Private sector skills in Kuwait debated

05/11/2025

KUWAIT CITY, Nov 5: Can the Kuwaiti private sector undertake the major projects that have been postponed for years, projects that would place a financial burden on the state budget if implemented? This question was posed by the daily to several economists. In response, economist Mohammad Ramadan stated that the local private sector is not capable of implementing large infrastructure projects, such as the metro project, due to a lack of experience in this field. He said the state could hire international companies with a strong track record for executing projects that the private sector cannot handle, especially since these projects require substantial capital.

Ramadan cited the Al-Mutlaa residential project, for which Kuwait contracted a Chinese company to execute. Meanwhile, economic advisor Abdullah Hadi Al-Gharib believes that private sector participation is the quickest way to implement major projects, especially since the private sector possesses substantial capital that enables it to carry out these projects without the state incurring any financial burdens that could increase budget deficits in the coming years. He affirmed that the return of Kuwaiti capital abroad, estimated at 25 billion dinars, to the local market would strengthen the national economy and create more job opportunities for Kuwaiti youth.

Indicating that bureaucracy had been driving capital flight, Al-Gharib revealed that the recent period has witnessed a strong and genuine push for economic and political reform, which has reassured Kuwaiti investors and encouraged the return of their capital. He stressed that the government could allow multiple private sector companies to participate in the metro project, with ownership reverting to the state after 20 years, similar to the arrangements for the Souq Sharq Complex and Al- Muthanna Complex.

Al-Gharib affirmed the importance of implementing the metro project in parallel with the construction of the six workers’ cities, noting that sites for these cities have already been allocated in Subiya, South Jahra, North Mutlaa, South Sabah Al-Ahmad, and South Khairan City. He indicated that the project to transform Kuwait into a financial and commercial hub has been proposed for many years but has yet to materialize, and insisted on the need to activate this initiative as one of the main goals of New Kuwait 2035 vision. Al-Gharib explained that the Public-Private Partnership Projects Authority should take the lead in implementing such projects. Its founding law No. 116/2014 aims to leverage the capabilities of the local private sector, enhance its efficiency, promote market competition, and facilitate development and innovation.

The authority’s role is not limited to encouraging private sector participation through partnerships with the government but also extends to ensuring balance in project tendering processes, stimulating and attracting Kuwaiti capital, and generating new revenues for the state budget. In addition, economist and former head of the Kuwait Contractors Association Dr. Salah Boursli highlighted the importance of involving the private sector in major projects that the government has postponed for years. He affirmed that private sector participation would help solve the problem of financing needed to implement these projects, especially since the state has been incurring billions in additional costs due to repeated delays.

Dr. Boursli explained that the metro project, for which structural plans were drawn up in 2011, was initially expected to cost the state around KD 4 billion to KD 5 billion. However, due to the postponement of the project, the cost may now exceed KD 15 billion. He called for the removal of all obstacles facing the local private sector so it can contribute more effectively to economic development and play a stronger role in resolving financial challenges. Dr. Boursli emphasized that there are many projects requiring private sector participation through the B.O.T. system, which is one of the main mechanisms for implementing major national projects.

By Najeh Bilal Al-Seyassah/Arab Times Staff