‘Heavy investment in buildings yields scant results’

KUWAIT CITY, July 19: Economic and financial studies have identified deficiencies in Kuwait’s public spending, one of which is the persistence of discrepancies between expenses and revenues, reports Al-Shahid daily.

Among the most significant of the discrepancies are expenditures and revenues related to buildings where the government spends tens of millions of dinars annually to rent multiple buildings for government agencies despite the urban expansion of government buildings but they are unable to meet government’s need for adequate buildings for its various agencies and ministries.

Specialists in this field emphasized that this is evidence of poor planning by the official authorities in the sense that these buildings were not designed according to the actual need of the renting agency, and this made the government’s continued expansion in renting the buildings a necessity, costing the state treasury amounts exceeding two billion dinars during previous decades, which is the value of rents paid by the government. During the coronavirus pandemic and the transformation of countries to work remotely and use technology in transactions, the presence of many of these buildings has become unnecessary and therefore the government must start dispensing these buildings. In contrast, some government agencies such as the Ministry of Education, which is one of the ministries that rent buildings, owns a huge number of government real estate that has been granted to other parties – mostly private schools and universities. This shows an actual defect between renting government buildings at the lowest prices and also renting buildings from private sector at the highest prices. Also, the Ministry of Awqaf, which owns and operates all mosques scattered everywhere in Kuwait, and despite doing so, it rents dozens of buildings to manage in different regions.

In the same context, despite the state’s ownership of most of the land, real estate and commercial projects utilized by private sector at the lowest price, government slacked in taking advantage of such facilities that were in the hands of private sector under the “BOT” agreement. Studies indicated that rental value is KD 11 thousand, which is the average monthly rent for a single government building. According to some official reports, the number of buildings and facilities leased by the government for official use through its ministries and sector branches amounts to 314 facilities.