International Contractors In Kuwait Will Be Affected By The Government Resignation

It was reported by Al-Qabas daily that the resignation of the government, about four months after its appointment, would dampen hopes for a recovery of project activity in Kuwait this year. According to the MEED report, the government's resignation would further erode the confidence of international contractors, who view Kuwait as a politically troubled site, affecting their participation in tenders. Over the past few years, political instability has greatly hampered the country's ability to implement major infrastructure projects, and now that the government has resigned, it is likely that major infrastructure projects will not be progressed for at least three months.

Publicly owned companies will be unable and unwilling to make major decisions necessary to complete major tenders and award contracts due to uncertainty about the future composition of the country's cabinet, MEED said. According to the report, projects with approved budgets, as well as smaller deals, such as maintenance contracts, are likely to progress. However, the MEED report said that important projects that could change the country’s prospects, create jobs and promote economic diversification are likely to be halted.

With project activity already at a low level, the resignation of the government is likely to have a significant impact on the country's economy in the coming years. Due to the low level of project activity in Kuwait, many of the major companies that have won and executed major projects there over the past decade have reduced their presence in the country in order to focus on other countries in the region that are experiencing rapid growth in project spending, such as Saudi Arabia, the UAE, and Qatar.

 

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