British Rush to Get Share of Contracts to Rebuild Kuwait

Amid concerns that U.S. companies are snapping up the most lucrative contracts for the multibillion-dollar rebuilding of Kuwait, the British government has launched an intense lobbying campaign to secure reconstruction work for U.K. firms.

In one of the most high-profile displays of government involvement, British Foreign Secretary Douglas Hurd took a group of senior businessmen with him when he traveled to Saudi Arabia over the weekend for talks with the exiled emir of Kuwait, Sheik Jabbar al Ahmed al Sabah.

At the end of the talks, Hurd announced the emir had agreed to give $1.32 billion to Great Britain to help defray its war expenses. The British businessmen were given dinner by the Kuwaiti Crown Prince and prime minister, Sheik Saad al Abdullah al Sabah, and, reportedly, an “extremely positive” response to their quest for contracts.

The businessmen, in turn, gave their hosts a glossy prospectus, 33 pages long and chock full of detailed information about British companies which have experience working in Kuwait. The brochure was produced by Britain’s Department of Trade and Industry.

The Trade Department also announced it was setting up an office in Dhahran, Saudi Arabia, to help British businesses process contracts. The creation of the office coincides with the Kuwaitis’ decision to move their reconstruction planning office from Washington to Dhahran, British officials said.

“When they were in America, it was somewhat difficult for us,” said Aileen Butler, a Trade Department spokeswoman. “Now there’s a focal point in the Middle East.”

Some companies complain that the British government has been slow in providing support. “There was quite a lot of criticism about the Americans getting all the business,” Butler said.

Britain’s Financial Times reported Monday that Bechtel, the giant San Francisco-based contracting firm, will manage the reconstruction of Kuwait’s oil and gas industry and that the British units of one Italian company and three other U.S. firms would get pieces of the project.

Lord Hesketh, the British minister for industry, has tried to downplay the transatlantic grappling for contracts. He told reporters at a press briefing that, although contract decisions are at an early stage, it appeared likely Americans companies would be getting a huge percentage of the work. But he stressed there would be a great deal of work for British companies and that they should work with the U.S. companies, rather than against them.

Kuwait has parceled out contracts worth about $800 million for the initial restoration of emergency services and supplies such as water, food, power and medicine. About 70% of those contracts have gone to American companies, according to Kuwaiti officials.

But that spending represents a fraction of the total amount that will be needed to restore the country to its former standard. Although no one can know how much the rebuilding will cost, the figure of $40 billion is often cited. Some estimates go as high as $200 billion.

Ironically, the size of the repair bill will depend not only on the extent of the damage caused by the invading Iraqis, but by the level of destruction inflicted by the allies during their fight to liberate Kuwait.

As one British journalist put it: “Much of the infrastructure the British companies hope to rebuild has not yet been destroyed.”

Officials are adamant there is nothing unseemly about lobbying for contracts while Kuwait is still occupied.

“I don’t think it’s distasteful,” said Butler, the trade ministry spokeswoman. “We didn’t push them before they were ready. As soon as we knew the Kuwaitis were talking about reconstruction, we started talking about it.”