Increase in Kuwaiti workers affects cost of contracts

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Cost of contracts expected to increase by about 400% from current cost

KUWAIT CITY, July 12: According to informed sources in Kuwait Municipality, a study was prepared by a number of project departments regarding the extent to which the increase in the proportion of Kuwaiti workers affects the cost of contracts, according to the administrative circular issued on January 15, 2023 related to the technical and supervisory department for private contracts in the municipality, reports 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.

According to the Director of the Environmental Affairs Department Adnan Sayed, the circular includes the technical and special conditions for projects to be put forward, and the binding legal text that the number of Kuwaitis in the technical supervisory and advisory positions in each contract should not be less than 50 percent of the total manpower. 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.

They have been offered for the first time in the country, and require the participation of foreign companies along with the local offices and companies due to the lack of local expertise in this regard. 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 projects. Sayed explained that most of the jobs and specializations required in management projects are specialized jobs. 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. Their costs are exaggerated to carry out the required work, and this undoubtedly imposes huge financial burdens on public money.

National labor
The percentage of national labor, as per the law of the Public Authority for Manpower, is five percent of the total number of offices and companies. It includes all workers in all specialties, due to which it is difficult to provide 50 percent of national labor for each contract separately. This results in the difficulty in 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. He also stressed the need for including such training programs in these contracts.

Meanwhile, Bashayer Al-Awadhi explained that the justifications and reasons for requesting an amendment to the decision are as follows:

1. In the event that the provisions of the decision are applied, specifically the first item (which includes the technical conditions for the projects to be put forward, the legal text obligating that the number of Kuwaitis in the supervisory or advisory technical staff for each contract should not be less than 50 percent of the total manpower, provided that the project contract manager is a Kuwaiti), it will raise the value of contracts by up to 700 percent of the estimated value of the project. 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. Most of the technical staff for construction and service contracts consists of technical workers (sign workers), and the majority of those workers are non-Kuwaitis.

3. Contracts for consultation services for design work and various consultancy services, whereby the technical requirements in these contracts require contracting with an experienced and specialized technical staff in the field of work in technical projects contained in the contract.

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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