KUWAIT - Real Estate & Construction
Minister of State, Housing Affairs
HE Yasser Hassan Abul was appointed Minister of State for Housing Affairs in January 2014, a capacity through which he chairs the Public Authority of Housing Welfare (PAHW). In December 2016, he was also appointed Minister of State for Services Affairs. Prior to his current duty, Abul served as a member of the Supreme Council for Planning and Development SCP. Before he assumed public office, he was active in the building materials and furniture industry and was board member at the Hassan Abul Holding Company, Chairman of Abyat real estate, and co-founder and a board member of Abyat Mega Store.
In the short term, PAHW has set an ambitious target of allocating 60,000 units over a five-year period, from 2015-2020, as per the second development plan. Furthermore, PAHW has succeeded in maintaining close coordination with other government entities to implement the government program and its ongoing strategic plan. In doing so, PAHW has exceeded previous targets and managed to distribute 45,746 units during the period from 2014 until 2016, compared to 96,938 units for the period from 1956 until 2013, representing 46% of the units of the past 58 years in just three years. In the long term, since PAHW is fully convinced that continuing the current approach in the provision of residential care is too expensive and unsustainable and will not solve the housing challenge and we will instead concentrate our efforts on the development of a sustainability strategy. For this, we work with the Kuwait Credit Bank (KCB) and other relevant parties. This requires a fundamental shift in the philosophy of providing residential care from securing the housing units through PAHW to the activation of public-private partnerships and developing sustainable communities with a social environment that complies with best industry standards. The practical application of this vision would result in the creation of investment opportunities, lift the burden from the state budget, and set the plan for long-term financial sustainability by converting non-residential lands into income-producing assets to transform to a self-financing entity.
In 2015, PAHW signed a program strategic consulting (PSC) agreement to provide technical and strategic support for the former housing programs and manage PAHW’s megaprojects. These projects include the new Cities of Al-Khairan with 35,000 housing units, South Saad Al-Abdullah with 25,000 units, and North Al-Mutlaa with 52,000 units, amongst others. These will be executed by creating urban communities according to best international standards and funded by public-private partnerships. Through these partnerships, we strive for an efficient utilization of resources and alleviation of the burden of financing projects away from the state and to leverage the expertise of the private sectors and transfer the skills, knowledge, and abilities from the private sector to the public sector. In addition, we seek to adopt a smart cities agenda where we also aim to rationalize energy usage. We are investing in attracting highly skilled calibers for all level of positions to enhance the efficiency and the delivery of these projects.
To drive private-sector participation in the development of housing projects, we plan to adopt a PPP framework that relies on an existing legislative setup, adoption of best practices in PPP project structuring, as well as close interaction with the private sector throughout development and tendering life cycle. The new legal setup provides the necessary tools for attracting investors and lenders such as allowing for foreign ownership of project companies, providing lenders security over the project contracts, and dictating a clear and transparent procurement process. Applied in several ongoing PPP procurements in Kuwait, PAHW does not envisage any major challenges in implementing the PPP law for its real estate and housing projects. In terms of PPP project structuring, PAHW will adopt the appropriate risk allocation between the public and private sector, which aims to allocate the risks to the party best able to manage them. Finally, PAHW is engaging the private sector throughout the development and procurement of PPP projects, and will be organizing roadshows for prospective bidders to outline up-and-coming opportunities and how these will be tendered. Since May 2016, PAHW has the authority to tender PPPs without involving the Kuwait Authority for Partnerships Projects (KAPP) and we will be fully responsible for the tender process.
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