Leaders Kuwait 2017: Can the ‘New Kuwait’ plan overcome market challenges?
A six-strong panel of industry experts considers challenges and opportunities related to the implementation of the Kuwait National Development Plan
A six-strong panel of industry experts considers challenges and opportunities related to the implementation of the Kuwait National Development Plan.
The event’s panel discussion saw six industry experts take to the stage to discuss the Kuwait National Development Plan. Commonly referred to as ‘New Kuwait’, this strategy represents a vision to diversify the country’s economy, create jobs, and generate additional revenue streams by 2035.
Moderated by Sachin Kerur, head of the Middle East region at Pinsent Masons, the panel comprised Ahmad Jamal Jafar, vice chairman of Kuwait Bruckner Construction Contracting; Bassam Khalaf, project director of KEO International Consultants’ project management division; Hassan Hayat, architect and project manager at Dar Al-Jazera Consultant Engineers; Henk Steyn, head of roads and infrastructure at Pace Architecture Engineering + Planning; and Yang Chunsen, vice president of China State Construction Engineering Corporation Middle East (CSCEC ME) and general manager of the contractor’s Kuwait representative office.
Kerur began: “The Kuwait National Development Plan has been described in many circles as both innovative and challenging. The construction industry will be paramount in the plan’s implementation; it will be important for our sector to get behind the ingredients of the strategy.”
Commenting on what differentiates New Kuwait from its predecessors, Kuwait Bruckner’s Jafar said: “In previous plans, I think we’ve tried to replicate what our neighbours have done with a focus on landmark ‘wow’ projects. New Kuwait represents something a little more realistic. It’s more concrete, with a focus on infrastructure. We’re now [pushing ahead with projects] that we were hoping would be announced 10 years ago.”
Dar Al-Jazera’s Hayat praised the 2035 strategy for its prioritisation of alternative models of project finance. He elaborated: “For the most part, I see that there is more of a shift towards including the private sector in development, which is a very important step. At the same time, we must understand that the goal of [involving] the private sector is to create a trickle-down effect for society, because development should be a holistic and comprehensive strategy. I definitely see steps in that direction within the new plan.”
While Pace’s Steyn also commended the plan’s vision, he noted that it must remain sufficiently flexible to allow for adjustments during the stage of implementation.
“Plans are only as good as the people who make them,” he said. “New Kuwait covers a lot of areas, so the challenge is therefore to take that plan and bring it down to a practical, implementable level. Plans change all the time, and so they should. The world is changing around us so quickly, so [these strategies] need to be adaptable.”
For his part, CSCEC ME’s Chunsen seemed confident that New Kuwait would prove more successful than its predecessors due to its emphasis on private sector involvement.
“I came to Kuwait in 2008 and, in 2010, the government [launched a plan],” he recalled. “I feel that plan was not really used very well. But in terms of [New Kuwait,] I have witnessed real involvement from all companies [and policy-makers,] not only in the economic sense, but also from a policy perspective. I believe that this plan will come to fruition, and I think the Chinese government is a big supporter of the strategy. We are encouraging other Chinese companies to take part as we believe we have a good future of business in Kuwait.”
Applauding the broad-ranging vision and private sector oversight of New Kuwait, KEO’s Khalaf commented: “There are lots of major developments in the government sector that have to be executed. I’m talking about multimillion-dinar megaprojects. These developments are spread all over Kuwait, so it is a very well-balanced plan. It includes [everything] from healthcare facilities to entertainment and tourism projects. What’s more, these projects are being supervised by high-level government bodies, representatives of which show up [on site] on a bi-monthly basis.”
Although encouraged by the idea of greater private sector involvement in the country’s developments, CSCEC ME’s Chunsen warned that this participation must extend beyond financing through to the integration of project-related expertise. He continued: “It is right that the client oversees delivery but, in Kuwait, the power is sometimes removed from the contractor. And if contractors don’t have the power to make decisions, it can make things difficult.”
Turning his attention to obstacles that must be overcome during the implementation of New Kuwait, Pace’s Steyn noted that the modernisation of financing and contractual mechanisms represented key focusses. He explained: “The major challenge is going to be financing this change [because] that will involve everybody. From an industry point of view, modernising systems and contracts to make them more manageable and reduce disputes will represent an important factor. Kuwait must also work to develop the knowledge and skill sets that will be required to make this plan work, and prove sustainable in the long term. This requirement applies to the private sector as well as to government. If we have the right skills and the right people in place, then the plan will be successful and sustainable.”
When asked whether there was sufficient private sector liquidity to deliver the projects outlined in the 2035 strategy, Kuwait Bruckner’s Jafar replied: “For the most part, the liquidity is here for the local contractors. And I think when the government hires international contractors to execute local jobs, it has to trust that they are able to secure financing.
“Even for large-scale projects, we’ve seen that the private banking sector is able to create [suitable financing packages]. So, in my opinion, the liquidity is there. It’s just a matter of reviewing the records of the companies that are [vying] to execute these jobs to ensure that they have the fundamentals that are necessary to deliver.”
Commenting on the role that workforce development will play in the long-term success of New Kuwait, Dar Al-Jazera’s Hayat said: “If we ascribe value to knowledge as a fundamental driver of the economy, I think it will help us to distinguish between the different forms of experience and skills that are available. In doing so, we can start to determine the types of knowledge that we should retain, and the types that are replaceable with faster means of learning.”
Returning to the broad-ranging nature of the 2035 strategy, KEO’s Khalaf noted: “This plan is comprehensive in all aspects. It’s not limited to one sector; it covers healthcare, transportation, cultural heritage, and more. All of these segments will contribute to the shift to New Kuwait, and you have to take them as a package. For example, we’re now moving into the entertainment and leisure business, which will not only serve to attract tourism, but also – perhaps most importantly – encourage locals to [stay and spend money in Kuwait]. It’s a facelift for the country.”
Pinsent Masons’ Kerur concluded: “I’m reminded of a quote: ‘If you don’t like change, you’ll hate irrelevance even more’.”