A report issued by the MEED magazine says the recent government resignation, about four months after its appointment, will weaken hopes for the recovery of project activity in Kuwait during the current year and will likely deal a blow to international contractors locally.
The MEED report, according to Al-Qabas daily, also indicated that the government’s resignation would deal another blow to the confidence of foreign contractors, many of whom view Kuwait as politically ‘unstable’, which would affect their bidding for tenders.
The report noted that over recent years, political instability has greatly affected the country’s ability to implement major infrastructure projects, and now that the government has resigned, it is very likely that there may be at least three months of little or no progress on major projects.
“Given the uncertainty about the future composition of the country’s cabinet, publicly owned companies will be unable and unwilling to make the major decisions needed to complete major tenders and award contracts,” MEED said.
However, “Projects with approved budgets are likely to see some progress, along with smaller deals, such as maintenance contracts,” said sources from MEED.
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 and this is not a good sign.
The government’s latest resignation comes at a time when project activity in the country is already at a low level, and it is likely to have a significant negative impact on the country’s economy in the coming years.
Due to the low level of project activity, many of the major companies that have won and executed major projects in Kuwait over the past decade have reduced their presence in the country to focus on other countries in the region that experience rapid growth in project spending, such as Saudi Arabia, the UAE and Qatar.