The Kuwait Authority for Partnership Projects (KAPP) is the new organisation replacing the Partnerships Technical Bureau (PTB) as the promoter of public-private partnerships (PPPs) in Kuwait. It was founded following the approval of the PPP Law (Law no. 116) in June 2014, which came into effect in March 2015.
As with the PTB, the body is overseen by a higher committee, chaired by the minister of finance, Anas Khaled al-Saleh. Former president of the PTB Adel al-Roumi has been appointed as the general manager of the new authority.
Made up of seven senior ministers and three technical specialists, the structure of the higher committee is broadly the same as it was under the previous PPP Law of 2008. However, the latest body has a wider remit than its predecessor.
Its functions include setting the general policies and priorities for PPP schemes, approving requests from public bodies seeking to implement PPP projects, approving land allocation requests for projects, approving the procurement stages, and ultimately approving the appointment of successful investors, based on recommendations from KAPP. It will also approve the accounts and budget of KAPP.
Under the terms of the new PPP Law, the minister of finance will soon nominate a director-general for KAPP, who must be approved by the Council of Ministers. This person will hold the post for a four-year term, which can be renewed once.
Like the PTB before it, KAPP is responsible for cooperating with other public bodies throughout the Kuwait government in order to develop the use of PPPs, and it is hoped that under the new law progress will now accelerate.
Kuwaits PPP project market is making better progress than even the most optimistic observers had predicted
The updated legislation brings Kuwaits law into line with international standards and tackles some of the issues that had previously slowed the progress of the use of PPP. New clarity on joint-stock company ownership, shareholding requirements, initial public offering timelines, concession periods and investor rights have all been viewed as welcome developments that will make the PPP sector more investor friendly.
These developments were much needed. Since the previous PPP Law was introduced in 2008, progress had been slow. The first PPP agreement for the 1,500MW Al-Zour North independent water and power project (IWPP) was signed in December 2013. However, the experience gained from this project was used to shape the new legislation, and already Kuwaits PPP project market is making better progress than even the most optimistic observers had predicted.
Not surprisingly, given the pressing need for more power generation and water desalination capacity in Kuwait, KAPP has been moving most quickly on its IWPP programme with the Ministry of Electricity & Water. Seven bidders were prequalified for a second 1,500MW phase of Al-Zour North in August and were invited to tender for the project just a few weeks later in September. The same seven consortia have also been prequalified for the Al-Khiran IWPP, which will produce 1,800MW in phase 1.
Also in the power generation sector is the 280MW Al-Abdaliyah integrated solar combined-cycle project, which combines 60MW of solar power generation with traditional gas-fired production. The private-sector-proposed scheme has been approved by the Higher Committee, and in August KAPP shortlisted seven groups to bid for the project.
Other schemes that had stalled since the restructuring of the sector, such as the long-awaited Umm Al-Haymann wastewater treatment project and the Kabd municipal solid waste treatment centre, have now been reopened.
Health, education, real estate, rail and metro schemes are also being progressed by KAPP, which, according to project tracker MEED Projects, has a portfolio worth $34.3bn. Assisted by its new investor-friendly PPP legislation, KAPP is now expected to focus on continuing the momentum that has built in 2015 and delivering much-needed major infrastructure to Kuwait.
|Key KAPP projects|
|Project||Budget ($m)||Status||Award year||Due|
|Kuwait national railroad: phase 1||8,000||Study||2017||2024|
|Kuwait City metropolitan rapid transit||7,000||Study||2017||2024|
|Al-Zour North IWPP: phase 1 power plant||2,000||Execution||2013||2016|
|Shuaiba South power and desalination plant||1,800||Study||2016||2020|
|Al-Zour North IWPP: phase 2 power plant||1,749||Main contract bid||2016||2019|
|Shuwaikh power plant 2||1,200||Study||2017||2020|
|Al-Zour North IWPP: phase 2 water desalination plant||941||Main contract bid||2016||2019|
|Al-Zour North IWPP: phase 3 power plant||891||Study||2018||2020|
|Al-Zour North IWPP: phase 4 power plant||772||Study||2019||2021|
|IWPP=Independent power and water project; PPP=Public-private partnerships. Source: MEED Projects|