Five minutes with: Donna Sultan, KEO International Consultants
Speaking ahead of <i>CW</i>’s Leaders Kuwait 2017, KEO International Consultants’ Donna Sultan offers her assessment of the Kuwaiti construction market
Speaking ahead of the Construction Week: Leaders in Construction Kuwait 2017, Donna Sultan, chief executive officer and president of KEO International Consultants, offers her assessment of the Kuwaiti construction market…
CW: What do you think are the main challenges facing the construction industry?
Donna Sultan: There are a number of challenges, but if I had to identify the main one, I would start with the disappointing number of new project opportunities that have been awarded, or let out for tender, against what was generally forecasted for 2017.
There are many factors as to why this is the case, such as oil prices, reduced government spending, delayed development programmes, and changing political and economic dynamics. These factors are not specific to the GCC; they are also global in nature. Tourism in the Gulf, and its growth or non-growth on a country-by-country basis, is also influencing investment appetites.
We are also witnessing price decline across the region, and price is increasingly becoming the decisive factor in project awards. This trend puts quite a strain on companies’ margins, especially in light of the increasing costs of labour, living, services, and supplies.
One other observation that I would make is that companies are increasingly expected to take on larger risk profiles in order to do business in the region. Contract terms have become more onerous, and payment terms are not usually favourable.
CW: What most excites you about the Kuwaiti construction industry?
DS: After years of a general lull in the market, with not much being announced, there are some indications that Kuwait has entered an era of significant construction growth. That is if one follows several very reliable industry sources and their analysis of the country’s construction market, coupled with the level of project awards seen in 2016 – the highest level witnessed in the last six years.
We have also witnessed press announcements from many government entities, stating their commitment to move ahead with some very ambitious products in several sectors, including power, oil, education, transportation, infrastructure, medical services, and public housing. Many of these are mega-developments of national interest, particularly those announced by Kuwait’s Public Authority for Housing Welfare (PAHW), and the new virgin cities that are planned.
Yet despite this trend, there remains room for cautious optimism as the dominance of any significant construction growth in Kuwait will be heavily driven by the public sector, which – owning to the nature of its organisations and institutions – is more conservative in its processes and decision-making.
Kuwait’s construction market is fairly mature, and most institutions have well-defined project-delivery practices. In this light, the country becomes even more attractive to those following construction opportunities if there is indeed a roll-out, as announced in its five-year development plan (2015-2020), whereby the government is expected to spend a reported $117.7bn (KWD35.6bn) on traditional and social infrastructure projects.
With these predictors, Kuwait looks set to become one of the most important markets in the region, and that is exciting news.
CW: What topics are you looking forward to discussing at CW: Leaders Kuwait 2017?
DS: Our industry peers and decision-makers will gather to address many pertinent topics during the summit’s panel discussions. I hope that the event’s focusses will include improved transparency in project awards; balanced risk sharing; Kuwaiti banks’ role in and appetite for project financing; decision-makers’ first-hand accounts of their planned processes for awarding projects; the likely repercussions of the implementation of value-added tax (VAT) in Kuwait; and updates on market opportunities.
CW: Could you outline some of the latest products and services that KEO has introduced?
DS: We intend to continue to expand our core services in our active markets, while simultaneously focussing on our architecture, engineering, and project and construction management offerings.
This year, we have also launched two uniquely branded allied practices, both of which are fully owned by KEO. One is InSite, which specialises in the provision of master-planning, urban design, and landscape architecture services. The second is C-Quest, an independent contract and quantity surveying practice, which provides pre-construction and construction services. The creation of these branded allied practices was conducted in a bid to establish a more direct and personalised relationship with our clients, while still ensuring that these entities are fully backed by all of KEO’s core and corporate services.
Moreover, KEO has continued to drive sustainable innovation with the launch of its City Information Modelling (CIM) laboratory. We believe data is one of our most valuable untapped environmental resources, and so will use the power of information modelling to understand and shape cities in new ways, thus solving problems and improving lives.
CW: What other news can we expect from KEO in 2017/18?
DS: We expect to continue to climb the charts, in terms of international rankings, and to receive more global and regional recognition of our efforts.
On the project delivery side, we are working on a number of exciting developments, which are helping to shape the construction landscape in the Middle East. In Kuwait alone, KEO is currently involved in the delivery of the new Kuwait International Airport; facilities at Kuwait University; a major public hospital; two new virgin cities, in the capacity of consultant and master planner; the country’s new Four Seasons Hotel; the Kuwait Investment Authority (KIA) Headquarters; the Gulf University for Science and Technology; and the Public Authority for Applied Technology’s new college; among others.
CW: Why is KEO supporting CW: Leaders Kuwait 2017?
DS: KEO was keen to support Construction Week’s Leaders in Construction Kuwait 2017 summit, which is the first of its kind to be held in Kuwait, particularly given our 50-plus years of experience in the country. We have seen this series of events succeed in other GCC member states, and believe it is high time the summit reaches a country with as vibrant a construction sector as Kuwait. There is a lot going on here; many important megaprojects are being planned, or are in various stages of execution.
Any seasoned player in the region knows that, in seeking the delivery of projects or related opportunities, you cannot afford to lump together countries, or assume that business is done in the same way in each. If you are going to gain market share in any part of the GCC, you must conduct the due diligence required to understand the lifecycles of project development, funding sources, country-by-country development programmes, and the evolving investment objectives or priorities of both the private and public sectors.
Construction Week’s Leaders in Construction series of events represent a great source of market information, and provide a forum in which multinational companies can network with individuals with on-the-ground, in-country experience. Delegates include both client groups, and those who are part of the project delivery chain, be they consultants, contractors, or suppliers.
This event will provide the kind of country-focus opportunity that, if tapped into, could prove beneficial to anyone in the construction business.
This year’s conference will take place on Wednesday, 18 October, 2017 at the Radisson Blu Hotel, Kuwait. Visit our microsite get involved in Construction Week: Leaders in Construction Kuwait 2017.
KEO International Consultants is the Silver Sponsor of Construction Week: Leaders in Construction Kuwait 2017.