By Andy Sambidge
Privatisation laws in Kuwait 'should be revisited' to attract investors for development projects
A reconsideration of Kuwait's privatisation laws would bolster the country's efforts to attract investors for its build-operate-transfer projects, according to Faisal Hamad Al Ayyar, vice-chairman of Kuwait Projects Company (KIPCO).
Al Ayyar said that the legislation introduced so far in Kuwait fell short of offering investors the incentives and security they were looking for, given the extent of the slowdown caused by the global economic crisis.
"We are not seeing these projects going forward for the time being as they are not attractive enough and leave most of the risk on the side of the private investor," he said in an interview with Oxford Business Group.
"These laws will have to be revisited," he added.
He also said the private sector should play a leading role in the economy, saying private businesses would deliver higher quality services at lower costs across a number of sectors.
"The whole economy would be better run by the private sector," he said. "Governments should aim to be regulators rather than operators."
Al Ayyar also acknowledged it would take time for the Kuwaiti government's spending package to produce results.
But he said the intervening period could provide the country with an opportunity to improve its contracting capabilities and put the infrastructure needed for large-scale projects in place.
"At the moment the plan is moving at a slow pace relative to expectations and most people are still waiting. But we as a nation are not set up for this kind of development," he said.
"If the government is committed and everything runs smoothly through parliament, I think we should start seeing momentum by 2013."
He said he believes Kuwait has different lessons to learn from the economic crisis than the West, since the country's problems stemmed from over-leveraging and a mismatch between projects and financing rather than toxic assets.
BOT will stop the corrupt practices that occur in many infrastructure deals that have created issues in the past in the country, such as the sewerage and water networks. Quality will be built in to enusre that the Kuwaiti people get what they pay for.