Necessity beats bureaucracy as $4bn contract finally gets awarded
For years, Kuwaitis watched on the sidelines as some of their GCC neighbours built or began building iconic airports.
While Dubai International airport took the limelight by becoming the worlds largest in 2014 and Dohas $15bn Hamad International airport reached completion in 2015, the Kuwaiti government struggled for nearly two years to get its second airport terminal project off the ground.
Kuwait International airport (KIA) has been operating beyond its capacity for years. In 2015, the airport processed 10.2 million passengers, which is twice its design capacity. It is also the only airport in the GCC with the same gates serving arriving and departing passengers.
For a country that sits on sovereign wealth assets worth half a trillion dollars, one would expect awarding a $4.3bn contract to ease congestion at its airport should have been more straightforward.
Instead, it took nine months between the time the low bidder was announced until the deal was finally awarded. During this period, some MPs repeatedly called for an investigation into alleged administrative irregularities committed in the tendering process. The issue triggered the resignation of then minister of public works Ahmad al-Jassar and severely tested the decision-making skills of his replacement, Ali al-Omair.
It also subjected the presumptive winning bidder, primarily Turkeys Limak Holding, to major pressures in terms of resource allocation. Limak, like the rest of the bidders, submitted offers for the scheme in 2014, when it was tendered the first time, and again in 2015, when it was retendered.
With the deal formally signed and awarded on 30 May, the target completion date for KIAs Terminal 2 has been moved from 2020 to 2022.
The award brings Kuwaits estimated contract awards for the first five months of 2016 to $10.2bn, or about a third of the total value of deals awarded in 2015.
Furthermore, the deal for a smaller passenger support terminal designed to take on traffic while Terminal 2 is under construction is expected to be awarded in June. A joint venture of Turkeys Cengiz Insaat Sanayi Ve Ticareta and the local First Kuwaiti General Trading & Contracting (FKTC) submitted a low bid of KD52.8m ($174m) for the contract in December 2015.
It is understood this second scheme has been transferred from the Directorate General of Civil Aviation (DGCA) to the Al-Diwan al-Amiri, which has allocated a special budget for the scheme.
This move seems to indicate key personalities in Kuwait are now taking strong measures to compensate for the slow decision-making process that Kuwait has come to be known for in the past decade.
While one contract may not be enough to reverse the governments reputation for failing to deliver on projects potential, it shows that change is foreseeable.
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