Leaders Kuwait 2018: New Kuwait 2035 needs smart city-led contracts
Localisation and contract modernisation are essential for Kuwait's diversification strategy
Industry experts from the project management, legal, design, and contracting spaces came together for the first panel at Construction Week’s Leaders in Construction Kuwait 2018 summit on 17 October. The professionals, speaking at the second iteration of the summit, discussed the infrastructural aspects of the New Kuwait 2035 vision.
The six-strong panel, moderated by Charles Lilley, partner at law firm Bryan Cave Leighton Paisner (BCLP), took to the stage to discuss all things related to the Kuwait National Development Plan. Commonly referred to as New Kuwait 2035, the programme seeks to increase the country’s revenue from $43.6bn ( KWD13.2bn) in 2017 to $164bn (KWD49.8bn) by 2035. With these figures in mind, the country’s leadership has placed great emphasis on the development of transport infrastructure, commercial buildings, industrial facilities, and renewable energy infrastructure.
When asked about vital considerations for firms entering the Kuwait market, Darren Bellew, head of industry at project management consultancy Faithful+Gould, said: “When entering a new market as an international [project management consultant] you bring best practice with you, but you need to localise that. You cannot just come in and force your solutions on to a client that has been developing in their own country for a number of years.
“You have to blend it and use all the best resources that are best fit for the client. There’s also an opportunity to build on the local skillset and train the local consultancies so over time they can get up to that international standard.”
Ben Highfield, partner at consulting and advisory experts HKA, noted South Korea’s engagement with Kuwait, stating the Asian nation has shown “a wonderful commitment to not just [Kuwait] but other markets across the Gulf”.
“They have a huge hunger to be part of the solution,” he explained. “I think with any international group that comes in, the most important thing is to take into account the culture of where you’re coming in to – particularly if you’re talking about housing developments – such as how do people want to live, what are they used to living like, and what are their style of communities.”
Yang Chunsen, vice president of China State Construction Engineering Corporation (CSCEC) Middle East and general manger of CSCEC Kuwait Representative Office, said he was hopeful that the Chinese state-owned contractor would get more support to do business in the Kuwait market: “We hope to get more support for [visa-related issues], so we can bring people in from outside Kuwait to work.”
For his part, Ahmad Jafar, vice chairman of Kuwait-based contractor Bruckner Construction Company, said he believed the biggest barrier to success in the Kuwait construction market is “the lack of human engagement and sharing of thoughts at the beginning of the process”.
“There is a lack of liquidity in the market right now,” he added. “A lot of that starts with the end user or client. The issues with payments are not necessarily down to a lack of funds, so much as the process of actually getting those funds.”
The issue of technology as part of Kuwait’s New Vision 2035 was also discussed, particularly in the context of numerous planned high-profile smart city initiatives rolling out across the region, notably the planned $86bn (KWD26.1bn) Silk City mega-project.
“Smart cities are no longer just something that is nice to have, but a requirement by default,” said Nabil Kobrosly, vice president of business development for Parsons’s built environment division in the Middle East and Africa. “In each and every project that we do, especially in construction design, provisions are made for smart city consultants or technology operators to be able to bring in their equipment.
“We have partnerships with a number of large international players who can offer these type of solutions, such as Microsoft. We are bringing these types of technology firms on every infrastructure project that we have.”
With this in mind, Highfield was quick to point out that technological progress must be met with the appropriate frameworks where technologies can be implemented successfully from both the contractual and commercial points of view.
“People are introducing technologies they want projects to use, but they are not thinking about the step before that, which is at the contractual level. They rely on very old forms of contracts that were drafted at a time when this technology didn’t even exist.
“So, when it comes to measuring the costs of these technologies and their uses, and how to manage them from a contractual and commercial point of view, their systems are not in place to do so. They envisage an era of 20-30 years ago.
“In that circumstance, more focus needs to be on using newer, more flexible and savvies forms of contracts that address the use of information technology systems and [platforms] alike.”