requests at the address and in the form your contract requires, and keep proof of delivery. Nothing in the decree stops contractual or legal time limits from running, and a missed notice period is hard to recover. Write to the authority's contract office, or to the official still handling the file, asking who will receive your correspondence and approve payments. Bring your records up to date: certified work, unpaid invoices, retention, pending variations and open claims, each with its supporting documents.

Banks deserve attention too. Performance bonds and advance payment guarantees issued in favour of the authority will need a new beneficiary. Speak to your bank early, so that an extension or release request is not held up by the change.

4. Disputes already under way

Where a claim or lawsuit is pending against the authority, or brought by it, the successor body will take its place in the proceedings. Until it is named, check that procedural steps are being served on the right party, and raise the point with the court if the authority is no longer represented. Any settlement in progress may need fresh approval from the new body, so it is worth putting the terms on paper now.

5. The port and the wider northern programme

Work on Mubarak Al-Kabeer Port is not affected. It was moved to the Ministry of Public Works under Decree No. 22 of 2025, following a Cabinet decision of November 2024 that also moved the follow-up of the Kuwait China agreements and memoranda of understanding away from the authority to a dedicated committee. Contractors on the port already deal with the Ministry, and Decree 175 confirms that arrangement.

6. Investors and landowners

For investors who have been watching Silk City, the decree changes the institution, not the objective. It creates no new land rules, incentives or investment framework, and it does not cancel any existing plan. The real signal will be the Cabinet decision: which bodies are named, and how the work is divided between them, will show whether the north is to be developed through one lead agency, through ministries, or through partnership and investment vehicles.

7. A short checklist

List every contract, purchase order, memorandum and bid you have with the authority. Pull the notice, suspension and termination clauses for each. Bring your claims and invoices up to date and send them, with proof of delivery. Ask your bank about guarantees issued in the authority's favour. Note any pending case or settlement. Then watch for the Cabinet decision naming the successor bodies, and write to the new body as soon as it is named.

WEFAQ's view: the decree is short, and in principle it protects counterparties well, because nothing that was owed to them or by them is lost. The risk lies in the transition: files moving between bodies, approvals held up and notices sent to the wrong place. Businesses that put their position on record now will be in a much stronger place when the successor body opens the file. Our team can review contracts with the authority and help prepare the correspondence.

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Source: Decree No. 175 of 2026 abolishing Decree No. 240 of 2012 establishing the Silk City (Al-Subiya) and Boubyan Island Development Authority; Kuwait Al-Youm Issue 1816, page 6, dated 8 November 2026; Council of Ministers meeting of 29 September 2026 (KUNA, reported by Arab Times, 29 September 2026). Background: Times Kuwait, 20 November 2024 (Cabinet decision moving Mubarak Al-Kabeer Port to the Ministry of Public Works).

This article is provided for general information only and does not constitute legal advice. For advice specific to your circumstances, please contact WEFAQ Law Firm.