Kuwaiti Workers Increase Affect Contract Costs

A number of Kuwait Municipality project departments have prepared a study regarding the impact of the increase in Kuwaiti workers on contract costs, according to informed sources. The municipality issued an administrative circular on January 15, 2023 relating to its technical and supervision department for private contracts, according to Al-Qabas daily. The circular highlighted an increase in the expected cost of the contracts by about 400 percent from the current cost, with the percentage of national labor not being less than five percent for each contract.

The circular includes the technical and special conditions for projects to be submitted, as well as the binding legal text that stipulates that Kuwaitis should not make up less than 50 percent of all staff in technical supervisory and advisory positions in every contract. Regarding the studies and projects related to the Department of Environmental Affairs, the nature of the studies and projects related to waste management, which were put forward by the Department of Evidence Affairs, are projects of a vital nature.

Since there is no local expertise in this area, they are being offered for the first time in the country and require the participation of foreign companies along with local offices and companies. In consideration of this fact, it therefore is not possible to provide Kuwaiti cadres according to this percentage of the local market with the expertise required for this type of distinguished project. Sayed explained that most management projects require specialized jobs and specializations. Therefore, their salaries will be very high. When 50 percent of the work team are Kuwaitis, the financial offers submitted will exceed the estimated cost of these projects and studies. In order to complete the required work, their costs are exaggerated, which imposes huge financial burdens on the public.

In accordance with the Public Authority for Manpower law, five percent of the total number of companies and offices are staffed by national labor. It includes all workers in all specialties, due to which it is difficult to provide 50 percent national labor for each contract separately. This results in the difficulty of preparing and completing offers proposed by companies and institutions. Sayed stressed the need for contracts to include binding clauses for offices and companies to train cadres of national workers among the employees in the concerned departments of the municipality who are not included in the training programs in those contracts in order to provide them with the necessary experience. In addition, he stressed the importance of including such training programs in these contracts.

According to Bashayer Al-Awadhi, the reasons and justifications for requesting an amendment are as follows:

1. The first item of the decision (which outlines the technical requirements for the projects to be presented) is applicable if the provisions of the decision are applied (the legal text requires that the number of Kuwaitis in the supervisory or advisory technical staff of each contract should not be less than 50 percent of the total manpower, provided the Kuwaiti project contract manager is), increasing contracts by as much as 700 percent of their estimated value. The projects most harmful to the decision are those for which a financial appropriation has been allocated, and are in the final stages of offering to the Central Agency for Public Tenders (CAPT).

2. The majority of the technical staff for construction and service contracts are non-Kuwaitis (sign workers).

3. These contracts require contracting with experienced and specialized technical staff in the fields of work in the technical projects contained in the contract for consultation services in design work and various consultancy services.

4. The lack of availability of Kuwaiti cadres with long enough experience in the private sector in the fields of the current and proposed contracts with CAPT due to the lack of job security and financial incentives, the length of the official working hours, the lack of guarantee of job continuity and fixed income, the lack of a law to secure unemployment in the event of sudden termination without warning, and the lack of employment of Kuwaiti cadres by companies and consulting offices due to the high salaries of Kuwaitis compared to expatriate workers.

 

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