Kuwait's focus on projects creating opportunities for contractors
EXCLUSIVE: Chief executive officer at Asad United Group, Wael Soliman, talks about the Kuwait construction industry
What are your views on the Kuwaiti construction market at present?
The construction market in Kuwait has been increasingly growing over the past few years and is expected to continue to do so due to the future plans of the government to diversify the sources of income, through investing in various sectors and industries.
These new sectors and industries would require huge amounts of expenditures on different construction projects.
This is evident in the budget that was allocated by the Kuwaiti government of nearly $148bn to develop numerous infrastructure projects, like new roads constructions, subways, housing, healthcare sector and to improve the power and water supply.
The value of the construction industry in Kuwait for the future planned projects is expected to be $188bn.
What are your projections for Kuwaiti contractors in 2020 and beyond? Do you think builders will win more work in the near future?
I think the builders will win more work in the near future because of all these new projects that are awaiting execution and the plans Kuwaiti government has put in place to develop the country’s infrastructure has also opened the appetite of several construction companies to penetrate the Kuwaiti market which has made the competition highly fierce for the new projects.
Which types of projects (for example, aviation, roads and bridges, healthcare etc.) are driving construction activity in Kuwait at present?
The construction industry has seen a fixed evolution in the past few years and is projected to bloom in the next few years because of all the mega projects that are currently in the pipelines awaiting execution.
These projects include the development of the education sector in which new schools and universities will be built to accommodate the growing population. These projects are estimated to be worth $10bn. In addition, there is also the project of developing the new Kuwait Airport which is running now and worth approximately $698m.
Moreover, there are several huge projects to construct new electricity generators to join the highly advanced electrical grid, which is worth about $17bn.
There is also the construction of 8000 housing units and the construction of new hospitals to enlarge the health sector to be able to cover the increasing populations needs.
How has the New Kuwait Vision 2035 impacted construction activity? Is the programme creating more opportunities for contractors?
Kuwait has executed projects worth more than $60bn toward its Vision Kuwait 2035 strategy, and according to senior officials, more than $100bn is still to be invested. Kuwait is focusing on the development and constructional activities and programmes which will be creating more opportunities for contractors.
Are contractors being involved in smart city construction programmes in Kuwait?
Kuwait Vision 2035 follows HH the Amir’s hopes of transforming Kuwait into a world-class financial and commercial centre.
All new projects that are awaiting execution and the plans that the Kuwaiti government has put in place to develop the country’s infrastructure has given the chance to several construction companies to penetrate the smart city construction programmes in addition, the customers of construction projects are becoming more knowledgeable about the construction industry and, as a result, are more demanding and insistent on having high-quality outcomes of their projects.
How is Kuwait’s legal system performing in terms of construction dispute resolution mechanisms?
Unfortunately the legal system in Kuwait is very slow in terms of construction dispute, also the number of different parties involved in most construction projects can result in a high risk of conflict which if not dealt with quickly, could develop into disputes that can take years to settle.
The nature of the construction business in the State of Kuwait is probably no different to other countries as one of the most litigious industries. However, improved dispute resolution practices within Kuwait, could result in significantly reduced costs and wastage.
What are some of Asad Group’s largest construction contracts at present?
Asad Group’s largest construction contracts at present are Sulaiman office Tower, Alrashed commercial tower which are located in very prime locations in the heart of Kuwait City. Beside Al-Mansour two residential towers that are located in Mahbolah.
Please list any three projects you are currently working on?
Asad always plays the role as the main contractor in all projects however Asad sometimes takes the role of construction manager in some projects through Asad’s sister company for projects management GOSSOR:
Sulaiman office tower: deadline is by the end of current year 2019, Alrashed commercial tower: proposed deadline is by the end of June 2020, and Al-Mansour two residential towers: deadline is by the end of next 2020.
What is Asad Group’s growth strategy for 2020, and what are your priorities for the year ahead?
We plan to target more projects next year, especially that we are financially solid and have bank facilities from the biggest banks in Kuwait, which are NBK and Gulf Bank that’s when Asad met the criteria of both banks and is classified as Corporate Baking company.