Kuwaiti Power Sweeping Bid Extensions Creating Costly Snafu
posted in September 2011
Editor's Note: In recent months I have heard several reports about a very long, drawn out and complex bid for sweeping in Kuwait. To track down the details I asked Phineas Fogg, who has previously reported on the Kuwait sweeping industry, to provide us with the details. Here they are.
There is nothing easy or ordinary about sweeping in Kuwait, a country where strong winds in June and July can blanket everything in quite deep sand drifts. This article details an entirely other issue, however: the perils of being a power sweeping contractor in Kuwait.
by Phineas Fogg, WorldSweeper.com international correspondent
Kuwait's sweeping contractors are tasked with cleaning not just city streets. In addition, they are responsible for sweeping up miles of highways outside of the city that are frequently covered up to 15" deep in dry, gritty, machine-destroying sand. As you will read, however, getting a street cleaning contract in the first place may be even more difficult.
Nearly two years ago the Kuwait Municipality called upon private contractors to submit tenders for the cleaning, sweeping and garbage collection in the city. The tender consisted of 17 separate contracts of various sizes and complexity, all of which had been carried out for the previous five years by five major contractors.
By any assessment, this is a big contract: in the region of 300M Kuwaiti, which is close to $1 billion US over five years. When the tenders were opened the municipal officers were surprised to see that their budget was well and truly blown by every bid.
So, the easy solution was taken, fiddle with the specifications slightly, have private and earnest discussions with the major players – and recall the tender. Simple enough.
The revised tender attracted some new, vigorous bidders with lower prices and new technology, exactly what was wanted. The seventeen contracts were assigned to a wide range of contractors; some had two, some had three and some only one.
However, this did not suit several of the older, larger contractors who saw their contracts shrink from up to half a dozen down to only two. And, although the contracts were ready, they had not been signed by the municipality representatives.
So, the disgruntled contractors did what large, connected organizations in many parts of the world do, which was to pull political and business strings. This was enough to stop the whole process until the end of 2012.
A member of parliament and Chairman of the Environmental Affairs Committee, Dr. Ali Al Omair, said in a news report the contracts were "...delayed to ensure the extension of the existing contracts in the interest of some opportunists who oppose the Minister's plan to use modern technology in maintaining the cleanliness of the country like the other developed nations."
Omair went on to say he has obtained information from a reliable source that the Municipality has asked the CTC to cancel the new contracts under the pretext that the companies, which have been qualified for this project, have submitted very high estimates. He argued the Municipality has not taken into consideration the public welfare.
Asserting the extension of existing contracts in government authorities is an outright
violation of a directive from the Audit Bureau not to extend these contracts, Al-Omair
claimed the Municipality has deliberately delayed the awarding of new contracts to
qualified companies in favor of the current contracts.
Some contractors I spoke to detailed the high cost to them for this second delay in awarding contracts. They have had tender bid bonds in place for over twelve months, in one case totaling around 800,000 KWD (nearly $3M). That is serious money to have locked up; or, as one contractor described it, "sleeping in the bank."
All manual work in Kuwait is carried out by imported labor and some contractors had already started to recruit in the Philippines, Pakistan, Bangladesh, as well as to make plans for accommodations.
Several equipment dealers I spoke to were equally worried about their holding costs and prices. All the prices are now on the table and any special deals are exposed so they anticipate, as one told me, "being screwed over prices."
Of course, the longer it all goes on the greater increase in equipment prices, since chassis and steel costs will not stand still. There is also no telling where the USD or Euro will be in another twelve months.
From the perspective of this sweeping industry insider – but Kuwaiti government onlooker – it sure seems to be a very strange way to ensure your city is clean. I am sure I would not like to be bidding anything under these circumstances. Some folks say the New York City tender was difficult; in comparison – child's play!
Phineas Fogg is an intrepid and voracious traveler with an abiding interest in the power sweeping industry. He has agreed to, from time-to-time, provide the WorldSweeper.com reading audience with interviews and other information from countries he finds himself in. You may reach Mr. Fogg via email sent to email@example.com.