Project delays hurting Kuwait development

Completion of projects on time and to cost is the Holy Grail that governments and those in the constructions and projects industry have been pursuing in vain ever since Kuwait began issuing tenders for public projects.

Even if we accept that project delays are a global phenomena and that most countries are besieged by cost and time overruns on major constructions, we still would have to admit that when it comes to implementation of projects and tardiness in delivery,  Kuwait is in a class of its own.

We have projects that have seemingly been going on for ever. Road and flyover constructions that take over whole areas with their barriers and large pre-constructed blocks that are then left lying idle for ages, impeding vehicles and pedestrians and choking traffic on main routes. Large construction sites are fenced off early on and then no one seems to know what comes next.

The Sheikh Jaber Al-Ahmad Al-Jaber Hospital, one of the largest medical facilities in the region was to be built in response to the pressing need for a new hospital by the Ministry of Health. The project which started in December 2009 and was slated for completion was  finally inaugurated by His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al Sabah in November 2018.

A prestigious project like the Al Jaber Hospital, urgently needed to meet the country’s health needs, opening its doors five years after its original completion, and allegedly only after strong directives from His Highness the Amir, speaks volumes about project delays in Kuwait.

According to a World Bank report, implementation phase of infrastructure projects in Kuwait are hobbled by cost overruns in 20 percent of cases and time delays in 110 percent of cases. Many research hours and even more dinars have been spent in attempting to identify the causes behind project delays, but no conclusive reasons have so far emerged. Kuwait continues to follow the traditional project flow of first assigning a designer for a project and then selecting a contractor based on the lowest bid submitted to the country’s Central Tenders Committee (CTC).

Kuwait’s project delivery pattern is based on a general contract document titled ‘Legal General Contracts’ that was initially launched in 1971 and last updated in 2003. Most countries in the region have revamped their contracts a long time back to bring them in line with new International Federation of Consulting Engineers (FIDIC) contract templates.

One constriction that a former housing minister identified as delaying construction projects was the unavailability of land in Kuwait. No future projects would be included in Kuwait’s development plans until land is allocated first, said the minister while also admitting that some projects had been delayed by more than 15 years, due to changes in budgets, conditions or other basic elements.

Besides the reasons cited by the minister, other common causes for project delays are  financial problems between owner and contractor; client induced additional work beyond the original scope, variation in engineering conditions from the contract document , decreased labor productivity due to extreme climatic conditions, lack of planning, poor scheduling of subcontractors and lack of coordination in design drawings among others. But the biggest delay in projects were attributed slowness in government approvals and permits, delay in preparation and approval of various documents.

Figures from the National Bank of Kuwait, (NBK) the country’s premier commercial lender show that in 2018 project awards declined for the third consecutive year. A total of KD1.7 billion in projects were awarded last year, less than half of the KD3.8 billion planned to be awarded at the start of 2018.

Prospects of project awards in 2019 are expected to improve with some of last year’s delayed projects being rolled over to this year. Awards worth KD4.4 billion are projected to be released this year, but given the low implementation rate of projects in recent years, this figure looks overly optimistic.

However, it will become increasingly difficult to repeatedly reschedule projects amid the growing housing, water, power and infrastructure shortages faced by the public and industry. The transport sector in particular is under increased pressure as maintenance and upkeep of the  country’s transport infrastructure becomes increasingly  overdue. Increased criticism from the public and lawmakers will probably ensure that the sector witnesses some project awards in 2019. Around KD1.4 billion worth of transport projects are in the  pipeline, many of which were postponed in 2018  due to structural issues with the Public  Authority for Roads and Transportation’s (PART), which is responsible for  executing roadworks and transport projects.

Analysts say the delays in public sector projects cannot be resolved without efficient partnership with the private sector. Public-private partnership (PPP) is a framework that engages both parties to successfully achieve long term plans to deliver what the country and citizens need. But to attract the private sector to participate and provide the services needed with the expected high qualities and techniques, the public sector would need to improve the environment to facilitate PPP implementation.

Kuwait has attempted to make progress with its public-private-partnership  (PPP) program, but it has suffered from structural, technical,  legal and financing issues, many of which remain to be resolved. Nevertheless, pressure is reportedly mounting on the relevant authorities, including the Kuwait Authority for Partnership Projects, which spearheads PPP projects in the country, to deliver results, given the importance many projects to New Kuwait development plan that envisions transforming Kuwait into a financial, commercial and cultural hub in the region by 2035.

Times Kuwait Report