Skills shortage may hurt Kuwait growth

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Severe problem: Kuwait’s anticipated property surge may be hampered by a skill shortage.

A severe shortage of construction professionals and skilled labourers is expected to hamper Kuwait's anticipated property surge this year.

A recent report by Al-Mutakhassis Real Estate said that lower income tax on foreign firms and the creation of a GCC common market would spark the boom.

Other indicators of growth include the release of land by Kuwait Petroleum Company for the construction of 16,000 low-cost homes and a potential US $14 billion railway and underground network.

But construction experts operating in the country have said that these moves could be held back by labour and visa processing issues, despite Kuwait's strong economic position.

"Kuwait is not like the UAE," said Azad Hossain, deputy head of contracts and chief quantity surveyor, Gulf Consult.

"While there is easy access to building materials, the labour problems still exist due to the visa procedure. The country is also lagging behind in contractural procedures and contract practices.

Hossain added that cumbersome bureaucracy and unfriendly investment laws have proved to be major obstacles facing businesses in the country, particularly in the construction sector.

"Kuwait should have been a haven for investors with unbeatable golden opportunities, but the spiralling prices in housing have raised the government's worries of fuelling inflation in recent months.

A lack of land for residential and commercial construction is one of the reasons for the house price increase, according to Hossain.

"The government owns an estimated 90% of land in Kuwait, which is one of the things fuelling property prices and one of the main obstacles for private development.

Kuwait property developers have also looked to the wider GCC for opportunities because of the difficulty in obtaining land.

Marzooq Rashid Al Rashdan, managing director of Abyaar Real Estate - a Kuwait-based company operating in Dubai - recently told Construction Week: "We established Abyaar to develop and grow from Dubai, but we have nothing in Kuwait. The country is stable politically, but in the real estate market there are no opportunities.

"I don't think it is easy in Kuwait and it is expensive - even for real estate companies to buy land it costs more than Dubai. Also, it is difficult to find land to buy and develop a project, and demand is not so high.

But the fact that Kuwait has not replicated the fast-paced approach of other GCC states could stand the country in good stead in the long-term, according to Pradip Guha, studio director and senior project manager of KEO in Kuwait.

"Why has Kuwait not joined the mad rush? It is good for the country. Developments have to be sustained by infrastructure improvements, which Kuwait has been concentrating on.

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