Kuwait Poses Pitfalls for Small Firms

By Gordon, Marcy | THE JOURNAL RECORD, March 15, 1991 | Go to article overview

Kuwait Poses Pitfalls for Small Firms


Gordon, Marcy, THE JOURNAL RECORD


By Marcy Gordon WASHINGTON - Doing business in Kuwait is riskier and more complicated than many small U.S. companies realize, say commercial experts who advise them to get help before trying to capture a piece of the massive rebuilding project.

Kuwait's laws, religious codes and business and social customs are all potential pitfalls.

``Small companies have to be very careful or they'll lose everything over there,'' said Donn E. Hancher, a professor of construction engineering at Texas A&M University who has worked in Persian Gulf countries.

``There's going to be a lot of people who will go over there and spend a lot of money and get nothing,'' he said. ``Anybody who's looking to get rich quick had better think twice. . .they'd better stay home unless they have a connection.''

A vital strategy for small businesses, Hancher said, is to subcontract with big companies with experience and connections in Kuwait.

Companies and unemployed workers across the United States are rushing to get in on what could become the biggest rebuilding effort since the Marshall Plan reconstruction of Europe after World War II. As the Friday filing deadline approaches, scores of companies have applied to the U.S. Army Corps of Engineers to participate in the Kuwait rebuilding, expected to cost as much as $100 billion.

The Corps, which is overseeing engineering work and damage assessment for the Kuwaiti government, already has hired eight big companies for the initial phase of the project. They are Raytheon Co., Blount International, American Dredging Co. and Brown & Root International, all of the United States; Al Harbi Trading and Contracting Co. Ltd. and Khudair Group, both of Saudi Arabia; Mohamed A. Kharafi of the United Arab Emirates and Shand Construction Ltd. of Britain.

Other companies, including some smaller firms such as oil field specialists, have signed contracts directly with the Kuwaitis.

But none of the small companies that applied to the Corps to work in the initial phase has received a contract.

The Corps got a $46 million contract from the Kuwaitis just before the Gulf War started in mid-January, and it recently was increased to $100 million as estimates rose for the costs of emergency repairs.

Some experts believe the contract could go higher still, as could the overall estimate of $100 billion for Kuwait's reconstruction. …

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