A major project in Kuwait City is suffering a huge setback with a lack of funds that have forced the contractor to renege on the payment of fees to workers, suppliers, subcontractors and other staff in the past few months. Some workers have abandoned the projects while other workers are struggling to support themselves and their families.
According to the news report, the Kuwait Municipality owns the project and is responsible for payments to the main contractor Eresco, to build a parking lot comprised of six floors with a capacity for 2,600 vehicles.
The project was aimed to be completed in 18 months, and the subcontractor started the project and continued to work on it despite payment delays. However, it has become very difficult with the lack of funds and the project remains in limbo.
The director from the subcontracting company spoke to the media, saying that the company has received only a down payment of the contract, which is 10 percent of the project’s value, while four payments are pending, the last payment should have been finished in October 2015.
The director mentioned that there have been attempts to resolve the issue amicably with the Municipality, but no favorable conclusion was reached. The company intends to file a court case within two weeks.
Following this experience working with the Kuwait Municipality, the subcontracting company mentioned how it is difficult to recommend or trust Kuwait institution where projects are concerned. The failure of mandatory payments on the side of the Kuwaiti institution reflects badly on Kuwait and such behavior could force foreign companies to reconsider any partnerships with Kuwait-based companies and would probably stall development in the country.