'We are at the very early stages of the ToR,' says a project source. 'There is a potential of a BOT, but the MEW [Ministry of Electricity & Water] is also keeping its options open to build the plant on an EPC [engineering, procurement and construction] basis. A decision is expected by September 2002.'

The estimated KD 533 million ($1,800 million) Al-Zour North power project will be built next to the existing Al-Zour South power station, about 100 kilometres southeast of Kuwait City. The proposed steam turbine plant will have a capacity of 2,500 MW and is scheduled to begin operation in the second half of 2006 (MEED 21:9:01).

'Privatisation is important for Kuwait, as it will reduce our budget deficit. We [the government of Kuwait] have gone through an exercise and prepared a list of state-owned companies which could be privatised,' Electricity & Water Minister Talal Mubarak al-Ayyar said in Abu Dhabi on 6 November. 'There are about 76 companies on the list.'

Privatisation of utilities will be carried out in phases. 'We will go through a step-by-step process. We may start off by setting up 100 per cent state-owned corporations to replace the MEW,' Al-Ayyar said.

A potential stumbling block in the BOT process will be the need for the National Assembly (parliament) to approve a law allowing the power sector to be opened up to foreign companies.